Safestore Holdings Plc · LSE:SAFE
Safestore — FY2008 Earnings Presentation
42 slides from Safestore's earnings presentation, Jan 20, 2009
Slide 1: Full Year Results
Full Year Results 20 January 2009
Slide 2: Preliminary Results Highlights
Preliminary Results Highlights A strong performance across key metrics despite a difficult economic climate Revenue up 11.5% to £82.9m – Average rate per sq ft up 11.6% to £24.06 – Closing occupancy down 6.7% – Ancillary sales up 5.2% EBITDA up 10.9% to £45.1m Adjusted EPS up 21.8% to 9.84 pence per
Slide 3: Financial Review
Financial Review Richard Hodsden, Chief Financial Officer
Slide 4: Summary IFRS Income Statement
Summary IFRS Income Statement Year ended 31 Year ended 31 October 2008 October 2007 £m £m Revenue 82.9 74.3 Operating expenses (excluding exceptionals) (37.8) (33.6) EBITDA before exceptional items and investment gain 45.1 40.7 Exceptional items (net) - 0.8 Depreciation (0.1) (0.1) Operating profit
Slide 5: Earnings Per Share
Earnings Per Share Year ended 31 Increase/ Year ended 31 October 2008 (decrease) October 2007 £m £m Profit after Tax (Earnings) 12.5 78.2 Basic EPS 6.68 (84.5%) 43.02 add (Loss)/gain on investment properties 8.3 (81.3) Exceptional items - (0.8) Tax effect of the above (2.4) 21.9 Tax rate change - (3
Slide 6: Cash Flow Reconciliation
Cash Flow Reconciliation Year ended 31 Year ended 31 October 2008 October 2007 £m £m Operating profit (before investment gain) 45.2 41.5 Working capital and non-cash movements 0.4 (1.7) Operating cash flow 45.6 39.8 Non-discretionary cash flow Maintenance capex (including signage) (3.0) (4.3) Net in
Slide 7: Summary - Net Debt
Summary - Net Debt Year ended 31 Year ended 31 October 2008 October 2007 £m £m Available facilities at the year end 302.0 302.0 Total bank borrowings (gross of FRS 4 Adjustment) (282.0) (246.2) Cash 11.1 18.6 Net debt (270.9) (227.6) Proportion of net debt covered by interest hedge 65% 78% Facilitie
Slide 8: Existing Covenants
Existing Covenants Loan to Value Covenant – LTV (UK assets only) at 52% at 31 October 2008 – LTV covenant set at 70% at 31 October 2008 – LTV covenant moves to 65% from 31 July 2009 until July 2011 Interest Cover Ratio Covenant – ICR in excess of 2.00x at 31 October 2008 – ICR covenant set at 1.60x
Slide 9: New French Bank Facility
New French Bank Facility Term facility of up to €60m secured against French assets (freeholds only currently) Facility runs in line with UK facilities to July 2011 No repayments due between now and July 2011 Costs of debt 175bps above EURIBOR year one Subsequent years margin ratchets between 125bps
Slide 10: Cost of Banking Facilities (including new French Facility)
Cost of Banking Facilities (including new French Facility) Weighted Average Weighted Average Debt at January Interest at January Interest at October 2009 2009 2008 £m % % Fixed rate debt (UK only) 177.5 6.11 6.10 Floating rate debt (UK only) 90.5 3.90 6.00 French Facility 24.0 4.25 - 292.0 5.27 6.07
Slide 11: Portfolio Summary Under IFRS
Portfolio Summary Under IFRS Note Mature: pre-1998 Established: >2 full financial years but post-1998 Developing: <2 full financial years October 2008 October 2007 Developing Established Mature Total Developing Established Mature Total Number of Stores 15 62 35 112 14 54 35 103 Sq ft ’000 Sq ft ’000
Slide 12: Operational Review
Operational Review Steve Williams, Chief Executive Officer
Slide 13: Operational Overview
Operational Overview A customer led retail focused business The Safestore model provides vital flexibility to respond rapidly in current environment – A conservative approach to new store acquisition costs – A good degree of discretionary costs – Targeted investment towards increasing enquiries and
Slide 14: Market Trends
Market Trends The type of demand, unit size and customer mix is changing although many of the drivers for storage remain essentially the same Less demand from home movers, but increasing demand from people requiring extra space – Demand for smaller units has risen – Negative impact on occupancy, but
Slide 15: Changing Customer Mix - UK
Changing Customer Mix - UK Breakdown of Business and Percentage of Space Occupied Average Length of Stay Domestic Customers by Customer Type 91 100 85 90 80 Business Business 77 73 31% 56% 80 70 60 50 40 30 Domestic Domestic 20 69% 44% 10 0 FY06 H107 FY07 H108 FY08 Domestic customers represent 69%,
Slide 16: Rate and Occupancy
Rate and Occupancy Note Focus in 2008 has been on rate protection Rate at period end Inner London Stores: 8 (£/sq ft) Oct 2008 £39.45 Oct 2007 £34.80 Good rate growth across all store classes, despite 35 30.35 27.88 lower occupancy 30 28.23 25.33 25.07 26.82 22.87 24.02 25 22.64 22.13 – Rate growth
Slide 17: Sales Mix and Contribution Analysis
Sales Mix and Contribution Analysis Rental Rate Improvement – UK Stores Total Revenue Growth - UK EBITDA Growth - UK (year end rate) 30 40 5.1% 75.0 7.0% 8.8% 70.0 17.8% 35 £/sq ft of Let Area Revenues (£m) EB ITD A (£m) 25 10.8% 65.0 35.6 24.56 16.1% 65.7 33.9 60.0 30 22.58 61.4 20 55.0 28.8 20.37
Slide 18: Brand And Marketing
Brand And Marketing Continue to see significant improvement in Safestore brand recognition and awareness of self storage Total planned investment in advertising and marketing for 2009 in line with 2008, including: – Search engine optimization – Sponsored links The Web is the highest driver of enquir
Slide 19: Property Review
Property Review Richard Hodsden, Chief Financial Officer
Slide 20: Property Portfolio Valuations
Property Portfolio Valuations Key Variables Oct-08 Apr-08 Oct-07 Average Rate per Sq Ft £24.06 £23.55 £21.56 Exit Cap Rate 7.88% 7.14% 7.12% Weighted average stabilised occupancy 79.30% 80.15% 80.11% Average number of months to stabilised occupancy 43 31 20 DCF based valuations Several key variables
Slide 21: Property Portfolio Valuation – Cushman & Wakefield
Property Portfolio Valuation – Cushman & Wakefield Maximum Lettable Movement since Location Tenure Stores Valuation** Area (‘000 sq ft)* April 2008 UK Freehold 51 2,259 £396m (£20m) Long Leasehold 5 280 £39m (£2m) Short Leasehold 35 1,489 £104m (£2m) France Freehold 7 290 £54m £10m Short Leasehold 1
Slide 22: Revaluation Movement in the Year
Revaluation Movement in the Year Year ended 31 Year ended 31 Movement October 2008 October 2007 £m £m £m Like for Like portfolio UK portfolio 502 519 (17) French portfolio 87 65 22 Gain from change in tenure (one store in France) 6 - 6 Like for Like total 595 584 11 New stores 44 - 44 Valuation 639
Slide 23: Expansion Stores
Expansion Stores Tenure Full Pipeline Opened Opened / Pipeline of 11 expansion stores which will Planning MLA MLA Estimated add 558,200 sq ft of MLA by 2011. Of Sq. ft Sq ft Opening Stores opened in year these: Glasgow (Dobbies Loan) FH 77,000 Jan 2008 – 10 are freehold Glasgow (Rutherglen) FH 56,00
Slide 24: Costs to Complete Pipeline
Costs to Complete Pipeline Year ended 31 October 2008 £m Costs of stores spent to date 30.7 Estimated costs to complete 40.5 Total Estimated Cost 71.2 Estimated net sq ft added 558,200 Cost per sq ft (freehold/long leasehold) £128 Relatively low risk pipeline in terms of cost per sq ft and EBITDA im
Slide 25: Outlook
Outlook Steve Williams, Chief Executive Officer
Slide 26: Outlook
Outlook Trading conditions are likely to 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 Ex
Slide 27: Appendix
Appendix | © self storage
Slide 28: Summary IFRS Balance Sheet
Summary IFRS Balance Sheet Year ended 31 Year ended 31 October 2008 October 2007 £m £m Assets Non-current assets Investment properties 712.9 647.1 Development properties 31.5 31.9 Other non-current assets 7.1 9.9 Non-current assets 751.5 688.9 Current assets 25.9 34.6 Liabilities Current liabilities
Slide 29: New Stores Opened in the Year
New Stores Opened in the Year Dobbies Loan Rutherglen Crayford Cheltenham Sunderland Bristol Filton La Fayette (Paris) Chingford Hanworth 29
Slide 30: Market Leadership & Cluster Strategy
Market Leadership & Cluster Strategy 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 2008: Hayes Notting Hill Whitechapel Acton Bermondsey Earls
Slide 31: Investment Property Valuation
Investment Property Valuation Deemed Cost Valuation Revaluation on deemed cost £m £m £m Freehold Centres As at 1 November 2007 212.2 449.6 237.4 Movement in Year 42.1 39.3 (2.8) As at 31 October 2008 254.3 488.9 234.6 Leasehold Centres As at 1 November 2007 56.8 133.2 76.4 Movement in Year 8.4 15.6
Slide 32: Occupancy and EBITDA vary by store size
Occupancy and EBITDA vary by store size Established Established Mature Established & 2-5 years 6-9 years Pre - 1998 Mature Average Occupancy § below 60,000 sq ft 65% 68% 77% 71% Target Occupancy 87% Average EBITDA* below 60,000 sq ft £279K £356K £516K £399K Average MLA occupancy § over 60,000 sq ft
Slide 33: 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 31/10/2007 Portfolio N0 of Stores 8 5 9 66 88 80 (wks (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 14 3.2 31 7.1 61 14.1 127 29.3 113 26.1 107 24.
Slide 34: France
| © self storage
Slide 35: Operational Overview
Operational Overview New Stores Opened in 2008 A solid performance across all metrics in a burgeoning market 2 new stores opened in the period 1 freehold interest purchased in an existing leasehold store (Arcueil) 1 expansion store contracted with full planning. Due to open in 2009 Kremlin (H1) Lafa
Slide 36: Market Leadership & Cluster Strategy
Market Leadership & Cluster Strategy Stores Operating Shurgard Homebox Others at 31/10/08 City of Paris (3 miles radius) 8 3 3 1 Paris “first belt” (5 miles radius) 12 6 4 1 Greater Paris (15 miles radius) 1 (+1) 25 5 6 Paris Area 21 (+1) 34 12 8 Rest of France 0 21 32 40 * Total France 21 (+1) 55 4
Slide 37: Brand and Marketing & Enquiry Drivers
Brand and Marketing & Enquiry Drivers Parisian cluster strategy designed to maximize marketing efficiency Permanent metro billboards and site signage are the principal drivers of brand awareness The Web is the highest driver of enquiries, reflecting our targeted marketing spend; circa 25% of web sea
Slide 38: 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 31/10/2007 Portfolio N0 of Stores 1 1 2 17 21 20 (wks (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) (wks) (mths) Business Existing 12 2.7 22 5.2 45 10.3 123 28.4 116 26.8 114 26.
Slide 39: Stores within Paris City limits (3 miles radius)
Stores within Paris City limits (3 miles radius) Marais Italie Pyrénées Montparnasse Cardinet Mac Donald Convention Lafayette 39
Slide 40: Stores Paris “first belt” (additional 2 miles radius)
Stores Paris “first belt” (additional 2 miles radius) La Défense Ivry Saint-Ouen Arcueil Saint-Denis 1 Saint-Denis 2 Clichy Gentilly Charenton Pleyel Kremlin Boulogne 40
Slide 41: Stores Greater Paris (additional 10 miles)
Stores Greater Paris (additional 10 miles) Longpont (2009) Montmagny 41
Slide 42: 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 2008. The information in this document has not been independently verified and no representation or warranty, ex