Half year trading update

14 June 2023

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

Interim results for the 6 months ended 30 April 2023
A solid first half performance building on the momentum of two record years; significant strategic progress.

Frederic Vecchioli, Safestore's Chief Executive Officer, commented:

"I am glad to report a solid performance in the period with strong average storage rates driving the results of our UK, French and Spanish businesses, with revenue increasing 9.0% from £101.0m to £110.1m. The performance is all the more pleasing as it builds on two record financial years. We are confident that our focus on balancing occupancy and rate to drive revenue per available foot (REVPAF), which has grown by 19.4% over the last three years, will continue to serve us well and drive shareholder value.

Over the last six months the Group has opened or extended six new stores, added a further five new developments or extensions to the pipeline, extended the leases on three stores, acquired the freeholds of two stores, acquired an existing store in the Netherlands and entered the German market through a new JV with Carlyle.

Over the last seven years, the Group has now developed or acquired 72 stores and expanded into four new countries (Netherlands, Belgium, Spain and now Germany) leveraging and improving our platform and central functions while managing investment risk very carefully. In addition, our development pipeline of 30 new stores, extensions, and projects represents a further c. 18% of our existing portfolio's MLA. Throughout this period of expansion, the Group has maintained its disciplined approach to return on capital.

Our strong and flexible balance sheet has been significantly enhanced by the agreement of a new unsecured four-year £400 million multi-currency RCF in November 2022 which increases funding capacity, allowing us to continue to consider strategic, value-accretive investments as and when they arise.

We have delivered a strong occupancy performance over recent years and, after a significant level of acquisition and development activity over the last six years, we still have 1.9m sq ft of fully invested currently unlet space in our UK, Paris, Spain and Benelux markets in addition to 1.5m sq ft of pipeline space. Our most significant upside opportunity is from filling our existing unlet space at appropriate rates and that remains our priority. The business has demonstrated its inherent resilience and, despite the challenging macroeconomic environment, we are confident in the future of the business.

The underlying fundamentals of the European self storage industry with limited supply, strong barriers to entry and a steadily growing product awareness are as strong as ever. Over the last ten years, Safestore has delivered a market leading 17.3% CAGR of its adjusted diluted EPRA Earnings per Share7 and I'm confident that Safestore will continue to play a leading role in the development of the self storage industry across Europe, delivering significant further value to its stakeholders.

The first six month's trading performance has provided us with a solid base for the rest of the financial year and, as we enter the peak season of trading, we anticipate that the business should deliver Adjusted Diluted EPRA Earnings per Share7 for 2022/23 broadly in line with the consensus of analysts' forecasts of 49.45p17.

None of this would be possible without the dedication and skills of our teams and I would like to thank all our colleagues in the UK, France, Spain, the Netherlands and Belgium for their performance so far in 2023 as well as their commitment and loyalty. We are appreciative of their efforts."




Solid financial performance

  • Group revenue up 9.0% and in CER2 up 7.7%
  • Group like-for-like storage revenue in CER2 up 3.2% and like-for-like total revenue in CER2 up 3.1%
  • Adjusted Diluted EPRA EPS7, up 5.3% at 23.7p (2022: 22.5p)
  • 5.3% increase in the interim dividend to 9.9p (2022: 9.4p) reflecting improved underlying profitability
  • Statutory profit before income tax of £103.4m down from £285.2m in 2022 with a robust trading performance offset by the lower gain on investment properties of £47.3m (2022: gain of £223.9m)
  • Adjusted Diluted EPRA Earnings per Share7 for the full year expected to be broadly in line with the consensus of 49.45p 17

Operational and Strategic Progress

  • Robust like-for-like operational performance driven by continued strong rate growth
    • Like-for-like revenue up 3.1% in CER2
      • UK up 2.7%
      • Paris up 4.3%
      • Spain up 4.7%
    • Like-for-like9 average storage rate6 for the period up 6.5% in CER2
      • UK up 6.9% to £30.55 (2022: £28.57)
      • Paris up 4.1% to €42.02 (2022: €40.38)
      • Spain up 9.1% to €37.18 (2022: €34.09)
    • Like-for-like9 occupancy4 down 2.9ppts at 78.9% (2022: 81.8%)
      • UK down 3.4ppts at 78.6% (2022: 82.0%)
      • Paris down 0.5ppts at 80.1% (2022: 80.6%)
      • Spain down 8.3ppts at 78.3% (2022: 86.6%)
  • Openings of 222,000 sq ft of new capacity across five stores in Madrid, Barcelona, London, and Wigan in addition to a store extension completion in London-Crayford of 9,000 sq ft.
  • Total Group development and extension pipeline of 30 stores and 1.5m sq ft representing c. 18% of the existing portfolio
  • New development or extension sites in the period acquired or identified in Barcelona, Madrid, London-Charlton, and Ellesmere Port adding 193,000 sq ft of future MLA
  • Purchases of the freehold interests of two stores in Barcelona and Manchester
  • Lease extensions completed for three stores in Edinburgh, London, and Burnley
  • Entry into German market via a new Joint Venture ("JV") with Carlyle which has acquired the seven-store myStorage business with 326,000 sq ft of MLA5
  • Acquisition of 58,000 sq ft existing storage facility in Apeldoorn in the Netherlands

Strong and Flexible Balance Sheet

  • Group loan-to-value ratio ("LTV"11) at 25.3% (2022: 24.8%) and interest cover ratio ("ICR"12) at 10.8x (2022: 10.0x)
  • Unutilised bank facilities of £227.1m at 30 April 2023 (2022: £198.5m)


Enquiry levels in the UK, whilst significantly ahead of pre-pandemic levels, were slightly below prior year levels in the UK in May but have showed some improvement in June. In our continental European business, enquiry levels have been ahead of prior year in May and June.

Group revenue for May 2023 grew by 3.9% (CER) compared to May 2022 and by 2.2% on like-for-like CER2 basis.
Our business has proved itself to be resilient with multiple drivers of demand and, despite the current macro-economic challenges, we believe the Group, whilst not entirely immune from any cost of living or inflationary issues, is well positioned to withstand any downturn. At present, Adjusted Diluted EPRA earnings per share for the full year is anticipated to be broadly in line with consensus17.

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For further information, please contact:

Safestore Holdings PLC     
Frederic Vecchioli, Chief Executive Officer    via Instinctif Partners
Andy Jones, Chief Financial Officer     

Instinctif Partners     
Guy Scarborough/ Bryn Woodward    07917 178920/ 07739 342009
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 measures are not defined under IFRS and they may not be directly comparable with other companies' adjusted measures and are not intended to be a substitute for, or superior to, any IFRS measures of performance. 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; and constant exchange rate (CER) figures are provided in order to present results on a more comparable basis, removing FX movements. 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 7 and 13 below and "Non-GAAP financial information" in the notes to the financial statements.

1 - Where reported amounts are presented either to the nearest £0.1m or to the nearest 10,000 sq ft, the effect of rounding may impact the reported percentage change.
2 - CER is Constant Exchange Rates (Euro denominated results for the current period have been retranslated at the exchange rate effective for the comparative period.  Euro denominated results for the comparative period are translated at the exchange rates effective in that period.  This is performed in order to present the reported results for the current period on a more comparable basis).
3 - 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, variable lease payments, depreciation and the share of associate's depreciation, interest and tax. 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.
4 - Occupancy excludes offices but includes bulk tenancy. As at 30 April 2023, closing occupancy includes 18,000 sq ft of bulk tenancy (30 April 2022: 14,000 sq ft).
5 - MLA is Maximum Lettable Area. At 30 April 2023, Group MLA was 7.99m sq ft (30 April 2022: 7.67m sq ft).
6 - 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.
7 - 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 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.
8 - Free cash flow is defined as cash flow before investing and financing activities but after leasehold rent payments.
9 - Like-for-like adjustments remove the impact of the 2023 acquisition of Apeldoorn, the 2023 openings of Wigan, London-Morden, North Barcelona, South Madrid and North Madrid, the 2022 acquisition of the Netherlands and Belgium Joint Venture, the 2022 acquisition of Christchurch, and the 2022 openings of London-Bow and South Madrid Central Barcelona
10 - Operating profit decreased by £177.7m to £114.9m (30 April 2022: £292.6m) compared to last year, principally as a result of a decrease in the gain on Investment properties of £176.6m to £47.3m (30 April 2022: £223.9m) and an increase of £4.5m in Underlying EBITDA as a result of stronger trading performance. It should be noted, in the prior period, Profit before income tax additionally included exceptional items of £10.5m, being other exceptional gains. £5.5m relating to the valuation gain recognised on the 20% equity investment held in the joint venture with CERF, when the Group acquired the remaining 80% on 30 March 2022. Further, £5.0m related to the net gain on disposal of the Nanterre site in Paris in November 2021
11 - LTV ratio is Loan-to-Value ratio, which is defined as net debt (excluding lease liabilities) as a proportion of the valuation of investment properties and investment properties under construction (excluding lease liabilities). At 30 April 2023, the Group LTV ratio was 25.3%. (31 October 2022: 23.6%)
12 - ICR is interest cover ratio and is calculated as the ratio of underlying EBITDA after leasehold rent to underlying finance charges.
13 - EPRA's Best Practices Recommendations guidelines for Net Asset Value ("NAV") metrics are EPRA Net Tangible Assets ("NTA"), EPRA Net Reinstatement Value ("NRV") and EPRA Net Disposal Value ("NDV"). EPRA NTA is considered to be the most relevant measure for the Group's business which provides sustainable long term progressive returns and is now the primary measure of net assets. The basis of calculation, including a reconciliation to reported net assets, is set out in note 15.
14 - On 30 March 2022, the Group acquired the remaining 80% of the Joint Venture with CERF. Prior to acquiring the 80%, the Joint Venture with CERF, which represented a 20% investment, was accounted for as an associate using the equity method of accounting, as described in the "Investment in associates" note to the financial statements.
15 - On 1 December 2022, the Group made an initial investment into a new joint venture with Carlyle, to enter the German self storage market, of c. €2.2 million for a 10% share. The Group will also earn a fee for providing management services to the joint venture.
16 - REVPAF is a new 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.
17 - As at the date of publication, the consensus of 10 analysts' forecasts of Adjusted EPRA EPS was 49.45p and the range of forecasts was from 47.3p to 51.7p

Reconciliations between underlying metrics and statutory metrics can be found in the financial review and financial statements sections of this announcement.
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