Management’s plan to convert more enquiries into sales is working at self-storage play Safestore (SAFE) judging by its full-year results.
Shares climbed 2% higher to 336.8p after pre-tax profits increased by 125.6% to £52.4 million in the 12 months to 31 October 2015.
This was the result of an 18.6% jump in new business and a 6.7% rise in UK pricing. Rental charges in its Paris stores were 2.4% higher than in the previous year.
Safestore has also enjoyed a strong start to its current financial year with revenues 7% higher in the first two months.
When a new management team took over the FTSE 250 member in 2014 they implemented a strategy to boost revenues. This included sales training for staff and developing its online offering to attract more business.
Investec likes the real estate investment trust but maintains its forecasts for now. ‘We continue to like the attractive supply/demand dynamics of the self-storage sector, the high and sustainable cash flow yield on offer (5.9%) and the business model’s non reliance on the capital cycle (yield compression) to drive growth.’
A note issued by Liberum following the results was equally upbeat. ‘Our continued confidence in Safestore’s opportunity rests in its latent potential, with 1.35 million square foot of unlet space and occupancy still lagging its nearest peer, as well as scope for gradual expansion in lettable area.’
For more details on what to expect from Safestore in 2016 read our article in the latest edition of shares.
