Self storage group Big Yellow has revealed a 4.6% dip in its net asset value after a change in VAT rules wiped 6% off the value of its assets.
In results for the year to March, the REIT delivered a net asset value of 429.2p a share, down from 449.8p at the same time last year, in an otherwise strong set of results.
The company’s 51 wholly owned stores showed an “impressive” occupancy gain of 5.6% over the year, while occupancy across all 65 of its stores grew by 328,000 sq ft.
From 1 October, storage will no longer be exempt from VAT which means that the company’s valuer reduced its portfolio valuation by 6% to £778m. The company said that values would have remained flat were it not for the tax change.
The group’s earnings per share were 18.2p – in line with analysts’ expectations – and the final dividend will be 5.5p, which implies a full-year dividend of 10p.
Big Yellow also announced that non-executive director Jonathan Short has left the company, and will be replaced by Forum Partners’ Richard Cotton.
Big Yellow executive chairman Nicholas Vetch said: “I am pleased to report that the group’s occupancy, revenue and cash flow growth measures well against the weak macroeconomic background.
“Occupancy across all our 65 stores increased by 328,000 sq ft during the financial year, compared to an increase of 215,000 sq ft across 62 stores in the previous year.
“The occupancy of the 51 wholly owned stores that were open at 31 March 2011 has grown to 64.9% from 59.3% at the same time last year.
“The Big Yellow Self Storage business model has proved to be resilient during the downturn, in line with the experience in the more established US self storage market. Over the past five years the group has reported a 12% compound annual adjusted eps growth.
“The free cash flow pre capital expenditure reported in the current year of £27.4m is almost double that reported in the year to 31 March 2008 of £14.4m, an annual compound increase of 17%.
“This performance is a reflection of the growing awareness of, and demand for, self storage at a time when new openings have slowed to a trickle.
“We are also seeing the benefits of our leading brand, strong market share online and our focus on London and the South East and other large metropolitan cities.”
Bridget.O’Connell@estatesgazette.com
