U.K. self-storage operator Big Yellow Group PLC released financial operating-performance results for its 2017 fiscal year, which ended March 31. The company reported same-store revenue of £114.7 million for the period, up 7 percent from 2016. It attributed the growth to strong gains in average occupancy across its portfolio, which closed at 81 percent compared to 78 percent a year ago. Occupancy drove 7 percent of revenue growth, according to a press release.
Same-store occupancy was 81.9 percent, up from 78 percent a year ago. Though it fell short of its total-portfolio average-occupancy goal of 90 percent, Big Yellow officials were encouraged by the positive movement and 2.7 percent increase in net rental rates.
"We remain focused on our core objective of increasing occupancy to 90 percent. As we have previously indicated, higher levels of occupancy deliver more traction on pricing and drive rate growth; and indeed, we have seen that materialize in the second half of the year,” said Nicholas Vetch, executive chairman.
Cash flow increased 13 percent to £63 million. The company could opt to use its financial flexibility to pursue more development projects. It has received planning approval for two developments in London and Manchester, England. Combined, the new facilities will comprise 132,000 square feet.
“As our vacant capacity has reduced, we have been more aggressively pursuing an expansion strategy. There are very few existing stores that are of sufficient quality available to purchase and brand as Big Yellow,” Vetch said. “We continue, therefore, to acquire raw land and develop our own stores, and are pleased to have secured a number of quality sites during the year. The development process, however, of which we have unparalleled experience, remains long, does carry risk, and is increasingly complex.”
Total revenue for the year was £116.7 million, a 7 percent increase year over year. Adjusted pre-tax profit was £61.4 million, up 12 percent from 2016. The group's pre-tax “statutory profit” was £134.1 million, a 34 percent increase compared to the previous fiscal year. The growth was attributed to increases in operating profit and revaluation gains in the company’s investment properties.
“Risks external to our business remain, and there will no doubt be setbacks in economic growth,” Vetch said. “It is for that reason that we keep the business very conservatively financed, thus enabling us to plan and execute the next phase of growth."
Big Yellow Group operates 96 self-storage locations in the United Kingdom under the Big Yellow Self Storage and Armadillo Self Storage brand names, with most concentrated in Greater London. Its total portfolio comprises 5.6 million square feet.
Big Yellow, Results for the Year Ended 31 March 2018