U.K. Self-Storage Operator Safestore Releases 4Q 2012 Financial Report

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U.K. self-storage operator Safestore Holdings PLC has released its financial statement for the fourth quarter of its fiscal year, which ended Oct. 31. The report indicates Safestore experienced growth in revenue and rented square footage at its self-storage facilities in the United Kingdom and France, while occupancy rates declined in both regions.

Revenue during the quarter was up 0.8 percent year over year to £25.5 million ($40.5 million), although revenue for the full fiscal year increased 4 percent from 2011 to £98.8 million ($156.9 million). Revenue from the company’s U.K. facilities increased 2.7 percent during the quarter compared to the same period last year. Quarterly revenue from properties in France increased 4.3 percent using constant exchange rate, but was down 4.7 percent in British sterling. The discrepancy is attributable to the year-over-year decline in Euro exchange rates, company officials said.

U.K. revenue was likely impacted by the imposition of a national 20 percent valued-added tax (VAT) on self-storage that went into effect Oct. 1. “We have sought to pass on the full additional costs of VAT wherever possible, with targeted discounts provided to a relatively small number of key or high-value customers,” company officials said. “This has resulted in a higher vacate rate and moderation in the rate of new let growth. While it will take more than one month's data to fully assess the impact on our business, early indications suggest that it remains in line with previous guidance.”

Despite vacancies blamed in part on the VAT, rented space at the company’s U.K. facilities was up 1.6 percent during the quarter, comprising 2.54 million square feet. Occupancy rate in the region was “broadly flat” at 61.9 percent for the quarter, although the rate was largely affected by the addition of two new locations during the year which added several hundred thousand square feet of new rentable space, company officials said.

Rented space at the company’s Paris-area facilities increased 5 percent to 750,000 square feet compared to the same period last year, although the occupancy rate in the region fell to 71.6 percent from 75.2 percent year over year. The decline was attributable to the addition of three new Paris locations that opened late in the year, company officials said.

The average rate per square foot during the quarter was £23.71 ($37.65) in the U.K., down 1.2 percent year over year, and €36.65 ($46.67) in France, 0.8 percent lower than the same period last year.

“The French economy remains challenging, but we continue to deliver growth in this market,” company officials said. “Our strong competitive position, together with the absence of new supply, create solid conditions for self-storage performance.”

In total, rented space increased 2.4 percent company-wide to 3.29 million square feet, improving on last year’s record total.

Safestore operates 135 self-storage facilities, including 98 wholly owned U.K. locations and 25 wholly owned facilities in France. The company also has 12 locations under management in the U.K. It serves approximately 43,700 total customers and employs about 550 people.

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