Solid demand for storage space helped Big Yellow (BTG) lift overall occupancy rates from 69.8 per cent in March to 75.2 per cent at the September half-year end. Store revenues rose 12 per cent to £39m year on year, and occupancy growth boosted occupied space by 288,000 sq ft.
The group also announced plans to raise around £75m through a share placing to purchase the two-thirds stake it doesn't already own in The Big Yellow Partnership from joint venture partner Pramerica, the US real estate investment arm of the Prudential. The purchase price is £39m, but Big Yellow will also take net debt of £56m onto the balance sheet. After adjusting for the placing, however, Big Yellow expects to see its loan-to-value ratio virtually unchanged at 28 per cent. The acquisition is expected to be earnings accretive, thanks to the 6.8 per cent net operating yield generated by the joint venture assets.
Other recent acquisitions include a freehold store in Oxford for £4.1m and a former Royal Mail (RMG) depot in Cambridge, which will accommodate 55,000 sq ft of storage space. The Cambridge deal is significant because it is Big Yellow's first acquisition for construction in seven years.
Analysts at Liberum are forecasting year end EPS of 24.7p (from 20.7p in March 2014).
| BIG YELLOW (BYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 563p | MARKET VALUE: | £800m | |
| TOUCH: | 561-563p | 12-MONTH HIGH: | 576p | LOW: 451p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 436p | NET DEBT: | 37% | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 35.9 | 34.5 | 24.7 | 8.0 |
| 2014 | 39.9 | 35.3 | 25.2 | 10.4 |
| % change | +11 | +2 | +2 | +30 |
Ex-div: 11 Dec Payment: 8 Jan | ||||
