12th Nov 2014 10:55
LONDON (Alliance News) - Safestore Holdings PLC saw its shares rise Wednesday after it said revenue growth was continuing to accelerate and it also expects its cash tax earnings per share for the financial year that just ended to be slightly above market expectations as it also focuses on cost control and cash management.
In a statement, the company said revenue in its fourth quarter to end-October was GBP26.1 million, up from GBP24.8 million a year earlier, bringing revenue for the full year to GBP97.9 million, up from GBP96.1 million in fiscal 2013.
The self-storage company's Paris operations took a hit due to the strength of sterling. It said total revenue would have been up 7.2% at constant exchange rates, compared with the 5.2% increase at actual rates.
It said the UK business performed strongly in the final quarter with like-for-like revenue up 10.1% and total revenue up 8.3% to GBP19.6 million. It said UK occupancy was 66.6% at the end of the quarter, up 3.1 percentage points compared with a year earlier. The average storage rate was up 4.4% in the fourth quarter after it implemented pricing policy changes in the first half, and for the full year the rate was in line with the prior year.
It illustrated the improving trend in its UK market, with total revenue down 6.9% in September 2013, improving to a decline of 1.5% in February 2014, swinging to growth of 0.6% in March and then hitting 8.3% growth in September and 8.8% in October.
"Our key focus throughout the year in the UK, has been on our store operational performance and on improving the conversion of enquiries at an appropriate rate to maximise revenues. New lets growth of 35.4% in the quarter and 19.8% for the year has continued to drive performance, with 125,000 square foot of occupancy added over the year," it said.
It said its Paris business also continued a "robust" performance, with revenue up 4.3% at constant currency. However, the strength of the pound meant sterling revenue fell 3.0% to GBP6.5 million, from GBP6.7 million.
Occupancy in Paris rose 5.3 percentage points on the year in the fourth quarter, although the average storage rate was down 5.1% in sterling terms.
It said the impact of a 9% weakening in the Euro against sterling was partly mitigated by foreign exchange swaps in place on EUR10.5 million of Paris profitability, at an average rate of EUR1.236. The benefit of these hedging arrangements is reflected within earnings before interest, tax, depreciation and amortisation, but not in revenue, it said.
"We have strong market positions in both the UK and Paris and ample scope for further operational upside, with 1.6 million square feet of space to fill. We remain fully focused on continuing our strategy of improving the operational performance of the business and are encouraged by the continued improvement in occupancy and rate trends as we head into the new financial year," the company said in its outlook statement.
Its cash tax adjusted earnings per share is its profit or loss for the year before exceptional items, change in fair value of derivatives, profit or loss on investment properties and the associated tax impacts as well as exceptional tax items and deferred tax charges. It said the consensus range for the year to end-October stood at 12.6 pence to 13.1p on November 11, based on forecasts of nine analysts.
Safestore Holdings shares were up 2.2% at 222.25 pence Wednesday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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