Big Yellow Finances Improve Despite Downturn

Big Yellow Self Storage’s financial performance improved in the second half of 2010 despite the persistent problems in the economy, according to their recently released half year report.

Big Yellow managed to make a profit of £8.6 million (before tax), a dramatic turnaround from the loss of £3.4 million they registered in the same period last year.

This created a better result for investors, as basic earnings per share in the company grew by 6.65p from the 2.71p loss they had recorded twelve months before; and an interim dividend of 4p per share was paid, having been suspended in 2009.

Occupancy increased by a total of 209,000 square feet, a big improvement over the 96,000 sq ft they managed last year. This means all their stores on average had an extra 3,400 sq ft of occupied space.

This was accomplished without Big Yellow opening any new stores between September 2009-10. Instead of expansion, the company focussed its strategy on increasing occupancy in existing stores and putting up rental rates.  The average rental price per square foot a year rose from £25.95 to £26.78 during the period.

Self storage in general was not expected to perform well this year owing to its strong correlation with the housing market, which remained sluggish. However, some people unable to sell their houses may have kept belongings in self storage for longer.

 Lok’nStore, its smaller British rival, also turned its finances around from a £598,000 net loss in 2009 to record a £221,000 net profit twelve months later (years ending in July).

 Big Yellow intends to start opening new stores again in the near future, as the company already owns nine additional development sites, eight of which currently have planning permission.

The Self Storage Blog