Headline first-half numbers from self-storage group Safestore (SAFE) were distorted by a £6.8m valuation loss on the group’s properties, compared with a £3.1m uplift a year earlier. This reflected an adverse currency movement on the French assets, and amortisation. But there was no revaluation of the property portfolio, because valuations are now undertaken annually rather than bi-annually. In fact, underlying pre-tax profits - those from rents - rose 2 per cent to £12.4m.
New chief executive Frederic Vecchioli’s first task has been to clean up the balance sheet. It was bolstered by the £40.5m sale of the Whitechapel store, a £31.6m share placing and the subsequent repayment of £75m of debt. As a result, the loan-to-value ratio has been cut from 47 to 39 per cent, while revised banking facilities are expected to save £5m a year in finance costs.
The occupancy rate edged up from 63.1 to 65.3 per cent, which still leaves plenty of growth potential from the high operationally leveraged business model. And, crucially, rents are now starting to recover. While average rents in the UK were down 3 per cent overall, rates in the second quarter were up from the first quarter for the first time in three years.
Analysts at Investec are forecasting full-year normalised pre-tax profits of £27.4m and EPS of 12.7p (from £21.8m and 9.9p in 2013).
| SAFESTORE (SAFE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 208p | MARKET VALUE: | £430m | |
| TOUCH: | 208-209p | 12-MONTH HIGH: | 245p | LOW: 116p |
| DIVIDEND YIELD: | 2.9% | PE RATIO: | 10 | |
| NET ASSET VALUE: | 179p | NET DEBT: | 84% | |
| Half-year to 30 Apr | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 47.1 | 12.8 | 39.8 | 1.85 |
| 2014 | 46.9 | 6.9 | 2.4 | 2.15 |
| % change | - | -46 | -94 | +16 |
Ex-div: 9 Jul Payment: 15 Aug | ||||
