Big Yellow hails "resilient" quarter but notes challenging environment

Big Yellow Group PLC on Monday reported a "resilient performance" in the first quarter, but said it expects the operating environment may continue to be challenging.

The Bagshot, England-based self-storage group said total revenue increased 3.3% to £53.2 million in the three months to the end of June from £51.5 million a year prior.

Like-for-like revenue was up 2.2% to £52.2 million from £51.1 million.

Closing occupancy increased 0.8% to 5.15 million square feet from 5.10 million, as store maximum lettable area grew 4.6% to 6.7 million square feet from 6.4 million.

The occupancy gain of 161,000 square feet was more than 47,000 extra square feet in the same quarter last year.

However, closing occupancy as a percentage fell to 76.6% from 79.4%, while like-for-like occupancy was down at 79.2% from 79.4%.

Big Yellow said it continues to invest in automation, which allows it to reduce costs without impacting customer service.

Due to the timing of this, the firm expects there to be a first half increase in store operating expenditure of 4% on a like-for-like basis, with a lower increase in the second half, leading to a combined 3% rise in like-for-like store operating expenditure for the full year.

Chief Executive Officer Jim Gibson said: "We have delivered a resilient performance in the first quarter, despite the challenges in the wider operating environment. We have delivered stronger occupancy growth than in the same period last year, whilst maintaining steady rate growth. Our stores opened last year are contributing to an increase in overall occupied space year-on-year by the end of June.

"We recognise that the operating environment may continue to be challenging in the months ahead, given the current fiscal and budgetary uncertainties, which will likely not be clarified until the autumn."

The CEO added: "In the meantime, we continue to focus on disciplined cost control, development of our new store pipeline and delivering a consistently high standard of customer service. The new store development, which will drive significant value in the years ahead, will be completed whilst maintaining a prudent capital structure."

Shares in Big Yellow Group were down 1.0% at 871.00 pence on Monday morning in London.

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