Safestore announces 2011 interim results

Safestore, the UK’s largest self storage operator, announced its interim results for the year ending 31 October 2011 on 26 January.

The announcements were broadly positive for the company across a number of key performance indicators. Their headline figure was an increase in total revenue of 6.6% over the year before, bringing Safestore’s revenue for the year to £95.1 million.

Safestore’s increased revenues were driven by two main factors. On the rental side of the business, the average annual rent the company charges per square foot rose 2.2% to £26.11, while occupancy reached a new record level of 3.21 million sq ft, 64% of Safestore’s total self storage space across all its stores.

Safestore were also able to achieve even more impressive growth from their ancillary sales – a category including goods such as boxes, tape and padlocks – which rose 8.3% to £13.2 million.

When it came to the most important measure of all, profits, Safestore were also able to announce strong progress. Profits after tax were up 4.8%, at £16.1 million, which is a very strong result given the present economic climate.

There was good news too for Safestore shareholders, as the dividend increased by nearly 10% to 3.55 pence per share, up from 3.25 pence per share the year before.

Rent drives self storage business

Safestore chief executive Peter Gowers put the growth in his company down to the housing crisis, as would-be buyers are spending longer and longer in small rental properties rather than being able to move into their own homes.

He told the Evening Standard: “The big change which has taken place in the housing market has led to a particularly buoyant rental sector, particularly in London. This benefits self storage because rental occupiers tend to move every 18 months to two years, compared with owner-occupiers who move every seven years. Also, people are moving into smaller flats due to higher rental prices.”

Safestore have also succeeded in increasing their number of business customers, who now account for around half of the total. These include large numbers of online retailers, particularly those operating on a smaller scale, who benefit from the flexibility and cost advantage offered by self storage compared to renting space in large warehouses.

Safestore relaxed about expansion

Compared to previous years, Safestore did relatively little in the way of expansion, opening two new sites in Paris and none in the UK (although they did replace two older self storage facilities here). This reflects the fact that, after years of relentless expansion by all the big self storage chains, the recession has forced them to be somewhat more modest in their expansion targets for the next few years.

Safestore has a total 131 self storage centres, 23 of which are located in the Paris region, with the rest in the UK. Between them, these contain a total of 5 million square feet available for rental, of 3.21 million is currently occupied. In total, 43,700 customers use Safestore for their self storage needs.