Big Yellow Group Plc · LSE:BYG
Big Yellow — H1 2007 Earnings Presentation
35 slides from Big Yellow's earnings presentation, Nov 23, 2006
Slide 1: Results for the Six Months and Second Quarter ended 30 September 2006
Big Yellow Group PLC Results for the Six Months and Second Quarter ended 30 September 2006 23 November 2006 1
Slide 2: Financial Highlights
Financial Highlights 2nd quarter Six months ended ended 30.09.06 30.09.06 Annualised Revenue £50.0m +5% £50.0m +17% Revenue £12.8m +10% £24.4m +20% Profit before tax £58.8m +39% Adjusted profit before tax 1 £7.0m +17% Adjusted diluted earnings per share 2 4.47p -9% Adjusted diluted NAV per share 3,4
Slide 3: Consolidated Income Statement
Consolidated Income Statement Year ended: Six months ended: 31.03.06 30.09.06 30.09.05 £m £m £m 41.9 Revenue 24.4 20.3 +20% (15.5) Cost of Sales (9.0) (7.7) (4.7) Admin Costs (2.6) (2.2) 21.6 Underlying Operating Profit 12.8 10.4 +23% 106.2 Revaluation Surplus 51.4 36.8 +40% (9.3) Net Interest Payab
Slide 4: Movement in Adjusted Profit Before Tax
Movement in Adjusted Profit Before Tax £m Adjusted PBT - 6.0 six months ended 30.09.05 Gross profit improvement 2.8 Interest expense (net) (1.5) Administration expense (0.3) Adjusted PBT - six months ended 30.09.06 7.0 4
Slide 5: Movement in Adjusted Diluted NAV per Share
Movement in Adjusted Diluted NAV per Share £m No of Diluted Pence Shares Per Share Adjusted NAV at 31 March 2006 322.3 108.5 297.0p Revaluation surplus – Investment 51.4 Properties Placing at 400p 35.8 9.1 Adjusted Earnings 4.9 Dividends Paid (3.1) Other Items (1.1) 0.5 410.2 118.1 347.3p Note: Deve
Slide 6: Cashflow and Net Debt Movement
Cashflow and Net Debt Movement Six Months ended: 30.09.06 31.03.06 30.09.05 £m £m £m Opening Net Debt 142.1 111.6 102.5 Cash from Operations 16.9 13.9 11.6 Interest (Net) (5.1) (3.9) (5.4) Dividends Paid (3.1) (2.0) (1.5) Property Purchases 44.1 20.5 9.5 Development / Refurb Capex 15.2 20.2 8.8 Othe
Slide 7: Gearing Levels
Gearing Levels 30.09.06 31.03.06 30.09.05 Net Debt / Gross Property Assets 27% 30% 31% Net Debt / Adjusted Net Assets 38% 44% 45% Interest Cover based on NOI* 2.8 3.0 3.0 Conservative balance sheet and healthy income cover * Based on store NOI and net interest expense excluding bank borrowing fair v
Slide 8: Trading Summary
Trading Summary Years since opening as at 1 Sept Sept Sept Sept Sept Sept April 2006 2006 2006 2006 2005 2005 2005 >2 years <2 years Total >2 years <2 years Total Number of stores 30 11 41 30 5 35 As at 30 Sept 2006: Total capacity (sq ft) 1.80m 0.65m 2.45m 1.80m 0.31m 2.11m Occupied space (sq ft) 1
Slide 9: Capex Summary
Capex Summary Sept Sept Sept 2006 2006 2006 > 2 years < 2 years Total No of Stores 30 11 41 £’m £’m £’m To 30 September 2006 145.1 69.0 214.1 To complete - 4.0 4.0 Total Cost 145.1 73.0 218.1 Freehold 124.1 73.0 197.1 Leasehold (9 stores) 21 - 21 145.1 73.0 218.1 9
Slide 10: Store Trading Performance
Store Trading Performance • 41 stores (2005: 35) trading at period end. Total capacity 2.45 million sq ft (2005: 2.11 million sq ft) • Occupancy up 143,000 sq ft (2005: 1,649,000 sq ft) to 1,792,000 sq ft, up 9% • 30 stores open more than 2 years at beginning of period: − Average occupancy stable at
Slide 11: Net Operating Income Margin %
Net Operating Income Margin % 65% 60% Margin % 55% 50% 45% 40% Sep-04 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Margin % Freehold Margin % Leasehold Margin % Combined Storage Centres > 2 years Freeholds v Leaseholds NOI growth 11
Slide 12: Net Rent per sq. ft. - Stores Open >2 Years
Net Rent per sq. ft. - Stores Open >2 Years £25.00 £24.00 Price per square foot £ £23.00 £22.00 £21.00 £20.00 £19.00 £18.00 Sep-04 Mar-04 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Rent / sq. ft. £19.36 £19.81 £19.74 £20.79 £22.48 £22.56 £23.77 Varies with London weighting and VAT restructuring September 20
Slide 13: REITs
REITs • Extensive due diligence and professional advice • One material issue to be resolved • Conversion considered beneficial –UK Tax exempt qualifying profits –Elimination of latent CGT –Improved dividend stream –New investor demand • Conversion charge –Estimated £11.2 million is based on current
Slide 14: Investment Property Valuation
Investment Property Valuation £m Deemed Cost Revaluation on Valuation deemed cost Freehold Centres As at 1 April 2006 152.0 197.4 349.4 Movement in Period 27.8 49.8 77.6 As at 30 Sept 2006 179.8 247.2 427.0 Leasehold Centres As at 1 April 2006 18.3 42.8 61.1 Movement in Period 0.2 1.6 1.8 As at 30 S
Slide 15: Property Valuation
Property Valuation Freehold – 10 year DCF assuming notional sale at year ten – Cap yield of year one NOI @ 5.77% (Mar 2006: 6.01%), rising to 7.34% (Mar 2006: 7.49%) in year after final stabilisation – Weighted average occupancy 86% (Mar 2006: 86%) at maturity Leasehold – No sale of assets at year 1
Slide 16: Revaluation Movement in the Year
Revaluation Movement in the Year £m (1) 37 storage centres at 31 March 2006 Value Increase 27.4 Capex in period (1.1) 26.3 (2) 4 new storage centres – Tunbridge Value 51.9 Wells, East Finchley, Bristol South, Kingston Cost (26.8) 25.1 51.4 7% increase in gross valuation of existing 37 storage centre
Slide 17: Property Review
Property Review • Sites acquired for development – 4 in London at, Merton, Richmond, Bromley and Eltham (Nov 2006) – And, Sheffield, Poole, High Wycombe • £189m development pipeline 20 sites (inc Edmonton Oct 06), 1.3 million net lettable space, 74% by sq ft is London • 61% stores and sites within M
Slide 18: Kingston
Kingston 18
Slide 19: Big Yellow Stores
Big Yellow Stores Plus Eltham (South East London) acquired in November 2006 19
Slide 20: Big Yellow Stores
Big Yellow Stores uu Somarte ts Milton Keynes Cheltenham © Colchester . *Luton A Chelmsford O Slough “3 Bristol (South) Guildford+ Tunbridge Wells Portsmouth Brighton Stores in Red are currently in planning or under development (October O06) 20
Slide 21: International Franchise
International Franchise • UAE Development Agreement signed – Site acquired in Dubai – Spring 2008 opening of 300,000 sq ft net lettable store • No equity risk, up front fee and share of revenue • Trademark protection in EU and other selected territories • Expansion plans – Update at full year 21
Slide 22: Funding Strategy
Funding Strategy • Capex Funding – Equity – July 2006 placing – Debt – Free Cashflow – increasing dividends • Bank Facilities – Current Facilities • RBS / Bank of Ireland / Barclays • Morgan Stanley repaid October 2006 • Net Debt at 30 September £156m – Interest Cover • Currently • Covenant • LTV on
Slide 23: Conclusion
Conclusion • Strong Development Pipeline • Valuation • REITs • Current Trading • Outlook 23
Slide 24: Appendix
Appendix 24
Slide 25: History
History • Early 1998 - market research commenced • October 1998 - Formed Cubic Self Storage • January 1999 - Acquisition of Big Yellow Self Storage Company • September 1999 - Pramerica investment • May 2000 - AIM listing • May 2001 - Placing and Open Offer • June 2002 - Full listing • February 2005
Slide 26: Self-Storage Market
Self-Storage Market • The Market – US market • 40,000 self-storage centres • 1.5 billion sq ft – 5 sq ft per person • Occupancy range of 82-89% since 1990 • Population 300 million (approximately) – UK market • Circa 400 self-storage centres • 15 million sq ft – 0.3 sq ft per person • Latest member s
Slide 27: Self-Storage Market
Self-Storage Market • Key influencers – Public awareness – low, new growing market – Population mobility and density – Physical planning and constraints, smaller homes – Focus on high density development on brownfield sites – Rising disposable incomes with GDP growth – Growth in housing demand, divo
Slide 28: UK Market Potential
UK Market Potential • Awareness of self-storage – Currently 20-25% approximately in London – Much lower in other major cities • Significant advertising and promotion raising awareness • Strong brands, roadside visibility also raising awareness • New customers being created as market grows, e.g. life
Slide 29: Big Yellow Model
Big Yellow Model • Develop Premium Brand – attractive modern premises – prominent main road frontages – high quality fit out – broad client base - B2B and B2C – ancillary packing materials and insurance sales • Customer Focus – customer service/loyalty – safe/secure – easy access 24 hours per day •
Slide 30: Market Share Analysis – March 2006
Market Share Analysis – March 2006 No of Average Self Revenue Stores Size Storage (£m) (sq ft) (sq ft) SSA Membership (144) 400 35,000 13.8m £234m Less 27% < 20,000 sq ft 107 17,500 1.9 m £32m Stores > 20,000 sq ft 290 41,500 11.9m £202m Big Yellow @ 31 March 37 60,000 2.2m £42m Big Yellow Market sh
Slide 31: Customer Average Length of Stay
Customer Average Length of Stay As at 30 Sept Stores (No of Months) 2006 < 1 Year 1-2 Years 2-5 Years >5 Years Portfolio No of Stores 6 4 17 14 41 Domestic Existing 3.4 6.4 11.9 15.4 12.8 Vacated 1.8 3.2 5.0 6.0 5.5 Total 2.7 4.3 6.6 7.6 7.1 Business Existing 4.0 7.1 13.0 17.2 14.7 Vacated 1.9 3.5 6
Slide 32: Disclaimer
Disclaimer This presentation contains certain statements that are neither reported financial results nor other historical information. These statements are forward-looking in nature and are subject to risks and uncertainties. Actual future results may differ materially from those expressed in or imp
Slide 33: Tunbridge Wells
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Slide 34: Finchley East
Finchley East 34
Slide 35: Bristol South
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