The ‘pasty tax’ bagged the headlines, but the March Budget also threatened to impose VAT on self-storage from October. That prompted Big Yellow’s surveyors to wipe £51.4m (6 per cent) off the book value of its portfolio of 58 warehouses, generating a large paper loss.
Yet, operationally, the group is doing well. The occupancy rate at the 51 wholly-owned stores that have been open more than a year increased from 59 to 65 per cent. Rents were flat, so revenue per available square foot – the key operating metric for self-storage companies – rose 5 per cent even as capacity expanded. Moreover, the climate improved as the year wore on, with store revenue growth of 10 per cent reported in the quarter ending 31 March – though that may be linked to the temporary surge in home sales before the re-introduction of stamp duty for first-time buyers.
The company has now halted its store expansion programme, freeing up cash flow to reduce debt. Chief executive James Gibson reckons gearing will be at the right level by 2014-15, after which he expects to distribute 80 per cent of earnings to shareholders.
Brokerage Peel Hunt expects current year adjusted pre-tax profits of £26.5m and EPS of 20p (2012: £23.4m and 18.2p).
BIG YELLOW (BYG) | ||||
|---|---|---|---|---|
| ORD PRICE: | 281p | MARKET VALUE: | £366m | |
| TOUCH: | 280-280.2p | 12-MONTH HIGH: | 350p | LOW: 218p |
| DIVIDEND YIELD: | 3.6% | DEVELOPMENT PROP: | £33.9m | |
| DISCOUNT TO NAV: | 27% | |||
| INVESTMENT PROP: | £726m | NET DEBT: | 55% | |
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£bn) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 506 | 103.0 | 89.9 | 9.5 |
| 2009 | 438 | -71.0 | -62.9 | nil |
| 2010 | 424 | 10.2 | 8.1 | 4.0 |
| 2011 | 422 | 6.9 | 5.3 | 9.0 |
| 2012 | 386 | -35.6 | -27.7 | 10.0 |
| % change | -9 | - | - | +11 |
Ex-div: 6 Jun Payment: 20 Jul | ||||
