Big Yellow's revenue growth slows amid 'heightened uncertainty'
By Duncan Ferris
Date: Friday 19 Jul 2019
(Sharecast News) - Big Yellow Group reported a slowdown in revenue growth during the first quarter of its new financial year, though a strong occupancy performance largely helped the company overcome the effects of Brexit uncertainty.
The self-storage company recorded revenue of £31.1m for the three month period ended 30 June, an increase of 4% compared to the same period last year but a slowdown in growth from the 7% achieved over the whole of its last full financial year.
The increase in revenue was achieved after Big Yellow's closing occupancy increased by 0.6 percentage points to 84% and its maximum lettable area rose by 1% to 4,684,000 square feet.
Like-for-like revenue, which excludes the Wapping, Manchester and Battersea sites, increased by 4% to £30.9m after like-for-like closing occupancy rose by 1.8 percentage points to 85.1%.
James Gibson, chief executive of Big Yellow, said: "This occupancy performance was helped by a recovery in prospect numbers to more normal levels over the quarter. The like-for-like growth in revenue this quarter of 4.4% was affected by the more muted occupancy performance in the final quarter of last year, given the heightened uncertainty in the run-up to 29 March, the UK's original proposed exit date from the EU."
Maximum lettable area appears set to increase further after the company reported that construction of its 77,000 sq ft store in Camberwell, London is on schedule and anticipated to open in April 2020.
Analysts from Liberum said: "Heightened uncertainty is a having a muted impact on revenue growth but demand is still robust and we continue to rate the benefits of the group's established first mover advantage and scale. Self storage remains one of the most attractive growth industries in UK real estate, aided by the compounding of its retained earnings into relatively high return activity."
Big Yellow's shares were down 0.78% at 1,023.00p at 0817 BST.
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