Big Yellow (BYG) pushed revenue ahead in the six months to September helped by a 2.3 percentage point increase in occupancy rates to 79 per cent, and with overheads largely fixed, there was plenty of room for an increase in the half-year dividend. However, the self-storage specialist warned that it would come as no surprise if activity levels were more subdued over the next two years.
The company has 89 stores and a further 16 branded under the Armadillo Self Storage brand, in which it has a 20 per cent interest. However, developing new stores in London and the south-east remains a challenge, given the scarcity of suitable sites and strong competition from housebuilders. No new stores will be opened in the current financial year, although there is a pipeline of seven development sites with an estimated cost of £55m, and six of these are subject to planning consent.
But there is plenty of room to improve existing occupancy rates, especially as there is a growing trend in the UK towards self-employment and smaller business start-ups both of which lend themselves towards the use of self-storage. The third quarter is traditionally the weakest quarter, and since the end of September around 1.8 per cent of maximum lettable space has been lost. Even so, during the first half like-for-like rents rose by 2.8 per cent.
Analysts at Peel Hunt are forecasting net operating income for the year to March 2017 of £74.7m and EPS of 34.8p (from £68.8m and 31.1p FY2016).
| BIG YELLOW (BYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 670p | MARKET VALUE: | £10.6bn | |
| TOUCH: | 669.5-671p | 12-MONTH HIGH: | 894p | LOW: 655p |
| DIVIDEND YIELD: | 3.9% | DEVELOPMENT PROPERTIES: | £34m | |
| PREMIUM TO NAV: | 21% | NET DEBT: | 35% | |
| INVESTMENT PROPERTIES: | £1.17bn | |||
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 510 | 59.6 | 38.2 | 12.1 |
| 2016 | 554 | 57.7 | 36.7 | 13.5 |
| % change | +9 | -3 | -4 | +12 |
Ex-div: 8 Dec Payment: 6 Jan | ||||
