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(Sharecast News) - Safestore reported a return to underlying earnings growth in its first half on Thursday, as revenue rose across all markets and recent store openings began to contribute to performance.
The FTSE 250 self-storage group said total revenue increased 6.9% to 120.6m in the six months ended 30 April, or 5.6% at constant exchange rates.
Like-for-like revenue rose 3.5%, with growth across all geographies.
Underlying EBITDAR increased 3.7% to 67.9m, while underlying profit before tax rose 2.3% to 44.6m.
Adjusted diluted EPRA earnings per share increased 2.1% to 19.4p, which the company said represented a return to earnings growth.
Statutory profit before tax fell 62.6% to 36.3m from 97.0m, while operating profit declined 52.8% to 53.3m, reflecting broadly stable investment property values in the period compared with a 49.5m fair value gain a year earlier.
Net cash inflows from operating activities rose 14.6% to 47.2m, while the interim dividend was increased 1.0% to 10.2p per share, in line with Safestore's progressive dividend policy.
UK revenue rose 3.3% to 83.9m, supported by domestic occupancy, unit partitioning and higher average storage rates.
Paris revenue increased 4.6% to 26.7m, while revenue in expansion markets, comprising Spain, the Netherlands and Belgium, rose 25.7% to 15.4m.
Safestore said closing occupancy increased to 75.1% of current lettable area from 74.4%, while like-for-like closing occupancy improved to 77.0% from 76.6%.
Group revenue per available square foot rose 5.0% to 28.11, or 3.7% at constant exchange rates.
The group invested 33.6m in store development during the half, adding four new stores and increasing maximum lettable area by 0.2 million square feet to 9.5 million square feet.
The openings comprised two stores in Paris, one in London and one in Madrid.
Safestore said recently opened stores were on track to meet its 10% yield-on-cost hurdle, while non-like-for-like stores and its development pipeline were expected to add 30m to 35m of EBITDA once stabilised.
Net assets stood at 2.27bn at the end of April, while net debt increased 3.8% to 1.10bn as the group continued to fund its store expansion programme.
The loan-to-value ratio rose to 29.1% from 28.1%, while interest cover was 3.9 times.
For the full year, Safestore said it expected earnings growth, with adjusted diluted EPRA EPS projected at the lower end of the May consensus range of 41.5p to 43.7p, largely reflecting higher interest rates in the second half.
The company said underlying like-for-like cost of sales growth was now expected to be at the lower end of its 3% to 6% range, while underlying net finance costs were expected to increase by 2m to 3m.
Capital expenditure on new stores is forecast at 86m for the year.
Chief executive officer Frederic Vecchioli said Safestore had delivered a positive first-half performance, with like-for-like revenue growth across all markets and a return to underlying earnings growth.
"Our new and recently opened stores are performing well and, together with the development pipeline of a further 17 stores, are expected to contribute an additional 30-35m of EBITDA to the group upon stabilisation over the coming years," he said.
Vecchioli said the company continued to drive revenue per available square foot and optimise trading across its like-for-like estate, while its expansion investment was now "clearly translating into both revenue and earnings growth".
At 1050 BST, shares in Safestore Holdings were down 1.62% at 621.75p.
Reporting by Josh White for Sharecast.com.
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