16th Apr 2020 11:54
(Alliance News) - Self-storage company Big Yellow Group PLC on Thursday said its annual revenue was higher, though occupancy fell in the final two weeks amid the UK's Covid-19 lockdown.
Revenue for the year ended March 31, was 3.1% higher at GBP129.3 million versus GBP125.4 million the year before. This included a 4.1% increase in revenue for the fourth quarter to GBP32.8 million from GBP31.5 million, with like-for-like revenue up 3.8% both in the fourth quarter and for the year as a whole.
Fourth-quarter occupancy was up by 36,000 square feet compared to a 32,000 square foot gain the previous year. On a like-for-like basis, closing occupancy was 813%, down from 82.4% the year before.
The company highlighted that under ordinary circumstances, the final two weeks of March are usually times of "relatively strong" in terms of occupancy gains for Big Yellow. However, the mid-march introduction of lockdown measures to control the spread of Covid-19 resulted in an overall net loss of 23,000 square feet in occupancy, compared to a 25,000 square foot gain in the same two weeks for 2019.
"Customer move-ins and move-outs in the business have reduced significantly in April. In addition, we have not as yet seen any notable impact on debtors and cash collection," Big Yellow noted.
So far in April, year-on-year revenue growth has been 2.6%. From April 1 to 15, loss of occupancy was 32,000 square feet versus 12,000 square feet of loss in the same period of 2019, though this was "partially offset by rate growth of 0.8%".
In light of the reduced number of move-ins, Big Yellow has seen fewer customers with opening offers in the business than is typical. In late March, the company suspended all rate increased for existing customers, though rate increases will resume once "the initial lifting of lockdown measures" takes place.
Modest cost increases have resulted from staff travel, as well as protective and sanitising equipment, though this was "more than offset by a reduction of spend on 'pay per click' and other marketing costs". Thus, overall operating costs are set to be smaller during the lockdown, with interest costs also lower since a "significant amount" of Big Yellow's debt is variable.
Work on Big Yellow's Camberwell and Battersea development site is on hold, which limited fit-out work continued at its facility in Bracknell. Construction will recommence once lockdown measures are relaxed, the firm added.
However, of the 13 stores within its development pipeline, Big Yellow said that only 6 have planning consent, while another 3 have applications submitted already. Applications for the final four will be submitted this year. Big Yellow said that "the applications that are awaiting committee approval are subject to delay as a result of the lockdown."
At the end of March, Big Yellow completes a seven-year debt facility with Aviva totaling GBP35 million with a 1.96% all-in cost. It currently has a GBP76 million headroom of cash and undrawn bank facilities.
Chief Executive James Gibson said: "Our investment in our digital platform in the last decade and our stores which allow automated access to existing customers, has enabled us to amend our operating practices to continue to provide secure storage services in this lockdown environment. Furthermore, we own 98% of our estate by value freehold, enjoy high operating margins, and we have a relatively flexible and conservative debt structure.
"Given the levels of distress in the economy it is not possible to make accurate judgements about future trading until we have improved visibility. We are self-evidently not immune from this very challenging environment, however, we believe our business model will provide the group with a good deal of resilience."
Shares in Big Yellow were up 0.7% at 997.00 pence in London on Thursday morning.
By Anna Farley; [email protected]
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