Consumer uncertainty may have meant self-storage specialist Big Yellow (BYG) reported weaker-than-expected trading during its fourth quarter, but increased occupancy and average rents resulted in full-year earnings that were in line with expectations. A lower revaluation increase weighed on pre-tax profits, but like-for-like revenue was up 7 per cent, boosting "Store EBITDA" (storage revenues less costs and rent) by 6 per cent to £84.1m.
The rise in new self-storage centre openings has averaged between 2 and 3 per cent a year over the last five years, which is down on the prior decade's growth rate. But at least those centres are nearing a 90 per cent capacity target: in the year to March, occupancy rates edged up 2.2 percentage points to 82.7 per cent, while average net rent was up 2.9 per cent per square foot (sq ft).
Big Yellow's development pipeline consists of 12 sites, with a cost to complete of £109m, which should add around 820,000 sq ft in storage space, equivalent to 18 per cent of the current portfolio, and will be supported by a £65.3m share placing in September. Operating cash conversion before property revaluation gains rose to 94 per cent, from 89 per cent in the prior year.
Analysts at Peel Hunt expect adjusted net asset value (NAV) of 744p a share at the March 2020 year-end, up from 724p at same time in the prior year.
| BIG YELLOW (BYG) | ||||
| ORD PRICE: | 1,054p | MARKET VALUE: | £1.76bn | |
| TOUCH: | 1,055-1,056p | 12-MONTH HIGH: | 1,075p | LOW: 834p |
| DIVIDEND YIELD: | 3.1% | DEVELOPMENT STOCK: | £91m | |
| PREMIUM TO NAV: | 36% | NET DEBT: | 28% | |
| INVESTMENT PROPERTIES: | £1.35bn | |||
| Year to 31 Mar | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 484 | 59.8 | 72.5 | 21.7 |
| 2016 | 531 | 105 | 71.9 | 24.9 |
| 2017 | 568 | 112 | 63.6 | 27.6 |
| 2018 | 623 | 134 | 85.0 | 30.8 |
| 2019 | 679 | 127 | 78.3 | 33.2 |
| % change | +9 | -5 | -8 | +8 |
| Ex-div: | 20 Jun | |||
| Payment: | 26 Jul |
