Big Yellow (BYG) executive chairman Nicholas Vetch called increasing occupancy to 90 per cent the “core objective” for the self-storage specialist. The target rate was increased midway through FY2018, as higher occupancy levels support rental rates – basic supply and demand. Indeed, like-for-like occupancy increased by 3.9 percentage points to 81.9 per cent, which underpinned 0.8 per cent growth in the average rental rate per square foot (sq ft).
By reducing vacancy rates across the portfolio, Big Yellow can also focus on expansion. Five freehold sites were acquired during the year, bringing the pipeline to around 640,000 sq ft. Once the group's 10 development sites (three of which have planning consent) are fully ‘built-out’, the lettable area of the entire portfolio will increase 11 per cent to 6.2m sq ft. The capacity build meant that capital expenditure more than doubled, although net debt as a proportion of gross property assets remained static from a year earlier, while operating cash flow increased by 13 per cent to £63m.
Analysts at Peel Hunt expect adjusted net asset value (NAV) at March 2019 of 693p, increasing to 727p in FY2020.
| BIG YELLOW (BYG) | ||||
| ORD PRICE: | 962p | MARKET VALUE: | £1.53bn | |
| TOUCH: | 960-962p | 12-MONTH HIGH: | 989p | LOW: 722p |
| DIVIDEND YIELD: | 3% | DEVELOPMENT STOCK: | £58.2m | |
| PREMIUM TO NAV: | 54% | NET DEBT: | 33% | |
| INVESTMENT PROPERTIES: | £1.25bn | |||
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2014 | 424 | 59.8 | 42.5 | 16.4 |
| 2015 | 484 | 105 | 72.5 | 21.7 |
| 2016 | 531 | 112 | 71.9 | 24.9 |
| 2017 | 568 | 100 | 63.6 | 27.6 |
| 2018 | 623 | 134 | 85.0 | 30.8 |
| % change | +10 | +34 | +34 | +12 |
| Ex-div: | 21 Jun | |||
| Payment: | 27 Jul |
