First quarter trading update

Safestore Holdings plc

22 February 2024

 

Safestore Holdings plc

First quarter trading update for the period 1 November 2023 to 31 January 2024

Resilient trading in a challenging economic environment. Continued progress on development pipeline

Key Measures - Total						Q1 2024	Q1 2023	Change	Change CER1
Group
Revenue (£'m)						55.3	55.7	-0.7%	-0.4%
Closing Occupancy (let sq ft- million)3						6.110	6.095	0.2%	n/a
Closing Occupancy (% of MLA4)						74.3%	77.6%	-3.3ppt	n/a
Maximum Lettable Area (MLA4)						8.21	7.85	4.6%	n/a
Average Storage Rate (£)						30.06	30.42	-1.2%	-0.9%
REVPAF (£)7						26.82	28.13	-4.7%	-4.6%

Key Measures - Like-For-Like5						Q1 2024	Q1 2023	Change	Change CER1
Group
Revenue (£'m)						54.2	54.8	-1.2%	-0.9%
Closing Occupancy (let sq ft- million)3						5.968	6.073	-1.7%	n/a
Closing Occupancy (% of MLA4)						77.3%	78.8%	-1.5ppt	n/a
Average Occupancy (let sq ft- million)						6.000	6.101	-1.7%	n/a
Maximum Lettable Area (MLA4)						7.72	7.71	0.1%	n/a
Average Storage Rate (£)						30.41	30.44	-0.1%	0.2%
REVPAF (£)7						27.95	28.23	-1.0%	-0.7%

Highlights

·      Group revenue for the quarter in CER¹ was down 0.4%

·      Like-for-like⁵ Group revenue for the quarter in CER¹ down 0.9%

·      Like-for-like⁵ average rate for the period up 0.2% in CER¹

·      Like-for-like⁵ closing occupancy at 77.3% (2023: 78.8%)

·      Openings of three new stores since the 17 January 2024 FY2023 announcement adding 75,400 sq ft of MLA

·      Group Property Pipeline of 1.4m sq ft representing c. 17% of the existing portfolio to be funded from existing financial resources and expected to generate £25-£30m of stabilised EBITDA.

·      Simon Clinton appointed as Chief Financial Officer and will join the Group on 11 March 2024. Simon succeeds Andy Jones as CFO following the announcement of his decision to retire on 28 September 2023. Andy Jones will remain with Safestore to affect a smooth transition. A separate RNS announcement has been made today on Simon's appointment.

Frederic Vecchioli, Chief Executive Officer, commented:

"As expected, the early trading trends indicated in our January 2024 announcement have continued through to the end of our first quarter. The good continental European performances, combined with a reduced seasonal outflow driving resilient UK trading in the context of challenging economic conditions, resulted in the Group delivering like-for-like revenue marginally down 0.9% on a CER basis. We continue to believe that the REVPAF delivered by the Group is the strongest in the European industry.

We opened three new stores in the period in the UK and the Netherlands and our pipeline, at 1.4m sq ft, now represents 17% of our existing portfolio's MLA underpinning our future growth. We anticipate the pipeline will continue to grow further over the months ahead. Our balance sheet has significant funding capacity, allowing us to continue to consider and execute strategic, value-accretive investments as and when they arise.

As seen in the first quarter, we will continue to be agile in managing rate and occupancy to drive the optimal total revenue performance, building out our industry leading REVPAF. Strong performances from our European operations are expected to mitigate the impact of a weaker market in the UK. Looking beyond any potential short-term volatility we believe the industry continues to have significant long term growth potential. There remains a substantial under-supply of high quality self-storage capacity across the UK and Europe which provides a structural growth driver for the industry. New locations feed awareness which subsequently drives demand and the Group's three newest geographies are growing according to plan. Safestore's industry leading business model remains unchanged and we have substantial growth to deliver both from filling the 2.1m square feet of fully invested, currently unlet space, and from the new sites in our pipeline, across major cities in the UK and continental Europe. Safestore has a proven track record, and the returns we deliver are significantly ahead of our cost of capital, so we look to the future with confidence".

Trading Performance

Trading Data- Total

Key Measures - Total					Q1/YTD 2024	Q1/YTD 2023	Change8
Group Revenue (CER1)					55.4	55.7	-0.4%
UK (£'m)					40.6	41.6	-2.5%
Paris (€'m)					12.6	12.5	1.1%
Spain (€'m)					1.3	1.0	41.2%
Netherlands (€'m)					2.0	1.7	17.2%
Belgium (€'m)					1.1	1.0	11.3%
Group Average Rate (CER1)					30.15	30.42	-0.9%
UK (£)					30.23	30.45	-0.7%
Paris (€)					41.42	41.26	0.4%
Spain (€)					30.02	35.48	-15.4%
Netherlands (€)					19.09	19.26	-0.9%
Belgium (€)					23.42	20.17	16.1%
Group REVPAF7 (CER1)					26.82	28.13	-4.6%
UK (£)					27.94	29.35	-4.8%
Paris (€)					36.82	36.32	1.4%
Spain (€)					15.64	18.37	-14.8%
Netherlands (€)					15.77	15.21	3.7%
Belgium (€)					19.96	17.88	11.6%
Group Closing Occupancy3					6.110	6.095	0.2%
UK (million)					4.315	4.410	-2.2%
Paris (million)					1.111	1.099	1.1%
Spain (million)					0.159	0.096	65.6%
Netherlands (million)					0.357	0.317	12.6%
Belgium (million)					0.168	0.173	-2.9%
Group Closing Occupancy (% of MLA)					74.3%	77.6%	-3.3ppt
UK (million)					74.4%	78.4%	-4.0ppt
Paris (million)					81.5%	80.7%	0.8ppt
Spain (million)					46.4%	46.4%	-
Netherlands (million)					72.2%	72.6%	-0.4ppt
Belgium (million)					75.8%	78.1%	-2.3ppt
Group Maximum Lettable Area (MLA)					8.210	7.850	4.6%
UK (million)					5.800	5.620	3.2%
Paris (million)					1.360	1.360	-
Spain (million)					0.340	0.210	61.9%
Netherlands (million)					0.490	0.440	11.4%
Belgium (million)					0.220	0.220	-

Trading Data- Like-For-Like⁵

Key Measures - Like-For-Like5					Q1/YTD 2024	Q1/YTD 2023	Change8
Group Revenue (CER1)					54.4	54.8	-0.9%
UK (£'m)					40.0	40.8	-2.1%
Paris (€'m)					12.6	12.5	1.1%
Spain (€'m)					1.0	0.9	1.5%
Netherlands (€'m)					1.8	1.7	11.2%
Belgium (€'m)					1.1	1.0	11.3%
Group Average Rate (CER1)					30.51	30.44	0.2%
UK (£)					30.32	30.45	-0.4%
Paris (€)					41.42	41.26	0.4%
Spain (€)					36.52	36.03	1.4%
Netherlands (€)					20.57	19.44	5.8%
Belgium (€)					23.42	20.17	16.1%
Group REVPAF7 (CER1)		`			28.03	28.23	-0.7%
UK (£)					28.20	28.79	-2.0%
Paris (€)					36.82	36.32	1.4%
Spain (€)					31.56	31.02	1.7%
Netherlands (€)					19.38	17.38	11.5%
Belgium (€)					19.96	17.88	11.6%
Group Average Occupancy					6.000	6.101	-1.7%
UK (million)					4.324	4.435	-2.5%
Paris (million)					1.108	1.102	0.5%
Spain (million)					0.091	0.092	-1.1%
Netherlands (million)					0.311	0.299	4.0%
Belgium (million)					0.166	0.173	-4.0%
Group Closing Occupancy3					5.968	6.073	-1.7%
UK (million)					4.287	4.410	-2.8%
Paris (million)					1.111	1.099	1.1%
Spain (million)					0.092	0.092	-
Netherlands (million)					0.310	0.299	3.7%
Belgium (million)					0.168	0.173	-2.9%
Group Closing Occupancy (% of MLA)					77.3%	78.8%	-1.5ppt
UK (million)					76.1%	78.4%	-2.3ppt
Paris (million)					81.5%	80.7%	0.8ppt
Spain (million)					76.5%	75.9%	0.6ppt
Netherlands (million)					82.0%	79.1%	2.9ppt
Belgium (million)					75.8%	78.1%	-2.3ppt
Group Maximum Lettable Area (MLA)					7.720	7.710	0.1%
UK (million)					5.640	5.630	0.2%
Paris (million)					1.360	1.360	-
Spain (million)					0.120	0.120	-
Netherlands (million)					0.380	0.380	-
Belgium (million)					0.220	0.220	-

Details of trading operating KPIs are included in the tables above.

UK

UK revenue was down 2.5% for the quarter in total and 2.1% on a like-for-like⁵ basis.

Like-for-like average rate was down 0.4% for the quarter. After selective, focused discounting in November and December 2023 impacted rate slightly, the absolute rate returned to levels that were above October 2023 during January 2024. For the quarter, the average rate grew marginally on a sequential basis compared to Q4 2023. Enquiries remain down on 2023 levels but above the pre-pandemic period.

Like-for-like average occupancy was down 2.5% compared to Q1 2023. However, the expected seasonal outflow was 62,000 sq ft less than in Q1 2023. As a result, closing occupancy, at 76.1%, was 2.3ppts behind Q1 2023 whereas at Q4 2023 closing occupancy was 3.8ppts behind the same period last year.

We believe that our REVPAF⁷, a measure of how effectively we yield manage our assets, is the strongest in the industry. REVPAF⁷ was down 2.0% for the year on a like-for-like⁵ basis at £28.20.

Paris

Paris revenue grew 1.1% in the quarter on a total and like-for-like⁵ basis.

The seasonal occupancy movement was an inflow of 4,000 sq ft in the period as compared to an outflow of 13,000 sq ft last year. As a result, closing occupancy, at 81.5%, was 0.8ppts ahead of Q1 2023. Average rate for the quarter was up 0.4% compared to the prior year.

Our REVPAF⁷, which we believe is significantly ahead of the local competition, grew by a further 1.4% for the quarter.

Spain

Since acquiring our Spanish business in 2019 we have opened a further seven stores. We now have eleven open stores and a pipeline of a further five stores.

During the quarter our Spanish business grew like-for-like revenue by 1.5% and by 41.2% on a total basis.

Like-for-like average occupancy was down 1.1% compared to Q1 2023 and average rate was up 1.4%. Ancillaries performed strongly and were up 12.7%. Closing occupancy finished the quarter up 0.6ppts at 76.5%.

Like-for-like REVPAF was up 1.7% at €31.56 per sq ft.

Netherlands

Our Netherlands business, acquired on 30 March 2022, had eleven stores open at the period end. A new store opened in Aalsmeer, near Schipol airport, just after the quarter concluded adding 48,400 sq ft of MLA and we have a pipeline of three sites.

On a like-for-like basis the business performed strongly in the first quarter. Revenue was up 11.2% driven by a balance of average occupancy (up 4.0%) and strong rate (up 5.8%); and ancillary revenues (up 22.4%). Closing occupancy was up 2.9ppts at 82.0%.

Like-for-like REVPAF was up 11.5% at €19.38 per sq ft.

Total revenue was up 17.2% including the impact of the recently opened stores.

Belgium

Our Belgium business, acquired with our Netherlands business on 30 March 2022, has six stores open in Belgium and a pipeline of one additional site.

On a like-for-like basis the business performed strongly in the first quarter. Revenue was up 11.3% driven by a balance of strong rate (up 16.1%) and ancillary revenues (up 16.0%) offsetting a 4.0% decline in average occupancy. Closing occupancy was down 2.3ppts at 75.8%.

Like-for-like REVPAF was up 11.6% at €19.96 per sq ft.

Property Pipeline Developments

Openings of New Stores and Extensions in the period

Open 2024	FH/LH	MLA	Other
New Developments
Eastleigh	LH	14,000	Conversion, Satellite
London- Paddington Park West	FH	13,000	Conversion, Satellite
Randstad- Aalsmeer	FH	48,400	New build

During the quarter our satellite stores at Eastleigh and London- Paddington Park West Place were opened. Our Aalsmeer store in the Netherlands was opened shortly after the quarter end.

Pipeline Summary

We are leveraging our effective and scalable operating platform to increase our expansion plans across both the UK and continental Europe. This approach has resulted in a significant development pipeline which will be funded from our existing financial resources. This pipeline of c. 1.4m sq ft represents c. 17% of our existing property portfolio. The pipeline and associated financing is dilutive to earnings in the near term but, as the stores mature, we are confident, based on our track record, that reliable, secure and significant earnings and value accretion will be achieved. We estimate that, on stabilisation, the current pipeline will deliver in the range of £25-£30m of incremental EBITDA.

Opening 2024	FH/LH	Status*	MLA	Other
Redevelopments and Extensions
London- Holloway	FH	C, STP	9,500	Extension
Paris- Poissy	FH	C, UC	25,000	Extension
Paris- Pyrenees	LH	C, UC	15,400	Extension
New Developments
London- Lea Bridge	FH	C, UC	80,900	New build
Paris- South Paris	FH	C, UC	55,000	New build
Paris- West 3	FH	C, UC	58,000	New build
Paris- East 1	FH	C, PG	60,000	Conversion
Paris- North West 1	FH	C, PG	54,000	Conversion
Madrid- South West	FH	C, UC	45,400	Conversion
Madrid- South 2	FH	C, UC	70,000	Conversion
Madrid- North East	FH	C, STP	57,000	Conversion
Barcelona- Central 2	LH	C, PG	20,400	Conversion
Randstad- Almere	FH	C, UC	43,300	Conversion
Randstad- Rotterdam	FH	C, UC	71,000	New build
Opening 2025
New Developments
London- Woodford	FH	C, PG	68,700	New build
London- Walton	FH	C, PG	20,700	Conversion
London- Watford	FH	CE, PG	57,500	New build
London- Wembley	FH	C, STP	55,000	New build
Paris- West 1	FH	C, PG	56,000	New build
Paris- West 4	FH	CE, PG	53,000	New Build
Paris- La Défense	FH	C, UC	44,000	Mixed use facility
Randstad- Amsterdam	FH	CE, PG	65,400	New build
Brussels- Zaventem	FH	CE, PG	47,400	New build
Pamplona	FH	C, PG	60,700	Conversion
Opening Beyond 2025
New Developments
London- Old Kent Road	FH	C, STP	75,600	New build
London- Bermondsey	FH	C, STP	50,000	New build
London- Romford	FH	C, STP	41,000	New build
Shoreham	FH	CE, PG	54,000	New build
Total Pipeline MLA (let sq ft- million)			c. 1.414
Total Outstanding CAPEX (£'m)			c. 113.0
*C = completed, CE = contracts exchanged, STP = subject to planning, PG = planning granted, UC = under construction

Ends

1 - CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, in order to present the reported results on a more comparable basis).

2 - Q1 2023 is the quarter ended 31 January 2023.

3 - Occupancy excludes offices but includes bulk tenancy. As of 31 January 2024, closing occupancy includes 18,000 sq ft of bulk tenancy (31 January 2023: 24,000 sq ft).

4 - MLA is Maximum Lettable Area.

5 - Like-for-like information includes only those stores which have been open throughout both the current and prior financial years, with adjustments made to remove the impact of new and closed stores, as well as corporate transactions.

6 - The Benelux business was acquired in March 2022 with the 15 stores now considered like-for-like.

7 - REVPAF is an alternative performance measure used by the business. REVPAF stands for Revenue per Available Square Foot and is calculated by dividing revenue for the period by weighted average available square feet for the same period.

8 - Where reported amounts are presented either to the nearest £0.1m or to the nearest 10,000 sq ft, the underlying variance presented may be significantly different to the variance calculated on the rounded numbers

9 - Store Protect has replaced our customer goods insurance programme from 1 November 2023, attracting VAT rather than Insurance Premium Tax (IPT). When comparing the first three months of the 2024 financial year, the 2023 comparative included revenue of £0.5 million representing 12% IPT on insurance sales for the three months. For 2024, VAT is not included in the revenue. The overall impact of these changes is neutral at EBITDA. With the LFL revenue figure adjusted to remove the IPT from the prior year, LFL revenue is down 1.2% as reported. Including the IPT in revenue in the PY would result in a variance of -1.8%.

Enquiries

Safestore Holdings PLC
Frederic Vecchioli, Chief Executive Officer	via Instinctif Partners
Andy Jones, Chief Financial Officer
www.safestore.com
Instinctif Partners
Guy Scarborough/ Emma Baxter	0207 457 2020

Notes to Editors

·      Safestore is the UK's largest self-storage group with 192 stores on 31 January 2024, comprising 135 wholly owned stores in the UK (including 74 in London and the South East with the remainder in key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh, Liverpool, Sheffield, Leeds, Newcastle, and Bristol), 29 wholly owned stores in the Paris region, 11 stores in Spain, 11 stores in the Netherlands and 6 stores in Belgium. In addition, the Group operates 7 stores in Germany under a Joint Venture agreement with Carlyle.

·      Safestore operates more self-storage sites inside the M25 and in central Paris than any competitor providing more proximity to customers in the wealthiest and more densely populated UK and French markets.

·      Safestore was founded in the UK in 1998. It acquired the French business "Une Pièce en Plus" ("UPP") in 2004 which was founded in 1998 by the current Safestore Group CEO Frederic Vecchioli.

·      Safestore has been listed on the London Stock Exchange since 2007. It entered the FTSE 250 index in October 2015.

·      The Group provides storage to around 90,000 personal and business customers.

·      As of 31 January 2024, Safestore had a maximum lettable area ("MLA") of 8.210 million sq ft (excluding the expansion pipeline stores) of which 6.110 million sq ft was occupied.

·      Safestore employs around 750 people in the UK, Paris, Spain, the Netherlands, and Belgium.

 

END