Self storage brand Big Yellow posted an 8 per cent annual increase in store revenue as it slipped into a pre-tax loss amid a persistently weak macroeconomic background.
The group made a statutory pre-tax loss of £35.6m for the year ended 31 March 2012 compared to a profit of £6.9m last year. This reduction reflects the decrease in the valuation of the group's open stores, partially offset by the improved adjusted profit, Big Yellow explained.
The group said there has been a £51.4m or 6% fall in the valuation of its store portfolio compared to 31 March 2011, principally caused by the impact of the proposed introduction of VAT on self storage from 1 October 2012.
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Big Yellow, which is currently exempt from VAT, said it is actively engaged with its tax advisors on the proposed VAT changes. The March 2012 Budget included a proposed change of legislation, which would require VAT to be applied to storage rent from 1 October 2012.
Store revenue for the fourth quarter climbed 10% to £16.1m from £14.6m for the same quarter last year.
Commenting on market conditions, it noted that ongoing difficulties in the Eurozone will have a depressing effect on UK macroeconomic performance and may of course have an impact on the trading of Big Yellow.
"From time to time and at moments of heightened economic fear, we can expect to see fluctuations in demand, but we have considerable confidence in the long term resilience of our income," it said.
"The proposition for investors is therefore a defensive income flow, with long term earnings growth potential, from a branded, London-centric, high margin, asset backed, internet dominant business with a conservative capital structure," the group added.
The board is recommending the payment of a final dividend of 5.5p per share, taking the total dividend declared for the year to 10p, up from 9p in the equivalent period in 2011.
CJ
