At Monday’s market close, the self-storage provider’s shares were changing hands for $2.08 apiece.
Why are National Storage shares halted?
National Storage shares entered a trading halt before market open this morning so the company could launch an accelerated non-renounceable entitlement offer.
This will see 1 share issued for every 6.27 shares owned at a price of $2.00, representing a 3.8% discount on Monday’s closing price. The company is hoping to raise approximately $325 million to repay debt and provide further liquidity on its balance sheet.
The entitlement offer represents 15.9% of total stapled securities currently on issue. Stapled securities means the combined 6.27 shares on offer cannot be bought or sold separately.
National Storage managing director Andrew Catsoulis commented:
This will enable us to further strengthen our balance sheet in order to facilitate ongoing growth of the business from a development, expansion and centre revitalisation basis, as well as enabling us to undertake continued acquisitions on a selected basis.
How has National Storage been performing?
In addition to the capital raise, National Storage provided a glimpse into its operational performance for the second half of FY21.
According to the company’s release, strong market conditions and ongoing portfolio improvements have driven revenue growth. In particular, National Storage achieved a record occupancy of 86.7%, up 9.1% on the prior corresponding period. This is for both Australian and New Zealand portfolios.
In addition, National Storage’s REVPAM (revenue per available square metre) increased to $229 per square metre, up from $188 at the end of FY20.
The rate per square metre also lifted to $261, a 5.2% increase on the $248 per square metre at the end of FY20.
Mr Catsoulis added:
All states and territories in which NSR operates continue to perform strongly and all these areas are now trading at over 80% occupancy, with over 35% of all centres now operating at over 90% occupancy, and approximately 70% operating at over 85%.
We attribute this strong operational result to a positive macroeconomic environment as well as a number of internal operational improvements over the past 12 to 18 months. These enhancements include an updated and fully rebuilt website, the integration of our “contact-free move-in“ process, refinements made to our revenue management system, as well as the internalisation of a number of key functions in the business that were previously outsourced.
Looking ahead, National Storage provided a positive outlook when taking into account the equity raising and robust operating performance.
For FY21, underlying earnings per share (EPS) is expected to slightly increase from 8.5 cents to 8.6 cents per stapled security. Previously the company was forecasting EPS to be in the range of 8.1 cents to 8.5 cents.
Preliminary guidance for FY22 underlying EPS is projected to be no less than an 8% growth on the FY21 result.
National Storage is scheduled to release its full-year results for 2021 on 25 August 2021.
Over the past 12 months, the National Storage share price has gained around 12%, and is up 9% this year.