Strong occupancy performance driving 7% revenue growth at Big Yellow – The Big Yellow Group (BYG) has reported its annual results to 31 March 2018.
When the company reported its results in May 2017, the company emphasised its ambition to achieve its long held occupancy target of 85%. In November that year, it raised that to 90%. The company is on track to achieving this with like-for-like occupancy is up 3.9% to 81.9% compared to 78.0% at 31 March 2017. Closing net rent was £26.74, an increase of 2.7% from the same time last year. Average rental growth was up 0.8% year-on-year and up 1.5% in the second half.
Highlights;
- Strong occupancy performance driving 7% revenue growth
- Closing net rent up 2.7% from 31 March 2017, average rate up 0.8% year on year and up 1.5% in the second half;
- Cash flow from operating activities (after net finance costs) increased by 13% to £63.0 million
- Adjusted profit before tax up 12% to £61.4 million
- 12% increase in total dividend to 30.8 pence per share
- Refinancing extending the term of the Group’s debt and reducing the average cost
Property highlights:
- Acquisition of new development sites in Wapping (London), Uxbridge (London), Bracknell, Hove and Slough taking pipeline to approximately 640,000 sq ft (14% of current MLA)
- Planning consent obtained at Manchester for a landmark city centre store of 60,000 sq ft
- Planning consent obtained at Camberwell, London for a 72,000 sq ft store
Dividends
The Group’s dividend policy is to distribute 80% of full year adjusted earnings per share. The final dividend declared is 15.5 pence per share. The dividend declared for the year of 30.8 pence per share represents an increase of 12% from 27.6 pence per share last year.
Outlook
Nicholas Vetch, Executive Chairman:
“We remain focussed on our core objective of increasing occupancy to 90%. As we have previously indicated, higher levels of occupancy deliver more traction on pricing and drive rate growth and indeed we have seen that materialise in the second half of the year.
As our vacant capacity has reduced we have been more aggressively pursuing an expansion strategy. There are very few existing stores that are of sufficient quality available to purchase and brand as Big Yellow. We continue therefore to acquire raw land and develop our own stores, and are pleased to have secured a number of quality sites during the year. The development process however, of which we have unparalleled experience, remains long, does carry risk, and is increasingly complex.
Risks external to our business remain, and there will no doubt be setbacks in economic growth. It is for that reason that we keep the business very conservatively financed thus enabling us to plan and execute the next phase of growth.”
BYG : Strong occupancy performance driving 7% revenue growth at Big Yellow