Equity prospects

BIG YELLOW GROUP

Theo Wyld, Research Analyst

Price£7.58

52 week high yield£8.93-£6.62

Net yield3.25%

Hist / pros per10.7-22.3

Equity market cap£1,206m

There are more searches on Google for 'big yellow storage', or other permutations, than for 'self-storage', according to the Big Yellow Group. Indeed you may have heard about or seen the brand popping up around the country without knowing much about the overall market itself.

Self-storage is still a relatively new concept for most, with four out of five customers using the service for the first time. Customers range from students taking space over the summer holidays, to small businesses working out of larger units. Key drivers of demand for Big Yellow are life events; such as divorce or death, and turnover in the property market; predominantly those downsizing.

The Group buys land freehold in areas too expensive for smaller regional competitors. They then build their facilities to ever more efficient specifications. Management have been clinical in the way they have extracted both build and operating costs. For instance, the lighting is all LED, the buildings are not heated (simply sealed) and are manned by only three people on average.

Big Yellow Group is a tightly run company with a recognisable brand which puts it in a position to potentially benefit from increased awareness of the self-storage market.

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