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Big Yellow Group PLC on Monday said its profit decreased in the first half of financial 2022, due to a revaluation loss compared to a gain in the prior period.
The Surrey, England-based self-storage facilities operator reported a drop in pretax profit to £6.8 million for the six months that ended September 30. This is down 97% from £254.9 million the year before.
Big Yellow reported a revaluation deficit of £47.7 million, compared to a gain of £204.7 million in 2021. The company said this reflects an outward movement in cap rates at the end of September, partly offset by the growth in cash flow from the stores.
Big Yellow’s revenue grew 15% to £93.8 million from £81.8 million from new stores and increases in average achieved rents. This was offset by a ‘slight fall’ in average occupancy given the strong comparator period.
Earnings before interest, taxes, depreciation, and amortisation for Big Yellow’s stores grew 16% to £66.8 million, which is up from £57.7 million a year before.
Big Yellow said all stores are currently trading profitably at the store Ebitda level, except for its recently opened stores in Harrow and Kingston North.
Big Yellow declared a dividend of 22.3 pence per share, up 8% from 20.6p the year before.
Looking ahead, Big Yellow said it is confident in the ‘resilience’ of its financial and business model. It said it is seeing a correction to land prices, and the concerns it has around construction are showing some signs of improvement.
‘It is pleasing to note that we have seen a strong recovery in our more central London stores in this half year as activity levels normalise post-pandemic, and this is being driven by both domestic and business customers. We have also been successful in controlling overall increases in store operating expenses to 4%, resulting in improved operating margins,’ Executive Chair Nicholas Vetch said.
Big Yellow shares ended down 1.1% to 1,155.00p on Monday afternoon in London.
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