Big Yellow Group PLC (AO) | Hold | FY 25/26: resilient micro, challenging macro

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Big Yellow Group PLC (AO) | Hold | FY 25/26: resilient micro, challenging macro

Big Yellow Group PLC Hold | Target Price: 1045p

Company description Management

Big Yellow is a leading provider of self-storage in the UK with a strong focus on Nick Vetch, Executive Chairman

London and SE England. Within a 109-store portfolio, nearly all of its 75 Big Jim Gibson, Chief Executive Officer

Yellow-branded stores are purpose-built stores in prominent locations. It owns John Trotman, CFO

the freehold for virtually all its stores and maintains low levels of financial Key shareholders

gearing. Big Yellow was IPOed in 2000 with a GBP40m placing and has funded its Free float 93.40%

subsequent growth into an FTSE250 company via a series of equity placings Blackrock 14.84%

spread over many years. Resolution Capital 7.07% T. Rowe Price 5.44%

Investment case Valuation methodology

Big Yellow is characterised by a high-quality portfolio, a strong We base 90% of our TP on a ten-year DCF model. We believe this

operating platform and a limited appetite for debt. UK self- allows us to best capture our views of both the long-term

storage landlords should benefit from a maturing market, but growth and risk profiles of Big Yellow's business. Key in this

not from our preferred structural change tailwinds. respect are: 1) both the operational and financial gearing, 2) the

Depsite various users of self-storage, economic activity is key to operating platform and management's influence, and 3) long-

overall customer demand, in our view. Developments are a key term property sub-sector prospects.

source of growth, but add to an already high level of sensitivity We base 10% of our TP on a multiple of NAV.

to the current weak macro environment. Risks to our rating