24Storage
24Storage - Solid expansion and LFL growth in 2020 (ABG Sundal Collier)
2021-03-01 07:09
Revenue growth of 21% to SEK 78m in 2020
Value gains of 4.3% vs. ABGSCe of 3.0%
Fair value range of SEK 33-58
Maturing operations behind lower discounts in ‘20Q4 revenue was SEK 22.8m (17.5m) just below ABGSCe at SEK 23.1m, bringing NOI to 24.3% (21.5%). Higher prices and lower discounts for customers were a result of more mature facilities. 24Storage added 7,645sqm in 2020 vs. its goal of 10,000sqm p.a. The majority was added in Q4 (5,205sqm) driven by a new facility in Uppsala (4,771sqm). Large volumes of initially empty units reduced the occupancy rate, which fell to 68.4% (71.9% in Q3), but up y-o-y (67.4%) due to like-for-like growth. This combined with revenue per sqm of SEK 2,028, +6.2% in ’20, took revenue per available sqm (RevPAM) to SEK 1,421 (+8% in ‘20) in line with ABGSCe. We target 24Storage to reach RevPAM of SEK 1,700 by the end of ‘22.
Leveraged balance sheet is positive for expansion
24Storage reported EPRA NAVPS of SEK 40.8 (39.3) vs. ABGSCe at SEK 37.6. Value revisions corresponded to +4.3%, well above our 3.0% estimate. Increased net operating income and a somewhat lower yield requirement drove the beat. FY’20 landed at +5.7% (3.8%). We estimate annual value growth of 3.5% in ’21-’23. However, we central admin and interest costs combined to exceed NOI, leaving cash earnings negative until Q4’23. A 400m bond was issued in the quarter, which added SEK 107m to IB-liabilities. Net LTV amounted to 57.3% vs. 57.4% in Q3 and 50.7% Q4’19. The higher LTV during 2020 has been welcomed to support the company’s expansion phase.
Area, occupancy rate and price are key drivers
With a change of analyst, we have thoroughly reviewed our estimates. Our implied share price range for 24Storage given its historical min and max P/EPRA NAV multiples is SEK 33-58. In our opinion, the key growth drivers for 24Storage are to expand its lettable area, (in line with targeted 10,000sqm/year) while also increasing the occupancy rate - we estimate 72.4% by Q4’22. The third fa
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