Annual Report & REIT Conversion

21 February 2013

 

Safestore Holdings PLC

Annual Report & Accounts 2012 and Proposed Conversion to REIT Status

 

Safestore Holdings PLC ("Safestore" or the "Company")

 

Further to the announcement on 30 January 2013 of its preliminary results and of its proposal to convert to REIT status with effect from 1 April 2013, the Company announces that it has:

 

(a)  published its Annual Report & Accounts 2012 and Notice of Annual General Meeting ("AGM") to be held at Britannic House, Stirling Way, Borehamwood, Hertfordshire WD6 2BT on 20 March 2013 at 12.00 noon; and

 

(b)  published a circular (the "Circular") to shareholders explaining the implications of REIT status for the Company and convening a General Meeting (the "General Meeting") of the Company to be held at Britannic House, Stirling Way, Borehamwood, Hertfordshire WD6 2BT on 20 March 2013 at 12.30 p.m. (or, if later, as soon as the AGM of the Company to be held that day has been concluded or adjourned) for the purpose of approving certain amendments to the Company's articles of association in connection with the proposed conversion to REIT status.

 

Copies of the following documents were sent to shareholders on 20 February 2013 and, in compliance with LR 9.6.1, are being submitted to the National Storage Mechanism and will be available for inspection at www.hemscott.com/nsm.do:

 

1.   Annual Report & Accounts 2012;

2.   Notice of AGM;

3.   the Circular; and

4.   forms of proxy for use in connection with the AGM and the General Meeting

 

The Annual Report & Accounts 2012, the Notice of AGM and the Circular can also be viewed at or downloaded from the Company's corporate website at www.safestore.com

 

A condensed set of Safestore's financial statements and information on important events that have occurred during the financial year ended 31 October 2012 and their impact on the financial statements were included in Safestore's preliminary results announcement released on 30 January 2013.  That information, together with the information set out below, which is extracted from the 2012 Annual Report, constitute the material required by Disclosure and Transparency Rule 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.  This announcement is not a substitute for reading the full 2012 Annual Report.  Page and note references in the text in the Appendices below refer to page numbers in the 2012 Annual Report.

 

For further information, please contact:

 

For enquiries, please contact:

 

Sam Ahmed, Company Secretary

 

Registered Office

Safestore Holdings plc

Brittanic House

Stirling Way

Borehamwood

Hertfordshire, WD6 2BT

 

Telephone 020 8732 1500

 

21 February 2013

 

Appendices

 

Appendix A: Directors' responsibility statement

 

Statement of Directors' responsibilities

The Directors are responsible for preparing the Annual Report, the Directors' remuneration report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the Directors to prepare financial statements for each financial year. Under that law, the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and the parent company financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (UK Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements, the Directors are required to:

 

•    select suitable accounting policies and then apply them consistently;

•    make judgements and accounting estimates that are reasonable and prudent;

•    state whether IFRS as adopted by the European Union and applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the Group and parent company financial statements respectively; and

•    prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

 

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and the Group and enable them to ensure that the financial statements and the Directors' remuneration report comply with the Companies Act 2006 and, as regards the Group financial statements, Article 4 of the IAS Regulations. They are also responsible for safeguarding the assets of the Company and the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

 

The Directors are responsible for the maintenance and integrity of the Company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

 

Each of the Directors, whose names and functions are listed in the Directors' report, confirm that, to the best of their knowledge:

 

•    the Group financial statements, which have been prepared in accordance with IFRS as adopted by the European Union, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

•    the Directors' report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

 

By order of the Board:

 

S Ahmed

Company Secretary

30 January 2013

 

Appendix B: Risks and risk management

 

Principal risks

The Group regularly reviews the risk within the Group. Risk management is a dynamic and critical business function as it is important to help achieve long-term shareholder value and protect our business, people, assets, capital and reputation. It is a fundamental aspect of the business and is subject to regular and ongoing reviews. We continuously identify and manage those risks and opportunities that could affect Safestore and the achievement of our business plans and strategic objectives. Our approach is aimed at early identification of key risks, reducing or removing those risks and/or responding quickly and effectively when a risk crystallises. In each instance, where possible, we seek to mitigate risks in order to reduce risk to an acceptable level.

 

For the purposes of Section 417(5)(c) of the Companies Act 2006, the facility agreements with the Group's bankers and Private Placement Note holders are the only contracts or arrangements which the Board considers essential to its business.

 

Managing our risks

The key strategic and operational risks are monitored by the Board and are defined as those which could prevent us from achieving our business goals. Our current strategic and operational risks and key mitigating actions are as follows:

 

Risk category	Risk	Mitigating activities
Strategy	The Group develops business plans based on a wide range of variables. Incorrect assumptions about the self-storage market or changes in the needs of customers, or the activities of customers may adversely affect the returns achieved by the Group.	-     The strategy development process draws on internal and external analysis of the self storage market, emerging customer trends and a range of other factors. -     The portfolio is geographically diversified with regular detailed review of performance.
Finance risk	Lack of funding resulting in inability to meet business plans, satisfy liabilities or breach of covenants	-     Funding requirements for business plans are reviewed regularly. -     The Group manages liquidity in accordance with Board approved policies designed to ensure that the Group has adequate funds for its ongoing needs. -     The Board monitors financial covenant ratios and headroom closely. -     The existing banking facilities run to 30 June 2016 and the US private placement notes mature in seven and twelve years.
Treasury risk	Adverse currency or interest rate movements	-     Guidelines set for our exposure to fixed and floating interest rates and use of interest rate and currency swaps to manage this risk. -     Foreign currency denominated assets financed by borrowings in the same currency where appropriate.
Property investment and development	Acquisition and development of properties that fail to meet performance expectations; and/or overexposure to developments within a short timeframe.	-     Thorough due diligence conducted and detailed analysis undertaken prior to Board approval for property investment and development. -     The Group's overall exposure to developments is monitored and projects phased. -     The performance of individual properties is benchmarked against target returns.
Valuation risk	Value of our properties declining as a result of external market or internal management factors	-     Independent valuations conducted six-monthly by external professionally qualified valuers. -     A diversified portfolio let to a large number of customers should help to mitigate any negative impact arising from changing conditions in the financial and property market. -     Headroom of loan to value banking covenants is maintained and reviewed.
Occupancy risk	A potential loss of income and increased vacancy due to falling demand, oversupply, or customer default.	-     Personal and business customers cover a wide range of segments, sectors and geographic territories with limited exposure to any single customer.  -     Weekly monitoring of occupancy levels and review of pricing at each individual store. -     Onsite staff maintains regular contact with customers and local monitoring of competitor offers. -     Monitoring of reasons for customers vacating and exit interviews conducted. -     The occupancy rate across the portfolio has been maintained through FY 2012 due to flexibility offered on deals by in-house marketing and customer support centre.
Energy risk	Reductions in energy usage are not achieved resulting in excessive costs	-     Ongoing upgrading of lighting and heating and review and monitoring of energy consumption. -     Full compliance with carbon reduction commitment regulations
Business organisation and human resources	Failure to recruit and retain key staff with appropriate skills and calibre	-     Recruitment procedures and the remuneration structure are regularly reviewed and benchmarked. -     Succession plans are monitored for all senior positions.
Business interruption risk	Major events mean that the Group is unable to carry out its business for a sustained period	-     Business continuity plans in place and tested. -     Back-up systems at remote places and remote working capabilities. -     Following the fire at the Paris La Défense store in December 2010, further reviews and assessments were undertaken for enhancements to supplement the existing compliant aspects of buildings and processes.
Reputational risk	Failure to meet customer and external stakeholder expectations	-     Customer surveys undertaken routinely and results acted upon. -     Training and mystery shopper initiatives undertaken. -     Regular communication with our stakeholders.

 

END

 

Notes to editors:

·	Safestore is the UK's largest self storage group with 135 stores. They include 98 wholly owned stores in the UK and 25 wholly owned stores in the Paris region together with 12 stores under management in the UK.
·	The Company provides storage to more than 43,700 personal and business customers.
·	Safestore (excluding Space Maker) has a maximum lettable area ("MLA") of 5.24 million sq ft (including the expansion pipeline stores) of which 3.29 million sq ft was occupied at 31 October 2012.
·	Safestore employs around 550 people.