Safestore FY25 Earnings Call - Strategy Execution Completed, Earnings Growth Expected as Expansion Peak Passes

Frederic, CEO, Safestore: Okay, thank you. Good morning, everybody, and thank you for joining us today. I’d like to start with key achievements of the year. In 2025, we continued to execute our strategy well, investing to expand and build our pan-European platform, accepting short-term earnings dilution while delivering a strong year of trading. We had growth in our like-for-like estates, costs have been well controlled, and we delivered EBITDA growth. Importantly, our non-like-for-like and pipeline stores are on track to deliver an additional EBITDA of GBP 35 million-GBP 40 million. FY25 also saw our largest extension of space in our recent history, and we have a secure future pipeline of new stores. Our investments in technology also ensure we remain a first-class operator. Our performance in the years gives us confidence for the future. Today, the majority of the assets that will drive future earnings are already built.

They are open, they are filling, and we have passed peak store openings. The drag from immature stores and land is now mechanically reducing, and so from here, earnings growth is driven primarily by utilization, maturity, and operational execution, and the business will transition from capital deployment to more cash generation. Investment will, of course, continue, but at a reduced scale where returns are compelling and risk is controlled. Safestore today is larger, is more resilient, and more operationally sophisticated than it was a few years ago. The heavy lifting has been done. What follows is execution and earnings delivery. FY25 was a year of steady operational delivery and, importantly, a year in which we positioned the business for the next phase of value creation. Looking at the slide, we show the four areas that explain our performance in the year. I will just highlight a few figures.

On the top left, you will see our financial performance: total revenue up 5% and like-for-like revenue up 3.1%, with six consecutive quarters of growth achieved. Underlying EBITDA of GBP 137 million, up 1.3%, and EPS that was down slightly due to funding our expansion program. On the top right, our operational progress, the core self-storage engine that drives our financial outcomes. Like-for-like closing occupancy increased to 81.2%, and RevPAF was up 2.9%. Like-for-like store cost growth was 4.4%, which is below guidance, and helped our store margins remain stable at 68%. In the bottom section, we have our space expansion and balance sheet metrics, which remain robust. Our strong cash generation is supporting a 30.7 full-year dividend, up 1%, and reflecting our progressive dividend policy. This was a year of discipline.

We managed the P&L efficiently while growing the estate, absorbing expansion costs and laying the foundations for material improvement in earnings and cash flow. This performance builds on a strong and a long track record of consistent growth. You will have seen this slide before. It shows an impressive track record of delivery and growth through multiple economic cycles while maintaining balance sheet strengths and funding a capital-intensive expansion program. The model has proven resilient and reflects the structural drivers of self-storage: low supply, rising adoption, and demand driven by life events and inquiry capture through sophisticated marketing and operational strategies. The investments made in recent years in all aspects of the business are designed to ensure this trajectory continues. But before to come back for the business review, I let Simon go through the financials.

Simon, CFO, Safestore: Thank you, Frederic. Good morning, everyone. I’m going to start with the key financial highlights for the year. Group revenue at £234.3 million grew 4.9% on last year, with increases coming through in all of our markets. Underlying EBITDA before the impact of leasehold costs was £137 million, a 1.2% increase year on year, driven by a 3.1% increase in store EBITDA, offset by a 19.6% increase in administrative costs, which I will pick up in more detail later. Our new store development program is continuing to successfully add new space to our portfolio, with the expansion financed through new borrowings and retained cash. As a result of the additional debt, interest costs increased by £5 million at the lower end of guidance.

This led to an underlying profit before tax overall falling by 4.2% year on year, and adjusted diluted EPS, our favored measure of earnings, which excludes gains on property revaluation, was 40.3 pence per share, in line with consensus estimates. We remain confident in our business with favorable medium-term dynamics and strong cash generation, and so are announcing a recommended 1% increase in the final dividend to 20.6 pence per share, taking the full-year dividend to 30.7 pence, again a 1% increase on prior year. Let’s look at those figures in a little more detail, starting with revenue growth. At constant currency exchange rates, total revenue grew by 5% year on year, with success seen across the group.

We achieved growth in all of our markets with strong contributions from the UK and expansion markets in particular, with the latter providing 40% of the group’s increase, despite only accounting for 11% of space. We can also see that we had growth from all of our maturities of store. Mature like-for-like stores are those which have been open for over five years and which comprise the majority of our portfolio at 79% of MLA. UK mature stores were the largest components of this, supported by our unit partitioning work, which Frederic will cover in more detail later on.

Together, the growth from stabilizing like-for-like and non-like-for-like sets of stores shows the value created by the development program, as the initial growth, when a non-like-for-like store starts to fill up over the first couple of years, is followed by continued growth from improving occupancy and rental rates as the stores then stabilize. On the bottom right-hand corner of this chart, you can see that like-for-like revenue, which comprises both mature like-for-like and stabilizing like-for-like stores, grew by 3.1% year on year on a constant currency basis, and this growth came from all segments: U.K., Paris, and expansion markets. The U.K. achieved 2.4% like-for-like growth for the full year. We saw a strong average rate growth, which was supported by the mixed impact of more domestic customers and our unit partitioning program. Paris returned growth of 1.3%, principally through improvements in occupancy in a subdued market.

Expansion markets showed strong growth of 13.5%, coming from both rates and occupancy improvement, with increases coming in all countries, and ancillary revenue was stable in the year, with our customer-led business model enabling us to achieve industry-leading levels of 16% of revenue. This slide breaks down our revenue and EBITDA growth into its component parts at the like-for-like and non-like-for-like level. At a group level, store EBITDA increased by 3.2% year on year. This came through growth in both like-for-like and non-like-for-like store EBITDA. Like-for-like store EBITDA increased 2.5% as achieved cost savings reduced the impact of inflationary cost pressures, resulting in store EBITDA margin coming in broadly flat year on year at just under 68%. In addition, we earned GBP 1.4 million of non-like-for-like store EBITDA, reflecting the operating leverage as we grew revenue in new stores, together with the management fees from our new joint venture in Italy.

Our group costs for 2025 were impacted by inflation, new store development, and investment in technological capabilities such as AI, and Frederic’s going to touch on that more later. At the underlying like-for-like cost of sales level, we continue to be impacted by strong inflationary cost pressures, particularly in U.K. store employee costs and business rates, both of which were driven by government-set indices. Our focus on cost control helped offset these inflationary pressures, and we had good success with multiple savings initiatives. We had the benefit of dynamic staff management in Paris, which included lower variable pay, integration of our U.K. call center teams with stores, better risk-benefit sharing with insurance companies, and we had some success challenging business rates assessments across the group.

These savings took underlying like-for-like costs of sales to a 4.4% growth, which is lower than the previously guided 7%-8%, as the benefit of some of these savings works came through earlier than projected. Looking forward, we’re expecting a similar story of inflationary pressures offset by the benefit from savings work. We will benefit from the full-year effect of the initiatives put in place in the FY25 financial year, together with the savings from additional projects, such as using group scaling capabilities to improve the procurement of utilities. In addition to the like-for-like costs of sales, we had a GBP 3.3 million increase in costs for the non-like-for-like part of the portfolio, reflecting the cost base for the newly opened stores. Administrative costs also increased in the year. This was predominantly driven by a reintroduction of variable pay for head office colleagues.

Following a couple of years where we haven’t met our own internal targets and therefore had very limited levels of variable remuneration, in this year we’ve partly met some of our targets and so had an increase in bonus-related payroll costs. In addition, whilst we remain super focused on our cost base, we have made certain investments in our capabilities, which are then applied across the group, including in technology and AI solutions, with the costs also coming through in administrative costs. The business continues to be strongly cash generative, with GBP 89 million of cash flow before investing activities, up 4% year on year. We invested a net GBP 103 million on developing new stores and investing in our existing estate, including our partitioning projects and refurbishments.

In addition, we invested GBP 38.9 million on our new joint venture in Italy, including the development of two new stores, taking the total there to two, 12, sorry, to 12. We distributed GBP 66.6 million to shareholders as dividends in the year, 1% more than in 2024. And we financed our investments through a combination of retained cash and new debt. In the year, we added GBP 105 million of new borrowings, resulting in a small net reduction in cash overall. As a result of the additional borrowings, net debt, including lease liabilities, increased GBP 159 million to GBP 1.1 billion at year-end. The new financing took the form of a new EUR 77.5 million term loan with interest swapped to a fixed 3.4% and a new eight-year EUR 70 million USPP with a 4.03% interest rate.

These two issuances continue our approach of staggering debt maturities to manage refinancing requirements, with the next maturities being USPPs totaling just under GBP 100 million in FY26, but not until the end of October this year. These USPPs have an average coupon of 1.74%, reflecting the base rates when issued. And so whilst refinancing our existing debt is not expected to have a material impact on ’26, there may be an impact in later years depending on where rates go. We have seen in the year the benefit of falling rates on the 36% of our debt, which is at floating rates. The impact of this, together with the results of the proactive swap of EUR 150 million of facilities from Sterling into euros to take advantage of lower base rates, led to a 50 basis point reduction in our average borrowing costs at year-end.

The positive market for self-storage assets is reflected in the stable valuation for our investment property portfolio in the year, with values increasing for the CapEx spent and valuation gains. Overall, we recognize a GBP 33 million revaluation gain over the year, with like-for-like stores stable in value and with growth created by the developments in new stores and their income stabilization. The increase in property value supported a 3.5% increase in net tangible assets to GBP 11.29 per share at year-end. In the last three years, we’ve made a significant step up in the volume of new development openings, with 30 stores adding 1.4 million sq ft of MLA and with an investment in these stores of GBP 225 million. Of this, FY25 represents the peak openings, with 13 stores adding an incremental 0.7 million sq ft of new space to take the portfolio to 9.28 million sq ft.

In addition, the pipeline, as it stands today, has a further 1.1 million sq ft of MLA to be delivered from FY26 onwards, with an estimated cost of GBP 212 million, of which GBP 96 million has already been spent. Going forward, the pipeline is projected to be delivered at a steadier rate, which will support the progression of incremental earnings. You’ll be familiar with these, sorry. You’ll be familiar with these charts if you’ve followed us for a while. We continue to believe that our development program is highly accretive for the group, and on the left, you can see the anticipated financial impact of the development pipeline. We project our existing 22 non-like-for-like stores, together with the 20 we have in the development pipeline, will add GBP 35 million to GBP 40 million of EBITDA to the group on stabilization.

As the interest cost on developments exceeds the income they initially generate, new developments lead to an earnings headwind. With the projected shape of openings for the pipeline, we expect the headwind on EPS from the development program to reduce in the coming years, supporting EPS growth. Do note that this reflects a different set of projects in the analysis that we produced for the FY24 year-end, with the stores which opened in FY23 now included in stabilizing like-for-like and with three new stores added to the pipeline in the year. And the charts on the right-hand side of the slide will also be familiar. The lines show how the different years of openings have progressed in terms of their yields on cost.

While stores grow at different rates over their life depending on local circumstances, we can clearly see a similar pattern from each, with the achievement of over 10% yield on cost on stabilisation. The latest two years, for which we have enough data points, the openings in FY 2022 and 2023 are on track to follow this consistent pattern. And lastly, looking ahead to the new financial year, we’re expecting to see continued pressure on operating costs from inflationary pressures, particularly in store staff costs as a result of National Living Wage increases and National Insurance increases in the UK, albeit at lower levels than we have seen in recent years. As I indicated earlier, we’re looking to offset some of this impact from these increases through efficiencies, including using group scaling capabilities on energy and insurance procurement.

The result of these factors is that we’re looking at increases of 3%-6% year on year in like-for-like underlying costs of sales. We’re expecting to continue to use additional debt to support the financing of our development activities, which will lead to increases in interest costs, but this is projected to be partially offset by reductions in floating rates. The net impact of an increase of £1-£2 million year on year is, of course, dependent on the progression of floating rates. As we have covered, we’re projecting £86 million of development CapEx for FY26. And lastly, for the dividend, we’ll continue with our progressive policy whilst looking to rebuild cover over the medium term, with the objective of taking the ratio of earnings to dividends back towards where it has been previously. And with that, I will hand back to Frederic. Thank you very much, Simon.

Moving to a business update. Safestore strategy has been consistent for now close to three decades. Dense urban portfolios in supply-constrained cities expanded methodically and benefiting from our operational expertise. As you can see in the table on the right-hand side, today the group operates 211 owned stores and 9.3 million sq ft of MLA, or 10.4 million if you include RGVs, and a future footprint of 11.5 million sq ft when the current pipeline is fully delivered. What differentiates the portfolio is not just scale, but density. In the U.K., Safestore is a clear market leader, particularly in London and the Southeast. In Paris again, we have a leading position, and more than half of our stores sit within five miles of the city center and 70% within 10 miles.

In Spain, Benelux, and Italy, we have built clusters in major cities such as Madrid, Barcelona, Milan, and Rome. This density in areas with high barriers to entry creates operational efficiencies and long-term pricing power. It is a foundational pillar of the Safestore investment opportunity. Turning to the U.K., the U.K. represents 64% of group MLA and is a structurally attractive market. We observe that higher customer awareness levels of self-storage in the U.K. helps drive the highest inquiry volumes per store in the group compared to other countries. U.K. revenue grew 3.3%, but within this, we saw mixed demand. Domestic customers remained particularly strong, which gave us the opportunity to accelerate our program to convert large legacy units into smaller, higher-yielding units suitable for domestic use. In 2025, 190,000 sq ft was converted of the 500,000 sq ft total sq ft targeted over two years.

We have seen that smaller units generate around 60% higher rent per sq ft. The absorption was positive. Despite year-on-year inquiries growth being muted, new lets increased by close to 7%. Logically, the average size per new let decreased around 6.5%, given we did not relet the large units being vacated. But the higher rate paid by customers in units below 250 sq ft, combined with AI-driven pricing and improved conversion, delivered 2.5% like-for-like rate growth, stable occupancy, and RevPAF expansion. You can see this illustrated on the bottom right-hand chart. This is a good point to mention our digital and AI platform, which underpins our group performance and impacts all our businesses.

Optimizing marketing spend and pricing elasticity, monitoring inquiry, conversion, and sales productivity are all key, and progress on all fronts in the year helped maintain marketing costs at 4.1% of revenue, which is flat year-on-year on a like-for-like basis. Automation improves efficiency, but human interaction continues to drive superior conversion, yields, and ancillary sales. This balanced model supports our industry-leading margins and cash generation. Our digital platform is built on 27 years of data and more than 2 million new lets, and it enables advanced pricing, marketing, and analytics capabilities that most competitors cannot replicate. Embedding AI across the business simply fine-tunes our execution further, all with a clear focus on driving yield, efficiency, and returns. Importantly, technology does not replace people in our model; it supports them. While UK customers can transact fully online if they wish, our data consistently show that staffed interaction delivers better outcomes.

Most customers, particularly first-time users, value professional guidance, which improves conversion, optimizes unit choice, and increases ancillary attachment. This balanced approach translates directly into financial performance. It underpins industry-leading ancillary income, strong RevPAF, and resilient margins. To some extent, our in-house capabilities spanning asset management, technology, and sales execution position us to perform relatively better, even if macro condition remains difficult. In Paris, domestic demand remained strong, while business inquiries were weaker. Like-for-like occupancy increased by 2.1 percentage points to 84.8%. Paris is one of Europe’s most supply-constrained markets, with a storage density still a third of London, but with population density four times higher and significantly higher barriers to entry. Our strategy is to build further our fortress position, securing long-term market position and pricing power as stores mature.

During FY25, we increased regional MLA by a significant 17%, and we were able to do this because of our scale and property expertise in Paris. The majority of the portfolio remains concentrated in the inner Paris and first belt area. Our Paris portfolio will grow further, with one store having opened since year-end and another three during the next 12 months, bringing the platform to 38 stores. I expect the recently opened stores to create initial short-term dilution of RevPAF through store overlap and lower initial pricing, but it is a deliberate trade-off, and given the lack of supply, the overall long-term economic value creation potential is compelling. Moving on to our expansion markets, Spain and the Benelux region, which are an additional growth engine. Revenue across these markets grew 27% in 2025, with like-for-like growth of 13.5%. Spain delivered nearly 23% like-for-like growth.

Occupancy is 81% in Spain on a like-for-like basis, 86% in the Netherlands, and close to 87% in Belgium. These markets are now moving from investment to contribution. In Europe, we are replicating a proven operating model. Pricing, marketing, AI tools, and systems are all centralized, allowing rapid scaling with limited local overhead. What drives value from here is execution and utilization, not additional complexity. We are scaling using the group’s central platform rather than building fragmented local structure. That approach allows us to grow quickly, keep overhead tightly controlled, and expand margins as store matures and occupancy increases. In Italy, our 50/50 joint venture with Nuveen comprises 12 prime stores in Rome, Milan, Turin, Florence, and Genoa.

It has allowed us to limit our investment size to GBP 39 million, with exposure to a portfolio of stores expected to deliver yield on cost of around 10%, in line with our group targets. Italy is an attractive self-storage market with supply at 3% of UK levels and strong demographic fundamentals across closely clustered major cities. Occupancy is at 76.8%. In Germany, our associate investment continues to perform well, with seven stores open and a closing occupancy of 88%. There is an additional pipeline in Frankfurt, Bonn, Düsseldorf, Stuttgart, and more recently, post year-end, in Munich. These partnerships allow us to enter major markets, retain operational influence, and preserve balance sheet flexibility. Importantly, these structures are a template for additional future growth in any of our existing markets.

Looking now, next slide, at the pipeline, which totals 1.1 million sq ft and which will increase MLA by a further 12%, albeit this growth in openings is at a more moderate rate than in the past three years. For FY26 completion, land is fully secured and planning risk removed. We are building high-quality capacity in supply-constrained markets. Around 60% of the pipeline sits in London and Paris. On a new project, we very rarely take planning risk, and capital is deployed only when construction is imminent, ensuring quicker payback time. In addition, the average store size of around 50,000 to 50,000 sq ft is deliberately optimized to maximize return, delivering higher achievable rates than significantly oversized formats, which can dilute yield and slow lease-up.

Since FY2023 and on completion of the current pipeline, we will have invested GBP 441 million to deliver 50 stores and 2.5 million sq ft at competitive unit cost. This is a total of 32% growth in our square footage at an average cost of GBP 9 million per store and GBP 180 per sq ft of MLA, a level that, when benchmarked, highlights the quality and the rigor of our construction delivery. And this is the key point. When you combine high RevPAF, high margins, and very efficient store investment cost, this is how we deliver industry-beating yields on cost. Our ambition is not to be the fastest grower, but the most reliable compounder of earnings and cash flow. This slide then brings the whole story together. All the building blocks we’ve discussed translate into a clear earnings opportunity.

EBITDA growth from there is driven by four compounding layers, as you can see in the chart on the right. First, looking at the chart from left to right, our stabilizing like-for-like stores, which are 10% of MLA. Growth here is driven by rising occupancy and RevPAF and high operational leverage to drive earnings. Our utilization improves. Second, our non-like-for-like stores and the pipeline. When these stores reach stabilization, usually around year five, they are expected to contribute 35-40 million of incremental EBITDA, with strong margin flow-through. Third, JVs, and especially the JV in Italy, which will deliver growth as a store portfolio matures. Fourth, mature store optimization. This is our cash engine. Through pricing, unit reconfiguration, and data-led yield management, we continue to extract value from the existing estate without adding risk. The key message is simple. The heavy investment phase is complete.

The platform is largely built. With the assets being in place, what follows is earnings delivery. For the past three years, we have absorbed the cost of growth, opening stores, and carrying development dilution. We have now passed that peak. As this bridge chart shows, growth from here is layered, visible, and mechanical. It is worth reminding you of the powerful compounding mechanics of our business model that I covered in our half-year results presentation. We have a relatively fixed cost base, which means incremental revenue flow-through to EBITDA at a higher rate with higher like-for-like growth. In the chart, in the last two bars on the right-hand side, you can see the variation of EBITDA growth for mature like-for-like stores and the resulting group growth, all depending on the level of like-for-like growth generated by our mature stores.

Assuming group store operating cost growth of 3.3% per year, which is in line with our historical average rates of cost growth, if we see a 2% annual growth in mature life-for-life revenue, we would mechanically experience around 7% EBITDA growth. At 6% mature life-for-life revenue growth, EBITDA CAGR would be around 12.4%. And at 4% mature life-for-life revenue growth, it would be around 10%. The graph shows the impact of that delivery over five years. These are not targets and not forecasts. This is an illustrative sensitivity to simply demonstrate how the model converts revenue into earnings through operating leverage as utilization improves. This is the mechanics of the model, not management ambition.

This dynamic underpins one of the most attractive features of our model: the ability to convert revenue into earnings through operating leverage as utilization improves and generates significant EBITDA growth, and importantly, without relying on external acquisitions or development. Looking to FY26, early trading is solid, with like-for-like revenue for November-December continuing the same trend. We will see continued benefit from our store partitioning program. Cost headwinds are easing. New store dilution is fading, but we still also have a steady, albeit lower, number of new stores coming online. All these factors mean we are now at an inflection point, and we expect a return to earning growth this year. And finally, as a reminder, Safestore operates in a structurally growing sector with a dense urban portfolio that is hard to replicate.

The assets are built, the strategy is proven, and we are now in the phase of reaping the benefits, with earnings and dividends increasingly driven by a maturing estate. I’m personally confident that Safestore will continue to progress as an EPS growth stock with yield. So this concludes the first part of our presentation, and I’ll be very happy to take questions. Hi, good morning. Aaron Guy from Citi. Thanks for the extra color on slide 25. Can you just talk a little bit about how you get to the composition of the future sort of EPS or earnings EBITDA growth in terms of how we should think about that in occupancy and rate terms? You’re starting this potential upcycle with 80% occupancy, whereas previous upcycles you’ve started with much lower. Should we think about more rate growth coming through sort of going forward? Hi, Aaron. Interesting question.

I guess when we’re thinking about where like-for-like could go, we think about it in terms of both occupancy and in terms of rate. I think that we have been clear that our operating model looks at how do we optimize RevPAF over time rather than necessarily optimizing either occupancy or rate, because we think that if we optimize RevPAF, that gives us the best returns to the group as a whole. So as we’re looking at the mature like-for-like as it expands through, I think we’ve got opportunities in both occupancy and in rate, and we’d expect to pursue both of those over time. Understood. And just secondly, can you just talk about what you’re seeing in investment markets transactions relative to your portfolio valuation? I can take that again.

So I think last year we described the market as being a positive one, but one where there were a number of relatively smaller transactions, but no sort of mega transactions. I think that the valuation that we’ve published today is in line with the market as it’s been happening. So it’s been a positive underlying market with our like-for-like portfolio being stable year on year. But we continue to add value to the portfolio overall through the development opportunities that we have and the delivery of new stores. Thanks. Jonny Coubrough from Deutsche Numis. Could I ask firstly, on trading within London, did you see any impact from a competitive point of view from assets being up for sale in the market, and did that drive any tougher competition? Secondly, in terms of the cost guidance, could I just ask on underlying admin costs?

Appreciate you beat on cost of sales, but what do you expect for admin costs in the year ahead? And then thirdly, I suppose a follow-up to the last question is that in the guidance you’ve given for 35-40 million incremental EBITDA from non-like-for-like, what are you assuming on the stabilisation there across RevPAF? Is that for it to get in line with current mature stores? Thanks very much. I’ll take the first question. So in terms of trading of London versus the regions, what we observe is that the split of inquiries and new lettings that we have between London, Southeast, and the rest of the region is absolutely stable, and it has been remarkably stable over the last 10 years. So there is nothing particular going with trading in London compared to the rest of the country. Hi, Jonny.

In terms of the underlying administrative costs, I guess the key thing to think about is the reasons for the movements that we’ve had this year. So this year, we’ve made some investments in AI and technology and our underlying capabilities around those sorts of areas. It’d be modest in terms of investments, but we think that they’ll pay dividends across the group over time. And that’s something we continue to monitor and make sure that we’ve got appropriate levels of capabilities on. The other thing, and this is probably the biggest element of the movement that we had in 2025 versus 2024, is around variable pay. And we philosophically believe that variable pay is an important way to make sure that all of our colleagues across the group are aligned with the results of the business.

As we meet targets or beat targets internally, then that variable pay will go up and down. And that makes it quite difficult for us to forecast in terms of where we are from an admin cost perspective. And so we don’t give strict guidance on that. But I think where we are today is probably a better indication of where we’ve been over the last couple of years. And then in terms of the 35-40, so when we think about that, we’re projecting the relative returns on each of the stores on a store-by-store basis. It’s just based on an underwrite, which we keep updated based on market trading conditions. And one of the things that we have is we have an enormous amount of information on very local-specific levels of pricing and demand and customer demand.

And that enables us to think very carefully about where do we think pricing is going to go and what’s achievable in each location. And that gives us an advantage when we’re thinking about buying new stores, but also when we’re thinking about what’s the impact of those stores going to be over time. And so that’s how it’s modeled, basically, from a returns perspective. Thanks very much. Hi, Ollie Woodall from Cavendish. Thank you for the presentation. Maybe just following on from a previous question on your increased investment into technology and AI, how are you kind of measuring the tangible benefits from that investment and quantifying that? And for example, in terms of margins, do you see that long-term you can push that above 70% or just some color there?

These are early days, so obviously, and it’s always difficult to know how you would have traded if you had not made this investment and all these efforts. What we can observe is that we have been able, despite probably stronger competitive pressure on Google, to maintain our budget on a like-for-like basis, our cost per inquiries, because without following any inflation and despite an increased competitive pressure, we have seen our conversion in stores going up. We have seen also a positive rate management. That comes from lots of initiatives, both in analyzing our database in order to understand better the value of a new letting and how to feed that back through to Google in a very complex set of metrics.

It allows to understand better and predict better your coming churn into your stores that allows you to anticipate, as opposed to being reactive to your store occupancy. You can be much more predictive, which is always much better. And so we may not be able to give a precise figure, but we can measure that we can predict at month’s end what occupancy store by store will be and in a quite an efficient way, which we were not necessarily able to do as well before. So I think that it’s certainly better to create your price list on that basis. We’ve been also for some time making transcripts of all the phone calls that are received or emitted from our stores. So that’s a big mass of text. And using machine learning allows us to correct our sales team to help sales team and drive sales team.

In the end, this also is a contributor to conversion as well as to the sale of ancillary elements. And I could go on. There are a long list of benefits. In the end, ultimately, it will translate into higher earnings because the cost impact is limited. And there is a clear, obvious direct benefit. It also helps in positioning where to open the new stores because we have been able on our models to rerun all our past openings and to see which stores and to score retrospectively these store openings with information that would have been very helpful if we had that at the time. So I think it will also help us going forward where we position stores. So there are lots of different areas. In the end, the final outcome is earnings per share. Absolutely.

But you will never know for sure exactly what you would have done if you had not taken these initiatives. But I think they’re still worthwhile. Yeah, I appreciate that. Okay, thank you. That’s helpful. Just one more, if I may, regarding the expansion markets, which has obviously been performing very strongly recently. I think there was a slight slowdown in Q4. Is that more of what we can expect as occupancies reach the 80% level, or is that just kind of the nature of what was in the like-for-like pool? Just some color there going forwards. Shall I take that? Yeah, sure. Yeah, I’ll take that just because within the Q4 element, so within like-for-like expansion markets, we’ve been recording the revenue that we have from management fees from Germany because we’ve had the German investment for a while. And that’s been relatively stable.

But there are some ups and downs as we have development fee income, basically. And we lapped some development fee income in 2024 and 2025 Q4. And that basically led to a step down. Excluding that, we’d be at teens, basically. So the long-term run rates in expansion markets in Q4. And that’s where we’re trending at the moment. Perfect. Thank you. Hi, good morning. Thank you for the explanation. Joseph from Banco Sabadell. You have explained to us that you are opening 30 stores in the last three years, that you have here a new pipeline of 1.1 million sq ft. So in FY 17, you explained that additional debt to finance that. Could you explain to us what have you in mind or your strategy for this new debt, please? When we’re raising new debt, we’ll tend to look at market conditions at the time.

We have a number of different options, and we’ve proved that we have good availability of debt through the USPP market and through bank market during the course of last year. So those are things we’re looking at, and there are other options as well. We’re getting to a stage where we have enough debt to have a lot of different options in terms of how we think about refinancing that over time. It’ll depend on where we are when we get to it. The predominant use is through our revolver, which gives us flexibility and a relatively low price. We’ll look to put term and fix the costs over time as well. Morning. It’s James Carswell from Peel Hunt. You talked a little bit about the development, the investment. Obviously, we’re past that kind of peak, and therefore the short-term headwind is easing.

You’ve also kind of talked about the longer-term exciting opportunity that pipeline gives you in terms of the growth it gives you in the yield on cost, etc. I’m just thinking about in terms of new opportunities. I mean, has the way you’re thinking about them changed at all? I mean, are you still looking for new opportunities? Are there particular regions that are more interesting than others in terms of the developments? And in terms of yield on cost, is that the same kind of hurdle rate today that it was a couple of years ago? The hurdle rate is absolutely and has been constant over the years. The minimum hurdle rate of 10%, and that has not changed, and that will not change. I mean, maybe it will change if circumstances change in the future.

But at the moment, it is still clearly the same, so that we don’t plan to change that. And clearly, we don’t think that there are going to be less opportunities, particularly across Europe. We’re just seeing that shareholders deserve to get the benefits of the big effort that they’ve been doing over the last few years. And then what the next stage of development in the future will be, I’m sure there will be one. I actually have lots of ideas about that. But I think the key message is at this stage, we’ve done a big balance sheet effort, and we want, I want also, as a shareholder, and I’m sure other shareholders want as well, to get and to see the benefits of that. And I will make sure that this is the case. But that’s not the end of the opportunities on the self-storage market, clearly.

And I think that all markets are attractive. Clearly, if you look at the UK, for instance, which is obviously one of the densest in Europe, I think the positive side of it is it’s also where you get the highest volume of inquiries per store. Despite having there is nowhere where we have as many competitors as in the UK, but there is nowhere that we have as many inquiries per stores as in the UK. Very clear. Thank you. Morning, John Cahill from Stifel. Just wanted to ask you about the share-based payments. Obviously, the reintroduction of variable pay clearly, in principle, a very good thing. And I assume that those payments have been triggered because operationally, you have done very, very well. No doubt about that.

But truly, how aligned are you with shareholders if in a year when earnings is down 5%, and we know why that’s clear, but earnings are down and share-based payments are up quite substantially? What does that mean going forward? Because you will go back to the very strong rates of growth that you’ve generated in the past. Is that number going to start multiplying up quite significantly? Well, I think that first you have to consider that for several years, the number was zero. And then even if we don’t know the final number for this year, it will certainly not be a max out. But it will nonetheless reflect the very hard work that the team has been delivering to deliver the foundation of the next round of growth, of which the shareholder will massively benefit.

And the remuneration policy, which has been approved by 97% of shareholders or something like that, and there is a new one to be approved in next March, is very conventional in its structure. And it is, I believe, massively supported. And therefore, I suppose it just very closely aligns outcomes with shareholders’ expectations. So I’d be surprised if that was a concern. Okay. Thank you. Okay. We’ve got a couple of questions come in on the system for people who have joined us on the call. The first one is from Michael Brown from Lombard Odier. Given the current valuation and the ramping up of new sites, would it be a good capital allocation decision to be buying back your own stock, even if it is just GBP 10-20 million? Which is an interesting question. That’s something we think about from time to time.

There’s lots of things to balance within that in terms of the relative returns on the shares that we would buy versus the other opportunities that we can see from a development perspective. Clearly, when there’s a discount to NAV, this sort of attracts attention a little bit. But we also need to consider leverage and what other returns we could get from other opportunities that we have. So it’s something that we don’t have any plans for at this stage. We’ve not ruled anything in, not ruled anything out. But it’s an interesting idea, which we will consider or keep under consideration. And there’s another question from Andres Toom from Green Street. Could you please provide some anecdotes of lease-up from recent new store openings? How are you seeing competitive pressures in the market? Well, there are as many answers as there are stores.

So I think it would be a very long. It might be a very long answer if I start going through the P&L of each individual stores. I think clearly we see, but a general answer would be that we see that new stores are leasing up very well. And we showed the occupancy percentage of the like-for-like occupancy in the expansion markets, which here are between all in the mid-80s. So I think that shows that the lease-up is pretty strong and new stores are following that trend. Then, as usual, you will have stores which underperform our expectations initially, at least. You never know what it is in the long run. And you will have stores that massively outperform them.

But on average, I think the key message, which is to be on track with our yield on cost target, I think I’m super confident around being able to continue to deliver that. I think we are very conservative how we invest. We are, I think, also very conservative on the amount of GBP per sq ft that we spend when we invest at around GBP 180 per sq ft, which I think compares super favorably compared to lots of openings that we see around. And the lease-up is good. So that just works. Okay. And then there’s one last one from Khaled Mitra from Barclays. The business model for all self-storage players will partly about higher self-storage adoption in Europe. With slowing development, are you reading that largely the higher adoption-related gains are over for the market in general? Well, I mean, that would be a very bold statement.

If I consider Italy, for instance, where the level of supply is 3% of that of the UK, I would assume that there is still some room to go. I still think that there is a significant room for further expansion in the UK as well. So no, the answer is clearly no. But as just coming back to the answer I provided earlier, there are moments in which we expand, and then there are moments in which we have to show the return for that. So we have other ways to consider expansion. And that can also be through joint ventures in order to be able to continue to get additional scale in all markets, additional presence, additional expertise, additional marketing and Google-related presence, which will help our future growth. But the answer to the question is simple. It is no.

I absolutely don’t think that it is the end of the story. I think it is just the start. Okay. Is that it? I think that’s all the questions, yeah. Okay. Well, then thank you very much. That concludes our presentation.