Abacus Storage King shares bounce on in-line result, outlook
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The news: Abacus Storage King (ASK) shares rose on the ASX after the self-storage company reported full-year results and FY25 guidance in line with analysts' expectations.
The numbers: ASK shares were up 4.6% to $1.25 by 1pm AEST.
Funds from operations (FFO) in FY24 was 6.36 cents per share, ahead of average forecasts of 6.2 cents. ASK's distribution per security of 6 cents was in line with FY24 guidance.
The company guided distribution per unit of 6.1 cents, in line with consensus estimates.
Portfolio occupancies grew in the second half from 90.4% to 91%, as did portfolio revenue per available square metre (RevPAM), which increased from $324 to $327.
The context: ASK noted that self storage operating conditions "remained robust" during the year, despite "ongoing economic uncertainty and consumer sentiment challenges".
Jarden analysts called the result "a strong operational update" and noted that "initial FY25 guidance looks in line with our expectations."
ASK's medium-term FFO growth is constrained by low weighted average cost of debt, they said, though this headwind could end up being "smaller than feared".
What they said: Abacus Group's managing director Steven Sewell said: "The continued growth in RevPAM is a result of our portfolio of right sized, urban locations combined with our sector leading operating platform, Storage King".
"Despite the inflationary headwinds, we expect our portfolio to continue to benefit from a range of tailwinds over the short to medium term, including organic growth as the self storage category continues to mature in Australia and New Zealand, acquisition opportunities in a heavily fragmented sector and the longer term platform initiatives to drive growth in brand, customer and revenue management," he said.
The sources: ASX announcement, Jarden research
