Date: Thursday 30 Jan 2014
LONDON (ShareCast) - Economic improvements in the UK and continental Europe are leading to more business for self-storage group Safestore as it posted a modest rise in annual profit.
Safestore, which has 134 storage outlets around the UK and 25 stores in France, said UK demand was robust and its French business performed strongly in the year to October 31st as more householders and businesses used its sites to store goods.
In particular, the group said it had increased the square footage taken by bigger UK customers with national accounts by 31%.
Underlying earnings before interest, tax, depreciation and amortisation rose 1% to £50.8m and the group increased its full-year dividend by 1.8% to 5.75p.
Chief Executive Frederic Vecchioli said he believed the profit rise was creditable given the UK government's introduction in October 2012 of VAT sales tax at 20%.
"Whilst it is early in the new financial year, the positive trading momentum seen in the fourth quarter is continuing in all our markets with net new lets and reservations up on the comparable period last year. As this momentum continues to build, and, with our operational focus, we anticipate a return to improving rates," he said.
During the period Safestore converted to a UK real estate investment trust, which removed its UK corporation tax liability on UK property rental income and eliminated "substantial" deferred tax liabilities from the balance sheet.
The group also said on Thursday that it had raised about £32.5m from a share placing with institutional investors and management, which it plans to use to pay off debt.
Shares rose 8.15% to 185.75p by 14:10 in London.
PW
853.50p
