Self-storage provider Big Yellow has seen its share price rebound with the wider property sector, even though it is still registering valuation losses on its portfolio of 59 stores.
Revenue for the latest trading period fell 3 per cent to £29.2m, and pre-tax losses were driven by a £14.2m negative valuation movement on the group's investment portfolio, despite an upturn in the wider commercial property market. This is due to six developments now being valued as investments, rather than held at cost, plus a weaker operational environment. However, on an underlying basis, pre-tax profits rose 12 per cent to £7.7m driven by reduced finance costs following the success of May's £31.5m placing.
Net rents fell to a low of £25.25 per sq ft in April 2009, but had recovered to £26.72 by the end of September. Overall occupancy rates are currently 55 per cent (this rises to 71 per cent at the mature stores), some way short of the group's 85 per cent "medium-term" target.
| BIG YELLOW (BYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 404p | MARKET VALUE: | £523m | |
| TOUCH: | 402-404p | 12M HIGH: | 444p | LOW: 148p |
| DIVIDEND YIELD: | nil | TRADING STOCK: | £20.6m | |
| DISCOUNT TO NAV: | 3% | |||
| INVEST PROPERTIES: | £750m | NET DEBT: | 55% | |
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 453 | -54.3 | -47.5 | nil |
| 2009 | 417 | -3.4 | -2.7 | nil |
| % change | -8 | - | - | - |
Big Yellow has committed to six new developments (five in London, one in Guildford), which require capital expenditure of £51m to build. To help fund these, the group intends to sell off £24m of surplus land; a process it believes will take 18 to 24 months. "Selective site acquisition opportunities" are also being considered.
Broker KBC Peel Hunt has upgraded its full-year adjusted net asset value forecast by 8 per cent to 499p (457p in 2009).
