Market leading self-storage operator Safestore is battling through the downturn thanks to a growing base of business customers. Around 40 per cent of business users rent space to store stock, with a further 40 per cent storing equipment or archiving documents across the company's portfolio of 117 outlets. This segment now accounts for 57 per cent of its occupied space.
Domestically, 'event-driven customers', who are getting married, divorced or travelling, are driving demand. There is also evidence of homeowners selling their homes before buying a new one and storing possessions in the interim, which has helped Selfstore grow its occupancy year-on-year by 57,000 sq ft in the financial year - quite a turnaround from the 195,000 sq ft reduction in 2008.
Tenants are currently occupying 50 per cent of the company's 5.4m sq ft of space, a 2.1 per cent improvement on the prior year, though occupancy levels fell slightly in the second half. The average length of stay remained stable at 91 weeks.
The falling value of Safestore's property portfolio has been a concern but, in the second half, property values rose 1.2 per cent, momentum that is sure to continue throughout 2010. The plan is to open four new stores in the current year and acquire between four and seven over the next two years.
Broker KBC Peel Hunt has revised its 2010 adjusted EPS forecast to 10.5p from 11.9p, pencilling in adjusted net asset value (NAV) of 239p (195p in 2009).
| SAFESTORE (SAFE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 137p | MARKET VALUE: | £257.7m | |
| TOUCH: | 136-138p | 12M HIGH | 165p | LOW: 49p |
| DIVIDEND YIELD: | 3.4% | TRADING STOCK: | nil | |
| PREMIUM TO NAV: | 3% | |||
| INVEST PROPERTIES: | £648m | NET DEBT: | 138% | |
| Year to 31 Oct | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2006* | 80 | 61.0 | 26.3 | nil |
| 2007 | 133 | 104.0 | 43.0 | 4.50 |
| 2008 | 137 | 14.9 | 6.7 | 4.65 |
| 2009 | 133 | -9.4 | 0.1 | 4.65 |
| % change | -3 | - | - | - |
Ex-div: 3 Mar Payment: 2 Apr *Pre-float | ||||
