LONDON (ShareCast) - Investec has placed its 'buy' rating and 140p target price for self-storage firm Safestore under review on the back of FX and VAT headwinds.

Despite the slump in the share price on Wednesday morning, the broker says that, at face value, operational metrics over the first half look strong, with occupancy, revenue per available foot and ancillary revenues rising substantially.

However, Investec notes that occupancy growth was strongest in the lower value stores, proceeds from the Parisian stores were hit by a weak euro and costs were higher than forecasted.

"The headwinds of FX and government proposals to introduce VAT on self-storage from October this year, coupled with on-going strategic investment leads us to put forecasts, target price and recommendation under review.

"Although the impact of VAT on Safestore will be reduced by the French business (c.25%) and UK business customers (c.35%), the balance of private customers subject to VAT will prompt a cut in rates, in our view, as Safestore looks to retain occupancy."

By 11:06, shares were down 8.85% at 103p.

BC

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