Big Yellow revenues rise despite weaker occupancy levels

(Sharecast News) - Self-storage operator Big Yellow Group reported higher revenues in its third quarter as increased space and higher rents offset a slight dip in occupancy levels compared with last year. Group revenues were up 2% year-on-year at £52.3m over the three months to 31 December, with like-for-like store revenues also growing 2%.

The maximum lettable area across its 111 stores expanded 2.2% to 6.562m square feet, while average rent per sq ft increased 4%.

Occupancy at the end of the seasonally weaker third quarter totalled 4.946m sq ft, down 82,000 sq ft (-0.8%) over the year before but an improvement on the previous year's loss of 180,000 sq ft.

"In our interim results, we highlighted the need to return occupancy to being a key driver of revenue growth. We have seen an increase in demand starting from the beginning of November and are pleased to be reporting an improvement in relative occupancy performance over the quarter and have narrowed further the year-on-year like-for-like gap," said chief executive Jim Gibson.

"The improvement in net occupancy performance has been across domestic and business customers, and of note we grew business occupancy this quarter by 15,000 sq ft, compared to a loss of 28,000 sq ft in the same quarter last year."

For the first nine months of the financial year combined, adjusted earnings per share were up 2%, slowing from the 7% growth seen in the first half, with full-year EPS growth expected to be 2%.

While LFL operating expenses were down 0.5% over the first three quarter, Big Yellow expects full-year LFL operating expenses to rise by 2-3% on the back of additional digital marketing spend to drive demand and occupancy.