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Safestore to pay final dividend as stores remain open

Safestore to pay final dividend as stores remain open

Self-storage owner Safestore has said it will pay its final dividend, with its stores fully operational.

The company’s self-storage units are exempt from shutdown as they provide support to small business customers and companies engaged in key supply chains including healthcare, food industry suppliers and infrastructure support.

Key trading performance indicators have seen relatively limited impact, the group said, with 4.92 million square feet of occupied space across the portfolio, a reduction of 0.8% since its first quarter ended on 31 January 2020.

Following shareholder approval at the company’s AGM on 18 March 2020, the company confirmed the final dividend of 12.0 pence per share will be paid to shareholders on 9 April 2020.

Safestore added that it was well-capitalised with a strong balance sheet. After payment of the 2019 final dividend, the company will have undrawn debt facilities of £151m. None of the facilities are due for renewal before June 2023 and the average cost of debt of the group is 2.3%. Its loan to value ratio will be 32% after the dividend payment and the Interest Cover Ratio is around 8.8x.

Portfolio update

The group said its stores in the UK, Paris, Barcelona and the Netherlands are currently open or accessible but the reception areas are closed, the staffing and opening hours have been reduced and the provision of services that involve person-to-person contact has been removed. 

The process for new enquiries remains unchanged with customers able to enquire via our website or phone, and we have adjusted the new let process so that ID checks will now take place electronically. In addition, we have intensified the daily cleaning levels of our stores, especially commonly touched areas.

Development projects

Building works relating to the scheduled openings for new stores in the remainder of the year – in Sheffield (April 2020) and Paris Magenta (December 2020) – have been paused. The group said the remaining capital expenditure relating to the outstanding 2020 pipeline projects is £12m and the projects will resume when further clarity on the covid-19 situation allows.

Hedging

Due to the recent volatility in the Sterling:Euro exchange rate, the group has taken out average rate FX forward contracts to hedge the majority of its exposure to the translation of Euro denominated earnings for the next three years. The value of the contracts are €6.5m for the second half of the 2020 financial year, €14.5m and €16m for the 2021 and 2022 financial years respectively and €8.5m for the first half of the 2023 financial year. These contracts have the effect of fixing the rate at which the majority of the Euro earnings are translated at a rate of €1.0751 to £1.

SAFE : Safestore to pay final dividend as stores remain open

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