20th May 2014 14:15
LONDON (Alliance News) - Self-storage business Big Yellow Group PLC Tuesday reported an increase in profit and revenue for the full year, as it benefited from revaluation gains and strong demand for its assets.
The company, which operates mainly in London and the South East, posted pretax profit of GBP59.8 million for the period ended March 31, up from GBP31.9 million a year earlier, while revenue crept to GBP72.2 million from GBP69.7 million in the corresponding period.
FTSE 250-listed Big Yellow was boosted by a GBP28.4 million property revaluation gain which it said reflected the operating performance of the business and some yield compression, particularly in its London stores. In the previous period, the company made a GBP9.5 million revaluation gain.
Big Yellow said it had a strong summer's trading with occupancy growth of 5.7 percentage points in the first six months of the year in its wholly owned stores.
In the final quarter to March the company returned to growth, after reporting a seasonal loss in occupancy of 2.8 percentage points in the third quarter.
Occupancy at the year-end stood at 69.8% up from 64.8% a year earlier, but slightly down from September's occupancy of 70.5%.
Big Yellow said the introduction of VAT on self storage sales in October 2012 led to a reduction in achieved net rents over the year to March 2013 by 6.9%, as "we did not pass all of the VAT onto our domestic customers".
In the year since April 1, 2013, Big Yellow said it has been looking to grow rents in line with occupancy and have successfully increased net rent per square foot over the year by 6.1% to GBP26.15 from GBP24.65.
Looking ahead, Big Yellow said increasing political uncertainty and interference, combined with an exuberant housing market in London and the South East, gives scope for "some trading volatility" in the short term.
However, it said land in London and the South East is increasingly scarce for non-residential development which should benefit the company as new supply of self-storage facilities will remain constrained.
"We are therefore confident about the demand and supply characteristics of our business," Big Yellow said.
On the back of its strong performance the company increased its final dividend 40% to 8.4 pence from 6.0 pence, making a total dividend of the year of 16.4 pence, up 49% from 11.0 pence.
Big Yellow shares were trading up 1.6% at 504.00 pence Tuesday afternoon.
By Anthony Tshibangu; [email protected]; @AnthonyAllNews
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