Broader movements on UK share markets are pretty stable on Monday. The FTSE 100 and the FTSE 250 are both struggling for traction, softness that reflects in part a fresh rally in sterling. However, not all British stocks are stuck in neutral: the Safestore Holdings (LSE: SAFE) share price, for instance, has exploded.
Shares in the self-storage operator soared above 946p for the first time ever earlier in the session. Safestore has settled back from these levels, but at 933p per share, it remains 7% higher in Monday trading.
Safestore soars as trading accelerates
Safestore’s share price has soared after lifting its full-year forecasts following strong recent trading.
The property share — which has operations in the UK, France, Spain, Belgium and the Netherlands — said that revenues soared 10.9% in the three months to April, to £43.7m. At constant exchange rates this represented an 11.2% year-on-year improvement.
Safestore’s closing occupancy rate for its second fiscal quarter was up 16.8% at 5.635m square feet, it added. And as a percentage of its total lettable space, the occupancy rate surged to 80.7% from 71.1% in the corresponding 2020 quarter.
Chief executive Frederic Vecchioli commented that “the strong trading momentum reported for our first quarter has accelerated in the second quarter of the year.” He noted that the improvement was “driven by the strength of our UK performance combined with continued robust results from our French and Spanish businesses.”
Safestore saw revenues rise by a more modest 9.8% at constant currencies in its first financial quarter.
Forecasts raised!
Looking ahead, Vecchioli said that the company’s improving momentum during the second quarter “gives me further confidence in relation to the outlook for the full year.” And as a result Safestore now expects to report adjusted diluted earnings per share of 37p to 38p for the 12 months to October 2021.
This would represent a year-on-year improvement of between 23% and 26%. Back in February, the firm tipped earnings per share growth “towards the top of the range of analysts’ forecasts” around 34.6p.
Safestore described trading in its core UK marketplace as “very strong” and revenues here rose 13.9% in the first quarter to £33.6m. Its closing occupancy (as a percentage of maximum letting area) meanwhile rose 11.2% to 81%. Safestore said the sales spike was thanks to like-for-like growth. But three store openings and the annualisation of the acquisitions of its St John’s Wood and Chelsea stores also made an impact. Trading at its UK division also benefited from management fees that it received from joint venture operations in the Netherlands and Belgium.
Safestore added that its Birmingham Middleway and Paris Magenta stores are due to open during the first half of 2021. It also said that “our new store pipeline will grow over the coming months and our strong and flexible balance sheet provides significant funding capacity.”
