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Financial Highlights

Strong Financial Performance

  • Group revenue for the year up 5.5% (up 5.6% in CER1)
  • Like-for-like8 Group revenue for the year in CER1 up 4.8%: 
    • UK up 4.7%
    • Paris up 5.6%
  • Underlying EBITDA2 up 5.4% in CER1 which, combined with a reduced gain on investment properties of £84.2m (FY2018: £122.1m), resulted in statutory operating profit9 of £163.7m (FY2018: £197.6m)
  • Adjusted Diluted EPRA Earnings per Share6 up 6.3% at 28.5 pence (FY2018: 26.8 pence). Diluted Earnings per Share was 62.6 pence (FY2018: 84.2 pence) largely due to the lower property valuation gain in FY2019 
  • 7.6% increase in the final dividend to 12.0 pence (FY2018: 11.15 pence) giving a total for the year of 17.5 pence (FY2018: 16.25 pence)
Operational Focus
  • Continued balanced approach to revenue management drives returns:
    • Like-for-like8 closing occupancy of 78.5% up 3.4ppts on 2018 (FY2018: 75.1%) 
    • Like-for-like8 average occupancy for the year up 3.5%
    • Like-for-like8 average storage rate5 for the year up 1.0% in CER1
    • Total average storage rate5 up 0.8% in CER1 reflecting dilutive impact of new store openings
  • New stores trading well and in line with business plans
Strategic Progress
  • Established joint venture14 with Carlyle, which acquired M3 Self Storage (“M3”) in the Netherlands (six stores in Amsterdam and Haarlem)
  • Acquisition of Fort Box Self Storage (two London stores) on 5 November 2019 for £14.3m10
  • On 30 December 2019 the Group entered the Spanish self-storage market with the acquisition of OMB Self Storage SL trading as OhMyBox (4 stores in Barcelona) for €17.25m
  • Acquisition of 34,000 sq ft freehold Heathrow store for £6.6m10 including acquisition costs
  • Freehold site acquired in Sheffield with 47,000 sq ft store to open in H1 2020
  • New long leasehold site secured at Gateshead (Newcastle)
  • Sites in Peterborough, Birmingham Merry Hill and Pontoise opened in the period
  • Four new stores in the pipeline with 175,000 sq ft of new space scheduled to open in London Carshalton, Gateshead, Sheffield and Paris Magenta opening in 2020
  • Further development sites acquired in London Bermondsey and London Morden.

Strong and Flexible Balance Sheet

  • £125m of new US Private Placement Notes issued to fund medium-term growth
  • Effective average interest rate of 2.3% and average tenor increased to 6.3 years
  • 11.1% increase in property valuation (including investment properties under construction) in CER1 driven by the Heathrow acquisition, reduced exit cap rates and revised stabilised occupancy assumptions
  • Group loan-to-value ratio (“LTV”11) at 31 October 2019 at 31% (31 October 2018: 30%) and interest cover ratio (“ICR”12) at 8.9x (31 October 2018: 8.6x)
Notes
We prepare our financial statements using IFRS. However we also use a number of adjusted measures in assessing and managing the performance of the business. These include like-for-like figures, to aid in the comparability of the underlying business as they exclude the impact on results of purchased, sold, opened or closed stores. These metrics have been disclosed because management review and monitor performance of the business on this basis. We have also included a number of measures defined by EPRA, which are designed to enhance transparency and comparability across the European Real Estate sector, see notes 6 and 13 below and “Non-GAAP financial information” in the notes to the financial statements.

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 – Underlying EBITDA is defined as Operating Profit before exceptional items, share-based payments, corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties, contingent rent and depreciation. Underlying EBITDA therefore excludes all leasehold rent charges. Underlying profit before tax is defined as underlying EBITDA less leasehold rent, depreciation charged on property, plant and equipment and net finance charges relating to bank loans and cash.
3 – Occupancy excludes offices but includes bulk tenancy. As at 31 October 2019, closing occupancy includes 14,000 sq ft of bulk tenancy (31 October 2018: 26,000 sq ft).
4 – MLA is Maximum Lettable Area. At 31 October 2019, Group MLA was 6.47m sq ft (FY2018: 6.37m sq ft).
5 – Average Storage Rate is calculated as the revenue generated from self storage revenues divided by the average square footage occupied during the period in question.
6 – Adjusted Diluted EPRA EPS is based on the European Public Real Estate Association's definition of Earnings and is defined as profit or loss for the period after tax but excluding corporate transaction costs, change in fair value of derivatives, gain/loss on investment properties and the associated tax impacts. The Company then makes further adjustments for the impact of exceptional items, IFRS 2 share-based payment charges, exceptional tax items, and deferred tax charges. This adjusted earnings is divided by the diluted number of shares. The IFRS 2 cost is excluded as it is written back to distributable reserves and is a non-cash item (with the exception of the associated National Insurance element). Therefore neither the Company’s ability to distribute nor pay dividends are impacted (with the exception of the associated National Insurance element). The financial statements will disclose earnings both on a statutory, EPRA and Adjusted Diluted EPRA basis and will provide a full reconciliation of the differences in the financial year in which any LTIP awards may vest.
7 – Free cash flow is defined as cash flow before investing and financing activities but after leasehold rent payments.
8 – Like-for-like adjustments have been made to remove the impact of Heathrow, the 2019 openings of Peterborough, Birmingham Merry Hill and Pontoise, the 2018 openings of Mitcham, Paddington Marble Arch and Poissy and 2018 closures of Leeds Central, Merton and Paddington.
9 – Operating profit decreased by £33.9m to £163.7m (FY2018: £197.6m) principally as a result of a decrease in the gain on Investment properties of £37.9m to £84.2m (FY2018: £122.1m), offset by an increase of £4.6m or 5.5% in Underlying EBITDA as a result of stronger trading performance. Profit before tax additionally included a decrease in the fair value of derivatives of £2.1m (FY2018: net gain £0.5m).
10 – The consideration paid for the Heathrow store on 29 July 2019 was £6.4m plus costs of £0.2m and for Fort Box Self Storage on 5 November 2019 was £13.6m plus costs of approximately £0.7m, both net of cash acquired and both are subject to customary working capital adjustment.
11 – LTV ratio is Loan-to-Value ratio, which is defined as gross debt (excluding finance leases) as a proportion of the valuation of investment properties and investment properties under construction (excluding finance leases).
12 – ICR is interest cover ratio, and is calculated as the ratio of underlying EBITDA after leasehold rent to underlying finance charges.
13 – EPRA basic NAV per share is an industry standard measure recommended by EPRA. The basis of calculation is set out in the “Earnings per share” note to the financial statements.
14 – The joint venture with Carlyle, which represents a 20% investment, has been accounted for as an associate using the equity method of accounting, as described in the “Investment in associates” note to the financial statements.
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