Ignoring a lower valuation uplift left adjusted pre-tax profits for Big Yellow (BYG) ahead by 9 per cent at £33.3m for the six months to September 2018. Once again, the self-storage operator focused on increasing occupancy rates, which rose from 83.4 per cent to 84.9 per cent, while it also achieved rental growth of 3.7 per cent.
Three development sites were acquired in the first half; two in London and one on the south coast at Hove. In addition, two 25,000 square foot (sq ft) extensions were opened in Wandsworth and Wapping. All in all, the company has a pipeline of 11 development sites, which will soak up developments costs of a further £100m. However, on completion they will add 680,000 sq ft of additional storage space, equivalent to 15 per cent of the existing portfolio.
Based on current prices, these will generate over £17.4m in rental income and, with total costs of nearly £200m, the net operating income on cost is expected to be around 8.8 per cent. Further site acquisitions are being sought, with financing in place from a share placing in September that generated a net £65.3m.
Analysts at Peel Hunt are forecasting adjusted net asset value (NAV) at the March 2019 year end of 639.4p per share, up from 616.1p a year earlier.
| BIG YELLOW (BYG) | ||||
| ORD PRICE: | 941p | MARKET VALUE: | £1.57bn | |
| TOUCH: | 941-942p | 12-MONTH HIGH: | 998p | LOW: 756p |
| DIVIDEND YIELD: | 3.4% | DEVELOPMENT PROPERTIES: | £63.3m | |
| PREMIUM TO NAV: | 44% | NET DEBT: | 25% | |
| INVESTMENT PROPERTIES: | £1.29bn | |||
| Half-year to 30 Sep | Net asset value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2017 | 603 | 78.7 | 50.0 | 15.3 |
| 2018 | 655 | 61.4 | 38.8 | 16.7 |
| % change | +9 | -22 | -22 | +9 |
| Ex-div: | 6 Dec | |||
| Payment: | 7 Jan |
