Annual results from self-storage operator Safestore Holdings Plc revealed a stronger top line but a sharp decline in earnings due to a huge drop in property property revaluation gains, though the company assured investors that the business is now at an "inflection point" as recent investments begin to bear fruit.
Revenues were up 4.9% on reported basis at £234.3m over the 12 months to 31 October, rising 3.1% in like-for-like terms, with positive LFL trends seen across all geographies.
Revenues in the larger UK division were up 3.3% at £167.5m, with LFL growth at 2.4%, helped by improved occupancy levels, unit partitioning and higher average storage rates. Paris revenues rose 2.5% to €52.6m as LFL sales grew 1.3%.
Meanwhile, Safestore's so-called 'Expansion Markets' saw a 27% jump in sales to €26.2m, with LFLs up 13.5%, with markets in Spain, Netherlands and Belgium all performing well.
However, operating profits sank 62.6% to just £159.3m, with the company booking property revaluation gains of just £23.1m, compared with £292.2m the year before.
Adjusting for these gains, the underlying pre-tax profit still declined 4.2% to £92.9m as net finance costs increased due to higher borrowings to support store expansions.
Some £80m was invested in store development during the year, helping drive maximum lettable area (MLA) 8% higher to 9.3m square feet through 13 new stores and one extension.
Looking ahead, Safestore said LFL trends since the fiscal year-end have continued across all markets, with the firm "cautiously optimistic" about a return to earnings growth in FY26.
"We have entered the new financial year with confidence, and on the back of solid trading in the first quarter to date," said chief executive Frederic Vecchioli.
"Safestore is now at an inflection point, where the significant investment we have made in MLA expansion is driving revenue growth and is set to translate into meaningful growth in earnings and long-term value creation."