18 November 2024

Big Yellow Group PLC

("Big Yellow", "the Group" or "the Company")

Results for the Six Months ended 30 September 2024

Financial metrics	Six months ended  30 September 2024	Six months ended 30 September 2023	Change
Revenue	£103.0 million	£99.6 million	3%
Store revenue (1)	£102.2 million	£98.3 million	4%
Like-for-like store revenue (1,2)	£101.0 million	£98.1 million	3%
Store EBITDA (1)	£70.9 million	£71.5 million	(1%)
Adjusted profit before tax (1)	£54.9 million	£53.5 million	3%
EPRA earnings per share (1)	28.0 pence	29.0 pence	(3%)
Interim dividend per share	22.6 pence	22.6 pence	-
Statutory metrics
Profit before tax	£145.8 million	£119.6 million	22%
Cash flow from operating activities (after net finance costs and pre-working capital movements)(3)	£53.5 million	£54.3 million	(1%)
Basic earnings per share	74.6 pence	65.3 pence	14%
Store metrics Store Maximum Lettable Area ("MLA") (1)	6,421,000	6,419,000	-
Closing occupancy (sq ft) (1)	5,168,000	5,228,000	(1%)
Occupancy growth in the period (sq ft) (1)	139,000	140,000	(1%)
Closing occupancy (1)	80.5%	81.4%	(0.9 ppts)
Occupancy - like-for-like stores (1,2)	80.9%	82.4%	(1.5 ppts)
Average achieved net rent per sq ft (1)	£34.36	£33.02	4%
Closing net rent per sq ft (1)	£34.77	£33.47	4%

(1) See note 20 for glossary of terms

(2) Excluding Kings Cross (opened June 2023)

(3) See reconciliation in Financial Review

 

Financial highlights

·     Store revenue growth for the period was 4%, with like-for-like store revenue up by 3%, principally through rental growth, and since the period end we have seen some improvement in year-on-year occupancy performance

·     Like-for-like occupancy increase of 1.9 ppts from 1 April 2024 and down 1.5 ppts from same time last year to 80.9% (September 2023: 82.4%), although this has now closed to 0.9 ppts

·     Average achieved net rent per sq ft increased by 4% period on period, closing net rent up by 4% from September 2023

·     Overall store EBITDA was down 1% in the period following an increase in store operating costs 

·     Adjusted profit before tax up 3% to £54.9 million, with EPRA earnings per share down 3%, due to the additional shares in issue following the placing in October 2023, only impacting the first half of the year

·     Statutory profit before tax of £145.8 million compared to £119.6 million in the prior period following a higher revaluation gain in the period

·     Cash flow from operating activities (after net finance costs and pre-working capital movements) decreased by 1% to £53.5 million

·     Interim dividend of 22.6 pence per share declared, in line with prior period

Property highlights

·     Opened new 65,000 sq ft freehold store in Slough Farnham Road, customers successfully transferred from nearby existing leasehold store, which will shortly be handed back to landlord 

·     Acquired freehold property in Leamington Spa, taking the pipeline to 12 development sites and one replacement store of approximately 1.0 million sq ft (15% of current MLA), of which 10 are in London or within close proximity.  1.3 million sq ft of fully built vacant space is currently available for future growth

·     Planning consent granted for key London proposed stores at West Kensington, Kentish Town (both at appeal) and Staples Corner; we now have 10 of our 13 pipeline stores with planning 

·     Disposal of land adjacent to our Battersea store for £30.9 million with planning for residential development

Commenting, Nicholas Vetch CBE, Executive Chairman, said:

"Although it is pleasing that we expect to return to earnings per share growth in the second half, we have always been more focussed on the longer term.  We will grow revenue through incrementally increasing occupancy levels from our existing store platform, alongside driving efficiencies across the business through investment in automation.  Furthermore, and critically, we are fully committed to capturing the opportunity of the revenue and earnings growth from our store pipeline, most of which is now in the construction phase. 

In addition, we expect to see more opportunities to acquire land and replenish our development pipeline in our core areas of operation."

- Ends -

 

ABOUT US

Big Yellow is the UK's brand leader in self storage and operates from a platform of 109 stores.  We have a pipeline of 1.0 million sq ft comprising 13 proposed self storage facilities.  The current maximum lettable area of the existing platform is 6.4 million sq ft.  When fully built out the portfolio will provide approximately 7.4 million sq ft of flexible storage space.  99% of our stores and sites by value are held freehold and long leasehold, with the remaining 1% short leasehold.  Currently by revenue 75% of our stores are in London and its commuter towns, with the balance in larger regional conurbations.

Our stores utilise state of the art technology for our digital and operating platforms including security, and we focus on locating our stores in high profile, accessible, main road locations.  We also focus on providing excellent customer service, a highly engaged employee culture, and with significant and increasing investment in sustainability.

For further information, please contact:

 

Big Yellow Group PLC Nicholas Vetch CBE, Executive Chairman Jim Gibson, Chief Executive Officer John Trotman, Chief Financial Officer	+44 (0)1276 477811
Sodali & Co Ben Foster	+44 (0)20 7250 1446

CHAIRMAN'S STATEMENT

 

Big Yellow Group PLC, the UK's brand leader in self storage, is pleased to announce its results for the six months ended 30 September 2024. 

The last two years or so have been difficult with muted trading conditions, cost pressures and until recently, sharp increases in the cost of debt, and in that time the business has proved relatively resilient.  Additionally, the issuance of new equity has created a drag on earnings per share over the last 12 months. 

The impact of higher operating costs has continued to wash through into this first half of the year particularly property taxes, energy costs and wages. This has been a constant pressure for over two years, and the largest increase has come from property taxation, which represents 70% of the increase in our same store operating expenses in that time.  We do however expect our store expense growth to moderate in the second half of the year and into next year as the impact of inflation reduces and as we benefit from lower energy costs and our investment into solar energy.

Adjusted profit before tax, which is up 3%, has benefited from the reduced level of debt over the period.  The interest rate reductions in August and November will benefit more in the second half and into the following year along with any further reductions in short term interest rates.

As reported in May, we have an opportunity to generate significant NOI growth from our pipeline of stores and it was pleasing to win two planning appeals at West Kensington and Kentish Town and to be granted planning on Staples Corner during the period.  From a planning perspective, our pipeline has largely been de-risked and we have committed to the construction of the next nine stores amounting to an additional capacity of 0.7 million sq ft, opening over the next two to three years. 

Financial results

Revenue for the period was £103.0 million (2023: £99.6 million), an increase of 3%, with store revenue up 4%; we saw a decrease in income from our development sites where we have now obtained vacant possession.  Like-for-like store revenue (which excludes new store openings) was up 3%, driven by an increase in average achieved net rent, offset by a slight fall in average occupancy.  Store EBITDA was £70.9 million, a decrease of 1% from the prior period (2023: £71.5 million).

The Group made an adjusted profit before tax in the period of £54.9 million, up 3% from £53.5 million for the same period last year (see note 6).  Adjusted diluted EPRA earnings per share were 28.0 pence (2023: 29.0 pence), a decrease of 3% due to the additional shares in issue following the placing in October 2023, only impacting the first half of the year. 

The Group's statutory profit before tax for the period was £145.8 million, an increase from £119.6 million for the same period last year, due to a revaluation surplus of £82.2 million in the period (2023: surplus of £67.2 million), reflecting the growth in net rents during the period, and a profit arising on the disposal of land adjacent to our Battersea store of £8.8 million.

The Group's cash flow from operating activities (after net finance costs and pre-working capital movements) decreased by 1% to £53.5 million for the period (2023: £54.3 million). 

Dividends

The Board has approved an interim dividend of 22.6 pence per share in line with the prior period.  This first half dividend has all been declared as Property Income Distribution ("PID").   

Development pipeline

During the period we opened our new freehold store in Slough Farnham Road, replacing a nearby leasehold store.  We have transferred the customers from the old store and are in the process of stripping the building out before returning it to the landlord.  This is consistent with our strategy of reducing our rent liabilities, which we view as quasi-debt.  Slough Farnham Road is our first net zero store, with a solar PV installation of 200 kWp (our largest to date), battery storage for the energy we generate, and a number of other sustainability features.  These helped the store achieve a rare EPC rating of A+.   

As mentioned above, we have been successful in achieving three key planning consents in London during the period; at West Kensington, Kentish Town and at Staples Corner.  The store in West Kensington will be only the second purpose-built self storage facility in the London Borough of Hammersmith & Fulham, alongside our Fulham store, with Kentish Town being the first purpose-built store in the London Borough of Camden.  These, along with the other sites in the pipeline, are very high-quality locations, and will help consolidate our market-leading platform.  We now have planning consent on 10 of our 13 development sites. 

We have commenced the construction process on the nine sites where we have vacant possession and anticipate opening these stores over the next three years, with three stores opening in the next financial year, five in the year ended March 2027, and West Kensington later in 2027.  The cost to complete these nine stores is approximately £183 million.

The projected net operating income of the increase in our total capacity of 1.0 million sq ft when stabilised, at today's prices, is £31.4 million representing an approximate 14% return on the incremental capital deployed.   If we include the replacement store at Staples Corner, due to open in Summer 2026, the proforma net operating income increases to £35.4 million, a return of approximately 8.9% on the total development cost of approximately £400 million, including land already acquired. 

Capital structure

It remains our view that elevated levels of debt over cycles destroys value and hence our strategy is to maintain debt at modest levels.  The Group's interest cover for the period (expressed as the ratio of cash generated from operations pre-working capital movements against interest paid) was 5.7 times (2023: 5.3 times), with the Group's net debt to EBITDA ratio now 2.9x (2023: 3.8x).

Net debt was £359.5 million at 30 September 2024 (2023: £495.3 million), giving the Group available committed liquidity of £214.6 million, with the $225 million bilateral shelf facility with Pricoa also available.  Approximately 50% of our debt is fixed, with the balance floating, in line with our hedging policy, and our current average cost of debt is 5.1% (2023: 5.7%).  Any further cuts in interest rates will benefit the second half and into next year.

Outlook

Although it is pleasing that we expect to return to earnings per share growth in the second half, we have always been more focussed on the longer term.  We will grow revenue through incrementally increasing occupancy levels from our existing store platform, alongside driving efficiencies across the business through investment in automation.  Furthermore, and critically, we are fully committed to capturing the opportunity of the revenue and earnings growth from our store pipeline, most of which is now in the construction phase. 

In addition, we expect to see more opportunities to acquire land and replenish our development pipeline in our core areas of operation.

 

Nicholas Vetch CBE                         

Executive Chairman          
18 November 2024

 

 

BUSINESS AND FINANCIAL REVIEW

Store occupancy

We now have a portfolio of 109 open and trading stores, with a current maximum lettable area of 6.4 million sq ft (2023: 109 stores, MLA of 6.4 million sq ft). 

Like-for-like occupancy increased by 1.9 ppts from 1 April 2024 but was down 1.5 ppts from the same time last year.  Like-for-like store revenue growth for the half year was 3%, driven by improvements in average achieved net rent per sq ft. 

Prospect numbers were down 5% on the prior period on a like-for-like basis, however, our conversion levels improved with move-ins down only 1.5% and move-outs in line with the same period last year. 

Occupancy across all 109 stores increased by 139,000 sq ft over the six months compared to a gain of 140,000 sq ft in the same period last year.  Demand from domestic customers has been higher than last year, up 143,000 sq ft (2023: up 133,000 sq ft).  Business occupancy dropped by 2% or 36,000 sq ft, on 1.84 million sq ft occupied at the beginning of the period and student occupancy rose by 32,000 sq ft.  Approximately 70% of our revenue derives from domestic and student customers, with the balance from our business customers.

Although business occupancy has been a little softer over the six months, we are seeing an improving move-in trend from businesses, particularly since the period end and overall business occupancy has stabilised.  We continue to see demand from online traders, e-tailers and service providers.  Over the six months, revenue from national customers (businesses who occupy space in multiple stores) has increased by 14% compared to the same period last year.

Since the period end, we have seen an improvement in activity levels, with move-ins up 5% on the same period last year.  Our third quarter is historically the weakest trading quarter where we see a loss in occupancy with a return to growth in the fourth quarter.  In the current year, given the improving move-in picture, we have lost 78,000 sq ft (1.2% of maximum lettable area "MLA") since the end of September, compared to a loss of 113,000 sq ft (1.8% of MLA) at the same stage last year.  The like-for-like gap in occupancy is now down to 0.9 ppts compared to 1.5 ppts at 30 September.  

At 30 September, the 79 established Big Yellow stores were 82.7% occupied compared to 85.1% at the same time last year.  The six developing Big Yellow stores added 46,000 sq ft of occupancy in the past six months to reach closing occupancy of 62.6%.  The Armadillo stores, representing 10% of the Group's revenue, added 28,000 sq ft of occupancy with closing occupancy of 77.2% (2023: 77.9%).  Overall store occupancy was 80.5%.

Rental growth

We continue to manage pricing dynamically, taking account of room availability, customer demand and local competition, with our pricing model reducing promotions and increasing asking prices where individual units are in scarce supply. 

We price competitively to win new customers and increase rents to in-place customers on a range dependent on what they are paying relative to the current asking price, and on average these were at levels slightly ahead of wage inflation.  We have reduced our in-place increases to customers since January given fallen inflation, and accordingly our average rate growth over the period was 4% compared to 8% in the prior period.  It must be remembered that some 60% to 70% of our customers move-out within six months, and therefore do not receive any price increases.  New customers over the period paid on average 2% more than move-ins for the same period last year, and 2% less than customers moving out over the six months.  If we can improve our relative occupancy performance, we would expect to see this reverse and be an additional driver to revenue growth.

The table below shows the change in net rent per sq ft for the portfolio by average occupancy over the six months (on a non-weighted basis). 

Average occupancy in the six months	Net rent per sq ft growth from 1 April to 30 September 2024	Net rent per sq ft growth from 1 April to 30 September 2023
75% to 85%	1.6%	2.6%
85 to 90%	4.1%	3.5%
Above 90%	5.0%	4.7%

Security of income

We believe that self storage income is essentially evergreen income with highly defensive characteristics driven from buildings with very low obsolescence and relatively low maintenance requirements.  Although our contract with our customers is in theory as short as a week, we do not rely on any one contract for our income security.  At 30 September 2024 the average length of stay for existing customers was 30.4 months (September 2023: 29.5 months).  For all customers, including those who have moved out of the business throughout the life of the portfolio, the average length of stay was 8.9 months (September 2023: 8.8 months).  We have seen an increase in the length of stay of customers who moved out over the rolling 12 months, which increased to 9.9 months from 9.4 months for the same period last year. 

38% of our customers by occupied space have been storing with us for over two years (2023: 37%), and a further 16% of customers have been in the business for between one and two years (2023: 15%).   For the 54% of customers that have stayed for more than one year, the average length of stay is 53 months.

Our business customer base is comprised of online retailers, B2B traders looking for flexible mini-warehousing for e-fulfilment, service providers, those looking to shorten supply chains, and businesses looking to rationalise their other fixed costs of accommodation.  For these customers, who typically are looking for rooms which could be from 50 sq ft to 500 sq ft in facilities that meet their operational requirements, the only supply in big cities is from self storage providers.  

We saw continued growth in occupancy from our domestic customer base, with demand across a broad spectrum of uses.  The majority of our customers are represented in ACORN profiled groups such as Flourishing Capital, Up and Coming Urbanites, Exclusive Addresses, Prosperous Professionals, Metropolitan Surroundings, Upmarket Families, Urban Aspiring Flat Dwellers and Privately Renting Professionals in Flats.  The largest element of demand into our business each year is customers who use us for relatively short periods driven by a need.  

We therefore have a very diverse base of domestic and business customers currently occupying 75,000 rooms.  This, together with the location and quality of our stores, limited growth in new supply, market-leading brand and digital platform, and customer service, all contribute to the resilience and security of our income.

We are not seeing any deterioration in rent collection.  Approximately 80% of our customers pay by direct debit, and the proportion of our billings that is more than 10 days overdue is in line with last year and lower than pre-Covid.  Our bad debt expense for the period was 0.2%, unchanged from last year.

Revenue

Total revenue for the six-month period was £103.0 million, an increase of £3.4 million (3%) from £99.6 million in the same period last year with store revenue up 4%, offset by a decline in income from the development sites where we have now obtained vacant possession.  Like-for-like store revenue (see glossary in note 20) was £102.2 million, an increase of 3% from the 2023 figure of £98.3 million.  

Revenue growth for the period in our London stores was 4%, our South East commuter stores 3%, and our regional stores 4%.

Other sales comprise the selling of packing materials, enhanced liability service ("ELS"), and storage related charges.  Our revenue from ELS increased by 6% compared to the same period last year, after a focus on improving the average level of cover we sell to customers. 

The other revenue earned is tenant income on sites where we have not started development. 

Operating costs

Cost of sales comprises principally direct store operating costs, including store staff salaries, utilities, business rates, insurance, a full allocation of the central marketing budget, and repairs and maintenance. 

The table below shows the breakdown of store operating costs compared to the same period last year:

Category	Period ended 30 September 2024 £000	Period ended 30 September 2023 £000	Change	% of store operating costs in period
Cost of sales (ELS and packing materials)	791	865	(9%)	3%
Staff costs	7,749	7,209	7%	25%
General & admin	882	812	9%	3%
Utilities	1,401	862	63%	5%
Property rates	10,493	9,135	15%	34%
Marketing	3,681	3,329	11%	12%
Repairs and maintenance	3,110	2,747	13%	10%
Insurance	1,767	1,697	4%	6%
Computer costs	578	509	14%	2%
Total before non-recurring items	30,452	27,165	12%
Non-recurring items	(359)	(1,388)	(74%)
Total per portfolio summary	30,093	25,777	17%

Store operating costs have increased by £4.3 million (17%).  The non-recurring items in the prior period relate principally to the release of a provision for property rates from the 2017 rating list, and a reassessment of the Group's bad debt provision.  In the current period the non-recurring items are some credits that have been received following a reassessment of property rates at certain stores. 

Store operating costs before these non-recurring items have increased by £3.3 million (12%) compared to the same period last year.  The additional operating expense from new stores accounted for £0.6 million in the period.   The remaining increase is £2.7 million (10%), with commentary below:

-      Cost of sales has reduced in line with packing material sales.

-      Staff costs have increased by £0.5 million (7%), with the salary review of on average 4.8% (including a higher increase to those at the lower end of the pay scale reflecting the rise in the national living wage), coupled with higher bonuses for the six months, which have averaged 11% compared to 8% in 2023.  There has also been an additional accrual for national insurance on share options of £0.2 million.  These increases have been partly offset by savings on headcount, as we drive efficiencies into the stores through automation.

-     Utilities have increased by £0.5 million (63%) compared to the prior period, with a new fixed rate contract starting in October 2023, which was at a 74% higher rate than our expiring contract.  This increase has been partly mitigated by our investment in solar.  We entered into a new contract from October 2024 which reduced the rate by 18% and this will benefit the second half of the year.

-    Property rates have increased by £1.3 million (15%).  The causes of this increase are the impact of new stores; the unwinding of taper relief from the introduction of the 2023 listing, and inflation applied to the multiplier which was set at 6.7%, based on the CPI print to September 2023.  The rates payable for the next financial year will be based off the CPI to September 2024, which was 1.7%.

-       Marketing has increased due to an increase in the PPC budget over the summer months to drive additional prospects in a softer demand environment.  The spend represents 3.6% of revenue for the first six months.

-      The repairs and maintenance expense has increased due to an additional investment in security in our stores, the timing of spend in the current year and an increase in solar panel maintenance costs, with higher numbers of stores now with solar PVs.

-   Computer costs have increased by £0.1 million (14%), which reflects additional investment in systems to drive automation across the business.

The table below reconciles store operating costs per the portfolio summary to cost of sales in the income statement:

	Period ended 30 September 2024 £000	Period ended 30 September 2023 £000
Direct store operating costs per portfolio summary (excluding rent)	30,093	25,777
Rent included in cost of sales (total rent payable is included in portfolio summary)	853	915
Depreciation charged to cost of sales	267	280
Head office operational management costs charged to cost of sales	893	832
Cost of sales per income statement	32,106	27,804

Store EBITDA

Store EBITDA for the period was £70.9 million, a decrease of £0.6 million (1%) from £71.5 million for the period ended 30 September 2023 (see Portfolio Summary).  The overall EBITDA margin for all stores during the period was 69.3%, down from 72.7% in 2023. 

All stores are currently trading profitably at the Store EBITDA level. 

Administrative expenses

Administrative expenses in the income statement have increased by £0.9 million (14%).  The charge for national insurance on the exercise of share options is higher than the same period last year following an increase in the Company's share price.  This is partly offset by a reduction in the IFRS 2 charge in the period; the net impact of these share-based payment related charges is an increase of £0.5 million.  The balance of £0.4 million is largely inflationary.

Other income

In February 2022 the Group experienced a fire at our Cheadle store, which resulted in a total loss to the store. Buildings all risk insurance is in place for the full reinstatement value with the landlord.  We have insurance cover in place for both our fit-out and four years loss of income.  The loss of income booked during the first six months of the financial year was £1.0 million (2023: £0.8 million) which is included in other income.   Subsequent to the period end, the Group reached a final settlement with its insurers over the claim and received a further £3.1 million.  The total amount received from the claim has been £12.1 million, of which £7.1 million was for loss of income and £5.0 million in respect of the fit-out of the store.

Interest expense on bank borrowings

Interest on bank borrowings during the period was £12.2 million, £1.5 million lower than the same period last year, with average debt levels lower in the period following the placing in October 2023, partly offset by a higher average cost of debt following the increase in interest rates in the prior period.  Our average cost of debt has now started to fall following the reduction in interest rates in August and November.

Interest capitalised in the period amounted to £3.2 million (2023: £1.8 million), arising on the Group's construction programme. 

Profit before tax

The Group's statutory profit before tax for the period was £145.8 million, compared to £119.6 million for the same period last year.  The increase in profitability is due to a higher revaluation gain in the in the period and the profit on the disposal of the land adjacent to our Battersea store.

After adjusting for the revaluation movement of investment properties and other matters shown in the table below, the Group made an adjusted profit before tax in the period of £54.9 million, up 3% from £53.5 million in 2023.

 

Profit before tax analysis	Six months ended 30 September 2024 £m	Six months ended 30 September 2023 £m
Profit before tax	145.8	119.6
Gain on revaluation of investment properties	(82.2)	(67.2)
Gain on disposal of non-current asset	(8.8)	-
Change in fair value of interest rate derivatives	0.1	1.1
Adjusted profit before tax	54.9	53.5
Tax	(0.1)	-
Adjusted profit after tax	54.8	53.5

The movement in the adjusted profit before tax from the prior year is shown in the table below:

Movement in adjusted profit before tax	£m
Adjusted profit before tax for the six months to 30 September 2023	53.5
Decrease in gross profit	(0.9)
Increase in administrative expenses	(0.9)
Increase in other operating income	0.2
Decrease in net interest payable	1.6
Increase in capitalised interest	1.4
Adjusted profit before tax for the six months to 30 September 2024	54.9

Diluted EPRA earnings per share was 28.0 pence (2023: 29.0 pence).  The decrease of 3% from the same period last year, compares to an increase in adjusted profit before tax of 3% due to the additional shares in issue following the placing in October 2023. 

Taxation

The Group is a Real Estate Investment Trust ("REIT").  We benefit from a zero-tax rate on our qualifying self storage earnings.  We only pay corporation tax on the profits attributable to our residual business, comprising primarily of the sale of packing materials and insurance, and management fees earned by the Group.  

There is a £0.7 million tax charge in the residual business for the period ended 30 September 2024, partly offset by an adjustment to the prior year tax estimate of £0.6 million (six months to 30 September 2023: £0.9 million, largely offset in the income statement by an adjustment to the prior year tax estimate). 

Dividends

REIT regulatory requirements determine the level of Property Income Distribution ("PID") payable by the Group.  A PID of 22.6 pence per share is proposed as the total interim dividend, in line with the same period last year. 

The interim dividend will be paid on 24 January 2025.  The ex-dividend date is 2 January 2025, and the record date is 3 January 2025.

Cash flow

Cash flows from operating activities (after net finance costs and pre-working capital movements) have decreased by 1% to £53.5 million for the period (2023: £54.3 million).  These operating cash flows are after the ongoing maintenance costs of the stores, which for this first half were on average approximately £28,000 per store.  The Group's net debt has reduced over the period to £359.5 million (March 2024: £385.4 million), following the receipt of £30.6 million from the disposal of land adjacent to our Battersea store.

There are distortive working capital items in the current period, and therefore the summary cash flow below sets out the free cash flow pre-working capital movements

	Six months ended 30 September 2024 £m	Six months ended 30 September 2023 £m
Cash generated from operations pre-working capital movements	65.5	68.3
Net finance costs	(11.4)	(12.8)
Interest on obligations under lease liabilities	(0.3)	(0.3)
Other operating income received	1.0	0.1
Tax	(1.3)	(1.0)
Cash flow from operating activities pre-working capital movements	53.5	54.3
Working capital movements	6.6	(3.5)
Cash flow from operating activities	60.1	50.8
Capital expenditure	(20.6)	(17.8)
Disposal of non-current asset	30.6	-
Cash flow after investing activities	70.1	33.0
Dividends	(44.1)	(41.7)
Payment of finance lease liabilities	(0.9)	(0.9)
Issue of share capital	0.7	0.9
(Decrease)/increase in borrowings	(29.6)	7.4
Net cash outflow	(3.8)	(1.3)

The Group's interest cover for the period (expressed as the ratio of cash generated from operations pre-working capital movements against interest paid) was 5.7 times (2023: 5.3 times), with the increase following the reduction in the interest expense over the period with lower average debt levels.  This is calculated per below:

	30 September 2024 £000	30 September 2023 £000
Cash generated from operations pre working capital movements (see note 26)	65,489	68,259
Interest paid per cash flow statement	(11,439)	(12,778)
Interest cover	5.7x	5.3x

£3.4 million of the capital expenditure in the period related to the acquisition of Leamington Spa, with the balance of £17.2 million principally construction capital expenditure on our development programme but also including our continued investment in solar retrofitting.

Balance sheet

Investment property

The Group's investment properties are carried at the half year at Directors' valuation.  They are valued externally by Jones Lang Lasalle ("JLL") at the year end.  The Directors' valuations reflect the latest cash flows derived from each of the stores at the end of September. 

In performing the valuations, the Directors consulted with JLL on the capitalisation rates used in the valuations, which are based on the JLL model.  The Directors, as advised by the valuers, consider that the prime capitalisation rates have remained stable since the March 2024 valuation date.

The Directors have made some minor amendments to a couple of the valuation assumptions, namely the adjustment of stable occupancy levels on certain stores that are consistently trading ahead of the previously used assumptions and to certain assumptions on net achieved rents within the valuations.  Other than the above, the Directors believe the core assumptions used by JLL in the March 2024 valuations are still appropriate at the September valuation date.  

At 30 September 2024 the external valuation of the Group's properties is shown in the table below:

 

Analysis of property portfolio	Value at 30 September 2024 £m	Revaluation movement in the period £m
Investment property	2,791.0	73.3
Investment property under construction	157.8	8.9
Investment property total	2,948.8	82.2

The revaluation surplus for the open stores in the period was £73.3 million, reflecting growth in net achieved rents across the portfolio.  The investment property under construction revaluation surplus of £8.9 million  reflects the benefit of receiving planning consents in the past six months at West Kensington, Kentish Town and Staples Corner. 

The initial yield on the portfolio is 5.3% (31 March 2024: 5.2%).  The Group's annual report and accounts for the year ended 31 March 2024 contains a detailed explanation of the valuation methodology.

Current development pipeline - with planning

Site	Location	Status	Anticipated capacity
Staines, London	Prominent location on the Causeway	Construction commenced with a view to opening in Summer 2025.  We are also developing 9 industrial units on the site totalling 99,000 sq ft.	66,000 sq ft
Queensbury, London	Prominent location off Honeypot Lane	Construction commenced with a view to opening in Autumn 2025.	70,000 sq ft
Wembley, London	Prominent location on Towers Business Park	Construction to commence in late 2024 with a view to opening in early 2026.	73,000 sq ft
Slough Bath Road	Prominent location on Bath Road	Construction commenced with a view to opening in Spring 2026.	94,000 sq ft
Epsom, London	Prominent location on East Street	Demolition in progress, construction to commence in late 2024 with a view to opening in Summer 2026.	59,000 sq ft
Staples Corner, London	Prominent location on North Circular Road	Demolition in progress, construction to commence in late 2024 with a view to opening in Summer 2026.	Replacement for existing leasehold store, additional 18,000 sq ft
Kentish Town, London	Prominent location on Regis Road	Demolition to start in early 2025, with a view to opening in Summer 2026.	68,000 sq ft
Wapping, London	Prominent location on the Highway, adjacent to existing Big Yellow	Demolition of existing building in progress, construction expected to commence in late 2024 with a view to opening in late 2026.	Additional 95,000 sq ft
West Kensington, London	Prominent location on Hammersmith Road	Demolition of existing building to commence in January 2025, with a view to opening in Autumn 2027.	176,000 sq ft
Newcastle	Scotswood Road	Planning consent granted, vacant possession awaited.	60,000 sq ft

Current development pipeline - without planning

Old Kent Road, London	Prominent location on Old Kent Road	Site acquired in June 2022.  Planning application submitted in October 2023, decision expected early 2025.	77,000 sq ft
Leicester	Prominent location on Belgrave Gate, Central Leicester	Site acquired in June 2023.  Planning discussions underway with Leicester City Council.	58,000 sq ft
Leamington Spa	Prominent location on Queensway	Site acquired in May 2024.  Planning discussions underway with local council.	55,000 sq ft
Total - all sites			969,000 sq ft

The capital expenditure forecast for the remainder of the financial year (excluding any new site acquisitions) is approximately £43 million, which principally relates to construction costs on our development sites and the continued retrofitting of solar panels across the Group's estate. 

Financing and treasury

Our financing policy is to fund our current needs through a mix of debt, equity, and cash flow to allow us to build out, and add to, our development pipeline and achieve our strategic growth objectives, which we believe improve returns for shareholders.  We aim to ensure that there are sufficient medium-term facilities in place to finance our committed development programme, secured against the freehold portfolio, with debt serviced by our strong operational cash flows.  We maintain a keen watch on medium and long-term rates and the Group's policy in respect of interest rates is to maintain a balance between flexibility and hedging of interest rate risk.

The table below shows the Group's debt position at 30 September 2024, with our average interest cost shown after the base rate reduction in November: 

Debt	Expiry	Facility	Drawn	Cost
Aviva Loan	September 2028	£154.1m	£154.1m	3.4%
M&G loan (£35 million fixed at 4.5%, £85 million floating)	September 2029	£120m	£120m	6.6%
Revolving bank facility (Lloyds, HSBC and Barclays, 100% floating)	December 2027 (option to extend for one further year)	£300m	£91m	5.9%
Total		£574.1m	£365.1m	5.1%

Subsequent to the period end, the expiry of the bank facility was extended by a year to December 2027, with the first "plus-one" option taken up.  In addition to the facilities above, the Group has a $225 million credit approved shelf facility with Pricoa Private Capital ("Pricoa"), to be drawn in fixed sterling notes.  The Group can draw the debt in minimum tranches of £10 million over the next two years with terms of between 7 and 15 years at short notice, typically 10 days. 

The Group was comfortably in compliance with its banking covenants at 30 September 2024 and is forecast to be for the period covered by the going concern statement. 

The Group's key financial ratios are shown in the table below:

Ratio	30 September 2024	30 September 2023
Net debt to gross property assets	12%	18%
Net debt to adjusted net assets	13%	21%
Net debt to market capitalisation	14%	29%
Net debt to Group EBITDA ratio1	2.9x	3.8x
Cash generated from operations pre-working capital movements against interest paid	5.7x	5.3x

¹ Annualising the Group EBITDA for the six months to 30 September

Net asset value

The adjusted net asset value per share is 1,348.0 pence (see note 13), up 4% from 1,296.4 pence per share at 31 March 2024.  The table below reconciles the movement from 31 March 2024:

 

Movement in adjusted net asset value	Equity shareholders' funds £m	EPRA adjusted NAV pence per share
31 March 2024	2,561.9	1,296.4
Adjusted profit after tax	54.8	27.7
Equity dividends paid	(44.1)	(22.3)
Revaluation movements	82.2	41.6
Gain on disposal of non-current asset	8.8	4.4
Movement in purchaser's cost adjustment	3.2	1.6
Other movements (e.g. share schemes)	1.8	(1.4)
30 September 2024	2,668.6	1,348.0

 

Jim Gibson                                                            John Trotman

Chief Executive Officer                                     Chief Financial Officer

18 November 2024

PORTFOLIO SUMMARY

	September 2024				September 2023
	Big Yellow Established	Big Yellow Developing	Armadillo	Total	Big Yellow Established	Big Yellow Developing	Armadillo	Total
Number of stores(1)	79	6	24	109	79	6	24	109
At 30 September:
Total capacity (sq ft)	4,991,000	422,000	1,008,000	6,421,000	4,989,000	422,000	1,008,000	6,419,000
Occupied space (sq ft)	4,126,000	264,000	778,000	5,168,000	4,247,000	196,000	785,000	5,228,000
Percentage occupied	82.7%	62.6%	77.2%	80.5%	85.1%	46.4%	77.9%	81.4%
Net rent per sq ft	£37.09	£31.95	£23.46	£34.77	£35.67	£29.63	£22.44	£33.47
For the period:
REVPAF(2)	£34.79	£21.05	£21.11	£31.74	£34.07	£14.97	£20.17	£30.73
Average occupancy	83.2%	57.6%	78.2%	80.7%	85.1%	44.4%	77.9%	81.5%
Average annual net rent psf	£36.66	£31.59	£23.22	£34.36	£35.14	£28.93	£22.42	£33.02
	£000	£000	£000	£000	£000	£000	£000	£000
Self storage income	76,262	3,843	9,159	89,264	74,841	2,497	8,824	86,162
Other storage related income (2)	10,052	604	1,464	12,120	9,791	397	1,362	11,550
Ancillary store rental Income	750	6	37	793	611	16	10	637
Total store revenue	87,064	4,453	10,660	102,177	85,243	2,910	10,196	98,349
Direct store operating costs (excluding depreciation)	(23,663)	(2,238)	(4,192)	(30,093)	(20,418)	(1,650)	(3,709)	(25,777)
Short and long leasehold rent(3)	(1,148)	-	(84)	(1,232)	(999)	-	(84)	(1,083)
Store EBITDA(2)	62,253	2,215	6,384	70,852	63,826	1,260	6,403	71,489
Store EBITDA margin	71.5%	49.7%	59.9%	69.3%	74.9%	43.3%	62.8%	72.7%
Deemed cost	£m	£m	£m	£m
To 30 September 2024	745.0	188.0	146.5	1,079.5
Capex to complete	-	0.5	-	0.5
Total	745.0	188.5	146.5	1,080.0

(1)   The Big Yellow established stores have been open for more than three years at 1 April 2024, and the developing stores have been open for fewer than three years at 1 April 2024.  We opened a new freehold store at Slough Farnham Road during the period.  After transferring its customers to the new Farnham Road store, we closed our leasehold Slough Whitby Road store during the period.  The occupancy, net rent and capacity at the balance sheet date shows Slough Farnham Road within the Established stores, as it was effectively a continuation of trade in a new location.  The revenue and operating costs for the period for both stores are shown within Established stores.

(2)   See glossary in note 20.

(3)   Rent under IFRS 16 for seven short leasehold properties accounted for as investment properties under IAS 40. 

The table below reconciles Store EBITDA to gross profit in the income statement:

	Period ended 30 September 2024 £000			Period ended 30 September 2023 £000
	Store EBITDA	Reconciling items	Per income statement	Store EBITDA	Reconciling items	Per income statement
Store revenue/Revenue(4)	102,177	782	102,959	98,349	1,215	99,564
Cost of sales(5)	(30,093)	(2,013)	(32,106)	(25,777)	(2,027)	(27,804)
Rent(6)	(1,232)	1,232	-	(1,083)	1,083	-
	70,852	1	70,853	71,489	271	71,760

(4)        See note 2 of the interim statement, reconciling items are non-storage income.

(5)        See reconciliation in cost of sales section in Business and Financial Review.

(6)       The rent shown above is the cost associated with leasehold stores, only part of which is recognised within gross profit in line with finance lease accounting principles.  The amount included in gross profit is shown in the reconciling items in cost of sales.

 

RESPONSIBILITY STATEMENT

 

We confirm that to the best of our knowledge:

-    the condensed set of financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted for use in the UK;

-       the interim management report includes a fair review of the information required by:

a)    DTR 4.2.7R of the Disclosure Guidance and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

b)    DTR 4.2.8R of the Disclosure Guidance and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

 

By order of the Board                  

 

Jim Gibson                                                          John Trotman

Chief Executive Officer                                     Chief Financial Officer

 

18 November 2024