Big Yellow Ups Occupancy Target As Revenue And Profit Increase

LONDON (Alliance News) - Self-storage company Big Yellow Group PLC said Tuesday it is ...

Alliance News 21 November, 2017 | 9:03AM
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LONDON (Alliance News) - Self-storage company Big Yellow Group PLC said Tuesday it is increasing its occupancy target with the company posting a rise in both profit and revenue for the first half of its financial year.

Revenue for the period, which ended on September 30, rose 6.0% to GBP58.1 million from the GBP54.8 million registered in the same period the previous year, driven by strong occupancy performance.

Like-for-like revenue growth in the first quarter was 5.0%, rising to 6.6% in the second. In the first half of the previous financial year, like-for-like growth was 5.7%.

Pretax profit rose to GBP78.7 million from GBP57.4 million on the back of revenue growth as well as a bigger gain year-on-year from investment property revaluations.

Big Yellow has increased its interim dividend for the half by 13% to 15.3 pence from 13.5p.

Occupancy at the end of the period was 84%, up from 79% at the end of September 2016, close to the target set at the end of its last financial year of 85%. Occupancy growth over the period was equivalent to 265,000 square feet.

Though the second half is seasonally weaker, Big Yellow said, with occupancy usually down around 3%, it still expects to beat the 85% target next summer.

As a result, the company is now increasing its occupancy target to 90%.

As at September 30 the future cost of Big Yellow's currency pipeline of ten development sites and extensions is estimated to be GBP90.0 million. Seven of these sites are currently subject to planning approval.

Executive Chairman Nicholas Vetch said: "Over the long term, we are confident that the existing platform will continue to deliver attractive returns. That said, adding more capacity will improve those returns.

"The expeditious way of doing that would be to acquire existing freehold self storage assets in London and other large conurbations in the UK. However, there are few self storage centres that meet our quality criteria and for those that do exist, they are generally not for sale. Furthermore, as stated previously, we have no interest in expanding abroad."

He added: "We will therefore continue to develop the Big Yellow platform organically, site by site. This does involve risk and requires patience, but it will allow us to expand and improve our unique and irreplaceable portfolio."

Big Yellow shares were up 0.9% in early trading Tuesday at 772.00p.

By George Collard; georgecollard@alliancenews.com

Copyright 2017 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article
Security Name Price Change (%) Morningstar Rating
Big Yellow Group PLC 999.50 GBX 0.35 -
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