Safestore Holdings Plc Annual Report and Financial Statements 2015
Total Page：16
File Type：pdf, Size：1020Kb
Overview Strategic report Governance Financial statements Copy to be supplied Safestore Holdings plc Annual report and financial 2015 statements Safestore Holdings plc Annual report and financial statements 2015 Annual report and financial statements 2015 | Safestore Holdings plc 4 OverviewFinancial statements – A successful year, well placed for future growth. I am pleased to report another successful year for Safestore which has culminated in our inclusion in the FTSE 250 Index. The operational initiatives implemented over the last two years continue to drive our financial performance and, as a result, we have reported cash tax adjusted earnings per share ahead of our original expectations for the full year and up 50% over two years. Frederic Vecchioli, Safestore’s Chief Executive Officer Key measures Year ended Year ended 31 October 31 October Change – 2015 2014 Change CER1 Underlying and operating metrics Revenue £104.8m £97.9m 7.0% 9.7% Underlying EBITDA2 £57.1m £53.0m 7.7% 9.2% Revenue – like-for-like3 £103.0m £94.6m 8.9% 11.5% Underlying EBITDA – like-for-like3 £56.2m £51.0m 10.2% 11.8% Cash tax adjusted earnings per share4 16.6p 13.5p 23.0% n/a Dividend per share 9.65p 7.45p 29.5% n/a Free cash flow5 £37.3m £26.5m 40.8% n/a Closing occupancy6 72.6% 68.8% +3.8ppts n/a Average storage rate £24.85 £24.24 2.5% 5.4% EPRA basic NAV per share £2.56 £2.18 17.7% n/a Statutory metrics Profit before tax £118.2m £52.4m 125.6% n/a Basic earnings per share 52.4p 23.2p 125.9% n/a Notes 1 CER is constant exchange rates (Euro-denominated results for the current period have been retranslated at the exchange rate effective for the comparative period, and the impact of foreign exchange swaps has been reversed, in order to present the reported results on a more comparable basis). 2 Underlying EBITDA is defined as operating profit before exceptional items, change in fair value of derivatives, gain/loss on investment properties, contingent rent and depreciation. Underlying profit before tax is defined as underlying EBITDA less leasehold rent, depreciation charged on property, plant and equipment and net finance charges relating to bank loans and cash. 3 Like-for-like adjustments have been made to remove the impact of the closure of St Denis Landy in Paris in 2014, and the 2015 closures of New Malden and Whitechapel in the UK. 4 Cash tax adjusted earnings per share is defined as profit or loss for the year before exceptional items, change in fair value of derivatives, gain/loss on investment properties and the associated tax impacts as well as exceptional tax items and deferred tax charges, divided by the weighted average number of shares in issue (excluding shares held by the Safestore Employee Benefit Trust). 5 Free cash flow is defined as cash flow before investing and financing activities but after leasehold rent payments. 6 Closing occupancy excludes offices but includes 64,022 sq ft of bulk tenancy as at 31 October 2015 (31 October 2014: 83,472 sq ft). 5 Annual report and financial statements 2015 | Safestore Holdings plc Overview Strategic report Governance Financial statements Highlights Overview 01 Highlights Strong financial performance 02 Chairman’s statement — Group like-for-like3 revenue up 11.5%1 with UK up 13.2% and Paris up 7.0% Strategic report 04 Chief Executive’s statement — Closing occupancy up 3.8ppts at 72.6% 12 Principal risks — Cash tax adjusted earnings per share up 23.0% at 16.6 pence 15 Financial review 23 Corporate social responsibility (“CSR”) — 25.5% increase in the final dividend to 6.65 pence (FY2014: 5.30 pence) Governance — Robust start to the year, Group like-for-like revenue for the first two 28 Corporate governance introduction 1 months up 7% at CER 29 Board of Directors 30 Corporate governance Operational focus 33 Nomination Committee report — New lets growth in the UK of 18.6%, resulting from strong enquiries and 34 Audit Committee report continued improvement in conversion rates 36 Directors’ remuneration report 47 Directors’ report — Resilient pricing growth with UK rate up 6.7% and Paris rate up 2.4% 49 Statement of Directors’ responsibilities — National Accounts UK business customers occupancy up 22% over the year Financial statements 50 Independent auditor’s report — Six lease extensions completed, increasing average remaining lease life to 54 Consolidated income statement 13.9 years and one freehold purchased 55 Consolidated statement of comprehensive income 56 Consolidated balance sheet Strong and flexible balance sheet 57 Consolidated statement of changes in shareholders’ equity — Group loan-to-value (“LTV”) lowered to 32% and full year underlying finance 58 Consolidated cash flow statement costs reduced by £2.3 million or 16.8% 59 Notes to the financial statements 87 Company balance sheet 88 Notes to the Company financial statements 92 Notice of Annual General Meeting 99 Proxy form 101 Directors and advisers Further information and investor updates can be found on our website at www.safestore.co.uk/corporate/ Financial highlights Revenue (£'m) Underlying EBITDA2 (£'m) Dividend (pence per share) £104.8m +7.0% £57.1m +7.7 % 9.65p +29.5% 15 104.8 15 57.1 15 9.65 14 97.9 14 53.0 14 7.45 13 96.1 13 50.8 13 5.75 12 98.8 12 50.3 12 5.65 11 95.1 11 50.5 11 5.30 Annual report and financial statements 2015 | Safestore Holdings plc 01 Overview – Chairman’s statement The business is well positioned for growth and to deliver further value creation to shareholders. Summary I am pleased to announce, on behalf of the The anniversary of our January 2014 re-financing, Board of Safestore, a strong set of results for combined with the 2015 amendment and — The operational improvements made over the year ended 31 October 2015. extension of our bank facilities, resulted in a reduction in the underlying finance charge of the last two years continue to yield This has been another year of good progress £2.3 million or 16.8% to £11.4 million (FY2014: positive results. across the business by the management team. £13.7 million). Over the last two years we have The operational improvements made over the reduced our finance charges by 38.0% or — The improvements made to our last two years continue to yield positive results, £7.0 million. customer website and to the even after passing the anniversary of their recruitment, training, coaching and implementation. I believe that the improvements As a result of the above factors, cash tax incentivisation of our store teams will made to our customer website and to the adjusted earnings per share grew by 23.0% recruitment, training, coaching and incentivisation to 16.6 pence (FY2014: 13.5 pence). EPS has serve the business well in the future. of our store teams will serve the business well grown by 5.5 pence or 50% over the last — EPS has grown by 5.5 pence or 50% in the future. two years. over the last two years. Following the amendment and extension of our banking facilities during the year, we have Capital structure the balance sheet flexibility and capacity to take During the summer we completed an amendment advantage of carefully selected development and and extension of the Group’s existing bank facilities. acquisition opportunities. I am confident that the The UK and Euro facilities were extended by a business is well positioned for growth and to further two years to June 2020 and the margin deliver further value creation to shareholders. was reduced by 75 bps to 1.5% over LIBOR in the UK and EURIBOR in Paris. In addition, Financial results £30 million of mandatory repayments, previously required under the facilities, were removed and Revenue for the year was £104.8 million, 7.0% an option to increase the quantum of the Sterling ahead of last year (FY2014: £97.9 million) and up facility by £60 million was agreed. 11.5% on a like-for-like and constant currency basis. This result was driven by a strong The Group’s balance sheet remains in good performance in the UK, which grew like-for-like shape with a Group loan-to-value ratio (“LTV”) revenue by 13.2%, combined with another good of 32% and an interest cover ratio of 4.2x. This performance by Une Pièce en Plus, our Parisian represents a level of gearing we consider is business, which grew like-for-like revenue by 7.0%. appropriate for the business to enable the Group to increase returns on equity, maintain financial Underlying EBITDA increased by 7.7% to flexibility and to achieve our medium-term £57.1 million (FY2014: £53.0 million) and 9.2% strategic objectives. on a constant currency basis. After rent costs, underlying EBITDA increased by 12.6% to £48.1 million (FY2014: £42.7 million). 02 Annual report and financial statements 2015 | Safestore Holdings plc Overview Strategic report Governance Financial statements Dividend Reflecting the strong trading performance, the Board is pleased to recommend a 25.5% increase The Board is pleased to recommend in the final dividend to 6.65 pence per share (FY2014: 5.30 pence per share) resulting in a 25.5% increase in the final dividend an increase of 29.5% in the total dividend to to 6.65 pence per share. 9.65 pence per share for the year (FY2014: 7.45 pence per share). This total dividend for the year is covered 1.72 times by cash tax earnings (1.81 times in 2014).