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1. Company Snapshot

1.a. Company Description

Big Yellow is the UK's brand leader in self storage.Big Yellow now operates from a platform of 103 stores, including 25 stores branded as Armadillo Self Storage, in which the Group has a 20% interest.We own a further 11 Big Yellow self storage development sites, of which eight have planning consent.


The current maximum lettable area of the existing platform (including Armadillo) is 6.0 million sq ft.When fully built out the portfolio will provide approximately 6.8 million sq ft of flexible storage space.Of the Big Yellow stores and sites, 98% by value are held freehold and long leasehold, with the remaining 2% short leasehold.


The Group has pioneered the development of the latest generation of self storage facilities, which utilise state of the art technology and are in high profile, accessible, main road locations.Our focus on the location and visibility of our Big Yellow stores, coupled with our excellent customer service and our market leading online platform, has created the most recognised brand name in the UK self storage industry.

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1.b. Last Insights on BYG

Big Yellow Group Plc's recent performance has been influenced by speculation of a potential takeover bid from Blackstone, one of the world's largest real estate investors. However, recent reports indicate that Blackstone is cooling on the prospect of a multibillion-pound bid, potentially abandoning its interest in a deal ahead of a December 8 deadline. The company's valuation may be reassessed in light of this development. Additionally, several Form 8.3 filings have been made, indicating changes in major shareholder holdings. There is no recent earnings release to reference.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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Form 8.3

Dec -04

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Big Yellow warns annual business rates bill to jump by £1.8m post Budget

Dec -03

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Blackstone cools on bid for self-storage group Big Yellow

Dec -01

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Form 8.3

Nov -28

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Form 8.3

Nov -27

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Form 8.3

Nov -21

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Form 8.3

Nov -20

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Form 8.3

Nov -19

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.65%)

6. Segments

Self Storage

Expected Growth: 8%

Big Yellow Group Plc's 8% growth in Self Storage is driven by increasing demand for flexible storage solutions, urbanization, and a growing need for decluttering. Additionally, the rise of e-commerce and omnichannel retailing has led to increased demand for storage facilities. Furthermore, the company's strategic expansion into new locations and investment in technology have also contributed to its growth.

Enhance Liability Service

Expected Growth: 6%

Big Yellow Group Plc's 6% growth in Enhance Liability Service is driven by increasing demand for flexible storage solutions, expansion into new locations, and strategic partnerships. Additionally, investments in digital platforms and process efficiencies have improved customer experience, leading to higher retention rates and revenue growth.

Packing Materials

Expected Growth: 5%

Big Yellow Group Plc's Packing Materials segment growth is driven by increasing demand for e-commerce packaging, rising online shopping trends, and growing need for sustainable packaging solutions. Additionally, the company's strategic expansion into new markets, investments in digitalization, and focus on operational efficiency are contributing to the 5% growth rate.

Insurance

Expected Growth: 4%

Big Yellow Group Plc's 4% insurance growth driven by increasing demand for self-storage facilities, rising UK housing market transactions, and growing need for flexible storage solutions among businesses and individuals. Additionally, the company's strategic expansion into new locations and investment in digital platforms have contributed to the growth.

Non-storage

Expected Growth: 3%

Big Yellow Group Plc's Non-Storage segment growth is driven by increasing demand for flexible workspace, rising e-commerce leading to higher demand for urban logistics, and growing need for affordable and convenient storage solutions. Additionally, the company's strategic expansion into new locations, investment in technology, and focus on customer experience are contributing to the segment's growth.

Other Income from Storage Customers

Expected Growth: 5%

Big Yellow Group Plc's 5% growth in Other Income from Storage Customers is driven by increasing demand for flexible storage solutions, rising e-commerce sales, and growing need for inventory management. Additionally, the company's strategic location expansion, improved customer service, and competitive pricing strategy have contributed to the growth.

Ancillary Store Rental

Expected Growth: 7%

Big Yellow Group Plc's 7% growth in Ancillary Store Rental is driven by increasing demand for flexible storage solutions, rising e-commerce sales, and growing need for urban logistics. Additionally, the company's strategic location of stores near city centers, high-quality facilities, and excellent customer service contribute to its growth.

7. Detailed Products

Self Storage

Big Yellow Group Plc offers self storage facilities for individuals and businesses, providing a secure and flexible storage solution for a variety of needs.

Business Storage

Big Yellow Group Plc provides business storage solutions for companies, offering a range of unit sizes and flexible lease terms.

Student Storage

Big Yellow Group Plc offers specialized storage solutions for students, providing a convenient and secure way to store belongings during summer breaks or semester transitions.

Shredding Services

Big Yellow Group Plc offers secure document shredding services for businesses and individuals, providing a convenient and confidential way to dispose of sensitive documents.

Packaging Supplies

Big Yellow Group Plc offers a range of packaging supplies, including boxes, bubble wrap, and tape, to help customers prepare their items for storage.

8. Big Yellow Group Plc's Porter Forces

Forces Ranking

Threat Of Substitutes

Big Yellow Group Plc operates in the self-storage industry, which has a moderate threat of substitutes. While there are alternative storage options available, such as renting a garage or attic space, they are not always convenient or cost-effective.

Bargaining Power Of Customers

Big Yellow Group Plc has a large customer base, but individual customers do not have significant bargaining power. The company's pricing strategy is competitive, and customers have limited alternatives.

Bargaining Power Of Suppliers

Big Yellow Group Plc has a diversified supplier base, and no single supplier has significant bargaining power. The company's procurement process is competitive, and suppliers are not concentrated.

Threat Of New Entrants

The self-storage industry has moderate barriers to entry, including the need for significant capital investment and regulatory approvals. However, the industry is not highly concentrated, and new entrants can still gain market share.

Intensity Of Rivalry

The self-storage industry is highly competitive, with several established players competing for market share. Big Yellow Group Plc faces intense competition from rivals, including national and regional players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 13.80%
Debt Cost 6.45%
Equity Weight 86.20%
Equity Cost 7.09%
WACC 7.00%
Leverage 16.01%

11. Quality Control: Big Yellow Group Plc passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 4.7/10

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Growth: 3.4

Quality: 6.2

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

10.16$

Current Price

10.16$

Potential

-0.00%

Expected Cash-Flows