Safestore Shares Decline as Lowered Earnings Guidance Overshadows Revenue Growth

Shares in Safestore (LON:SAFE) fell on Thursday after the company tempered its full-year earnings outlook, signaling that pressure on occupancy is offsetting revenue gains. The self-storage operator's stock was down 1.7% to 565 pence in early trading, underperforming the broader FTSE 250 index.

Revenue Rises but Occupancy Slips

For the third quarter ended July 31, Safestore reported a 4.1% increase in group revenue at constant exchange rates, reaching £62.2 million. The company's like-for-like revenue, which excludes the impact of new stores, rose 1.9%.

However, the key pressure point for investors was a decline in occupancy. Group closing occupancy fell by 0.9 percentage points year-over-year to 77.5% of the current lettable area. On a like-for-like basis, occupancy was down 0.8 points to 79.6%. The company was able to partially mitigate this through pricing, with average storage rates climbing 3.4% and revenue per available square foot (RevPAF) increasing 2.9%.

Mixed Regional Performance

The company's performance varied significantly across its markets:

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• United Kingdom: Like-for-like revenue grew 1.9%, supported by domestic customer demand.
• Expansion Markets: Newer operations in Spain, the Netherlands, and Belgium delivered strong like-for-like revenue growth of 11.6%, driven by gains in both occupancy and rates.
• Paris: The French capital remained a weak spot, with like-for-like revenue falling 2.5%. Safestore attributed the decline to new store openings diverting demand, ongoing unit partitioning, and subdued economic conditions.

Cautious Outlook

Looking ahead, Safestore now expects its fiscal 2026 adjusted diluted EPRA earnings per share (EPS) to be in the lower half of the analyst consensus range. The company-compiled forecast range is 39.6 pence to 42.4 pence, with a consensus of 41.4 pence.

While its 2026 store opening plans remain on track, Safestore announced it is reviewing the timing of its UK development pipeline for 2027-28 in light of the current trading environment.