Safestore Holdings Plc · LSE:SAFE
Safestore — H1 2007 Earnings Presentation
29 slides from Safestore's earnings presentation, Jul 10, 2007
Slide 1: Interim Results Presentation
Interim Results Presentation 10 July 2007 The largest self storage retailer in the UK and Paris
Slide 2: Interim Highlights
Interim Highlights y Strong financial performance – Revenues up 14.9% to £34.6m – EBITDA up 25.4% to £19.0m – Adjusted NAV per share up 54.8% to 157.4p – Maiden interim dividend of 1.5p per share y Strong operational performance – Closing occupancy up 6.3% to 2.8m sq ft – Average rate per sq ft up 8
Slide 3: Financial Review
Financial Review Richard Hodsden, Chief Financial Officer
Slide 4: Summary IFRS Profit and Loss Account
Summary IFRS Profit and Loss Account Year ended Six months Six months ended 31 October ended 30 April 30 April 2006 % 2006 2007 £m £m £m 64.3 Revenue 34.6 30.1 +14.9 (30.8) Operating expenses (excluding exceptionals) (15.6) (15.0) 33.5 EBITDA before exceptional items and investment gain 19.0 15.1 +2
Slide 5: Summary IFRS Balance Sheet
Summary IFRS Balance Sheet Year ended Six months Six months 31 October ended 30 April ended 30 April 2006 2007 2006 £m £m £m Assets Non-current assets 519.3 Investment properties 554.1 440.3 7.9 Development properties 21.0 12.6 11.1 Other non-current assets 9.5 8.5 538.3 Non-current assets 584.6 461
Slide 6: Summary - Net Debt Statement
Summary - Net Debt Statement Year ended Six months Six months 31 October ended 30 April ended 30 April 2006 2007 2006 £m £m £m (237.0) Total bank borrowings (gross of FRS 4 adjustment) (237.0) (218.7) 9.5 Cash 22.0 8.9 (227.5) Net debt (215.0) (209.8) 77% Proportion of net debt covered by interest h
Slide 7: Summary IFRS Cash Flow Statement
Summary IFRS Cash Flow Statement Year ended Six months Six months 31 October ended 30 April ended 30 April 2006 2007 2006 £m £m £m 26.3 Operating profit (before investment gain) 16.6 10.7 6.8 Working capital and non-cash movements 1.2 8.9 33.1 Operating cash flow 17.8 19.6 (14.4) Capex on existing p
Slide 8: Property Portfolio Valuation – Cushman & Wakefield
Property Portfolio Valuation – Cushman & Wakefield Maximum Lettable Location Tenure Stores Valuation** Uplift*** Area (‘000 sq ft)* UK Freehold & Long 48 2,260 £372m £78m Leasehold Short Leasehold 32 1,248 £76m £21m France Freehold & Long 4 178 £21m £4m Leasehold Short Leasehold 15 644 £29m £7m Tota
Slide 9: Property Valuation Assumptions
Property Valuation Assumptions y Freehold/Long Leaseholds (UK and France) – 10 year DCF assuming notional sale at the end of year 10 – Exit cap rate at 30 April 2007 of 7.03% against 7.52% (31 Oct 2006) and 7.64% (30 April 2006) y UK Short Leaseholds – No sale of assets: DCF to lease expiry (althoug
Slide 10: REITs
REITs y Safestore has the benefit of significant tax losses and capital allowances, particularly in France, minimising potential future tax payments y However, Safestore is giving full consideration to converting to REIT status for our UK business, based on: – Ensuring continued ability to deliver g
Slide 11: Operational Review
Operational Review Steve Williams, Chief Executive Officer
Slide 12: Customer Led Retail Focus Delivering Results
Customer Led Retail Focus Delivering Results y Significant increases in all Key Performance Indicators – Revenues increased by 14.9% – Closing occupancy increased by 6.3% – Average Rates per sq ft increased by 8.0% – Ancillary revenue increased by 26% – EBITDA Margin increased by 4.6 percentage poin
Slide 13: Marketing and Brand Power: Don’t Just Store It, Safestore It
Marketing and Brand Power: Don’t Just Store It, Safestore It y Significant investment in marketing and building the brand – £2.9million marketing spend in the current financial year – All stores now re-branded and re-badged – Web is now the main marketing tool y Retail initiatives providing brand re
Slide 14: Driving Occupancy
Driving Occupancy 74.2% 72.5% 75.1% 76.4% 80% 71.9% 67.6% 66.6% 64.2% 66.3% 70% 61.4% 60.9% 60.6% Occupancy based on MLA (sq ft) 60% 50% 34.6% 40% 27.5% 30% 20% 10% 0% New Established Mature Group Group London* Rest of UK Paris April 2007 April 2006 Note Mature: pre-1998 *Added 186,000 sq ft mainly
Slide 15: Driving Growth in Rates
Driving Growth in Rates 30 April 2007 April 2006 26.00 23.50 25 21.73 20.57 20.95 20.54 Average Rates per sq ft (GBP) 19.71 19.55 20.18 19.40 19.73 18.07 17.32 20 16.16 15 10 5 0 New Established Mature Group Group London* Rest of UK Paris April 2007 April 2006 Inner London Stores: 8 Note Mature: pre
Slide 16: Sales Mix and Contribution Analysis
Sales Mix and Contribution Analysis Total Revenue Growth – UK Total Revenue Growth – France 30 7.0 14.9% 14.8% Revenues (£m) Revenues (£m) 28.6 6.0 6.1 25 24.8 5.0 5.3 20 4.0 2006 H1 2007 H1 2006 H1 2007 H1 Ancillary Revenue Growth – UK Ancillary Revenue Growth – France 6.0 20% 0.8 10% % of Self Sto
Slide 17: Strong Performance Indicators
Strong Performance Indicators Price Improvements – UK Stores Price Improvements – French Stores 22 22 £/sq ft of Let Area £/sq ft of Let Area 4.1% 9.0% 20 £21.06 20 £20.54 £19.73 £19.32 18 18 16 16 2006 H1 2007 H1 2006 H1 2007 H1 IFRS EBITDA Growth – UK IFRS EBITDA Growth – France 20.0 3.5 22.2% 3.0
Slide 18: Substantial Opportunity for Further Growth
Substantial Opportunity for Further Growth Enfield Borehamwood Alexandra Palace Stanmore Edmonton Wood Green Overview Edgware Stoke Newington • 100 stores, 16 expansion sites Staples Corner Pentonville Road Ruislip Holloway Camden Ilford Paddington Hayes Notting Hill Acton Earls Court Whitechapel Be
Slide 19: Expansion Stores
Expansion Stores Tenure Full Full Pipeline Opened Estimated Planning Planning MLA MLA Opening Summary Sq. ft Sq ft Then Now Completed/Exchanged Development Stores at the time of the IPO y 18 exchanged expansion Slough LH 9 9 49,750 Glasgow (Dobbies Loan) FH 9 9 77,000 2007 stores will add c. 0.9m sq
Slide 20: Property Valuation Upside
Property Valuation Upside y Mix of freehold and leasehold provides flexibility in competing for new sites y Leaseholds offer attractive ROI and significant property valuation opportunities y While self storage yields should continue to compress Safestore also has good defensive qualities 20
Slide 21: Summary
Summary
Slide 22: Outlook
Outlook y Positive start to H2 trading y Healthy increases in occupancy and rates y Excellent expansion pipeline with good visibility on new site openings y Well positioned to capture growth in rapidly expanding market y Board remains confident of the outcome for the full year 22
Slide 23: Appendix
Appendix
Slide 24: Portfolio Summary under UK GAAP
Portfolio Summary under UK GAAP April 2007 April 2006 Developed Established Mature Total Developed Established Mature Total Number of Stores 9 55 35 99 6 55 35 96 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 Sq ft ’000 MLA (self storage only) 452 2,054 1,630 4,137 266
Slide 25: Experienced Management Team with Proven Track Record
Experienced Management Team with Proven Track Record • Opened 5 stores • Opened 2 stores • Opened 4 stores • Opened 9 stores • Acquired 2 UK stores • IPO on LSE and 1 JV store • Disposed of 4 • Acquired 54 • Opened 3 stores • Disposed of 4 and 17 French stores • Raised gross • Disposed of 2 non-trad
Slide 26: UK Self Storage Market: Still Immature
UK Self Storage Market: Still Immature European Market Share by Country (Fedessa) Favourable Change in Demographic Factors 10% 3% 12% y UK self storage market has increased in size from 81 stores in 1996 to 600 stores in 2005, a CAGR of 25% 4% 4% y According to SSA, UK self storage market is forecas
Slide 27: The Customers
The Customers Customer Information Domestic Customers: Why Self Storage? y Domestic customers – Generally require smaller, higher yielding units House move – Price-inelastic demand Short of space – Less frequent visits De-cluttering – Event-driven customers and lifestyle customers y Business custome
Slide 28: Operational Management
Operational Management Developing Stores Established Stores Mature Stores (0 to 2 full financial years) (2 to 8 years) (opened pre-1998) Occupancy Growth 999 99 9 Store 9 99 9 Reconfiguration Rental Yield 9 99 999 Operational y Maximise occupancy growth y Manage according to specific y Manage to max
Slide 29: Disclaimer
Disclaimer This document has been prepared by the Company solely for use at presentations held in connection with the announcement of its Interim Results for the half year ended 30 April 2007. The information in this document has not been independently verified and no representation or warranty, exp