Final Results

RNS Number : 1025H

Big Yellow Group PLC

24 May 2011

Big Yellow Group PLC

("Big Yellow", "the Group" or "the Company")

audited Results for the YEAR and FOURTH Quarter ended 31 MARCH 2011

Big Yellow Group PLC, the UK's leading self storage brand, is pleased to announce results for the year and for the fourth quarter ended 31 March 2011.

Financial highlights

· Occupancy growth of 215,000 sq ft across all stores (2010: growth of 140,000 sq ft)

· Store revenue for the year up 8% to £59.6 million (2010: £55.1 million)

· Store revenue for the fourth quarter increased by 7% to £14.6 million from £13.7 million for the same quarter last year

· Store revenue for the second half of the year of £29.7 million up 7% compared to the second half of the prior year of £27.7 million

· Revenue of £61.9 million, an increase of £3.9 million (7%) compared to £58.0 million for the prior year

· Store EBITDA up 13% to £37.1 million from £32.7 million in 2010

· Adjusted profit before tax¹ of £20.2 million up 22% (2010: £16.5 million)

· Diluted EPRA earnings per share² up 19% to 15.49 pence (2010: 12.99 pence)

· Cash inflows from operating activities (after interest) increased by 23% to £23.5 million (2010: £19.1 million)

· Group net debt reduced by £3.4 million to £266.0 million from £269.4 million at 31 March 2010

· Adjusted net assets per share³ down 1% to 449.8 pence from 453.3 pence as at 31 March 2010

· Final dividend of 5 pence per share declared (2010: 4 pence per share), full year dividend of 9 pence per share (2010: 4 pence per share)

¹ See note 10 ² See note 12 ³ See notes 12 and 14

Other statutory measures

· Profit before tax for the year £6.9 million (2010: £10.2 million)

· Basic earnings per share 5.34 pence (2010: 8.11 pence)

· Basic net assets per share 421.9 pence (2010: 424.0 pence)²

Nicholas Vetch, Chairman of Big Yellow commenting said:

"I reported last year that the Group was enjoying a recovery in line with the slowly improving economic picture. This recovery has continued in the current year, and I am pleased to report that occupancy across all of our 62 stores increased by 215,000 sq ft during the financial year, compared to an increase of 140,000 sq ft across 60 stores in the prior year.

It is of no surprise to us that the recovery in the UK economy is so muted, given the combined effects of the fiscal consolidation, the pressure on disposable incomes, and the constrained lending to businesses and individuals. The next step change in the recovery of the wider economy and hence self storage is unlikely to occur until some of these pressures are alleviated.

We therefore expect that the performance of this business will continue to show steady progress, however at some point we would anticipate seeing a change in economic pace which will feed directly into the growth rate of our business.

In the meantime, our exposure to London, dominant brand, innovative marketing, internet presence, quality of stores and customer service, coupled with our strong balance sheet and financial position, gives us a significant advantage."

For further information, please contact:

Big Yellow Group PLC 01276 477811

Nicholas Vetch, Executive Chairman

James Gibson, Chief Executive Officer

John Trotman, Chief Financial Officer

Weber Shandwick Financial 020 7067 0700

Nick Oborne, John Moriarty

Notes to Editors

Big Yellow Group PLC is the best known and one of the most dynamic self storage groups in the UK. It was founded in September 1998 by Nicholas Vetch, Philip Burks, and James Gibson and listed on AIM in May 2000, moving to the Official List of the London Stock Exchange in June 2002.

Big Yellow has expanded rapidly and now operates from 63 stores, 56 in London and the South, two in Sheffield, and one each in Birmingham, Edinburgh, Leeds, Liverpool, and Nottingham. There are a further seven stores in development. Of the 70 total stores and sites, 59 are held freehold and four long leasehold (together representing approximately 94% by value of the total property assets); seven stores are held short leasehold. All the stores have distinct yellow branding, with the majority being within the M25 or in strong urban conurbations. When fully built out the portfolio will provide approximately 4.4 million sq ft of flexible storage space.

The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are located in high profile, accessible, main road locations. Its focus on the location and visibility of its buildings, coupled with excellent customer service, has created the most recognised brand name in the UK self storage industry.

Big Yellow Group PLC

Chairman's Statement

Big Yellow Group PLC ("Big Yellow", "the Group" or "the Company"), the UK's leading self storage brand, is pleased to announce results for the fourth quarter and year ended 31 March 2011.

I reported last year that the Group was enjoying a recovery in line with the slowly improving economic picture. This recovery has continued in the current year, and I am pleased to report that occupancy across all of our 62 stores increased by 215,000 sq ft during the financial year, compared to an increase of 140,000 sq ft across 60 stores in the prior year. The occupancy of our 51 wholly owned stores at 31 March 2011 has grown by 117,000 sq ft to 59.3% from 55.7% at the same time last year.

The average net rent per sq ft achieved during the year, after all discounts and promotional offers, increased by 2% to £26.82. This is consistent with our strategy for the next couple of years of focussing on growing occupancy in the stores with a lower expectation of average rental rate growth compared to historically achieved rates of growth.

We are pleased with the performance of our stores, particularly given the backdrop of the level of housing transactions and mortgage approvals to owner occupiers which, whilst improved from the trough in 2009, averaged 47,000 per month for the financial year, against a twenty year average of 89,000 per month. The demand for self storage, which is driven by changing circumstances for individuals and businesses, has also benefited from the slowly improving UK economy.

Financial Results

Revenue for the year was £61.9 million (2010: £58.0 million), an increase of 7%; store revenue increased by 8% to £59.6 million (2010: £55.1 million). EBITDA for the 51 wholly owned stores increased by £4.4 million to £37.1 million.

Store revenue for the fourth quarter increased by 7% to £14.6 million from £13.7 million for the same quarter last year. Store revenue in the second half of the year was £29.7 million, up 7% from £27.7 million for the second half of the year ended 31 March 2010.

Cash inflows from operating activities (after finance costs) increased by £4.4 million (23%) to £23.5 million for the year (2010: £19.1 million).

The Group made an adjusted profit before tax in the period of £20.2 million (2010: £16.5 million). This translated into a 19% increase in adjusted earnings per share to 15.49 pence (2010: 12.99p).

The Group made a statutory profit before tax for the year of £6.9 million, compared to £10.2 million last year. This reduction reflects the decrease in the valuation of the Group's open stores, partially offset by the improved recurring profit. The Operating and Financial Review contains more detail on the operating assumptions underpinning the ten year cash flow which have led to a 2% reduction in value of the store portfolio from the same time last year.

The Group remains relatively conservatively geared with net bank debt of £266.0 million at 31 March 2011 (2010: £269.4 million). This represents approximately 33% (2010: 33%) of the Group's gross property assets totalling £809.7 million (2010: £815.8 million) and 45% (2010: 45%) of the adjusted net assets of £591.4 million (2010: £593.8 million).

The Group's income cover for the year expressed as the ratio of Group EBITDA post admin expenses to net interest payable was 2.8 times.

Property

Our store in Eltham opened shortly after the year end. We now have a pipeline of six wholly owned development sites; all bar our site in Central Manchester have planning consent. We are constructing our stores in Chiswick and New Cross; both of which are due to open in Spring 2012.

The three development sites with planning consent at Enfield, Guildford Central and Gypsy Corner have an estimated cost to complete of £17 million, and will be developed over the next three years, subject to trading conditions.

During the year we sold our surplus site at Clapham North to a social housing developer for £3.3 million. We have exchanged a contract to sell our surplus land at Blackheath to a social housing developer, conditional on planning and grant funding. We have also obtained planning consent for a 92 bedroom hotel on our surplus site at Richmond and have entered into a pre-let with Premier Inn and started construction shortly after the year end. We have agreed terms and solicitors have been instructed to sell the completed hotel investment as a forward commitment. At 31 March 2011, the Group owned approximately a further £17.6 million of land surplus to our requirements. We aim to sell the remaining surplus land once we have maximised its value through planning.

Since September 2007 we have only acquired three sites given the level of uncertainty following the onset of the financial crisis. At the time we had a significant development pipeline of 24 sites, of which 11 had planning consent. In the past three and a half years we have obtained a further 15 planning consents and built out twenty stores (ten in the Partnership and ten in the wholly owned group), adding 1.3 million sq ft of self storage capacity. We continue to monitor site acquisition opportunities, principally focused on London.

Growth Opportunity

We have spent the last decade developing the market leading Big Yellow brand with a current store network of 63 stores, largely focused on London and the South East, where the drivers for self storage are strongest and barriers to entry are at their highest. We believe that this is the most resilient and dynamic part of the economy and will be less affected by the proposed public spending cuts. Our stores outside London and the South East are in the larger metropolitan cities in the South West, Midlands and the North, where similar characteristics can be found. One outcome from the recent economic downturn has been a significant slowdown in self storage openings, with very few stores expected to open in 2011, particularly in these large urban conurbations. Indeed in some of our markets, capacity has reduced marginally as smaller operators have closed down and sold their customer base to other operators.

71% of our current revenue derives from within the M25; for London and the South East, the proportion of current revenue rises to 89%. We would expect the proportion of revenue from London to increase over time as 72% of the current available vacant capacity in the wholly owned stores is in London, where the average net rent per sq ft is also higher.

We believe that the value creation opportunity in this business for shareholders will in the medium term be driven mainly from leasing up stores to drive revenue, the vast majority of which flows through to the bottom line given that our operating costs are already largely embedded. We have increased occupancy of the wholly owned stores from 55.7% to 59.3% in the year, and this has translated into a £4.0 million increase in our annualised store revenue and a £4.4 million increase in the Group's operating cash flow after finance costs.

Dividend

REIT regulatory requirements determine the level of Property Income Dividend ("PID") payable by the Group. On the basis of the distributable reserves for PID purposes, a PID of 4 pence per share is payable for the year, of which 2 pence per share will be paid as part of the final dividend in addition to the 2 pence per share paid in December 2010 (31 March 2010: PID of nil pence per share).

The Board has reviewed our anticipated capital expenditure over the medium term, our forecast operating cash flow and the resultant levels of debt, balance sheet gearing and income cover. Following this review the Board is recommending the payment of a discretionary ordinary final dividend of 3 pence per share, taking the proposed final dividend to 5 pence per share and the total dividend declared for the year to 9 pence per share.

The cash dividend payment is two times covered by our free cash flow.

Banking

Santander have joined our core banking syndicate during the year, taking £25 million of the £325 million facility. HSBC have increased their participation in the year from £25 million to £50 million of the facility. We have a supportive group of banks who understand the self storage sector; Lloyds, HSBC, Santander and HSH Nordbank. I would like to thank them for their support.

Our People

The efforts of the Big Yellow team, both at head office and in the stores, have delivered this performance and they remain pivotal to the achievement of our key medium term objectives of driving occupancy, revenue, and cash flow growth. Thank you.

Board

We have strengthened the Board during the year with the appointment of Steve Johnson as a Non-Executive Director. Steve has significant experience in marketing and retail and I believe he will add considerable value to the Board.

Outlook

Nicholas Vetch

Chairman

23 May 2011

Big Yellow Group PLC

Business Review

Introduction

In January 2010 we saw an improvement in a number of our key self storage demand indicators, coinciding with the economy coming out of recession. This led to year on year improvements in occupancy and revenue within our business. Store revenue for the year grew by 8%, feeding through to a 22% improvement in recurring profit and a 23% increase in operating cash flow.

Store Performance

In all Big Yellow stores, the occupancy growth in the current year was 215,000 sq ft, against an increase of 140,000 sq ft in the prior year. This growth across the 51 wholly owned and 11 stores in the Partnership represents an average of 3,468 sq ft per store (2010: 2,333 sq ft per store).

Store Occupancy Summary
	Occupancy 31 March 2011 000 sq ft	Occupancy 31 March 2010 000 sq ft	Occupancy growth for year to 31 March 2011 000 sq ft	Occupancy growth for year to 31 March 2010 000 sq ft
32 established stores 19 lease-up stores Total - 51 wholly owned stores 11 Partnership lease-up stores Total - all 62 stores	1,381	1,350	31	(29)
	534	448	86	95
	1,915	1,798	117	66
	215	117	98	74
	2,130	1,915	215	140

The 51 wholly owned stores had a net gain in occupancy of 117,000 sq ft, representing an average of 2,294 sq ft per store. This compares to an overall gain in the wholly owned stores of 66,000 sq ft in the year to 31 March 2010, and a loss of 85,000 sq ft in the year to 31 March 2009. The 11 stores in the Partnership, which are at much earlier stages of lease-up, with two openings in the year, increased their occupancy by 98,000 sq ft, representing average growth of 8,909 sq ft per store.

During the year we opened two stores, in High Wycombe and Camberley, both within Big Yellow Limited Partnership. Since the year end, we have opened a wholly owned store in Eltham, South East London. These store openings bring the number now trading in the Group and the Partnership to 63.

We saw an increase in move-in activity during the year, moving in over 47,000 customers into all stores (including those in the Partnership) taking 2.95 million sq ft compared to 39,000 customers taking 2.37 million sq ft last year. Move-out activity also increased in the year, reflecting a higher level of churn in the business, with 45,000 customers moving out from 2.73 million sq ft compared to 38,000 customers moving out from 2.23 million sq ft last year.

The table below illustrates the seasonality of the business with move-ins to the like-for-like portfolio of 51 wholly owned stores, which were up 14% on the prior year.

Move-ins	Year ended 31 March 2011	Year ended 31 March 2010	Increase
April to June	10,991	9,357	17%
July to September	11,981	9,919	21%
October to December	8,845	8,042	10%
January to March	8,685	8,279	5%
Total	40,502	35,597	14%

As stated earlier the recovery started in January 2010, therefore the comparators have become more challenging, and hence the January to March year on year increase in activity growth was lower than in previous quarters. However, we are pleased to report that move-ins in April 2011 were 13% up on April 2010.

Of the 51 wholly owned stores open at the year end all are trading profitably at the EBITDA level. Ten of the eleven stores within Big Yellow Limited Partnership are trading profitably at the EBITDA level, with the exception being Camberley which opened in January 2011.

71% of our current revenue derives from within the M25; for London and the South East, the proportion of current revenue rises to 89%. The performance of our stores in London has been more resilient over the past four years than those outside London.

The average net rental achieved last year across the 51 wholly owned stores was £26.82 per sq ft per annum (the average rent in London is higher at £28.76 per sq ft per annum). The stores in lease-up achieved a higher average rental (£28.22 per sq ft) than the 32 established stores (£26.32 per sq ft), reflecting the greater London weighting of the lease-up stores.

Our key aim over the next two to three years is to drive occupancy and hence revenue in the stores. During the downturn we increased the level of promotional offers in the business, resulting in more muted rental growth over the past couple of years. As the stores lease-up, and the number of vacant rooms in particular sizes reduce, our pricing model will automatically reduce the level of discounts offered, leading to an increase in net achieved rents. We have a rolling programme of price increases to existing storage customers, in most cases providing an annual increase in storage rents of 6%. Over the last seven years, average net storage rental growth has been over 4% per annum.

Store Operations

The Big Yellow store model is well established. The "typical" store has 60,000 sq ft of net lettable storage area and takes some 3 to 5 years to achieve 85% occupancy. Some stores may take longer than this given they opened shortly prior to the downturn. The average room size occupied in the portfolio is currently 64 sq ft.

The store is open seven days a week and is initially run by three staff, adding a part time member of staff once the store occupancy justifies the need for the extra administrative and sales workload.

Given that the operating costs of these assets are relatively fixed, larger stores in bigger urban conurbations, particularly London, drive higher revenues and higher operating margins. The table below illustrates the average key metrics across the 32 established store portfolio for the year ended 31 March 2011:

Store capacity	60,656 sq ft
Closing sq ft occupied per store	43,156 sq ft
Revenue per store	£1,330,000
EBITDA per store	£860,000
EBITDA margin	65%

The average store size in the UK market is approximately 40,000 sq ft according to the Self Storage Association. Clearly the upside from filling our larger than average sized stores is in our view only possible in large metropolitan markets, where self storage drivers from domestic and business customers are highest.

Of the customers moving into the business in the last year, our surveys indicate approximately 57% are linked to the housing market, of which 19% are customers renting storage space whilst moving within the rental sector, and 38% moving within the owner occupied sector. We have seen a small increase in demand during the year from customers within the owner occupied sector, consistent with the slowly improving picture for mortgage approvals and housing transactions. During the last year 11% of our customers who moved in took storage space as a spare room for lifestyle purposes and approximately 23% of our customers used the product because some event has occurred in their lives generating the need for storage; they may be moving abroad for a job, have inherited furniture, are getting married or divorced, are students who need storage during the holidays, or homeowners developing into their lofts or basements. The balance of 9% of our customer demand in the year came from businesses.

We have a dedicated national accounts team for business customers who wish to occupy space in multiple stores. These accounts are billed and managed centrally. We have grown the team during the year, so we now have three full time members of staff working on growing and managing our national account customers. The national accounts team can arrange storage at short notice at any location for our customers.

Business customers typically stay longer than domestic customers, and also on average occupy larger rooms. Whilst only representing 9% of new customers during the year, businesses represent 19% of our overall customer numbers, occupying 35% of the space in our stores. The average room size occupied by business customers is 117 sq ft, against 51 sq ft for domestic customers.

Our business customers range across a number of industry types, such as retailers, professional service companies, hospitality companies and importers/exporters. These businesses store stock, documents, equipment, or promotional materials all requiring a convenient flexible solution to their storage, either to get started or to free up more expensive space.

The demand from business customers, who typically occupy larger rooms, has been relatively robust, as they seek a cost effective, flexible solution to their storage requirements, preferring self storage to the commitment of a long lease.

The split between business and domestic customers for the 51 wholly owned stores is as follows:

	Sq ft occupied at 31 March 2011	%	No of customers at 31 March 2011	%	% of storage revenue for the year
Business customers	668,000	35%	5,730	19%	27%
Domestic customers	1,247,000	65%	24,430	81%	73%
Total	1,915,000	100%	30,160	100%	100%

The net rent per sq ft for domestic customers is approximately 45% higher than for business customers, reflecting the smaller average unit size occupied for domestic customers.

For the 32 established stores, the average split between business and domestic customers is shown in the table below.

	Domestic	Business	Total
% of occupied space	65%	35%	100%
Sq ft occupied per store at 31 March	28,051	15,105	43,156
Revenue per store for the year	£971,000	£359,000	£1,330,000

The drive to improve store operating standards and consistency across the portfolio remains a key focus for the Group. Excellent customer service is at the heart of our business objectives, as a satisfied customer is our best marketing tool. We measure customer service standards through a programme of mystery shoppers and ex-customer surveys and have introduced online customer reviews during the year, which give an average customer service score of 4.7 out of 5. We have in place a team of Area Managers who have on average worked for Big Yellow for eight years. They develop and support the stores to drive the growth of the business. Adrian Lee, Operations Director, is the Board member responsible for dealing with all customer issues.

Our core proposition remains a high quality product, competitively priced, with excellent customer service, providing value for money to our customers. Our stores offer a headline opening promotion of 50% off for up to the first 8 weeks, and we continue to manage pricing dynamically, taking account of customer demand and local competition.

The store bonus structure rewards occupancy growth, sales growth and cost control through setting quarterly targets based on occupancy and store profitability, including the contribution from ancillary sales of insurance and packing materials. Information on bonus build up is circulated monthly and stores are consulted in preparing their own targets and budgets each quarter, leading to improved visibility, a better understanding of sales lines and control of operating costs.

We believe that as a customer-facing branded business it is paramount to maintain the quality of our estate and customer offering. We therefore continue to invest in a rolling programme of store makeovers, preventative maintenance, store cleaning and the repair and replacement of essential equipment, such as lifts and gates. The ongoing annual expenditure is approximately £30,000 per store, which is included within the income statement in cost of sales. This excludes makeovers, which typically take place every four years, at a cost of approximately £15,000 to £20,000 per store.

We have continued to manage the ten freehold stores for HSBC Bank plc branded as Armadillo Self Storage alongside our Big Yellow stores using the same operating model. The management contract expires in February 2014 and our key objective within the Armadillo portfolio remains driving occupancy, revenue and cash flow. During the year Armadillo acquired customers in Stoke and Hull from a self storage operation which was closing down and transferred these customers to their own stores. The retention rate of the transferred customers to date has been encouraging.

Sales and Marketing

This year our strategy has continued to focus on leveraging the Big Yellow brand. Our annual You Gov survey puts our national brand awareness at three times the level of our nearest competitor. We have maintained brand awareness of 80% in London and 47% outside of London. Although Big Yellow leads the industry in terms of brand preference, there is still an opportunity to improve our brand awareness, in particular in regional cities outside London where we have recently opened stores. (Source YouGov: September 2010)

Online Innovation

The website and our e-commerce proposition continue to grow in strength, with online prospects now accounting for 80% of all sales leads where details are first recorded on our operating system. Telephone is the first point of contact for 11% of prospects and walk-in enquiries, where we have had no previous contact with a prospect, represent 9%.

The Big Yellow website continues to evolve, and we are constantly improving the user journey and prospect conversion throughout the site.

This year we have developed and launched a dedicated business section of the website, communicating the benefits of Big Yellow Self Storage to this target audience. It is supported by more in-depth information, online videos demonstrating the business services available and testimonials from existing business customers.

Online Customer Reviews

Consistent with our strategy of putting the customer at the heart of our business, our online customer reviews continue to generate real-time feedback from customers as well as providing positive word of mouth to prospective customers. These customer reviews are now being pulled into Google's local search results and continue to be a powerful marketing asset to us.

The reviews indicate we are consistently delivering a very high standard of service:

· Over 4,300 reviews have been published

· Over 55% have awarded a score of 5 out of 5

· Our average rating is 4.5 out of 5

· Our average customer service score is 4.7 out of 5

In our view, real time customer reviews which have been independently and externally obtained are much more persuasive to prospects than scripted testimonials.

Search Engines

Search Engines continue to be the most important acquisition tool for us, accounting for nearly 70% of all traffic to the website. More investment has also been made in search engine optimisation ("SEO") techniques both on and off the site. This has enabled us to maintain the number one position for the popular search terms "storage" and "self storage" in the organic listings on Google. We will continue with this strategy targeting a wider range of relevant search terms for the business.

All stores have also been optimised within Google's local search functionality Google Places, allowing the relevant local Big Yellow stores to appear on a web user's search.

Social Media

Social media continues to be complementary to our existing marketing channels and we maintain a significant presence on all the major social media sites.

Over the past year the strategy for Facebook was to build a volume of interested fans which has now reached over 24,000. Facebook allows us to keep engaged with our target audiences, keeping the brand front of mind and to gather customer feedback. In addition, the Big Yellow You Tube channel is now being used to showcase our domestic and business store tours and customer testimonials.

We have also developed a substantial amount of online blog content aimed at anyone considering self storage. Advice and tips for packing, storage and de-cluttering are published weekly on the site and posted through our Facebook and Twitter channels. This provides useful and engaging content for visitors.

Driving online traffic

This year, we have continued online display advertising on sites visited by our target audiences. This activity performs both a direct response and branding role. Efficiencies in all online spend are continuing into 2011/12, ensuring return on investment is maximised from all our different online traffic sources.

Online targeting opportunities are now more sophisticated enabling us to target our core target audiences more effectively. Online marketing budgets will remain fluid and be directed towards the media with the best return on investment.

Sales Promotion

We have continued our sales promotion offer throughout the year of "50% off your first 8 weeks storage" across all stores, coupled with a Price Promise for comparable local competition. These two offers, managed alongside dynamic pricing, will remain our pricing policy for the year ahead.

Budget

During the year the Group spent approximately £2.8 million (4.5% of revenue) on marketing, up from £2.6 million in the previous year. We have increased the budget for the year ended 31 March 2012 to £2.9 million with a focus on driving our revenue through delivering more prospects to the website.

People

At Big Yellow we aim to provide a lively, fun and enjoyable working environment, without losing our commitment to delivering the very best standards of customer service.

We encourage a culture of partnership within the business and believe in staff participating in corporate performance through bonus schemes and share incentives. Many employees benefit from an HMRC approved Sharesave Scheme, which provides an opportunity to invest in the future success of Big Yellow at a discount to the prevailing share price at the date of each invitation. Our stakeholder pension scheme has been taken up by over two thirds of employees eligible to join and a voucher awards scheme is used extensively across the business to recognise and reward our staff's efforts and achievements.

We aim to promote employee wellbeing through a range of flexible working options which include flexitime, staggered hours, home working and sabbaticals. We provide a comprehensive range of medical support and advice though our occupational health providers and have arranged corporate gym membership on a national basis, as well as a Cycle to Work Scheme.

We continue to recognise the importance of communication and consultation with an annual spring conference, regular formal and informal meetings and quarterly newsletters and weekly operational updates. In addition, the Directors and senior management spend a significant amount of time in the stores and are accessible to employees at all levels. An annual Employee Attitude Survey provides management with key feedback and guidance as to where to focus their attention to further improve the working environment.

We had 301 full-time, part-time and casual employees in the business at the year end (2010: 287 employees) and recruiting and retaining the right calibre people remains critical to the continued success of the Company.

We promote the individual development of staff through training and regular performance appraisals and delivered just over 830 days training to employees in the last year, equating to an average of approximately 2.8 days training per employee. In the stores, nearly two thirds of the managerial posts have been filled by internal promotions.

Property and Development

During the year our property team has focused on obtaining the remaining self storage planning consents, building out selected sites within our development pipeline, and selling surplus land held in our balance sheet.

We believe the continuing difficulties in the banking and capital markets make access to capital required to fund growth more difficult and will slow down the growth in self storage store openings in the market generally. We believe that we are in a relatively strong position with our freehold property assets, with the proven ability to access more funding when the opportunity presents itself.

We now have a portfolio of 70 stores and sites of which 63 are currently open and a further 6 have planning consents, with planning negotiations ongoing at our site in central Manchester.

Development Pipeline

There are a further six freehold sites with planning for Big Yellow stores (including Stockport within Big Yellow Limited Partnership) to be developed. We also have a 4.5 acre development site in central Manchester where we are in planning discussions for a mixed use scheme incorporating a new Big Yellow store. The status of the development pipeline is summarised in the table below:

Wholly owned sites	Location	Status	Anticipated capacity
New Cross, South East London	Prominent location on Lewisham Way (A20), London	Under construction, planned opening April 2012	60,000 sq ft
Chiswick, West London	On the A4, high visibility from M4 flyover	Under construction, planned opening May 2012	75,000 sq ft
Gypsy Corner, West London	Highly visible site on A40 in Acton, West London	Consent granted	70,000 sq ft
Enfield, North London	Prominent site on the A10 Great Cambridge Road, London	Consent granted	60,000 sq ft
Guildford Central	Prime location in centre of Guildford on Woodbridge Meadows	Consent granted	56,000 sq ft

Manchester Central	Prime location on Water Street in central Manchester	Planning under negotiation	50,000 sq ft to 70,000 sq ft
Site within BYLP
Stockport	Prominent location visible from M60, Greater Manchester	Under construction, planned opening September 2011	60,000 sq ft

We expect to open two stores in the current financial year. Our wholly owned store at Eltham, on the junction roundabout of the South Circular and the A20, opened in April; the Partnership store at Stockport will open in September 2011.

The Group manages the construction and fit-out of its stores in-house, as we believe it provides both better control and quality, and we have an excellent record of building stores on time and within budget. The total construction spend in the year was £19.6 million, of which £11.2 million was in the wholly owned Group.

Corporate Social Responsibility

The Board employs a Corporate Social Responsibility Manager, who reports to the Board through the Operations Director. Our policy on Corporate Social Responsibility is set out on our website bigyellow.co.uk/csr.

Our CSR programme for 2011 committed to focus on our most significant environmental challenge of energy efficiency and carbon reduction. In order to achieve these objectives we:

- increased the roll-out of our store lighting energy efficiency re-lamping programmes to 41% of the estate;

- reduced store carbon intensity emissions by 2.1%;

- reduced Construction Fit Out carbon emissions by 63.5%;

- increased solar panel electricity generation by 20.6%;

- increased renewable energy generation by 11.5%; and

- generated 255 MWh of solar electricity and 398 MWh of cumulative renewable energy since 2008.

Business Objectives

Big Yellow is the leading self storage brand in the UK (YouGov Survey, September 2010), with national brand awareness of three times that of our nearest competitor. The Group continues to invest in developing quality assets at the premium end of the self storage market and to build on our brand leadership nationally. We intend to measure our progress by continuing to commission quantitative research each year.

Our main strategic objective is to grow the occupancy in our stores from the current level of 59.3% to 85% over the medium term. We will achieve this through:

- an unwavering focus on customer service;

- excellent operational and financial management;

- innovative and creative marketing;

- recruiting and retaining quality people in the business;

- an entrepreneurial and passionate culture, with accessible senior management encouraging innovation and dialogue throughout all levels of the business; and

- having stores located in visible, convenient and accessible locations.

Our other key objectives are:

- the selective build out of freehold stores in major urban conurbations throughout the UK, but focused principally on London; and

- mortgage financing secured against our prime freehold portfolio, and our Partnership with Pramerica.

Financing Objectives

Big Yellow's financing policy is to fund its current needs through a mix of debt, equity and cash flow to allow us to build out the existing portfolio and achieve our strategic growth objectives, which we believe improve returns for shareholders.

We aim to ensure that there are sufficient medium term facilities in place to finance our committed development programme, secured against the freehold portfolio, with debt serviced by our strong operational cash flows.

Risk Management

The management of risk is a fundamental part of how we have controlled the development of Big Yellow since its formation in September 1998, and the opening of our first purpose-built store in Richmond, London in May 1999. The principal areas of risk that the Group faces are considered below.

Self Storage Market Risk

The UK economy has continued its slow recovery from the recession. The demand for self storage has slowed since the liquidity crisis began in August 2007, however we believe that the structural need for self storage remains. We saw an increase in demand in the financial year, with move-ins in our wholly owned portfolio up 14% on the prior year.

Self storage is a relatively immature market in the UK compared to other self storage markets such as the United States and Australia, and we believe has further opportunity for growth. Awareness of self storage and how it can be used by domestic and business customers is relatively low throughout the UK, although higher in London. The rate of growth of branded self storage on main roads in good locations has historically been limited by the difficulty of acquiring sites at affordable prices and obtaining planning consent. The lack of availability of credit within the economy has further reduced this rate of growth since the start of the downturn.

Our performance during the downturn has been relatively resilient, although not immune. We believe that the resilience of our performance is due to a combination of factors including:

- a prime portfolio of freehold self storage properties;

- a firm focus on London and the South East, which has proved more resilient during the downturn;

- the strength of operational and sales management;

- continuing innovation to deliver the highest levels of customer service;

- the UK's leading self storage brand, with high public awareness; and

- strong cash flow generation and high operating margins.

Big Yellow only invests in prime storage locations, developing high quality self storage centres in the large urban conurbations where the drivers in the self storage market are at their strongest and the barriers to competition are at their highest. We have focused the business on London and the South East, and other large metropolitan cities, where we believe the drivers for and resilience of the product are strongest.

We have a large current storage customer base of approximately 33,000 spread across the portfolio of open stores and many thousands more who have used Big Yellow over the years. In any month, customers move in and out at the margin resulting in changes in occupancy. Despite the current economic environment, this has remained a seasonal business and typically we see growth over the spring and the summer months, with the seasonally weaker periods being the winter months.

The performance in terms of occupancy, revenue and EBITDA of our stores can be seen from the Portfolio Summary.

At 31 March 2011 the average length of stay for existing customers was 18.8 months; an increase from 18.6 months in the prior year. For the stores that have been open more than five years, the average length of stay increases to 21.9 months. For all customers, including those who have moved out of the business, the average length of stay has remained at 8.5 months. This translates into a loyal customer base. In our 32 established store portfolio, 38% of our customers have been storing with us for over three years. A further 15% of customers in these stores have been in the business for between one and three years.

That said, we have seen a small decline in the financial year of the length of stay of customers who moved out during the year. This fell to 7.6 months from 8.1 months for the year to 31 March 2010. This is consistent with the improving demand from customers using the product for relatively short periods of time, linked in the main to house moves and home improvements.

Property Risk

Big Yellow's management has significant experience in the property industry generated over many years and in particular in acquiring property on main roads in high profile locations and obtaining planning consents.

We do take planning risk where necessary, although the more distressed property market will in our view provide more opportunity to buy sites on a conditional basis. The planning process remains difficult with some planning consents taking in excess of twelve months to achieve, although given we have planning consent on all bar one site, the risk to the Group has reduced significantly from prior years.

We manage the construction of our properties very tightly. The building of each site is handled through a design and build contract, with the fit out project managed in-house using an established professional team of external advisors and sub-contractors who have worked with us for many years to our Big Yellow specification.

Treasury Risk

The Group borrows in sterling at floating rates of interest and uses swaps to hedge its interest rate exposure. The Group has derivatives in place to ensure at least 50% of our bank borrowings are hedged, the balance is left floating paying margin over LIBOR. At 31 March 2011, we had fixed rate swaps in place over 69% of our outstanding bank borrowings, including hedging of at least 70% of the investment tranche of our senior debt facility, as required by our loan documentation. The hedging expires in September 2015, two years beyond the expiry of the facility, thus providing interest rate risk mitigation when the facility is refinanced. The Group does not hedge account its interest rate derivatives, all movements in fair value are taken through the income statement. The Group regularly monitors its counterparty risk.

The Group monitors compliance with its banking covenants closely. During the year it complied with all its covenants, and is forecast to do so for the foreseeable future.

Our portfolio is relatively high yielding and we believe a flexible approach to our hedging is appropriate for our strategic aims, given our conservative balance sheet.

Interest Cover and Balance Sheet Risk

The Group reviews its current and forecast projections of cash flow, borrowing and interest cover as part of its monthly management accounts. In addition, an analysis of the impact of significant transactions is carried out regularly, as well as a sensitivity analysis assuming movements in interest rates and occupancy in the stores on gearing and interest cover.

Credit Risk

Our customers are required to pay a deposit when they start to rent a self storage room and are also required to pay in advance for their four-weekly storage charges. The Group is therefore not exposed to a significant credit risk. 77% of our current customers pay by direct debit; however of new customers moving into the business in the last year 84% have paid by direct debit. Businesses often prefer to pay by cheque or BACS. During the recession, we did not see an increase in the levels of bad debts and arrears. Our bad debt expense represents 0.12% of revenue in the year (2010: 0.17% of revenue).

Taxation Risk

The Group is exposed to changes in the tax regime affecting the cost of corporation tax, VAT and Stamp Duty Land Tax ("SDLT"). We regularly monitor proposed and actual changes in legislation with the help of our professional advisors, through direct liaison with HMRC, and through trade bodies to understand and, if possible, mitigate or benefit from their impact.

Real Estate Investment Trust ("REIT") Risk

The Group converted to a REIT in January 2007. The Group is therefore exposed to potential tax penalties or loss of its REIT status by failing to comply with the REIT legislation. The Group has internal monitoring procedures in place to ensure that the appropriate rules and legislation are complied with. To date all REIT regulations have been complied with.

Human Resources Risk

Our staff are key to our success and we are exposed to a risk of high staff turnover, and a risk of the loss of key personnel. We have developed a professional, lively and enjoyable working environment and believe our success stems from attracting and retaining the right people. We encourage all our staff to build on their skills through appropriate training and regular performance reviews. We believe in an accessible and open culture and everyone at all levels is encouraged to review and challenge accepted norms, so as to contribute to the performance of the Group.

Reputational Risk

Big Yellow's reputation with all its stakeholders is something we value highly and will always look to protect and enhance. We aim to communicate clearly with our customers, suppliers, local authorities and communities, employees and shareholders and to listen to and take account of their views. Big Yellow's intranet and website are important avenues of communication for both employees and shareholders.

Security Risk

The safety and security of our customers and stores remains a key priority. To achieve this we invest in state of the art access control systems, individual room alarms, digital CCTV systems, intruder and fire alarm systems and the remote monitoring of all our stores out of our trading hours.

We have implemented customer security procedures in line with advice from the Police and continue to work with the regulatory authorities on issues of security, reviewing our operational procedures regularly. The importance of security and the need for vigilance is communicated to all store staff and reinforced through training and routine operational procedures. We have continued to run courses for all our staff to enhance the awareness and effectiveness of our procedures in relation to security.

Big Yellow Group PLC

Financial Review

Financial Results

Revenue for the year was £61.9 million, an increase of £3.9 million (7%) from £58.0 million in the prior year. Revenue from our stores increased by 8% in the year. The overall increase in revenue was lower due to a fall in construction fees earned from Big Yellow Limited Partnership, and a reduction in tenant income on sites where we have started development. Other sales (included within the above), comprising the selling of packing materials, insurance and storage related charges, represented 17.4% of storage income for the year (2010: 17.7%) and generated revenue of £8.8 million for the year, up 7% from £8.3 million in 2010.

Store revenue for the fourth quarter increased by 7% to £14.7 million from £13.7 million for the same quarter last year. Store revenue in the seasonally weaker second half of the year was £29.7 million, compared to £29.9 million for the first half of the year, and up 7% from £27.7 million for the second half of the year ended 31 March 2010. Annualised store revenue at 31 March 2011 was £60.0 million, an increase of 7% from £56.0 million at 31 March 2010.

The EBITDA margin for the 32 established stores was 65% (2010: 64%), the EBITDA margin for the 19 lease-up stores grew from 44% to 56%. There was an increase in revenue of 3% for the 32 established stores and 24% for the 19 lease-up stores. The table below illustrates the performance of the 32 established stores and the lease-up stores during the year.

Wholly owned store performance	Capacity	Occupancy		Revenue		EBITDA
	000 sq ft	31 Mar 11 000 sq ft	31 Mar 10 000 sq ft	31 Mar 11 £000	31 Mar 10 £000	31 Mar 11 £000	31 Mar 10 £000
32 established stores	1,941	1,381	1,350	42,558	41,346	27,522	26,649
19 lease-up stores	1,288	534	448	17,064	13,788	9,604	6,099
Total	3,229	1,915	1,798	59,622	55,134	37,126	32,748

Of the 19 lease-up stores, three stores opened before 31 March 2006, six stores opened in the year ended 31 March 2007, six stores opened in the year ended 31 March 2008 and four have opened since 1 April 2008.

The Group made a profit before tax in the year of £6.9 million, compared to £10.2 million in the prior year. This reduction in Group profitability reflects the decrease in the valuation of the Group's open stores partially offset by the improved adjusted profit.

After adjusting for the loss on the revaluation of investment properties and other matters shown in the table below the Group made an adjusted profit before tax in the year of £20.2 million, up 22% from £16.5 million in 2010.

Profit before tax analysis	2011 £m	2010 £m
Profit before tax	6.9	10.2
Loss on revaluation of investment properties	16.0	3.6
Movement in fair value on interest rate derivatives	(0.2)	2.7
Net (gains)/losses on surplus land	(0.1)	2.0
Share of non-recurring gains in associate	(2.4)	(2.0)
Adjusted profit before tax	20.2	16.5

The movement in the adjusted profit before tax from the prior year is illustrated in the table below:

	£m
Adjusted profit before tax - March 2010	16.5
Increase in gross profit	3.3
Increase in administrative expenses	(0.3)
Reduction in net interest payable	0.1
Increase in capitalised interest	0.6
Adjusted profit before tax - March 2011	20.2

Basic earnings per share for the year were 5.34p (2010: 8.11p) and fully diluted earnings per share were 5.29p (2010: 8.03p). Diluted EPRA earnings per share based on adjusted profit after tax was up 19% to 15.49p (2010: 12.99p) (see note 12).

Operating costs

Cost of sales comprise principally of the direct store operating costs, including store staff salaries, utilities, business rates, insurance, an allocation of the central marketing budget, and repairs and maintenance. We have continued with our programme of cost control in the Group; direct store operating costs, including leasehold rent, have increased by 1% reflecting wage restraint, a more efficient use of marketing costs and rates rebates. We saw an increase in business rates that were applied from the Rating Revaluation effective from April 2010, particularly in our London stores, where the Crossrail levy was applied. Our rates costs have increased by £0.4 million year on year, and we expect to see a similar increase in the forthcoming financial year. That said, the operating costs in the 19 lease-up stores have fallen in the year following rebates on a couple of stores where we have agreed an assessment with the Valuation Office below the original rateable value.

Administrative expenses were £7.2 million compared to £6.9 million in 2010, an increase of 4%. Salary increases at head office were held at 2%, however we have seen general inflationary pressures and additional one-off costs, including recruiting a replacement head of marketing, and an additional Non-Executive Director.

Interest Expense on Bank Borrowings

The gross bank interest expense for the year reduced to £11.1 million from £11.4 million in 2010 reflecting a lower level of average drawn debt in the year. The average cost of borrowing during the year was 3.6%, in line with the prior year.

Total interest payable has decreased in the income statement from £12.3 million to £11.3 million following the reduction in debt as above, and an increase in the level of capitalised interest in the year. Capitalised interest increased from £0.3 million in the prior year to £0.9 million in the current year, with construction taking place on three sites during the year, compared to only one site in the prior year.

REIT Status

The Group converted to a Real Estate Investment Trust ("REIT") in January 2007. Since then the Group has benefited from a zero tax rate on the Group's qualifying self storage earnings. The Group only pays tax on the profits attributable to our residual business, comprising primarily of the sale of packing materials and insurance, and fees earned from Big Yellow Limited Partnership and from the management of the Armadillo portfolio.

REIT status gives the Group exemption from UK corporation tax on profits and gains from its qualifying portfolio of UK stores. Future revaluation gains on these developments and our existing open stores will be exempt from corporation tax on capital gains, provided certain criteria are met.

The Group has a rigorous internal system in place for monitoring compliance with criteria set out in the REIT regulations. On a monthly basis, a report to the Board on compliance with these criteria is carried out. To date, the Group has complied with all REIT regulations, including forward looking tests.

Taxation

There is no cash tax payable for the year, due to tax relief arising from the restructuring of interest rate derivatives in 2009. There is no tax charge for the year ended 31 March 2011 (2010: £nil).

Dividends

REIT regulatory requirements determine the level of Property Income Dividend ("PID") payable by the Group. On the basis of the full year distributable reserves for PID purposes, a PID of 4 pence per share is payable (31 March 2010: nil PID).

The Board is recommending the payment of a final dividend of 5 pence per share. The table below summarises the declared dividend for the year:

Dividend (pence per share)	31 March 2011	31 March 2010
Interim dividend - PID	2p	nil p
- discretionary	2p	nil p
- total	4p	nil p

Final dividend - PID	2p	nil p
- discretionary	3p	4p
- total	5p	4p

Total dividend - PID	4p	nil p
- discretionary	5p	4p
- total	9p	4p

Subject to approval by shareholders at the Annual General Meeting to be held on 18 July 2011, the final dividend will be paid on 20 July 2011 to shareholders on the Register on 10 June 2011.

Financing and Treasury

The Group is strongly cash generative and draws down from its longer term committed facilities as required to meet obligations.

A summary of the cash flow for the year is set out in the table below:

	Year ended 31 March 2011 £000	Year ended 31 March 2010 £000

Cash flow from operations	34,925	31,271
Finance costs (net)	(11,391)	(12,208)
Free cash flow	23,534	19,063
Capital expenditure	(13,395)	(14,388)
Asset sales	4,497	1,927
Investment in associate	(1,000)	(1,500)
Cash flow after investing activities	13,636	5,102

Ordinary dividends	(10,328)	-
Issue of share capital	27	33,634
Decrease in borrowings	(25,000)	(11,339)

Net cash (outflow)/inflow	(21,665)	27,397

Opening cash and cash equivalents	30,619	3,222
Closing cash and cash equivalents	8,954	30,619
Debt	(275,000)	(300,000)
Net debt	(266,046)	(269,381)

Free cash flow pre-capital expenditure increased to £23.5 million for the year (2010: £19.1 million). In the year capital expenditure outflows were £13.4 million, down from £14.4 million in the prior year. The cash flow after investing activities was a net inflow of £13.6 million in the year, compared to an inflow of £5.1 million in 2010.

Balance Sheet

Property

The Group's 51 wholly owned stores and seven stores under development at 31 March 2011, which are classified as investment properties, have been revalued by Cushman & Wakefield ("C&W") and this has resulted in an investment property asset value of £792.1 million, comprising £698.5 million (88%) for the 44 freehold (including one long leasehold) open stores, £47.3 million (6%) for the seven short leasehold open stores and £46.3 million (6%) for the seven investment properties under construction.

Analysis of property portfolio	No of locations	Value at 31 March 2011 £m	Revaluation movement in year £m
Investment property	51	745.8	(17.3)
Investment property under construction	7	46.3	1.3
Investment property total	58	792.1	(16.0)
Surplus land	6	17.6	-
Total	64	809.7	(16.0)

Investment property

Each store is reviewed and valued individually by Cushman & Wakefield LLP, who are the valuers to a significant proportion of the UK and European self storage market.

The value of the investment property portfolio at 31 March 2011 was £745.8 million, down £15.8 million from £761.6 million at 31 March 2010. The represents a 2.1% fall, of which we estimate 0.5% is a function of capital movements, including an increase in the purchaser's cost assumption to 5.80% from 5.75%. The balance of 1.6% is due to operational factors. This is principally caused by three reasons: there has been an increase in operating costs assumed in the cash flows, principally down to business rates; the long term rental growth assumptions have been reduced to reflect the current trading patterns and the stabilised occupancy level assumed in the valuations has fallen from 84.2% to 83.1%. The valuation is based on an average occupancy over the 10 year cash flow period of 78.2% across the whole portfolio. Between April 2004 and March 2008, the 32 established stores had an average occupancy of 83%.

The fall in valuation on the 44 freehold stores was 1.7%, with the seven short leasehold stores showing a fall in valuation of 7.6%.

The initial yield pre-administration expenses assuming no rental growth is 5.2% rising to a stabilised yield of 8.4% (March 2010: 8.4%). The 32 established stores that were mature in 2007 are assumed to return to stabilised occupancy in 37 months on average. The 19 lease-up stores, the majority of which have opened in the past three years, are assumed to reach stabilised occupancy in 49 months on average.

Investment property under construction

The seven wholly owned development sites have increased in value by £12.3 million, £11.0 million relating to capital expenditure incurred, with the balance of £1.3 million a revaluation surplus. The valuation uplift of the development site in Big Yellow Limited Partnership was in line with capital expenditure incurred. C&W's forecast valuations for when the Group assets have reached stabilised occupancy, including assumptions in relation to revenue and operating cost growth within these assets, are currently pointing to a revaluation surplus on total development cost of £84.4 million on the six wholly owned development sites with planning consent and £7.4 million on the site within Big Yellow Limited Partnership.

In their report to us, our valuers, Cushman and Wakefield have drawn attention to valuation uncertainty resulting from a lack of transactions in the self storage investment market. Please see note 14 for further details.

Purchasers' cost adjustment

As in prior years, we have instructed an alternative valuation on our assets using a purchaser's cost assumption of 2.75% (see note 14 for further details) to be used in the calculation of our adjusted diluted net asset value. This Red Book valuation on the basis of 2.75% purchaser's costs, results in a higher property valuation at 31 March 2011 of £827,970,000 million (£35,820,000 higher than the value recorded in the financial statements). The valuations in Big Yellow Limited Partnership are £4,990,000 higher than the value recorded in the financial statements, of which the Group's share is £1,663,000. The sum of these is £37,483,000 and translates to 28.5 pence per share.

The revised valuation translates into an adjusted net asset value per share of 449.8 pence (2010: 453.3 pence) after the dilutive effect of outstanding share options.

Surplus land

These are sites which the Directors do not intend to develop into self storage centres. The sites are held at the lower of cost and net realisable value and have not been externally valued. The Directors have assessed the carrying value of these sites. In prior years, a provision of £9.2 million was made against these sites, representing approximately a third of the cost of the land. The Group's received £4.5 million during the year from the disposal of surplus land; £3.3 million from the disposal of our surplus site in Clapham North; and the £1.2 million deferred consideration from the disposal of our surplus land in Twickenham.

Movement in adjusted NAV

The year on year movement is illustrated in the table below:

Movement in adjusted net asset value	Equity shareholders' funds	EPRA adjusted NAV per share
1 April 2010	593,756	453.3
Adjusted profit	20,207	15.4
Equity dividends paid	(10,328)	(7.9)
Revaluation movements (including share of BYLP)	(13,798)	(10.5)
Movement in purchasers' cost adjustment	356	0.3
Other movements (eg share options)	1,204	(0.8)

31 March 2011	591,397	449.8

Borrowings

We focus on improving our cash flows and we currently have healthy Group interest cover of 2.8 times based on Group EBITDA against existing interest costs, allied to a relatively conservative debt structure secured principally against the freehold estate.

The Group has a £325 million senior debt facility in place until 15 September 2013, provided by a syndicate of four banks.

Bank	Participation at 31 March 2011	Participation at 31 March 2010
HSH Nordbank AG	£150 million	£200 million
Lloyds TSB Bank plc	£100 million	£100 million
HSBC Bank plc	£50 million	£25 million
Santander	£25 million	£nil

The facility is divided into two tranches, Tranche A, up to a maximum of £50 million is used to finance non-stabilised properties within the Group and carries a margin of 150 bps. Tranche B is used to finance stabilised Group properties, and carries a margin of between 112.5 bps and 150 bps dependent on the Tranche B income cover. The Group is currently paying a margin of 112.5 bps on this Tranche. As the properties within Tranche A stabilise they may be transferred to Tranche B, reducing the margin payable. There is no loan to value covenant on the facility.

The Group was comfortably in compliance with its covenants at 31 March 2011, as illustrated in the table below.

	Covenant	At 31 March 2011
Minimum income cover on Tranche B properties*	1.4x	3.88x
Minimum net assets	£250 million	£544.9 million
Maximum gross loan to net assets gearing	1.3:1	0.50:1

* The income cover covenant rises to 1.5x from September 2011

The Group has £59 million of cash and undrawn bank facilities and relatively conservative levels of gearing. The Group currently has a net debt to gross property assets ratio of 33%, and a net debt to adjusted net assets ratio of 45%.

£190 million of the Group's debt is hedged by way of interest rate swaps to September 2015, two years beyond the expiry of the current debt facility. £120 million of this is fixed at 2.99% (excluding margin). The remaining £70 million is fixed at 3.93% (excluding margin). At 31 March 2011 we had floating rate debt of £85 million, on which we are paying one month LIBOR plus applicable margin. The interest rate profile of the Group's debt is shown in the table below:

	Amount of debt 2011	Weighted average interest cost at 31 March 2011	Weighted average interest cost at 31 March 2010

Fixed (to September 2015)	£190 million	4.5%	4.5%
Variable	£85 million	1.7%	1.7%
Total	£275 million	3.6%	3.5%

At 31 March 2011, the fair value on the Group's interest rate derivatives was a liability of £7.8 million. A gain of £0.2 million has been credited to the income statement to reflect the movement from the prior year. The Group does not hedge account its interest rate derivatives. As recommended by EPRA (European Public Real Estate Association), the fair value movements are eliminated from adjusted profit before tax, diluted EPRA earnings per share, and adjusted net assets per share.

Treasury continues to be closely monitored and its policy approved by the Board. We maintain a keen watch on medium and long term rates and the Group's policy in respect of interest rates is to maintain a balance between flexibility and hedging of interest rate risk.

Cash deposits are only placed with approved financial institutions in accordance with the Group's policy.

Share Capital

The share capital of the Company totalled £13.1 million at 31 March 2011 (2010: £13.1 million), consisting of 131,060,522 ordinary shares of 10p each (2010: 130,990,837 shares).

Shares issued for the exercise of options during the period amounted to 69,685 at an average exercise price of 34p.

The Group holds 1,905,000 of its shares within an Employee Benefit Trust ("EBT"). These shares are shown as a debit in reserves and are not included in calculating net asset value per share.

	2011 No.	2010 No.

Opening shares	130,990,837	115,592,541
Shares issued in placing	-	11,549,000
Shares issued to EBT	-	1,090,000
Shares issued for the exercise of options	69,685	2,759,296

Closing shares in issue	131,060,522	130,990,837
Shares held in EBT and Treasury	(1,905,000)	(1,905,000)

Closing shares for NAV purposes	129,155,522	129,085,837

71,869,364 shares were traded in the market during the year ended 31 March 2011 (2010: 113,703,496). In the prior year there were two significant placings totalling approximately 23 million shares. The average mid market price of shares traded during the year was 320.0p with a high of 353.3p and a low of 284.4p.

At 31 March 2011 there were 86,351 shares subject to share option awards to employees of the Group at a weighted average strike price of 92p. In addition there are 1,361,082 nil paid options, granted under the Group's LTIP scheme and 302,599 share options granted under the Group's SAYE scheme at a weighted average strike price of 173p.

Big Yellow Limited Partnership

Big Yellow Limited Partnership, a joint venture with Pramerica Real Estate Investors Limited, owns self storage centres and development sites in the Midlands, the North, Scotland and four towns in the South. In the consolidated accounts of Big Yellow Group PLC, the Partnership is treated as an associate. We have adopted equity accounting for the Partnership, so that our share of the Partnership's results are disclosed in operating profit and our net investment is shown in the balance sheet within "Investment in Associate". We have provided in note 13d the balance sheet and income statement of the Partnership, along with the Group's share of the income statement captions.

The table below shows the split of stores and development sites between the Group and the Partnership:

At 31 March 2011	Big Yellow (wholly owned)	Big Yellow Limited Partnership	Total
No of stores trading	51	11	62
No of stores under development	7	1	8
Total number of stores and sites	58	12	70

Development sites with planning consent	6	1	7

Open store capacity	3.23 million sq ft	0.68 million sq ft	3.91 million sq ft
Development site capacity	0.46 million sq ft	0.06 million sq ft	0.52 million sq ft
Total planned capacity	3.69 million sq ft	0.74 million sq ft	4.43 million sq ft

Structure

The Group and Pramerica have committed equity in a one third, two thirds split respectively. The Board of the Partnership comprises two representatives of both Pramerica and Big Yellow. Pramerica have the casting vote over the approval of the Partnership's annual business plan.

The anticipated remaining capital expenditure on the remaining site in the Joint Venture is £3.9 million. This will take the number of stores in the Partnership to 12 and the Partners have resolved not to develop any further stores. Our total further commitment required to fund both the outstanding capital expenditure and trading losses to break even is estimated at £2 million.

The Group earns certain property acquisition, planning, construction and operational fees from the Partnership. For the year to 31 March 2011, these fees amounted to £0.9 million (2010: £1.2 million).

Funding

A five year term development loan of £68 million is in place from the Royal Bank of Scotland plc and HSBC Bank plc to further fund the Partnership. The original loan available was £75 million, but this was reduced by £7 million in the year at the Partners' request, as projections showed the full amount of the loan would not be drawn. £62.7 million of this loan had been drawn at 31 March 2011.

The Partnership's policy is to fix at least 50% of drawn amounts to 30 June 2013 (as required in its facility agreement), and to leave the balance benefiting from the currently low levels of short term interest rates. £31.8 million of the £62.7 million drawn down at 31 March 2011 has been fixed to 30 June 2013 at a weighted average interest cost post margin of 5.5%. The weighted average interest cost of the overall facility at 31 March 2011 was 4.3% including margin.

Results

For the year ended 31 March 2011, the Partnership made a profit of £5.5 million (2010: £4.0 million), of which Big Yellow's share was £1.8 million (2010: £1.3 million). The operating profit of the Partnership was £0.2 million (2010: operating loss of £0.8 million), with the majority of the stores being profitable at the operating level. After adjusting for non-recurring items (revaluation gains of £6.7 million, and fair value gain on interest rate derivatives of £0.6 million), the Partnership made an adjusted loss of £1.9 million (2010: adjusted loss of £2.0 million), of which the Group's share is £0.6 million (2010: share of loss of £0.7 million). The Partnership is tax transparent, so the limited partners are taxed on any profits.

Big Yellow has an option to purchase the assets contained within the Partnership or the interest in the Partnership which it does not own exercisable from 31 March 2013. On exit whether by way of exercise of the option or a sale to a third party, Big Yellow is entitled to certain promotes, which could result in Big Yellow sharing in the surplus created in the Partnership ahead of its equity participation.

PORTFOLIO SUMMARY - WHOLLY OWNED STORES

Wholly owned stores ⁽¹⁾	March 2011 Established	March 2011 Lease-up	March 2011 Total	March 2010 Established	March 2010 Lease-up	March 2010 Total
Number of stores	32	19	51	32	19	51
At 31 March
Total capacity (sq ft)	1,941,000	1,288,000	3,229,000	1,942,000	1,285,000	3,227,000
Occupied space (sq ft)	1,381,000	534,000	1,915,000	1,350,000	448,000	1,798,000
Percentage occupied	71.1%	41.5%	59.3%	69.5%	34.9%	55.7%
Net rent per sq ft	£26.34	£27.92	£26.78	£26.44	£27.52	£26.85
Annualised revenue (£000)	42,154	17,801	59,955	40,995	15,005	56,000
For the year
Average occupancy	71.6%	38.8%	58.5%	70.0%	32.5%	55.1%
Average annual rent psf	£26.32	£28.22	£26.82	£26.12	£26.97	£26.31
	£000	£000	£000	£000	£000	£000
Self storage income	36,589	14,101	50,690	35,504	11,259	46,763
Other storage related income ⁽²⁾	5,908	2,936	8,844	5,773	2,509	8,282
Ancillary store rental income	61	27	88	69	20	89
Total store revenue	42,558	17,064	59,622	41,346	13,788	55,134
Direct store operating costs (excluding depreciation) ⁽³⁾	(13,046)	(7,415)	(20,461)	(12,780)	(7,644)	(20,424)
Short and long leasehold rent⁽⁴⁾	(1,990)	(45)	(2,035)	(1,917)	(45)	(1,962)
Store EBITDA⁽⁵⁾	27,522	9,604	37,126	26,649	6,099	32,748
Store EBITDA margin⁽⁶⁾	65%	56%	62%	64%	44%	59%
Cumulative capital expenditure	£m	£m	£m
To 31 March 2011	161.5	186.9	348.4
To complete	-	3.7	3.7
Total capital expenditure	161.5	190.6	352.1

(1) The 32 established stores are those that had reached stabilisation as a portfolio in 2007 prior to the economic downturn. The lease-up stores have yet to trade at their stabilised occupancy levels. Of the 19 lease-up stores, three stores opened before 31 March 2006, six stores opened in the year ended 31 March 2007, six stores opened in the year ended 31 March 2008 and four have opened since 1 April 2008.

(2) Packing materials, insurance and other storage related fees.

(3) Includes direct marketing costs and customer support centre costs allocated across the portfolio of Big Yellow stores

(4) Rent for seven established short leasehold properties accounted for as investment properties and finance leases under IFRS with total self storage capacity of 431,000 sq ft, and a long leasehold lease-up store with a capacity of 64,000 sq ft.

(5) Earnings before interest, tax, depreciation and amortisation.

(6) Of the established stores, the seven leasehold stores achieved a store EBITDA of £4.5 million and EBITDA margin of 45%. The 25 freehold stores achieved a store EBITDA of £23.0 million and EBITDA margin of 71%.

PORTFOLIO SUMMARY - BIG YELLOW LIMITED PARTNERSHIP STORES

	March 2011	March 2010

Number of stores	11	9
At 31 March
Total capacity (sq ft)	683,000	556,000
Occupied space (sq ft)	215,000	117,000
Percentage occupied	31.5%	21.0%
Net rent per sq ft	£18.70	£18.99
Annualised revenue (£000)	5,066	2,823
For the year
Average occupancy	25%	14%
Average annual rent psf	£19.01	£18.06
	£000	£000
Self storage income	3,211	1,417
Other storage related income	919	462
Ancillary store rental income	4	1
Total store revenue	4,134	1,880
Direct store operating costs (excluding depreciation)	(3,181)	(2,178)
Store EBITDA	953	(298)
Store EBITDA Margin	23%	(16%)
Cumulative capital expenditure ⁽¹⁾
To 31 March 2011	95.6
To complete	3.0
Total capital expenditure	98.6

(1) This cost includes Leeds which was acquired by the Partnership as an open store in November 2007.

Big Yellow Group PLC

Consolidated Statement of Comprehensive Income

Year ended 31 March 2011


	Note	2011 £000	2010 £000

Revenue	3	61,885	57,995
Cost of sales		(22,669)	(22,067)

Gross profit		39,216	35,928

Administrative expenses		(7,158)	(6,860)

Operating profit before gains and losses on property assets		32,058	29,068
Loss on the revaluation of investment properties	13a,14	(16,039)	(3,558)
Gains/(losses) on surplus land	15	71	(2,073)

Operating profit		16,090	23,437
Share of profit of associate	13d	1,826	1,320
Investment income - interest receivable	7	114	386
- fair value movement of derivatives	7,18	197	-
Finance costs - interest payable	8	(11,326)	(12,259)
- fair value movement of derivatives	8, 18	-	(2,675)

Profit before taxation		6,901	10,209
Taxation	9	-	-

Profit for the year (attributable to equity shareholders)	5	6,901	10,209

Total comprehensive income for the period attributable to equity shareholders		6,901	10,209

Basic earnings per share	12	5.34p	8.11p

Diluted earnings per share	12	5.29p	8.03p

EPRA earnings per share are shown in Note 12.

All items in the income statement relate to continuing operations.

Big Yellow Group PLC

Consolidated Balance Sheet

31 March 2011

	Note	2011 £000	2010 £000
Non-current assets
Investment property	13a	745,840	761,570
Investment property under construction	13a	46,310	33,960
Development property	13a	-	-
Interests in leasehold property	13a	21,244	21,998
Plant, equipment and owner-occupied property	13b	2,674	2,833
Goodwill	13c	1,433	1,433
Investment in associate	13d	14,931	12,105

		832,432	833,899
Current assets
Surplus land	15	17,633	20,237
Inventories		319	295
Trade and other receivables	16	11,540	11,097
Cash and cash equivalents		8,954	30,619

		38,446	62,248

Total assets		870,878	896,147

Current liabilities
Trade and other payables	17	(22,718)	(19,459)
Obligations under finance leases	21	(1,947)	(1,958)

		(24,665)	(21,417)
Non-current liabilities
Derivative financial instruments	18	(7,783)	(7,980)
Bank borrowings	19	(273,230)	(297,816)
Obligations under finance leases	21	(19,297)	(20,040)
Other payables	17	(954)	(1,609)

		(301,264)	(327,445)

Total liabilities		(325,929)	(348,862)

Net assets		544,949	547,285

Equity
Called up share capital	22	13,106	13,099
Share premium account		43,404	43,384
Reserves		488,439	490,802

Equity shareholders' funds		544,949	547,285

The financial statements were approved by the Board of Directors and authorised for issue on 23 May 2011. They were signed on its behalf by:

James Gibson, Director John Trotman, Director

Company Registration No. 03625199

Big Yellow Group PLC

Consolidated Statement of Changes in Equity

Year ended 31 March 2011

	Share capital £000	Share premium account £000	Capital redemption reserve £000	Retained earnings £000	Other distributable reserve £000	Own shares £000	Total £000

At 1 April 2010	13,099	43,384	1,653	460,672	30,373	(1,896)	547,285
Total comprehensive income for the period	-	-	-	6,901	-	-	6,901
Issue of share capital	7	20	-	-	-	-	27
Dividend	-	-	-	(10,328)	-	-	(10,328)
Credit to equity for equity-settled share based payments	-	-	-	1,064	-	-	1,064

At 31 March 2011	13,106	43,404	1,653	458,309	30,373	(1,896)	544,949

The other distributable reserve arose from merger relief under S612 of Companies Act 2006, following the Group's placing of 11.5 million shares in the prior year.

Year ended 31 March 2010

	Share capital £000	Share premium account £000	Capital redemption reserve £000	Retained earnings £000	Other distributable reserve £000	Own shares £000	Total £000

At 1 April 2009	11,559	41,663	1,653	449,338	-	(1,896)	502,317
Total comprehensive income for the period	-	-	-	10,209	-	-	10,209
Issue of share capital	1,540	1,721	-	-	30,373	-	33,634
Credit to equity for equity-settled share based payments	-	-	-	1,125	-	-	1,125

At 31 March 2010	13,099	43,384	1,653	460,672	30,373	(1,896)	547,285

Big Yellow Group PLC

Consolidated Cash Flow Statement

Year ended 31 March 2011

	Note	2011 £000	2010 £000
Operating profit		16,090	23,437
Loss on the revaluation of investment properties	13a, 14	16,039	3,558
(Gains)/losses on surplus land	15	(71)	2,073
Depreciation	13b	611	631
Depreciation of finance lease capital obligations	13a	910	815
Employee share options	6	1,641	1,664
(Increase)/decrease in inventories		(24)	43
Increase in receivables		(1,945)	(1,233)
Increase in payables		1,674	283

Cash generated from operations		34,925	31,271

Interest paid		(11,806)	(12,292)
Interest received		415	84

Cash flows from operating activities		23,534	19,063

Investing activities

Sale of surplus land		4,497	1,927
Purchase of non-current assets		(11,864)	(13,213)
Additions to surplus land		(621)	(360)
Investment in associate	13d	(1,000)	(1,500)

Cash flows from investing activities		(8,988)	(13,146)

Financing activities
Issue of share capital		27	33,634
Payment of finance lease liabilities	13a	(910)	(815)
Equity dividends paid	11	(10,328)	-
Reduction in borrowings		(25,000)	(11,339)

Cash flows from financing activities		(36,211)	21,480

Net (decrease)/increase in cash and cash equivalents		(21,665)	27,397

Opening cash and cash equivalents		30,619	3,222

Closing cash and cash equivalents		8,954	30,619

Big Yellow Group PLC

Reconciliation of Net Cash Flow to Movement in Net Debt

Year ended 31 March 2011

	Note	2011 £000	2010 £000

Net (decrease)/increase in cash and cash equivalents in the year		(21,665)	27,397
Cash outflow from decrease in debt financing		25,000	11,339

Change in net debt resulting from cash flows		3,335	38,736

Movement in net debt in the year		3,335	38,736
Net debt at the start of the year		(269,381)	(308,117)

Net debt at the end of the year	18	(266,046)	(269,381)

Big Yellow Group PLC

Notes to the financial statements

Year ended 31 March 2011

1. General information

Big Yellow Group PLC is a Company incorporated in Great Britain under the Companies Act 2006. The address of the registered office is 2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT. The nature of the Group's operations and its principal activities are set out in note 4 and in the Business Review.

These financial statements are presented in pounds sterling because that is the currency of the economic environment in which the Group operates.

2. BASIS OF PREPARATION

The condensed set of financial statements set out above (which was approved by the Board on 23 May 2011) has been compiled in accordance with IFRS, but does not contain sufficient information to constitute a full set of IFRS financial statements. This financial information does not constitute the Company's statutory accounts for the years ended 31 March 2010 and 31 March 2011, but is derived from those accounts. Those accounts give a true and fair view of the assets, liabilities, financial position and profit and loss of the Company and the undertakings included in the consolidation taken as a whole. The Company's statutory accounts for the year ended 31 March 2010 have been filed with the Registrar of Companies. The Company's statutory accounts for the year ended 31 March 2011 will be filed with the Registrar of Companies following the Annual General Meeting. The auditors' reports on both the 2010 and 2011 accounts were unqualified; did not draw attention to any matters by way of emphasis; and did not contain statements under s498(2) or (3) Companies Act 2006 or preceding legislation.

The statutory accounts have been prepared in accordance with International Financial Reporting Standards (IFRS) adopted for use in the European Union and therefore comply with Article 4 of the EU IAS Regulation and with those parts of the Companies Act 2006 that are applicable to companies reporting under IFRS. The Group has applied all accounting standards and interpretations issued by the International Accounting Standards Board and International Financial Reporting Interpretations Committee as endorsed by the EU relevant to its operations and effective for accounting periods beginning on 1 April 2010. The same accounting policies as applied in the Group's statutory accounts for the year ended 31 March 2010 have been applied in this condensed set of financial statements.

3. Revenue

Analysis of the Group's operating revenue can be found below and in the Portfolio Summary.

	2011 £000	2011 £000	2010 £000	2010 £000

Open stores
Self storage revenue	50,690		46,763
Other storage related revenue	8,844		8,282
Ancillary store rental revenue	88		89

		59,622		55,134
Stores under development
Non-storage income	937		1,232

		937		1,232
Fee income
Fees earned from Big Yellow Limited Partnership	920		1,198
Other management fees earned	406		406
Franchise fees received	-		25

		1,326		1,629

Revenue per income statement		61,885		57,995

Investment income (see note 7)		114		386

Total revenue per IAS 18		61,999		58,381

Non-storage income derives principally from rental income earned from tenants of properties awaiting development.

4. Segmental Information

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance. Given the nature of the Group's business, there is one segment, which is the provision of self storage accommodation and related services.

Revenue represents amounts derived from the provision of self storage accommodation and related services which fall within the Group's ordinary activities after deduction of trade discounts and value added tax. The Group's net assets, revenue and profit before tax are attributable to one activity, the provision of self storage accommodation and related services. These all arise in the United Kingdom in the current year and prior year.

5. Profit for the year

a) Profit for the year has been arrived at after charging/(crediting):

	2011 £000	2010 £000

Depreciation of plant, equipment and owner-occupied property	611	631
Finance lease depreciation	910	815
Decrease in fair value of investment property	16,039	3,558
(Gains)/losses on surplus land	(71)	2,073
Cost of inventories recognised as an expense	822	764
Employee costs (see note 6)	9,867	9,649
Operating lease rentals	87	80
Auditors' remuneration for audit services (see below)	165	160

b) Analysis of auditors' remuneration:

	2011 £000	2010 £000

Fees payable to the Company's auditors for the audit of the Company's annual accounts	158	153
Other services - audit of the Company's subsidiaries' annual accounts	7	7

Total audit fees	165	160

Tax services - compliance	30	26
Tax services - advisory	62	47
Other services	50	30
Drivers Jonas Deloitte real estate advice	16	-

Total non-audit fees	158	103

Fees payable to Deloitte LLP and their associates for non-audit services to the Company are not required to be disclosed because the consolidated financial statements are required to disclose such fees on a consolidated basis.

6. Employee costs

The average monthly number of full-time equivalent employees (including Executive Directors) was:

	2011 Number	2010 Number

Sales	229	209
Administration	44	43

	273	252

At 31 March 2011 the total number of Group employees was 301 (2010: 287).
	2011 £000	2010 £000
Their aggregate remuneration comprised:
Wages and salaries	7,133	6,948
Social security costs	768	719
Other pension costs	325	318
Share-based payments	1,641	1,664

	9,867	9,649

7. INVESTMENT INCOME

	2011 £000	2010 £000

Interest receivable	114	386
Change in the fair value of interest rate derivatives	197	-

	311	386

8. FINANCE COSTS

	2011 £000	2010 £000

Interest on bank borrowings	11,074	11,379
Capitalised interest	(878)	(268)
Interest on obligations under finance leases	1,123	1,147
Other interest payable	7	1

Total interest payable	11,326	12,259

Change in fair value of interest rate derivatives (see below)	-	2,675

Total finance costs	11,326	14,934

Included within the £2,675,000 reported above for the year ended 31 March 2010 is £245,000 in respect of derivative positions that were extended in March 2010.

9. TAXATION

The Group converted to a REIT in January 2007. As a result the Group does not pay UK corporation tax on the profits and gains from qualifying rental business in the UK provided that it meets certain conditions. Non-qualifying profits and gains of the Group are subject to corporation tax as normal. The Group monitors its compliance with the REIT conditions. There have been no breaches of the conditions to date.

UK current tax	2011 £000	2010 £000

Current tax:
- Current year	-	-

Deferred tax (see note 20):
- Current year	-	-

	-	-

A reconciliation of the tax charge is shown below:

	2011 £000	2010 £000

Profit before tax	6,901	10,209

Tax charge at 28% (2010 - 28%) thereon	1,932	2,858

Effects of:
Revaluation of investment properties	4,491	996
Share of results of associate	(48)	(55)
Permanent differences	(1,511)	(972)
Profits from the tax exempt business	(5,294)	(4,321)
Losses not utilised in the year	387	1,318
Temporary timing differences	43	176

Total tax charge	-	-

10. Adjusted Profit before tax

	2011 £000	2010 £000

Profit before tax	6,901	10,209
Loss/(gain) on revaluation of investment properties - wholly owned	16,039	3,558
- in associate	(2,241)	(2,036)
Change in fair value of interest rate derivatives - Group (see below)	(197)	2,675
- in associate	(191)	65
Losses/(gains) on surplus land - wholly owned	(71)	2,073
- in associate	(33)	(30)

Adjusted profit before tax	20,207	16,514

Net bank and other interest	10,089	10,726
Depreciation	611	631

Adjusted EBITDA	30,907	27,871

Adjusted profit before tax which excludes gains and losses on the revaluation of investment properties, changes in fair value of interest rate derivatives, net gains and losses on surplus land, and non-recurring items of income and expenditure has been disclosed to give a clearer understanding of the Group's underlying trading performance. The adjusted profit before tax of £20,207,000 (2010: £16,514,000) equates to EPRA earnings, as there is no tax charge in the year.

11. DIVIDENDS

	2011 £000	2010 £000
Amounts recognised as distributions to equity holders in the period:
Final dividend for the year ended 31 March 2010 of 4p (2009: nil p) per share.	5,163	-
Interim dividend for the year ended 31 March 2011 of 4p (2010: nil p) per share.	5,165	-

	10,328	-

Proposed final dividend for the year ended 31 March 2011 of 5p (2010: 4 p) per share.	6,458	5,163

Subject to approval by shareholders at the Annual General Meeting to be held on 18 July 2011, the final dividend will be paid on 20 July 2011 to shareholders on the Register on 10 June 2011.

The Property Income Dividend ("PID") payable for the current year is 4 pence per share.

12. Earnings AND NET ASSETS per share

Earnings per ordinary share

	Year ended 31 March 2011			Year ended 31 March 2010
	Earnings £m	Shares million	Pence per share	Earnings £m	Shares million	Pence per share
Basic	6.90	129.11	5.34	10.21	125.83	8.11
Dilutive share options	-	1.38	(0.05)	-	1.31	(0.08)

Diluted	6.90	130.49	5.29	10.21	127.14	8.03

Adjustments:
Loss on revaluation of investment properties	16.04	-	12.29	3.56	-	2.80
Change in fair value of interest rate derivatives	(0.20)	-	(0.15)	2.67	-	2.10
(Gains)/losses on surplus land	(0.07)	-	(0.05)	2.07	-	1.63
Share of associate non-recurring gains	(2.46)	-	(1.89)	(2.00)	-	(1.57)

EPRA - diluted	20.21	130.49	15.49	16.51	127.14	12.99

EPRA - basic	20.21	129.11	15.65	16.51	125.83	13.12

The calculation of basic earnings is based on profit after tax for the year. The weighted average number of shares used to calculate diluted earnings per share has been adjusted for the conversion of share options.

EPRA earnings and earnings per ordinary share before non-recurring items, movements on revaluation of investment properties, gains and losses on surplus land, the change in fair value of interest rate swaps, and share of associate non-recurring gains have been disclosed to give a clearer understanding of the Group's underlying trading performance.

The European Public Real Estate Association ("EPRA") has issued recommended bases for the calculation of net assets per share information and this is shown in the table below:

Analysis of net asset value	As at 31 March 2011 £000	As at 31 March 2010 £000

Basic net asset value	544,949	547,285
Exercise of share options	603	594
EPRA NNNAV	545,552	547,879

Adjustments:
Fair value of derivatives	7,783	7,980
Fair value of derivatives - share of associate	579	770

EPRA NAV	553,914	556,629

Basic net assets per share (pence)	421.9	424.0
EPRA NNNAV per share (pence)	415.0	418.3
EPRA NAV per share (pence)	421.3	425.0

EPRA NAV (as above) (£000)	553,914	556,629
Valuation methodology assumption (see note 14) (£000)	37,483	37,127

Adjusted net asset value (£000)	591,397	593,756
Adjusted net assets per share (pence)	449.8	453.3

	No. of shares	No. of shares
Shares in issue	131,060,522	130,990,837
Own shares held	(1,905,000)	(1,905,000)
Basic shares in issue used for calculation	129,155,522	129,085,837
Exercise of share options	2,312,475	1,897,685
Diluted shares used for calculation	131,467,997	130,983,522

Net assets per share are shareholders' funds divided by the number of shares at the period end. The shares currently held in the Group's Employee Benefit Trust are excluded from both net assets and the number of shares.

Adjusted net assets per share include the effect of those shares issuable under employee share option schemes and the effect of alternative valuation methodology assumptions (see note 14).

13. Non-Current Assets

a) Investment property, development property and interests in leasehold property

	Investment property £000	Investment property under construction £000	Development property £000	Interests in leasehold property £000	Total £000

At 31 March 2009	735,060	-	73,618	21,852	830,530
Reclassifications to investment property under construction	-	51,741	(51,741)	-	-
Reclassifications to surplus land	-	-	(21,877)	-	(21,877)
Additions	2,368	9,919	-	-	12,287
Adjustment to present value	-	-	-	961	961
Transfer to investment property	14,437	(14,437)	-	-	-
Revaluation	9,705	(13,263)	-	-	(3,558)
Depreciation	-	-	-	(815)	(815)

At 31 March 2010	761,570	33,960	-	21,998	817,528
Additions	1,617	11,037	-	-	12,654
Adjustment to present value	-	-	-	156	156
Reclassification from plant, equipment and freehold property	5	-	-	-	5
Revaluation (see note 14)	(17,352)	1,313	-	-	(16,039)
Depreciation	-	-	-	(910)	(910)

At 31 March 2011	745,840	46,310	-	21,244	813,394

The income from self storage accommodation earned by the Group from its investment property is disclosed in note 3. Direct operating expenses arising on the investment property in the year are disclosed in the Portfolio Summary.

b) Plant, equipment and owner occupied property

	Freehold property £000	Leasehold improve-ments £000	Plant and machinery £000	Motor vehicles £000	Fixtures, fittings & office equipment £000	Total £000
Cost
At 31 March 2009	1,858	44	651	-	5,137	7,690
Additions	17	-	32	-	320	369

At 31 March 2010	1,875	44	683	-	5,457	8,059
Reclassifications	(8)	-	3	-	-	(5)
Additions	-	-	58	25	374	457

At 31 March 2011	1,867	44	744	25	5,831	8,511

Depreciation
At 31 March 2009	(125)	(34)	(392)	-	(4,044)	(4,595)
Charge for the year	(34)	(3)	(63)	-	(531)	(631)

At 31 March 2010	(159)	(37)	(455)	-	(4,575)	(5,226)
Charge for the year	(32)	(4)	(60)	(3)	(512)	(611)

At 31 March 2011	(191)	(41)	(515)	(3)	(5,087)	(5,837)

Net book value
At 31 March 2011	1,676	3	229	22	744	2,674

At 31 March 2010	1,716	7	228	-	882	2,833

c) Goodwill

Goodwill relates to the purchase of Big Yellow Self Storage Company Limited in 1999. The asset is tested bi-annually for impairment. The carrying value of £1,433,000 remains unchanged from the prior year as there is considered to be no impairment in the value of the asset.

d) Investment in associate

The Group has a 33.3% interest in Big Yellow Limited Partnership. This interest is accounted for as an associate, using equity accounting. The Partnership commenced trading on 1 December 2007.

	31 March 2011 £000	31 March 2010 £000
At the beginning of the year	12,105	9,285
Subscription for partnership capital and advances	1,000	1,500
Share of results (see below)	1,826	1,320

	14,931	12,105

The Group has subscribed for cumulative partnership capital and advances of £13,632,000 to 31 March 2011 (2010: £12,632,000).

The figures below show the trading results of Big Yellow Limited Partnership, and the Group's share of the results and the net assets of the Partnership.

Big Yellow Limited Partnership	Year ended 31 March 2011 £000	Year ended 31 March 2010 £000

Income statement (100%)
Revenue	4,134	1,880
Cost of sales	(3,836)	(2,645)
Administrative expenses	(75)	(75)

Operating profit/(loss)	223	(840)
Gain on the revaluation of investment properties	6,725	6,109
Gain on the disposal of surplus land	99	91
Net interest payable	(2,141)	(1,204)
Fair value movement of interest rate derivatives	574	(196)

Profit before and after tax	5,480	3,960

Balance sheet (100%)
Investment property	105,450	79,660
Investment property under construction	2,730	12,850
Other fixed assets	725	753
Current assets	1,981	1,398
Current liabilities	(2,160)	(1,569)
Derivative financial instruments	(1,736)	(2,310)
Non-current liabilities	(62,195)	(54,467)

Net assets (100%)	44,795	36,315

Group share of (33.3%)	£000	£000
Operating profit/(loss)	74	(280)
Gain on the revaluation of investment properties	2,241	2,036
Gain on the disposal of surplus land	33	30
Net interest payable	(713)	(401)
Fair value movement of interest rate derivatives	191	(65)

Profit for the year	1,826	1,320

Associate net assets	14,931	12,105

The Partnership has in place a loan facility of £68 million, secured from Royal Bank of Scotland plc and HSBC Bank plc. The original loan available was £75 million, but this was reduced by £7 million in the year at the Partners' request, as projections showed the full amount of the loan would not be drawn.

The loan has a five year term and expires in 2013. £31.8 million of the £62.7 million drawn down at 31 March 2011 has been fixed to 30 June 2013 at a weighted average interest cost post margin of 5.5%. The balance of the drawn debt is currently paying one month LIBOR plus applicable margin. The weighted average interest cost post margin at 31 March 2011 of the facility was 4.3%.

The Partnership loan has a loan to value covenant which requires the gross loan to the value of the Partnership's investment property assets to be no more than 60%. This covenant reduces to 55% from November 2011. The loan is non-recourse to the Group.

The Group has an option at 31 March 2013, and certain dates thereafter, provided certain Internal Rate of Return ("IRR") hurdles are met, to acquire the assets within the Partnership or the remaining interest in the Partnership not held by the Group. The price payable is based on the market value of the Partnership's assets and liabilities, and is subject to certain promotes, dependent on the IRR achieved.

14. VALUATION OF INVESTMENT PROPERTY

	Deemed cost £000	Revaluation on deemed cost £000	Valuation £000
Freehold stores*
As at 1 April 2010	323,914	386,446	710,360
Movement in period	1,439	(13,269)	(11,830)
As at 31 March 2011	325,353	373,177	698,530

Leasehold stores
As at 1 April 2010	15,509	35,701	51,210
Movement in period	183	(4,083)	(3,900)
As at 31 March 2011	15,692	31,618	47,310

Total of open stores
As at 1 April 2010	339,423	422,147	761,570
Movement in period	1,622	(17,352)	(15,730)
As at 31 March 2011	341,045	404,795	745,840

Investment property under construction
As at 1 April 2010	47,223	(13,263)	33,960
Movement in period	11,037	1,313	12,350
As at 31 March 2011	58,260	(11,950)	46,310

Valuation of all investment property
As at 1 April 2010	386,646	408,884	795,530
Movement in period	12,659	(16,039)	(3,380)
As at 31 March 2011	399,305	392,845	792,150

* Includes one long leasehold property

The investment properties have been valued at 31 March 2011 by external valuers, Cushman & Wakefield LLP ("C&W"). The valuation has been carried out in accordance with the RICS Valuation Standards published by The Royal Institution of Chartered Surveyors ("the Red Book"). The valuation of each of the investment properties and the investment properties under construction has been prepared on the basis of Market Value as a fully equipped operational entity, having regard to trading potential.

The valuation has been provided for accounts purposes and as such, is a Regulated Purpose Valuation as defined in the Red Book. In compliance with the disclosure requirements of the Red Book, C&W have confirmed that:

· The members of the RICS who have been the signatories to the valuations provided to the Group for the same purposes as this valuation have done so since September 2004;

· C&W have been carrying out this bi-annual valuation for the same purposes as this valuation on behalf of the Group since September 2004;

· C&W do not provide other significant professional or agency services to the Group;

· In relation to the preceding financial year of C&W, the proportion of the total fees payable by the Group to the total fee income of the firm is less than 5%; and

· The fee payable to C&W is a fixed amount per store, and is not contingent on the appraised value.

Market uncertainty

C&W's valuation report comments on valuation uncertainty resulting from the recent global banking crisis coupled with the economic downturn, which have caused a low number of transactions in the market for self storage property. C&W note that, although there were a number of self storage transactions in 2007, the only significant transactions since 2007 are:

1. The sale of a 51% share in Shurgard Europe which was announced in January 2008 and completed on 31 March 2008;

2. The sale of the former Keepsafe portfolio by Macquarie to Alligator Self Storage which was completed in January 2010; and

3. The purchase by Shurgard Europe of the 80% interests held by its joint venture partner (Arcapita) in its two European joint venture vehicles, First Shurgard and Second Shurgard. The price paid was €172 million and the transaction was announced in March 2011. The two joint ventures owned 72 self storage properties.

C&W observe that in order to provide a rational opinion of value at the present time it is necessary to assume that the self storage sector will continue to perform in a way not greatly different from that being anticipated prior to the "credit crunch", however they have reflected negative sentiment in their capitalisation rates and they have reflected current trading conditions in their cash flow projections for each property. C&W state that there is therefore greater uncertainty attached to their opinion of value than would be anticipated during more active market conditions.

Valuation methodology

C&W have adopted different approaches for the valuation of the leasehold and freehold assets as follows:

Freehold and long leasehold

The valuation is based on a discounted cash flow of the net operating income over a ten year period and notional sale of the asset at the end of the tenth year.

Assumptions

A. Net operating income is based on projected revenue received less projected operating costs together with a central administration charge of 6% of the estimated annual revenue subject to a cap and a collar. The initial net operating income is calculated by estimating the net operating income in the first 12 months following the valuation date.

B. The net operating income in future years is calculated assuming straight-line absorption from day one actual occupancy to an estimated stabilised/mature occupancy level. In the valuation the assumed stabilised occupancy level for the 51 open stores (both freeholds and leaseholds) at 31 March 2011 averages 83.1% (2010: 84.2%). The projected revenues and costs have been adjusted for estimated cost inflation and revenue growth. The average time assumed for the stores to trade at their maturity levels across the portfolio is 41 months (2010: 42 months); for the 32 established stores, the period to maturity is 37 months (2010: 37 months).

C. The capitalisation rates applied to existing and future net cash flow have been estimated by reference to underlying yields for industrial and retail warehouse property, yields for other trading property types such as student housing and hotels, bank base rates, ten year money rates, inflation and the available evidence of transactions in the sector. The valuation included in the accounts assumes rental growth in future periods. If an assumption of no rental growth is applied to the external valuation, the stabilised yield for the 51 stores pre administration expenses is 8.4% (2010: 8.4%).

D. The future net cash flow projections (including revenue growth and cost inflation) have been discounted at a rate that reflects the risk associated with each asset. The weighted average annual discount rate adopted (for both freeholds and leaseholds) is 11.29% (2010: 11.35%).

E. Purchaser's costs of 5.8% (see below) have been assumed initially and sale plus purchaser's costs totalling 6.8% are assumed on the notional sales in the tenth year in relation to the freehold stores.

Short leasehold

The same methodology has been used as for freeholds, except that no sale of the assets in the tenth year is assumed but the discounted cash flow is extended to the expiry of the lease. The average unexpired term of the Group's seven short leasehold properties is 16.2 years (March 2010: 15.8 years).

Investment properties under construction

C&W have valued the stores in development adopting the same methodology as set out above but on the basis of the cash flow projection expected for the store at opening after allowing for the outstanding costs to take each scheme from its current state to completion and full fit out. C&W have allowed for holding costs and construction contingency, as appropriate. For the scheme where planning consent has not yet been granted, C&W have reflected the planning risk in their valuation.

Prudent lotting

C&W have assessed the value of each property individually. However, with regard to eight recently opened stores which are loss making or have low cash flow (three wholly owned and five in the Partnership) (2010: ten stores, three wholly owned and seven in the Partnership) C&W have prepared their valuation on the assumption that were these properties to be brought to the market then they would be lotted or grouped for sale with other more mature assets of a similar type owned by the Company in such a manner as would most likely be adopted in the case of an actual sale of the interests valued. This lotting assumption has been made in order to alleviate the issue of negative or low short term cash flow. C&W have not assumed that the entire portfolio of properties owned by the Group would be sold as a single lot and the value for the whole portfolio in the context of a sale as a single lot may differ significantly from the aggregate of the individual values for each property in the portfolio, reflecting prudent lotting as described above.

Valuation assumption for purchaser's costs

The Group's investment property assets have been valued for the purposes of the financial statements after deducting notional purchaser's cost of 5.8% of gross value, as if they were sold directly as property assets. The valuation is an asset valuation which is entirely linked to the operating performance of the business. They would have to be sold with the benefit of operational contracts, employment contracts and customer contracts, which would be very difficult to achieve except in a corporate structure.

This approach follows the logic of the valuation methodology in that the valuation is based on a capitalisation of the net operating income after allowing a deduction for operational cost and an allowance for central administration costs. Sale in a corporate structure would result in a reduction in the assumed Stamp Duty Land Tax but an increase in other transaction costs reflecting additional due diligence resulting in a reduced notional purchaser's cost of 2.75% of gross value. All the significant sized transactions that have been concluded in the UK in recent years were completed in a corporate structure. The Group therefore instructed C&W to carry out a Red Book valuation on the above basis, and this results in a higher property valuation at 31 March 2011 of £827,970,000 (£35,820,000 higher than the value recorded in the financial statements). The valuations in Big Yellow Limited Partnership are £4,990,000 higher than the value recorded in the financial statements, of which the Group's share is £1,663,000. The sum of these is £37,483,000 and translates to 28.5 pence per share. We have included this revised valuation in the adjusted diluted net asset calculation (see note 12).

15. SURPLUS LAND

			£000

At 1 April 2010			20,237
Additions			621
Write back of prior year impairment			500
Disposals			(3,725)

At 31 March 2011			17,633

The current year gain of £71,000 is comprised of a write back of a prior year impairment on a site of £500,000, offset by a loss on disposal of £429,000. In the prior year, an impairment of £2,000,000 was made against a site in addition to £73,000 of disposal costs, giving a total income statement loss for the prior year of £2,073,000.

16. TRADE AND OTHER RECEIVABLES

	31 March 2011 £000	31 March 2010 £000

Trade receivables	1,776	1,796
Other receivables	274	1,592
Prepayments and accrued income	9,490	7,709

	11,540	11,097

Trade receivables are net of a bad debt provision of £25,000 (2010: £29,000). The Directors consider that the carrying amount of trade and other receivables approximates their fair value.

The other receivables balance has reduced since the prior year due to a deferred consideration of £1.2 million on the sale of surplus land at our site in Twickenham, which was received in October 2010.

Trade receivables

The Group does not typically offer credit terms to its customers and hence the Group is not exposed to significant credit risk. All customers are required to pay in advance of the storage period. A late charge of 10% is applied to a customer's account if they are greater than 10 days overdue in their payment. The Group provides for receivables on a specific basis. There is a right of lien over the customers' goods, so if they have not paid within a certain time frame, we have the right to sell the items they store to recoup the debt owed by the customer. Trade receivables that are overdue are provided for based on estimated irrecoverable amounts determined by reference to past default experience.

For individual storage customers, the Group does not perform credit checks, however this is mitigated by the fact that all customers are required to pay in advance, and also to pay a deposit ranging from between 1 week to 4 weeks storage income. Before accepting a new business customer who wishes to use a number of the Group's stores, the Group uses an external credit rating to assess the potential customer's credit quality and defines credit limits by customer. There are no customers who represent more than 5 per cent of the total balance of trade receivables.

Included in the Group's trade receivable balance are debtors with a carrying amount of £155,000 (2010: £161,000) which are past due at the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The average age of these receivables is 34 days past due (2010: 36 days past due).

Ageing of past due but not impaired receivables

	2011 £000	2010 £000
1 - 30 days	99	98
30 - 60 days	33	38
60 + days	23	25

Total	155	161

Movement in the allowance for doubtful debts

	2011 £000	2010 £000
Balance at the beginning of the year	29	21
Amounts provided in year	69	109
Amounts written off as uncollectible	(73)	(101)

Balance at the end of the year	25	29

The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

Ageing of impaired trade receivables

	2011 £000	2010 £000
1 - 30 days	-	-
30 - 60 days	4	4
60 + days	21	25

Total	25	29

17. TRADE AND OTHER PAYABLES

	31 March 2011 £000	31 March 2010 £000
Current
Trade payables	9,885	7,425
Other payables	2,075	2,510
Accruals and deferred income	9,663	8,472
Amounts owed to associate	177	-
VAT repayable under Capital Goods Scheme	918	1,052

	22,718	19,459

Non current
VAT repayable under Capital Goods Scheme	954	1,609

The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe. The Directors consider the carrying amount of trade and other payables and accruals and deferred income approximates fair value. See note 19 for details of VAT repayable under Capital Goods Scheme. Included within accruals and deferred income is £1,116,000 in respect of the Long Term Bonus Performance Plan.

The Directors estimate the fair value of the Group's VAT payable under capital goods scheme as follows:

	2011		2010
	Carrying amount £000	Estimated fair value £000	Carrying amount £000	Estimated fair value £000

VAT payable under capital goods scheme	1,872	1,791	2,661	2,490

The fair values have been calculated by discounting expected cash flows at interest rates prevailing at the year end.

18. FINANCIAL INSTRUMENTS

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the borrowings disclosed in note 19, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves and retained earnings. The Group's banking facilities require hedging of 70% of the funds drawn under the investment tranche of its core banking facility. The Group has complied with this during the year.

Exposure to credit, interest rate and currency risks arises in the normal course of the Group's business. Derivative financial instruments are used to manage exposure to fluctuations in interest rates, but are not employed for speculative purposes.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2 to the financial statements.

A. Balance sheet management

The Group's Board reviews the capital structure on an ongoing basis. As part of this review, the Board considers the cost of capital and the risks associated with each class of capital. The Group seeks to have a conservative gearing ratio (the proportion of net debt to equity). The Board considers at each review the appropriateness of the current ratio in light of the above. The Board is currently satisfied with the Group's gearing ratio.

The gearing ratio at the year end is as follows:

	2011 £000	2010 £000

Debt	(275,000)	(300,000)
Cash and cash equivalents	8,954	30,619

Net debt	266,046	269,381
Balance sheet equity	544,949	547,285
Net debt to equity ratio	48.8%	49.2%

Debt is defined as long-term and short-term borrowings, as detailed in note 19. Equity includes all capital and reserves of the Group attributable to equity holders of the Company. Net debt is defined as gross bank borrowings less cash and cash equivalents.

B. Debt management

The Group borrows through a senior term loan, secured on its existing store portfolio. Borrowings are arranged to ensure an appropriate maturity profile and to maintain short term liquidity. Funding is arranged in the Group and in Big Yellow Limited Partnership through banks and financial institutions with whom the Group has a strong working relationship.

C. Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, by the use of interest rate swap contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring optimal hedging strategies are applied, by either positioning the balance sheet or protecting interest expense through different interest rate cycles.

The Group has two interest rate derivatives in place; £120 million fixed at 2.99% (excluding the margin on the underlying debt instrument) until September 2015 and £70 million fixed at 3.93% (excluding the margin on the underlying debt instrument) also until September 2015.

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract, and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.

The interest rate swaps settle on a monthly basis. The floating rate on the interest rate swaps is one month LIBOR. The Group will settle the difference between the fixed and floating interest rate on a net basis.

The Group does not hedge account for its interest rate swaps and states them at fair value, with changes in fair value included in the income statement. The gain in the income statement for the year of these interest rate swaps was £197,000 (2010: loss of £2,430,000).

A further income statement charge arose in the prior year of £245,000 in respect of the fair value movement of derivative positions that were extended in March 2010.

The fair value of the above derivatives at 31 March 2011 was a liability of £7,783,000 (2010: liability of £7,980,000).

D. Interest rate sensitivity analysis

In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group's earnings, without jeopardising its flexibility. Over the longer term, permanent changes in interest rates may have an impact on consolidated earnings.

At 31 March 2011, it is estimated that an increase of 0.5 percentage points in interest rates would have reduced the Group's adjusted profit before tax by £425,000 (2010: reduced adjusted profit before tax by £550,000) and a decrease of 0.5 percentage points in interest rates would have increased the Group's adjusted profit before tax by £425,000 (2010: increased adjusted profit before tax by £550,000). There would have been no effect on amounts recognised directly in equity. The sensitivity has been calculated by applying the interest rate change to the variable rate borrowings, net of interest rate swaps, at the year end.

The Group's sensitivity to interest rates has decreased during the year, following the repayment of floating rate debt from cash resources. The Board monitors closely the exposure to the floating rate element of our debt.

E. Cash management and liquidity

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group's short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 19 is a description of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.

Short term money market deposits are used to manage liquidity whilst maximising the rate of return on cash resources, giving due consideration to risk.

F. Foreign currency management

The Group does not have any foreign currency exposure.

G. Credit risk

The credit risk management policies of the Group with respect to trade receivables are discussed in note 16. The Group has no significant concentration of credit risk, with exposure spread over 30,500 customers in our wholly owned stores.

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

H. Financial maturity analysis

In respect of interest-bearing financial liabilities, the following table provides a maturity analysis for individual elements.

2011 Maturity
	Total £000	Less than one year £000	One to two years £000	Two to five years £000	More than five years £000

Debt
Bank loan payable at variable rate	85,000	-	-	85,000	-
Debt fixed by interest rate derivatives	190,000	-	-	190,000	-

Total	275,000	-	-	275,000	-

2010 Maturity
	Total £000	Less than one year £000	One to two years £000	Two to five years £000	More than five years £000

Debt
Bank loan payable at variable rate	110,000	-	-	110,000	-
Debt fixed by interest rate derivatives	190,000	-	-	190,000	-

Total	300,000	-	-	300,000	-

I. Fair values of financial instruments

The fair values of the Group's cash and short term deposits and those of other financial assets equate to their book values. Details of the Group's receivables at amortised cost are set out in note 16. The amounts are presented net of provisions for doubtful receivables and allowances for impairment are made where appropriate. Trade and other payables, including bank borrowings, are carried at amortised cost. Finance lease liabilities are included at the fair value of their minimum lease payments. Derivatives are carried at fair value.

For those financial instruments held at valuation, the Group has categorised them into a three level fair value hierarchy based on the priority of the inputs to the valuation technique in accordance with IFRS 7. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the instrument in its entirety. The fair values of the Group's outstanding interest rate swaps, as detailed in note 18J, have been estimated by calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as defined by IFRS 7. There are no financial instruments which have been categorised as Level 1 or Level 3.

J. Maturity analysis of financial liabilities

The contractual maturities based on market conditions and expected yield curves prevailing at the year end date are as follows:

2011	Trade and other payables £000	Interest rate swaps £000	Borrowings and interest £000	Finance leases £000	Total £000

From five to twenty years	-	-	-	23,189	23,189
From two to five years	-	482	279,566	5,959	286,007
From one to two years	954	2,682	9,980	1,987	15,603

Due after more than one year	954	3,164	289,546	31,135	324,799
Due within one year	22,718	4,444	9,980	1,987	39,129

Total	23,672	7,608	299,526	33,122	363,928

2010	Trade and other payables £000	Interest rate swaps £000	Borrowings and interest £000	Finance leases £000	Total £000

From five to twenty years	-	(672)	-	25,254	24,582
From two to five years	-	355	315,203	5,995	321,553
From one to two years	1,609	3,304	10,431	1,998	17,342

Due after more than one year	1,609	2,987	325,634	33,247	363,477
Due within one year	19,459	5,039	10,431	1,998	36,927

Total	21,068	8,026	336,065	35,245	400,404

K. Reconciliation of maturity analyses

The maturity analysis in note 18J shows non-discounted cash flows for all financial liabilities including interest payments. The table below reconciles the borrowings column in note 19 with the borrowings and interest column in the maturity analysis presented in note 18J.

2011	Borrowings £000	Interest £000	Unamortised borrowing costs £000	Borrowings and interest £000

From two to five years	273,230	4,566	1,770	279,566
From one to two years	-	9,980	-	9,980

Due after more than one year	273,230	14,546	1,770	289,546
Due within one year	-	9,980	-	9,980

Total	273,230	24,526	1,770	299,526

2010	Borrowings £000	Interest £000	Unamortised borrowing costs £000	Borrowings and interest £000

From two to five years	297,816	15,203	2,184	315,203
From one to two years	-	10,431	-	10,431

Due after more than one year	297,816	25,634	2,184	325,634
Due within one year	-	10,431	-	10,431

Total	297,816	36,065	2,184	336,065

19. BANK BORROWINGS

Secured borrowings at amortised cost

31 March

2011

£000

31 March

2010

£000

Bank borrowings

275,000

300,000

Unamortised loan arrangement costs

(1,770)

(2,184)

273,230

297,816

The Group has a £325 million senior debt facility in place, provided by HSH Nordbank AG, Lloyds TSB Bank plc, HSBC Bank plc and Santander. The loan is due to expire on 15 September 2013.

The facility is secured on a first charge of 55 of the Group's properties and is subject to certain covenants. The facility is divided into two tranches, Tranche A, up to a maximum of £50 million is used to finance non-stabilised properties within the Group and carries a margin of 150 bps. Tranche B is used to finance stabilised Group properties, and carries a margin of between 112.5 bps and 150 bps dependent on the Tranche B income cover. The Group is currently paying a margin of 112.5 bps on this Tranche. As the properties within Tranche A stabilise, they can be transferred to Tranche B, reducing the margin payable.

The facility's principal covenant is an income cover covenant that requires Tranche B EBITDA to be greater than 1.4 times the interest cost in Tranche B; this covenant rises to 1.5 times from September 2011.

The Group is also required to retain consolidated net assets of £250 million; and a net debt to net assets ratio of less than 1.3 to 1. There is no loan to value covenant. At 31 March 2011 all covenants were complied with as illustrated in the table below:

	Covenant	At 31 March 2011
Minimum income cover	1.4 x	3.88x
Minimum net assets	£250 million	£544.9 million
Maximum gross loan to net assets gearing	1.3:1	0.50:1

The weighted average interest rate paid on the bank borrowings during the year was 3.6% (2010: 3.6%).

The Group has £50,000,000 in undrawn committed borrowing facilities at 31 March 2011 which expire between two and three years (2010: £25,000,000 expiring between three and four years).

Interest rate profile of financial liabilities

	Total £000	Floating rate £000	Fixed rate £000	Weighted average interest rate	Period for which the rate is fixed	Weighted average period until maturity

At 31 March 2011
Gross financial liabilities	275,000	85,000	190,000	3.6%	6.0 years	4.7 years

At 31 March 2010
Gross financial liabilities	300,000	110,000	190,000	3.5%	6.0 years	4.7 years

The floating rate at 31 March 2011 was paying a margin of 1.125% above one month LIBOR, the fixed rate debt was paying a weighted average margin of 1.14%. All monetary liabilities, including short term receivables and payables are denominated in sterling. The weighted average interest rate includes the effect of the Group's interest rate derivatives.

Narrative disclosures on the Group's policy for financial instruments are included within the Business Review and note 18.

20. Deferred tax

Deferred tax assets in respect of share based payments (£0.1 million), interest rate swaps (£4.2 million), losses (£1.7 million) and capital losses (£0.5 million) in respect of the residual business have not been recognised due to uncertainty over taxable profits in the short term within the residual business.

21. OBLIGATIONS UNDER FINANCE LEASES

	Minimum lease payments		Present value minimum of lease payments
	2011 £000	2010 £000	2011 £000	2010 £000

Amounts payable under finance leases:
Within one year	1,987	1,998	1,947	1,958
Within two to five years inclusive	7,946	7,993	6,828	6,836
Greater than five years	23,189	25,254	12,469	13,204

	33,122	35,245	21,244	21,998

Less: future finance charges	(11,878)	(13,247)

Present value of lease obligations	21,244	21,998

All lease obligations are denominated in sterling. Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments.

The carrying amount of the Group's lease obligations approximates their fair value.

22. SHARE CAPITAL

	Authorised		Called up, allotted and fully paid
	2011 £000	2010 £000	2011 £000	2010 £000

Ordinary shares at 10 pence each	20,000	20,000	13,106	13,099


Movement in issued share capital
Number of shares at 31 March 2009				115,592,541
Share placing				11,549,000
Issue to shares to Employee Benefit Trust				1,090,000
Exercise of share options - Share option schemes				2,759,296

Number of shares at 31 March 2010				130,990,837
Exercise of share options - Share option schemes				69,685

Number of shares at 31 March 2011				131,060,522

The Company has one class of ordinary shares which carry no right to fixed income

Own Shares

    The own shares reserve represents the cost of shares in Big Yellow Group PLC purchased in the market, and held by the Big Yellow Group PLC
    Employee Benefit, along with shares issued directly to the Employee Benefit Trust. 1,905,000 shares are held in the Employee Benefit Trust (2010:
    1,905,000).

23. Share based payments

The Company has four equity share-based payment arrangements, namely approved and unapproved share option schemes, an LTIP scheme, an Employee Share Save Scheme ("SAYE") and a Long Term Bonus Performance Plan. The Group recognised a total expense in the year related to equity-settled share-based payment transactions of £1,640,000 (2010: £1,664,000).

24. CAPITAL COMMITMENTS

Amounts contracted but not provided in respect of the Group's properties as at 31 March 2011 were £3.4 million (2010: £5.0 million).

25. EVENTS AFTER THE BALANCE SHEET DATE

There are no reportable events after the balance sheet date.

26. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in this
note.

Transactions with Big Yellow Limited Partnership

As described in note 13, the Group has a 33.3% interest in Big Yellow Limited Partnership ("the Partnership"), and entered into transactions with the
Partnership during the year on normal commercial terms.

In the current year the Group earned fees from the Partnership of £920,000 (2010: £1,198,000). At 31 March 2011, the Group owed £177,000 to the
Partnership (2010: Group was owed £140,000 by the Partnership).

No other related party transactions took place during the years ended 31 March 2011 and 31 March 2010.

Ten Year Summary

	2011 £000	2010 £000	2009 £000	2008 £000	2007 £000	2006 £000	2005 £000	2004 £000	2003 £000	2002 £000
Results
Revenue	61,885	57,995	58,487	56,870	51,248	41,889	33,375	23,830	15,579	8,408

Operating profit/(loss) before gains and losses on property assets	32,058	29,068	30,946	29,342	27,067	21,645	15,030	4,719	(449)	(2,775)

Cash flow from operating activities	23,534	19,063	10,203	14,388	16,726	16,125	9,664	5,761	2,125	(170)

Profit/(loss) before taxation	6,901	10,209	(71,489)	102,618	152,837	118,547	42,836	1,243	(2,294)	(2,306)

Adjusted profit before taxation	20,207	16,514	13,791	15,006	14,233	12,601	7,791	n/d	n/d	n/d

Net assets	544,949	547,285	502,317	580,886	487,979	244,139	159,168	58,391	58,951	74,026

EPRA earnings per share	15.49p	12.99p	11.89p	11.72p	10.01p	8.86p	5.53p	n/d	n/d	n/d
Declared total dividend per share	9.0p	4.0p	0p	9.5p	9.0p	5.0p	2.0p	1.05p	1.0p	0p

Key statistics
Number of stores open*	62	60	54	48	43	37	32	29	26	19
Sq ft occupied (000)*	2,130	1,915	1,775	1,850	1,835	1,672	1,470	1,268	875	550
Occupancy growth in year 000 sq ft)	215	140	(75)	15	163	202	202	393	325	322
Number of customers*	32,800	30,500	28,500	30,500	30,100	27,800	24,600	20,400	13,800	8,100
Average no. of employees during the year	273	252	239	218	191	178	160	140	116	79

* - includes stores operating in Big Yellow Limited Partnership

Results to 2004 under UK GAAP, 2005 onwards under IFRS.
n/d - measure not disclosed in that year

This information is provided by RNS

The company news service from the London Stock Exchange

END

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Secured borrowings at amortised cost	31 March 2011 £000	31 March 2010 £000

Bank borrowings	275,000	300,000
Unamortised loan arrangement costs	(1,770)	(2,184)

	273,230	297,816