Annual Report and Accounts

RNS Number : 8317X

Safestore Holdings plc

21 February 2012

 



21 February 2012

Safestore Holdings plc

ANNUAL REPORT AND ACCOUNTS

Safestore Holdings plc ("Safestore" or the "Company")

Following the release on 26 January 2012 of the Company's preliminary full year results for the year ended 31 October 2011 (the "Preliminary Announcement"), the Company announces it has published its Annual Report and Accounts for 2011 (the "Annual Report and Accounts").

Copies of the Annual Report and Accounts and the Notice of the Annual General Meeting 2012 have been sent to shareholders and are available to view on the Safestore corporate website: www.safestore.com

The Company's 2012 AGM will be held at 12 noon on Wednesday 21 March 2012 at the Company's registered office at Brittanic House, Stirling Way, Borehamwood, Hertfordshire WD6 2BT.

In accordance with Listing Rule 9.6.1, a copy of each of the Annual Report and Accounts, the Notice of Annual General Meeting 2012 and the Form of Proxy in relation to the Annual General Meeting 2012 have also been submitted to the UK Listing Authority via the National Storage Mechanism and will shortly be available for viewing at www.hemscott.com/nsm.do

In accordance with Disclosure and Transparency Rule 6.3.5(2)(b) additional information is set out in the appendices to this announcement. This information is extracted in full unedited text from the Annual Report and Accounts.

The Preliminary Announcement included a set of condensed financial statements and a fair review of the development and performance of the business and the position of the Company and the group.

Appendices

Appendix A: Directors' responsibility statement

Directors' responsibility statement required by DTR4.1.12R

The following directors' responsibility statement is extracted from the Annual Report and Accounts (page 52).

The Directors are responsible for preparing the Annual Report, the Directors' remuneration report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union, and the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

•     select suitable accounting policies and then apply them consistently;

•     make judgements and accounting estimates that are reasonable and prudent;

•     state whether IFRS as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent company financial statements respectively; and

•     prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

•     The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulations. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Each of the Directors, whose names and functions are listed in the Directors' report confirm that, to the best of their knowledge:

•     the Group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

•     the Directors' report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

By order of the Board:

S Ahmed

Company Secretary

26 January 2012

Appendix B: A description of the principal risks and uncertainties that the Company faces

The following description of the principal risks and uncertainties that the Company faces is extracted from the Annual Report and Accounts

(pages 32-33)

Principal Risks

The Group regularly reviews the risk within the Group. Risk management is a dynamic and critical business function as it is important to help achieve long-term shareholder value and protect our business, people, assets, capital and reputation. It is a fundamental aspect of the business and is subject to regular and ongoing reviews. We continuously identify and manage those risks and opportunities that could affect Safestore and the achievement of our business plans and strategic objectives. Our approach is aimed at early identification of key risks, reducing or removing those risks and/or responding quickly and effectively when a risk crystallises. In each instance, where possible, we seek to mitigate risks in order to reduce risk to an acceptable level.

For the purposes of Section 417(5)(c) of the Companies Act 2006, the facility agreements with the Group's bankers are the only contracts or arrangements which the Board considers essential to its business.

Managing our Risks

The key strategic and operational risks are monitored by the Board and are defined as those which could prevent us from achieving our business goals. Our current strategic and operational risks and key mitigating actions are as follows:

Risk category	Risk	Mitigating activities
Strategy	The Group develops business plans based on a wide range of variables. Incorrect assumptions about the self-storage market or changes in the needs of customers, or the activities of customers may adversely affect the returns achieved by the Group.	-     The strategy development process draws on internal and external analysis of the self storage market, emerging customer trends and a range of other factors. -     The portfolio is geographically diversified with performance regularly reviewed.
Finance risk	Lack of funding resulting in inability to meet business plans, satisfy liabilities or breach of covenants.	-     Funding requirements for business plans are reviewed regularly. -     The Group manages liquidity in accordance with Board approved policies designed to ensure that the Group has adequate funds for its ongoing needs. -     The Board monitors financial covenant ratios and headroom closely. -     The existing banking facilities run to 31 August 2013 and discussions with the Group's key lead banks and other potential partners about refinancing these facilities have commenced. Whilst only in their early stages initial responses have been encouraging.
Treasury risk	Adverse currency or interest rate movements	-     Guidelines set for our exposure to fixed and floating interest rates and use interest rate and currency swaps to manage this risk. -     Foreign currency denominated assets financed by borrowings in the same currency where appropriate.
Property investment and development	Acquisition and development of properties that fail to meet performance expectations. Overexposure to developments within a short timeframe.	-     Thorough due diligence conducted and detailed analysis undertaken prior to Board approval for property investment and development. -     The Group's overall exposure to developments is monitored and projects phased. -     The performance of individual properties is benchmarked against target returns.
Valuation risk	Value of our properties declining as a result of external market or internal management factors	-     Independent valuations conducted six-monthly by external professionally qualified valuers. -     A diversified portfolio let to a large number of customers should help to mitigate any negative impact arising from changing conditions in the financial and property market. -     Headroom of loan to value banking covenants is maintained and reviewed.
Occupancy risk	A potential loss of income and increased vacancy due to falling demand, oversupply, or customer default.	-     Personal and business customers cover a wide range of segments, sectors, and geographic territories with limited exposure to any single customer.  -     Weekly monitoring of occupancy levels and update of pricing at each store. -     On-site staff maintains regular contact with customers and local monitoring of competitor offers. -     Monitoring of reasons for customers vacating and exit interviews conducted. -     The occupancy rate across the portfolio has been improving through 2011 due to flexibility offered on deals by in-house marketing and customer support centre.
Energy risk	Reductions in energy usage are not achieved resulting in excessive costs	-     Ongoing upgrading of lighting and heating, and review and monitoring of energy consumption. -     Full compliance with carbon reduction commitment regulations
Business organisation and human resources	Failure to recruit and retain key staff with appropriate skills and calibre	-     Recruitment procedures and the remuneration structure are regularly reviewed and benchmarked. -     Succession plans are monitored for all senior positions.
Business interruption risk	Major events mean that the Group is unable to carry out its business for a sustained period	-     Business continuity plans in place and tested. -     Back-up systems at remote places and remote working capabilities. -     Following the fire at the Paris La Défense store in December 2010, further reviews and assessments undertaken for enhancements to supplement the existing compliant aspects of buildings and processes.
Reputational risk	Failure to meet customer and external stakeholder expectations	-     Customer surveys undertaken and results acted upon. -     Training and mystery shopper initiatives undertaken. -     Regular communication with our stakeholders.

Appendix C: Related party transactions

The following related party transactions are extracted from the Annual Report and Accounts (page 84).

The Group's shares are widely held. On 19 January 2011 Bridgepoint Capital (Nominees) Limited disposed of their 19% shareholding.

The ultimate parent company of the Group is Safestore Holdings plc.

During the year the following transactions were carried out with related parties:

	2011	2010
Bridgepoint Capital	£'000	£'000
Director fees (for the period 1 November 2010 - 19 January 2011)	6	25

The following amounts are outstanding, owed to Bridgepoint Capital Limited at 31 October:

	2011	2010
	£'000	£'000
Trade payables	-	2

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