In the 2018 Annual General Meeting, Chairman Laurence Brindle addressed the long-term performance growth of National Storage REIT (ASX: NSR) since its listing in December 2013.
Earnings per share of the company has increased from 7.5 cps in year one to 9.6 cents per share at the end of FY18, recording a growth of 28% over the period. Whereas, the total distribution paid to securityholders over the period from IPO to date has been 39.5 cents per share.
In addition to raising approximately $59 million in FY18, the company has raised $175 million by way of Placement and a non-renounceable accelerated rights issue in August 2018. The company intends to utilize the proceeds in reducing gearing levels and support further growth initiatives through flexibility of funds.
Currently, National Storage holds the portfolio of over 120 owned storage properties and 140 operating business, growing from an initial 28 owned properties and 62 operating businesses.
In Fiscal 2018 the company achieved the underlying earnings of $51.4 million, up 12.5% on previous corresponding period. This reflects a strong growth of 4% in the same centre REVPAM and 3% rise in Australian portfolio occupancy of 80.4%. Further, the company’s IFRS profit increased by 41% to $145.8 million in FY18. Asset under management grew by 23% in FY18 to stand at $1.43 billion.
On portfolio development front, NSR’s Auckland portfolio currently enjoys occupancy of greater than 90% with three new development sites under negotiation. NSR NZ portfolio ongoing cash-flows support the development of multiple new greenfield and brownfield self-storage assets in the Auckland and greater New Zealand market. Further, the company continues to investigate the opportunity to take its New Zealand’s portfolio off balance sheet by way of a capital partnership.
NSR’s solar PV program has resulted in over 1.3MW of installed solar panels by the end of Fiscal 2018 which are expected to reduce the electricity usage of around 2GWH per year, or approximately $400,000 in expected cost saving for FY19. Further the company confirmed that Phase 2 of the solar project rollout is close to activation with 40 more sites to be completed in FY19.
In FY19 outlook, National Storage expects underlying earnings to range between $62.5 and $64.5 million, while underlying EPS is anticipated to lie within 9.6 and 9.9 cents per stapled security.
In the early trade today, the stock of National Storage REIT fell 1.146 to stand at $1.725 on 15 November 2018 (12:07 PM AEST). Looking at the past performance of NSR, we can see the stock has moved up by 15.31% over the past one year. Moreover, the stock is currently trading at a PE of 528.790 x with market capitalization of $1.17 billion.
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