Storage firm Big Yellow’s profit jumps on higher revaluation gain
Big Yellow’s pre-tax profit jumped over 50 per cent in the first half thanks to a higher revaluation gain, as the self storage firm reported increased revenue despite the “less than helpful” economic and political environment.
The figures
For the six months ending 30 September Big Yellow’s profit before tax increased 56 per cent to £95.8m, up from £61.4m a year earlier.
Read more: Big Yellow quarterly revenue grows amid ‘aggressive’ expansion plan
The group reported a 3.4 per cent increase in revenue to £64.3m, with a 4.2 per cent increase in like-for-like revenue, which Big Yellow said was driven by a growth in average occupancy and rate.
The self storage firm reported basic earnings per share of 57.6p for the first half, a 48 per cent increase on last year, and announced an interim dividend per share of 17.1p.
Why it’s interesting
Big Yellow is focusing on expanding its existing base of 75 stores, and the acquisition of development sites in Slough, Hayes and Harrow takes its pipeline to 13 sites.
It also gained planning consent for three new stores in Uxbridge, Queenbury and Hove during the first half.
This morning’s results were boosted by a strong revaluation surplus for open stores during the period, which hit £55.7m.
The company said 43 per cent of this increase resulting from “the adjustment in cap rates and the balance from growth in the store cash flows”.
It also reported a revaluation uplift of £5.2m on investment property under construction due to the change in cap rates and impact of it obtaining planning permission for some new sites.
Big Yellow’s shares fell over 4.2 per cent in morning trading.
What Big Yellow said
“The economic and political environment is currently less than helpful, however despite this we have continued to deliver growth in revenue, cash flow and profit,” said chief executive Nicholas Vetch.
“We have a proven business model which we have developed over the last two decades and we will continue to innovate and optimise our marketing strategy and improve our operating performance to drive revenue,” said Vetch.
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“Crucially, we will also maintain our focus on managing costs such that revenue growth transmits efficiently to the bottom line.”