Self-storage group Safestore had a strong first quarter, with new lets up 9 per cent on the prior year. But recovery slowed markedly in the three months to April - growth in new lets fell to 3 per cent, while the number of business transactions actually contracted. Accordingly, new chief executive Peter Gowers did his best to talk down expectations for the full-year in a circumspect outlook statement.
The more muted economic environment also meant write-downs on the company’s portfolio of self-storage facilities as surveyors downgraded their valuation assumptions. That knocked £11.5m off the reported earnings figures - even though underlying cash profit jumped 5.9 per cent per thanks to modest growth in both average rents and occupancy.
Mr Gowers identified three ways in which he thinks he can improve Safestore. First, he wants to work on the brand, particularly online. Second, he wants to find a better balance between rental and occupancy growth by making the company’s pricing structure more dynamic - as it is in the hotel world from which he has arrived. Finally, he wants to focus on asset management - using each individual asset as efficiently as possible.
Numis Securities has downgraded its expectation of full-year adjusted cash profits by 4.2 per cent to £49.4m (2010: £49.2m).
SAFESTORE HOLDINGS (SAFE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 136p | MARKET VALUE: | £256m | |
| TOUCH: | 133-136p | 12-MONTH HIGH: | 157p | LOW: 103p |
| DIVIDEND YIELD: | 3.7% | TRADING STOCK: | NIL | |
| DISCOUNT TO NAV: | 6% | |||
| INVEST PROPERTIES: | £693m | NET DEBT: | 118% | |
| Half-year to 30 Apr | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 134 | 6.68 | 2.56 | 1.70 |
| 2011 | 145 | 0.97 | 2.38 | 1.75 |
| % change | +8 | -85 | -7 | +3 |
Ex-div: 13 Jul Payment: 10 Aug | ||||
