SELF-STORAGE firm Big Yellow Group expects 15-20 per cent earnings growth for the year on continued demand for its stores from London and the south east, its chief executive said yesterday.
The British company, which helps people and businesses store merchandise, goods, equipment and furniture while moving homes and offices, also expects higher demand from companies, particularly small and medium enterprises, looking to downsize their operations amid an economic downturn.
“Within the UK, London and the south east economy is behaving better than certain other regional parts of the country, which are more dependent on public spending,” chief executive James Gibson said. “In this kind of suboptimal environment...we can deliver 3-4 per cent occupancy growth and double-digit, perhaps 15-20 per cent, earnings growth.”
The company’s domestic customers, including people moving homes, occupy 65 per cent of its storage space, while businesses take the rest. Some 88 per cent of sales come from London and the south east.
Big Yellow said the seasonal decline in occupancy levels in the third quarter would be lower than a year ago. Earlier in the day, the company, which competes with Safestore and Lok’n Store, posted a 20 per cent rise in first-half adjusted pre-tax profit at £11.6m
Big Yellow shares, which are down more than a third of their value over the last six months, rebounded 9.8 per cent to close at 239.4p yesterday.
City A.M. Reporter