12th Sep 2018 09:06
LONDON (Alliance News) - Big Yellow Group PLC on Wednesday said it intends to raise up to GBP67 million through a share placing to continue its longer-term portfolio expansion strategy.
The company did not provide details of the placing, which will be run by JP Morgan Cazenove. It said the new shares issued will not exceed 4.99% of the its existing issued share capital. Big Yellow has 159 million shares in issue and a market capitalisation of GBP1.52 billion.
The stock was trading 0.8% higher early on Monday at 955.00 pence each.
Big Yellow added that members of its board intend to invest up to GBP265,000.
The self-storage company said it has eleven development sites with completion costs of GBP102 million. Big Yellow expects these store openings to add about 680,000 square feet of storage space to the portfolio, up 15% from its current maximum lettable area.
The company estimates the total development cost, including cost incurred to-date to total GBP198 million, implying an 8.8% net operating income return on cost.
For the year to the end of March 2019, Big Yellow plans to make GBP40 million in capital expenditure, down from GBP42 million a year earlier. However, these expenses have a potential to increase following further site acquisitions, the company noted.
For the five months to August, Big Yellow said it saw continued growth with like-for-like average net achieved rent of GBP26.92, up 4.0% compared to the same period last year. Year-on-year revenue growth for the five months to the end of August was 7.1% with like-for-like growth at 6.9%.
"This equity raise allows us to execute our next phase of growth through the acquisition of new development sites that will deliver medium-term earnings progression," said Executive Chairman Nicholas Vetch.
"We continue to identify attractive locations for the Big Yellow brand," added Vetch.
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