20th Apr 2020 18:19
(Alliance News) - Big Yellow Group PLC on Monday said it plans to raise around GBP80 million in order to acquire more land and grow its development pipeline.
The number of shares to be issued will be no more than 8.3 million, the maximum authorised by shareholders at its July 2019 annual general meeting. An GBP80 million placing of 8.3 million shares would give a price per share of around 964 pence.
Shares in Big Yellow ended 1.1% lower at 993.00p in London on Monday.
Since its September 2018 placing, which raised GBP65.3 million, Big Yellow has incurred capital expenditure of GBP106.1 million through the acquisition of six development site and the freehold of its New Malden store for GBP75.6 million and another "GBP30.5 million principally on the construction of Manchester, Camberwell, Battersea and Bracknell".
Board members intend to invest up to GBP300,000 in the placing in aggregate, with the placing to be conducted via an accelerated bookbuild with JP Morgan Securities PLC as sole bookrunner.
Big Yellow Executive Chair Nicholas Vetch said: "Following the placing in November 2014 your board embarked on a strategy of growing the company and its earnings by acquiring and developing sites of the very highest quality with a focus on London and the South East. Since then, we have purchased 15 development sites and two trading freehold stores. We have secured 8 planning consents, opened two and have a further three under construction. We have also opened three other stores where the sites had been acquired prior to November 2014. Although, we are always subject to the vagaries of the planning system, at the time of writing, we see no significant impediment to building and opening the remaining stores in the development pipeline. In doing so we have or will deploy a total of GBP235 million.
"The development process is lengthy and often complicated, but the prize is in our view, significant. It has always been difficult to acquire new sites by dint of their scarcity with competition principally coming from other uses, and a planning system which remains complex and unpredictable. The availability of sites for our use will remain limited despite the current economic dislocation, but we believe that inevitably this environment will provide some increased opportunity.
"This equity raise allows us to execute the next phase of growth through the continuation of our core strategy."
The firm said its current trading is still in line with its fourth quarter trading update posted Thursday last week.
At that time, Big Yellow said revenue for its financial 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.
By Anna Farley; [email protected]
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