Safestore Holdings Plc · LSE:SAFE
Safestore — FY2009 Earnings Presentation
38 slides from Safestore's earnings presentation, January 2010
Slide 1: Full Year Results January 2010
Full Year Results January 2010
Slide 2: Trading Results
Trading Results Revenue up 1.9% to £84.4m - Occupancy growth of 57,000 sq ft compared to a loss of 195,000 sq ft for the same period last year - Average rate per sq ft up 4.9% to £25.24 - Ancillary sales up by 4.8% to £11.5m Underlying EBITDA up 1.3% at £45.7m Adjusted EPS down 3.1% to 9.53 pence pe
Slide 3: Financial Review
Financial Review Richard Hodsden, Chief Financial Officer
Slide 4: Summary IFRS Income Statement
Summary IFRS Income Statement Year Ended Year Ended 31 October 2009 31 October 2008 £m £m Revenue 84.4 82.9 Operating expenses (excluding exceptionals) (38.7) (37.8) EBITDA before exceptional items and investment gain 45.7 45.1 Exceptional item, Gain on sale of non-current assets and FX swap 1.7 - D
Slide 5: Cash Flow Reconciliation
Cash Flow Reconciliation Year ended Year ended 31 October 2009 31 October 2008 £m £m Operating profit (before investment (loss)/gain) 47.2 45.2 Working capital and non-cash movements (1.9) 0.4 Operating cash flow 45.3 45.6 Non-discretionary cash flow Maintenance capex (including signage) (2.0) (3.0)
Slide 6: Net Debt
Net Debt Year ended Year ended 31 October 2009 31 October 2008 £m £m Available facilities at the year end* 347.7 302.0 Total bank borrowings (gross of FRS 4 Adjustment) (300.9) (282.0) Cash 26.4 11.1 Net debt (274.5) (270.9) Proportion of net debt covered by interest hedge 65% 65% * Includes €60m Fr
Slide 7: Existing Covenants
Existing Covenants Loan to Value Covenant (only tested annually at year end) – LTV (UK assets only) at 52% on 31 October 2009 – Valuations at October 2009 marginally up on October 2008 – LTV covenant at 65% until July 2011 Interest Cover Ratio Covenant – ICR in excess of 2.00x at 31 October 2009 – I
Slide 8: Cost of Banking Facilities
Cost of Banking Facilities Weighted Weighted Debt at Average Debt at Average October 2009 Interest at October 2008 Interest at October 2009 October 2008 £m % £m % Fixed rate debt (UK only) 177.5 6.11 177.5 6.11 Floating rate debt (UK only) 96.5 1.75 104.5 6.00 French Facility 26.9 4.02 - - 300.9 4.5
Slide 9: Portfolio Summary Under IFRS
Portfolio Summary Under IFRS Note Established: >2 full financial years Developing: <2 full financial years October 2009 October 2008 Developing Established Total Developing Established Total Number of Stores 20 97 117 15 97 112 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 MLA (s
Slide 10: Operational Review
Operational Review Steve Williams, Chief Executive Officer
Slide 11: The UK Market Leader
The UK Market Leader Safestore the No.1 self storage company in the UK 117 trading and six pipeline stores:- which will provide 5.4m sq ft of storage space when fully fitted out 95 UK stores, the only self storage operator with a geographically diverse spread across the UK More stores that any other
Slide 12: Safestore store locations
Safestore Enfield Borehamwood Chingford Friern Barnet Stanmore Wood Green Edgware Alexandra Palace Staples Corner Stoke Newington Pentonville Road Ruislip Holloway Camden Ilford Paddington Barking As at 31 October 2009: Hayes Notting Hill Whitechapel Acton Bermondsey Earls Court Hanworth Fulham Char
Slide 13: Une Pièce en Plus (UPP) – Paris
Une Pièce en Plus (“UPP”) – Paris Safestore is the biggest self storage company in central Paris trading as Une Pièce en Plus UPP has an excellent management team led by Frederic Vecchioli 22 stores mainly situated in central Paris A cash generative business Has seen excellent growth in all KPI’s in
Slide 14: A Focused Business Model
A Focused Business Model A customer led retail focused business The Safestore model provides vital flexibility to respond rapidly in current environment Low cost business model Clear but flexible operational strategy Balancing rate per sq ft and occupancy Innovative approach to USPs and strategic al
Slide 15: Innovation
Innovation Safestore has consistently led innovation in the industry: Web – Dedicated internal resource Pricing – ‘Lowest Price Guarantee’ – 3 tier pricing Added value services / USPs – Guaranteed unit availability – National accounts – Internal call centre support – Free pick up and free van hire –
Slide 16: Market Trends & Drivers
Market Trends & Drivers Positive trends with the change of demand and use of self storage – Demand for smaller units has risen which results in a higher rate per square foot – Length of stay has been maintained and occupancy performance is improving Demand from business customers remains strong – Up
Slide 17: Why Use Safestore? Top Five Reasons
Why Use Safestore? Top Five Reasons Business % Store stock 39 Store equipment 23 Archive documents 17 Office 6 New premises 4 Domestic % Need more space 20 New house not ready 20 Declutter to sell house 13 Moving to rented 11 Aboard / travelling 8 Source: Company Information 17
Slide 18: Brand And Marketing
Brand And Marketing Continue to see significant improvement in Safestore brand recognition Total planned investment in 2010 around 4.5% of revenue Key focus online (search engine optimisation, display advertising, social media) Safestore continues to be the online market leader Web now the biggest b
Slide 19: Enquiries By Source – Oct 06 to Oct 09
Enquiries By Source – Oct 06 to Oct 09 19
Slide 20: Online Leadership
Online Leadership Web traffic Google rankings Social media websites (e.g. Facebook) Web enquiries and new lets Web expertise Online leadership Consistent presence Web traffic in Q4 20
Slide 21: Property Valuation
Property Valuation XX January 2010
Slide 22: Property Portfolio Valuation
Property Portfolio Valuation Key Variables Oct 09 Apr-09 Oct-08 Average Rate per Sq Ft £25.24 £25.24 £24.06 Exit Cap Rate 8.14% 8.17% 7.88% Weighted average stabilised occupancy 77.79% 78.38% 79.30% Average number of months to stabilised occupancy 44 47 43 DCF based valuations Several key variables
Slide 23: Property Portfolio Valuation
Property Portfolio Valuation Maximum Lettable Valuation at Movement since Location Tenure Stores Area* October 2009 October 2008 ‘000 sq ft £m £m UK Freehold 54 2,443 391 (5) Long Leasehold 6 334 40 1 Short Leasehold 35 1,489 91 (13) France Freehold 8 334 69 15 Short Leasehold 14 572 57 11 Total 117
Slide 24: Property Portfolio Valuation - Movement in the Year
Property Portfolio Valuation - Movement in the Year Non-income Investment October 2009 October 2008 Movement statement movements Loss £m £m £m £m £m UK Like for Like Assets 493 539 (46) (46) French Like for Like Assets 1 122 100 22 (13) 9 Group Like for Like Assets 615 639 (24) (13) (37) New Stores
Slide 25: Costs to Complete Pipeline
Costs to Complete Pipeline Year ended 31 October 2009 £m Costs of stores spent to date 11.8 Estimated costs to complete 23.7 Total Estimated Cost 35.5 Estimated net sq ft added 280,100 Cost per sq ft (freehold/long leasehold) £127 The pipeline consists of 6 stores, 4 freehold and 2 long leasehold, a
Slide 26: Illustration of Operational Gearing
Illustration of Operational Gearing Build out existing MLA and fill to 78% occupancy (consistent with property valuations) Rate increases assumed at broadly 5% per annum Potential for year 1 at stabilisation of: – Revenue of circa £200m – EBITDA of circa £145m Assumptions/estimates are included in t
Slide 27: Outlook
Outlook Trading conditions will remain challenging Safestore positioned to increase market share and maintain competitive advantage due to: – Scale – Market leadership – Geographic spread A balanced approach to rate and occupancy will maintain margins A clear but flexible strategy is key Expenditure
Slide 28: Appendices
Appendices XX January 2010
Slide 29: Safestore Background
Safestore Background • Opened 9 stores; • Opened 4 stores • Disposed of 4 • Disposed of 4 • Acquired 2 UK stores • Opened 6 stores • Opened 5 stores non-trading stores stores and 17 French stores • Disposed of 7 stores • Opened 5 stores • Opened 2 stores • Opened 3 stores • Opened 9 stores and 1 JV
Slide 30: Customer Mix – UK
Customer Mix – UK Breakdown of Business and Percentage of Space Occupied Domestic Customers by Customer Type Customer FY – FY - FY - Occupancy Sq FY – FY - FY - Count 2007 2008 2009 Ft 2007 2008 2009 Business 28.9% 31.3% 31.4% Business 52.8% 56.8% 56.8% Domestic 71.1% 68.7% 68.6% Domestic 47.2% 43.2
Slide 31: Status of Company at Stabilisation
Status of Company at Stabilisation Key Statistics at Stabilisation Modelling Assumptions Number of current stores including pipeline – 121 Annual occupancy growth increases to circa 300,000 sq ft pa by FY15 MLA – 5.4 million sq ft Rate per sq ft growth at 5% to FY10 and 6% thereafter Target occupanc
Slide 32: Rate and Occupancy
Rate and Occupancy Rate (average £/sq ft) 27.16 £28.00 25.73 25.25 £26.00 24.79 24.23 23.60 £24.00 Good rate growth £22.00 19.54 £20.00 Improved occupancy performance 17.78 £18.00 £16.00 Important to balance rate and occupancy £14.00 Group Developing * Established Mature Area Growth (‘000 sq ft) 239
Slide 33: Expansion Stores
Expansion Stores Tenure Full Pipeline Opened Opened / Pipeline of 6 expansion stores which will Planning MLA MLA Estimated add 280,100 sq ft of MLA. Of these: Sq. ft Sq ft Opening Stores opened in year – 4 are freehold Clapham FH 52,000 Jan 2009 Cardiff FH 78,000 Apr 2009 – 21 is long leasehold Pari
Slide 34: Summary IFRS Balance Sheet
Summary IFRS Balance Sheet Year ended Year ended 31 October 2009 31 October 2008 £m £m Assets Non-current assets Investment properties 718.7 712.9 Development properties 12.6 31.5 Other non-current assets 13.3 7.1 Non-current assets 744.6 751.5 Current assets 40.3 25.9 Liabilities Current liabilitie
Slide 35: Investment Property Valuation
Investment Property Valuation Deemed Cost Valuation Revaluation on deemed cost £m £m £m Freehold Centres As at 1 November 2008 254.3 488.9 234.6 Movement in Year 38.5 10.6 (27.9) As at 31 October 2009 292.8 499.5 206.7 Leasehold Centres As at 1 November 2008 65.2 148.8 83.6 Movement in Year 6.9 (1.5
Slide 36: Customer Average Length of Stay in the UK
Customer Average Length of Stay in the UK As at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Portfolio 31/10/2008 Portfolio N0 of Stores 4 8 11 69 92 88 (mths (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) ) Business Existing 13 3.1 34 7.7 63 14.5 128 29.5 113 26.1 113
Slide 37: Customer Average Length of Stay in France
Customer Average Length of Stay in France As at Age of Store < 1year 1-2 Years 2-5 Years > 5 Years Portfolio 31/10/2008 Portfolio N0 of Stores 1 1 3 17 22 21 (wks (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 12 2.8 29 6.6 55 12.6 132 30.4 122 28.1 116 26.
Slide 38: Disclaimer
Disclaimer This document has been prepared by the Company solely for use at presentations held in connection with the announcement of its Preliminary Results for the year ended 31 October 2009. The information in this document has not been independently verified and no representation or warranty, ex