REG - Safestore Hldgs plc - Interim results
12/06/2024 07:15
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RNS Number : 0455S Safestore Holdings plc 12 June 2024
12 June 2024
Safestore Holdings plc
("Safestore", "the Company" or "the Group")
Interim results for the 6 months ended 30 April 2024
Robust performance in the first half, building on strong foundations, with
continued strategic progress
Key Measures 6 months ended 30 April 2024 6 months ended 30 April 2023 Change(1) Change-CER(2)
Underlying and Operating Metrics- total
Revenue(3) £109.2m £110.1m (0.8%) (0.3%)
Underlying EBITDA(4) £67.1m £69.7m (3.7%) (3.3%)
Closing Occupancy (let sq ft- million)(5) 6.129 6.124 0.1% n/a
Closing Occupancy (% of MLA)(6) 74.4% 76.7% (2.3ppts) n/a
Average Storage Rate(7) £30.16 £30.58 (1.4%) (0.8%)
REVPAF (£)(8) £26.74 £28.28 (5.4%) (4.9%)
Adjusted Diluted EPRA Earnings per Share(9) 21.2p 23.7p (10.5%) n/a
Free Cash flow(10) £41.0m £31.9m 28.5% n/a
EPRA NTA per Share(11) £10.03 £9.12 10.0% n/a
Underlying and Operating Metrics- like-for-like(12)
Revenue £107.0m £107.9m (0.8%) (0.3%)
Storage Revenue £90.6m £92.1m (1.8%) (1.2%)
Ancillary Revenue £16.4m £15.8m 4.2% 4.6%
Underlying EBITDA £66.7m £69.0m (3.3%) (2.8%)
Closing Occupancy (let sq ft- million) 5.949 6.049 (1.6%) n/a
Closing Occupancy (% of MLA) 76.9% 78.5% (1.6ppts) n/a
Average Occupancy (let sq ft- million) 5.960 6.055 (1.6%) n/a
Average Storage Rate 30.55 30.70 (0.5%) 0.1%
REVPAF (£) £27.86 £28.24 (1.3%) (0.8%)
Statutory Metrics
Operating Profit(13) £186.3m £114.9m 62.1% n/a
Profit before Income Tax(13) £173.7m £103.4m 68.0% n/a
Diluted Earnings per Share 71.5p 42.7p 67.4% n/a
Dividend per Share 10.0p 9.9p 1.0% n/a
Cash Inflow from Operating Activities £45.4m £36.3m 25.1% n/a
Basic net assets per share £9.35 £8.48 10.2% n/a
Highlights
Resilient Financial performance
· Group revenue down 0.8% and in CER down 0.3%
· H1 2023 revenue included £1.0m of insurance premium tax relating
to the sale of customer goods insurance not repeated in 2024. Excluding this,
revenue at CER grew 0.7%.
· Group like-for-like revenue in CER down 0.3%
· Adjusted Diluted EPRA EPS, down 10.5% at 21.2p (H1 2023: 23.7p)
· Dividend increase to 10.0p (H1 2023: 9.9p)
· Investment property value increased 5.8%, with net gain of
£121.7m (H1 2023: gain of £47.3m)
· Strong cash generation with free cash flow increase of 28.5% to
£41.0m (H1 2023: £31.9m)
· Statutory profit before income tax of £173.7m up from £103.4m
in H1 2023
· Adjusted Diluted EPRA Earnings per Share for the full year
expected to be in the lower half of the range of consensus estimates
Operational and Strategic Progress
· Consistent like-for-like operational performance driven by
continued rate growth
o Like-for-like revenue down 0.3% in CER
§ UK down 1.5%
§ Paris up 1.4%
§ Spain up 2.4%
§ Benelux up 13.5%
o Like-for-like industry leading 7.4% increase in REVPAF over the last 3
years.
o Like-for-like average storage rate for the period up 0.1% in CER
§ UK down 0.2% to £30.45 (H1 2023: £30.51)
§ Paris down 0.6% to €41.78 (H1 2023: €42.02)
§ Spain down 0.8% to €36.71 (H1 2023: €37.00)
§ Benelux up 10.2% to €22.37 (H1 2023: €20.28)
o Like-for-like closing occupancy down 1.6ppts at 76.9% (H1 2023: 78.5%)
§ UK down 2.6ppts at 75.6% (H1 2023: 78.2%)
§ Paris up 1.0ppts at 81.1% (H1 2023: 80.1%)
§ Spain up 3.6ppts at 77.7% (H1 2023: 74.1%)
§ Benelux up 2.5ppts to 80.0% (H1 2023: 77.5%)
· Enquiries for the Group consistently well above pre-covid levels
in all markets, with 39% enquiry growth over the last five years
· Openings of 259,700 sq ft in the year to date and post-period end
of new capacity across six stores (including satellite stores) in Eastleigh,
London- Paddington Park West, Madrid- South 2, Almere, Aalsmeer, and Rotterdam
· Continue to expand portfolio of stores with a focus on key
metropolitan areas with development and extension pipeline of 30 stores and
1.5m sq ft representing c. 18% of the existing portfolio
· New development or extension sites in the period secured in
London / SE England and the Netherlands adding 263,250 sq ft of future MLA at
London- Kingston, Welwyn Garden City, St Albans, Hemel Hempstead and Randstad-
Utrecht
· Acquired the freehold interests of two stores in Utrecht and
London- Paddington Park West and lease extensions completed for one store in
London- Bermondsey
Strong and Flexible Balance Sheet
· 5.8% increase in property valuation (including investment
properties under construction)
· 5.4% increase in EPRA basic NTA per share to £10.03 (FY 2023:
£9.52)
· On 30 April 2024, the Group completed the financing of its RCF
accordion option for £100m. This increased the facility to £500m
· Group loan-to-value ratio ("LTV"(14)) at 25.7% (FY 2023: 25.4%)
and interest cover ratio ("ICR"(15)) at 5.0x (FY 2023: 6.7x)
· Ample liquidity with unutilised bank facilities of £245.4m at 30
April 2024 (FY 2023: £197.0m)
· 68% of debt at fixed interest rates with weighted average term of
4.7 years following refinancing of €51m USPP in May 2024
Frederic Vecchioli, Safestore's Chief Executive Officer, commented:
"We have delivered robust operating performance in difficult market conditions
and have continued to demonstrate the value of our strategy of focusing on
REVPAF to optimise returns from our assets.
Our track record has delivered market leading returns with revenue growing
49.3% since pre-pandemic as we grew occupied space by 31.8% and increased
rental rates by 14.7% and ancillary revenue by 33.3% across all of our
markets. During the period our central pricing approach has meant that we have
been able to adapt our approach across our different markets to enable
optimisation of revenue.
In the UK, despite a challenging economic backdrop, we have seen solid
like-for-like revenue performance with broadly flat average storage rates and
a small occupancy decline. We have delivered strong like-for-like revenue
growth in our other markets demonstrating the value of our diversified
approach led by our Benelux markets with 13.5% like-for-like revenue
increases.
In addition, we continue to grow income through our store development
programme. In the period new stores and developments, generated an additional
£2.2m of revenue, with particularly strong performance in Spain as we
leverage the Oh My Box! operating platform.
So far this year we opened six new stores from our development programme,
adding 3% to our available rental area. The programme has a further 30 stores,
including six in the second half of 2024, which will add 1.5m sq ft of new
space when open. These development projects are concentrated, like our
existing stores, in the major metropolitan areas in our markets with 94% in
the largest cities such as London, Paris, Amsterdam / Randstad, Barcelona and
Madrid. We have a clear track record of delivering 10%+ cash returns on new
stores and so we are confident that this programme will be accretive on
stabilisation after a short period where earnings are impacted.
Overall, we remain confident in our operating model and believe the market
across Europe continues to have favourable supply / demand dynamics as
reflected in the increase in value of our properties of 5.8% since the October
year end.
The business continues to be highly cash generative with free cash flow of
£41.0m in the period enabling us to both partially finance our development
programme and to declare a 10.0p per share interim dividend to be paid in
August.
As we look forward to the rest of the year, we expect to see trading move back
into growth in the UK, notwithstanding the current short-term economic
uncertainties, with continued growth in Europe leading to overall EPS for the
full year in the lower half of consensus forecasts.
Finally, I would like to thank all of our colleagues across our stores and
head office whose hard work and customer focus has enabled our results and
continued success.
Notes
We prepare our financial statements using IFRS. However, we also use a number
of adjusted measures in assessing and managing the performance of the
business. These measures are not defined under IFRS and they may not be
directly comparable with other companies' adjusted measures and are not
intended to be a substitute for, or superior to, any IFRS measures of
performance. These include like-for-like figures, to aid in the comparability
of the underlying business as they exclude the impact on results of purchased,
sold, opened or closed stores; and constant exchange rate (CER) figures are
provided in order to present results on a more comparable basis, removing FX
movements. These metrics have been disclosed because management review and
monitor performance of the business on this basis. We have also included a
number of measures defined by EPRA, which are designed to enhance transparency
and comparability across the European Real Estate sector, see notes 9 and 11
below and "Non-GAAP financial information" in the notes to the financial
statements.
1 - Where reported amounts are presented either to the nearest £0.1m or to
the nearest 10,000 sq ft, the effect of rounding may impact the reported
percentage change.
2 - CER is Constant Exchange Rates (Euro denominated results for the current
period have been retranslated at the exchange rate effective for the
comparative period. Euro denominated results for the comparative period are
translated at the exchange rates effective in that period. This is performed
in order to present the reported results for the current period on a more
comparable basis).
3 - H1 2023 Revenue included £1.0m of insurance premium tax relating to the
sale of customer goods insurance not repeated in FY 2024 due to a change in
the way customer goods protection is provided in the UK. Excluding this,
revenue at CER grew 0.7%. Cost of goods sold in H1 2023 included 1.0m of
additional costs similarly not repeated in FY 2024
4 - Underlying EBITDA is defined as Operating Profit before exceptional items,
share-based payments, corporate transaction costs, change in fair value of
derivatives, gain/loss on investment properties, variable lease payments,
depreciation and the share of associate's depreciation, interest and tax.
Underlying EBITDA therefore excludes all leasehold rent charges. Underlying
profit before tax is defined as underlying EBITDA less leasehold rent,
depreciation charged on property, plant and equipment and net finance charges
relating to bank loans and cash.
5 - Occupancy excludes offices but includes bulk tenancy. As at 30 April 2024,
closing occupancy includes 18,000 sq ft of bulk tenancy (30 April 2023: 18,000
sq ft).
6 - MLA is Maximum Lettable Area. At 30 April 2024, Group MLA was 8.23m sq ft
(30 April 2023: 7.99m sq ft).
7 - Average Storage Rate is calculated as the revenue generated from
self-storage revenues divided by the average square footage occupied during
the period in question.
8 - Revenue per Available Square Foot ("REVPAF") is an alternate performance
measure used by the business and is considered by management as the best KPI
of economic performance of a mature self-storage asset as it is the net
outcome of the occupancy/rate mix plus ancillary sales. It is calculated by
dividing revenue for the period by weighted average available square feet for
the same period.
9 - Adjusted Diluted EPRA EPS is based on the European Public Real Estate
Association's definition of Earnings and is defined as profit or loss for the
period after tax but excluding corporate transaction costs, change in fair
value of derivatives, gain/loss on investment properties and the associated
tax impacts. The Company then makes further adjustments for the impact of
exceptional items, IFRS 2 share-based payment charges, exceptional tax items,
and deferred tax charges. This adjusted earnings is divided by the diluted
number of shares. The IFRS 2 cost is excluded as it is written back to
distributable reserves and is a non-cash item (with the exception of the
associated National Insurance element). Therefore, neither the Company's
ability to distribute nor pay dividends are impacted (with the exception of
the associated National Insurance element). The financial statements will
disclose earnings on a statutory, EPRA and Adjusted Diluted EPRA basis and
will provide a full reconciliation of the differences in the financial year in
which any LTIP awards may vest.
10 - Free cash flow is defined as cash flow before investing and financing
activities but after leasehold rent payments.
11 - EPRA's Best Practices Recommendations guidelines for Net Asset Value
("NAV") metrics are EPRA Net Tangible Assets ("NTA"), EPRA Net Reinstatement
Value ("NRV") and EPRA Net Disposal Value ("NDV"). EPRA NTA is considered to
be the most relevant measure for the Group's business which provides
sustainable long term progressive returns and is now the primary measure of
net assets. The basis of calculation, including a reconciliation to reported
net assets, is set out in note 14.
12 - Like-for-like adjustments remove the impact of the 2024 openings and
post-period end openings at Eastleigh, South Madrid 2, Almere, Aalsmeer, and
Rotterdam, the 2023 acquisition of Apeldoorn and the 2023 openings of Wigan,
London-Morden, Ellesmere Port, North Barcelona, South Barcelona, Central
Barcelona 3, South Madrid, North Madrid, East Madrid, and Amersfoort.
13 - Operating profit increased by £71.4m to £186.3m (30 April 2023:
£114.9m) compared to last year, principally as a result of an increase the
gain on Investment properties of £74.4m to £121.7m (30 April 2023: £47.3m).
14 - LTV ratio is Loan-to-Value ratio, which is defined as net debt (excluding
lease liabilities) as a proportion of the valuation of investment properties
and investment properties under construction (excluding lease liabilities). At
30 April 2024, the Group LTV ratio was 25.7%. (31 October 2023: 25.4%)
15 - ICR is interest cover ratio and is calculated as the ratio of underlying
EBITDA after leasehold rent to underlying finance charges.
16 - As at the date of publication, the consensus of 12 analysts' forecasts of
Adjusted EPRA EPS was 46.1p.
Reconciliations between underlying metrics and statutory metrics can be found
in the financial review and financial statements sections of this
announcement.
Summary
Following three years of market outperformance during which like-for-like
revenue increased by 26.9% and REVPAF by 7.4%, we have delivered a robust
financial performance in the first half of the financial year, against a
backdrop of challenging economic conditions, particularly in the UK, resulting
in revenue down slightly by 0.8% to £109.2m (H1 2023: £110.1m). This was
driven by broadly stable like-for-like revenue at CER (down 0.3%), the
negative impact of adverse currency exchange rate (0.6%), increases in revenue
from new stores and developments (1.0%) less the impact of changes in customer
goods protection and insurance in the UK (1.0% impact).
Profit before income tax increased to £173.7m from £103.4m in 2023 as a
result of a gain on the revaluation of investment properties of £126.1m (H1
2023: gain of £51.7m) partially offset by a decrease in underlying trading
performance of £2.6m.
Our operational performance across the UK has been resilient in the current
economic environment with like-for-like revenue of £78.6m, down 1.5% from
£79.8m in the prior period. Average storage rate, driven by our industry
leading digital marketing platform, enquiry generation and store team
conversion, has again performed well, particularly considering the strength of
the prior year performance, maintaining a steady like-for-like rate of £30.45
(H1 2023: £30.51). Like-for-like closing occupancy at the period-end was down
2.6ppts at 75.6% (H1 2023: 78.2%). New stores and developments contributed a
further incremental £0.3m of revenue in the period.
In Paris, our trading performance was steady with like-for-like revenue
growing by 1.4%. This was driven by our like-for-like average occupancy
increasing by 1.1% compared to the prior year with closing occupancy growing
by 1.0ppts to 81.1% (H1 2023: 80.1%). Average like-for-like storage rate was
down 0.6% at €41.78 (H1 2023: €42.02).
Our Spanish business, which was acquired in December 2019, contributed €2.0m
of like-for-like revenue, up 2.4% compared to the prior year. This was driven
by like-for-like average occupancy growth of 1.1% compared to the prior year
despite the impact of our neighbouring new store openings in Barcelona, offset
by a reduction in the average like-for-like storage rate of 0.8% to €36.71
(H1 2023: €37.00) but with growth in ancillary revenue a continued focus.
Closing like-for-like occupancy was up 3.6ppts at 77.7% (H1 2023: 74.1%). We
continue to grow our Spanish business and new stores and developments added an
incremental €0.8m of revenue in the period. We have 12 stores in Spain
including post-period end openings with a further four in the pipeline
bringing benefits of additional operational leverage.
Our Belgium and Netherlands (together "Benelux") businesses, which were
acquired in 2022, contributed €6.0m of like-for-like revenue, up 13.5%
compared to the prior year. This was driven by like-for-like average rate
growth of 7.0% in the Netherlands and 13.5% in Belgium compared to the prior
year, with the average like-for-like storage rate increasing to €21.14 and
€23.60 respectively (H1 2023: €19.76 and €20.80) coupled with an
increase in like-for-like average occupancy of 2.1%. Closing like-for-like
occupancy was up 1.6ppts in the Netherlands up 3.4ppts in Belgium at 80.6% and
79.3% respectively (H1 2023: 79.0% and 75.9%). We now have 20 stores in the
Benelux including post-period end openings with a further three in the
pipeline.
Group underlying EBITDA of £67.1m decreased 3.3% at CER on the prior year and
3.7% on a reported basis, reflecting the impact of the 2.1% strengthening of
the average Sterling to Euro exchange rate, compared to the prior period, on
the profit earned on our Paris, Spain and Benelux businesses. Adjusted diluted
EPRA EPS decreased by 10.5% in the period to 21.2p (H1 2023: 23.7p).
During the year to date we have opened 259,700 sq ft of new space across six
stores, including post-period end openings. We continue to expand our
portfolio of stores with a focus on key metropolitan areas and have a pipeline
of 1.5m sq ft of new stores and developments which will add 18% to our
existing asset base.
Our property portfolio valuation (excluding investment properties under
construction) has increased by £157.7m since October 2023 to £2,838.8m. The
increase comprises a revaluation gain of £129.5m (equivalent to 4.8% of the
valuation at October 2023), £46.0m of additions and reclassifications, less
an unfavourable currency impact of £17.8m. The Group's external valuers,
Cushman & Wakefield Debenham Tie Leung Limited ("C&W"), valued 30% of
the portfolio at April 2024 with a Directors' valuation being carried out,
with the assistance of C&W, on the remaining 70%.
Reflecting the Group's solid trading performance, the Board is pleased to
recommend an interim dividend of 10.0p per share (H1 2023 9.9p).
Outlook
We remain focused on further optimising the Group's operational performance
and continuing to grow in all of our geographies. Our development pipeline
represents 18% of our existing MLA and our balance sheet strength and
flexibility provide us with the opportunity to consider further self-funded
selective development and acquisition opportunities in all of our markets.
As disclosed in our 2023 full year results, we expect the development pipeline
and associated financing to be dilutive to earnings in the 2024 financial year
before becoming highly accretive in future years as the stores stabilise. We
believe that, on stabilisation, an incremental £30-£35 million of EBITDA
will be added by the 30 projects in the pipeline together with the stores
opened in the last 18 months.
Our business model has proven to be highly resilient as we navigate the
current economic backdrop. We believe the Group is strongly positioned with
low leverage at 25.7% LTV, 68% fixed-rate debt, strong operating margins and
the potential for material earnings growth through the opening of our pipeline
space together with our existing stores, all supported by our 25-year track
record of delivering market leading operational performance.
Since 30 April 2024, UK trading has been slightly improving with domestic like
for like occupancy now flat year-on-year and business occupancy improving
0.90ppts since 30 April 2024 to (3.6%) year-on-year, with Paris, Spain and
Benelux trading consistently with the first half. New store openings are
trading in line with expectations.
For further information, please contact:
Safestore Holdings PLC
Frederic Vecchioli, Chief Executive Officer 020 8732 1500
Simon Clinton, Chief Financial Officer
www.safestore.com (http://www.safestore.com)
Instinctif Partners
Guy Scarborough 020 7457 2020
Joe Quinlan
A conference call for analysts will be held at 9:30am today.
For dial-in details of the presentation please contact:
Guy Scarborough (guy.scarborough@instinctif.com
(mailto:guy.scarborough@instinctif.com) or telephone on 07917 178920).
Notes to Editors
· Safestore is the UK's largest self-storage group with 192
stores on 30 April 2024, comprising 135 wholly owned stores in
the UK (including 74 in London and the South East with the remainder in
key metropolitan areas such as Manchester, Birmingham, Glasgow, Edinburgh,
Liverpool, Sheffield, Leeds, Newcastle, and Bristol), 29 wholly owned stores
in the Paris region, 11 stores in Spain, 11 stores in the Netherlands and 6
stores in Belgium.
· Safestore operates more self-storage sites inside the M25 and in
central Paris than any competitor providing more proximity to customers in
the wealthiest and more densely populated UK and French markets.
· Safestore was founded in the UK in 1998. It acquired the French
business "Une Pièce en Plus" ("UPP") in 2004 which was founded in 1998 by the
current Safestore Group CEO Frederic Vecchioli.
· Safestore has been listed on the London Stock Exchange since
2007. It entered the FTSE 250 index in October 2015.
· The Group provides storage to over 90,000 personal and business
customers.
· As at 30 April 2024, Safestore had a maximum lettable area
("MLA") of 8.230 million sq ft (excluding the expansion pipeline stores) of
which 6.129 million sq ft was occupied.
· Safestore employs around 750 people in
the UK, Paris, Spain, the Netherlands and Belgium.
Our Strategy
The Group intends to continue to deliver on its proven strategy of leveraging
its well-located asset base, management expertise, infrastructure, scale and
balance sheet strength and further increase its Earnings per Share by:
· Optimising the trading performance of the existing portfolio;
· Maintaining a strong and flexible capital structure; and
· Taking advantage of selective portfolio management and expansion
opportunities in our existing markets and, if appropriate, in attractive new
geographies either through a joint venture or in our own right.
In addition, the Group's strategy is pursued whilst maintaining a strong focus
on Environmental, Social and Governance ("ESG") matters and a summary of our
ESG strategy is provided further on.
Optimisation of Portfolio
With the opening of 35 new stores since August 2016 including post period
openings, in addition to the acquisitions of 47 existing trading stores, we
have established and strengthened our market-leading portfolio in the UK and
Paris and have entered the Spanish, Netherlands and Belgium markets. We have a
high quality, fully invested estate in all geographies and, of our 192 stores
as at 30 April 2024, 103 are in London and the South East of England or in
Paris, with 61 in the other major UK cities and 28 in Spain and the Benelux
region. In the UK, we now operate 51 stores within the M25, which represents a
higher number of stores than any other competitor.
Our MLA has increased to 8.2m sq ft at 30 April 2024 (FY 2023: 8.1m sq ft). At
the current occupancy level of 76.9% on a like-for-like basis, we have 2.1m sq
ft of fully invested unoccupied space (3.8m sq ft including the development
pipeline and post-period end openings), of which 1.5m sq ft is in our UK
stores, 0.3m sq ft is in Paris and 0.3m sq ft is in Spain and Benelux. In
total, unlet space at our existing stores is the equivalent of c. 53 empty
stores located across the estate and provides the Group with significant
opportunity to grow further. We have a proven track record of filling our
vacant space at efficiently managed rates, so we view this availability of
space with considerable optimism. We will also benefit from the operational
leverage from the fact that this available space is fully invested, and the
related operating costs are essentially fixed and already included in the
Group cost base. Our continued focus will be on ensuring that we drive
occupancy to utilise this capacity at carefully managed rates. From full year
2013 to half year 2024, occupancy of the stores in the portfolio in 2013 that
remain in the Group today has increased from 63.1% to 77.8%, i.e. an average
of 1.3ppts per year and equivalent to a total of c. 1.0m sq ft.
There are three elements that are critical to the optimisation of our existing
portfolio:
· Enquiry generation through an efficient marketing operation;
· Strong conversion of enquiries into new lets; and
· Disciplined central revenue management and cost control.
Digital Marketing Expertise
Awareness of self-storage remains relatively low with half of the UK
population either knowing very little or nothing about self-storage (source:
SSA Annual Report 2024). In the UK, many of our new customers are using
self-storage for the first time and it is largely a brand-blind purchase.
Typically, customers requiring storage start their journey by conducting
online research using generic keywords in their locality (e.g. "storage in
Borehamwood", "self-storage near me") which means that geographic coverage and
search engine prominence remain key competitive advantages.
We believe there is a clear benefit of scale in the generation of customer
enquiries. The Group has continued to invest in technology and in-house
expertise which has resulted in the development of a leading digital marketing
platform that has generated 39% enquiry growth for the Group over the last
five years, an annual growth of 7%. Our in-house expertise and significant
annual budget have enabled us to deliver strong results.
The Group's online strength came to the fore during the various Covid-19
lockdowns and has since continued to be the predominant channel for customer
acquisition. Online enquiries in the first half of this year made up 89% of
all our enquiries in the UK (H1 2023: 89%), with 85% in France (H1 2023:
84%). The majority of our online enquiries now originate from a mobile device
(69% share in UK for H1 2024, H1 2023: 65%), highlighting the need for
continual investment in our responsive web platform for a "mobile-first"
world. We continue to invest in activities that promote a strong search engine
presence to grow enquiry volume whilst managing efficiency in terms of overall
cost per enquiry and cost per new let. Group marketing costs for the half year
as a percentage of revenue were in line with the previous year at 4.0% (H1
2023: 3.6%).
During the period and post-period end, the Group demonstrated its ability to
integrate newly developed and acquired stores into its marketing platform with
successful new openings at Eastleigh, South Madrid, Almere, Aalsmeer, and
Rotterdam in the Netherlands; and the satellite store at London Paddington
Park West Place. We have clearly demonstrated that our marketing platform is
transferrable into multiple overseas geographies.
Motivated and effective store teams benefiting from investment in training and
development
Training, People and Performance Management
In what is still a relatively immature and poorly understood market, customer
service and selling skills at the point of sale remain essential in earning
the trust of the customer and in driving the appropriate balance of volumes
and unit price in order to optimise revenue growth in each store.
Our enthusiastic, well-trained, and customer-centric sales team remains a key
differentiator and a strength of our business. Understanding the needs of our
customers and using this knowledge to develop trusted in-store advisors is a
fundamental part of driving revenue growth and market share.
Safestore has been an Investors in People ("IIP") accredited organisation
since 2003 and we passionately believe that our continued success is dependent
on our highly motivated and well-trained colleagues. Following the award of a
Bronze accreditation in 2015, a Gold accreditation in 2018, and a Platinum
accreditation in 2021, we were delighted to be awarded the "we invest in
people" Platinum accreditation again in March 2024. Platinum is the highest
accolade in the Investors in People scale and achieving Platinum twice is a
fantastic achievement placing us as an employer of choice.
IIP is the international standard for people management, defining what it
takes to lead, support, and engage people effectively to achieve sustainable
results. Underpinning the standard is the Investors in People framework,
reflecting the latest workplace trends, essential skills and effective
structures required to outperform in any industry. Investors in People enables
organisations to benchmark against the best in the business on an
international scale. We are proud to have our colleagues recognised to such a
high standard.
We are committed to growing and rewarding our people and we tailor our
development, reward and recognition programmes to reflect this. Our IIP
recognised coaching programme, launched in 2018 and upgraded every year since,
continues to be a driving force behind the continuous performance improvement
demonstrated by our store colleagues.
Our online learning portal, combined with the energy and flexibility of our
store colleagues, allows us to deliver our award-winning development
programmes.
All new recruits to the business benefit from enhanced induction and training
tools that have been developed in-house and enable us to quickly identify
high-potential individuals and increase their speed to competency. They
receive individual performance targets within four weeks of joining the
business and are placed on the "pay-for-skills" programme that allows
accelerated basic pay increases dependent on success in demonstrating specific
and defined skills. The key target of our programme remains that we grow our
talent through our internal Store Manager Development ("SMD") programme, and
we are pleased with our progress to date.
Our SMD programme has been in place since 2016 and is a key part of succession
planning for future Store Managers. All eleven participants of our 2023 SMD
programme successfully completed their Level 3 Management and Leadership
apprenticeship, and we're delighted that ten of those participants were
awarded distinctions.
In January 2024, we commenced our seventh SMD programme. Funded by the
Apprenticeship Levy this programme provides the opportunity to complete a
Level 3 Management and Leadership apprenticeship, with the additional
opportunity to complete an Institute of Leadership and Management ("ILM")
qualification.
Our Senior Leadership Development programme ("LEAD") focuses on developing our
high performing Store Managers, aimed at preparing them for more senior roles
within the business. We are proud that all nine participants of our Senior
Leadership Development programme (LEAD Academy) successfully completed their
Level 5 Management and Leadership apprenticeship; six of those participants
were awarded Distinctions.
Our performance dashboard allows our store and field teams to focus on the key
operating metrics of the business providing an appropriate level of management
information to enable swift decision making. Reporting performance down to
individual colleague level enhances our competitive approach to team and
individual performance. We continue to reward our store colleagues for their
performance with bonuses of up to 50% of basic salary based on their
achievements against individual targets for new lets, occupancy, and ancillary
sales. In addition, our Values and Behaviours framework is overlaid on
individuals' performance in order to assess performance and development needs
on a quarterly basis.
Our "Make the Difference" people forum, launched in 2018, enables frequent
opportunities for us to hear and respond to our colleagues. Our network of 15
"People Champions" collects questions and feedback from their peers across the
business and put them to members of the Executive Committee. We drive change
and continuous improvement in responding to the feedback we receive for "Our
Business, Our Customers and Our Colleagues".
People Champions:
· Consult and collect the views and suggestions of all colleagues
that they represent;
· Engage in the bi-annual "Make the Difference" people forum,
raising and representing the views of their colleagues; and
· Consult with and discuss feedback with management and the
leadership team at Safestore.
Our values are authentic, having been created by our people. They are core to
the employment life cycle and bring consistency to our culture. Our leaders
have high values alignment enabling us to make the right decisions for our
colleagues and our customers.
Our customers continue to be at the heart of everything we do, whether it be
in store, online or in their communities. Our commitment to our customers
mirrors that of our commitment to our colleagues.
Technological Developments
After delivering the appropriate technology the Group recently opened a
further two fully automated, unmanned, satellite self-storage centre in
Eastleigh and London Paddington Park West having opened its first in
Christchurch in FY 2023. Utilising industry leading automated technology,
along with in-house created communication and control technologies, customers
can securely enter the building and their storage unit from a simple app on
their mobile phone. Several additional unmanned satellite stores are currently
under various stages of development in the UK.
Our customers also have the option to complete a booking and contract for a
self-storage unit online for any UK store location. The Group's belief is that
its multi-channel sales strategy utilising, full automation, colleague
interaction through our store sales teams or our specialist call centre and
National Accounts team provide each type of customer with the most tailored
and easy way to buy self-storage at Safestore.
Customer Satisfaction
In February 2024, Safestore UK won the Feefo Platinum Trusted Service award
for the fifth time. The award is given to businesses which have achieved Gold
standard for three consecutive years. It is an independent mark of excellence
that recognises businesses for delivering exceptional experiences, as rated by
real customers. In addition to using Feefo, Safestore invites customers to
leave a review on a number of review platforms, including Google and
Trustpilot. Our ratings for each of these three providers in the UK are
between 4.7 and 4.9 out of 5. In France, Une Pièce en Plus uses Google and
Trustpilot to obtain independent customer reviews and In H1 2024, achieved a
4.7 out of 5 and a "TrustScore" of 4.6 out of 5 respectively. In Spain, OMB
collects customer feedback via Google reviews and has attained a score of 4.9
out of 5.
Central Revenue Management and Cost Control
We continue to pursue a balanced approach to revenue management. We aim to
optimise revenue per available space ("REVPAF") by improving the utilisation
of the available space in our portfolio at carefully managed rates. Our
central pricing team is responsible for the management of our dynamic pricing
policy, which is set weekly at the granular level of store / unit size,
together with the implementation of promotional offers and the identification
of additional ancillary revenue opportunities. Whilst prices are managed
centrally, where it is appropriate the store sales teams have the ability to
offer discretionary discounts or a Lowest Price Guarantee in the event that a
local competitor is offering a lower price in order to optimise REVPAF.
Average rates are predominantly influenced by:
· The store location and catchment area;
· The volume of enquiries generated online and available space;
· The store team skills at converting these enquiries into new lets
at the expected price; and
· The very granular pricing policy and the confidence provided by
analytical capabilities and systems that smaller players might lack.
We believe that Safestore has a very strong proposition in each of these
areas.
Costs are managed centrally with a lean structure maintained at Head Office.
Enhancements to cost control are continually considered and, particularly in
the context of the current inflationary environment, the cost base is
challenged on an ongoing basis.
Strong and Flexible Capital Structure
We believe that our capital structure is appropriate for our business, with a
strong position which provides us with the flexibility to take advantage of
carefully evaluated development and acquisition opportunities.
The Group finances its operations through a combination of equity and debt. As
at 30 April 2024, the Loan to Value ("LTV") ratio for the Group was 25.7% (H1
2023: 25.3%) which is well below the 40% maximum policy rate which the Board
considers appropriate.
Both this LTV and the interest cover ratio of 5.0x for the twelve-month period
ended 30 April 2024 provides us with significant headroom compared to our
banking covenants (LTV of 60% and ICR of 2.4:1).
At 30 April 2024, the Group's weighted average cost of debt was 3.77% (3.35%
after capitalised interest) and 68% of our drawn debt was incurred a fixed
rate of interest (FY 2023: 2.97% and 73% respectively). The weighted average
maturity of the Group's drawn debt was 4.5 years (FY 2023: 4.1 years) with
this increasing to 4.7 years following the repayment of the 2024 USPP in May
2024.
We have ample liquidity with £245.4 million of undrawn bank facilities at 30
April 2024 following the exercise of an additional £100 million accordion
option on our revolving credit facility which takes total funds available
under our committed RCF to £500m. In addition, the Group's operations are
strongly cash generative and produce sufficient free cash flow to fund our
progressive dividend policy together with the development of three to four new
stores per annum depending on location and cost of land.
The ongoing market for self-storage is supporting investor demand which has
led to increased valuations. In the period ending 30 April 2024, valuations on
a constant currency basis of the standing store portfolio (excluding additions
and reclassifications) grew £130.2m to £2,811.3m (FY 2023: £2,681.1m)
demonstrating the underlying strength of the balance sheet.
Recent refinancing
On 30 April 2024, the Group exercised the RCF's accordion option to increase
the committed facility by £100m to £500m. The facility currently has a term
to November 2027 with an option for us to extend by a further year.
The Group pays interest on the RCF at a margin of 125bps plus SONIA or Euribor
depending on both Sterling and Euro drawn amounts. The margin on the facility
is also linked to ESG targets, enabling a reduction in the margin of up to
5bps to 120bps when certain targets are met.
The 2024 tranche of US Private Placement notes matured at the end of May 2024
and were repaid utilising existing facilities. The Euro denominated borrowings
provide a natural hedge against the Group's investment in the Paris, Spain and
Benelux businesses.
The main covenants under all of the Group's borrowings are a Group
Loan-to-value ("LTV") covenant of 60% and an Interest Cover Ratio covenant of
2.4x. At 30 April 2024, all covenants have been comfortably met.
ESG Strategy
ESG: Sustainable Self-Storage
Our purpose - to add stakeholder value by developing profitable and
sustainable spaces that allow individuals, businesses and local communities to
thrive - is supported by the "pillars" of our sustainability strategy: our
people, our customers, our community and our environment. In addition, the
Group and its stakeholders recognise that its efforts are part of a broader
movement and we have, therefore, aligned our objectives with the UN
Sustainable Development Goals ("SDGs"). We reviewed the significance of each
goal to our business, their importance to our stakeholders and assessed our
ability to contribute to each of them. Following this materiality exercise, we
have chosen to focus our efforts in the areas where we can have a meaningful
impact. These are "Decent work and economic growth" (goal 8), "Sustainable
cities and communities" (goal 11), "Responsible consumption and production"
(goal 12) and "Climate action" (goal 13).
Sustainability is embedded into day-to-day responsibilities at Safestore and,
accordingly, we have opted for a governance structure which reflects this. Two
members of the Executive Management team co-chair a cross-functional
sustainability group consisting of the functional leads responsible for each
area of the business.
In 2018, the Group established medium-term targets in each of the "pillars"
towards which the Group continued to progress in H1 2024.
Our people: Safestore was awarded the prestigious Investors in People ("IIP")
Platinum accreditation in both 2021 and 2024. Platinum is the highest level of
accreditation possible to achieve on our We invest in people accreditation.
It means policies and practices around supporting people are embedded in every
corner of Safestore. And in a platinum company, everyone knows they have a
part to play in the company doing well and are always looking for ways to
improve.
Our customers: the Group's brands continue to deliver a high-quality
experience, from online enquiry to move-in. This is reflected in customer
satisfaction scores on independent review platforms (Trustpilot, Feefo,
Google) of over 90% in each market. The introduction of digital contracts
during the pandemic offers both customer convenience and a reduction in
printing, saving an estimated 44,000 pieces of paper each month.
Our community: we remain committed to being a responsible business by making a
positive contribution within the local communities wherever our stores are
based. We continue to do this by developing brownfield sites and actively
engaging with local communities when we establish a new store, identifying and
implementing greener approaches in the way we build and operate our stores,
helping charities and communities to make better use of limited space, and
creating and sustaining local employment opportunities directly and indirectly
through the many small and medium-sized enterprises which use our space.
During FY 2023, the space occupied by local charities in 184 units across 104
stores was 20,941 sq ft and worth £0.9 million.
Our environment: we are committed to ensuring our buildings are constructed
responsibly and their ongoing operation has a minimal impact on local
communities and the environment. It should be noted that the self-storage
sector is not a significant consumer of energy when compared with other real
estate subsectors. As a result, operational emissions intensity tends to be
far lower. According to a 2023 report by KPMG and EPRA, self-storage generates
the lowest greenhouse gas emissions intensity (4 kg/m(2) for scope 1 and 2) of
all European real estate sub-sectors. Reflecting the considerable progress
made on energy mix, efficiency measures and waste reduction to date, our
emissions intensity is considerably than the self-storage subsector average.
In H1 2024, the Group continued progress towards achieving operational carbon
neutrality (target 2035) by implementing key elements of the transition plan,
specifically removal of gas-burning appliances from a further six stores in
the UK estate and ensuring all new openings meet or exceed minimum energy
performance standard of a 'B' rating and include energy solar PV installations
where viable.
In addition to the IIP award and the customer satisfaction ratings, the Group
has received recognition for its sustainability progress and disclosures in
the last twelve months. Safestore has been given a Silver rating in the 2023
EPRA Sustainability BPR awards. The Global ESG Benchmark for Real Assets
("GRESB") has once again awarded Safestore an "A" rating in its 2023 Public
Disclosures assessment. MSCI has also awarded Safestore its second-highest
rating of "AA" for ESG. The Group has also been awarded the highest rating of
five stars by Support the Goals.
Portfolio Management
Our approach to store development and acquisitions in the UK, Paris, Spain,
the Netherlands, Belgium and, through our joint venture with Carlyle, in
Germany, continues to be pragmatic, flexible and focused on the return on
capital.
Our experienced and skilled property teams in all geographies continue to seek
investment opportunities in new sites to add to the store pipeline. However,
investments will only be made if they comply with our disciplined and strict
investment criteria. Our preference is to acquire sites that are capable of
being fully operational within 18-24 months from completion.
Since 2016, the Group has opened 35 new stores in the UK (17), Paris (5),
Spain (8) and the Netherlands (5) adding 1,677,000 sq ft of MLA.
In addition, the Group has acquired 47 existing stores through the
acquisitions of Space Maker, Alligator, Fort Box, Salus and Your Room in the
UK, OhMyBox! in Barcelona, the Lokabox and M3 group from our Benelux JV
acquisition, and Apeldoorn in the Netherlands. These acquisitions added a
further 1,890,000 sq ft of MLA and revenue performance has been enhanced in
all cases under the Group's ownership.
In the same period, we have also completed the revenue enhancing extensions
and refurbishments of eleven stores adding a net 141,000 sq ft of fully
invested space to the estate. All of these stores are performing in line with
or ahead of their business plans.
The Group's current pipeline of new developments and store extensions (see
below) has grown significantly over the last year and now constitutes c.
1,486,000 sq ft of future MLA. The pipeline is equivalent to c. 18% of the
existing portfolio. The outstanding capital expenditure of £170 million is
expected to be funded from the Group's existing resources.
Property Pipeline
Openings of New Stores and Extensions
Opened YTD 2024 FH/LH MLA Development Type
New Developments
Eastleigh LH 14.0 Conversion, Satellite
London- Paddington Park West FH 13.0 Conversion, Satellite
Madrid- South 2 FH 68.8 Conversion
Randstad- Aalsmeer FH 48.4 New build
Randstad- Almere FH 44.5 Conversion
Randstad- Rotterdam FH 71.0 New build
Total New Developments Opened H1 2024 and post-period end 259.7
In the period we opened two stores in the UK with a further four in Spain (1)
and the Netherlands (3) opened early in H2 2024, adding in total 259,700 sq ft
of MLA to our portfolio contributing significantly to our operational scale in
our growing EU markets. The new stores include two new satellite stores,
adding capacity in high-demand locations whilst leveraging the existing cost
base and customer relationships.
Development Sites
Opening H2 2024 FH/LH Status* MLA Development Type
Redevelopments and Extensions
London- Holloway FH C, UC 9.5 Extension
Paris- Poissy FH C, UC 25.0 Extension
Paris- Pyrenees LH C, UC 15.4 Extension
Total Redevelopments and Extensions H2 2024 49.9
New Developments
London- Lea Bridge FH C, UC 80.9 New build
St Albans FH C, UC 56.0 Conversion
Paris- South Paris FH C, UC 55.0 New build
Total New Developments H2 2024 191.9
Total Opening H2 2024 241.8
Opening 2025
New Developments
London- Walton FH C, PG 20.7 Conversion
London- Wembley FH C, PG 55.0 New build
London- Watford FH CE, PG 57.5 New build
London- Woodford FH C, PG 68.7 New build
Paris- La Défense FH C, UC 44.0 Mixed use facility
Paris- West 3 FH C, UC 58.0 New build
Paris- East 1 FH C, PG 60.0 Conversion
Paris- North West 1 FH C, PG 54.0 Conversion
Paris- West 1 FH C, PG 56.0 New build
Paris- West 4 FH CE, PG 53.0 New Build
Barcelona- Central 2 LH C, UC 20.4 Conversion
Madrid- North East FH C, UC 57.0 Conversion
Madrid- South West FH C, UC 45.4 Conversion
Pamplona FH C, PG 60.7 Conversion
Randstad- Amsterdam FH C, PG 65.4 New build
Randstad- Utrecht FH C, PG 50.0 Conversion
Brussels- Zaventem FH C, PG 47.4 New build
Total New Developments 2025 873.2
Opening Beyond 2025
New Developments
London- Bermondsey FH C, STP 50.0 New build
London- Old Kent Road FH C, STP 75.6 New build
London- Romford FH C, STP 41.0 New build
Shoreham FH CE, PG 47.0 New build
Hemel Hempstead FH CE, STP 51.3 New build
London- Kingston FH CE, STP 55.0 New build
Welwyn Garden City FH CE, STP 51.0 New build
Total New Developments Beyond 2025 370.9
Total Pipeline 1,485.9
*C = completed, CE = contracts exchanged, STP = subject to planning, PG =
planning granted, UC = under construction
We have three redevelopments and extensions and a further three new stores
under construction with expected completion dates in H2 2024. These will add
241,800 sq ft of new space and are all located in London and its surroundings
and in Paris.
Our pipeline of new store developments continues with 30 projects identified
which will deliver an additional 1,486,000 sq ft of new space. The
developments are located in all of our markets and are focused in the key
cities London (11 stores, 565,000 sq ft), Paris (9 stores, 420,000 sq ft),
Barcelona and Madrid (3 stores, 123,000 sq ft), the Randstad in the
Netherlands (2 stores, 115,000 sq ft), Brussels (1 store, 47,000 sq ft) and
other regional cities (4 stores, 216,000 sq ft).
The pipeline is expected to deliver 873,200 sq ft of new space opening in FY
2025 and 370,850 in later years. All property projects require planning
permission and of the projects 75% are projects with planning granted and 25%
of projects are still subject to planning. Typically, we aim to structure our
development opportunities to minimise planning risk and working capital by
making completion on contracts for opportunities to also be subject to
planning.
Of the development projects two (7%) are leasehold sites where the city-centre
locations have limited freehold development opportunities but are where we
believe there is strong customer demand.
Portfolio Summary
The self-storage market has been growing consistently for over 20 years across
many European countries, but few regions offer the unique characteristics of
London and Paris, both of which consist of large, wealthy and densely
populated markets. In the London region, the population is 13 million
inhabitants with a density of 5,200 inhabitants per square mile in the region,
11,000 per square mile in central London and up to 32,000 per square mile in
the densest boroughs.
The population of the Paris urban area is 10.7 million inhabitants with a
density of 9,300 inhabitants per square mile in the urban area but 54,000 per
square mile in the City of Paris and first belt, where 69% of our French
stores are located and which has one of the highest population densities in
the western world. 85% of the Paris region population live in central parts of
the city versus the rest of the urban area, which compares with 60% in the
London region. There are currently c. 250 storage centres within the M25 as
compared to only c. 125 in the Paris urban area. The density of
self-storage supply is estimated to be 0.89 sq ft per inhabitants in the UK
and 0.40 sq ft in Paris.
In addition, barriers to entry in these two important city markets are high,
due to land values and limited availability of sites as well as planning
regulation. This is the case for Paris and its first belt in particular, which
inhibits new development possibilities.
Over the last four years the Group has expanded into further attractive,
under-penetrated markets in Spain, the Netherlands and Belgium with a focus on
the conurbations of Barcelona, Madrid, the Randstad area and Brussels. All
these new markets, particularly Madrid and Barcelona, are wealthy high-density
conurbations with very high barriers to entry. The density of self-storage
supply is estimated at 0.50 sq ft per inhabitants in the Netherlands, 0.20 sq
ft in Belgium, 0.54 sq ft in Madrid and 0.65 sq ft in Barcelona.
Store Portfolio by Region London & Rest of UK Paris Group
Spain Benelux
South East UK Total Total
Number of Stores 74 61 135 29 11 17 192
Let Square Feet (m sq ft) 2.252 2.064 4.316 1.104 0.179 0.530 6.129
Maximum Lettable Area (m sq ft) 3.000 2.820 5.820 1.360 0.340 0.710 8.230
Average Let Square Feet per store (k sq ft) 30 34 32 38 16 31 32
Average Store Capacity (k sq ft) 41 46 43 47 31 42 43
Closing Occupancy % 75.3% 73.2% 74.3% 81.1% 52.1% 73.9% 74.4%
Average Rate (£ per sq ft) 36.85 23.30 30.34 35.91 25.60 18.39 30.16
Revenue (£'m) 50.2 29.5 79.7 21.6 2.40 5.50 109.2
Average Revenue per Store (£'m) 0.68 0.48 0.59 0.74 0.22 0.32 0.57
The reported totals have not been adjusted for the impact of rounding
We have a strong position in both the UK and Paris markets operating 135
stores in the UK, 74 of which are in London and the South East, and 29 stores
in Paris.
In the UK, 63% of our revenue is generated by our stores in London and the
South East. On average, our stores in London and the South East are smaller
than in the rest of the UK but the rental rates achieved are materially
higher, enabling these stores to typically achieve similar or better margins
than the larger stores. In London we operate 51 stores within the M25, more
than any other competitor.
In France, we have a leading position in the heart of the affluent City of
Paris market with nine stores branded as Une Pièce en Plus ("UPP") ("A spare
room"). Over 60% of the UPP stores are located in a cluster within a five-mile
radius of the city centre, which facilitates strong operational and marketing
synergies as well as options to differentiate and channel customers to the
right store subject to their preference for convenience or price
affordability. The Parisian market has attractive socio-demographic
characteristics for self-storage and we believe that UPP enjoys unique
strategic strength in such an attractive market.
In Spain, including post-period end openings, the Group has twelve stores open
in Barcelona and Madrid with a further three stores in the pipeline in these
two cities and one in Pamplona in the Basque Country/ Navarra region which has
clusters of population benefitting from an above average dynamic and healthy
economy
In the Benelux Region, including post-period end openings, the Group has
fourteen stores open in the Netherlands and six in Belgium. The pipeline
contains a further two stores in the Netherlands and two in Belgium.
In addition, we have the benefit of a leading national presence in the UK
outside of London where the stores are predominantly located in the centre of
key metropolitan areas such as Birmingham, Manchester, Liverpool, Bristol,
Newcastle, Glasgow and Edinburgh.
Market
The self-storage market in the UK, France, Spain, the Netherlands and Belgium
remains relatively immature compared to geographies such as the USA and
Australia. The SSA Annual Survey (May 2024) confirmed that self-storage
capacity stands at 0.89 sq ft per head of population in the UK. The most
recent report relating to Europe (FEDESSA's 2023 report) showed that capacity
in France is 0.35 sq ft per capita. Whilst the Paris market density is greater
than France, we estimate it to be significantly lower than the UK at around
0.4 sq ft per inhabitant. This compares with closer to 7 sq ft per inhabitant
in the USA and 2 sq ft in Australia. In the UK, in order to reach the US
density of supply, it would require the addition of around another 17,000
stores as compared to c. 1,500 currently. In the Paris region, it would
require around 2,400 new facilities versus c. 122 currently opened.
In Spain, the Netherlands and Belgium, penetration is similarly low. In Spain
capacity is around 0.32 sq ft per head of population and the consumer is
serviced by just 585 stores. In the Netherlands penetration is 0.50 sq ft per
head of population (320 stores) and in Belgium 0.20 sq ft per head of
population (96 stores).
The Group has a JV with Carlyle in Germany. The German market is one of
Europe's more under-penetrated markets with just 0.21 sq ft of storage space
per capita and, according to the 2023 FEDESSA report, there are just 530
facilities in the country and 17.4 million sq ft of lettable space.
Our interpretation of the most recent 2024 SSA report is that operators remain
optimistic about their trading and the future growth of the industry. The
level of development estimated for the next three years is similar to that
witnessed in recent years and we do not consider this level of new supply
growth to be of concern, especially as we believe new supply helps to create
increased awareness of what is a relatively immature product on Europe. We
estimate new supply to represent around 2% to 3% of the traditional
self-storage industry in the UK. These figures represent gross openings and do
not consider storage facilities closing or being converted for alternative
uses. We estimate that a small proportion of these sites compete with existing
Safestore stores.
New supply in London and Paris is likely to continue to be limited in the
short and medium term as a result of planning restrictions, competition from a
variety of other uses and the availability of suitable land.
The supply in the UK market, according to the SSA Survey, remains relatively
fragmented despite a number of acquisitions in the sector in recent years. The
SSA's estimates of the scale of the UK industry are finessed each year and
changes from one year to the next represent improved data in addition to new
supply. In the 2024 report the SSA estimates that 2,706 self-storage
facilities exist in the UK market including around 1,694 container-based
operations. At the point in time that the 2024 survey was written, Safestore
was the industry leader by number of stores with 133 wholly owned sites
followed by Big Yellow with 109 stores (including Armadillo), Access with 60
stores, Shurgard with 43 stores, Lok'n Store with 43 stores, Storage King with
42 stores and Ready Steady Store with 27 stores. In aggregate, the top seven
leading operators account for around 20% of the UK store portfolio. The
remaining c. 2,182 self-storage outlets (including container-based operations)
are independently owned in small chains or single units. Based on the 2023 SSA
reports there were 1,086 storage brands operating in the UK.
Our French business, UPP, is mainly present in the core wealthier and more
densely populated inner Paris and first belt areas, whereas our two main
competitors, Shurgard and Homebox, have a greater presence in the outskirts
and second belt of Paris.
Our Spanish business currently operates in Barcelona and Madrid. The
metropolitan areas of Barcelona and Madrid have combined growing high-density
populations of twelve million inhabitants and significant barriers to entry.
Our focus in the Netherlands market is on the densely populated Amsterdam and
Randstad conurbations. The Netherlands is the second most developed
self-storage market in Europe (after the UK) but still remains
under-penetrated with approximately 320 stores and 0.50 sq ft per capita of
storage space.
Belgium is one of the more under-penetrated markets in Europe with just 96
stores and 0.20 sq ft per capita of self-storage space. In Belgium our
presence is focused on Brussels and the significant urban conurbations of
Liege, Charleroi and Nivelles.
Consumer awareness of self-storage appears to be increasing but at a
relatively slow rate, providing an opportunity for future industry growth. The
SSA survey indicates that approximately half of consumers have low awareness
about the service offered by self-storage operators or had not heard of
self-storage at all. Since 2014, this statistic has only fallen 9ppts from
61%. Therefore, the opportunity to grow awareness, combined with limited new
industry supply, makes for an attractive industry backdrop.
Self-storage is a brand-blind product. 52% of respondents in the 2024 SSA
Survey were unable to name a self-storage business in their local area. The
lack of relevance of brand in the process of purchasing a self-storage product
emphasises the need for operators to have a strong online presence. This
requirement for a strong online presence was also reiterated by the SSA Survey
where 76% of those surveyed (76% in 2023) confirmed that an internet search
would be their chosen means of finding a self-storage unit to contact, whilst
knowledge of a physical location of a store as reason for enquiry was only c.
30% of respondents (c. 30% in 2023).
There are numerous drivers of self-storage growth. Most private and business
customers need storage either temporarily or permanently for different reasons
at any point in the economic cycle, resulting in a market depth that is, in
our view, the reason for its exceptional resilience. The growth of the market
is driven both by the fluctuation of economic conditions, which has an impact
on the mix of demand, and by growing awareness of the product.
Our domestic customers' need for storage is often driven by life events such
as births, marriages, bereavements, divorces or by the housing market
including house moves and developments and moves between rental properties. We
have estimated that UK owner-occupied housing transactions drive around 8-13%
of the Group's new lets.
Business and Personal Customers UK Paris Spain Benelux
Personal Customers
Numbers (% of total) 77% 81% 91% 84%
Square feet occupied (% of total) 59% 63% 84% 76%
Average Length of Stay (months) 17.2 28.3 21.5 29.1
Business Customers
Numbers (% of total) 23% 19% 9% 16%
Square feet occupied (% of total) 41% 37% 16% 24%
Average Length of Stay (months) 26.3 26.7 24.0 32.2
Our customer base is resilient and diverse and consists of around 90,000
domestic, business and National Accounts customers across London, Paris,
Spain, the UK regions, the Netherlands and Belgium.
Business Model
The Group operates in a market with relatively low consumer awareness. It is
anticipated that this will increase over time as the industry matures. To
date, despite the financial crisis in 2007/08, the implementation of VAT in
the UK on self-storage in 2012, Brexit and the Covid-19 pandemic, the industry
has been exceptionally resilient. In the context of uncertain economic
conditions, driven by inflation and the war in Ukraine, the industry remains
well positioned with limited new supply coming into the self-storage market.
With more stores inside London's M25 than any other operator and a strong
position in central Paris, we have leading positions in the two most important
and demographically favourable markets in Europe. In addition, our regional
presence in the UK is unsurpassed and contributes to the success of our
industry-leading National Accounts business. In the UK, Safestore is the
leading operator by number of wholly owned stores. With 53% of customers
travelling for less than 15 minutes to their storage facility (2024 SSA
Survey). Our national store footprint represents a competitive advantage.
Based on the revenue reported by Cushman and Wakefield in the various SSA
reports, our market share in the UK based on revenue is 21%.
The Group's capital-efficient portfolio of 192 stores in the UK, Paris, Spain,
the Netherlands and Belgium consists of a mix of freehold and leasehold
stores. In order to grow the business and secure the best locations for our
facilities we have maintained a flexible approach to leasehold and freehold
developments as well as being comfortable with a range of building types, from
new builds to conversions of warehouses and underground car parks.
Currently, around a quarter of our stores in the UK are leaseholds with an
average remaining lease length at 30 April 2024 of 13.6 years (FY 2023: 12.4
years). Although our property valuation for leaseholds is based on future cash
flows until the next contractual lease renewal date, Safestore has a
demonstrable track record of successfully re-gearing leases several years
before renewal whilst at the same time achieving concessions from landlords.
In England, we benefit from the Landlord and Tenant Act that protects our
rights for renewal except in case of redevelopment. The vast majority of our
leasehold stores have building characteristics or locations in retail parks
that make current usage either the optimal and best use of the property or the
only one authorised by planning. We observe that our landlords, who are
property investors, value the quality of Safestore as a tenant and typically
prefer to extend the length of the leases that they have in their portfolio,
enabling Safestore to maintain favourable terms.
In Paris, where 40% of stores are leaseholds, our leases typically benefit
from the well-enshrined Commercial Lease statute that provides that tenants
own the commercial property of the premises and that they are entitled to
renew their lease at a rent that is indexed to the Indice des Loyers
Commerciaux (Commercial Rental Index) published by the state. Taking into
account this context, the valuer values the French leaseholds based on an
indefinite property tenure, similar to freeholds but at a significantly higher
exit cap rate.
The Group believes there is an opportunity to leverage its highly scalable
marketing and operational expertise in geographies outside the UK and Paris.
During 2019, a Joint Venture was established with Carlyle. There were six
stores acquired in the Netherlands (M3 Self Storage business) and then a
further two added to the portfolio and six stores acquired in Belgium
(Lokabox) After three years of learning about and understanding these markets,
the Group acquired the remaining 80% of equity in the Joint Venture owned by
Carlyle in March 2022 and subsequently added a further six stores.
In 2019, the Group entered the Spanish market with the acquisition of Oh My
Box!. Our Spanish portfolio currently consists of eight stores in Barcelona,
and four Madrid stores including post-period end openings. We have a further
four stores in our development pipeline situated in Madrid, Barcelona and
Pamplona. We consider these cities to have attractive characteristics in
relation to self-storage and intend to continue to seek further expansion
opportunities.
In late 2022, Safestore entered the German self-storage market via a joint
venture with Carlyle, which has acquired the myStorage business. myStorage has
seven medium to long-term leasehold stores and 326,000 sq ft of MLA in Berlin,
Heidelburg, Mannheim, Fürth, Nuremburg, Neu-Ulm and Reutlingen.
Our experience is that being flexible in its approach has enabled us to
operate from properties and in markets that would have been otherwise
unavailable and to generate strong cash-on-cash returns.
We excel in the generation of customer enquiries which are received through a
variety of channels including the internet, telephone and "walk-ins". In the
early days of the industry, local directories and store visibility were key
drivers of enquiries. However, the internet is now by far the dominant
channel, accounting for 89% (H1 2023: 89%) of our enquiries in the UK and 85%
(H1 2023: 84%) in France. This dynamic is a clear benefit to the leading
national operators that possess the budget and the management skills necessary
to generate a commanding presence in the major search engines. We have
developed and continue to invest in a leading digital marketing platform that
has generated 39% enquiry growth over the last five years.
Although mostly generated online, our enquiries are predominantly handled
directly by the stores and, in the UK, we have a Customer Support Centre
("CSC") which handles customer service issues in addition to enquiries, in
particular when the store colleagues are busy handling calls or outside of
normal store opening hours.
Our pricing platform provides the store and CSC colleagues with
system-generated real-time prices managed by our centrally based
yield-management team. Local colleagues have certain levels of discretion to
flex the system-generated prices, but this is continually monitored.
Customer service standards are high and customer satisfaction feedback is
consistently very positive. We invite customers to leave a review on a number
of review platforms, including Google and Trustpilot. Our ratings for each of
these three providers in the UK are between 4.7 and 4.9 out of 5. In France,
Une Pièce en Plus uses Google and Trustpilot to obtain independent customer
reviews and In H1 2024, achieved a 4.7 out of 5 and a "TrustScore" of 4.6 out
of 5 respectively. In Spain, OMB collects customer feedback via Google reviews
and has attained a score of 4.9 out of 5.. The key drivers of sales success
are the capacity to generate enquiries in a digital world, the capacity to
provide storage locations that are conveniently located close to the
customers' requirements and the ability to maintain a consistently high
quality, motivated retail team that is able to secure customer sales at an
appropriate storage rate, all of which can be better provided by larger, more
efficient organisations.
We remain focused on business as well as domestic customers. Our national
network means that we are uniquely placed to further grow the business
customer market and in particular National Accounts. Business customers in the
UK constitute 41% of our total space let and have an average length of stay of
26 months. Within our business customer category, our National Accounts
business represents around 493,000 sq ft of occupied space (around 11% of the
UK's occupancy). Approximately 71% of the space occupied by National Accounts
customers is outside London, demonstrating the importance and quality of our
well invested national estate.
The business now has in excess of 90,000 business and domestic customers with
an average length of stay of 27 months and 21 months respectively.
The cost base of the business is relatively fixed. Each store typically
employs three staff. Our Group Head Office comprises business support
functions such as Yield Management, Property, Marketing, HR, IT and Finance.
In April 2024, the Group exercised the RCF's accordion option to increase the
committed facility by £100m to £500m. We have secure financing, a strong
balance sheet and significant covenant headroom. This provides the Group with
financial flexibility and the ability to grow organically and via carefully
selected new development or acquisition opportunities.
At 30 April 2024 the Group had 1.5m sq ft of unoccupied space in the UK, 0.2m
sq ft in France and 0.2m sq ft in Spain and 0.2m sq in Benelux, equivalent to
c. 47 full new stores. Our main focus is on filling the spare capacity in our
stores at optimally yield-managed rates. The operational leverage of our
business model will ensure that the bulk of the incremental revenue converts
to profit given the relatively fixed nature of our cost base.
Trading performance
Trading Data - Total
Key Measures - Total H1 2024 H1 2023 Change
Group
Revenue (£'m) 109.2 110.1 (0.8%)
Closing Occupancy (million sq ft) 6.129 6.124 0.1%
Closing Occupancy (% of MLA) 74.4% 76.7% (2.3%)
Maximum Lettable Area 8.23 7.99 3.0%
Average Storage Rate (£ per sq ft) 30.16 30.58 (1.4%)
REVPAF (£ per sq ft) 26.74 28.28 (5.4%)
Revenue (millions)
UK (£) 79.7 81.7 (2.4%)
Paris (€) 25.1 24.8 1.4%
Spain (€) 2.8 1.9 45.5%
Netherlands (€) 4.0 3.5 16.2%
Belgium (€) 2.3 2.0 14.0%
Average Rate (per sq ft)
UK (£) 30.34 30.50 (0.5%)
Paris (€) 41.78 42.02 (0.6%)
Spain (€) 29.78 35.44 (16.0%)
Netherlands (€) 19.73 18.95 4.1%
Belgium (€) 23.60 20.80 13.5%
REVPAF (per sq ft)
UK (£) 27.68 29.19 (5.2%)
Paris (€) 37.13 36.73 1.1%
Spain (€) 16.66 19.81 (15.9%)
Netherlands (€) 16.40 16.79 (2.3%)
Belgium (€) 20.72 18.22 13.7%
Closing Occupancy (million sq ft)
UK 4.316 4.410 (2.1%)
Paris 1.104 1.091 1.2%
Spain 0.179 0.105 70.5%
Netherlands 0.354 0.350 1.1%
Belgium 0.176 0.168 4.8%
Closing Occupancy (% of MLA)
UK 74.3% 77.1% (2.8ppt)
Paris 81.1% 80.1% 1.0ppt
Spain 52.1% 42.4% 9.7ppt
Netherlands 71.5% 80.3% (8.8ppt)
Belgium 79.3% 75.9% 3.4ppt
Maximum Lettable Area (million sq ft)
UK 5.820 5.720 1.7%
Paris 1.360 1.360 -
Spain 0.340 0.250 36.0%
Netherlands 0.490 0.440 11.4%
Belgium 0.220 0.220 -
Trading Data - Like-For-Like
Key Measures - Like-For-Like H1 2024 H1 2023 Change
Group
Revenue (£'m) 107.0 107.9 (0.8%)
Closing Occupancy (million sq ft) 5.949 6.049 (1.7%)
Closing Occupancy (% of MLA) 76.9% 78.5% (1.6%)
Average Occupancy (million sq ft) 5.960 6.055 (1.6ppt)
Maximum Lettable Area (million sq ft) 7.730 7.710 0.3%
Average Storage Rate (£ per sq ft) 30.55 30.70 (0.5%)
REVPAF (£ per sq ft) 27.86 28.24 (1.3%)
Revenue (millions)
UK (£) 78.6 79.8 (1.5%)
Paris (€) 25.1 24.8 1.4%
Spain (€) 2.0 1.9 2.4%
Netherlands (€) 3.7 3.3 13.2%
Belgium (€) 2.3 2.0 14.0%
Average Rate (per sq ft)
UK (£) 30.45 30.51 (0.2%)
Paris (€) 41.78 42.02 (0.6%)
Spain (€) 36.71 37.00 (0.8%)
Netherlands (€) 21.14 19.76 7.0%
Belgium (€) 23.60 20.80 13.5%
REVPAF (per sq ft)
UK (£) 28.00 28.62 (2.2%)
Paris (€) 37.13 36.73 1.1%
Spain (€) 32.09 31.43 2.1%
Netherlands (€) 19.95 17.67 12.9%
Belgium (€) 20.72 18.22 13.7%
Closing Occupancy (million sq ft)
UK 4.270 4.402 (3.0%)
Paris 1.104 1.091 1.2%
Spain 0.094 0.089 5.6%
Netherlands 0.305 0.299 2.0%
Belgium 0.176 0.168 4.8%
Closing Occupancy (% of MLA)
UK 75.6% 78.2% (2.6ppt)
Paris 81.1% 80.1% 1.0ppt
Spain 77.7% 74.1% 3.6ppt
Netherlands 80.6% 79.0% 1.6ppt
Belgium 79.3% 75.9% 3.4ppt
Maximum Lettable Area (million sq ft)
UK 5.650 5.630 0.4%
Paris 1.360 1.360 -
Spain 0.120 0.120 -
Netherlands 0.380 0.380 -
Belgium 0.220 0.220 -
Average Occupancy (million sq ft)
UK 4.281 4.399 (2.7%)
Paris 1.107 1.095 1.1%
Spain 0.092 0.091 1.1%
Netherlands 0.310 0.299 3.7%
Belgium 0.170 0.171 (0.6%)
UK
Our operational performance across the UK has been robust in the current
economic environment with UK revenue was down 2.4% for the period and 1.5% on
a like-for-like basis.
This resulted from a broadly stable like-for-like average rental rate of
£30.34 (0.5% down on H1 2023 at £30.50) together with a like-for-like
average occupancy decrease of 2.7% to 4.281 million sq ft (H1 2023: 4.399
million sq ft).
Overall revenue in the UK was impacted by £1.0m due to the changes to
customer goods protection with cover in FY 2024 no longer attracting insurance
premium tax. This difference is offset in cost of goods sold with lower costs
of goods in FY 2024. In addition, new stores and developments contributed an
additional £1.1m in the period.
The total cost base in the UK was flat year on year reflecting a £1.0m
reduction in costs of sales due to changes in customer goods protection offset
by increases in leasehold rent payments and administrative costs.
As a result, underlying EBITDA after leasehold costs for the UK business was
£45.8m (H1 2023: £47.8m), a decrease of £2.0m or 4.2%.
Operating profit for the UK business was £120.4m (H1 2023: £74.5m), an
increase of £45.9m or 62%, driven by the increase in the gain of investment
properties of £47.8m to £72.3m (H1 2023: £24.5m).
Paris
In Paris, all stores are like-for-like in the period and delivered strong
trading performance, growing revenue by €0.3m or 1.4%.
Average occupancy for the period has increased by 1.1% to 1.107 million sq ft
with closing occupancy at 30 April 2024 increasing by 1.2% compared to 30
April 2023 to 1.104 million sq ft. This was offset by a slight reduction in
the average rental rate in Paris to €41.78 for the period, a decrease of
0.6% on H1 2023 (€42.02).
REVPAF, which we believe is materially ahead of the local competition, grew by
a further 1.1% for the period.
Like-for-like EBITDA was down by 7.6% against H1 2023 with cost of sales and
administrative costs increasing by €1.6m.
Spain
Since acquiring our Spanish business in 2019 we have opened a further eight
stores. We now have twelve open stores, including post-period end openings,
and a pipeline of a further two stores in Madrid one in Barcelona and one in
Pamplona.
The Spanish business contributed €2.0m of like-for-like revenue, up 2.4%
compared to the prior year. This was driven by like-for-like average occupancy
growth of 1.1% compared to the prior period, offset by a reduction in the
average like-for-like storage rate of 0.8% to €36.71 (H1 2023: €37.00).
Ancillary revenues, an area of particular focus, drove further increases in
LFL revenue.
Like-for-like occupancy in Barcelona has initially been diluted by the new
Central Barcelona 2 store having opened in close proximity and within the same
catchment area as an existing store. In addition, the imminent opening of
Central Barcelona 3 also within short distance may initially further dilute
the like-for-like occupancy, but management believes that, given the limited
supply in central Barcelona, once the absorption phase has been passed, the
business will generate higher revenue and profits.
New stores contributed €0.8m of revenue growth in the period.
Underlying EBITDA increased by €0.6m to €1.1m as the increase in revenue
was partially offset by an increase in the underlying cost of sales and
administrative expenses of €0.4m, resulting from additional costs to support
the new stores as well as their dilutive impact whilst they achieve
stabilisation.
Netherlands
Our Netherlands business, acquired in March 2022 and is now included within
the like-for-like metrics for H1 2024. Total revenue delivered was €4.0m for
the period, an increase of €0.5m over prior period. On a like-for-like
basis, revenue increased 13.2% driven by strong increases in both average
occupancy of 3.7% and average rate of 7.0%.
During the period, we opened three new stores in Almere, Aalsmeer and
Rotterdam. New stores contributed €0.3m of revenue in the period, an
increase of €0.1m over H1 2023.
Belgium
Our Belgium business, was also acquired in March 2022 and is now included
within the like-for-like metrics for 2024. Total revenue delivered was €2.3m
for the period, an increase of €0.3m over prior period. On a like-for-like
basis, revenue increased 14.0% driven by strong increases in average rate of
13.5% with broadly stable average occupancy down 0.6%.
Frederic Vecchioli
11 June 2024
Financial Review
Underlying Income Statement
The table below sets out the Group's underlying results of operations for the
six months ended 30 April 2024 and the six months ended 30 April 2023.
H1 2024 H1 2023 Mvmt
£'m £'m %
Revenue 109.2 110.1 (0.8%)
Underlying costs (42.1) (40.4) 4.2%
Underlying EBITDA 67.1 69.7 (3.7%)
Leasehold rent (7.7) (7.2) 6.9%
Underlying EBITDA after leasehold rent 59.4 62.5 (5.0%)
Depreciation (0.7) (0.6) 16.7%
Net underlying finance charges (9.7) (7.5) 29.3%
Underlying profit before tax 49.0 54.4 (9.9%)
Current tax (2.6) (2.6) 0.0%
Adjusted EPRA earnings 46.4 51.8 (10.4%)
Share-based payments charge (1.4) (1.3) 7.7%
EPRA basic earnings 45.0 50.5 (10.9%)
Average shares in issue (m) 218.3 216.5
Diluted shares (for ADE EPS) (m) 219.3 219.0
Adjusted diluted EPRA EPS (p) 21.2 23.7 (10.5%)
Notes:
1. Adjusted Diluted EPRA EPS is defined in note 2 to the financial
statements.
2. Adjusted EPRA earnings excludes share-based payment charges and,
accordingly, the underlying EBITDA, underlying EBITDA after leasehold costs
and underlying profit before tax measures have been restated to exclude
share-based payment charges for consistency.
3. Store Protect has replaced our customer goods insurance programme
from 1 November 2023, attracting VAT rather than Insurance Premium Tax (IPT).
When comparing the 2024 half year, the 2023 comparative included revenue of
£1.0m representing 12% IPT on insurance sales. Excluding this, revenue grew
by 0.2% and underlying costs of sales increased by 6.9% on the prior year.
The table below reconciles statutory profit before tax in the income statement
to underlying profit before tax in the table above.
H1 2024 H1 2023
£'m £'m
Statutory profit before tax 173.7 103.4
Adjusted for
- gain on investment properties and investment properties under construction (126.1) (51.7)
- change in fair value of derivatives - 1.4
- share-based payments 1.4 1.3
Underlying profit before tax 49.0 54.4
Management considers the above presentation of earnings to be representative
of the underlying performance of the business.
Underlying EBITDA decreased by 3.7% to £67.1m (H1 2023: £69.7m) reflecting a
0.8% decrease in revenue and a 4.2% increase in underlying costs (see
below).
Finance charges increased from £7.5m in H1 2023 to £9.7m in H1 2024. This
principally reflects the increased borrowing associated with developments and
higher interest rates.
As a result, underlying profit before tax decreased 9.9% to £49.0m (H1 2023:
£54.4m). The increase in statutory profit before tax of £70.3m to £173.7m
(H1 2023: £103.4) results from the increased gain on investment properties of
£74.4m to £126.1m (H1 2023: £51.7m) This increase reflects the increased
value of the Group's store portfolio primarily as a result of an improvement
in cap rates, reflecting recent market transactions in the self-storage
market.
Given the Group's REIT status in the UK, tax is not normally payable on rental
income in the UK. The current tax charge for the period was consistent at
£2.6m (H1 2023: £2.6m).
As explained in note 2 to the financial statements, management considers that
the most representative earnings per share ("EPS") measure is Adjusted Diluted
EPRA EPS which has decreased by 2.5p or 10.5% to 21.2 pence (H1 2023: 23.7
pence).
Reconciliation of Underlying EBITDA
The table below reconciles the operating profit included in the consolidated
income statement to underlying EBITDA.
H1 2024 H1 2023
£'m £'m
Statutory operating profit 186.3 114.9
Adjusted for
- gain on investment properties (121.7) (47.3)
- depreciation 0.7 0.6
- variable lease payments 0.4 0.2
- share-based payments 1.4 1.3
Underlying EBITDA 67.1 69.7
The main reconciling items between statutory operating profit and underlying
EBITDA are the gain on investment properties of £121.7m in H1 2024 (H1 2023:
£47.3m), represented by a gain on investment properties and investment
properties under construction of £126.1m less fair value re-measurement of
lease liabilities (£4.4m).
Underlying Profit by geographical region
The Group is organised and managed in five operating segments based on
geographical region, with Benelux representing our Netherlands and Belgium
operations. The table below details the underlying profitability of each
region.
H1 2024 H1 2023
UK Paris Spain Benelux Total (CER) UK Paris Spain Benelux Total (CER)
£'m €'m €'m €'m £'m £'m €'m €'m €'m £'m
Revenue 79.7 25.1 2.8 6.3 109.8 81.7 24.8 1.8 5.5 110.1
Underlying cost of sales (24.4) (7.6) (1.3) (2.9) (34.9) (25.2) (6.4) (0.8) (2.3) (33.7)
Store EBITDA 55.3 17.5 1.5 3.4 74.9 56.5 18.4 1.0 3.2 76.4
Store EBITDA margin 69.4% 69.7% 53.6% 54.0% 68.2% 69.2% 74.2% 55.6% 58.2% 69.4%
LFL store EBITDA margin 69.8% 69.7% 75.0% 56.7% 69.1% 69.8% 73.8% 78.9% 58.5% 70.1%
Underlying administrative expenses (5.0) (1.8) (0.4) (0.7) (7.5) (4.6) (1.5) (0.5) (0.4) (6.7)
Underlying EBITDA 50.3 15.7 1.1 2.7 67.4 51.9 16.9 0.5 2.8 69.7
Underlying EBITDA margin 63.1% 62.5% 39.3% 42.9% 61.4% 63.5% 68.1% 27.8% 50.9% 63.3%
LFL EBITDA margin 63.7% 62.5% 52.6% 45.0% 62.4% 64.2% 68.5% 52.6% 45.3% 64.0%
Leasehold rent (4.5) (3.3) (0.3) (0.2) (7.7) (4.1) (3.2) (0.2) (0.2) (7.2)
Underlying EBITDA after leasehold rent 45.8 12.4 0.8 2.5 59.7 47.8 13.7 0.3 2.6 62.5
EBITDA after leasehold rent margin 57.5% 49.4% 28.6% 39.7% 54.4% 58.5% 55.2% 16.7% 47.3% 56.8%
Impact of Currency exchange rates
Underlying EBITDA after leasehold rent (CER) 45.8 11.0 0.8 2.1 59.7 47.8 12.1 0.4 2.2 62.5
Adjustment to actual exchange rate - (0.2) (0.1) - (0.3) - - - - -
Underlying EBITDA after leasehold rent 45.8 10.8 0.7 2.1 59.4 47.8 12.1 0.4 2.2 62.5
Note: CER is Constant Exchange Rates (Euro denominated results for the current
period have been retranslated at the exchange rate effective for the
comparative period in order to present the reported results on a more
comparable basis).
Underlying EBITDA in the UK decreased by £1.6m, or 3.1%, to £50.3m (H1 2023:
£51.9m), reflecting a 2.4% reduction in revenue together with a decrease in
underlying cost of sales and administrative expenses of £0.4m. The Underlying
EBITDA margin slightly reduced to 63.1% compared to H1 2023 at 63.5% with the
like-for-like ("LFL") EBITDA margin also seeing a slight reduction to 63.7%
from 64.3% in H1 2023.
In Paris, underlying EBITDA decreased by €1.2m, reflecting a €0.3m
increase in revenue less an increase in cost of sales and administrative
expenses of €1.5m. As a result, Underlying EBITDA decreased from 68.1% in H1
2023 to 62.5% in H1 2024.
In Spain, revenue increased by €1.0m or 55.6%, to €2.8m (H1 2023:
€1.8m), arising from a 2.4% increase in LFL revenue together with an
additional €0.8m from new stores and developments. Underlying EBITDA
increased by €0.6m to €1.1m as the increase in revenue was partially
offset by an increase in the underlying cost of sales and administrative
expenses of €0.4m, resulting from additional costs to support the new stores
as well as their dilutive impact whilst they achieve stabilisation.
In Belgium and Netherlands (together "Benelux"), revenue increased by €0.8m
or 15.4% to €6.3m (H1 2023 €5.5m). This arises from an increase from LFL
stores of 13.5% together with an additional €0.1m of growth from new stores
and developments. Underlying EBITDA decreased by €0.1m as underlying costs
of sales and administrative costs increased by €0.9m to €3.6m in the
period as a result of new store openings.
The combined performance of the UK, Paris, Spain, Netherlands and Belgium
resulted in a 4.5% decrease in underlying EBITDA after leasehold rent at
constant exchange rates. Adjusting for an unfavourable exchange rate movement
of 2.1% resulting in an impact of £0.3m in the current year, Group reported
underlying EBITDA after leasehold rent decreased by 5.0% or £3.1m to £59.4m
(H1 2023: £62.5m).
Revenue
Revenue for the Group is primarily derived from the rental of self-storage
space and the sale of ancillary products such as customer goods protection and
merchandise (e.g. packing materials and padlocks).
The split of the Group's revenues by geographical segment is set out below for
H1 2023 and H1 2024.
H1 2024 % of total H1 2023 % of total % change
UK £'m 79.7 73% 81.7 73% (2.4%)
Paris
Local currency €'m 25.1 24.8
Paris in Sterling £'m 21.6 20% 21.8 20% (0.9%)
Spain
Local currency €'m 2.8 1.8
Spain in Sterling £'m 2.4 2% 1.7 2% 41.2%
Benelux
Local currency €'m 6.3 5.5
Benelux in Sterling £'m 5.5 5% 4.9 5% 12.2%
Average exchange rate €:£ 1.163 1.139 (2.1%)
Total revenue 109.2 100% 110.1 100% (0.8%)
The Group's reported revenue decreased by 0.8% or £0.9m during the period.
This was driven by broadly stable LFL revenue at CER (down 0.3%), the impact
of adverse currency exchange rate (0.6%), increases in revenue from new stores
and developments (1.0%) less the impact of changes in customer goods
protection and insurance in the UK (1.0% impact).
Average rental rates for the Group on a LFL CER basis increased by 0.1% to
£30.74 (H1 2023 £30.70) coupled with a decrease in average occupancy of
1.4ppts to 77.2% (H1 2023: 78.6%).
In the UK, on a LFL basis which excludes the impact of new stores and changes
to customer goods protection, Revenue decreased by £1.2m or 1.5%. This was
driven by a 2.7% decrease in the average occupancy together with a broadly
stable average store rate of (a decline of 0.2%).
Overall revenue in the UK was impacted by £1.0m due the changes to customer
goods protection with cover in FY 2024 no longer attracting insurance premium
tax. This difference is offset in cost of goods sold with lower costs of goods
in FY 2024. In addition, new stores and developments contributed an additional
£0.2m in the period.
In Paris, revenue increased by €0.3m or 1.4%. Average occupancy for the
period has increased by 1.1% compared to 30 April 2023 to 1.11 million sq ft.
This was offset by a slight reduction in the average rental rate in Paris to
€41.78 for the period, a decrease of 0.6% on H1 2023, €42.02.
For Spain, revenue was €2.8m in the period (H1 2023: €1.8m). New stores
contributed €0.8m of revenue growth in the period. On a LFL basis revenue
was €2.0m, a 2.4% increase from prior period. Average LFL occupancy
increased 1.3% to 0.092 million sq ft (H1 2023: 0.091 million sq ft). The
like-for-like average rental rate in Spain was €36.71 for the period, a
decrease of 0.8% on H1 2023 at €37.00.
The Benelux business delivered €6.3m of revenue for the period (H1 2023:
€5.5m). New stores contributed €0.1m of revenue growth in the period. On a
LFL basis revenue was €6.0m. For the Netherlands, average LFL occupancy was
82.0% (H1 2023: 79.0%) with an average LFL rental rate of €21.14 (H1 2023:
€19.76), and for Belgium, average LFL occupancy was 76.8% (H1 2023: 77.3%)
with an average LFL rental rate of €23.60 (H1 2023: €20.80).
Analysis of Cost Base
On a like-for-like basis, adjusting for new stores, total costs increased by
4.1% from £38.9m in H1 2023 to £40.5m in H1 2024. The below tables detail
the key movements in cost of sales and administration expenses between H1 2023
and H1 2024.
Cost of sales
H1 2024 H1 2023
£'m £'m
Volume related including bad debt (2.7) (2.4)
Store employee and related (11.4) (11.0)
Marketing (4.2) (3.9)
Business rates (7.3) (7.0)
Facilities and premises insurance (7.6) (8.0)
Underlying cost of sales (Like-for-like; CER) (33.2) (32.3)
New stores and developments (1.7) (0.4)
Store Protect replacement IPT - (1.0)
Foreign exchange 0.3 -
Underlying costs of sales (34.6) (33.7)
Depreciation (0.7) (0.6)
Variable lease payments (0.4) (0.2)
Total costs of sales (35.7) (34.5)
In order to arrive at underlying cost of sales, adjustments are made to remove
the impact of depreciation and variable lease payments.
Adjusting for the impact of new stores, underlying cost of sales at CER on a
like-for-like basis increased by 2.8% or £0.9m, to £33.2m (H1 2023:
£32.3m), principally due to increased employee remuneration and volume
related costs.
The cost of sales attributable to the 2024 openings at Eastleigh, South Madrid
2, Almere, Aalsmeer, and Rotterdam and the 2023 openings of Wigan,
London-Morden, Ellesmere Port, North Barcelona, Central Barcelona 3, South
Madrid, North Madrid, East Madrid and Amersfoort is £1.7m in H1 2024.
Administrative Expenses
The table below reconciles reported administrative expenses to underlying
administrative expenses and details the key movements in underlying
administrative expenses between H1 2023 and H1 2024.
H1 2024 H1 2023
£'m £'m
Underlying administrative expenses (Like-for-like; CER) (7.3) (6.6)
New stores and developments (0.2) (0.1)
Underlying administrative expenses (7.5) (6.7)
Share based payments (1.4) (1.3)
Total administrative expenses (8.9) (8.0)
In order to arrive at underlying administrative expenses, adjustments are made
to remove the impact of exceptional items, share-based payments and corporate
transaction costs.
Underlying administrative expenses increased by 11.9% or £0.8m to £7.5m (H1
2023: £6.7m). The increase arose from a rise in employee and related costs of
£0.7m.
Gain on revaluation of Investment Properties
A full, independent external valuation of the store portfolio is undertaken by
the Group on an annual basis for year-end reporting. A sample of the Group's
largest properties, representing approximately 30% of the value of the Group's
investment property portfolio, has been valued by the Group's external
valuers, Cushman & Wakefield LLP ("C&W") as at 30 April 2024. In
addition, at the same date, the Directors have prepared estimates of fair
values for the remaining approximately 70% of the Group's investment property
portfolio by updating 31 October 2023 valuations to incorporate latest
assumptions reflecting market conditions and trading performance.
As a result of this exercise, the net gain on investment properties during the
period was as follows.
H1 2024 H1 2023
£'m £'m
Gain on revaluation of investment properties 129.5 52.3
Loss on revaluation of investment properties under construction (3.4) (0.6)
Fair value re-measurement of lease liabilities add back (4.4) (4.4)
Gain on revaluation of investment properties 121.7 47.3
The movement on investment properties reflects the increased value of the
Group's store portfolio primarily as a result of an improvement in cap rates,
reflecting recent market transactions in self-storage, as well as the trading
performance. The UK business contributed £74.3m of the £126.1m net
revaluation gain, with a £36.6m revaluation gain arising in Paris, a £10.5m
revaluation gain arising in Spain and a £4.7m revaluation gain arising in
Benelux.
The value of investment properties under construction increased by £5.3m in
the period due to significant capital additions required to enable the store
to be operational which is not reflected in the valuation. The re-measurement
of lease liabilities of £4.4m represents the adjustment of amortisation on
the lease liabilities which is added back to net valuation of the investment
property.
Operating profit
Reported operating profit increased by £71.4m from £114.9m in H1 2023 to
£186.3m in H1 2024, primarily reflecting a £74.4m increase in the investment
property gain offset by a £2.6m reduction in underlying EBITDA.
Net finance costs
Net finance costs include interest payable, interest on obligations under
lease labilities, fair value movements on derivatives, exchange gains or
losses, unwinding of discounts and exceptional finance income. Net finance
costs increased by £1.1m to £12.6m in H1 2024 (H1 2023: £11.5m). The main
driver of the increase was net bank interest payable reflecting the Group's
additional borrowings to fund the Group's acquisition and development
activity, higher interest rates on floating-rate borrowings and prior period
fair value movements on derivatives.
H1 2024 H1 2023
£'m £'m
Other interest received 0.1 0.5
Interest from loan to associates 0.2 -
Total finance income 0.3 0.5
Net bank interest payable (9.4) (7.3)
Amortisation of debt issuance costs on bank loans (0.6) (0.7)
Underlying finance costs (10.0) (8.0)
Interest on lease liabilities (2.9) (2.6)
Fair value movement on derivatives - (1.4)
Total finance costs (12.9) (12.0)
Net finance costs (12.6) (11.5)
The movement in underlying finance costs can be summarised as follows:
Underlying finance charge
The underlying finance costs represent the finance expense before interest on
obligations under lease liabilities, changes in fair value of derivatives and
exceptional items and is disclosed because management reviews and monitors
performance of the business on this basis.
The underlying finance costs (reflecting revolving credit facility ("RCF") and
US Private Placement ("USPP") interest costs and the amortisation of
capitalised debt issuance costs) increased by £2.0m to £10.0m (H1 2023:
£8.0m), principally reflecting the Group's additional borrowings in the year
drawn to fund the Group's acquisition and development activity and higher
interest rates on RCF borrowings.
Including the benefit of interest received, net underlying finance charges
were £9.7m in the period (H1 2023: £7.5m).
Based on the drawn debt position as at 30 April 2024, the effective interest
rate is analysed as follows:
Facility Fixed-rate borrowings Floating-rate borrowings Total rate
£/€'m £'m £'m
RCF - GBP drawn £500.0 £211.0 6.39%
RCF - EUR drawn £43.6 5.05%
RCF - non-utilisation £245.4 0.42%
USPP2024 €50.9 £43.5 1.59%
USPP2026 €70.0 £59.7 1.26%
USPP2026 £35.0 £35.0 2.59%
USPP2027 €74.1 £63.2 2.00%
USPP2028 £20.0 £20.0 1.96%
USPP2028 €29.0 £24.7 0.93%
USPP2029 £50.5 £50.5 2.92%
USPP2029 £30.0 £30.0 2.69%
USPP2029 €105.0 £89.7 2.45%
USPP2031 £80.0 £80.0 2.39%
USPP2033 €29.0 £24.8 1.42%
Unamortised finance costs - (£4.5) -
Total £1,021.1 £762.0 £254.6 3.77%
Capitalised interest costs (£3.3m)
Effective Interest Rate after capitalised interest costs 3.35%
The debt repayment profile can be summarised as follows:
On 30 April 2024, the Group exercised the RCF's accordion option to increase
the committed facility by £100m to £500m. The facility was originally for a
four-year term with two one-year extension options exercisable after the first
and second years of the agreement. The first of these extensions was granted
in October 2023, taking the term to five years, to November 2027.
The Group pays interest on the RCF at a margin of 125bps plus SONIA or Euribor
depending on whether the borrowings are drawn in Sterling or Euros. This
margin is now linked to ESG targets, which have been met, enabling a reduction
in the margin of up to 5bps to 120bps.
As at 30 April 2024, £254.6m of the £500.0m UK revolver was drawn, split
£211.0m and €51.0m (£43.6m). The Group pays a non-utilisation fee of 0.42%
on the undrawn balance of £245.4m.
The 2024, 2026, 2027, 2028, 2029 and 2033 USPP Notes are denominated in Euros
and attract fixed interest rates of 1.59% (on €50.9m), 1.26% (on €70.0m),
2.00% (on €74.1m), 0.93% (on €29.0m), 2.45% (on €105.0m) and 1.42% (on
€29.0m) respectively. The 2024 tranche of US Private Placement notes matured
at the end of May 2024 and was repaid utilising existing facilities. The Euro
denominated borrowings provide a natural hedge against the Group's investment
in the Paris, Spain, and Benelux businesses.
The 2026 (£35.0 million), 2028 (£20.0 million), 2029 (£50.5 million), 2029
(£30.0 million) and 2031 (£80.0 million) US Private Placement Notes are
denominated in Sterling and attract a fixed interest rate of 2.59%, 1.96%,
2.92%, 2.69% and 2.39% respectively.
As at 30 April 2024, 68% of the Group's drawn debt is at fixed rates of
interest. Overall, the Group has an effective interest rate on its borrowings
of 3.77% as at 30 April 2024, compared with 3.58% at the previous year end.
After adjusting for capitalised interest costs the Group has an effective
interest rate on its borrowings of 3.35%, compared with 2.97% at the previous
year end.
Non-underlying finance charge
Interest on finance leases was £2.9m (H1 2023: £2.6m) and reflects part of
the leasehold rental payment. The balance of the leasehold payment is charged
through the gain or loss on investment properties line and variable lease
payments in the income statement. Overall, the leasehold rent charge increased
by £0.5m to £7.7m in H1 2024 (H1 2023: £7.2m). In the prior year, a net
loss of £1.4m was recognised on fair valuation of derivatives when they
matured.
The Group undertakes net investment hedge accounting for its Euro denominated
loan notes.
Tax
The tax charge for the period is analysed below:
Tax charge H1 2024 H1 2023
£'m £'m
Underlying current tax 2.6 2.6
Current tax charge 2.6 2.6
Tax on investment properties movement 13.8 8.0
Adjustment in respect of prior years (0.4) -
Losses in respect of current year 0.9 -
Deferred tax charge 14.3 8.0
Net tax charge 16.9 10.6
Income tax in the period was a net charge of £16.9m (H1 2023: £10.6m).
In the UK, the Group is a REIT, so the current tax charge relates to the Paris
and Spain businesses. The underlying current tax charge for the period
amounted to £2.6m (H1 2023: £2.6m).
Profit after tax
The profit after tax for the period was £156.8m, compared with £92.8m in H1
2023, an increase of £64.0m which arose principally due to the increased gain
on investment properties, which is explained above.
Basic EPS was 71.8 pence (H1 2023: 42.9 pence) and diluted EPS was 71.5 pence
(H1 2023: 42.7 pence). As explained in note 2 to the financial statements,
management considers adjusted diluted EPRA EPS to be more representative of
the underlying EPS performance of the business.
Investment Properties
As discussed above, a sample of the Group's largest properties, representing
approximately 30% of the value of the Group's investment property, has been
valued by the Group's external valuers and the Directors have prepared
estimates of fair values for the remaining 70% of the Group's investment
property portfolio.
UK Paris Spain Benelux Total Paris Spain Benelux
£'m £'m £'m £'m £'m €'m €'m €'m
Total Investment Properties Including IPuC 1,934.0 590.3 83.5 181.9 2,789.7 676.7 95.7 208.7
Value as at 1 November 2023
Currency translation movement - (12.8) (2.0) (3.9) (18.7)
Additions incl Acquisitions 27.9 7.7 5.5 14.5 55.6 8.9 6.3 16.9
Revaluation 74.3 36.6 10.5 4.7 126.1 42.6 12.2 5.4
Value at 30 April 2024 2,036.2 621.8 97.5 197.2 2,952.7 728.2 114.2 231.0
The above tables summarise the movement in the valuations of the Group's
investment property portfolio including investment properties under
construction.
The Group's property portfolio valuation, including investment properties
under construction, increased by £163.0m from the valuation of £2,789.7m at
31 October 2023. This includes the gain on valuation of £126.1m, and £55.6m
relating to additions and store refurbishments, including acquisitions.
The exchange rate at 30 April 2024 was €1.171:£1 compared to €1.146:£1
at 31 October 2023. This movement in the foreign exchange rate has resulted in
a £18.7m unfavourable currency translation movement in the period.
The EPRA basic NTA per share, as reconciled to IFRS net assets per share in
financial statements, was 1,003 pence at 30 April 2024, up 5.4% since 31
October 2023 (952 pence), and the IFRS reported diluted NAV per share was 930
pence (FY 2023: 884 pence), reflecting a £106.3m increase in reported net
assets since 31 October 2023.
Gearing, and Capital Structure and Going Concern
As at 30 April 2024, the Group's borrowings comprised bank borrowing
facilities, made up of the RCF together with USPPs.
Net debt (including finance leases and cash) stood at £862.7m at 30 April
2024, an increase of £52.4m during the period, principally due to increased
funding required for store acquisitions and developments. Total capital (net
debt plus equity) increased from £2,745.4m at 31 October 2023 to £2,904.1m
at 30 April 2024. The net impact is that the gearing ratio has increased to
29.7% at 30 April 2024 from 29.5% at 31 October 2023.
Management also measures gearing with reference to its loan to value ("LTV")
ratio defined as net debt (excluding lease liabilities) as a proportion of the
valuation of investment properties (excluding finance leases), including
investment properties under construction. As at 30 April 2024, the Group LTV
ratio was 25.7% compared with 25.4% at 31 October 2023. The Board considers
the current level of gearing is appropriate for the business to enable the
Group to increase returns on equity, maintain financial flexibility and to
achieve our medium-term strategic objectives.
As at 30 April 2024, £254.6m of the £500.0m UK revolver was drawn. Including
the USPP debt of €358.0m (£305.9m) and £215.5m, the Group's borrowings
totalled £775.7m (before adjustment for unamortised finance costs). As at 30
April 2024, the weighted average remaining term for the Group's committed
borrowing facilities is 4.5 years.
Following the repayment of the 2024 USPP, the Group has no other maturities
until 2026 and has a weighted average term to maturity of 4.7 years.
Borrowings under the existing loan facilities are subject to certain financial
covenants. The RCF and the USPPs share interest cover and LTV covenants. The
interest cover requirement of a minimum of EBITDA:interest of 2.4:1. Interest
cover for the twelve-month period to 30 April 2024 was 5.0x (FY 2023: 6.7x),
calculated on the basis required under our financial covenants.
The LTV covenant is 60% for the Group. As at 30 April 2024, there is
significant headroom in the Group LTV covenant calculations. The Group is in
compliance with its covenants at 30 April 2024 and, based on forecast
projections (which considered a number of factors, including the current
balance sheet position, the principal and emerging risks which could impact
the performance of the Group, and the Group's strategic and financial plan),
is expected to be in compliance for a period in excess of twelve months from
the date of this report and accordingly, this interim statement is prepared on
the basis of going concern.
Cash flow
The table below sets out the cash flow of the business in H1 2024 and H1 2023.
H1 2024 H1 2023
£'m £'m
Underlying EBITDA 67.1 69.7
Working capital/ exceptionals/ other (6.3) (19.8)
Adjusted operating cash inflow 60.8 49.9
Interest payments (9.0) (7.1)
Leasehold payments (7.7) (7.2)
Tax payments (3.1) (3.7)
Free cash flow (before investing and financing activities) 41.0 31.9
Investment in associates - (1.5)
Capital expenditure - investment properties (56.7) (62.2)
Capital expenditure - property, plant and equipment (1.2) (0.5)
Adjusted net cash flow after investing activities (16.9) (32.3)
Issues of share capital 0.7 0.3
Dividends paid (38.9) (37.7)
Net drawdown of borrowings 52.4 71.1
Swap termination income - 0.4
Debt issuance costs - (4.3)
Net (decrease) in cash (2.7) (2.5)
Note: Free cash flow is a non-GAAP measure, defined as cash flow before
investing and financing activities but after leasehold rent payments.
Adjusted operating cash flow increased by £10.9m in the period. In the prior
period, the movement in working capital was primarily associated with
settlement of employment-related taxes connected with the maturity of the five
and three-year share based payment schemes at the end of 2022 and early 2023
respectively.
Interest payments increased compared to the prior half year as a result of the
increased interest charge associated with the additional borrowings to fund
the capital expenditure on new stores and development of the existing
portfolio.
Investing activities generated a net outflow of £57.9m (H1 2023: net outflow
of £64.2m) from capital expenditure on new stores and development of the
existing portfolio. Of the £56.7m cash outflow on investment properties,
£51.3m (H1 2023: £59.4m) was spent on new stores and development of the
existing portfolio, with the balance principally spent on capital maintenance.
Dividends paid to shareholders increased from £37.7m in H1 2023 to £38.9m in
H1 2024, and the Group drew a net £52.4m of borrowings, primarily to finance
capital expenditure.
The first table below reconciles free cash flow (before investing and
financing activities) in the table above to net cash inflow from operating
activities in the consolidated cash flow statement. The second table below
reconciles adjusted net cash flow after investing activities in the table
above to the consolidated cash flow statement.
H1 2024 H1 2023
£'m £'m
Free cash flow (before investing and financing activities) 41.0 31.9
Addback: Finance lease principal payments 4.4 4.4
Net cash inflow from operating activities 45.4 36.3
H1 2024 H1 2023
£'m £'m
From table above:
Adjusted net cash flow after investing activities (16.9) (32.3)
Addback: Finance lease principal payments 4.4 4.4
Net cash outflow after investing activities (12.5) (27.9)
From consolidated cash flow:
Net cash inflow from operating activities 45.4 36.3
Net cash outflow from investing activities (57.9) (64.2)
Net cash outflow after investing activities (12.5) (27.9)
Dividends
The Board has announced an interim dividend of 10.0 pence per share, an
increase of 1% on the prior period. This will amount to a dividend payment of
£21.8m (H1 2023: £21.6m). The dividend will be paid on 8 August 2024 to
shareholders who are on the Company's register on 5 July 2024. The ex-dividend
date will be 4 July 2024. 25% (H1 2023: 25%) of the dividend will be paid as a
REIT Property Income Distribution ("PID").
Consolidated income statement
for the six months ended 30 April 2024
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
Note £m £m £m
Revenue 4,5 109.2 110.1 224.2
Cost of sales (35.7) (34.5) (69.9)
Gross profit 73.5 75.6 154.3
Administrative expenses (8.9) (8.0) (17.7)
Underlying EBITDA 5 67.1 69.7 142.2
Share-based payments (1.4) (1.3) (3.5)
Depreciation and variable lease payments (1.1) (0.8) (2.1)
Operating profit before gain on investment properties and other exceptional 64.6 67.6 136.6
gains
Gain on revaluation of investment properties 12 121.7 47.3 93.8
Operating profit 186.3 114.9 230.4
Finance income 6 0.3 0.5 0.8
Finance expense 6 (12.9) (12.0) (23.4)
Profit before income tax 5 173.7 103.4 207.8
Tax charge 7 (16.9) (10.6) (7.6)
Profit for the period 156.8 92.8 200.2
Earnings per share for profit attributable to the equity holders
- basic (pence) 10 71.8 42.9 92.2
- diluted (pence) 10 71.5 42.7 91.8
All items in the income statement relate to continuing operations. Underlying
EBITDA is an Alternative Performance Measure and is defined as operating
profit before exceptional items, share-based payments, corporate transaction
costs, gain/loss on investment properties, depreciation and variable lease
payments and the share of associate's depreciation, interest and tax.
An interim dividend of 10.0 pence per ordinary share has been declared for the
period ended 30 April 2024 (30 April 2023: 9.9 pence).
Consolidated statement of comprehensive income
for the six months ended 30 April 2024
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Profit for the period 156.8 92.8 200.2
Other comprehensive income:
Items that may be reclassified subsequently to profit and loss:
Currency translation differences (11.4) 9.2 7.1
Net investment hedge 3.0 (3.8) (2.9)
Total other comprehensive (expense)/income net of tax (8.4) 5.4 4.2
Total comprehensive income for the period 148.4 98.2 204.4
Consolidated balance sheet
as at 30 April 2024
30 April 30 April 31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
Note £m £m £m
Non-current assets
Investment in associates 11 4.1 3.3 4.1
Fair value of investment properties, net of lease liabilities 2,838.8 2,586.6 2,681.1
Add-back of lease liabilities 105.2 97.3 101.2
Investment properties under construction 113.9 93.7 108.6
Total investment properties 12 3,057.9 2,777.6 2,890.9
Property, plant and equipment 6.0 3.2 5.2
Deferred tax assets 8 6.1 0.8 6.6
3,074.1 2,784.9 2,906.8
Current assets
Inventories 0.4 0.4 0.4
Derivative financial instruments - 0.3 -
Trade and other receivables 30.0 36.0 32.7
Current tax assets 0.3 0.2 -
Amounts due from associates 0.2 - 0.1
Cash and cash equivalents 13.8 18.1 16.9
44.7 55.0 50.1
Total assets 3,118.8 2,839.9 2,956.9
Current liabilities
Borrowings 15 (43.5) - (44.5)
Trade and other payables (48.2) (54.9) (52.4)
Current tax liabilities - - (0.4)
Obligations under lease liabilities (14.4) (13.1) (13.1)
(106.1) (68.0) (110.4)
Non-current liabilities
Borrowings 15 (727.7) (697.2) (681.3)
Deferred tax liabilities 8 (150.1) (139.4) (139.2)
Obligations under lease liabilities (90.9) (84.4) (88.3)
Provisions 19 (2.6) (2.6) (2.6)
(971.3) (923.6) (911.4)
Total liabilities (1,077.4) (991.6) (1,021.8)
Net assets 14 2,041.4 1,848.3 1,935.1
Shareholders' equity
Ordinary shares 16 2.2 2.2 2.2
Share premium 62.7 62.0 62.0
Translation reserve 4.3 13.9 12.7
Retained earnings 1,972.2 1,770.2 1,858.2
Total equity 2,041.4 1,843.3 1,935.1
The notes set out below form an integral part of this condensed consolidated
interim financial information.
Condensed consolidated statement of changes in equity
for the six months ended 30 April 2024
Share Share Translation Retained Total
capital Premium reserve earnings equity
£m £m £m £m £m
Balance at 1 November 2023 2.2 62.0 12.7 1,858.2 1,935.1
Profit for the period - - - 156.8 156.8
Other comprehensive income for the period - - (8.4) - (8.4)
Total comprehensive income for the period - - (8.4) 156.8 148.4
Transactions with owners in their capacity as owner:
Dividends (note 9) - - - (44.1) (44.1)
Increase in share capital - 0.7 - - 0.7
Employee share options - - - 1.3 1.3
Balance at 30 April 2024 2.2 62.7 4.3 1,972.2 2,041.4
Condensed consolidated statement of changes in equity
for the six months ended 30 April 2023
Share Share Translation Retained Total
capital premium reserve earnings Equity
£m £m £m £m £m
Balance at 1 November 2022 2.1 61.8 8.5 1,721.0 1,793.4
Profit for the period - - - 92.8 92.8
Other comprehensive income for the period - - 5.4 - 5.4
Total comprehensive income for the period - - 5.4 92.8 98.2
Transactions with owners in their capacity as owner:
Dividends (note 9) - - - (44.5) (44.5)
Increase in share capital 0.1 0.2 - - 0.3
Employee share options - - - 0.9 0.9
Balance at 30 April 2023 2.2 62.0 13.9 1,770.2 1,848.3
Condensed consolidated statement of changes in equity
for the year ended 31 October 2023
Share Share Translation Retained Total
capital premium reserve earnings Equity
£m £m £m £m £m
Balance at 1 November 2022 2.1 61.8 8.5 1,721.0 1,793.4
Profit for the period - - - 200.2 200.2
Other comprehensive income - - 4.2 - 4.2
Total comprehensive income for the year - - 4.2 200.2 204.4
Transactions with owners in their capacity as owner:
Dividends (note 9) - - - (65.9) (65.9)
Increase in share capital 0.1 0.2 - - 0.3
Employee share options - - - 2.9 2.9
Balance at 31 October 2023 2.2 62.0 12.7 1,858.2 1,935.1
Consolidated cash flow statement
for the six months ended 30 April 2024
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Profit before income tax 173.7 103.4 207.8
Gain on the revaluation of investment properties (121.7) (47.3) (93.8)
Depreciation 0.7 0.6 1.3
Net finance expense 12.6 11.5 22.6
Employee share options 1.3 1.0 2.9
(Increase)/decrease in inventories - (0.1) -
(Increase)/decrease in trade and other receivables 2.6 (4.2) (1.4)
(Decrease) in trade and other payables (8.8) (15.4) (11.2)
Increase in provision - 0.2 0.2
Cash flows from operating activities 60.4 49.7 128.4
Interest received 0.3 - -
Interest paid (12.2) (9.7) (24.9)
Tax paid (3.1) (3.7) (5.5)
Net cash inflow from operating activities 45.4 36.3 98.0
Cash flows from investing activities
Investment in associates - (1.5) (2.3)
Expenditure on investment and development properties (56.7) (62.2) (119.0)
Purchase of property, plant and equipment (1.2) (0.5) (2.9)
Net cash (outflow) from investing activities (57.9) (64.2) (124.2)
Cash flows from financing activities
Issue of share capital 0.7 0.3 0.2
Equity dividends paid (38.9) (37.7) (65.9)
Proceeds from borrowings 52.4 176.2 108.4
Repayment of borrowings - (105.1) (7.1)
Debt issuance costs - (4.4) (4.9)
Financial instruments income - 0.4 0.4
Principal payment of lease liabilities (4.4) (4.3) (8.8)
Net cash inflow from financing activities 9.8 25.4 22.3
Net (decrease) / increase in cash and cash equivalents (2.7) (2.5) (3.9)
Exchange loss on cash and cash equivalents (0.4) (0.3) (0.1)
Opening cash and cash equivalents 16.9 20.9 20.9
Closing cash and cash equivalents 13.8 18.1 16.9
Reconciliation of net cash flow to movement in net debt
for the six months ended 30 April 2024
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Net (decrease) in cash and cash equivalents (after exchange adjustments) (3.1) (2.8) (4.0)
Increase in debt financing (49.3) (75.5) (108.0)
(Increase) in net debt (52.4) (78.3) (112.0)
Net debt at start of period (810.3) (698.3) (698.3)
Net debt at end of period (862.7) (776.6) (810.3)
Notes to the interim report for the six months ended 30 April 2024
1 General information
The Company is a public limited company incorporated and domiciled in the UK.
The address of its registered office is Brittanic House, Stirling Way,
Borehamwood, Hertfordshire WD6 2BT.
The Company is listed on the London Stock Exchange.
This interim report was approved for issue on 11 June 2024.
This condensed consolidated interim financial information does not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. The full accounts of Safestore Holdings plc for the year ended 31
October 2023, which received an unqualified report from the auditor, and did
not contain a statement under S.498(2) or (3) of the Companies Act 2006, were
filed with the Registrar of Companies on 26 March 2024.
This condensed consolidated interim financial information for 30 April 2024
and 30 April 2023 is unaudited. The interim financial information for 30 April
2024 has been reviewed by the auditor and their Independent Review report is
included within this financial information.
2 Basis of preparation
The condensed consolidated interim financial information for the six months
ended 30 April 2024 has been prepared in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority and
with United Kingdom adopted International Accounting Standard 34 'Interim
Financial Reporting' (IAS 34).
The Directors are satisfied that the Group has sufficient resources to
continue in operation for the foreseeable future, a period of not less than
twelve months from the date of this report. Accordingly, they continue to
adopt the going concern basis in preparing this condensed consolidated interim
financial information.
In assessing the Group's going concern position as at 30 April 2024, the
Directors have considered a number of factors, including the net current
liability balance sheet position of £61.4m, which is mainly the current USPP
tranche which was settled at the end of May 2024, the principal and emerging
risks which could impact the performance of the Group and the Group's
strategic and financial plan. Consideration has been given to compliance with
borrowing covenants along with the uncertainty inherent in future financial
forecasts. The Directors considered the most recent three-year outlook
approved by the Board. More recently, the Board have reviewed and approved the
budget and recent forecast for the current and next financial year. This
forecast includes a projected cashflow position which highlights that Group
has sufficient available cash to support the business strategy for the next
twelve months. Should situations arise where the Group's demand and enquiry
levels, average rate growth and the level of cost savings be impacted, clear
mitigating actions are available to ensure that the Group remains liquid and
able to meet its liabilities as they fall due. The financial position of the
Group, including details of its financing and capital structure, is set out in
the financial review section of this announcement.
On 30 April 2024, the Group completed the financing of its RCF's accordion
option for £100m. This increased the facility to £500m. The facility was
originally for a four-year term with two one-year extension options
exercisable after the first and second years of the agreement. The first
extension was granted in October 2023, taking the term to five years, maturing
November 2027. One tranche of Private Placement notes matured at the end of
May 2024 and was repaid utilising existing debt facilities.
Further details of the Group's viability statement is included in page 42 of
the Annual Report and Financial Statements for the year ended 31 October 2023.
The assessment concluded that, for the foreseeable future, the Group has
sufficient capital to support its operations; has a funding and liquidity base
which is strong, robust and well managed with substantial future capacity and
has expectations that performance will continue to improve as the Group's
strategy is executed.
The condensed consolidated interim financial information should be read in
conjunction with the annual financial statements for the year ended 31 October
2023, which have been prepared in accordance with the International Financial
Reporting Standards ("IFRS").
Non-GAAP financial information
The Directors have identified certain measures that they believe will assist
the understanding of the performance of the business. The measures are not
defined under IFRS and they may not be directly comparable with other
companies' adjusted measures. The non-GAAP measures are not intended to be a
substitute for, or superior to, any IFRS measures of performance but they have
been included as the Directors consider them to be important comparable and
key measures used within the business for assessing performance. The following
are the key non-GAAP measures identified by the Group:
· The Group defines exceptional items to be those that warrant, by
virtue of their nature, size or frequency, separate disclosure on the face of
the income statement where, in the opinion of the Directors, this enhances the
understanding of the Group's financial performance.
· Underlying EBITDA is an Alternative Performance Measure and is
defined as operating profit before exceptional items, share-based payments,
corporate transaction costs, gain/loss on investment properties, depreciation
and variable lease payments and the share of associate's depreciation,
interest and tax. Management considers this presentation to be representative
of the underlying performance of the business, as it removes the income
statement impact of items not fully controllable by management, such as the
revaluation of derivatives and investment properties, and the impact of
exceptional credits, costs and finance charges. A reconciliation of statutory
operating profit to Underlying EBITDA can be found in the financial review
section of this announcement.
· Adjusted Diluted EPRA EPS is based on the European Public Real
Estate Association's ("EPRA") definition of EPRA earnings and is defined as
profit or loss for the period after tax but excluding corporate transaction
costs, change in fair value of derivatives, fair value gain/loss on investment
properties and the associated tax impacts. The Company then makes further
company-specific adjustments for the impact of exceptional items, net exchange
gains/losses recognised in net finance costs, exceptional tax items, and
deferred and current tax in respect of these adjustments. The Company also
adjusts for IFRS 2 share-based payment charges. This adjusted earnings is
divided by the diluted number of shares. The IFRS 2 cost is excluded as it is
written back to distributable reserves and is a non-cash item (with the
exception of the associated National Insurance element). Therefore, neither
the Company's ability to distribute nor pay dividends are impacted (with the
exception of the associated National Insurance element). The financial
statements disclose earnings on a statutory, EPRA and Adjusted Diluted EPRA
basis and will provide a full reconciliation of the differences in the
financial year in which any LTIP awards may vest. A reconciliation of
statutory basic earnings per share to Adjusted Diluted EPRA EPS can be found
in note 10.
· EPRA's Best Practices Recommendations guidelines for Net Asset
Value ("NAV") metrics are EPRA Net Tangible Assets ("NTA"), EPRA Net
Reinstatement Value ("NRV") and EPRA Net Disposal Value ("NDV"). EPRA NTA is
considered to be the most relevant measure for the Group's business which
provides sustainable long term progressive returns and is now the primary
measure of net assets. The basis of calculation, including a reconciliation
to reported net assets, is set out in note 14.
· Like-for-like figures are presented to aid in the comparability
of the underlying business as they exclude the impact on results of purchased,
sold, opened or closed stores.
· Constant exchange rate (CER) figures are provided in order to
present results on a more comparable basis, removing foreign exchange
movements.
3 Accounting policies
The condensed consolidated interim financial information has been prepared on
the basis of the accounting policies expected to apply for the financial year
to 31 October 2024 and the same as applied for the Group's Financial
Statements for the Full Year October 2023 applicable to companies under IFRS.
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of certain critical accounting
estimates. It also requires management to exercise judgement in the process of
applying the Company's accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates
are significant to the condensed consolidated interim financial statements are
disclosed within the Group's accounting policies as disclosed in the IFRS
financial statements for the year ended 31 October 2023. There have been no
other significant changes in accounting estimates in the period.
The same accounting policies, presentation and methods of computation are
followed in the condensed set of financial statements as applied in the
Group's latest financial statements. The nature of the Critical Accounting
Judgements and Key Sources of Estimation Uncertainty applied in the condensed
financial statements have remained consistent with those applied in the
Group's latest annual audited financial statements.
4 Revenue
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Self-storage income 91.6 92.4 187.2
Customer goods protection 12.0 12.1 25.5
Other non-storage income 5.6 5.6 11.5
Total revenue 109.2 110.1 224.2
5 Segmental information
The segmental information for the six months ended 30 April 2024 is as
follows:
United Kingdom Paris Spain Benelux Total
£m £m £m £m £m
Continuing operations
Revenue 79.7 21.6 2.4 5.5 109.2
Underlying EBITDA 50.3 13.6 0.9 2.3 67.1
Share-based payments (1.2) (0.2) - - (1.4)
Depreciation and variable lease payments (1.0) (0.1) - - (1.1)
Operating profit before gain on investment properties and other exceptional 48.1 13.3 0.9 2.3 64.6
gains
Gain on revaluation investment properties 72.3 34.5 10.3 4.6 121.7
Operating profit 120.4 47.8 11.2 6.9 186.3
Net finance expense (8.9) (1.1) (1.6) (1.0) (12.6)
Profit before income tax 111.5 46.7 9.6 5.9 173.7
Total assets 2,326.2 638.0 73.6 81.0 3,118.8
The segmental information for the six months ended 30 April 2023 is as
follows:
United Kingdom Paris Spain Benelux Total
£m £m £m £m £m
Continuing operations
Revenue 81.7 21.8 1.7 4.9 110.1
Underlying EBITDA 51.9 14.9 0.6 2.3 69.7
Share-based payments (1.2) (0.1) - - (1.3)
Depreciation and variable lease payments (0.7) (0.1) - - (0.8)
Operating profit before gain on investment properties and other exceptional 50.0 14.7 0.6 2.3 67.6
gains
Gain on revaluation of investment properties 24.5 14.4 2.1 6.3 47.3
Operating profit 74.5 29.1 2.7 8.6 114.9
Net finance expense (10.8) (0.6) (0.1) - (11.5)
Profit before income tax 63.7 28.5 2.6 8.6 103.4
Total assets 2,143.9 586.2 30.7 79.1 2,839.9
Underlying EBITDA is defined as operating profit before exceptional items,
share-based payments, corporate transaction costs, gain/loss on investment
properties, depreciation and variable lease payments and the share of
associate's depreciation, interest and tax.
6 Finance income and costs
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Finance income
Interest receivable from loan to associates 0.2 - -
Other interest received 0.1 0.1 0.1
Financial instruments income - 0.4 0.4
Underlying finance income 0.3 0.5 0.5
Net exchange gains - - 0.3
Total finance income 0.3 0.5 0.8
Finance costs
Interest payable on bank loans and overdrafts (9.4) (7.3) (15.1)
Amortisation of debt issuance costs on bank loans (0.6) (0.7) (1.3)
Underlying finance charges (10.0) (8.0) (16.4)
Interest on obligations under lease liabilities (2.9) (2.6) (5.3)
Fair value movement on derivatives - (1.4) (1.7)
Total finance costs (12.9) (12.0) (23.4)
Net finance costs (12.6) (11.5) (22.6)
7 Taxation
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Current tax - current year 2.6 2.6 5.1
Current tax - prior year - -
Deferred tax - current year 14.7 8.0 5.3
Deferred tax - prior year (0.4) - (2.8)
16.9 10.6 7.6
Income tax is recognised based on management's best estimate of the weighted
average annual income tax rate expected for the full financial year.
In the UK, the Group is a Real Estate Investment Trust ("REIT"). As a result,
the Group is exempt from UK corporation tax on the profits and gains arising
from its qualifying property rental business in the UK provided that it meets
certain conditions. Non-qualifying profits and gains of the Group remain
subject to corporation tax as normal. The Group monitors its compliance with
the REIT conditions. There have been no breaches of the conditions to date.
The main rate of corporation tax in the UK is 25%. Accordingly, the Group's
results for this accounting period are taxed at an effective rate of 25% (30
April 2023: 18%). Following Finance Act 2021, the main rate of corporation
increased from 19% to 25% from 1 April 2023. There is no deferred taxation
impact in respect of this change in taxation rate.
Taxation for other jurisdictions is calculated at the rates prevailing in the
respective jurisdictions.
8 Deferred tax
As at As at As at
30 April
30 April
31 October 2023
2024
2023
(unaudited) (unaudited) (audited)
£m £m £m
The amounts provided in the accounts are:
Revaluation of investment properties and tax depreciation 150.1 139.4 139.2
Deferred tax liabilities 150.1 139.4 139.2
Other timing differences 6.1 0.8 6.6
Deferred tax assets 6.1 0.8 6.6
Net deferred tax liability 144.0 138.6 132.6
As at 30 April 2024, the Group had income losses of £32.7m (30 April 2023:
£41.0m) and capital losses of £36.4m (30 April 2023: £36.4m) in respect of
its UK operations. All losses can be carried forward indefinitely. A deferred
tax asset has been recognised on £21.0m of income tax losses.
9 Dividends
Six months Six months Year
ended
ended
ended
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
For the year ended 31 October 2022:
Final dividend - paid 7 April 2023 (20.40p per share) 44.3 44.3
For the year ended 31 October 2023
Interim dividend - paid 10 August 2023 (9.90p per share) - 21.6
Final dividend - paid 9 April 2024 (20.20p per share) 44.1 -
Dividends in the statement of changes in equity 44.1 44.3 65.9
Timing difference on payment of withholding tax (5.2) (6.6) -
Dividends in the cash flow statement (38.9) 37.7 65.9
An interim dividend of 10.0 pence per ordinary share (April 2023: 9.9 pence)
has been declared. The ex-dividend date will be 4 July 2024 and the record
date 5 July 2024, with an intended payment date of 8 August 2024.
It is intended that 25% (April 2023: 25%) of the interim dividend of 10.0
pence per ordinary share (April 2023: 9.9 pence) will be paid as a REIT
Property Income Distribution ("PID") net of withholding tax where appropriate.
The interim dividend, amounting to £21.8m (April 2023: £21.6m), has not been
included as a liability at 30 April 2024. It will be recognised in
shareholders' equity in the year to 31 October 2024.
10 Earnings per ordinary share
Basic earnings per share has been calculated by dividing the profit
attributable to equity holders of the Company by the weighted average number
of ordinary shares in issue during the period/year excluding ordinary shares
held by the Safestore Employee Benefit Trust. Diluted earnings per share are
calculated by adjusting the weighted average numbers of ordinary shares to
assume conversion of all dilutive potential shares. The Company has one
category of dilutive potential ordinary shares: share options. For the share
options, a calculation is done to determine the number of shares that could
have been acquired at fair value (determined as the average annual market
price of the Company's shares) based on the monetary value of the subscription
rights attached to the outstanding share options. The number of shares
calculated as above is compared with the number of shares that would have been
issued assuming the exercise of the share options.
Six months ended Six months ended Year ended
30 April 2024
30 April 2023
31 October 2023
(unaudited) (unaudited) (audited)
Earnings Shares million Pence Earnings Shares million Pence per share Earnings Shares million Pence
£m
per share
£m
£m
per share
Basic 156.8 218.3 71.8 92.8 216.5 42.9 200.2 217.2 92.2
Dilutive share options - 1.0 (0.3) - 0.8 (0.2) - 0.9 (0.4)
Diluted 156.8 219.3 71.5 92.8 217.3 42.7 200.2 218.1 91.8
Adjusted earnings per share
Adjusted earnings per share represents profit after tax adjusted for the
valuation movement on investment properties, exceptional items, change in fair
value of derivatives and the associated tax thereon. As an industry standard
measure, European Public Real Estate Association ("EPRA") earnings are
presented below. Adjusted diluted earnings are also presented by adding back
the share-based payment charge to the EPRA earnings. The Directors consider
that these alternative measures provide useful information on the performance
of the Group.
Six months ended Six months ended Year ended
30 April 2024
30 April 2023
31 October 2023
(unaudited) (unaudited) (audited)
Earnings/(loss) Shares million Pence Earnings/ Shares million Pence per share Earnings/ Shares million Pence
£m
per share
(loss)
(loss)
per share
£m
£m
Basic 156.8 218.3 71.8 92.8 216.5 42.9 200.2 217.2 92.2
Adjustments:
Gain on investment properties (121.7) - (55.7) (47.3) - (21.9) (93.8) - (43.2)
Net exchange loss - - - - - - (0.3) - (0.1)
Gain in fair value of derivatives - - - 1.4 - 0.6 1.7 - 0.8
Tax on adjustments and exceptional tax 13.7 - 6.3 7.4 - 3.4 1.4 - 0.6
Adjusted 48.8 218.3 22.4 54.3 216.5 25.0 109.2 217.2 50.3
EPRA adjusted:
Fair value re-measurement of lease liabilities add-back (4.4) - (2.0) (4.4) - (2.0) (8.8) - (4.1)
Tax on lease liabilities add-back adjustment 0.6 - 0.3 0.6 - 0.3 1.1 - 0.5
Adjusted EPRA basic EPS 45.0 218.3 20.7 50.5 216.5 23.3 101.5 217.2 46.7
Share-based payment charge 1.4 - 0.6 1.3 - 0.6 3.5 - 1.6
Dilutive shares - 1.0 (0.1) - 2.5 (0.2) - 1.9 (0.4)
Adjusted Diluted EPRA EPS 46.4 219.3 21.2 51.8 219.0 23.7 105.0 219.1 47.9
The definition of Adjusted Diluted EPRA EPS can be found in note 2 to the
financial statements, being based on the EPRA definition of earnings with
company adjustments for specific items such as tor the impact of exceptional
items, IFRS 2 share-based payment charges, and deferred tax charges.
Gain on investment properties includes the fair value re-measurement of lease
liabilities add-back of £4.4m (30 April 2023: £4.4m) and the related tax
thereon of £0.6m (30 April 2023: £0.6m). As an industry standard measure,
EPRA earnings is presented. EPRA earnings of £45.0m (30 April 2023: £50.5m)
and EPRA earnings per share of 20.7 pence (30 April 2023: 23.3 pence) are
calculated after further adjusting for these items.
11 Investment in associates
As at As at As at
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Investment in associates 4.1 3.3 4.1
PBC Les Groues SAS
The Group has a 24.9% interest in PBC Les Groues SAS ("PBC"), a company
registered and operating in France. PBC is accounted for using the equity
method of accounting. PBC is the parent company of Nanterre FOCD 92, a company
also registered and operating in France, which is developing a new store as
part of a wider development programme located in Paris. The development
project is managed by its joint venture partners, therefore the Group will
have no operational liability during this phase. During the current period
there has been no further investment in the company. The investment is
considered immaterial relative to the Group's underlying operations.
The aggregate carrying value of the Group's interest in PBC was £1.8m (30
April 2023: £1.8m), made up of an investment of £1.8m (30 April 2023:
£1.8m). The Group's share of profits from continuing operations for the
period was £nil (30 April 2023: £nil). The Group's share of total
comprehensive income of associates for the period was £nil (30 April 2023:
£nil).
Cerf II German Storage Topco S.a.r.l.
On 1 December 2022 the Group acquired a 10.0% interest in CERF II German
Storage Topco S.a.r.l. (CERF II), a company registered in Luxembourg for which
the Group has board representation. The reporting date of the financial
statements for the company is 31 December. Cerf II is accounted for using the
equity method of accounting. Safestore entered the German Self Storage market
via a new investment with Carlyle which acquired the myStorage business.
The aggregate carrying value of the Group's interest in CERFII was £2.3m (30
April 2023: £1.5m), made up of an investment of £2.3m (30 April 2023:
£1.5m). The Group's share of profits from continuing operations for the
period was £nil (30 April 2023: £nil). The Group's share of total
comprehensive income of associates for the period was £nil (30 April 2023:
£nil).
12 Investment properties
Investment properties, net of lease liabilities Add-back of Investment Total
properties under construction
lease liabilities investment
properties
£m £m £m £m
Balance at 1 November 2023 2,681.1 101.2 108.6 2,890.9
Additions 18.8 9.1 36.8 64.7
Reclassification 27.2 - (27.2) -
Revaluation movement 129.5 - (3.4) 126.1
Fair value re-measurement of lease liabilities - (4.4) - (4.4)
Exchange movements (17.8) (0.7) (0.9) (19.4)
Balance at 30 April 2024 2,838.8 105.2 113.9 3,057.9
Fair value of investment properties, net of lease liabilities Add-back of Investment Total
properties under construction
lease liabilities investment
properties
£m £m £m £m
Balance at 1 November 2022 2,457.8 95.1 94.5 2,647.4
Additions 33.2 9.0 29.0 71.2
Disposal of subsidiaries - (3.1) - (3.1)
Reclassification 29.9 (29.9) -
Revaluation movement 52.3 - (0.6) 51.7
Fair value re-measurement of lease liabilities - (4.4) - (4.4)
Exchange movements 13.4 0.7 0.7 14.8
Balance at 30 April 2023 2,586.6 97.3 93.7 2,777.6
The gain on investment properties of £121.7m (30 April 2023: £47.3m) as
disclosed in the consolidated income statement comprises a £126.1m (30 April
2023: £51.7m) revaluation gain on investment properties, net of lease
liabilities and investment properties under construction less the fair value
re-measurement of lease liabilities add-back of £4.4m (30 April 2023:
£4.4m).
The Group has classified investment property and investment property under
construction, held at fair value, within Level 3 of the fair value hierarchy.
There were no transfers to or from Level 3 during the period. The fair
valuation exercise undertaken at 30 April 2024 is explained in note 13.
The fair value of investment property held by the Group classified as the
add-back of lease liabilities of £105.2m (30 April 2023: £97.3m) reflects
expected cash flows (including rent reviews settled that are expected to
become payable). Accordingly, if a valuation obtained for a property is net of
all payments expected to be made, it will be necessary to add-back any
recognised lease liability, to arrive at the carrying amount of the investment
property using the fair value model under IAS 40. The lease liability of
£105.3m (30 April 2023: £97.5m) differs by £0.1m (30 April 2023: £0.2m)
which relates to the right-of-use asset classified as part of property, plant
and equipment.
13 Valuations
External valuation
A sample of the Group's largest properties, representing 30% of the value of
the Group's investment property portfolio at 31 October 2023, has been valued
by the Group's external valuers, C&W, as at 30 April 2024. The valuation
has been carried out in accordance with the requirements of the RICS Valuation
- Global Standards which incorporate the International Valuation Standards
("IVS") and the RICS Valuation UK National Supplement (the "RICS Red Book")
edition current at 30 April 2024. The valuation of each of the investment
properties has been prepared on the basis of fair value as a fully equipped
operational entity, having regard to trading potential. The valuation has been
provided for accounts purposes and, as such, is a Regulated Purpose Valuation
as defined in the Red Book. In compliance with the disclosure requirements of
the Red Book, C&W has confirmed that:
· the member of the RICS who has been the signatory to the
valuations provided to the Group for the same purposes as previous valuations,
has done so since April 2020;
· C&W has been carrying out regular valuations for the same
purpose as this valuation on behalf of the Group since October 2006;
· C&W does not provide other significant professional or agency
services to the Group;
· The proportion of fees payable by the Group to C&W to the
total fee income of C&W's last financial year to 31 December 2023, was
less than 5%. We anticipate that the proportion of fees for the financial year
to 31 December 2024 will remain at less than 5%; and
· the fee payable to C&W is a fixed amount per property and is
not contingent on the appraised value.
Further details of the valuation carried out by C&W as at 31 October 2023,
including the valuation method and assumptions, are set out in note 13 to the
Group's annual report and financial statements for the year ended 31 October
2023. This note should be read in conjunction with note 13 of the Group's
annual report.
Directors' valuation
In addition, at the same date, the Directors have prepared estimates of fair
values for the remaining 70% of the Group's investment property portfolio,
incorporating assumptions for estimated absorption, revenue growth and
capitalisation rates to reflect current market conditions and trading.
Assumptions
The key assumptions incorporated into both the external valuation and the
Directors' valuation, calculated on a weighted average basis across the entire
portfolio, are:
· Net operating income is based on projected revenue received less
projected operating costs together with a central administration charge of 6%
of the estimated annual revenue subject to a cap and collar. The initial net
operating income is calculated by estimating the net operating income in the
first twelve months following the valuation date.
· The net operating income in future years is calculated assuming
either straight line absorption from day one actual occupancy or variable
absorption over years one to four of the cash flow period, to an estimated
stabilised/mature occupancy level. In the valuations the assumed stabilised
occupancy level for the trading stores (both freeholds and all leaseholds)
open at 30 April 2024 averages 89.35% (31 October 2023: 89.33%). The projected
revenues and costs have been adjusted for estimated cost inflation and revenue
growth. The average time assumed for stores to trade at their maturity levels
is 12.35 months (31 October 2023: 13.44 months).
· The capitalisation rates applied to existing and future net cash
flows have been estimated by reference to underlying yields for industrial and
retail warehouse property, yields for other trading property types such as
student housing and hotels, bank base rates, ten year money rates, inflation
and the available evidence of transactions in the sector. The valuations
included in the accounts assume rental growth in future periods. If an
assumption of no rental growth is applied to the valuations, the net initial
yield pre-administration expenses for the mature stores (i.e., excluding those
stores categorised as "developing") is 5.11% (31 October 2023: 5.92%), rising
to stabilised net yield pre-administration expenses of 6.71% (31 October 2023:
6.71%).
· The weighted average freehold exit yield on UK freeholds is 5.51%
(31 October 2023: 5.75%), on Paris freeholds is 5.33% (31 October 2023:
5.61%), on Spain freeholds is 5.36% (31 October 2023: 5.50%), on the
Netherlands freeholds is 4.89% (31 October 2023: 5.15%) and on Belgium
freeholds is 4.77% (31 October 2023: 5.00%). The weighted average freehold
exit yield for all freeholds adopted 5.42% (31 October 2023: 5.72%).
· The future net cash flow projections (including revenue growth
and cost inflation) have been discounted at a rate that reflects the risk
associated with each asset. The weighted average annual discount rate adopted
(for both freeholds and leaseholds) in the UK portfolio is 8.20% (31 October
2023: 8.59%) in the France portfolio is 8.17% (31 October 2023: 8.38%), in the
Spain portfolio is 8.18% (31 October 2023: 8.39%), in the Netherlands
portfolio is 7.59% (31 October 2023: 7.74%) and in the Belgium portfolio is
7.57% (31 October 2023: 7.99%). The weighted average annual discount rate
adopted (for both freeholds and all leaseholds) is 8.26% (31 October 2023:
8.54%).
· Purchaser's costs in the range of approximately 3.3% to 6.8% for
the UK, 7.5% for Paris and 2.5% for Spain have been assumed initially,
reflecting the progressive SDLT rates brought into force in March 2016 in the
UK, and sales plus purchaser's costs totalling approximately 5.3% to 8.8%
(UK), 9.5% (Paris) and 4.5% (Spain) are assumed on the notional sales in the
tenth year in relation to freehold and long leasehold stores.
All other factors being equal, higher net operating income would lead to an
increase in the valuation of a store and an increase in the capitalisation
rate or discount rate would result in a lower valuation, and vice versa.
Higher assumptions for stabilised occupancy, absorption rate, rental rate and
other revenue, and a lower assumption for operating costs, would result in an
increase in projected net operating income, and thus an increase in valuation.
As a result of these exercises, as at 30 April 2024, the Group's investment
property portfolio has been valued at £2,838.8m (30 April 2023: £2,586.6m),
and a revaluation gain of £121.7m (30 April 2023: £47.3m) has been
recognised in the income statement for the period.
A full external valuation of the Group's investment property portfolio will be
performed at 31 October 2024.
14 Net assets per share
As at As at As at
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
Analysis of net asset value £m £m £m
Balance sheet net assets 2,041.4 1,848.3 1,935.1
Adjustments to exclude:
Fair value of derivative financial instruments (net of deferred tax) - (0.3) -
Deferred tax liabilities on the revaluation of investment properties 150.1 139.4 139.2
EPRA NTA 2,191.5 1,987.4 2,074.3
Basic net assets per share (pence) 935 848 888
EPRA basic NTA per share (pence) 1003 912 952
Diluted net assets per share (pence) 930 845 884
EPRA diluted NTA per share (pence) 999 909 948
Number Number Number
Shares in issue 218,487,150 218,006,528 218,039,419
Basic net assets per share is shareholders' funds divided by the number of
shares at the period end. The number of shares in issue at the period end
excludes 75,814 shares (30 April 2023: 145,493 shares) held by the Safestore
Employee Benefit Trust. Diluted net assets per share is shareholders' funds
divided by the number of shares at the period end, adjusted for dilutive share
options of 1,023,639 shares (30 April 2023: 821,170 shares).
15 Borrowings
The tables below set out the Group's borrowings position as at 30 April 2024:
As at As at As at
30 April
30 April
31 October 2023
2024
2023
(unaudited) (unaudited) (audited)
Non-current £m £m £m
Borrowings:
Unsecured - revolving credit facility 254.6 172.9 203.0
Unsecured - US Private placement notes 477.6 529.2 483.3
Debt issue costs (4.5) (4.9) (5.0)
727.7 697.2 681.3
Current
Borrowings:
Unsecured - US Private placement notes 43.5 - 44.5
43.5 - 44.5
On 30 April 2024, the Group completed the financing of its RCF's accordion
option for £100m. This increased the facility to £500m. The facility was
originally for a four-year term with two one-year extension options
exercisable after the first and second years of the agreement. The first
extension was granted in October 2023, taking the term to five years.
One tranche of Private Placement notes matured at the end of May 2024 and was
repaid following the balance sheet date utilising existing debt facilities.
The remaining US Private Placement Notes of €307.1 have maturities extending
to 2026, 2027, 2028, 2029 and 2033 and £215.5m which have maturities
extending to 2026, 2028, 2029 and 2031.
Borrowings are stated before unamortised issue costs of £4.5m (30 April 2023:
£4.9m). The bank loans and private placement notes were repayable as follows:
As at As at As at
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Within one year 43.5 - 44.5
Between one and two years - 44.6 -
Between two and five years 457.3 334.2 409.0
After more than five years 274.9 323.3 277.3
Borrowings 775.7 702.1 730.8
Unamortised issue costs (4.5) (4.9) (5.0)
771.2 697.2 725.8
The effective interest rates at the balance sheet date were as follows:
As at As at As at
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
RCF (£) Monthly, quarterly or six monthly SONIA plus 1.25% Monthly, quarterly or six monthly SONIA plus 1.25% Monthly, quarterly or six monthly SONIA plus 1.25%
RCF (€) Monthly, quarterly or six monthly EURIBOR plus 1.25% Monthly, quarterly or six monthly EURIBOR plus 1.25% Monthly, quarterly or six monthly EURIBOR plus 1.25%
Private placement notes (€) Weighted average rate of 1.80% Weighted average rate of 1.80% Weighted average rate of 1.80%
Private placement notes (£) Weighted average rate of 2.55% Weighted average rate of 2.55% Weighted average rate of 2.55%
In addition to the margin of 1.25%, the RCF also has ESG targets enabling a
reduction in the margin of up to 5bps to 1.20%. In the period these targets
were all met.
Borrowing facilities
The Group has the following undrawn committed borrowing facilities available
at the period end in respect of which all conditions precedent had been met at
that date:
Floating rate
As at As at As at
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
£m £m £m
Expiring within one year - - -
Expiring beyond one year 245.4 227.1 297.0
16 Share capital
As at As at As at
30 April
30 April
31 October
2024
2023
2023
(unaudited) (unaudited) (audited)
Called up, issued and fully paid £m £m £m
218,487,150 (30 April 2023: 218,006,528) ordinary shares of 1p each 2.2 2.2 2.2
17 Capital commitments
The Group had capital commitments of £170.0m as at 30 April 2024 (31 October
2023: £128.0m; 30 April 2023: £134.0m).
18 Related party transactions
The Group's shares are widely held. Transactions between the Company and its
subsidiaries, which are related parties, have been eliminated on consolidation
and are not disclosed in this note.
Transactions with PBC Les Groues SAS
As described in note 11, the Group has a 24.9% interest in PBC Les Groues SAS
("PBC"). During the period, the Group is due to receive interest of £0.2m
which is included within amounts due from associates (30 April 2023: £nil).
The total amount invested is included as part of its non-current investments
in associates.
Transactions with CERF II German Storage Topco S a r l (CERF II)
As described in note 11, the Group has a 10.0% interest in CERF II German
Storage Topco S a r l (CERF II). During the period, the Group recharged £0.2m
(30 April 2023: £Nil).
19 Provisions
In France, the basis on which property taxes have been assessed has been
challenged by the tax authority for financial years 2011 onwards. In November
2022 the French Supreme Court delivered a final judgement in respect of
litigation for years 2011 to 2013, which resulted in a partial success for the
Group. The Group is separately pursuing litigation in respect of years since
2013 and has lodged an appeal with the French administrative tribunal against
the issues included in assessments for 2013 onwards on which it was ultimately
unsuccessful in the French Supreme Court for the earlier years. A provision is
included in the consolidated financial accounts of £2.6m at 30 April 2024 (31
October 2023: £2.6m), to reflect the increased uncertainty surrounding the
likelihood of a successful outcome.
It is possible that the French tax authority may appeal the decisions of the
French Court of Appeal on which the Group was successful to the French Supreme
Court. The maximum potential exposure in relation to these issues at 30 April
2024 is £3.0m (31 October 2023: £3.0m). No provision for any further
potential exposure has been recorded in the consolidated financial statements
since the Group believes it is more likely than not that a successful outcome
will be achieved, resulting in no additional liabilities.
20 Contingent liabilities
The Group has a contingent liability in respect of property taxation in the
French subsidiary as disclosed in note 19.
21 Post Balance Sheet Events
One tranche of Private Placement notes matured for €50.9m (£43.5m) at the
end of May 2024 and was repaid utilising existing debt facilities.
The delivery of our strategic objectives is dependent on effective risk
management. There are a number of potential risks and uncertainties which
could have a material impact on the Group's performance and could cause actual
results to differ materially from expected and historical results. Details of
the principal risks facing the Group were included on pages 35 to 40 of the
Annual Report and Financial Statements for the year ended 31 October 2023, a
copy of which is available at www.safestore.com (http://www.safestore.com) ,
and include:
· Strategic risks
· Finance risk
· Treasury risk
· Property investment and development risk
· Valuation risk
· Occupancy risk
· Real estate investment trust ("REIT") risk
· Catastrophic event risk
· Regulatory compliance risk
· Marketing risk
· IT security/GDPR
· Brand and Reputational risk
· Geographical expansion
· Human resource risk
· Climate change related risk
The Company regularly assesses these risks together with the associated
mitigating factors listed in the 2023 Annual Report. The levels of activity in
the Group's markets and the level of financial liquidity and flexibility
continue to be the areas designated as appropriate for added management focus.
We continue to believe that our market leading position in the UK and Paris,
our strong brand and depth of management, as well as our retail expertise and
infrastructure, help mitigate the effects of fluctuations in the economy or
the housing market. Furthermore, the UK self-storage market remains immature
with little risk of supply outstripping demand in the medium term.
Our prudent approach on new stores reduces our dependence on the number of
non-trading investment properties in relation to the established and mature
stores that provide relatively stable and growing cash flow. The Board
regularly reviews the cash requirements of the business, including the
covenant position although given the nature of the product, customer base and
lack of working capital requirements, liquidity is not considered to be a
significant risk.
The Outlook section of this half yearly report provides a commentary
concerning the remainder of the financial year.
Forward-looking statements
Certain statements in this interim results announcement are forward-looking
statements. By their nature, forward-looking statements involve a number of
risks, uncertainties or assumptions that could cause actual results or events
to differ materially from those expressed or implied by the forward-looking
statements. These risks, uncertainties or assumptions could adversely affect
the outcome and financial effects of the plans and events described herein.
Forward-looking statements contained in this interim results announcement
regarding past trends or activities should not be taken as a representation
that such trends or activities will continue in the future. You should not
place undue reliance on forward-looking statements, which speak only as of the
date of this interim results announcement. Except as required by law, the
Company is under no obligation to update or keep current the forward-looking
statements contained in this interim results announcement or to correct any
inaccuracies which may become apparent in such forward-looking statements.
Statement of Directors' responsibilities for the six months ended 30 April
2024
The Directors confirm that, to the best of their knowledge, this condensed
consolidated interim financial information has been prepared in accordance
with IAS 34 as contained in the United Kingdom adopted IFRS and that the
interim management report includes a fair review of the information required
by DTR 4.2.4R, DTR 4.2.7R and DTR 4.2.8R, namely:
· the condensed set of financial statements gives a true and fair
view of the assets, liabilities, financial position and profit or loss of
Safestore Holdings plc, or the undertakings included in the consolidation;
· an indication of important events that have occurred during the
first six months of the financial year and their impact on the condensed set
of financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
· material related-party transactions in the first six months and
any material changes in the related-party transactions described in the last
annual report.
A list of current Directors is maintained on the Safestore Holdings plc
website, www.safestore.com (http://www.safestore.com) .
The Directors are responsible for the maintenance and integrity of the
Company's website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.
By order of the Board
Frederic Vecchioli Simon Clinton
11 June 2024 11 June 2024
Chief Executive Officer Chief Financial Officer
INDEPENDENT REVIEW REPORT TO SAFESTORE HOLDINGS PLC
Conclusion
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
April 2024 which comprises the consolidated income statement, the consolidated
balance sheet, the consolidated statement of changes in equity, the
consolidated cash flow statement, and related notes 1 to 21.
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 April 2024 is not prepared, in
all material respects, in accordance with the accounting policies the group
intends to use in preparing its next annual financial statements and the
Disclosure Guidance and Transparency Rules of the United Kingdom's Financial
Conduct Authority.
Basis for Conclusion
We conducted our review in accordance with International Standard on Review
Engagements (UK) 2410 "Review of Interim Financial Information Performed by
the Independent Auditor of the Entity" issued by the Financial Reporting
Council for use in the United Kingdom (ISRE (UK) 2410). A review of interim
financial information consists of making inquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
As disclosed in note 2, the annual financial statements of the group are
prepared in accordance with United Kingdom adopted international accounting
standards. The condensed set of financial statements included in this
half-yearly financial report has been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim Financial
Reporting".
Conclusion Relating to Going Concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This Conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410; however future events or conditions may cause the entity to
cease to continue as a going concern.
Responsibilities of the directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the Disclosure Guidance and Transparency Rules of the
United Kingdom's Financial Conduct Authority.
In preparing the half-yearly financial report, the directors are responsible
for assessing the group's ability to continue as a going concern, disclosing
as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative but to do so.
Auditor's Responsibilities for the review of the financial information
In reviewing the half-yearly financial report, we are responsible for
expressing to the company a conclusion on the condensed set of financial
statements in the half-yearly financial report. Our Conclusion, including our
Conclusion Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for Conclusion
paragraph of this report.
Use of our report
This report is made solely to the company in accordance with ISRE (UK) 2410.
Our work has been undertaken so that we might state to the company those
matters we are required to state to it in an independent review report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the company, for our review work,
for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, United Kingdom
11 June 2024
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