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2024
Annual Report and Accounts
Big Yellow Group PLC
Well Positioned
for Success
Get some space in your life.
™
02 Highlights
04 Building the Pipeline
06 A Unique Development
08 Security Matters
10 From Solar to Net Positive
12 Location
14 Chairman’s Statement
16 Strategic Report
16 Chief Executive’s Statement
20 Our Strategy
22 Our Investment Case
24 Our Key Performance Indicators
26 Operating Review
31 Portfolio Summary
33 Our Stores
38 Financial Review
44 Principal Risks and Uncertainties
55 Section 172 Statement
56 Environmental, Social and Governance Report
73 SGS Assurance Statement on the ESG Report
78 Governance Report
78 Executive Chairman’s Introduction
79 How We Are Structured
80 Directors, Officers and Advisers
83 Corporate Governance Report
90 Nominations Committee Report
94 Sustainability Committee Report
96 Remuneration Committee Report
120 Audit Committee Report
124 Directors’ Report
129 Statement of Directors’ Responsibilities in Respect
ofthe Annual Report and the Financial Statements
130 Financial Statements
130 Independent Auditor’s Report to the
Members ofBigYellow Group PLC
138 Consolidated Statement of Comprehensive Income
139 Consolidated Balance Sheet
140 Consolidated Statement of Changes in Equity
141 Consolidated Cash Flow Statement
142 Notes to the Financial Statements
174 Company Balance Sheet
175 Company Statement of Changes in Equity
176 Notes to the Financial Statements
181 Glossary
183 Ten Year Summary
This report was approved by the Board of Directors on20 May 2024
andsigned onits behalf by:
Jim Gibson
Chief Executive Officer
John Trotman
Chief Financial Officer
Contents
Big Yellow
is the UK’s brand leader
in self storage.
We are committed to innovation in customer
engagement, harnessing technology and investing
in the development of our store teams. This dedication
puts exceptional customer service at the heart of what
we do, whilst ensuring we continue to operate a
sustainable business.
Annual Report and Accounts 2024 Big Yellow Group PLC 1
Financial metrics
Revenue
£199.6m +6%
£188.8m
Store revenue
(1)
£197.1m +6%
£186.7m
Like-for-like store revenue
(1,2)
£193.5m +4%
£185.6m
Store EBITDA
(1)
£143.0m +7%
£134.0m
Adjusted profit before tax
(1)
£107.3m +1%
£106.0m
Adjusted earnings per share
(1)
55.9p (1%)
56.5p
Dividend final
22.6p (1%)
22.9p
Dividend total
45.2p
45.2p
Highlights
Big Yellow has again proved itself
to be resilient with a healthy
revenue increase and EBITDA
growth of 7%.
Highlights
Store EBITDA up 7%,
Adjusted profit before
taxup1%
Annual Report and Accounts 2024 Big Yellow Group PLC2
Highlights
– Revenue growth of 6%, with like-for-like store revenue up by 4%,
driven by increases in average achieved rents
– Big Yellow store like-for-like occupancy decrease of 2.3 ppts to 80.9%
(March 2023:83.2%). Closing occupancy, reflecting the additional
capacity from recently opened stores, is down 2.6 ppts
– Average achieved net rent per sq ft increased by 7.5% year on year,
closing net rent up 5.1% from March 2023
– Overall store EBITDA margin increased to 72.5% (2023:71.8%)
– Cash flow from operating activities (after net finance costs and
pre-working capital movements) increased by 1% to £110.1million
– Adjusted profit before tax up 1% to £107.3million, adjusted earnings
per share down 1% to 55.9p
– 45.2 pence per share full year dividend, in line with prior year
– Statutory profit before tax of £241.0million, up from £75.3million
in the prior year, due to a revaluation gain of £131.2million in the
current year
– £300million sustainability-linked revolving credit facility put in place
during the year
– £6million invested in the year on solar retrofit, 68 stores now have
solar with a 47% increase in capacity in the year to 6.6 Megawatts
Store maximum lettable area (“MLA”)
(1)
6,419,000 +2%
6,292,000
Closing occupancy (sq ft)
(1)
5,029,000 (1%)
5,088,000
Closing occupancy
(1)
78.3% (2.6 ppts)
80.9%
Closing occupancy – Big Yellow
like-for-like stores (%)
(1,4)
80.9% (2.3 ppts)
83.2%
Average net rent per sq ft
£33.64 +8%
£31.28
Closing net rent per sq ft
(1)
£34.14 +5%
£32.48
Investment in new capacity
– £107million (net of expenses) raised by way of a placing of 6.3%
of the Company’s issued share capital to fund the build out of the
development pipeline
– Kings Cross opening and one extension added 127,000 sq ft of space; we
have committed to build a further seven stores (MLA of 448,000 sq ft)
with all due to open by summer 2026
– Acquisition of freehold properties in Leicester and Leamington Spa
(the latter post year-end), taking the pipeline to 12 development
sitesand two replacement stores of approximately 1.0million sqft
(15%of current MLA), of which 11 are in London or within close
proximity. 1.4million sq ft of fully built vacant space is currently
available for future growth
– Planning consent granted for new stores in Wapping (London)
and Epsom (London); we now have eight of our 14 pipeline stores
with planning
(1)
See note 33 for glossary of terms.
(2)
Excluding Aberdeen (acquired June 2022), Harrow and
Kingston North (both opened September 2022) and
KingsCross (opened June 2023).
(3)
See reconciliation in Financial Review on page 41.
(4)
As per (2), additionally excluding the Armadillo stores.
Profit before tax
£241.0m (+220%)
£75.3m
Cash flow from operating
activities(after net finance costs and
pre-working capital movements)
(3)
£110.1m +1%
£109.2m
Basic earnings per share
127.1p (+217%)
40.1p
Highlights
2024 2023
Statutory metrics
Store metrics
Annual Report and Accounts 2024 Big Yellow Group PLC 3
An important aspect of our future growth is the development of new
stores, particularly in London, where there are very few existing assets
suitable to be acquired. Over the last year, we added 127,000 sq ft of
capacity through opening a new store in Kings Cross (London) and
extending our Armadillo store in Stockton South.
Building the Pipeline
Development pipeline with planning
Site
Location Status
Anticipated
capacity
Slough
Farnham Road
Prominent location on
Farnham Road
Store opening in July 2024.
Replacement for existing
leasehold store of a
similar size
Staines,
London
Prominent location on
TheCauseway
Construction to commence in June 2024
with a view to opening in summer 2025.
Wealso have consent on the site to develop
nine industrial units totalling 99,000 sq ft.
65,000 sq ft
Queensbury,
London
Prominent location off
Honeypot Lane
Construction to commence in July 2024
with a view to opening in autumn 2025.
70,000 sq ft
Wembley,
London
Prominent location on
Towers Business Park
Construction to commence in late 2024
with a view to opening in late 2025.
70,000 sq ft
Slough
Bath Road
Prominent location
onBath Road
Construction to commence in autumn
2024 with a view to opening in early 2026.
90,000 sq ft
Epsom,
London
Prominent location
onEast Street
Construction to commence in late 2024
with a view to opening in spring 2026.
58,000 sq ft
Wapping,
London
Prominent location on
TheHighway, adjacent
toexisting Big Yellow
Demolition of existing building in progress,
construction expected to commence in
autumn 2024 with a view to opening in
summer 2026.
Additional 95,000 sq ft
Newcastle
Prominent location on
Scotswood Road
Planning consent granted, vacant
possession awaited.
60,000 sq ft
Annual Report and Accounts 2024 Big Yellow Group PLC4
Development pipeline without planning
Site Location Status Anticipated capacity
Kentish Town, London
Prominent location on
RegisRoad
Site acquired in April 2021. Planning appeal submitted and due to
be heard in May 2024. 68,000 sq ft
West Kensington, London
Prominent location on
Hammersmith Road
Site acquired in June 2021. Planning appeal submitted and due
to be heard in July 2024. 175,000 sq ft
Old Kent Road, London
Prominent location on
OldKentRoad
Site acquired in June 2022. Planning application submitted in
October 2023. 75,000 sq ft
Staples Corner, London
Prominent location on
NorthCircular Road
Site acquired in December 2022. Planning application submitted
in December 2023.
Replacement for
existing leasehold store,
additional 18,000 sq ft
Leicester
Prominent location on Belgrave
Gate, central Leicester
Site acquired in June 2023. Planning discussions underway with
Leicester City Council. 58,000 sq ft
Leamington Spa
Prominent location
onQueensway
Site acquired in May 2024.
55,000 sq ft
Total – all sites 957,000 sq ft
Opportunity
We now have an opportunity to generate in excess of £50 million of net operating income from a combination of delivering the
income from our pipeline stores and leasing up the existing fully built 1.4 million sq ft of vacant space to previously achieved levels
ofoccupancy, the majority of which would flow through to earnings.
Big Yellow Slough Farnham Road under construction – opening July 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 5
Kings Cross: A decade
oftransformation
Over the past 15 years, Kings Cross has undergone a remarkable
transformation, unparalleled in Central London. The area has
seen the rise of 8 million square feet of mixed-use development,
including 3.4 million square feet of office space and approximately
1,900 new homes and apartments. 20 new streets and public
spaces have further invigorated the area.
The new face of Kings Cross
The area now boasts prestigious institutions and companies,
including the University of the Arts London, Google, and Louis Vuitton.
The Coal Drops Yard, a retail space by Thomas Heatherwick, has
become a bustling hub for shopping and dining.
In June 2023 we opened our 109th store, located in the
vibrant heart of Kings Cross, London.
This new 103,000 sq ft store complements the area's industrial
heritage and showcases a milestone in our evolution, reflecting
a bold stride in innovation. The store has achieved 40,000 sq ft
of occupancy growth up to 31 March 2024 and reached break
even at the EBITDA level after four months.
A Unique Development
Big Yellow’s Kings Cross store
Big Yellow’s £50 million investment in Kings Cross posed
significant logistical challenges, from constructing temporary
structures to creating a double basement with seven-story
brick-clad elevations. The inclusion of sprinkler systems, smoke
ventilation, stormwater tanks and public realm enhancements
added layers of complexity. After four years of planning and
over two years of construction, the store opened in June 2023.
The store has achieved 40,000 sq ft of occupancy growth up
to 31 March 2024 and reached break even at the EBITDA level
after four months.
Sustainability and design
The store reflects the area’s industrial heritage with its
Victorian-inspired design, featuring artisan brickwork and
Crittal windows. It’s equipped with eco-friendly features,
such as a 50 kWp solar PV system, air source heat pumps and
water-saving devices. A green roof, bird and bat boxes enhance
biodiversity and invite local wildlife. 16 bicycle bays and two
EV charging bays are also available.
Annual Report and Accounts 2024 Big Yellow Group PLC6
Flexi offices o Climate-controlled wine cellars o Air source heat pumps o Business hub o 50 kWp solar PV system
Innovative storage and art
This flagship store offers diverse facilities, including
1,600 storage units, climate-controlled wine cellars,
13 flexi offices and a communal business hub, all
equipped with state-of-the-art security. It also
showcases what is possibly the UK’s largest floor art
installation by London artist Danny Rolph.
Climate-controlled wine cellars
Annual Report and Accounts 2024 Big Yellow Group PLC 7
When it comes to self storage, we take security
extremely seriously.
Our store teams, who are on site seven days a week alongside our
state-of-the-art security systems are crucial in protecting our stores 24/7.
Security Matters
Balancing automation,
customer service and security
As the market-leading self storage operator in the UK, we take
thesecurity of our customers and their possessions seriously.
This requires an investment in technology and automation,
physical security, and in our view most crucially, having team
members present in the store during normal retail hours.
Security that sets us apart
We will continue to invest in the security of our stores through
providing individually alarmed rooms with unique PIN access,
and digital CCTV monitored 24/7. We also restrict which of our
customers have access to our stores when there are no team
members present.
Extra security checks
We carry out identity checks on every customer. Our onboarding
process is online and customers can upload ID prior to arriving
at our stores. Our store teams provide an extra layer of security
through double checking every customer ID at the point of
move in.
Our store teams are able to identify and refuse custom to
any suspicious enquiries. They also provide a valuable service
to business customers such as online traders, who require
deliveries to be taken. Clearly this cannot bedone without
team members present.
Vigilant staff on site o Customer ID checks o Perimeter fencing o Electronic coded gates o Individually alarmed rooms o PIN access o 24 hour CCTV o Smoke and fire detectors
Annual Report and Accounts 2024 Big Yellow Group PLC8
Highly appreciated the efforts
of the staff and management
to keep the things I stored in a
safe and secure manner.
Customer at Big Yellow Kingston North
So easy to move in and
access a storage room.
Excellent security.
Customer at Big Yellow Chelmsford
Vigilant staff on site o Customer ID checks o Perimeter fencing o Electronic coded gates o Individually alarmed rooms o PIN access o 24 hour CCTV o Smoke and fire detectors
Annual Report and Accounts 2024 Big Yellow Group PLC 9
We installed our first solar PV on a Big Yellow store in 2008.
We are now committed to a £25 million solar PV retrofit
programme of which £13.6 million has been spent to date. We
now have 68 stores generating their own rooftop solar energy.
From Solar to Net Positive
Progress towards
self-sufficiency in energy
Over the past year, our solar retrofit programme has successfully
upgraded 16 existing stores plus the new Kings Cross store,
boosting our solar capacity to 6.6 Megawatts, an increase of
47%over the year. We will be piloting a new battery system at our
Slough Farnham Road store to optimise on-site electricity use and
minimise how much we sell to the grid. We look forward to rolling
out this technology further to enhance energy efficiency and
reduce costs.
Energy use remains stable
Our energy consumption has maintained a steady level, even
with the expansion of our store network. We use sustainable
building practices and incorporate cutting-edge technology in
our new store development. We also install solar PV systems on
all new stores alongside our retrofit programme. These factors
have contributed to this consistency in energy usage.
Solar capacity on our stores
0
2
4
6
8
10
12
14
16
18
20
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20242023
No of stores with solar
No of installations per year
Total installed capacity
Financial Year End
Total kWp installed
Annual Report and Accounts 2024 Big Yellow Group PLC10
Installation of solar PV systems.
Investing in the generation of off-site
renewable energy and energy reduction.
Pathway to 100% renewable energy and zero carbon emissions
Using Big Yellow generated electricity
from renewable sources.
Replacing gas with electric alternatives.
Improve the embodied carbon of our
new stores.
Invest in EV charging pods.
Store solar electricity generation (2008 to 2024)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20242023
41
94
113
134
209
286
314
358
343
329
450
578
665
865
3,396
1,688
Solar Generation (MWh)
Our portfolio of stores with roof-mounted solar PV installations generate zero carbon electricity, some of which we use in store with the
restexported. We receive financial payments from the energy companies we export to. We now have 68 stores that generate renewable
solar electricity.
Net Renewable Energy
Positive by
2030
Net Zero Scope 1 & 2
Emissions by
2030
Net Zero Scope 3
Emissions by
2032
Annual Report and Accounts 2024 Big Yellow Group PLC 11
Our customers benefit from a choice of 109 modern and
purpose-built stores, located in safe and easily accessible
locations across the UK.
Location
Expanding our reach
A pivotal element of our expansion strategy is building newstores, with
a focus on London. In the past year, we’ve broadened our operational
footprint by 127,000 square feet. This was achieved by opening our 109th
store in Kings Cross and expanding our Armadillo storein Stockton South.
Our strategically situated stores with high visibility, help position us
as the UK's market-leading self storage brand.
Looking ahead, we have 14 new store locations, with eight already
securing planning approval.
Total stores
109 stores
London stores
48 stores
Stores in the pipeline
14 stores
Armadillo stores
24 stores
% of revenue generated
from London stores
60%
New flagship store opened
Putting Big Yellow on the map
Kings Cross
June 2023
Poole
Oxford X2
Swindon
Guildford Slyfield
Guildford Central
Camberley
Reading
Slough
High Wycombe
Bracknell
Nottingham
Colchester
Norwich
Peterborough
Derby
Cambridge
Brighton
Tunbridge Wells
Cheltenham
Southend
Chelmsford
Luton
Milton Keynes
Birmingham
Stoke-on-Trent
Chester
Macclesfield
Sheffield Parkway
Sheffield Westbar
Sheffield Hillsborough
Hull
Grimsby
Stockport
Manchester
Leeds
Liverpool South
Liverpool
Liverpool Aintree
Liverpool North
Morecambe
Edinburgh
Dundee
Newcastle
Canterbury
Cardiff
Gloucester
Bristol
Central
Bristol
Ashton Gate
Portsmouth
Exeter
Torquay
Hove
Stockton Central
Stockton South
Newcastle
London
Aberdeen
Plymouth
Daventry
Sheffield Bramall Lane
Gateshead
Warrington
Leicester
Leamington Spa
Annual Report and Accounts 2024 Big Yellow Group PLC12
KEY
85 Big Yellow stores (47 in London)
14 Big Yellow stores under
development (9 in London)
24 Armadillo stores (1 in London)
London
Poole
Oxford X2
Swindon
Guildford Slyfield
Guildford Central
Camberley
Reading
Slough
High Wycombe
Bracknell
Nottingham
Colchester
Norwich
Peterborough
Derby
Cambridge
Brighton
Tunbridge Wells
Cheltenham
Southend
Chelmsford
Luton
Milton Keynes
Birmingham
Stoke-on-Trent
Chester
Macclesfield
Sheffield Parkway
Sheffield Westbar
Sheffield Hillsborough
Hull
Grimsby
Stockport
Manchester
Leeds
Liverpool South
Liverpool
Liverpool Aintree
Liverpool North
Morecambe
Edinburgh
Dundee
Newcastle
Canterbury
Cardiff
Gloucester
Bristol
Central
Bristol
Ashton Gate
Portsmouth
Exeter
Torquay
Hove
Stockton Central
Stockton South
Newcastle
London
Aberdeen
Plymouth
Daventry
Sheffield Bramall Lane
Gateshead
Warrington
Leicester
Leamington Spa
Romford
Ilford
Dagenham
Barking
West Norwood
Balham
New Cross
Byfleet
Croydon
Orpington
Beckenham
Bromley
Sutton
Kingston
New Malden
Battersea
Kingston North
Kennington
Sheen
Fulham
Richmond
Twickenham x2
Hounslow
Chiswick
East Finchley
Bow
Edmonton
Enfield
Hanger Lane
Ealing
Gypsy Corner
West Molesey
Nine Elms
Camberwell
Kings Cross
Wembley
Harrow
Staines
West Kensington
Uxbridge
Hayes
Epsom
Kentish Town
Eltham
Wapping
Old Kent Road
North Finchley
Queensbury
Wandsworth
Tolworth
Watford
North Kensington
Staples Corner
Merton
LONDON
Annual Report and Accounts 2024 Big Yellow Group PLC 13
The transition to higher interest rates has had the impact intended by
policymakers of subduing activity and Big Yellow has not been immune,
although it has again proved itself to be resilient with a healthy revenue
increase and EBITDA growth of 7%. The driver of this performance has
been an increase in net rents, partially offset by a decline in occupancy.
As usual we caution that we have limited visibility beyond a few weeks,
but the period since the year end has seen an encouraging pick-up
in occupancy growth, closing the gap with the prior year like-for-like
occupancy to 0.7 ppts, and we expect occupancy to continue to grow
intoour seasonally stronger summer trading period.
The increase in revenue and EBITDA did not translate into a commensurate
growth in earnings as we absorbed a significant increase in interest
expense, but we believe that this impact is now behind us and indeed
maywell turn from a head to a tailwind.
When we first conceived this business, now over 25 years ago, we were
clear that we would piece together a store portfolio of unparalleled
quality, largely focused on London and the South East. The performance
of our recently opened Kings Cross store, which has achieved 40,000
sq ft of occupancy growth and was cashflow positive after four months,
exemplifies the benefit of this strategy.
Financial results
Revenue for the year was £199.6million (2023:£188.8million), an
increase of 6%. Like-for-like store revenue growth (see note 33) was 4%
driven by improvements in average net rent. Like-for-like store revenue
excludes new store openings and acquired stores. Store EBITDA was
£143.0million, an increase of 7% from the prior year (2023:£134.0million).
Store revenue for the fourth quarter was £48.9million, an increase of
5.4% from £46.4million for the same quarter last year, with one additional
day’s trading.
The Group’s cash flow from operating activities (after net finance costs
and pre-working capital movements) increased by £0.9million (1%) to
£110.1million for the year (2023:£109.2million). The adjusted profit
before tax in the year was £107.3million up 1% from £106.0million in 2023.
Adjusted earnings per share decreased by 1% to 55.9p (2023:56.5p).
The Group’s statutory profit before tax was £241.0million, an increase
from £75.3million in the prior year. There was a revaluation surplus for the
current year of £131.2million, compared to a deficit of £29.9million in the
prior year. The surplus in the current year arises from an improvement in
cap rates, reflecting recent transactions in the sector, and operating cash
flow growth. The prior year deficit was due to a £57.5million reduction in
the value of our industrial property and land without self storage planning
in the development pipeline, reflective of changed financing conditions
and the wider market environment for land.
Development pipeline
The pursuit of building first rate stores in first rate locations, particularly
in London, is a long and complex process. It has required a good deal of
persistence and patience and of course has created a significant drag
on earnings as we have held land for redevelopment sometimes for
many years. We now have planning consents for eight stores and have
started the construction process on seven of those. We have four large
London sites in the later stages of planning (including two at appeal) and
although the vagaries of the planning system mean we cannot be certain
of positive outcomes, we expect clarity by the autumn.
In May 2022, we suspended construction on all projects that were
not already on site because conditions in the construction market
were unfavourable. Those conditions have improved considerably
with steelwork and cladding prices falling, and other material prices
stabilising. In addition, we are seeing on recent tenders that main
contractors and specialist sub-contractors are pricing new projects
morecompetitively.
This is the most significant expansion of the Company’s footprint for
many years, which is largely tangible and deliverable, with the new
pipeline stores, even by the high standards of our portfolio, improving
theoverall quality.
Although we are not out of risk both in terms of planning and construction
on the existing pipeline, we will increasingly turn our attention to
acquiring new sites and to that end have purchased in May 2024 for
£3million a first-class property in Leamington Spa, that will also serve
theuniversity town of Warwick.
In June, the Group acquired a 0.8 acre property for development on
Belgrave Gate, central Leicester for £1.85million. We will be seeking
planning permission for a 58,000 sq ft self storage centre on the site.
Big Yellow Group PLC (“Big Yellow”, “the Group” or “the Company”),
theUK’s brand leader in self storage, is pleased to announce its results
forthe year ended 31March 2024.
Chairman’s Statement
This is the most significant
expansion of the Company’s
footprint for many years,
which is largely tangible
and deliverable, with the
new pipeline stores, even
bythe high standards of
ourportfolio, improving
theoverall quality.
Annual Report and Accounts 2024 Big Yellow Group PLC14
Capital structure
It is our view that elevated levels of debt over cycles destroys value
andso it remains our long-term strategy to keep debt at modest levels.
We believe it is therefore optimal that future capital expenditure on new
sites and the £224million of construction spend should be funded from
cash flow, surplus property sales and equity.
In October 2023 we raised £107million (net of expenses) by way of a
placing of 6.3% of the Company’s share capital. The net proceeds will be
used to expand capacity in London, our strongest market, and monetise
land that we already own. The placing has been marginally accretive to
earnings in the short term, and we expect it to be significantly so over the
medium to long term.
Net debt was £385.4million at 31March 2024 (2023:£486.6million), and
the Group has undrawn committed facilities of £181million. Approximately
50% of our debt is fixed, with the balance floating, in line with our hedging
policy, and our current average cost of drawn debt is 5.4%.
The Group’s interest cover for the year (expressed as the ratio of cash
generated from operations pre-working capital movements against
interest paid) was 5.6 times (2023:7.7 times). This is currently
approximately 6 times, and the Group’s net debt to EBITDA ratio is
currently 3 times.
The Group owns its assets largely freehold, representing some 99% by
value of our portfolio which has shielded us from the significant rise in
industrial and warehouse rents that has occurred over the last decade
or more. We view rent liabilities as quasi-debt. Following the relocation
of Farnham Road, Slough this summer and Staples Corner in due course
(subject to planning) to new freehold stores we expect our total rent
liability to fall to approximately £1million per annum.
Dividends
The Group’s dividend policy is to distribute a minimum of 80% of full year
adjusted earnings per share. The final distribution of PID declared is
22.6pence per share. This brings the total distribution declared for the
year to 45.2 pence per share in line with the prior year.
Our people
Adrian Lee, who joined the business soon after its founding in early 1999,
retired from Big Yellow at the end of March. We had limited knowledge of
operational businesses at that time, and Adrian was key in establishing
what over the years has become a market-leading self storage platform in
the UK. After 25 years, any statement is insufficient, but we are grateful
for all his efforts and successes over the last quarter of a century, and we
have no doubt he will remain in the Big Yellow orbit in the years to come.
We commenced a search to replace Adrian last year, and I am delighted to
announce that John Hunter has recently joined the business as our new
Chief Operating Officer. John started out in finance, and then moved into
more commercial roles, most recently as COO at Homeserve plc. Prior to
that he spent several years in operational roles at Dixons Carphone plc.
We all look forward to working with John and feel sure that he will make a
positive contribution to the continued success of Big Yellow.
Any successful business requires a fully engaged workforce, and our
recent engagement survey, with an average score of 88% across the
business was very pleasing, although improvement is a perpetual quest.
I would like to thank all of our people for their dedication and support in
what for many has been a personally difficult year with the impact of rises
in the cost of living and higher interest rates.
Outlook
The successful placing last October has given us the balance sheet
strength to commit to building out our pipeline. We now have an
opportunity to additionally generate in excess of £50million of net
operating income from a combination of delivering the income from our
pipeline stores and leasing up the existing fully built 1.4million sq ft of
vacant space to previously achieved levels of occupancy, the majority
ofwhich would flow through to earnings.
We are entirely cognisant that delivering this growth will take time and
is to some degree subject to external forces, but we believe that it is
achievable and will be our predominant focus over the next few years.
Nicholas Vetch CBE
Executive Chairman
20 May 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 15
Trading
Although activity levels were subdued in the first three quarters of the
year, we have seen a recovery in the fourth quarter, which has continued
into the current year.
Given this weaker demand environment, we continued to use rental
growth, both to new and existing customers, to drive revenue, and over
the year our average rate growth was 7.5% down from 9.8% in 2023.
Inaddition, we have also reduced our increases to existing customers in
the fourth quarter, reflective of a moderating inflationary environment.
Our principal objective in the current year, in an improving demand
environment, is to drive occupancy and have it make a meaningful
contribution to revenue growth which has not been the case over the
last two years. Since the year end, we have seen continued growth in
occupancy, and our total occupied space today is now broadly in line
with last year, with current like-for-like occupancy now down 0.7 ppts
compared to the same period last year.
The main driver in this current improvement in demand is from domestic
customers, who currently represent 68% of revenue and 63% of occupied
space. We believe this to be from a combination of improving consumer
confidence in a lower inflationary environment with real wage growth
and improving activity levels in the housing market since the new
year; one barometer being mortgage approvals to the owner-occupied
market, which have recovered; in essence more decisions are being
made. Ourbusiness occupancy is largely flat since the half year, but
again weare beginning to see more demand, with prospects largely flat,
but move-ins up 2% since the start of January. Demand from national
customers (4% of our total revenue) continues to be robust, with revenue
growth year-on-year of 13%. Businesses currently occupy 37% of space,
unchanged from last year.
Over the year, revenue growth from our London and South East stores
(75% of our business) has outperformed the regions, however we saw
an improved performance in the regions in the fourth quarter which has
continued into the current year.
Investment in our operating
platform and systems
Self storage operators are providers of secure storage, and in adopting
automation it is important not to lose sight of keeping our customers
and their possessions safe and secure. This requires an investment in
technology and automation, physical security, and in our view most
importantly having team members present in the centre during normal
retail hours.
We will continue to invest in the security of our stores through providing
individually alarmed rooms/24 hours CCTV, monitoring of our stores
overnight and most importantly restricting which of our customers
haveaccess to our stores when there are no team members present.
About 15% of our customers – typically businesses providing services
and online traders – use and pay for out of hours access, the balance of
our customers are happy to use the centres during normal trading hours,
and all our feedback indicates that they appreciate having team members
present at the store.
Our store operating model is analogous to the car rental market.
Newcustomers can select and reserve rooms and check-in online,
includinguploading ID, all prior to arriving at a store. In essence the
onboarding process is online, however, our team members double check
the customer ID, review insurance, and take payment in store. In addition
to dealing with any issues and providing customer service, store team
members are also required to carry out due diligence tasks, prepare vacated
rooms for new customers, accept deliveries for our business customers,
optimise contents cover and packing material sales, follow up on prospects
and reservations, and importantly to identify and refuse custom to
suspicious prospects.
AI is a technology that enables machines to learn from data and perform
tasks that normally require human intelligence. AI can be classified into
two types: rules-based and machine learning systems. The rules-based
manipulation of data to, for example, manage our dynamic pricing,
issomething that we have done for several years in our business and
will continue to invest in and improve. Other examples would include
the manipulation of data to provide reporting and alerts to speed up
and improve decision making, leading to efficiencies, and we use this
across the business. An example in the stores is the automatic tracking
of competitor pricing using an external data supplier providing alerts
to bothstores and operational management. We are also using the
significant data from customer use of stores to provide alerts to us on
unusual behaviours that require attention to our overnight monitoring
centre and store teams, so improving security.
Generative AI is used throughout the business, particularly in relation
to content and ideas creation, examples being in marketing or the
development of procedures and training modules. What always must be
remembered is that those using these models are still required to be the
editor to achieve optimal results, but of no doubt there is the potential for
significant and continuing efficiency gains. A more detailed summary of
how AI is used within the business is included in the Operating Review.
We are pleased to have delivered another year of revenue and EBITDA
growth against a weaker demand environment, demonstrating the
resilience of our business model.
Chief Executive’s Statement
Annual Report and Accounts 2024 Big Yellow Group PLC16
We continue to invest in improving our web journey, with more automation
of prospect handling through to reservation and check-in, with regular
communication both by email and text. 93% of our prospects come
through our digital channels (we still have customers whose first contact
is at the store or over the phone). 66% of visits are from mobile devices,
and the balance is portable and desktop computers. Interestingly, this
has remained stable in recent years, and we have not seen the continued
drive to smart phones as was expected, which is possibly a reflection of
prospects searching using desktop computers or portables either while
working from home or during the day while at work.
The cyber threat remains, and we continue to invest in our digital security,
and review the effectiveness of all the tools we deploy.
People
Our progress this year once again reflects the steadfast commitment and
hard work of our people.
Since January 2023, the level of staff turnover and vacancies in the
business started to decline, with a reduction in leavers. Our current staff
turnover and level of vacancies continues to be at relatively low levels,
which is encouraging.
We have also carried out a review of our store staffing structure and have
not been replacing certain positions, reducing our average headcount
in stores, with an annualised saving including on-costs of £0.4million
– a benefit of the improved automation in the business. As mentioned
above, the delivery of customer service and the security of our stores is
paramount, and hence having team members in our stores for part of the
day will always be required.
We carried out an employee engagement survey using external
consultants last summer and were very pleased with the results.
The engagement score across the business was a record 88%, with a
significantly improved participation rate of 92% from the previous survey
in 2021. This was an excellent result, reflective of a key priority for the
business, which is its culture.
– Manage our dynamic pricing
– Improve data reporting and decision making
– Tracking and alerting of competitor pricing changes
– Provide security alerts on unusual
customer behaviour
– Assist in the creation of customer facing content
– Improve internal communications and training
– Improve the effectiveness of our digital marketing
– Automation of customer communications
– AI is embedded in our cyber security and defense tools
– Improving the onboarding of customers and
newemployees
– Measuring our call centre performance and
improving call quality
Examples of using AI to drive
operational efficiencies
Annual Report and Accounts 2024 Big Yellow Group PLC 17
Strategic Report Governance Report Financial Statements
We continue to believe that the customer experience and the service
delivered by our store teams is a critical and differentiating success
factor, particularly with those customers who are regular users of our
facilities. A retail measure is a net promoter score, and our average over
the year for move-ins and move-outs was 80.5 (2023:78.9), a very
creditable result.
We continue to make improvements to our culture and practices in
respect of diversity, and these are set out in our Gender and Inclusivity
Report, which is available on our corporate website, and has been formally
filed for 2023. We formalised a Diversity and Inclusivity Committee in
2020, with representation from colleagues from throughout the business,
and I am also a standing member of the Committee, as I believe diversity
has a positive impact on our culture and performance.
ESG
The Big Yellow Foundation, which was launched in 2018 is our principal
vehicle for delivering social good, with the cause being the rehabilitation
of vulnerable people into work. The Company matches all money raised
from customers at move-in and move-out and from fundraising from our
team members. In the year we have raised a record £298,000 for the
Foundation, and we provided £256,000 of funding to our seven charity
partners, with the total to date now over £1.0million.
We have an initiative of providing 12 week work placements to candidates
from some of our partner charities, and over the year 12 placements were
carried out at several of our stores. This can be life changing for some in
improving their confidence and work chances, and we have also found it
to be particularly rewarding to our store teams.
We have also over the years provided space to local charities and
community groups in each of our stores; at present we support on
average two charities per store this way. The recent refinancing of our
bank facility is aligned with this strategy and includes social targets for
both the Foundation and the provision of space to local charities.
I mentioned the solar retrofit programme last year, which is a
£25million investment, of which £13.6million has been spent to date.
Progress has been very good, and as of now we have completed the
retrofit of 35 stores. Our current installed solar capacity is 6.6 Megawatts,
an increase of 47% over the year. We estimate that this is currently saving
the business £0.6million per year. This will continue to increase as we
make further progress towards our objective of being self-sufficient in
renewable energy.
We will be trialling a new battery at our Slough Farnham Road store, using
the electricity that we generate at our stores more efficiently, with less
being sold to the grid. If this is successful we will then look to adopt this in
new stores, which will see further battery improvement and reduction in
costs. We will also be looking at how we can retrofit it into existing stores,
all designed to improve the efficiency of our energy usage. Energy costs
represent 5% of operating costs (c. £25,000 per store), and we aim to
continue to reduce this.
Chief Executive’s Statement continued
Annual Report and Accounts 2024 Big Yellow Group PLC18
The investment in solar improves the EPC rating in our stores. There is a
requirement to have all stores with an EPC rating of A to C by 2025 and A to
B by 2030. At present all bar one of our stores is A to C, and we have plans
in place to install solar at that store to meet the 2025 requirement. For the
2030 requirement, the majority of stores already meet it, and there are
plans for all stores to be A or B rated by 2028. Much of the improvement
is being driven by the investment in solar and also through removing
gasboilers.
Further detail, including progress on our Science Based Targets,
isincluded in the ESG Report.
Summary
Our business model, market-leading brand and operating platform
hasdelivered a resilient performance over recent years, and we remain
confident that it will continue to deliver attractive and sustainable returns
over the medium to long term. As we enter our historically stronger
summer trading period, we are looking forward to another year of growth.
Jim Gibson
Chief Executive Officer
20 May 2024
Our business model,
market-leading brand
andoperating platform
hasdelivered a resilient
performance over recent
years, and we remain
confident that it will
continue to deliver
attractive and sustainable
returns over the medium
tolong term.
Annual Report and Accounts 2024 Big Yellow Group PLC 19
Strategic Report Governance Report Financial Statements
We concentrate on developing our stores in main road locations with
highvisibility, where our distinctive branding generates high awareness
of BigYellow.
Creating shareholder value
We continue to believe that the medium-term opportunity to create
shareholder value consists of driving revenue and cash flow from our
existing portfolio through continued investment in sustainability,
our people, culture, and digital operating and marketing platforms.
Inaddition, we aim to deliver external growth as new stores open
throughcontinued investment in our development pipeline, and
selectively acquiring existing storage centres from smaller operators.
As a REIT our key financial objective is to produce sustainable returns
for shareholders through a relatively low leverage, low volatility, high
distribution business. In addition, any successful business must have
aneffective sustainability strategy, particularly around climate change,
and this continues to be a key strategic focus for our business.
Real estate
The other main plank of our strategy has been to build a portfolio of
large purpose-built freehold self storage centres, focussed on London,
the South East and other large urban conurbations. We believe that by
owning a predominantly freehold estate we are insulating ourselves
against: economic downturns as we operate at higher margins; adverse
rent reviews; and in the long-term possible redevelopment of key stores
by the landlord. It also provides us financing flexibility as rent is a form
ofgearing.
Approximately 60% of our current annualised store revenue derives from
within the M25; for London and the South East, the proportion of current
annualised store revenue is 75%. With our store development pipeline
largely in London and the South East, we would expect these proportions
to increase over the medium term.
New supply and competition is a key risk to our business model, hence
our weighting to London and its commuter towns, where barriers to entry
in terms of competition for land and difficulty around obtaining planning
are highest. We continue to see limited new supply growth in our key
areas of operation. Looking back over the last five years, we estimate
capacity growth in London of approximately 2-3% per annum. In 2023,
there have been eight store openings in London (including our Kings
Cross store), and we anticipate four new stores in London in 2024.
Our stores are on average 59,000 sq ft, compared to an industry
averageof approximately 30,000 sq ft (source: UK Self Storage
Association 2024 Annual Survey). The upside from filling our larger
thanaverage sized stores is, in our view, only possible in large
metropolitan markets. As our operating costs are relatively fixed,
largerstores in bigger urban conurbations, particularly London,
drivehigher revenues and higher operating margins.
Capital structure
Following the Global Financial Crisis and the ensuing economic recession,
we have materially reduced the financial risk within the business and
diversified our sources of debt, whilst at the same time, increasing our
store platform by deploying significant capital investment. We measure
leverage by looking at our interest cover and that has increased from
1.9times in 2008 to 5.6 times for the year ended 31March 2024, and our
objective is to not let this fall below 5 times, compared to the consolidated
EBITDA covenant of 1.5 times. We also look at our debt to EBITDA ratio,
which is currently 3 times, and we seek to maintain this in the range
of three to four times. We manage this business on the basis that an
external economic shock could potentially happen at any time. This is
reinforced by the performance of the business during the pandemic,
where we delivered a strong trading performance whilst at the same
timecontinuing to invest and expand.
Self storage demand drivers
Economic activity and change are key drivers of self storage demand and
are greatest in the larger urban conurbations, and in particular London
and the South East. The structural changes consisting of the conversion
of ex-industrial brownfield land to other uses, in particular residential; the
reduction in home ownership and increased proportion of those choosing
to rent; increasing density of living with new properties being built with
optimised living space and very little provision for storage; will continue
and are resulting in increased demand for our product. These changes
have resulted in a significant shortage of available warehousing space,
particularly in London, which has been accentuated by the current crisis.
Self storage provides a convenient flexible solution to businesses such
as online retailers, importers and exporters, service providers, the public
sector, and marketing companies looking for mini-warehousing space.
In addition to domestic customers taking space to declutter their homes,
our largest customer base is those using us short-term around an event,
such as moving home, refurbishment, inheritance, household formation,
separation, relocation, and students.
Our strategy from the outset has been to develop Big Yellow into the
market-leading self storage brand, delivering excellent customer service,
investing in sustainability and our market-leading operating platform and
digital channels, with a great culture and highly motivated employees.
Our Strategy
Annual Report and Accounts 2024 Big Yellow Group PLC20
Resilience
The location of our stores, brand, security, and most importantly
customer service, together with the diversity of use in our 73,000
occupied rooms, serve better than any lease contract in providing
incomesecurity.
The business proved to be relatively resilient, but not immune during
the Global Financial Crisis and recession of 2007 to 2009, with London
and the South East proving to be less volatile. Since 2020, the Group has
grown its revenue by 54%.
80% of our customers pay by direct debit, and our cash collection has
remained robust over recent years.
1. Digital execution
Leveraging our market-leading brand position to generate
new prospects, principally from our digital, mobile and
desktop platforms
2. Customer experience
Focusing on training, selling skills, and customer satisfaction
to maximise prospect conversion and referrals
3. Driving revenue
Growing occupancy and net rent to drive revenue optimally
at each store
4. Cost control
Maintaining a focus on cost control, so revenue growth is
transmitted through to earnings growth
5. Increasing footprint
Increasing the footprint of the Big Yellow platform principally
through new site development and where possible existing
prime freehold stores that meet our quality criteria
6. Expanding Armadillo
Selectively acquiring existing self storage assets into the
Armadillo platform
7. Sustainability
Through our environmental initiatives, aim to create a more
sustainable business which will increase shareholder and
customer value in both the medium and long-term
8. Social initiatives
Through our social initiatives, we support local charities with
free storage space and help vulnerable adults get back into the
workplace through the Big Yellow Foundation
9. Culture
Maintaining Big Yellow’s culture as an accessible, apolitical,
inclusive, non-hierarchical, socially responsible, and enjoyable
place to work
10. Conservative capital structure
Maintaining a conservative capital structure in the business with
Group debt to EBITDA in the range of three to four times
We focus on the following key areas:
Annual Report and Accounts 2024 Big Yellow Group PLC 21
Strategic Report Governance Report Financial Statements
Helpfulness
Big Yellow exists to help people out
and relieve pressure in their lives.
Weconstantly strive to make our
customers’ lives easier.
Empathy
We always listen and put ourselves
intheposition of the individual we are
serving, understanding how exactly
wecanlighten their load.
Flexibility
We are always flexible and adapt our
service to best suit the needs and the
desires of our customers.
Innovativeness
We strive to innovate to help drive our
business forward and we never accept
thestatus quo.
Integrity
We approach everything we do
withacommitment to doing right.
This goes beyond our customers
toinclude our people, local communities
and the environment.
Attractive
market dynamics
– UK self storage penetration in
keyurban conurbations remains
relatively low
– Limited new supply coming onto
themarket
– Resilient through the last economic
downturn and performed well during
the pandemic
– Awareness still remains relatively
low, with only 40% to 50% having
reasonable or good knowledge of
selfstorage
In the twenty four years since flotation in May 2000, Big Yellow
hasdelivered a Total Shareholder Return (“TSR”), including dividends
reinvested, of 13.6% per annum, in aggregate 1,770.4% at the closing price
of 1,064p on 31March 2024. This compares to 4.8% per annum for the
FTSE Real Estate Index and 5.4% per annum for the FTSE All Share index
over the same period. We feel this illustrates the power of compounding
ofconsistent incremental returns over the longer term.
Our competitive
advantage
– UK self storage industry’s most
recognised brand with 93% of
enquiriesnow online
– Prominent stores on arterial or main
roads, with extensive frontage and
high visibility
– Continuous innovation and
investmentinto our mobile and
desktop digital channels
– Strong customer satisfaction and
NPSscores reflecting excellent
customer service
– 6.4million sq ft UK footprint,
withdevelopment pipeline of
1.0million sq ft
– Primarily freehold estate concentrated
in London and South East and other
larger urban conurbations
– Larger average store capacity
– economies of scale, higher
operatingmargins
– Secure financing structure with strong
balance sheet
– Continued significant investment in
sustainability and our culture
Our values
Our Investment Case
How we deliver value
In twenty four years Big Yellow has delivered a TSR of 13.6% per annum. Thiscompares to 4.8% per annum for the FTSE Real Estate Index.
Annual Report and Accounts 2024 Big Yellow Group PLC22
High margins
Freehold assets for high operating margins
and operational advantage
Sustainable
Low technology and obsolescence product,
maintenance capex fully expensed
Annual compound
adjusted eps
13%
Annual compound adjusted eps growth of
13% since 2004/5
Cash flow
13%
Annual compound cash flow growth of
13%since 2004/5
Dividend pay-out
80%
Dividend pay-out ratio of a minimum of
80%of adjusted eps
Evergreen
income streams
– 73,000 occupied rooms, with
customers from a diverse
base – individuals, SMEs, and
nationalcustomers
– 38% of customers in stores greater
than two-year length of stay, a further
16% for one to two years
– Average length of stay for existing
customers of 31 months, for the
54% ofcustomers that have stayed
for more than one year, the average
lengthof stay is 53 months
– Low bad debt expense (0.2% of
revenue in the year)
Strong growth
opportunities
– Opportunities to drive further
occupancy growth
– Yield management as
occupancyincreases
– Densification of living and scarcity
offlexible business warehouse
spacedrives demand
– Growth in national customers and
business customer base
– Increasing the platform with a
conservative capital structure
Conversion into
quality returns
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In twenty four years Big Yellow has delivered a TSR of 13.6% per annum. Thiscompares to 4.8% per annum for the FTSE Real Estate Index.
Annual Report and Accounts 2024 Big Yellow Group PLC 23
Strategic Report Governance Report Financial Statements
Over the course of the past five years, revenue has grown significantly,
with Armadillo included in our consolidated results from 1 July 2021.
Wesaw particularly strong growth in 2021 and 2022, after a weaker 2020
following the Brexit uncertainty and the initial impact of the UK lockdown in
response to Covid-19. The current year has seen a reduction in occupancy,
but revenue has grown by 6%, with improvements in average rate.
In 2020 closing net rent per sq ft increased by 3%, by 2% in 2021, by 4% in
2022, by 9% in 2023 and by 5% in the year to 31March 2024. We expect
revenue growth to be driven by a combination of occupancy increases
and growth in net achieved rent per sq ft.
Adjusted profit before tax and adjusted earnings per share (“eps”),
asdefined in note 33, which drive the distributions to shareholders
(asour dividend policy is to pay a minimum of 80% of adjusted earnings
as dividends) are also KPIs. The Group focuses on adjusted profit and
earnings measures as they give a clearer picture of the Group’s trading
performance without distortion from external factors such as property
valuations and the fair value of derivatives. We have delivered compound
adjusted eps and dividend growth of 6% over the past five years.
Compound adjusted eps growth since 2004/5 is 13%. We have
illustrated the Group’s performance in these measures over the past
five years on page 25.
Our non-financial KPIs are the net promoter scores we receive from our
customers and the carbon intensity of the Group’s business. The Group’s
net promoter score received from its customers during the year was 80.5
(2023:78.9). We believe this overall score compares very favourably with
other consumer-facing businesses.
The Group has reduced its carbon intensity (our carbon emissions divided
by our average occupied space) by 33% over the past five years. This has
been achieved through investment in renewable technology, roof mounted
solar photo-voltaic systems, and LED lighting across the Group’s portfolio.
Our Key Performance Indicators
The Group’s KPIs are shown in the charts on page 25. The key
performance indicators of our stores are occupancy and net
rentper sq ft, which together drive the revenue of the business.
These are the key measures which are focused on by the Board
and are reported on a weekly basis.
Annual Report and Accounts 2024 Big Yellow Group PLC24
Adjusted earnings per share
55.9 pence
+33% over 5 years
Dividend per share
45.2 pence
+34% over 5 years
30.0
35.0
40.0
45.0
50.0
55.0
60.0
42.1
42.4
52.5
56.5
55.9
2020 2021 2022 2023 2024
0
5
10
15
20
25
30
35
40
45
50
33.8
34.0
42.0
45.2 45.2
2020 2021 2022 2023 2024
Net promoter score
80.5
Average of 80.6
over 5 years
Carbon intensity
4.8
(33%) over 5 years
50
55
60
65
70
75
80
85
90
81.9
82.9
78.9
78.9
80.5
2020 2021 2022 2023 2024
0
2
4
6
8
10
7.2
6.3
5.4
5.0
4.8
2020 2021 2022 2023 2024
(pence) (pence)
kgCO
2
e/1000m
2
Closing occupancy
5,029,000 sq ft
+33% over 5 years
Revenue
£199.6m
+54% over 5 years
Closing net rent per sq ft
£34.14
+21% over 5 years
Adjusted profit before tax
£107.3m
+51% over 5 years
3,000
3,500
4,000
4,500
5,000
5,500
2020 2021 2022 2023 2024
3,781
4,201
5,107
5,088
5,029
50
70
90
110
130
150
170
190
210
2020 2021 2022 2023 2024
129.3
135.2
171.3
188.8
199.6
25
26
27
28
29
30
31
32
33
34
35
2020 2021 2022 2023 2024
28.15
28.71
29.92
32.48
34.14
15.0
25.0
35.0
45.0
55.0
65.0
75.0
85.0
95.0
105.0
115.0
71.0
74.6
96.8
106.0
107.3
2020 2021 2022 2023 2024
(000 sq ft)
(£)
(£m)(£m)
Annual Report and Accounts 2024 Big Yellow Group PLC 25
Strategic Report Governance Report Financial Statements
The store platform and demand
Self storage demand is spread across a diverse set of drivers, and is
largely driven by need, with security, convenience, quality of product,
service and location being key factors. Awareness remains relatively
low compared to commoditised products, such as hotel rooms or airline
seats, albeit it is increasing slowly year-on-year with increased supply,
marketing expenditure and customer use. Over 70% of our domestic
customers are in the top 3 ACORN categories: Affluent Achievers,
Rising Prosperity, and Comfortable Communities. The largest element
of demand into our business each year is customers who use us for
relatively short periods driven by a need.
Of our move-ins during the year:
– customers renting storage space whilst moving represented 41% of
move-ins during the year (2023:41%), with homeowners representing
26% and renters 15%. The proportion of renters increased during the
year, offsetting some of the slowdown in the owner-occupied market;
– 12% of our customers who moved in took storage space as a spare
room for decluttering (2023:11%);
– 36% of our customers used the product because some event had
occurred in their lives generating the need for storage; they may
be moving abroad for a job, have inherited possessions, are getting
together, or separating, are students who need storage during the
holidays, or homeowners developing into their lofts or basements
(2023:37%);
– the balance of 11% of our new customer demand during the year came
from businesses (2023:11%), who stay longer and represent around
20% of our customers in store at any one time, occupying 37% of the
space at 31March 2024.
Of our overall occupied space today, customers who are longer stay
lifestyle users, decluttering into small rooms as an extension to their
accommodation, occupy 10% to 15% of our space; approximately 50%
of the space is customers using it for less than 12 months, for reasons
which are largely event driven, which could be inheritance, moving in
the owner-occupied or rental sector, home improvements, travelling;
thebalance of 37% of our space is businesses.
Our business customer base is comprised of online retailers,
B2B traders looking for flexible mini-warehousing for e-fulfilment,
service providers, those looking to shorten supply chains, and
businesses looking to rationalise their other fixed costs of
accommodation. For thesecustomers,who typically are looking
for rooms which could be from 50sqft to 500sqft in facilities that meet
their operational requirements, the only supply in big cities is from self
storage providers. The average space occupied by business customers
at the year-end is 177 sq ft (2023:179 sq ft).
Domestic customers occupy on average 58 sq ft (2023:59 sq ft) and
pay on average 17% more in rent per sq ft (2023:18%), however business
customers do stay longer, take more space and represent around 32% of
revenue (2023:33%).
The pandemic accelerated many structural changes that were already
occurring, such as the move to online retailing and an increase in working
from home facilitated by technological advances. The deindustrialisation
of big cities with the conversion of commercial space into residential
and other uses, has led to a shortage of suitable flexible mini-warehouse
space from which to operate small scale storage and e-fulfilment,
particularly in London. These developments, along with businesses
increasingly seeking flexible office and storage space rather than longer
inflexible leases, have been driving our demand. We believe these are
long-term structural trends, which will benefit our business going forward.
Operating Review
We now have a portfolio of 109 open and trading stores,
withacurrent maximum lettable area of 6.4million sq ft
(2023:108 stores, MLA of 6.3million sq ft).
Residential owner-occupied
Student storage
Residential rental sector
Other
Business storage
Decluttering
Travelling
Home improvements
5%
6%
12%
11%
13%
15%
12%
26%
5%
6%
12%
11%
13%
15%
12%
26%
Reasons people use Big Yellow
Annual Report and Accounts 2024 Big Yellow Group PLC26
From research we have previously carried out, a typical small business
using storage employs around three people and 60% of them are early-stage
businesses and for 50% of them this is their only space.
In addition, we have a dedicated national customers team for businesses
who wish to occupy space in multiple stores. These customers on average
occupy approximately 1,000 sq ft, paying £30,000 per annum, and are
billed and managed centrally. This area has performed strongly in the
year with revenue up 13% compared to the prior year, making up 5% of
occupied space.
Activity
Prospect numbers are more in-line with the pre-Covid period on a like-for-like
basis, and activity levels within the business have consequently been
a little bit slower than last year, with move-ins down 6%, and move-outs
also down 6% over the year, reflecting less churn. Our conversion rates
over the period have increased, which is indicative of more needs-driven
demand. Since the year end we have seen an increase in move-in activity,
with move-ins up 5% compared to the same period last year.
Occupancy across all 109 stores fell over the year by 59,000 sq ft
(2023:fall of 58,000 sq ft, with an additional 39,000 sq ft of occupancy
acquired with Aberdeen in June 2022). Business occupancy dropped by
2.6% or 50,000 sq ft on 1.9million sq ft occupied at the beginning of the
year. Our larger rooms, which are occupied in the main by businesses,
remain highly occupied, particularly in London. Domestic occupied space
was in line with the prior year.
As we have experienced over the years, there are businesses who
outgrow us and move to their own accommodation, others cease
operations, some are seasonal, and we continue to replace any vacated
space with new move-ins from online traders, e-tailers and service
providers. We are not seeing any noticeable further softening in demand
from businesses, particularly in London.
The 76 established Big Yellow stores are 81.6% occupied compared to
84.2% at the same time last year. The nine developing Big Yellow stores
added 73,000 sq ft of occupancy over the year to reach closing occupancy
of 59.8%. The 24 Armadillo stores, representing 10% of the Group’s revenue
are 74.3% occupied, compared to 76.9% at this time last year (including
an additional 20,000 sq ft of capacity added during the year at Stockton
South). Overall store occupancy was 78.3% (2023:80.9%).
Occupancy
31March 2024
%
Occupancy
change in year
000 sq ft
Occupancy
31March 2024
000 sq ft
Occupancy
31March 2023
000 sq ft
76 established Big Yellow stores 81.6% (124) 3,905 4,029
9 developing Big Yellow stores 59.8% 73 375 302
All 85 Big Yellow stores 79.1% (51) 4,280 4,331
24 Armadillo stores 74.3% (8) 749 757
All 109 stores 78.3% (59) 5,029 5,088
All stores are trading profitably at the EBITDA level, with our most recent opening in Kings Cross reaching break even in September 2023, four months
after opening.
Annual Report and Accounts 2024 Big Yellow Group PLC 27
Strategic Report Governance Report Financial Statements
Rental growth
We continue to manage pricing dynamically, taking account of room
availability, customer demand and local competition, with our pricing
model reducing promotions and increasing asking prices where individual
units are in scarce supply.
We continue to price competitively to win new customers and have
moderated our existing customer price increases over the year with
the fall in inflation. It must be remembered that some 60% to 70% of our
customers move-out within six months, and therefore do not receive
anyprice increases.
The average achieved net rent per sq ft increased by 7.5% compared to
the prior year, with closing net rent up 5.1% compared to 31March 2023.
The table below shows the change in net rent per sq ft for the portfolio by
average occupancy over the year (on a non-weighted basis). The analysis
excludes our most recent store openings.
Average occupancy in the year
Net rent per sqft
growth from
April2023 to
March 2024
Net rent per sqft
growth from
April2022 to
March 2023
70% to 85% 5.4% 8.3%
85% to 90% 5.5% 8.7%
Above 90%
6.9%
9.7%
The self storage market
In the recently published 2024 Self Storage Association UK Survey, only
43% of those surveyed had a reasonable or good awareness of self storage.
Furthermore, only 12% of the 2,076 adults surveyed were currently
using self storage or were thinking of using self storage in the next year,
which was an improvement from 9% in the survey last year. Self storage
is therefore not a commoditised product, such as hotels, taxis, cinemas
etc, and it will take many years of use and growing awareness before it
becomes so, particularly given the subdued growth in new supply.
Growth in new facilities across the industry has been largely in regional
areas of the UK and particularly in smaller towns. Historically, new supply
creation in our core markets in London and the South East, has been
difficult, with high land values driven by competing uses such as residential
and urban industrial. In London in the year to 31 December 2023, there
were eight new store openings, including one Big Yellow store. We are aware
of four planned store openings in London in calendar year 2024.
The Self Storage Association (“SSA”) estimates that the UK industry is
made up of approximately 1,700 self storage facilities and 1,000 purely
container operations, providing 60million sq ft of self storage space,
equating to 0.9 sq ft per person in the UK. This compares to 12sq ft
per person in the US, 2.2 sq ft per person in Australia and 0.2 sq ft for
mainland Europe, where the roll-out of self storage is a more recent
phenomenon (sources: UK Self Storage Association Survey May 2024
andFEDESSA European Self Storage Annual Survey 2023).
Operating Review continued
Marketing and operations
Our marketing strategy focuses on building our market-leading brand
awareness further and using it to maximise the cost-efficient generation
of enquiries, customer move-ins and user satisfaction through our
digital platforms. Our strong brand and continued digital investment and
innovation has helped us create a market-leading website which delivers
over 90% of our enquiries.
Our annual YouGov survey (published May 2024) again confirmed that
the brand awareness of Big Yellow remained significantly ahead of other
UK operators in the sector. The survey shows our unprompted brand
awareness to be 4.1 times higher than our nearest competitor across
theUK (2023:4.4 times higher).
The Big Yellow website allows users to browse different room sizes, obtain
a price, reserve online and check-in online prior to arriving at the stores
which are automated in terms of access once a customer moves-in.
The online customer experience also allows customers to communicate
with us in real-time via Live Chat, WhatsApp, or Facebook Messenger.
Thecomprehensive online FAQs provide our users with another way to
ask questions they may have about the service without needing to call us
directly. This is critical because approximately 60% of our new prospects
have not used self storage before.
The seamless digital experience continues with our online check-in
platform. This allows customers to complete the majority of their move-in
process remotely. They can upload their photo and identity documents,
sign the full customer licence, set up authorised persons, complete
their storage inventory and set up a paperless Direct Debit – all done
remotely. This check-in online capability has significantly cut down the
time our customers need to spend in our receptions when they move-in.
Theprocess is completed with our in-store digital signature pads.
We also offer the ability to purchase boxes and packing materials through
our online BoxShop store. These items can be home delivered or made
available for our Click and Collect service from stores, which represents
80% of BoxShop transactions.
Driving online traffic
Self storage is a consumer-facing business, and the development of a
strong and sustainable brand is multi-layered and requires a consistency
of product, customer service and interaction at all touch points,
particularly online.
Search engines are the most important acquisition tool for us, accounting
for the majority of traffic to our website. Our focus for a competitive
advantage on search continues and search engine optimisation (“SEO”)
work has helped us to maintain high organic listings for popular generic
and local self storage related search terms. This in turn drives the growth
and cost efficiencies of acquiring new prospects.
Brand search terms are also a valuable driver of enquiries for Big Yellow
and help improve the efficiencies of our cost per enquiry. 41% of all
traffic generated from search engines to our website originated from
“BigYellow” brand searches in the year. This clearly indicates that brand
is important in driving higher levels of prospects and customer referrals,
leading to improved operational efficiencies. We have demonstrated this
through significant improvements in the performance of existing storage
centres following their acquisition, re-branding, and assimilation into
ourbusiness.
Annual Report and Accounts 2024 Big Yellow Group PLC28
Search engine marketing remains our largest source of paid for web
traffic. Ongoing website optimisation and an engaging user experience
through our digital platforms helps ensure we maximise the conversion
of these web visits into enquiries and then customers. Digital display
advertising enables us to regionally target audiences in the market for
self storage, raising consideration of the service and the Big Yellow brand
through engaging creatives.
Online customer reviews and
social media
Supporting our values of putting the customer at the heart of our
business, our online customer reviews generate real-time feedback from
customers and provide positive word of mouth referral to our website
visitors. Through our ‘Big Impressions’ customer feedback programme,
we ask our new customers to rate our service. With the users’ permission,
we then publish these independent customer reviews on the Big Yellow
website which currently total over 52,000 averaging 4.7 out of 5.
The Big Impressions programme also generates customer feedback on
their move-in and move-out experience. These customer reviews and
mystery shop results are transparently accessible across the business
and helps reinforce our focus on outstanding customer service. Over the
year, we have achieved an average net promoter score of 80.5 which is a
very strong consumer-facing benchmark result.
We also gain real-time customer feedback from over 23,500 Google
Reviews averaging 4.7 out of 5. These help to enhance our visibility within
local search listings conveying trust in the Big Yellow brand. Additionally,
we have over 4,200 reviews from the independent review site TrustPilot.
These reviews average 4.8 out of 5-star rating, labelled as “Excellent”
on the TrustPilot ratings scale. We monitor our customer reviews and
respond where necessary for customer service reasons or to manage
ouronline reputation and improve our service offering.
Social media continues to be complementary to our existing marketing
channels. Big Yellow actively posts content across Twitter, Facebook
and Instagram which help to raise awareness of our services and ESG
activities. These social channels are also used by customers to connect
with us and are monitored in real-time, enabling us to respond promptly
to any enquiries. The Big Yellow LinkedIn platform is used to communicate
company achievements, ESG initiatives and our company culture and the
Big Yellow YouTube channel is used to allow web prospects to experience
our stores online through our video guides to self storage.
We will continue to invest in improving the customer experience and
user journey across all our digital marketing channels and also in-store
operations to achieve higher levels of automation and hence efficiencies
in the business.
Our YouGov survey (published May 2024) again confirmed
Big Yellow’s brand awareness remains significantly ahead
of our competitors.
Market-leading brandawareness
Our brand
awareness is over
four times higher
than our nearest
competitor.
Annual Report and Accounts 2024 Big Yellow Group PLC 29
Strategic Report Governance Report Financial Statements
AI
Generative AI is now used throughout the business and has been adopted
quickly since its launch. We have a variety of tools available including
Canva, ChatGPT, Google Gemini and Microsoft 365 CoPilot. These are used
to generate content and ideas across social media, SEO, responses to
customer reviews, drafting emails, developing training modules, policies,
procedures and creating visuals in our communications. We see these
large language models continuing to improve and allowing us to increase
our productivity and efficiency, particularly at our head office.
Rules-based data manipulation and automation is also something
that we have used within Big Yellow for some time and continue to
improve. Examples of this include our dynamic pricing system, prospect
management, check-in online, digital automation of all customer
communications, access control reporting and alerts based on the
significant data we have at stores, exception reporting for our store
audit processes. Other examples in marketing would be translation
AI, optimisation of paid search and targeting of prospects. Although
provided by third parties, machine learning AI is the core of all our cyber
security and defence, across anti-malware, firewalls, email management,
vulnerability testing and Security Information and Event Monitoring.
A further example is that we have just invested in a SaaS recruitment
platform, which manages the workflow for all recruitment and interaction
with candidates through automation. Our CAFM platform in facilities which
was implemented three years ago to manage all our interactions between
the stores, the facilities team and the various contractors has made a
significant difference to productivity and control in that area.
The above is by no means a complete summary of how AI is making a
difference to our business, but hopefully provides an insight and it is
something that we will continue to invest in.
Cyber security and IT infrastructure
Cyber security and IT infrastructure are vital for the Group's strategy and
operations. The Group has a robust cyber security and IT infrastructure
framework that covers risk, security, compliance, innovation, and
efficiency. The Group has achieved significant results and progress in
thepast year, but also faces challenges and opportunities in the future.
The Group is committed to investing and improving its cyber security and
IT infrastructure capabilities, and to maintaining its competitive edge.
We regularly evaluate cyber risk and security status with the help of
both internal experts and external consultants and conduct frequent
tests on our systems and people, such as penetration tests and phishing
simulations. The Group's systems underwent an external audit during
the year and retained the IASME Gold certification which includes Cyber
Essentials. The Group has cyber insurance in place should a breach occur.
Our Data Compliance Officer oversees our ongoing compliance with
GDPR and PCI DSS. The role also includes Business Continuity and Crisis
Communication management. Policies and procedures are under regular
review and are benchmarked against industry best practice. There are
mandatory courses for all staff to complete both for Information Security
and Data Protection. Our Infrastructure and Development teams continue
to drive innovation and efficiencies throughout the Group.
Operating Review continued
ESG
We have a long-term strategy to become Net Renewable Energy
Positive and deliver Net Zero Scope 1 and 2 Emissions targets, which
will be funded with significant investment from the Group over the next
few years. The main delivery vehicle for this new strategy will be the
installation of solar generation capacity onto our existing store estate.
By 2025, we expect to have completed a multi-million pound investment
in renewable energy generation both on the roofs of our estate and also
at other locations. We published in 2022 our Strategy document that sets
out our Commitments, Actions and Timelines to become 100% Renewable
Energy Positive and Net Zero Scope 1 and 2 Emissions by 2030.
The sustainability performance highlights for the year are:
– we have invested £6million in our solar programme over the year and
now have 68 stores with solar and have expanded the programme
to all stores. Our current peak capacity has increased over the past
three years from 0.9 Megawatts to 6.6 Megawatts;
– we have donated £796,000 in Community Investment. This consists
of a combination of free and discounted space to worthy local
charitable organisations and not-for-profits and we house different
organisations, from foodbanks to small community groups to NHS
partners and also BoxShop products donated;
– £298,000 has been raised for the Foundation from customer
donations and employee fundraising including the matched
contributions from the Company. These funds allowed us to make
grants of £256,000 to our partner charities in the year;
– we have delivered 12 successful and all-round enriching work
placements with Breaking Barriers, Street League and the Down’s
Syndrome Association;
– increased our GRESB Green Star rating from 4 to 5, improved from
aBto an A- award from CDP and maintained our ISS indices; and
– we obtained our third EPRA sBPR Gold Award.
Annual Report and Accounts 2024 Big Yellow Group PLC30
Portfolio Summary
March 2024 March 2023
Big Yellow
Established
(1)
Big Yellow
Developing
Total
Big Yellow Armadillo Total
Big Yellow
Established
Big Yellow
Developing
Total
Big Yellow Armadillo Total
Number of stores 76 9 85 24 109 76 8 84 24 108
At 31March:
Total capacity (sq ft) 4,784,000 627,000 5,411,000 1,008,000 6,419,000 4,784,000 524,000 5,308,000 984,000 6,292,000
Occupied space (sq ft) 3,905,000 375,000 4,280,000 749,000 5,029,000 4,029,000 302,000 4,331,000 757,000 5,088,000
Percentage occupied 81.6% 59.8% 79.1% 74.3% 78.3% 84.2% 57.6% 81.6% 76.9% 80.9%
Net rent per sq ft £36.38 £33.06 £36.09 £22.98 £34.14 £34.55 £30.70 £34.28 £22.20 £32.48
For the year:
REVPAF
(2)
£34.16 £21.30 £32.70 £20.02 £30.71 £32.68 £22.20 £31.84 £20.27 £30.02
Average occupancy 84.0% 56.2% 80.9% 76.4% 80.2% 86.9% 54.1% 84.0% 82.1% 83.7%
Average annual net rent psf £35.83 £32.46 £35.56 £22.75 £33.64 £33.28 £30.10 £33.10 £21.33 £31.28
£000 £000 £000 £000 £000 £000 £000 £000 £000 £000
Self storage income 144,418 11,167 155,585 17,562 173,147 136,925 8,809 145,734 17,177 162,911
Other storage related income
(2)
18,332 1,571 19,903 2,651 22,554 18,523 1,401 19,924 2,691 22,615
Ancillary store rental income 1,108 284 1,392 19 1,411 1,028 165 1,193 20 1,213
Total store revenue 163,858 13,022 176,880 20,232 197,112 156,476 10,375 166,851 19,888 186,739
Direct store operating costs (38,979) (5,334) (44,313) (7,517) (51,830) (38,644) (4,482) (43,126) (7,437) (50,563)
Short and long leasehold rent
(3)
(2,112) – (2,112) (169) (2,281) (1,983) – (1,983) (170) (2,153)
Store EBITDA
(2)
122,767 7,688 130,455 12,546 143,001 115,849 5,893 121 ,74 2 12,281 134,023
Store EBITDA margin 74.9% 59.0% 73.8% 62.0% 72.5% 74.0% 56.8% 73.0% 61.8% 71.8%
Deemed cost
£m £m £m £m £m
To 31March 2024 739.0 188.0 927.0 145.3 1,072.3
Capex to complete – 1.0 1.0 0.1 1.1
Total 739.0 189.0 928.0 145.4 1,073.4
(1)
The Big Yellow established stores have been open for more than three years at 1 April 2023, and the developing stores have been open for fewer than three years at 1 April 2023.
(2)
See glossary in note 33.
(3)
Rent paid for six short leasehold properties and one long leasehold property.
Annual Report and Accounts 2024 Big Yellow Group PLC 31
Strategic Report Governance Report Financial Statements
Portfolio Summary continued
The table below reconciles Store EBITDA to gross profit in the statement of comprehensive income.
Year ended 31March 2024 Year ended 31March 2023
Store EBITDA
£000
Reconciling items
£000
Gross profit per
statement of
comprehensive
income
£000
Store EBITDA
£000
Reconciling items
£000
Gross profit per
statement of
comprehensive
income
£000
Store revenue/Revenue
(4)
19 7,112 2,507 199,619 186,739 2,090 188,829
Cost of sales
(5)
(51,830) (4,164) (55,994) (50,563) (3,744) (54,307)
Rent
(3)
(2,281) 2,281 – (2,153) 2,153 –
Store EBITDA 143,001 624 143,625 134,023 499 134,522
(3)
Rent paid for six short leasehold properties and one long leasehold property.
(4)
See note 3 of the financial statements, reconciling items are management fees and non-storage income.
(5)
See reconciliation in cost of sales section in Financial Review on page 39.
Reconciliation of APMs
The table below reconciles the reported figures above to the like-for-like metrics the Group reports:
Like-for-like revenue
Year ended
31March 2024
£000
Year ended
31March 2023
£000
Store revenue
(6)
19 7,112 186,739
Less revenue from non like-for-like stores
(6)
(3,657) (1,133)
Like-for-like revenue
(6)
193,455 185,606
Like-for-like Big Yellow store occupancy
Year ended
31March 2024
Year ended
31March 2023
Store MLA (sq ft)
(6)
6,419,000 6,292,000
Less MLA from non like-for-like stores (sq ft)
(6)
(1,304,000) (1,178,000)
Like-for-like MLA (sq ft)
(6)
5,115,000 5,114,000
Store occupancy (sq ft)
(6)
5,029,000 5,088,000
Less occupancy from non like-for-like (sq ft)
(6)
(890,000) (835,000)
Like-for-like occupancy (sq ft)
(6)
4,139,000 4,253,000
Like-for-like occupancy (%)
(6)
80.9% 83.2%
(6)
See glossary in note 33.
Annual Report and Accounts 2024 Big Yellow Group PLC32
Twickenham 2, April 2016
MLA – 22,000 sq ft
Nine Elms, April 2016
MLA – 65,000 sq ft
Cambridge, January 2016
MLA – 60,000 sq ft
Enfield, April 2015
MLA – 60,000 sq ft
Chester, February 2015
MLA – 69,000 sq ft
Oxford 2, July 2014
MLA – 35,000 sq ft
Gypsy Corner, April 2014
MLA – 70,000 sq ft
Chiswick, April 2012
MLA – 73,000 sq ft
New Cross, February 2012
MLA – 61,000 sq ft
Stockport, September 2011
MLA – 65,000 sq ft
Eltham, April 2011
MLA – 70,000 sq ft
Camberley, January 2011
MLA – 67,000 sq ft
High Wycombe, June 2010
MLA – 60,000 sq ft
Reading, December 2009
MLA – 62,000 sq ft
Sheffield Bramall Lane,
September 2009
MLA – 60,000 sq ft
Poole, August 2009
MLA – 55,000 sq ft
Nottingham, August 2009
MLA – 67,000 sq ft
Edinburgh, July 2009
MLA – 63,000 sq ft
Twickenham, May 2009
MLA – 73,000 sq ft
Liverpool, March 2009
MLA – 60,000 sq ft
Bromley, March 2009
MLA – 71,000 sq ft
Birmingham, February 2009
MLA – 60,000 sq ft
Sheen, December 2008
MLA – 64,000 sq ft
Sheffield Hillsborough,
October 2008
MLA – 60,000 sq ft
Annual Report and Accounts 2024 Big Yellow Group PLC34 Annual Report and Accounts 2024 Big Yellow Group PLC
Kennington, May 2008
MLA – 66,000 sq ft
Merton, March 2008
MLA – 70,000 sq ft
Fulham, March 2008
MLA – 138,000 sq ft
Balham, March 2008
MLA – 61,000 sq ft
Barking, November 2007
MLA – 64,000 sq ft
Ealing Southall, November 2007
MLA – 57,000 sq ft
Sutton, July 2007
MLA – 70,000 sq ft
Gloucester, December 2006
MLA – 50,000 sq ft
Edmonton, October 2006
MLA – 75,000 sq ft
Kingston, August 2006
MLA – 62,000 sq ft
Bristol Ashton Gate, July 2006
MLA – 61,000 sq ft
Finchley East, May 2006
MLA – 54,000 sq ft
Tunbridge Wells, April 2006
MLA – 57,000 sq ft
Bristol Central, March 2006
MLA – 64,000 sq ft
North Kensington, December 2005
MLA – 50,000 sq ft
Leeds, July 2005
MLA – 76,000 sq ft
Beckenham, May 2005
MLA – 71,000 sq ft
Tolworth, November 2004
MLA – 56,000 sq ft
Watford, August 2004
MLA – 64,000 sq ft
Swindon, April 2004
MLA – 53,000 sq ft
Orpington, December 2003
MLA – 64,000 sq ft
Byfleet, November 2003
MLA – 48,000 sq ft
Chelmsford, April 2003
MLA – 54,000 sq ft
Finchley North, March 2003
MLA – 62,000 sq ft
Annual Report and Accounts 2024 Big Yellow Group PLC 35
Our Big Yellow Stores
An unrivalled portfolio of stores across London,
theSouth East and other large metropolitan cities.
Kings Cross, June 2023
MLA – 105,000 sq ft
Hove, March 2022
MLA – 58,000 sq ft
Hayes, January 2022
MLA – 73,000 sq ft
Uxbridge, June 2021
MLA – 54,000 sq ft
Battersea, November 2020
MLA – 70,000 sq ft
Bracknell, September 2020
MLA – 59,000 sq ft
Camberwell, July 2020
MLA – 75,000 sq ft
Manchester, May 2019
MLA – 60,000 sq ft
Wapping, July 2018
MLA – 26,000 sq ft
Guildford Central, March 2018
MLA – 55,000 sq ft
Harrow, September 2022
MLA – 82,000 sq ft
Kingston North, September 2022
MLA – 56,000 sq ft
Aberdeen, June 2022
MLA – 54,000 sq ft
Annual Report and Accounts 2024 Big Yellow Group PLC 33
Cardiff, October 2001
MLA – 74,000 sq ft
Portsmouth, October 2001
MLA – 61,000 sq ft
Norwich, September 2001
MLA – 47,000 sq ft
Dagenham, July 2001
MLA – 51,000 sq ft
Wandsworth, April 2001
MLA – 72,000 sq ft
Luton, March 2001
MLA – 41,000 sq ft
Southend, March 2001
MLA – 57,000 sq ft
Staples Corner, March 2001
MLA – 112,000 sq ft
Romford, November 2000
MLA – 70,000 sq ft
Milton Keynes, September 2000
MLA – 60,000 sq ft
Cheltenham, April 2000
MLA – 50,000 sq ft
Slough, February 2000
MLA – 67,000 sq ft
Hanger Lane, October 1999
MLA – 66,000 sq ft
Oxford, August 1999
MLA – 33,000 sq ft
Croydon, July 1999
MLA – 79,000 sq ft
Richmond, May 1999
MLA – 35,000 sq ft
New Malden, May 2002
MLA – 81,000 sq ft
Hounslow, December 2001
MLA – 54,000 sq ft
Ilford, November 2001
MLA – 58,000 sq ft
Guildford Slyfield, June 2002
MLA – 55,000 sq ft
Brighton, October 2002
MLA – 59,000 sq ft
Bow, November 2002
MLA – 132,000 sq ft
Colchester, December 2002
MLA – 54,000 sq ft
West Norwood, January 2003
MLA – 57,000 sq ft
Annual Report and Accounts 2024 Big Yellow Group PLC36
Canterbury
MLA – 35,000 sq ft
Daventry
MLA – 35,000 sq ft
Derby
MLA – 43,000 sq ft
Dundee
MLA – 39,000 sq ft
Exeter
MLA – 34,000 sq ft
Gateshead
MLA – 46,000 sq ft
Grimsby
MLA – 40,000 sq ft
Hull
MLA – 32,000 sq ft
Liverpool Aintree
MLA – 49,000 sq ft
Liverpool Bootle
MLA – 36,000 sq ft
Liverpool South
MLA – 50,000 sq ft
Macclesfield
MLA – 63,000 sq ft
Morecambe
MLA – 50,000 sq ft
Newcastle
MLA – 56,000 sq ft
Peterborough
MLA – 49,000 sq ft
Plymouth
MLA – 25,000 sq ft
Sheffield Parkway
MLA – 48,000 sq ft
Sheffield West Bar
MLA – 29,000 sq ft
Stockton Central
MLA – 43,000 sq ft
Stockton South
MLA – 41,000 sq ft
Stoke
MLA – 39,000 sq ft
Torquay
MLA – 33,000 sq ft
Warrington
MLA – 57,000 sq ft
West Molesey
MLA – 35,000 sq ft
Our Armadillo Stores
Armadillo is Big Yellow’s regional brand in smaller towns and cities with 24 largely freehold stores.
Annual Report and Accounts 2024 Big Yellow Group PLC 37
Strategic Report Governance Report Financial Statements
Financial Review
Revenue
Total revenue for the year was £199.6million, an increase of £10.8million
(6%) from £188.8million in the prior year. Like-for-like store revenue
(seeglossary in note 33) for the year was £193.5million, an increase
of4% from the prior year (2023:£185.6million).
Revenue growth for the year in our London stores was 7%, our south east
commuter stores 5% and our regional stores 3%.
Included in store revenue is other storage related income, from the sale
of packing materials, insurance/enhanced liability service (“ELS”), and
storage related charges. This amounted to £22.6million in the year
(2023:£22.6million).
Store operating costs have increased by £1.3million (3%). The one-off
items in the current year relate to the release of a provision for property
rates from the 2017 rating list (£2.3million), and a reassessment of the
Group’s bad debt provision (£0.5million). Store operating costs before
these one-off items have increased by £3.8million (8%) compared to the
prior year. New stores accounted for £1.5million of operating expense
increase in the year. Cost of sales has decreased by £0.7million following
the move to selling an ELS rather than insurance (see explanation in
revenue above), and also due to a decline in packing material sales during
the year.
The Group changed the way it sold its contents protection cover to its
customers on 1 June 2022 to an Enhanced Liability Service, which is
subject to VAT at 20% and not Insurance Premium Tax (“IPT”) at 12%, the
latter being included in revenue. We estimate the impact of this on the
total revenue and like-for-like revenue for the year is 0.2%.
The other revenue earned by the Group is tenant income on sites where
we have not started development.
Operating costs
Cost of sales principally comprise the direct store operating costs,
including store staff salaries, utilities, business rates, insurance, a full
allocation of the central marketing budget and repairs and maintenance.
The table below shows the breakdown of our store operating costs
compared to the prior year:
The remaining increase of £3million represents an increase of 6%.
Morespecifically, we would comment as follows:
– Staff costs have increased by £0.3million (2%). The average salary
review in the year was 5.6%, which has been partly offset by a
reduction in staffing in stores as we continue to invest in automation,
and lower bonuses in the year.
– General and admin expenses are down by £0.3million (15%),
following a reassessment of the Group’s bad debt provision in
theyear.
– Marketing is 1% down on the prior year with continued efficiencies
being achieved from our digital campaigns.
– Utilities has increased by 30%, with a new fixed rate electricity
contract starting on 1 October 2023, which was at a 74% higher
rate than our expiring contract. This increased rate has been partly
mitigated by our investment in solar.
Category
Year ended
31March
2024
£000
Year ended
31March
2023
£000 Change
% of store
operating
costs in
2024
Cost of sales 1,519 2,202 -31% 3%
Staff costs 14,721 14,415 2% 27%
General & admin 1,434 1,691 -15% 2%
Utilities 2,670 2,056 30% 5%
Property rates 18,153 15,498 17% 33%
Marketing 6,438 6,504 -1% 12 %
Repairs & maintenance 5,336 4,685 14% 10%
Insurance 3,323 2,757 21% 6%
Computer costs 1,031 1,001 3% 2%
Total before one-off items 54,625 50,809 8%
One-off items (2,795) (246)
Total per portfolio summary 51,830 50,563 3%
Annual Report and Accounts 2024 Big Yellow Group PLC38
– Property rates have increased by £2.7million (17%), following
theRating Revaluation published in November 2022, effective
1April2023.
– Insurance has increased by £0.6million (21%). Overall buildings and
loss of income insurance premiums increased from 1 April 2023 by
16%, due to market conditions and higher insured values. In addition,
we now insure our customers contents for catastrophe risk, with
a Lloyds underwriter, and as a result are responsible for paying for
claims up to £250,000 in any one loss. During the year £348,000 was
paid in claims (2023:£128,000), with higher claims this year due to
the very wet winter.
– The repairs and maintenance expense has increased due to higher
store numbers, and an increase in solar panel maintenance costs,
with higher numbers of stores now with solar PVs.
– The Group’s bad debt expense for the year was 0.2% of revenue, in line
with the prior year. The Group has not seen any deterioration in its
aged debtors’ profile over recent months.
The table below reconciles store operating costs per the portfolio
summary to cost of sales in the statement of comprehensive income:
Year ended
31March
2024
£000
Year ended
31March
2023
£000
Direct store operating costs per portfolio
summary(excluding rent) 51,830 50,563
Rent included in cost of sales (total rent payable
isincluded in portfolio summary) 1,784 1,551
Depreciation charged to cost of sales 569 496
Head office and other operational management
costscharged to cost of sales 1,811 1,697
Cost of sales per statement of comprehensive income 55,994 54,307
Store EBITDA
Store EBITDA for the year was £143.0million, an increase of £9.0million
(7%) from £134.0million for the prior year (see Portfolio Summary).
The overall EBITDA margin for during the year was 72.5%, up from 71.8%
in2023.
All stores are currently trading profitably at the Store EBITDA level. Our
store in Kings Cross, which opened in June 2023, reached break even
after four months of trading.
Administrative expenses
Administrative expenses in the statement of comprehensive income
of £15.2million were up £0.7million (5%) compared to the prior year,
including increased legal and professional fees and COO recruitment
costs. The non-cash share-based payments charge represents
£4.0million of the overall £15.2million expense (2023:£3.7million
of£14.5million expense).
Other income
In February 2022 the Group experienced a fire at our Cheadle store, which
resulted in a total loss to the store. We have insurance cover in place for
both the fit-out and four years loss of income. The loss of income received
during the financial year was £1.8million, which is included in other
income (2023:£1.4million).
The Group also received £4.7million in the year which was the insurance
proceeds for the fit-out of the Cheadle store. This amount is shown in
other income but has not been included in the Group’s adjusted earnings
for the year.
Interest expense on
bank borrowings
The gross bank interest expense for the year was £25.6million, an
increase of £7.5million from the prior year, due to higher average debt
levels in the first half of the year, coupled with the Group’s higher average
cost of debt following the increase in interest rates. The average cost of
borrowing during the year was 5.5% compared to 4.2% in the prior year.
Capitalised interest on our construction programme was £3.3million, up
from £2.8million in the prior year.
Total finance costs in the statement of comprehensive income increased
to £22.9million from £16.9million in the prior year.
Annual Report and Accounts 2024 Big Yellow Group PLC 39
Strategic Report Governance Report Financial Statements
Profit before tax
The Group made a profit before tax in the year of £241.0million, compared
to a profit of £75.3million in the prior year. After adjusting for the gain on
the revaluation of investment properties and other matters shown in the
table below, the Group made an adjusted profit before tax in the year of
£107.3million, up 1% from £106.0million in 2023.
Profit before tax analysis
2024
£000
2023
£000
Profit before tax 241,035 75,309
(Gain)/loss on revaluation of investment properties (131,159) 29,861
Movement in fair value on interest rate derivatives 2,146 133
Cheadle fit-out insurance proceeds (4,723) –
Refinancing costs – 732
Adjusted profit before tax 107,299 106,035
The adjustments made to the Group’s profit before tax follow guidance
issued by EPRA, with additional Company specific adjustments made
to give readers a clearer underlying picture of the Group’s performance.
EPRA profit before tax is disclosed in note 10.
The movement in the adjusted profit before tax from the prior year is
illustrated in the table below:
£m
Adjusted profit before tax – year ended 31March 2023 106.0
Increase in gross profit 9.1
Increase in administrative expenses (0.7)
Decrease in other income (0.4)
Increase in net interest payable (7.2)
Increase in capitalised interest 0.5
Adjusted profit before tax – year ended 31March 2024 107. 3
Basic earnings per share for the year was 127.1p (2023:40.1p) and
diluted earnings per share was 126.4p (2023:39.8p). Diluted adjusted
earnings per share based on adjusted profit after tax was down 1% to
55.9p (2023:56.5p) (see note 12).
REIT status
The Group converted to a Real Estate Investment Trust (“REIT”) in January
2007. Since then, the Group has benefited from a zero tax rate on the
Group’s qualifying self storage earnings. The Group only pays tax on the
profits attributable to our residual business, comprising primarily of the
sale of packing materials and insurance.
REIT status gives the Group exemption from UK corporation tax on profits
and gains from its qualifying portfolio of UK stores. Revaluation gains on
developments and our existing open stores are exempt from corporation
tax on chargeable gains, provided certain criteria are met. The Armadillo
stores joined our REIT group on acquisition of the remaining interest,
allowing us to write back the deferred tax that had been provided on
previous revaluation uplifts.
The Group has a rigorous internal system in place for monitoring
compliance with criteria set out in the REIT regulations. On a monthly
basis, a report on compliance with these criteria is issued to the
Executive. To date, the Group has complied with all REIT regulations,
including forward looking tests.
Taxation
There is a £2.3million tax charge in the residual business for the year
ended 31March 2024 (2023:£2.3million). The current year tax charge
ispartly offset in the income statement by an adjustment to the prior
year tax estimate.
Dividends
The Board is recommending the payment of a final dividend of 22.6 pence
per share in addition to the interim dividend of 22.6 pence, giving a total
dividend for the year of 45.2 pence, in line with the prior year. The Group’s
policy is to distribute a minimum of 80% of our adjusted earnings per
share in each reporting period.
REIT regulatory requirements determine the level of Property Income
Distribution (“PID”) payable by the Group. On the basis of the full year
distributable reserves for PID purposes, a PID of 45.2p pence per
share is payable (31March 2023:45.2 pence). The PID for the year to
31March 2024 accounts for all of the declared dividend. The table below
summarises the declared dividend for the year:
Dividend (pence per share)
31March
2024
31March
2023
Interim dividend 22.6p 22.3p
Final dividend 22.6p 22.9p
Total dividend 45.2p 45.2p
Subject to approval by shareholders at the Annual General Meeting to
be held on 18 July 2024, the final dividend will be paid on 26 July 2024.
The ex-div date is 4 July 2024 and the record date is 5 July 2024.
Cash flow growth
The Group is strongly cash generative and draws down from its longer
term committed facilities as required to meet its obligations. The Group’s
cash flow from operating activities pre-working capital movements for
the year was £110.1million, an increase of 1% from £109.2million in
the prior year, with the growth in line with the increase in the Group’s
profitability in the year.
These operating cash flows are after the ongoing maintenance costs
of the stores, which were on average approximately £49,000 per store
(2023:£43,000).
The Group’s net debt has decreased over the year to £385.4million
(March 2023:£486.6million).
There are distortive working capital items in the current period, and
therefore the summary cash flow below sets out the free cash flow
pre-working capital movements.
Financial Review continued
Annual Report and Accounts 2024 Big Yellow Group PLC40
Year ended
31March 2024
£m
Year ended
31March 2023
£m
Cash generated from operations pre-working capital movements 135.1 126.2
Net finance costs (24.0) (16.5)
Interest on obligations under lease liabilities (0.6) (0.7)
Loss of income insurance proceeds 1.6 2.0
Tax (2.0) (1.8)
Cash flow from operating activities pre-working capital movements 110.1 109.2
Working capital movements
(5.3)
2.8
Cash flow from operating activities 104.8 112.0
Capital expenditure (30.9) (106.4)
Disposal of non-current asset 5.4 –
Insurance proceeds on fit-out 4.7 –
Receipt from Capital Goods Scheme – 0.2
Cash flow after investing activities 84.0 5.8
Ordinary dividends (85.2) (79.2)
Issue of share capital 108.0 1.0
Payment of lease liabilities (1.8) (1.3)
Receipt from termination of interest rate derivatives – 0.4
Loan arrangement fees paid (3.7) (1.5)
(Decrease)/increase in borrowings (100.2) 74.5
Net cash inflow/(outflow) 1.1 (0.3)
Opening cash and cash equivalents 8.3 8.6
Closing cash and cash equivalents 9.4 8.3
Closing debt (394.8) (494.9)
Closing net debt (385.4) (486.6)
The Group’s interest cover for the period (expressed as the ratio of
cashgenerated from operations pre-working capital movements
againstinterest paid) was 5.6 times (2023:7.7 times). This is
calculatedper below:
31March
2024
£000
31March
2023
£000
Cash generated from operations pre working capital
movements (see note 26) 135,086 126,195
Interest paid per cash flow statement (24,069) (16,486)
Interest cover 5.6x 7. 7 x
In the year capital expenditure outflows were £30.9million, down from
£106.4million in the prior year. This capital expenditure was principally
on the construction of new stores, and the continued roll-out of our solar
retrofit programme. We expect the amount of capital expenditure to
increase next year, as we build out our seven sites with planning consent
and vacant possession. The disposal of non-current asset of £5.4million
relates to the proceeds from a land swap at Kings Cross.
The cash flow after investing activities was a net inflow of £84.0million in
the year, compared to a net inflow of £5.8million in 2023.
Balance sheet
Property
The Group’s open stores and stores under development owned at
31March 2024, which are classified as investment properties, have
allbeen valued individually by JLL.
The external valuation has resulted in an investment property asset
value of £2.865 billion, comprising £2.686 billion (94%) for the freehold
(including nine long leaseholds) open stores, £32.2million (1%) for the
short leasehold open stores and £146.5million (5%) for the freehold
investment properties under construction.
Annual Report and Accounts 2024 Big Yellow Group PLC 41
Strategic Report Governance Report Financial Statements
Investment property
The open store portfolio has increased in value by £145.4million (5.3%).
This increase in value arises from an improvement in cap rates, reflecting
recent transactions in the sector, and operating cash flow growth.
The weighted average exit capitalisation rate used in the valuations was
5.4% in the current year, compared to 5.6% in the prior year.
Analysis of property portfolio
Value at
31March
2024
£m
Revaluation
movement in the
year
£m
Investment property 2,718.5 145.4
Investment property under construction 146.5 (14.2)
Investment property total 2,865.0 131.2
The table below provides a further breakdown of the open store valuations:
Established Developing Armadillo
Freehold Leasehold Freehold Largely Freehold Total
Number of stores 71 5 9 24 109
MLA capacity (sq ft) 4,473,000 311,000 627,000 1,008,000 6,419,000
Valuation at 31March 2024 (£m) £2,082.6m £27.4m £343.1m £173.8m £2,626.9m
Value per sq ft £466 £88 £547 £172 £409
Occupancy at 31March 2024 81.7% 80.2% 59.8% 74.3% 78.3%
Stabilised occupancy assumed 88.6% 87.3% 86.1% 86.4% 87.8%
Net initial year one NOI yield 5.3% 18.2% 3.2% 6.2% 5.2%
The total store valuation in this table differs to the balance sheet due
to the non-self storage investment property that the Group owns, such
as the Harrow Industrial Scheme. The net initial year one NOI yield is
5.2% (2023:5.3%). Note 15 contains more detail on the assumptions
underpinning the valuations.
Investment property under construction
The Group spent £15.1million on investment property under construction
in the year, the majority of which was construction expenditure,
principally on Kings Cross and Slough Farnham Road. This spend also
includes the site purchase of Leicester. Kings Cross transferred to
investment property during the year as the store opened, and the Harrow
Industrial Scheme has also been transferred to investment property
during the year, following the completion of its construction.
The revaluation deficit of £14.2million on the investment property under
construction is largely as a result of a reduction in the value of our land
without self storage planning – this deficit all occurred in the first half of
the year, with values stable in the second half of the year.
The projected net operating income of the increase in our total
capacityof 957,000 sq ft when stabilised is £30.4million representing
an approximate 13.5% return on the incremental capital deployed. On a
proforma basis at stabilisation, the projected net operating income for
the 12 new stores and two replacement stores is £35.9million, a return
of approximately 8.7% on the total development cost of £412million,
including land already acquired.
Purchaser’s cost adjustment
As in prior years, we have instructed an alternative valuation on our
assets using a purchaser’s cost assumption of 2.75% (see note 15 for
further details) to be used in the calculation of our adjusted diluted
net asset value. This Red Book valuation on the basis of the special
assumption of 2.75% purchaser’s costs, results in a higher property
valuation at 31March 2024 of £2.976 billion (£111.1million higher than
the value recorded in the financial statements). This translates to 56.2
pence per share. This revised valuation translates into an adjusted net
asset value per share of 1,296.4 pence (2023:1,237.3 pence) after the
dilutive effect of outstanding share options.
Receivables
The Group’s bad debt expense in the year represented 0.2% of revenue
compared to 0.2% in the prior year, with 80% of our customer base paying
by direct debit.
Net asset value
The adjusted net asset value is 1,296.4 pence per share (see note 13),
compared to 1,218.5 pence per share at 31March 2023 (after adjusting
for the impact of the placing in October 2023). The table below reconciles
the movement:
Movement in adjusted net asset value £m
Adjusted NAV
pence per share
31March 2023 2,287.2 1,237.3
Adjusted for placing 107. 0 (18.8)
31March 2023 (adjusted) 2,394.2 1,218.5
Adjusted profit after tax 106.1 54.0
Equity dividends paid (86.0) (43.8)
Revaluation movements 131.2 66.8
Movement in purchaser’s cost adjustment 6.5 3.3
Other movements (e.g. share schemes,
insurance fit-out receipt) 9.9 (2.4)
31March 2024 2,561.9 1,296.4
Financial Review continued
Annual Report and Accounts 2024 Big Yellow Group PLC42
Borrowings
Our financing policy is to fund our current needs through a mix of debt, equity, and cash flow to allow us to build out, and add to, our development
pipelineand achieve our strategic growth objectives, which we believe improve returns for shareholders. We aim to ensure that there are sufficient
medium-term facilities in place to finance our committed development programme, secured against the freehold portfolio, with debt serviced by
our strong operational cash flows. We maintain a keen watch on medium and long-term rates and the Group’s policy in respect of interest rates is
tomaintain a balance between flexibility and hedging of interest rate risk.
The table below summarises the Group’s debt facilities at 31March 2024, with a current average cost of debt of 5.4% (March 2023:4.7%).
Debt Expiry Facility Drawn
Average
interest cost
Aviva Loan September 2028 £155.8m £155.8m 3.3%
M&G loan (£35million fixed at 4.5%, £85million floating) September 2029 £120m £120m 6.9%
Revolving bank facility
(Lloyds, HSBC, Barclays and Bank of Ireland, floating)
December 2026
(option to extend for two further years)
£300m £119m 6.4%
Total Average term 4.2 years £575.8m £394.8m 5.4%
In addition to the facilities above, the Group has a $225million credit
approved shelf facility with Pricoa Private Capital (“Pricoa”), to be drawn
in fixed sterling notes. The Group can draw the debt in minimum tranches
of £10million over the next two and half years with terms of between 7
and 15 years at short notice, typically 10 days.
During the year the Group put in place a new £300million
sustainability-linked facility for an initial term of three years, with the
option to extend the facility by two additional one-year terms through
to December 2028, subject to lender approval. The loan is provided by
Lloyds Bank plc, HSBC UK Bank plc, Bank of Ireland, and Barclays Bank
plc, with Barclays joining the existing three bank syndicate.
The margin of 1.25% was unchanged from the existing facility.
The Group has incorporated Sustainability-linked KPIs into the loan,
which include annual pre-agreed targets and are based on:
– reductions in Scope 1 and 2 emissions;
– increase in solar generation capacity;
– total annual grants to Big Yellow Foundation charity partners; and
– the value of storage space provided free of charge to local charities
in our stores.
Performance against the KPIs will be measured annually, and a margin
decrease or increase will be applied to the headline margin on the basis
of this performance.
The Group was comfortably in compliance with its banking covenants at
31March 2024. Further details of the Group’s covenants are provided in
note 19 of the accounts.
The Group’s key financial ratios are shown in the table below:
Metric
31March
2024
31March
2023
Net Debt / Gross Property Assets 13% 18%
Net Debt / Adjusted Net Assets 15% 21%
Net Debt / Market Capitalisation 18% 23%
Net debt to Group EBITDA ratio 3.0x 4.1x
Cash generated from operations pre-working capital
movements against interest paid 5.6x 7. 7 x
At 31March 2024, the fair value on the Group’s interest rate derivatives
was a liability of £1.8million. The Group does not hedge account its
interest rate derivatives. The fair value movements are eliminated from
adjusted profit before tax, adjusted earnings per share, and adjusted net
assets per share.
Cash deposits are only placed with approved financial institutions in
accordance with the Group’s Treasury policy.
Share capital
The share capital of the Company totalled £19.6million at 31March 2024
(2023:£18.4million), consisting of 196,195,287 ordinary shares of
10p each (2023:184,265,973 shares). 11.6million shares were issued
in October 2023 for a placing, raising £107million (net of expenses).
0.3million shares were issued for the exercise of options during the year
at an average exercise price of £10.77 (2023:0.3million shares at an
average price of £13.13).
The Group holds 1.1million shares within an Employee Benefit Trust
(“EBT”). These shares are shown as a debit in reserves and are not
included in calculating net asset value per share.
Metric
2024
No.
2023
No.
Opening shares 184,265,973 183,967,378
Shares issued in placing 11,640,212 –
Shares issued for the exercise of options 289,102 298,595
Closing shares in issue 196,195,287 184,265,973
Shares held in EBT (1,098,686) (1,122,907)
Closing shares for NAV purposes 195,096,601 183,143,066
111.2million shares were traded in the market during the year ended
31March 2024 (2023:116.3million). The average mid-market price of
shares traded during the year was £10.84 with a high of £12.39 and a
lowof £9.10.
Annual Report and Accounts 2024 Big Yellow Group PLC 43
Strategic Report Governance Report Financial Statements
The Group maintains a low appetite to risk, in line with our strategic objectives of providing a low volatility, high distribution business.
The section below details the emerging and principal risks and uncertainties that are considered to have the most material impact on the Group’s
strategy and objectives. These key risks are monitored on an ongoing basis by the Executive Directors and considered fully by the Board in its annual
risk review.
Risk and impact
Mitigation
Change during the year and outlook
Self storage
market risk
There is a risk to the business that the
self storage market does not grow in
line with our projections, and that
economic growth in the UK is below
expectations, which could result in
falling demand and a loss of income.
Self storage is a relatively immature market in the UK compared to
otherself storage markets such as the United States and Australia,
andwe believe has further opportunity for growth. Awareness of self
storage and how it can be used by domestic and business customers is
relatively low throughout the UK, although higher in London; awareness
increased during the pandemic.
The rate of growth of branded self storage on main roads in good
locations has historically been limited by the difficulty of acquiring sites
at affordable prices and obtaining planning consent. New store openings
in London and other large urban conurbations within the sector have
slowed significantly over the past few years.
Our performance during the past four years has been strong with
revenue growing by 54% from £129.3million in the year ended 31March
2020 to £199.6million for this year. We believe that this performance is
due to a combination of factors including:
– a high quality and growing portfolio of freehold properties delivering
higher operating margins;
– a focus on London and the South East and other large urban
conurbations, where the drivers in the self storage market are at
their strongest and the barriers to competition are at their highest;
– continuing innovation and automation;
– an inclusive and non-hierarchical culture with a highly
engagedteam;
– a focus on delivering the highest levels of customer service;
– delivering on our strong ESG commitments;
– the UK’s leading self storage brand, with high and growing public
awareness and online strength; and
– strong cash flow generation from a secure capital structure.
We have a large current storage customer base occupying
approximately 73,000 rooms spread across the portfolio of stores and
hundreds of thousands more who have used our stores over the years.
Inany month, customers move in and out at the margin resulting in
changes in occupancy. This is a seasonal business and typically we see
growth over the spring and the summer months, with the seasonally
weaker period being the winter months.
The past two financial years have seen a
challenging geopolitical and macroeconomic
backdrop, with the Russian invasion of Ukraine
inFebruary 2022, the US regional banking crisis
and the collapse of Credit Suisse, the conflict in
the Middle East, and the impact of rising inflation
and interest rates. The latter has impacted the
cost of living in the UK, and the level of housing
transactions has fallen as the cost of mortgages
has increased. The UK economy briefly entered a
recession in the second half of 2023.
The Group’s move-in activity levels were
impacted by this backdrop during the year
andwere down 6% compared to the prior year.
However, since the year end, activity levels have
improved and move-ins are up 5% compared to
the same period last year.
Inflation has moderated over recent months, and
most commentators consider that interest rates
have peaked and will start to fall towards the end
of the year, subject to inflation remaining on its
current trajectory.
Principal Risks and Uncertainties
The Directors have carried out a robust assessment of the
emerging and principal risks facing the Group, including those
that would threaten its business model, future performance,
solvency, or liquidity.
Annual Report and Accounts 2024 Big Yellow Group PLC44
Risk and impact
Mitigation
Change during the year and outlook
Property risk
There is a risk that we will be unable to
acquire new development sites which
meet management’s criteria. This
would impact on our ability to grow
the overall store platform.
Changing climate and resulting
likelychanges to planning
restrictionswill narrow choice
ofavailable sites further.
The Group is also subject to the risk of
failing to obtain planning consents on
its development sites, and the risk of
a rising cost of development.
Planning approval is increasingly
dependent on Social or Environmental
enhanced features (e.g. social
enterprise at Battersea, BREEAM
standards, local planners demands
for green spaces) – adding cost
andcomplexity.
Our management has significant experience in the property industry
generated over many years and in particular acquiring property on main
roads in high profile locations and obtaining planning consents. We do
take planning risk where necessary, although the availability of land,
and competition for it makes acquiring new sites challenging.
Our in-house development team and our professional advisers
havesignificant experience in obtaining planning consents for self
storage centres.
We manage the construction of our properties very tightly. The building
of each site is handled through a design and build contract, with the
fit-out project managed in-house using an established professional
team of external advisers and sub-contractors who have worked with
usfor many years to our Big Yellow specification.
We carried out an external benchmarking of our construction costs and
tendering programme during the prior year, which reinforced our current
approach, but also gave some areas where further efficiencies and cost
savings can be achieved, which we have been implementing this year.
The Group has acquired thirteen sites over the
past five years, taking its total pipeline to 14
sites which, when opened, would expand the
Group’s current MLA by 15%.
The planning process remains difficult and
toachieve a planning consent can take
anythingfrom eighteen months to three years.
Local planning policy is favouring residential
development over other uses, and we don’t
expect this to change given the shortage of
housing in the UK.
We currently have planning consent on eight
ofthe 14 development sites.
In May 2022, we suspended construction on all
projects that were not already on site because
conditions in the construction market were
unfavourable. Those conditions have improved
considerably with steelwork and cladding prices
falling, and other material prices stabilising.
Inaddition, we are seeing on recent tenders that
main contractors and specialist sub-contractors
are pricing new projects more competitively.
Weare therefore proceeding with the build-out of
our sites with planning and vacant possession.
Valuation risk
The valuation of the Group’s
investment properties may fall due
toexternal pressures or the impact
ofperformance.
Lack of transactional evidence in
theself storage sector leads to
moresubjective valuations.
The portfolio is diverse with approximately 73,000 rooms currently
occupied in our stores for a wide variety of reasons.
The valuations are carried out by independent, qualified external valuers
who have significant experience in the UK self storage industry.
The revaluation surplus on the Group’s open store
investment properties was £145.4million in the
year (an uplift of 5%), due to an improvement in
cap rates following recent transactions in the
sector and growth in underlying cash flows used
in the valuations.
There have been a number of larger portfolio
transactions across Europe over the past
fouryears, notably including the proposed
acquisition of Lok ‘n Store by Shurgard, and
thereis a weight of institutional money looking
toinvest in self storage.
There is significant headroom on our loan to
value banking covenants.
Annual Report and Accounts 2024 Big Yellow Group PLC 45
Strategic Report Governance Report Financial Statements
Risk and impact
Mitigation
Change during the year and outlook
Treasury risk
The Group may face increased
costsfrom adverse interest
ratemovements.
Our financing policy is to fund our current needs through a mix of debt,
equity, and cash flow to allow us to selectively build out the remaining
development pipeline and achieve our strategic growth objectives,
which we believe improve returns for shareholders. We have made it
clear that we believe optimal leverage for a business such as ours should
be a debt to EBITDA ratio in the range of 3 to 4 times and this informs our
management of treasury risk.
We aim to ensure that there are sufficient medium-term facilities in
place to finance our committed development programme, secured
against the freehold portfolio, with debt serviced by our strong
operational cash flows.
We have a fixed rate loan in place from Aviva Commercial Finance
Limited, with 4 and half years remaining. The Group has a £120million
loan from M&G Investments, which is repayable in 2029. For our
revolving credit facility, we borrow at floating rates of interest.
The Group has a $225million credit approved shelf facility with Pricoa
Private Capital (“Pricoa”), to be drawn in fixed sterling notes. The Group
can draw the debt in minimum tranches of £10million over the next two
and a half years with terms of between 7 and 15 years at short notice,
typically 10 days.
Our policy is to maintain a flexible borrowing structure, with a long-term
average of approximately 50% of our total borrowings fixed, with the
balance floating. At 31March 2024 48% of the Group’s total drawn
borrowings were fixed or subject to interest rate derivatives. The Group
reviews its current and forecast projections of cash flow, borrowing and
interest cover as part of its monthly management accounts. In addition,
an analysis of the impact of significant transactions is carried out
regularly, as well as a sensitivity analysis assuming movements in
interest rates and store occupancy on gearing and interest cover.
Thissensitivity testing underpins the viability statement below.
The Group regularly monitors its counterparty risk. The Group monitors
compliance with its banking covenants closely. During the year it
complied with all its covenants and is forecast to do so for the
foreseeable future.
The Bank of England base rate has been
increased further during the year, with it
currently at 5.25%, up from 4.25% at the start of
our financial year, and 0.75% the year before.
52% of the Group’s drawn debt is floating, and
hence the Group will benefit from any reductions
in the base rate.
Debt providers currently remain supportive to
companies with a strong capital structure, as
evidenced by the Group refinancing the RCF
during the year at an unchanged margin.
The Group’s interest cover ratio for the year
ended 31March 2024 was 5.6 times,
comfortably ahead of our banking covenants,
asdisclosed in note 19.
We keep our hedging arrangements under review
and if the long term cost of borrowing for durations
of ten to twelve year falls, we will consider taking
out more longer term debt, which would increase
the weighting of the fixed element.
Tax and
regulatory risk
The Group is exposed to changes
inthe tax regime affecting the cost
ofcorporation tax, property rates,
VAT, Stamp Duty and Stamp Duty
LandTax (“SDLT”), for example the
imposition of VAT on self storage
from1 October 2012.
The Group is exposed to potential
taxpenalties or loss of its REIT
statusby failing to comply with
theREIT legislation.
We regularly monitor proposed and actual changes in legislation with the
help of our professional advisers, through direct liaison with HMRC, and
through trade bodies to understand and, if possible, mitigate or benefit
from their impact.
HMRC have designated the Group as having a low-risk tax status, and we
hold regular meetings with them. We carry out detailed planning ahead
of any future regulatory and tax changes using our expert advisers.
The Group has internal monitoring procedures in place to ensure that the
appropriate REIT rules and legislation are complied with. To date all REIT
regulations have been complied with, including projected tests.
The Group’s property rates bill for the year ended
31March 2024 has increased by 17% from the
prior year, with the 2023 rating list reflecting the
rise in industrial rents over the past few years.
The corporation tax rate increased with effect
from April 2023, and there is a risk that tax rates
will rise further in the medium-term to fund the
increased government deficits that have arisen
from the policy response to the pandemic.
Principal Risks and Uncertainties continued
Annual Report and Accounts 2024 Big Yellow Group PLC46
Risk and impact
Mitigation
Change during the year and outlook
Human resources risk
Our people are key to our success and
as such we are exposed to a risk of
high staff turnover, and a risk of the
loss of key personnel.
We have developed a professional, lively, and enjoyable working
environment and believe our success stems from attracting and
retaining the right people. We encourage all our staff to build on their
skills through appropriate training and regular performance reviews.
Webelieve in an accessible and open culture and everyone at all levels
isencouraged to review, and challenge accepted norms, to contribute
tothe performance of the Group.
The Group carried out an engagement survey
ofits employees during the prior year, which
showed very pleasing results of the level of
engagement of our teams.
We have listened to the feedback from our
employees raised during our engagement survey
and made a number of changes to the Group’s
operations, included reviewing and relaunching
our Bright Ideas Suggestion Scheme, reviewing our
salary bands for Store employees, and personal
safety training having been provided for all team
members within our stores. We also introduced a
new Employee Assistance Programme, re-trained
our Wellbeing Experts and set up a specific
Wellbeing sub-site on our Intranet.
Brand and
reputation risk
The Group is exposed to the risk of
asingle serious incident materially
affecting our customers, people,
financial performance and hence our
brand and reputation, including the
risk of a data breach.
We have always aimed to run this business in a professional way,
whichhas involved strict adherence with all regulations that affect our
business, such as health and safety legislation, building regulations in
relation to the construction of our buildings, anti-slavery, anti-bribery,
and data regulations.
We also invest in cyber security (discussed below), and make an
ongoing investment in staff training, facilities management, and the
maintenance of our stores.
We work closely with our key suppliers to ensure a consistency of
service from them.
To ensure consistency of service and to understand the needs of our
customers, we send surveys to every customer who moves in and
moves out of the business. The results of the surveys and mystery
shops are reviewed to continuously improve and deliver consistent
performance throughout the business.
We maintain regular communication with our key stakeholders,
customers, employees, shareholders, and debt providers.
The Group has a crisis response plan which
wasdeveloped in conjunction with external
consultants to ensure the Group is well placed
toeffectively deal with a major incident.
We experienced a fire caused by arson at our
Armadillo Cheadle store a couple of years ago.
Our crisis response team worked effectively in
managing the incident.
Security risk
The Group is exposed to the risk of
thedamage or loss of a store due to
vandalism, fire, or natural incidents
such as flooding. This may also cause
reputational damage.
The safety and security of our customers, their belongings, stores, and
our staff remains a key priority. To achieve this, we invest in state-of-
the-art access control systems, individual room alarms, digital CCTV
systems, intruder and fire alarm systems and the remote monitoring of
all our stores outside of our trading hours. We are the only major operator
in the UK self storage industry that has every room in every Big Yellow
store individually alarmed.
We have implemented customer security procedures in line with
advicefrom the Police and continue to work with the regulatory
authorities on issues of security, reviewing our operational procedures
regularly. The importance of security and the need for vigilance is
communicated to all store staff and reinforced through training and
routine operational procedures.
We have continued to run courses for all our staff
to enhance the awareness and effectiveness of
our procedures in relation to security.
We have further invested in security
improvements in our stores during the year.
Wehave also invested in additional automated
reports and alerts which notify our overnight
monitoring station and the operating team of
suspicious customer activity.
We regularly review and implement
improvements to our security processes
andprocedures.
Annual Report and Accounts 2024 Big Yellow Group PLC 47
Strategic Report Governance Report Financial Statements
Risk and impact
Mitigation
Change during the year and outlook
Cyber risk
High profile cyber-attacks and data
breaches are a regular staple in
today’s news. The results of any
breach may result in reputational
damage, fines, or customer
compensation, causing a loss
ofmarket share and income.
The Group receives specialist advice and consultancy in respect of cyber
security, and we have dedicated in-house monitoring and regular review
of our security systems. We also limit the retention of customer data to
the minimum requirement.
Policies and procedures are under regular review and benchmarked
against industry best practice by our consultants. These policies also
include defend, detect and response policies.
We don’t consider the risk to have increased
more for the Group than any other business;
however, we consider that the threats in the
entire digital landscape do continue to increase
and evolve. As such we have continued to invest
in cyber security upgrading or replacing
components as required.
Climate change
related risk
The Group is exposed to climate-change
related transition and physical risks.
Physical risks may affect the Group’s
stores and may result in higher
maintenance and repair costs. Failing
to transition to a low carbon economy
may cause an increase in taxation,
decrease in access to loan facilities and
reputational damage.
The good working order of our stores is of critical importance to our
business model.
We visually inspect each of our stores at least once per annum and
planned and unplanned work is discussed immediately.
Maintenance requirements are discussed at budget reviews; proposals
are made to raise climate change related issues to the Board, who may
request more holistic adaptation work to be carried out.
The key mitigation strategy to address transitional risks is the delivery of
our Net Renewable Energy Positive Strategy and the Net Zero Scope 1 and
Scope 2 Emissions Strategy. Our investment to decarbonise our business
over the next eight years is expected to mitigate fully against taxation
(carbon tax) risk and reputational risks (both investors and customers).
Our Sustainability Committee, chaired by a
Non-Executive Director, has delivered an
ambitious strategic plan to 2032.
We appreciate that both physical and transition
risks are expected to materialise to lesser or
greater extents over the coming years and costs
may go up gradually, hidden within what may be
perceived as ‘natural variations’. Our focus and
strong governance will allow us to continue to
mitigate the effects.
Internal audit
The Group employs a Head of Store Compliance responsible for reviewing
store operational and financial controls. He reports to the Chief Financial
Officer, and also meets with the Audit Committee at least once a year.
This role is supported by three other team members, enabling additional
work and support to be carried out across the Group’s store portfolio.
TheStore Compliance team visits each operational store twice per year to
carry out a detailed store audit. These audits are unannounced, and the
Store Compliance team carry out detailed tests on financial management,
administrative standards, and operational standards within the stores.
Part of the store staff’s bonus is based on the scores they achieve in these
audits. The results of each audit are reviewed by the Chief Financial Officer,
the Financial Controller, and the Regional Operations Managers. This is the
equivalent of an internal audit function for the Group’s store operations.
For the key business cycles conducted at the Group’s head office, external
consultants are used to review the Group’s controls on a rotational
basis. The consultants produce a report with recommendations which
is discussed with management and reviewed by the Audit Committee.
The cycles covered by this activity include construction expenditure,
treasury, taxation, and facilities management.
During the year, the Group implemented new software to enable us to
better capture risks and controls and implement a formal testing cycle
ahead of the new Corporate Governance Code. With the assistance
of external consultants, we performed a detailed walk through of key
processes. We have developed a detailed Risk and Controls Matrix in these
areas and documented the workflows. These are being embedded in the
software, and with reference to best practice will highlight any risks we can
further develop controls around, or any controls that could be improved.
With the combination of the store internal audit process and the external
assessment of the key business cycles, the Audit Committee considers
that this provides a robust internal audit assessment for the Group.
Going concern
A review of the Group’s business activities, together with the factors
likely to affect its future development, performance and position are set
out in the Strategic Report. The financial position of the Group, its cash
flows, liquidity position and borrowing facilities are shown in the balance
sheet, cash flow statement and accompanying notes to the financial
statements. Further information concerning the Group’s objectives,
policies, and processes for managing its capital; its financial risk
management objectives; details of its financial instruments and hedging
activities; and its exposures to credit risk and liquidity risk can be found
in this Report and in the notes to the financial statements.
Principal Risks and Uncertainties continued
Annual Report and Accounts 2024 Big Yellow Group PLC48
At 31March 2024 the Group had available liquidity of approximately
£190million, from a combination of cash and undrawn bank debt
facilities. The Group additionally has a $225million credit approved shelf
facility with Pricoa Private Capital to be drawn in fixed sterling notes.
The Group can draw the debt in minimum tranches of £10million over the
next two and half years with terms of between 7 and 15 years at short
notice, typically 10 days. The Group is cash generative and for the year
ended 31March 2024, had operational cash flow of £110.1million, with
capital commitments at the balance sheet date of £3.9million.
The Directors have prepared cash flow forecasts for a period of 18
months from the date of approval of these financial statements, taking
into account the Group’s operating plan and budget for the year ending
31March 2025 and projections contained in the longer-term business
plan which cover the 18 month going concern assessment period.
After reviewing these projected cash flows together with the Group’s
and Company’s cash balances, borrowing facilities and covenant
requirements, and potential property valuation movements over that
period, the Directors believe that, taking account of severe but plausible
downsides, the Group and Company will have sufficient funds to meet
their liabilities as they fall due for that period.
In making their assessment, the Directors have carefully considered the
outlook for the Group’s trading performance and cash flows as a result
of the current economic environment, taking into account the trading
performance of the Group over the recent dislocations in the global
economy from Covid-19, the Russian invasion of Ukraine and the cost
of living crisis. The Directors have also considered the performance of
the business during the Global Financial Crisis. The Directors modelled
several different scenarios, including material reductions in the Group’s
occupancy rates and property valuations, and assessed the impact of
these scenarios against the Group’s liquidity and the Group’s banking
covenants. The scenarios considered did not lead to breaching any of the
banking covenants, and the Group retained sufficient liquidity to meet its
financial obligations as they fall due.
Consequently, the Directors continue to adopt the going concern basis in
preparing the Group and Company financial statements.
Viability statement
The Directors have assessed the Group’s viability over a four-year period
to March 2028. This period is selected based on the Group’s long-term
strategic plan to give greater certainty over the forecasting assumptions
used. As in the assessment of going concern, the Directors have modelled
a number of different scenarios on the Group’s future prospects.
In making their assessment, the Directors took account of the Group’s
current financial position, including committed capital expenditure.
The Directors carried out a robust assessment of the emerging and
principal risks and uncertainties facing the business, their potential
financial impact on the Group’s cash flows, REIT compliance and financial
covenants and the likely effectiveness of the mitigating options detailed.
The Directors have assumed that funding for the business in the form
of equity, bank and insurance company debt will be available in all
reasonably plausible market conditions. Whilst the eventual impact of the
current economic environment on the Group is uncertain, and may not be
known for some time, the Group has a highly cash generative business,
good liquidity and has proved resilient in its trading in recent years.
Based on this assessment the Directors have a reasonable expectation
that the Company and the Group will be able to continue operating and
meeting all their liabilities as they fall due to March 2028.
Climate-Related Risks
andOpportunities
TCFD compliance statement
Big Yellow recognises the importance of addressing climate-related
risks and opportunities in our business operations and decision-making
processes. As such, we are committed to transparently disclosing
our approach to managing climate-related risks and opportunities in
alignment with the recommendations of the Task Force on Climate-related
Financial Disclosures (“TCFD”). Our disclosures are consistent with the
TCFD recommendations and recommended disclosures set out in the
report entitled ‘Recommendations of the Task Force on Climate-related
Financial Disclosures’ published in 2017 and updated in 2021 by the
TCFD. Our disclosures encompass all four pillars outlined by the TCFD
framework in line with the UK’s Financial Conduct Authority Listing Rules.
These are detailed below:
Pillar Disclosure Location
Governance Describe the Board’s oversight of
climate-related risks and opportunities
Governance I
page 50
Describe management’s role in
assessingandmanaging climate-related
risksand opportunities
Governance II
page 50
Strategy Describe the climate-related risks and
opportunities the organisation has identified
over the short, medium, and long-term
Strategy I
page 50
Describe the impact of climate-related
risks and opportunities have had on the
organisation’s businesses, strategy and
financial planning
Strategy II
page 53
Describe the resilience of the strategy, taking
into consideration different climate-related
scenarios, including a 2°C or lower scenario
Strategy III
page 51
Risk
Management
Describe the organisation’s processes
foridentifying and assessing
climate-relatedrisks
Risk Management I
page 53
Describe the organisation’s process for
managing climate-related risks
Risk Management II
page 53
Describe how processes for identifying,
assessing, and managing climate-related
risks are integrated into the organization’s
overall risk management
Risk Management III
page 53
Metrics &
Targets
Disclose the metrics used by the organization
to assess climate-related risks and
opportunities in line with its strategy and risk
management process
Metrics & Targets I
page 54
Disclose Scope 1, Scope 2, and, if appropriate,
Scope 3 greenhouse gas (GHG) emissions,
and the related risks
Metrics & Targets II
page 54
Describe the targets used by the
organizationto manage climate-related
risksand opportunities and performance
against targets
Metrics & Targets III
page 54
Annual Report and Accounts 2024 Big Yellow Group PLC 49
Strategic Report Governance Report Financial Statements
Governance
Board Oversight
Our Chief Executive has overall responsibility for climate-related risks
andopportunities. Ongoing oversight of climate-related issues is carried
out by our Sustainability Committee, chaired by our Non-Executive
Director for Sustainability, and attended by our Head of Sustainability
and the Executive Leadership Team. The Sustainability Committee
meetstwice yearly.
The Board is updated on relevant aspects of our sustainability
strategyateach meeting. In addition, climate-related risk has been
defined as a ‘principal risk’ and managed as part of our standard
businessrisk process.
Management’s role
The Quarterly Environmental Committee has been tasked by the CEO with
assessing climate change risk exposure and to feed that back into the
Business Risk Process, the Sustainability Committee where it intersects
with the Sustainability Strategy, and to the CEO. It will then be available
to the CFO, CEO and the Board for discussion. Outputs of the work will
be used to submit to external benchmarks and enhance ESG reporting.
Theprogress of the work on the TCFD is guided and monitored by the Head
of Sustainability who manages the Quarterly Environmental Committee.
As part of the existing business risk process, the Company assesses,
amongst other things, the impact the (temporary) loss of a store has
on the business. That loss could occur through any number of reasons;
the Environmental Committee will provide input into the business risk
process with climate-related specific risks and opportunities.
For more detail on our governance structure and management’s role in
assessing and managing climate-related risks and opportunities, please
see the link below. This is kept as an independent document as this is of
interest to some of our stakeholders separately from our annual report
and accounts.
https://corporate.bigyellow.co.uk/download_file/view/996/236
Strategy
In order to address this pillar, we have identified the material
climate-related risks and opportunities, the impact they have on our
business and our response to them. We have considered various future
scenarios over three different time frames. Finally, we have described
how we have incorporated climate change resilience holistically
into our organisation.
Identifying climate-related risks and opportunities over our
short, medium and long term time horizons.
Big Yellow has assessed the 10 main risk themes defined by the TCFD
framework in our ‘Managing Climate Risk and Opportunities’ document
Managing_Climate_Related_Risks_and_Opportunities_2022.pdf (https://
corporate.bigyellow.co.uk/application/files/9616/5235/3338/
Managing_Climate_Related_Risks_and_Opportunities_2022.pdf).
The 10 topics are: Current regulation; Emerging Regulation;
Technology; Legal; Market; Reputation; Acute physical; Chronic physical;
Upstream and Downstream. Using CDP terminology, seven of the TCFD
climate-related risk themes are assessed as ‘relevant, always included’
(in bold); two are assessed as ‘relevant, sometimes included’; and one is
assessed as ‘not relevant, included’.
Principal Risks and Uncertainties continued
Annual Report and Accounts 2024 Big Yellow Group PLC50
(1)
Short-term is determined to be less than five years, Medium-term between five to ten years and Long-term above ten years.
(2)
A +2°C scenario was used for identifying Physical risk and has been determined to have a medium-long-term timeline, using IPPC report (SPP3-7.0).
Climate-related risks are broken down into Physical and Transitional risks and are prioritised based on the potential severity of their impact on the
business. The below table illustrates time periods and the importance of the risks identified by the CSR department and Environmental Committee.
Risk Type Risk Theme
Potential Materiality
(1)
Short-Term Medium-Term Long-Term
Physical Risks
Heat Stress Chronic physical
Flooding
(2)
Acute physical
Transition Risks
Stranded Assets Market
Reputational Risk Reputation
An increase in carbon/emission taxation & fines
(unlikely that there will be significant incentives.)
Current regulation
An increase in standards, especially for buildings Emerging regulation
A significantly higher financial reporting burden including Scope 3 Emerging regulation
Importance:
Low Medium High
Climate-related risks: Physical Risks
Impacts from both flooding and increased heat stress will likely have
some financial impact on Big Yellow. It may also have a reputational
impact if stored goods are affected and an indirect financial impact
through rising insurance costs. Store locations have been identified using
either postcodes or 6-digit ONS coordinates. The coordinates are listed in
the Appendix of the full ESG report.
Heat stress
To determine heat stress we have used average daytime summer
temperatures at +2°C scenario data set as well as current climate in
order to test the resilience of the strategies at different temperature
points. We have considered the likelihood of stores experiencing more
than 5% temp increase on hottest day temp from base year and where
there is an increase in days that will experience temperatures of more
than 25°C.
Assuming a +2°C scenario, 42 of our stores may experience heat stress,
both as an increase in ‘hottest summer day temperature’ of 5 percentage
points or more and from at least a doubling in the number of summer days
per month that exceed 25°C.
The financial impact for longer periods of hot weather could come from a
range of impacts, such as heat damage to goods being stored, increase
in use of ventilation / cooling, potentially retrofitting of air conditioning
units, detrimental impact on immediate neighbourhoods through urban
island heat effects and community pressure to address heat issues.
Flooding
To determine flood risk we have used three sources of information:
planning flood zones; flood risk from rivers and sea; and flood risk from
surface water (across 3 websites depending on store location: .gov
SEPA and .Wales). We have looked at the current climate as well as +2°C
scenario to test the resilience of the strategy.
We have three Big Yellow stores that are in Flood Zone 3 and that
haveatleast medium to high risk of surface water flooding – all three
stores contain measures to minimise impacts, such as flood defences.
Weanticipate that we will be monitoring the adequacies of these
measures going forward.
Assuming a +2°C scenario, 89 of our stores may experience both
areduction in the number of rainy summer days per month and an
increase in mm of rainfall on the wettest summer day.
The financial impact of flooding could come from a range of impacts,
such as damage to goods stored on the ground and basement floors,
unblocking drains, clearing up large scale flooding, more frequent
maintenance of the building infrastructure that is exposed to a large
amount of rain falling over shorter time frames, such as roofs, gutters,
signage, etc.
Annual Report and Accounts 2024 Big Yellow Group PLC 51
Strategic Report Governance Report Financial Statements
Climate-related risks: Transition Risks
There are a number of consequences of changing climate that the
Sustainability Committee deem likely to occur:
– A focus on electrification and decarbonisation.
– An increase in carbon / emission taxation and fines (unlikely that
there will be significant incentives).
– An increase in standards, especially for buildings.
– A significantly higher financial reporting burden including Scope 3.
– The introduction of a price of carbon.
The Environmental Committee has proposed, and the Sustainability
Committee agrees, that decarbonising our business is important to
allowus to:
a. avoid the risk of “stranded assets”;
b. maximise the opportunity to invest at the right time, optimising costs;
c. minimise carbon / emission taxation;
d. provide EV charging pods for our staff and customers in all new stores.
Climate-related opportunities
Opportunities, arising from risks explored above, are also identified where possible and how these will be integrated within the Company’s strategy and
financial planning. Our internal processes and scenario analysis also identify possible climate-related opportunities, these are listed in the table below.
Climate-related Opportunity Company Response
Potential Materiality
Short-Term
(3)
Medium-Term Long-Term
Growth in demand for renewable energy Investment into retrofitting existing stores with PV systems
Aim for all new stores to be fitted with minimum 100kWp PV system
Purchasing 100% renewable energy
Growth in solar and battery markets driven by
decarbonisation
Investing in solar battery pilot projects to combat export limitations
Transition away from fossil fuelled heating and
Natural Gas
Investing into retrofitting existing gas boilers with Heat pumps
Growth of EV transport market Deploying electric vehicle chargers for all new stores
Importance: Low Medium High
(3)
Short-term is defined as up to five years, medium-term is between five years to ten years and Long-term is above ten years.
Stranded assets
The risk of ‘stranded assets’ is a focus for investors, and so becomes a
material concern to us. This has been part of our risk process, considered
throughout the year by the Environmental committee as well as by the
Board and during the risk management review. We have a clear plan to
improve the efficiency of our buildings working on the continual upgrade
of all EPCs across the estate. 99.6% of the estate is currently at a C or
above with plans to have all stores at a B or above by 2028.
Reputational risk
We believe that not tackling these physical and transitional risks head
on has a real potential of damaging our reputation. In the process of
undergoing a double materiality assessment this year we have had
thisreinforced with climate-related topics featuring in four of the nine
material topics.
Increase in carbon/emission taxation
An increase in carbon/emission taxation and fines is likely to occur
across the longer timeframes of the period. We are continuously horizon
scanning for changes in regulation.
Financial reporting burden
There has been a substantial change in the reporting regulations in the EU
over the past 12 months. We have made the decision to align ourselves
with the reporting requirements. Although they are not mandatory for
Big Yellow, we have made the decision to align with the CSRD so that our
reporting is comparable to our European REIT peers.
Principal Risks and Uncertainties continued
Annual Report and Accounts 2024 Big Yellow Group PLC52
Growth in demand for renewable energy
Big Yellow are investing heavily into the retrofit of renewable energy
across our estate with solar being installed on all roofs that can feasibly
hold the weight of panels. All new stores will have at least 100kWp of solar
installed with the roof space being maximised with solar where possible.
Growth in solar and battery markets driven bydecarbonisation
The continuation of our battery pilot is allowing us to learn from the issues
that have arisen in the first round of the pilot. By the end of the second
pilot, we hope to have a project plan that will allow us to couple batteries
with solar generation across the estate, reducing our reliance on the
national grid further still at the same time as continuing to decarbonise
our activities.
Transition away from fossil fuelled heating and NaturalGas
Our Net Zero Emission strategy sets out how we intend to deliver a
decarbonised business. Please note that the work to move away from gas
boilers is currently being undertaken with a further seven boilers being
removed this year. The remaining stores will have their heating swapped
to electric over the next two financial years.
Growth of EV transport market
We believe this is becoming an even stronger consumer preference /
offering real customer solutions, such as only using renewable energy at
our stores and providing EV charging pods for our staff and customers.
Impact of climate-related risks and opportunities haveon the
organisation’s businesses, strategy and financial planning
Both physical and transition risks are expected to materialise to a lesser
or greater extent over the coming years and costs may go up gradually,
hidden within what may be perceived as ‘natural variations’.
The initial view was to establish a ‘trigger’ metric that will prompt the
Company to review current measures taken and therefore allow for
strategic decision-making if thresholds are exceeded.
On discussing how this may work on an operational level, we felt that our
current processes in place are sufficient to maintain a close watch on
increasing costs driven by climate change.
We deem our current understanding of the inherent physical risks to our
assets and the unique features of each of our stores to be more than
enough to manage future changes.
Physical risk planning process – identifying emerging issues
through visual inspection and half yearly budget reviews
The CEO, CFO and COO visually inspect each of our stores at least once
per annum; they are usually accompanied by the Head of Estates and
Facilities where planned and unplanned work is discussed immediately.
The budgeting process then allows the CFO as well as Head of Estates
and Facilities to prioritise both planned and unplanned maintenance.
The budget review by the Financial Controller looks at planned costs
versus historic years and where costs are changing year on year. This is
the point at which trends may be identified and proposals are made to
raise climate change related issues to the Board, who may request a more
holistic solution and who may charge the Environmental Committee to
identify such a solution.
Transitional risk planning process – identifyingissues
via our internal and externalSustainabilitycommunity
The Head of Sustainability or the Environmental Committee or the
Non-Executive Director for Sustainability may identify aspects that
could pose a risk to the Group, and they may raise these either at the
Environmental Committee or at the Sustainability Committee. Specific
risks, such as those connected to Planning for our future store opening
program, may beintegrated into the standard Business Risk process.
Where we identify that a larger scale change needs to be considered,
such as replacing gas heating with electric or renewable energy heating,
depending on the budget implications this will be assessed either by the
Environmental Committee or if significant extra budget is required, at the
Board level Sustainability Committee.
Risk Management
Identification, assessment and management
ofclimate-related risks
Big Yellow has a rigorous system of risk management and
internal control which includes the identification and assessment
of climate-related risks. As detailed earlier in this document we have
mapped out our seven risk themes and categorised them as
transitional or physical. Next understanding and quantifying the
impact these could have on our business, strategy and financial
planning has been considered.
For more detail on our governance structure and management’s role in
assessing and managing climate-related risks and opportunities, please
see the link below. This is kept as an independent document as this is of
interest to some of our stakeholders separately from our annual report
and accounts.
https://corporate.bigyellow.co.uk/download_file/view/996/236
Metrics and Targets
Disclosure of metrics to assess climate-related
risks andopportunities
We have created a broad range of environmental metrics and targets with
the intention of enabling our stakeholders to make informed decisions.
The full comprehensive list has been compiled in response to the full
Double Materiality Assessment that has been conducted this year.
For full information and detail about our targets, metrics including Scope
1, 2 and 3 GHG emissions please see our full ESG report.
Annual Report and Accounts 2024 Big Yellow Group PLC 53
Strategic Report Governance Report Financial Statements
Metrics
The metrics found below are taken from the Double Materiality Assessment results and are those that are relevant to the main risk themes defined by
the TCFD framework detailed at the beginning of the report.
Climate-related risk metrics
Aspect KPI 22-23 23-24 Target
Regulation No of EPCs rated F or G 0 0 maintain
Extreme Weather % of current lettable area (sq ft) located in Planning flood Zone 3
&atleastmedium to highrisk of surface water flooding
4
0.68
5
0.67 n/a
% of at risk current lettable area protected by adaptive measures,
suchasraised floors orSUDs
6
100% 100% 100%
Climate-related opportunities metrics
Aspect KPI 22-23 23-24 Target
Transitioning to a low
carbon economy
% of electricity from renewable energy generation
7
16%
8
33% 100% + by 2030
Investment in retrofitting activities to drive decarbonisation (approx..)
9
£5.2m
10,11
£6.0m
12
£5.5m per annum to 2025
% of electricity purchased from renewable sources (‘market-based)
7
100% 100% 100%
Greenhouse Gas (GHG) emissions intensity from building energy
consumption (Scope 1 & 2) – tCO
2
e/CLA(m
2
)
4.1
13
3.8 As per our NREP & Net Zero Strategy
Greenhouse Gas (GHG) emissions intensity from
Scope 3 – tCO
2
e/CLA (sq ft)
0.0022 0.0021 As per our Science Based Targets
(4)
Sq ft from ground and below ground level floors.
(5)
Restated as 2022/23 reporting error made, resulting in Hull being reporting not Barking.
(6)
SUDs stands for Sustainable Urban Drainage.
(7)
Import gird use only.
(8)
Restated due to estimated figures being replaced with actuals post year end.
(9)
Figure includes removal of gas boilers, retrofitting of solar installations, all energy efficiency
related projects.
(10)
Restated to include reclassified project spend.
(11)
Projects included solar retrofit, gas boiler removal, EV charger installations and solar films.
(12)
Projects included solar retrofit, gas boiler removal and LED light conversions.
(13)
Restated with most up to date emissions factors.
EPC by Number of Stores
Targets to manage climate-related
risksandopportunities
Emissions
We have set out our full pathway for all Scope 1, 2 and 3 Emissions by
2032 in our Net Renewable Energy Positive (“NREP”) Strategy and Net
Zero Emissions Strategy.
In order to achieve our main Net Zero commitments, we have set a number
of sub targets that need to be achieved along our pathways. These are
summarised in our annual ESG report, as well as in the Directors’ Report.
To track progress against our science-based targets, we have our Scope
3 footprint calculated annually starting with the calculation for the year
ended 31March 2023. For more information on this please refer to our
Benchmarks and Standards section in the Full ESG Report.
EPCs
99.6% of EPCs for our store portfolio are in the ‘Green’ range, i.e. an A, B
or C rating. The final store with an EPC rating of D is due for renovation in
2024-5; once those works are completed we hope to be able to say the
whole estate is rated C or above. 100% of our stores are covered by an
Energy Performance Certificate.
We aim to achieve a good balance between disclosing our risks and any
mitigating actions we are taking and protecting commercially sensitive
information. We trust this section achieves this balance; for any further
questions, please contact csr@bigyellow.co.uk.
C
38
B
54
A
16
D
1
Principal Risks and Uncertainties continued
Annual Report and Accounts 2024 Big Yellow Group PLC54
In performing this Section 172 requires a Director to have regards among
other matters to:
– the likely consequences of any decision in the long-term;
– the interests of the Company’s employees;
– the need to foster the Company’s business relationships with
suppliers, customers and others;
– the impact of the Company’s operations on the community and
theenvironment;
– the desirability of the Company maintaining a reputation for high
standards of business conduct; and
– the need to act fairly with members of the Company.
The Directors give careful consideration to the factors set out above in
discharging their duties under section 172. The Board’s obligations under
Section 172 are considered at Board meetings within each relevant
section of the Board pack. The stakeholders we consider in this regard
are our employees, our customers, our shareholders, our suppliers, and
the environment. The Board recognises that building strong relationships
with our stakeholders will help us to deliver our strategy in line with our
long-term values and operate the business in a sustainable way.
The Board regularly receives reports from management on issues
concerning customers, the environment, suppliers, employees, and
investors, which it takes into account in its discussions and in its
decision-making process under Section 172.
Stakeholder engagement
The Board is committed to effective engagement with all of our key
stakeholders. The importance of each matter may differ to each
stakeholder group, and hence the Group seeks to understand the relevant
interests and priorities of each stakeholder Group, and to have regard to
these in its decision making. The Board does acknowledge that not every
decision that it makes will necessarily result in a positive outcome for
allstakeholders.
Information on interaction with our key stakeholders is included in the
Corporate Governance Report on pages 83 to 89.
Further information
You can read further information on stakeholder engagement and our
approach to S172 in the following places:
Employees
Chief Executive’s Statement (page 17)
Governance (page 89)
Customers
Chief Executive’s Statement (page 16)
Operating Review (page 26)
Governance (page 87)
Suppliers
ESG Report (page 69)
Governance (page 88)
Investors
Chairman’s Statement (page 14)
Chief Executive’s Statement (page 19)
Our Strategy (page 20)
Our Investment Case (page 22)
ESG Report (page 72)
Governance (page 87)
Environment
Chief Executive’s Statement (page 18)
Operating Review (page 30)
ESG Report (pages 56 to 72)
Long term
Chairman’s Statement (page 14)
Chief Executive’s Statement (page 16)
Our Strategy (page 20)
Our Investment Case (page 22)
Risk Management (page 44)
Viability Statement (page 49)
Section 172 Statement
Section 172 of the Companies Act 2006 requires a Director of a Company
to act in the way they consider, in good faith, would be the most likely
topromote the success of the Company for the benefit of its members as
awhole.
Annual Report and Accounts 2024 Big Yellow Group PLC 55
Strategic Report Governance Report Financial Statements
Environmental, Social
andGovernance Report
Big Yellow Group PLC (“Big Yellow”) is committed to responsible
and sustainable business practices.
Introduction
The Big Yellow Board recognises that corporate social responsibility
(“CSR”) – when linked to clear commercial objectives will create a more
sustainable business and increase shareholder and customer value,
in both the medium and long term. People, Planet and Profit need to be
aligned to make a sustainable business.
Big Yellow seeks to meet the demand for self storage from businesses and
private individuals by providing the storage space for their commercial
and/or domestic needs, whilst aiding local employment and contributing
to the local community.
Our CSR Policy covers all Big Yellow’s activities, which now includes 85
Big Yellow stores, 24 Armadillo stores, and 14 proposed stores in the
development pipeline, as both an operator of self storage facilities and a
developer of new self storage facilities. We recognise that our operations
can have significant economic, environmental, and social impacts. We
are therefore committed to assessing our ESG risks and opportunities,
and taking appropriate steps to mitigate negative impacts and, where
possible, enhance positive impacts for the benefit of our business, our
stakeholders, and our local environment.
The governance of our sustainability activities is delivered by the Board
level Sustainability Committee, chaired by Heather Savory. For an
update on the activities of the Committee please see the Sustainability
Committee Report on page 94. Heather, along with the Board, oversees
the sustainability agenda delivered by the Environmental Committee and
the Head of Sustainability.
The outcome of operating responsibly is the social value that we create
and the long-term resilience of our business when faced with external
pressures and changes, such as a changing climate and a changing
political and legislative environment.
Our full ESG Report and the relevant sections within our Annual Reports
and Accounts (the Directors’ Report and the ESG section) have been
prepared in accordance with the Companies (Directors’ Report) and
Limited Liability Partnerships (Energy and Carbon Report) Regulations
2018 implementing the Streamlined Energy and Carbon Reporting
(“SECR”) requirements. The Greenhouse Gas (“GHG”) section of the
ESG report has been reported in accordance with the WRI/WBCSD GHG
Protocol – a Corporate Accounting and Reporting Standard.
Our health and safety reporting is stated in accordance with the UK Health
and Safety Executive guidance. You can read more about our business
model on page 22 of the Annual Report.
Annual Report and Accounts 2024 Big Yellow Group PLC56
1. ESG executive summary
1.1 CEO introduction
Following the external verification of our Science Based Targets last year,
this year we have focussed on reporting and improving our understanding
of the carbon within our buildings. Following the introduction of the
Corporate Sustainability Reporting Directive (“CSRD”) in the EU many
of our peers will be overhauling the fundamentals of their reporting and
auditing process within the ESG space. Although we are not mandated to
do this, we have decided to align our reporting with CSRD. We believe this
standard will be viewed as best practice also for UK listed companies and
we wish our reporting to be directly comparable to our EU peers.
We have partnered with an ESG consultancy and embarked on a Double
Materiality Assessment of the business to get an understanding from our
stakeholders, both internal and external, of the material environmental
issues related to Big Yellow’s activities. This set of topics will inform our
revised KPIs and reporting structure.
We have also started a detailed review of the design and build of our
newconstruction projects with a clear focus on the embodied carbon.
This builds on the reporting needed for BREEAM and includes Whole
Lifecycle Assessments on our construction projects during design and
post construction. We intend to use the findings to inform our design
process in the future with the aim of reducing embodied carbon and
improving the sustainability of our buildings.
Given the size of our development programme and our buildings
beinganimportant part of our business we have decided to bring all
the relevantinformation about our buildings into its own chapter within
thisESG report.
At Board level, our Sustainability Committee, chaired by Heather Savory,
are pleased with the progress made with the solar retrofit programme.
We have installed solar on new stores since 2008 and started phase 1
ofour solar retrofit programme in 2021. In 2023 it was decided to extend
the program from the 36 originally identified stores to the whole estate
so that, where possible, every store can benefit from renewable onsite
power in the future. Phase 3 of this process is almost complete taking the
total to 35 stores at a cost of £13.6million.
Following the pilot installation of a battery project at Guildford we have
considered new options and decided to use a different supplier and a
larger battery. This will be tested at our Slough Farnham Road centre
which is currently under construction and due to open this summer.
The Big Yellow Foundation has had a successful year this year with
£255,700 donated to our seven charity partners all of whom are
focussed on the rehabilitation of vulnerable young people and adults
intomeaningful work. The Foundation was set up in 2018 and over the
last six years we have donated over £1million to this cause.
We continue to provide free space to small local charities and community
organisations across our network. In the year under review this amounts
at current rents to a total of £0.8million in value of donated space.
At Big Yellow we embrace both the Environmental and Social pillars of our
ESG initiatives. We firmly believe that our journey towards achieving Net
Zero targets, the impactful efforts of The Foundation, and our donations
of space to local charities are all interconnected. Each action we take
is not just about making a difference in the environment; it's about
fostering stronger, more vibrant communities in the local neighbourhoods
of our stores. We are not only doing what is the right thing to do but
making a real, tangible impact, both for the local environment and all
our stakeholders. I would like to thank all those involved throughout
thebusiness.
Jim Gibson
Chief Executive Officer
May 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 57
Strategic Report Governance Report Financial Statements
1.2 Climate Change and our Business –
looking forward
We have a well-established strategy which we have been working towards
since 2021. Building on this by setting Science-Based Targets (“SBTs”)
last year, this year we have gone a step further. The announcement of
the Corporate Social Reporting Directive (“CSRD”) for EU businesses
has given us the opportunity to consider our own reporting structure.
Although we are not obligated to report under the CSRD, we want our
stakeholders to be able to compare us with our REIT and Self Storage
peers with ease. We can also see the benefit of the transparent approach
the directive has taken, and with these factors in mind, we have aligned
ourselves to the directive.
The biggest activity in this area has been to undertake a Double
Materiality Assessment to understand how the material topics for the
business have changed since the last materiality assessment. This time
we have looked both at the impact of the environment on the business as
well as the impact the business has on our local environment.
(14)
ONS Employee turnover levels and rates by industry section, UK.
Environmental, Social andGovernance Report continued
UN SDG Topic CSRD KPI Progress
Our Environment
Scope 1&2 Emissions Energy Management 70% reduction to 948 tCO
2
e by 2032 2,237 tCO
2
e*
A 29% reduction to date
Total installed solar Renewable Energy Total installed capacity increase to
11,479 kWp by March 2028
6,627 kWp*
58% progress towards target
Scope 3 / Embodied carbon Carbon Management This is in early stages of development with the plan to have
aKPIinthefuture
Our People
Turnover of full-time staff Maintain turn over below average UK
Retail levels of 33%
14
14.0%*, turnover including
part-timers is 18.1%
A staff training KPI Increase year on year of total hours
trained, both male and female
28,088 hours* a 20% increase
Our Communities
Free space donation to local charities Access & Affordability Trajectory in line with targets in
revolving credit facility
£796,123* exceeding this year’s target
Customer donations & matched funds Raise a minimum of £220k a year £220,282*
1.3 Sustainability performance overview
This year, after the completion of our Double Materiality Assessment
(please see the Materiality section of our full ESG report for more details),
we have also reviewed our ongoing Key Performance Indicators (“KPIs”).
We have rationalised these to distil them down to the most important
areas of focus for us. In the table below are the 14 KPIs and the progress
we have made against them during the financial year ended 31March
2024. The KPIs are derived from the whole range of topics discussed in
this report and then related to both the CSRD topic where appropriate and
the UN Sustainable Development Goals (“UNSDGs”).
Although we are aligning ourselves to the CSRD there is no requirement
for us to comply with the directive as we do not have any assets in
the EU. We have identified appropriate KPIs for seven of our nine
material topics. The remaining two are covered in our ESG Report or
Annual Report. Risk Management is handled in our TCFD section and
Management, Site Acquisition and Growth Strategy in the Our Buildings
section of this document.
The tables below show the Group’s performance against Sustainable Development Goals (“SDG”).
Annual Report and Accounts 2024 Big Yellow Group PLC58
(15)
500m
2
sedum green roof and 10 ornamental trees at street level detailed in BREEAM report – further info in our the Our Buildings Section.
(16)
Industry – Warehousing and support activities for transportation. SIC 52 – HSE Work-related non-fatal injuries to employees in Great Britain by detailed industry.
UN SDG Topic CSRD KPI Progress
Our Buildings
Estate EPCs Sustainable Self Storage Design Have all stores achieve a B or above
by 2028
70 stores (64%) with B or above rating
Biodiversity Average Biodiversity Net Gain
(“BNG”) per new store of over 10%
Kings Cross 2,583% net gain
15
Our Suppliers
Prompt payment Pay 95% of invoices within 60 days 100%
Our Health, Safety & Information Security
Staff annual incident rate AIIR to stay lower than industry
category average of 1,169
16
647*
Information security breaches Cyber & Data Security Maintain a minimal level of breaches No reportable information security
breaches in the past 3 years
Our Governance
ESG related LTIP vesting criteria –
solar retrofit
Board Ownership & responsibility Retrofitting solar panels on 30-40
stores between 2022 and 2025
35 stores retrofitted to date
ESG related LTIP vesting criteria –
green loan debt facility
Board Ownership & responsibility 30-50% of the group’s total debt
facilities being green loans by 2025
67% of the Group's total debt
facilities at 31March 2024 are
green loans
For our climate-related risk and opportunity metrics, please see the TCFD section on page 49.
Annual Report and Accounts 2024 Big Yellow Group PLC 59
Strategic Report Governance Report Financial Statements
Environmental, Social andGovernance Report continued
2. Our Governance
Environmental responsibilities
Our ESG Policy sets out the aspects of what we manage. Our ESG Policy
Standard and our web content provide further information on how we
manage the impact of our business on society and the local environment
to control our risks and manage our opportunities in a sustainable manner.
Reporting compliance
Our full ESG Report and the relevant sections within our Annual Reports
and Accounts (Directors’ Report and ESG section) have been prepared
in accordance with the Companies (Directors’ Report) and Limited
Liability Partnerships (Energy and Carbon Report) Regulations 2018
implementing the Streamlined Energy and Carbon Reporting (“SECR”)
requirements. The GHG section of the ESG report has been reported in
accordance with the WRI/WBCSD GHG Protocol – A Corporate Accounting
and Reporting Standard.
Fines, notifications, penalties or settlements
There were no fines, notifications, penalties, or settlements received by
the Company that are relevant to sustainability during the financial year
ended 31March 2024.
Approach
We have provided a specific section on energy, emissions, water,
and waste, reporting against all environmental European Public Real
Estate Association (“EPRA”) indicators (and GRI where relevant).
Having achieved ‘Gold’ status in terms of transparency and quality of our
reporting during 2022/23 we continue to present our data in this format.
After the Double Materiality Assessment, where we feel further KPIs may
be insightful, we have provided these in each subsection too, including a
brief narrative to explain variances where applicable.
All the changes we make to our reporting are tabled in our Basis of
Reporting document.
Benchmarking and standards
We use the detail in this ESG Report to participate in external/industry
benchmarks, such as the annual Carbon Disclosure Project (“CDP”), the
Global Real Estate Sustainability Benchmark (“GRESB”) and FTSE4Good to
engage with our other Ethical Investors.
The GRESB and CDP benchmarks inform our investor community of our
general ESG performance, our governance approach, risk management
protocols and a range of other indicators that give reassurance that our
business is ‘sustainable’.
We consider GRESB and FTSE4Good to be particularly relevant to the
nature of our business and our continued inclusion forms part of select
Big Yellow’s senior managers’ performance conversations.
We are aware of the limitations we face with taking part in benchmarks
designed for traditional Real Estate organisations rather than self
storage but value the opportunity to be transparent and are committed
tocontinued participation.
Assurance of data
We have commissioned SGS United Kingdom Ltd to carry out independent
assurance of our Greenhouse Gas emissions disclosures and other select
voluntary disclosures, predominantly at a limited level of assurance
according to the International Organization for Standardization’s (2006)
ISO 14064-3. The full assurance statement is published in our ESG
Report 2023-24. We have made the decision to have one KPI assured to
areasonable level this year. The reason for this is to start to prepare us
forthe transition of all KPIs so that we can align with the CSRD.
Annual Report and Accounts 2024 Big Yellow Group PLC60
3.2 Big Yellow Net Renewable Energy
Positive (NREP) Strategy and Net Zero
Emissions Strategy
Our Net Renewable Energy Positive (“NREP”) and Net Zero Emissions
strategy are in the 2nd year of delivery since being re-published in 2022.
As part of the NREP Strategy and Net Zero Emissions Strategy, the
Sustainability Committee approved budgets to deliver a number of
keyprogrammes.
The Company is tracking six initiatives to ensure the delivery of the
strategy is on track, the headlines are below with further detail later in
thereport. The six initiatives are:
a. Solar Generation: deliver retrofitting of 36 Big Yellow stores that
currently do not have solar. This commitment has been further
extended to cover all suitable roofs on the estate. On track
b. Science-Based Targets: our Science-Based Targets have been set
andexternally verified by the SBTi. Complete
c. Storage Batteries: first battery installed. We are working with a new
battery provider for a second phase of the pilot, to be installed at our
new Slough Farnham Road store. On track
d. Estate Decarbonisation: first and second steps of our gas boiler
replacement programme completed: seven gas boilers replaced with
electric boilers in the year; a final four scheduled for the year ending
31March 2025. On track
e. Sustainable Construction: the Sustainability Committee reviewed
theupfront investment the Company made to ensure all newly
constructed stores were aligned with the retrofitted stores. From our
Kingston North development onwards, all new stores are being
equipped with the optimal capacity in the range 50kWp-200kWp
subject to suitability of store roofs. On track
f. Embodied Carbon of our construction projects: this is now being
considered and assessed at RIBA 4 and 6 on a project by project
basis. In progress
3. Our Environment
3.1 Highlights
– We now have 6.6MWp of solar generating capacity across
68of our stores.
– Despite the opening of a new store and electrification of store
heat in seven stores, our absolute scope 1&2 emissions
have reduced.
– We have had REGO accreditation for 41 of our solar
installations to enable us to sell the REGO certificates
withour solar export.
– We have commissioned the next battery to extend our battery
pilot at our new Slough Farnham Road store in July 2024.
– We completed an estate wide water review saving £45,000
per annum.
In a constantly developing landscape, we are faced with a number of
variables in delivering the NREP Strategy and Net Zero Emissions Strategy
through to 2032; we intend to report on progress on an annual basis as
part of our ESG Report. We may also update the strategy document from
time-to-time, as we continue to develop the strategy for the Armadillo
stores and as the progression of our work is likely to uncover new options
becoming available to us.
We have created a number of environmental communications to help our
customers understand what we are doing and why. These include our Big
Yellow Green campaign with a short video of the various sustainability
features on our estate. During our customers’ online journey, we have
several ESG facts on holding screens to share the detail. In all our solar
stores there are displays showing how much energy has been created
in the store that day rather than bought from the grid. We also use social
media to share our sustainability messaging. We understand this is
important to our customers and so we share our journey with them.
3.3 Energy
Our portfolio of stores with roof-mounted solar PV installations generates
low carbon electricity that is monitored for performance and receives
financial payments from the energy companies that we export to. We now
have 68 stores that generate renewable solar electricity, with 17 new
systems commissioned this year.
Annual Report and Accounts 2024 Big Yellow Group PLC 61
Strategic Report Governance Report Financial Statements
Environmental, Social andGovernance Report continued
Long Term Solar Electricity Generation
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 20242023
41
94
113
134
209
286
314
358
343
329
450
578
665
865
3,396
1,688
Solar Generation (MWh)
Having generated over 3million kWh of power on our stores this year,
we have saved over £400,000 in grid electricity bills. Once an export
connection is established, which takes some time after the panel
installation is complete, we are also able to sell any unused power back
to the grid. Below is a summary of this year’s financial benefits from our
solar generation. This year we have also started to apply for Renewable
Energy Guarantees of Origin (“REGO”) accreditation for our stores.
Thismeans that we can receive certificates for every megawatt of
electricity generated on our sites, adding another revenue stream to the
business. This year we have managed to secure accreditation for 41 sites.
This has generated additional revenue of £5,764. As the majority of these
accreditations were granted midyear this number is set to grow further
next year.
Financial benefits of solar generation
Year ended 31March 2021 2022 2023 restated 2024
Solar Generation (MWh) 681 865 1,688 3,396
Store solar use (MWh) 391 557 1,514 2,600
Displaced grid energy
savings (£) £93,116 £121,065 £236,375 £438,447
FiT & PPA payments (£) £108,951 £115,735 £135,352 £204,182
REGO payments (£) New 2024 New 2024 New 2024 £5,764
Total savings (£) £202,068 £236,800 £ 371,727 £648,392
Notes:
– March 2024 FiT payments have been estimated using March 2023 data as current year
notavailable until Q2.
– The process of setting up PPAs once a solar installation is complete can take some time,
sothesplit of used compared to exported does change over time.
– Supplied UK Network displaced electricity savings = solar generated kWh x 14p Grid kWh
charges for any power generated up to 30 September 2023 and the price of 23.8p/kWh from
our new energy contract which started on 1 October 2023.
Annual Report and Accounts 2024 Big Yellow Group PLC62
Long-term Electricity Use
The chart below shows how grid bought electricity plus solar energy used in our stores between 2008 and 2024 has changed over time.
Despite increasing store numbers, our long-term electricity use remains relatively stable. This is because new stores coming on board are more energy
efficient and built to our updated sustainable construction standards, using the best technology available and come ready equipped with solar PV
installations. This has been furthered by our investment in retrofitted solar across the estate.
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
0
20
40
60
80
100
120
12,866
13,899
12,730
13,925
13,674
13,846
11,688
9,643
9,376
9,571
9,494
8,991
11,902
11,585
11,558
12,75112,420
MWh solar and grid Number of stores
2008/09 2007/08 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2023/242022/23
Note: chart shows the used solar energy from the year ended 31March 2020 included in the total MWh number
Note: some of our stores rent out roof space to a company that installs and operates telecom masts. The telecom masts are powered via our stores’ electricity supply, increasing the total store energy
consumption. This additional energy became a material percentage of our emissions during 2018/19 and, as the masts are not within our control, their electricity consumption has been removed from
ourtotal Scope 2 and reported as part of Scope 3.
Long-term store electricity
3.4 Emissions
In addressing the environmental impacts of our operations, we recognise the significance of emissions management as a key component of our
sustainability strategy. We are committed to minimising our carbon footprint and mitigating the effects of climate change.
Absolute Scope 1 & 2 Greenhouse Gas Emissions
The UK government has made several commitments on the behalf of UK companies to reduce emissions, primarily aimed at addressing climate
changeand achieving net-zero greenhouse gas emissions by 2050. In addition to the government commitment, we have made a further Science
BasedTarget commitment to reduce our Scope 1 & 2 emissions by 70% of our FYE 2020 baseline by 2032. The following graph shows our absolute
Scope1 & 2 emissions reduction since our baseline year in yellow. The red line shows a projection of what is needed to hit our Science Based Target
by2032. The orange bars show the emission levels of the past five years under the straight trajectory from our baseline year to our target to show
thatto date we have done more than the minimum needed year-on-year to meet our target.
Absolute Scope 1 &2 GHG emissions progress to target
For further information about our emissions and for all mandatory SECR and GHG reporting, please refer to the Directors’ Report on page 124.
0
500
1000
1500
2000
2500
3000
3500
2019/20 2020/21 2021/22 2022/23
restated
2023/24 2024/25 2025/26 2026/27 2027/28 2028/29 2029/30 2030/31 2031/32
Absolute Scope 1&2 emissions (TCO
2
e)
Scope 1&2 emissions Scope 1&2 emissions trendline to target
Annual Report and Accounts 2024 Big Yellow Group PLC 63
Strategic Report Governance Report Financial Statements
3.5 Water
We benchmark our water consumption against the Better Building
Partnership’s (“BBP”) Real Estate Environmental Benchmarks (Water).
We have selected: ‘Water Benchmarks – Enclosed Shopping Centres’ –
‘Water Intensity’ – Water Intensity by space (litres/m
2
CPA / year).
At ‘77’ (35,940m
3
of water / 467,209m
2
occupied space), we are very
pleased to share that our water consumption remains significantly lower
than BBP ‘Good Practice’.
This year our utilities bureau consultants undertook a
comprehensive review of our water suppliers/meters and billing
processes. They audited our water charges and tendered the supply to
make sure we obtained the most competitive contract possible. We have
also set up an ongoing bill validation process with them to ensure we are
only paying for what is used. The procurement exercise realised a £3,000
annual saving, alongside the audit work uncovering approximately
£45,000 of annualsavings.
A number of ongoing leaks have been identified and repaired during this
process, saving a further circa £28,000 per year.
3.6 Waste
Our main source of waste is from the operational activities of our stores.
Our store staff apply best practice waste segregation for general and
mixed dry recyclable materials. Also, our waste contractor provides
further waste segregation and recycling services post collection. We
report waste for our Big Yellow store portfolio but the occupied office
space at our head office site is excluded as waste collection there is our
landlord’s responsibility.
We have now had a full year of service with our new waste contractor.
Since their instruction we have far better oversight of our waste data
witha much better handle on the quantities of waste generated as well
as their processing route. Our contractor now gives us clear monthly
collection data with associated emission information. This improves
our emissions reporting and enables us to focus our efforts on waste
reduction where possible.
3.7 Resources use
As we are looking towards other potential opportunities, we are likely to
focus our efforts on other areas of our business, such as paper use and
will report on individual initiatives over time.
Avoidance of unnecessary material helps to reduce carbon emissions;
minimise waste going to landfill and demonstrates a commitment to
sustainability. We have around 13 key processes left that involve the
printing of paper, which we are trying to address by finding acceptable
and compliant online solutions. We have graded each process by difficulty
in terms of finding an alternative solution and intend to work our way
through these over the next few years to reduce our paper consumption
as much as possible.
Most of our products are perfect for re-use or recycling – we have
amended our online Box Shop to make the composition of individual
products clearer, under the heading ‘Environmental Attributes’ and we
have introduced a ‘Your bit’ section to inform customers if products can
be recycled.
Our longstanding relationship with TreePoints allows us to give back a
little, for every box bought on our online Box Shop TreePoints plant a tree
for us. Although there will be a positive carbon impact for this event,
accounting for it can be difficult and not all that accurate, so we do not
count the carbon for this process. We do this because it is the right thing
to do and goes some way to replacing some of the trees used in our box
making process.
Our customer move-ins are paper-free which saves approximately
800,000 pieces of paper each year.
Environmental, Social andGovernance Report continued
Annual Report and Accounts 2024 Big Yellow Group PLC64
4.1 Highlights
– Implemented a number of Resourcing and Talent Policies
toinclude Internal and External Resourcing, Recruiting
People with Convictions and Work Placements for People
withConvictions.
– Launched a new On-Boarding Policy to ensure that all team
members receive a planned, well organised and structured
on-boarding experience when they join the Company.
– Integrated our recruitment and people management
databases to fully automate our on-boarding process for
newteam members.
– Introduced a Fertility Treatment Policy, to support team
members who are receiving treatment.
– Introduced a Sabbatical Leave Policy, allowing employees
the time to pursue personal interests to enhance their overall
wellbeing and engagement at work.
– Re-trained our Wellbeing Experts with Mental Health First Aid
England, to ensure that they maintain their knowledge and
skills, to provide support to team members as required.
– Introduced a new Employee Assistance Programme which
provides counselling services, as well as advice and support
on a range of issues such as health, relationships, caring
responsibilities, financial guidance and work-related matters.
– 20 of our managers attended a Personal Safety and Lone
Trading Course with the Suzy Lamplugh Trust and we
subsequently wrote our own Personal Safety and Lone
Trading module which was uploaded to our training platform
for all team members.
– 53% of eligible team members were participating in our
Sharesave Scheme as at 31March 2024 (March 2023:53%).
4. Our people
We remain committed to our strategy of delivering excellent customer
service through a great working culture and highly motivated team
members. We aim to achieve this by recruiting, retaining and motivating
individuals with talent and integrity and ensuring that we understand and
maximise the skills and performance of our people.
We believe that we have a strong culture of inclusivity and diversity
within the Company and recruit based on personality over CV. We invest
significantly in the training of our team members to ensure that they
deliver our high customer service standards and have the opportunity
toprogress their career.
We continue to encourage a culture of partnership within the business
and believe in staff participating in corporate performance through
benefits such as bonus schemes, share incentives, sales and service
awards and our Bright Ideas Suggestion Scheme. We recognise and
reward the exceptional performance, achievements, and ideas from our
people through a Recognition Points Scheme and allocated points with
avalue of just under £66,300 for the year ended 31March 2024.
In May 2023, we ran our fifth externally managed Employee Engagement
Survey and are delighted to have achieved a 92% response rate, which
is our highest score ever, as well as an engagement score of 88%, up
from 85% in our last survey in 2021. 89% of our team members said that
they were proud to work for the Company with our highest scoring areas
being Our Values 92% (2021: 90%), Management Style 92% (2021: 89%),
Inclusion and Diversity 91% (2021: 90%) and Working Environment 91%
(2021: 89%).
The results of the survey have provided us with the opportunity to review
our lower scoring areas such as Communication, Wellbeing and Employee
Voice, albeit that these still scored very well, with results falling between
77% and 81%. Our actions resulting from the survey were incorporated
into Implementation Plans which have been communicated across the
business, with progress reviews and updates being issued on an on-going
basis throughout the year.
Annual Report and Accounts 2024 Big Yellow Group PLC 65
Strategic Report Governance Report Financial Statements
5.1 Highlights
– Big Yellow’s community investment for the year, delivered via
free space, was £796,123.
– Our employees raised £4,366, which was matched by Big
Yellow totalling £8,732 being donated to the Foundation.
– Big Yellow enabled the Foundation to deliver 12 successful
and all-round enriching work placements with Breaking
Barriers, Street League, Back Up Trust and the Down’s
Syndrome Association, by welcoming each of the placement
candidates into our stores.
– We provided a permanent role in our Cardiff store to a young
man with Down’s Syndrome who had successfully completed
an extended work placement there.
– We continued our financial support of The Big Yellow Inner City
Schools Rugby Programme in South London. This initiative,
in partnership with Southwark Rugby Club aims to get local
children, many from disadvantaged backgrounds, from local
urban schools who do not offer the sport, playing rugby as
part of their P.E curriculum. The programme now consists
of players from 12 local secondary schools and offers the
benefits of team building, fitness, and healthy competition.
Some of the changes resulting from the survey have included reviewing
and relaunching our Bright Ideas Suggestion Scheme, reviewing our
salary bands for store employees, and a review of personal safety and
call outs, with personal safety training having been provided for all
team members within our stores. We also introduced a new Employee
Assistance Programme, re-trained our Wellbeing Experts and set up a
specific Wellbeing sub-site on our Intranet.
In order to improve communication and the sharing of ideas, we have
introduced a weekly “Anchor Day” within our Head Office, where all
team members are present on a regular day each week, with the
aim of promoting communication, collaboration and involvement.
Inaddition, wehave also introduced a new Intranet to facilitate
improvedcommunication both within Head Office and across our stores.
5. Our communities
Our communities are made up of all the people who work and store in
our facilities and everyone who lives around us. Our aim is to positively
contribute to the local communities of our stores through community
investments and engagement as well as with our Big Yellow Foundation.
We do this in a number of ways, through free space provided at each
store to local charities, fundraising by our employees with Big Yellow
matching the funds raised by their endeavours and partnering with the
Foundation’s charity partners.
5.2 Community investments
Free Space donated for community or charity use £796,123*
Total employee Big Yellow Foundation fundraising & Big Yellow
matched funds £8,732*
Customer Donations & Foundation matched funds £220,282*
Total Community Investment £1,025,137*
Notes to the table:
– Any KPI marked with an * has been independently verified by SGS.
– Definition of free space: space given to the charitable organization completely for free for the
whole of their stay during the reporting period.
Big Yellow commits to donate a minimum of £1 for every customer move-in,
and our store teams invite our customers to join us and in turn donate to
our Foundation. We have made the commitment this year that through
this mechanism there will be a total minimum donation of £220,000 to
theFoundation. If this is not achieved through donations Big Yellow will
top up the difference so that the Foundation receives the full £220,000.
5.3 Work placements at Big Yellow
Our work placement programme in conjunction with the Foundation was
launched in July 2021 to help individuals with disabilities, or who are
excluded from mainstream work for other reasons, with the opportunity
to gain work experience. These individuals are often highly motivated and
want to work, but face barriers that most of us do not.
These work experience placements allow an individual to work in a
supported, structured environment that allows them to develop their
work-base skills and hopefully leads to the kind of future employment
that meets their needs. Big Yellow are working with our Foundation and
a selection of our Big Yellow Foundation charity partners to actively
make work placements happen. We have currently been able to secure
work placements from the Foundation for individuals through the Down's
Syndrome Association, Street League, Back Up Trust and Breaking
Barriers to offer their clients work placements.
We are really pleased to be able to share that having completed a
successful extended work placement in our Cardiff store, a young man
from the Down’s Syndrome Association has progressed to a permanent
role with Big Yellow.
Environmental, Social andGovernance Report continued
Annual Report and Accounts 2024 Big Yellow Group PLC66
5.4 Big Yellow Foundation
In June we were pleased to announce a new Big Yellow Foundation charity
partner, Supporting Wounded Veterans, who provide six comprehensive
pathways including sporting events, mentoring, pain management and
employment to enable former UK servicemen and women, who have been
physically or mentally wounded, to move forward from rehabilitation
toemployment.
During 2023-24 we worked with our seven charity partners: Back Up
Trust, Breaking Barriers, Down’s Syndrome Association, St Giles Trust,
Street League, Supporting Wounded Veterans and Working Chance.
The Foundation has filed its annual report and accounts for March 2023,
which can be found on the charity commission website.
You can find out more about all our partners and the Big Yellow Foundation
on our website https://www.bigyellow.co.uk/foundation/.
Big Yellow and our customers and employees provide the income to the
Big Yellow Foundation. The Big Yellow Foundation Steering Committee,
who meet on a quarterly basis, determines how best to raise funds, and
promote the Foundation to our employees, customers, and suppliers.
The Foundation is Big Yellow’s main vehicle to deliver a consistent
customer and employee facing community programme.
The Foundation paid out £255,700 to its seven charity partners in the
year ended 31March 2024. Most of the grants made are unrestricted
funds, helping our charity partners to pay for everyday necessities to
keep the organisation going.
In addition to the Trustees’ time and the Steering Committee’s time,
BigYellow also supports the Big Yellow Foundation with donations in kind,
by providing financial and accountancy services plus the secretariat to
the Big Yellow Foundation Board of Trustees.
6. Our buildings
Our buildings are one of the core parts of our business structure.
Withoutour storage facilities we would have no business. We take pride
in the buildings we design; significant environmental consideration goes
into each of our new stores from the acquisition of land through to the
opening and operation of a new store. Although we have been sharing
our progress on this for several years, we now feel that this has become
material enough to be discussed as a topic in its own right.
6.1 Highlights
– There are currently 14 sites in our property pipeline
– We have achieved planning permission on eight of our
pipeline developments so far.
– This year’s new store – Kings Cross achieved:
– BREEAM Excellent
– 39 on Considerate Constructor Scheme
– An A rated EPC
– All stores, bar one, across the estate now have an EPC of C
orabove.
6.2 Acquisitions
There are 14 sites in our current development pipeline. Prior to the
acquisition of these sites several environmental considerations are
made. Once a potential new site has been identified, satisfying a number
of initial business criteria, including development yield, the Group will
undertake a number of inspections. These inspections include, but
are not limited to, Flood Risk Assessment, conservation and canal
assessments, Contamination surveys, daylight analysis of future self
storage developments to assess the potential impact on adjoining
properties, the current use and heritage of the site and the surrounding
residence and businesses that may become neighbours.
We have developed a number of thresholds that need to be met in order
for us to proceed with a purchase. We prioritise brownfield redevelopment
and infill sites whenever feasible, never developing on greenfield sites
to preserve valuable ecosystems. Our design process incorporates
principles of sustainable urban planning, such as compact development,
green infrastructure, and biodiversity enhancement, to create vibrant
and resilient stores.
Annual Report and Accounts 2024 Big Yellow Group PLC 67
Strategic Report Governance Report Financial Statements
6.3 Planning
Once the procurement of the site has been completed the process of
preparing for the planning application begins. The planning process varies
across the country but common threads run through all applications.
These include highways assessments drainage surveys, habitat surveys
to inform our biodiversity net gain plan, Air Quality assessments and
travel plans, to name just a few.
Urban regeneration is a key focus of our planning efforts. We seek to
revitalise urban areas, enhancing community connectivity and liveability.
Our stores aim to create an inclusive space that contributes to the social,
economic, and environmental well-being of the surrounding area. As part
of the planning process, we must demonstrate to the planning department
the local economic benefits of the self storage facility in terms of job
creation, business opportunities, and local economic development.
Biodiversity Net Gain (“BNG”)
We are committed to achieving biodiversity net gain in all our
developments. This is reinforced by the mandatory planning requirement
that all developers must deliver a minimum BNG of 10%. This means a
development will result in more or better-quality natural habitat than
there was before development. Enhancing green spaces through green
walls and roofs, creating additional wildlife habitats, and planting
hedgerows and trees, we strive to increase biodiversity value beyond
the pre-development baseline. Our aim is to leave a positive legacy by
conserving and enhancing natural ecosystems for future generations.
As part of the Ecology Report conducted at pre-planning for the Kings
Cross site 132 units were recorded. This was then used post completion
of the store to calculate the biodiversity net gain. With an additional
3,410.58 units deemed to be created an overall post-development
score of 2,583% of the pre-development score was awarded. We were
awarded an exemplary credit to be awarded for this as part of the
BREEAMcertification.
6.4 Design
We design our stores to prioritise energy efficiency and sustainability
by incorporating green building standards and best practices into our
designs. Big Yellow has set an external minimum commitment of BREEAM
Very Good, as standard for all new builds, even where local planning does
not demand a specific standard. A number of our stores have been built to
BREEAM Excellent standard.
As part of this commitment, we consider optimising building orientation,
including high-performance insulation, implementing energy-efficient
lighting systems, and integrating renewable energy technologies where
feasible. Our goal is to minimise energy consumption, reduce greenhouse
gas emissions, and enhance the long-term sustainability ofour properties.
Environmental, Social andGovernance Report continued
6.5 Construction
During the construction of our stores, where possible, we select
sustainable materials with low environmental impact where possible,
such as concrete with increased aggregate and recycled content,
recycled steel, and non-toxic materials. Additionally, we implement
construction practices that minimise waste generation, optimise material
use, and prioritise responsible sourcing and disposal.
We have been required to complete Whole Life Carbon Assessments
(“WLCA”) at RIBA Stages 2 and 4. This year we have decided to take this
analysis a step further, by engaging our lifecycle consultants to complete
full WLCAs at both RIBA stage 4 (detailed design) and RIBA stage 6
(post practical completion). We are making a commitment to reduce
our embodied carbon in future construction and will be able to use the
findings in these reports to find real world opportunities for carbon saving
measures on future buildings designs.
6.6 Store Sustainability and
GreenStorePortfolio
Along with the environmental consideration of our new stores we also
take pride in the ongoing sustainability of our whole estate. We share the
details of this in our full ESG report in the appendix, which details all of
the environmental credentials of each of our stores. We are continuously
upgrading our older buildings through the removal of gas and upgrading
of lighting as examples. We have been retrofitting solar to our stores for a
number of years and hope that, at the end of a successful second phase
of our battery pilot on our Slough Bath Road store next year, we will be
able to start to deliver wider spreading battery storage alongside our
solarinstallations.
Annual Report and Accounts 2024 Big Yellow Group PLC68
7.3 Supply chain risk
No issues were raised to us via our confidential Whistleblowing Helpline in
the last financial year.
Supply Chain Engagement
Following the successful solution found for the concerns raised about the
potential of human rights breaches within our solar panel supply chain we
have engaged SGS to work with us on a Supply Chain Risk framework and
assess a number of our key suppliers. We have focused on the top 80%
of our value chain. We continue to engage with these suppliers on topics
including their approach to ESG, environmental management, health and
safety and general governance and succession planning. We continue to
deliver our plan to work with our suppliers in more detail across some of
the areas.
We have identified approximately 27 key Construction, Facilities, IT and
Stock suppliers who are part of this ongoing structured Supply Chain
Riskreview.
We will continue to provide updates as part of our UK Modern Slavery
ActStatement.
CDP Supplier Engagement Rating (“SER”)
Background to the SER: Following CDP’s 2021 global score release,
companies responding to the full version of the CDP climate change
questionnaire also receive a Supplier Engagement Rating (SER) in
addition to their climate change score.
The SER provides a rating for how effectively companies are engaging
their suppliers on climate change.
CDP assesses performance on supplier engagement using a company’s
response to selected questions in the CDP climate change questionnaire
on governance, targets, Scope 3 emissions, and value chain engagement.
The SER Introduction and SER methodology 2021 is available on CDP’s
guidance page for more information. An organisation’s average upstream
emissions are around 11.4 times greater than their direct operations
– which shows how vital supplier engagement is to achieve ambitious
climate goals, such as Science-Based Targets.
We are pleased to confirm we have achieved an A- rating in the Supper
Engagement Rating.
7. Our suppliers
Big Yellow recognises that it can have a significant impact on its suppliers
and that its suppliers are an important asset to help Big Yellow to deliver
its own environmental and social responsibilities.
We manage our suppliers on a decentralised basis, with each Department
Head overseeing the onboarding, contracting and in-life management
of their suppliers. Many of our suppliers have become trusted partners,
having worked with us for many years.
In addition, our construction partners source a broad variety of materials
from companies all over the world on our behalf. Whilst these goods are
not sourced directly by us, some may be specified by us. We place great
value on using recycled materials in our construction process and all
materials are procured in accordance with our guidelines.
7.2 Supplier payment performance
We measure our payment performance to our suppliers on a quarterly
basis. Prompt payment is especially important to our smaller suppliers,
who may not have the cash flow to manage with very long payment terms.
Year ended 31March 2022 2023 2024
Within 30 days 88% 89% 92%
Between 30 and 60 days 11% 10% 8%
Over 60 days 1% 1% 0%
Average time to pay an invoice 25 days 24 days 23 days
7.1 Highlights
– No issues were raised to us via our confidential
Whistleblowing Helpline in the last financial year.
– We have been scored an A- in the Supplier Engagement
Ratings by the Carbon Disclosure project.
– We have updated our spend-based Scope 3
Footprintassessment.
– We continue to deliver strong payment performance:
– We paid 92% of invoices within 30 days and the
remaining8% between 30 and 60 days
– Our average time to pay an invoice was 23 days.
Annual Report and Accounts 2024 Big Yellow Group PLC 69
Strategic Report Governance Report Financial Statements
8. Our health & safety and
information security
Big Yellow recognises the importance of maintaining high standards of
Health & Safety for our customers, staff, contractors, and any visitors to
our stores.
8.1 Highlights
– There were no “Fatal Injuries, Notices or Prosecutions” in any
part of our operations during the year ended 31March 2024.
– There were no reportable Information Security breaches
thisyear.
Health & Safety
Our Health & Safety Committee reviews Policies, Risk Assessments,
performance, and records on a quarterly basis. The Policies cover
twodistinct areas – our routine store operations and our fit-out
construction activities.
The Health & Safety Committee discuss and review any issues reported
from our regular meetings held at Bagshot (our head office), Maidenhead
(our distribution warehouse), the stores and our construction sites.
OurHealth & Safety Policy states that all employees have a responsibility
for Health & Safety, but that managers have special responsibilities.
The responsibilities of our CEO are to keep the Board advised on Health
& Safety issues and to ensure compliance with the Policy in respect
of Construction (via the Construction Director) and store operations
(viatheHead of Facilities and Store Operations Managers). Externally,
other interested stakeholders include the Health & Safety Executive
(“HSE”) and Local Government Authorities.
Environmental, Social andGovernance Report continued
Data Protection and Information Governance
Big Yellow is committed to upholding information security and
protectingpersonal data. Our Data Compliance Officer and the Head of IT
ensure that staff are adequately trained in UK GDPR, Data Protection and
Information Security.
We are certified to IASME Cyber Assurance Level 1 due to the Cyber
Assurance accreditation cycle. Level 2 can only be achieved on the three
yearly basis, and we are currently positioned to pass Level 2 in 2024.
Our library of policies on UK GDPR and Information Security are reviewed
and updated on an annual basis to ensure they remain relevant, fit for
purpose and, in the ever-changing world of Data Protection legislation
andtechnological advances, legally accurate.
The Group has not experienced a reportable information breach in the
past three years and has cyber insurance in place in the event a breach
should occur in the future.
Annual Report and Accounts 2024 Big Yellow Group PLC70
9. Benchmarks and standards
We have a number of Benchmarks and standard that we submit each year. Below is a summary of this year’s rankings:
Report 2020/21 score 2021/22 score 2022/23 score
GRESB
84%
4/5 gold stars
86%
4/5 gold stars
89%
5/5 gold stars
EPRA Gold Gold Gold
CDP B B A-
FTSE4Good 3.1 3.1 3
ISS C with Prime status C with Prime status C with Prime status
MSCI AA A BBB
There are a number of factors that have impacted our MSCi score, including the way we disclose some of our metrics. We have completed a full review of
our ESG content to ensure that we use the language MSCi are looking for in their review.
We have updated our risk and opportunities assessment as part of our commitment to implement the TCFD recommendations – for more information,
please see the ‘Managing Risks and Opportunities’ section.
For Construction activities, we also sign up to BREAAM standards and the Considerate Constructor Scheme (‘CCS’); Kings Cross achieved an Excellent rating.
9.1 Science-based targets
Science-based targets (“SBT”) have increased in popularity as a way of businesses showing genuine commitment to reducing their emissions and
impact on the wider world. The process of target verification is a rigorous one, completed by qualified individuals at the Science Based Targets initiative.
The process has multiple stages of scrutiny with each calculation and target pathway considered. We have now had our targets externally verified.
Ourpublic commitment is as follows.
Our commitment
Big Yellow Group PLC commits to:
– Reduce absolute scope 1 and 2 GHG emissions 70% by FY2032 from a FY2019 base year.
– Reduce scope 3 GHG emissions from purchased goods and services, capital goods, and fuel and energy related activities 61.1% per square foot
within the same time frame.
Scope of emission Coverage of baseline Type of target 2020 baseline 2032 target % 2032 target
Scope 1 & 2 100% absolute 3,160 tCO
2
e -70% 948 tCO
2
e
Scope 3 78% intensity 3.3 kgCO
2
e /sq ft -61.1% 1.3 kgCO
2
e /sq ft
Our Progress
To date we have been mainly focusing on our Scope 1&2 reductions with a big drive for gas removal and an increase in onsite solar generation. This is
shown in our results last year, with our Scope 1&2 absolute figures reducing, however, our Scope 3 figure is increasing in the short term. We are making
steady progress towards our Scope 1&2 SBT and looking towards what we should focus on next year. Once we have removed gas from the estate we will
need to re-focus our efforts in new areas for improvement across the estate.
Our Scope 3 figures are an intensity target. This means that any emissions that are generated through the construction of new storage space are
somewhat abated by the increased square footage created. However, when a large amount of money is spent on the bettering of existing building stock
this has a negative impact on our scope 3 emissions. This has been the case with our solar retrofit programme. This year we have spent £6million on
the solar retrofit programme. This equates to 1.7 tCO
2
e additional emissions, now sitting in our scope 3. We understand that this is exactly where these
emissions should sit, and consider these as a necessary backwards step in our Scope 3 for the overall long-term benefit of our buildings’ environmental
operation and performance.
We have started the process of calculating our Scope 3 emissions for this year. We intend to report our Scope 3 results at the half year when we have
afull understanding of the calculations and emissions conversion factors.
Annual Report and Accounts 2024 Big Yellow Group PLC 71
Strategic Report Governance Report Financial Statements
11. Our stakeholders
This year, the Board of Directors has set out in the Governance section
of our Annual Report and Accounts an overview of engagement
activitieswith our key stakeholder groups. These are identified as (1) our
employees, (2) our shareholders, (3) our customers, (4) our suppliers and
(5) our communities. Please note that in our ESG Stakeholder assessment
we also name ‘the Environment’ as well as local and national Government
as further stakeholder groups, and their needs and our engagement
activities are set out here.
As mentioned earlier we have undertaken a double materiality
assessment this year which has included engagement with all of our
stakeholder groups. Through tailored questionnaires followed by
interviews with a number of the stakeholders. These have been used
to get into the detail of the questions answered in the questionnaire
stage. We have been able to get a detailed understanding of what our
stakeholders feel to be material both from the point of view of how the
environment impacts Big Yellow but also how Big Yellow impacts its
immediate environment and communities. Ten material topics were
identified through the process. These are detailed at the beginning of
thisreport and in detail in the full ESG report.
Environmental, Social andGovernance Report continued
10. Legislation
Big Yellow has obligations under several regimes and regulations, namely:
– The Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018 (‘SECR’);
– EU Energy Efficiency Directive, The UK Energy Savings Opportunities
Scheme (‘ESOS’);
– Energy Performance Certificate (‘EPCs’) – please see ‘asset list &
green store portfolio’ section in the full ESG report for more information.
Investors
The GRESB and CDP benchmarks inform our investor community of our
general ESG performance, our governance approach, risk management
protocols and a range of other indicators that give reassurance that our
business is ‘sustainable’.
For more information on these benchmarks, please see the ‘Benchmarks,
Legislation and Standards’ section above.
We have seen a shift in the level of environmental detail our investors
are interested in over the past 12 months. This is one of the reasons we
have decided to align ourselves with the CSRD. We have also decided to
conduct CRREM pathway analysis from the year ending 31March 2025 to
give ourselves and our investors as much transparency about the impact
our sustainability and environmental efforts are having on our estate.
Our Directors run a programme of face-to face investor engagement
activities by holding roadshows following annual and interim reporting
cycles and attend investor conferences and other ad-hoc meetings with
investors, both in the UK and internationally.
We also provide specific information on request to other investor
benchmarks, where available.
Annual Report and Accounts 2024 Big Yellow Group PLC72
Nature and purpose
of the assurance
SGS United Kingdom Ltd (hereinafter referred to as SGS) was
commissioned by Big Yellow Group PLC (hereinafter referred to as
BigYellow) to conduct an independent assurance of selected KPIs
included in the report ‘Sustainability Report 2023/24’ (herein referred
toas the report).
Intended users of this
assurance statement
This Assurance Statement is provided with the intention of informing all
ofBig Yellow Group PLC’s Stakeholders.
Responsibilities
The information in the Report and its presentation are the responsibility
of the directors and the management of Big Yellow Group PLC, and SGS
has not been involved in the preparation of any of the material included
in the Report. Our responsibility is to express an opinion on the text, data,
graphs and statements within the scope of verification with the intention
to inform all of Big Yellow Group PLC’s stakeholders.
Assurance Statement
SGS United Kingdom Ltd’s report on selected KPIs pertaining
to sustainability activities in the sustainability report
2023/24 of Big Yellow Group PLC for the review period
1st April 2023 to 31st March 2024.
Assurance standards, type
and level ofassurance
The SGS ESG & Sustainability Report Assurance protocols used to
conduct assurance are based upon internationally recognised assurance
guidance and standards including the principles of reporting process
contained within the Global Reporting Initiative Sustainability Reporting
Standards (GRI Standards) GRI 1: Foundation 2021 for report quality,
GRI 2 General Disclosure 2021 for organisation’s reporting practices
and other organizational detail and the guidance on levels of assurance
contained within the ISAE3000 (Revised), Assurance Engagements Other
than Audits or Reviews of Historical Financial Information.
The assurance of this report has been conducted according to the
following Assurance Standards:
Assurance Standard Options Level of Assurance
A
SGS ESG & SRA Assurance Protocols (based on GRI
Principles and guidance in AA1000) n/a
B ISAE3000 Limited
C ISO14064-3 Limited & Reasonable
Assurance has been conducted at a limited level of scrutiny for all
KPIsexcept for ‘Store electricity emissions (tCO
2
e)’ which was at
reasonable level.
Scope of assurance
The scope of the assurance included evaluation of quality, accuracy and
reliability of specified performance information as detailed below:
Reporting Criteria – GHG & Environmental KPIs
1 GHG Protocol – A Corporate Accounting & Reporting Standard.
Reporting Criteria – Social & Governance KPIs
1 None selected (Specified Performance Information as
detailedinproposal).
Annual Report and Accounts 2024 Big Yellow Group PLC 73
Strategic Report Governance Report Financial Statements
Specified performance information
and disclosures included in scope
The scope of the assurance included data only for the following KPIs:
GHG & Environmental KPIs
FY2023/24
– Store electricity emissions (tCO
2
e)
– Store flexi- offices gas emissions (tCO
2
e)
– Refrigerant emissions (tCO
2
e)
– Absolute Operational carbon dioxide emissions (tCO
2
e)
– Store Electricity use (MWh)
– Like for like Store Electricity use (MWh)
– Absolute carbon dioxide emissions (tCO
2
e)
(Store and non-store portfolio) – location-based
– Absolute carbon dioxide emissions (tCO
2
e)
(Store and non-store portfolio) – market-based
– Carbon intensity (kgCO
2
e/m
2
Current Lettable Area)
– Carbon intensity (kgCO
2
e/m
2
Occupied Space)
– Carbon intensity (kgCO
2
e/£000 revenue) – location based
– Carbon intensity (kgCO
2
e/£000 revenue) – market based
– Total renewable energy (kWh) generated
– Total installed renewables capacity (kWp)
– Store Water supply and treatment (tCO
2
e)
– Solar energy deemed or metered 'export' (kWh)
– Solar used (not exported) (kWh)
– Van fuel emissions (tCO
2
e)
Social & Governance KPIs
FY2023/24
Community investment data:
– Free space donated for community or charity use (£)
– Foundation matched funds from customer donations (£)
– Total employee Big Yellow Foundation fundraising & Big Yellow
matched funds (£)
– One-off donations (£)
– Total community investment (£)
People data:
– Total number of employees
– % female employees at each management level (total, board,
executive & management)
– Number of new employees (stores, head office, and total)
– Proportion of new employees
– Number of leavers (stores, head office, and total)
– Proportion of leavers
– Training hours (total, and average hours by gender)
Safety data:
– Minor injuries (staff, customer, contractor, and visitor)
– Reportable injuries RIDDOR (staff, customer, contractor, and visitor)
– Staff annual injury incidence rate (AIIR) per 100,000 staff
– Construction ‘fit-out’ minor injuries (total and Kings Cross)
– Construction ‘fit-out’ reportable injuries (total and RIDDOR)
– Reportable injuries per 100,000 move-ins (RIDDOR)
– Fatal injuries, notices, or prosecutions (total)
Assurance methodology
GHG & Environmental KPIs
CO
2
emissions from own operations and value chain were
verified at a limited level of assurance except from purchased
electricity which was verified to a reasonable level according to standard
EN ISO14064-3:2019 Specification with guidance for the validation and
verification of Greenhouse Gas assertions, to establish conformance with
the requirements of Big Yellow’s reporting methodology as stated in its
‘Basis of Reporting 2023/24’ and the WRI/WBCSD GHG Protocol –
A Corporate Accounting and Reporting Standard (‘The WRI/WBCSD GHG
Protocol’), within the scope of the verification. The materiality required of
the verification was considered by SGS to be below 10% for all KPIs except
for ‘Store electricity emissions (tCO
2
e)’ which was below 5%, based on the
needs of the intended user.
The engagement included verification of emissions from anthropogenic
sources of greenhouse gases included within the organisation’s boundary
and meeting the requirements of Big Yellow’s ‘Basis of Reporting 2023/24’
and the WRI/WBCSD GHG Protocol. The organisational boundary was
established following the operational control approach.
– Description of activities: Self Storage services
– Location/boundary of the activities: United Kingdom
– Physical infrastructure, activities, technologies and processes of the
organisation: Self storage stores and administrative offices
– GHG sources, sinks and/or reservoirs included:
– Scope 1 – stationary combustion, mobile combustion and
fugitive emissions;
– Scope 2 – purchased electricity and solar generation;
– Scope 3 – Store water.
– Types of GHGs included: CO
2
, N2O, CH4
(HFCs, PFCs, SF6 and NF3 areexcluded)
– Directed actions: none
Assurance Statement continued
Annual Report and Accounts 2024 Big Yellow Group PLC74
Social & Governance KPIs
The assurance comprised a combination of:
– Pre-assurance research.
– Remote interviews with the Head of Sustainability, Project Director,
Head of Finance, and Head of Marketing, the managers with
responsibility for risk assessment, control, and reporting processes
associated with the KPIs, metrics, and disclosures.
– Review of documentation and evidence for materiality and
stakeholder engagement processes.
– Remote interviews with the managers responsible for internal data
collection for each KPI.
– Document review of relevant management systems, policies
andprocedures.
– Remote interrogation of and testing of relevant data collection
systems and procedures, including interviews with relevant data
analysts and data accuracy checking.
– Final data verification checks to ensure KPI data is accurate and
aligns with expectations.
– Reviewing Report content against our findings and making
recommendations for improvement.
Verification was conducted upon all KPIs within the verification
scopeas an evaluation of historical data and information to determine
whether the reported KPI data is materially correct and conforms to the
criteria described above. SGS’ approach is risk-based, drawing on an
understanding of the risks associated with modelling KPI information and
the controls in place to mitigate these risks. Our examination included
assessment, on a sample b asis, of evidence relevant to the voluntary
reporting of KPIs, including emission information. The procedures
performed in a limited assurance engagement vary in nature and timing
from, and are less in extent than for, a reasonable assurance engagement.
Consequently, the level of assurance obtained in a limited assurance
engagement is substantially lower than the assurance that would have
been obtained had a reasonable assurance engagement been performed.
Limitations and mitigations
Financial data drawn directly from independently audited financial
accounts has not been checked back to source as part of this assurance
process. Note here any other specific limitations for the assurance
engagement and actions taken to mitigate those limitations.
Statement of independence
andcompetence
The SGS Group of companies is the world leader in inspection, testing and
verification, operating in more than 140 countries and providing services
including management systems and service certification; quality,
environmental, social and ethical auditing and training; environmental,
social and sustainability report assurance. SGS affirm our independence
from Big Yellow Group PLC, being free from bias and conflicts of interest
with the organisation, its subsidiaries and stakeholders.
The assurance team was assembled based on their knowledge,
experience and qualifications for this assignment, and comprised
auditors with relevant qualifications, expertise and experience.
Findings and conclusions
Assurance/verification opinion
GHG & Environmental KPIs
SGS concludes with limited assurance that there is no evidence
to suggest that the presented CO
2
equivalent assertion except
for purchased electricity is not materially correct and is not a fair
representation of the CO
2
equivalent data and information and is not
prepared following the requirements of Big Yellow’s ‘Basis of Reporting
2023/24’ and the WRI/WBCSD GHG Protocol.
SGS concludes with reasonable assurance that the presented CO
2
equivalent assertion of purchased electricity is materially correct and
is a fair representation of the CO
2
equivalent data and information and is
prepared following the requirements of Big Yellow’s ‘Basis of Reporting
2023/24’ and the WRI/WBCSD GHG Protocol.
We planned and performed our work to obtain the information,
explanations, and evidence that we considered necessary to provide a
limited level of assurance that the CO
2
equivalent emissions for the period
1st April 2023 to 31st March 2024 for all KPIs except for ‘Store electricity
emissions (tCO
2
e)’ which was to reasonable level of assurance are fairly
stated. This statement shall be interpreted with the CO
2
equivalent
assertion of Big Yellow as a whole.
Big Yellow provided the GHG assertion based on the requirements of its
‘Basis of Reporting 2023/24’ and the WRI/WBCSD GHG Protocol. The GHG
information for the period 1st April 2023 to 31st March 2024 disclosing
gross emissions of 2,237 metric tonnes of CO
2
equivalent (Location-
Based) and 115 metric tonnes of CO
2
equivalent (Market-Based) are
verified by SGS to a limited level of assurance, consistent with the agreed
verification scope, objectives, and criteria.
Verified emissions by scope are as follows:
Scope 1 – (Direct) (store and non-store): 115 tCO
2
e
Scope 2 – Location-based (Indirect) (store and non-store): 2,122 tCO
2
e
Scope 2 – Market-based (Indirect): 0 tCO
2
e
Scope 3 – Water (excludes non store facilities) – 13 tCO
2
e
Annual Report and Accounts 2024 Big Yellow Group PLC 75
Strategic Report Governance Report Financial Statements
Social & Governance KPIs
On the basis of the methodology described and the verification work performed, nothing has come to our attention that causes us to believe that
the specified performance information included in the scope of assurance is not fairly stated and has not been prepared, in all material respects,
inaccordance with the reporting criteria. Overall, the communication and presentation of information is appropriate to the size of the business,
anditsESG impacts, risks and opportunities. We believe that the organisation has chosen an appropriate level and scope of assurance for this stage
intheir reporting. Assured KPIs and the verified values;
KPI Unit of Reporting Indicator / Sub KPI – Title
Verified Figure
2023/24
Community
Investment
£ Free space donated for community or charity use 796,123
£ Total employee Big Yellow Foundation fundraising and Big Yellow matched fund 8,732
£ One off donations 0
£ Foundation matched funds from customer donations 220,282
£ Total Community Investment 1,025,137
People Data
Employee # Total number of employees 508
Percentage Female employees at each mgmt. level: Board 37.5%
Percentage Female employees at each mgmt. level: Executive 45.5%
Percentage Female employees at each mgmt. level: Managers 33.6%
Percentage % female employees at each mgmt. level: All 44.7%
Employee # Number of new employees: stores 129
Employee # Number of new employees: head office 3
Employee # Number of new employees: total 132
Percentage Proportion of new employees 26.0%
Employee # Number of leavers: stores 63
Employee # Number of leavers: head office 8
Employee # Number of leavers: total 71
Percentage Proportion of leavers 13.9%
Hours Training hours: total 28,088
Hours Training hours: average hours by woman 45.0
Hours Training hours: average hours by man 63.6
Health & Safety
Data
Incidents Minor injuries: customer, contractor & visitor 41
Incidents Minor injuries: staff 21
Incidents Reportable injuries (RIDDOR): customer, contractor & visitor 5
Incidents Reportable injuries (RIDDOR): staff 3
Incidents RIDDOR per 100,000 move ins 6.0
Incidents Staff Annual Incidence Injury Rate (AIIR) per 100,000 staff 647
Incidents Fatal Injuries, Notices or Prosecutions 0
Incidents Construction Fit out minor injuries – Kings Cross 1
Incidents Construction Fit out minor injuries – Total 1
Incidents Construction Fit out Reportable injuries (RIDDOR) – Kings Cross 0
Incidents Construction Fit out Reportable injuries (RIDDOR) -Total 0
Assurance Statement continued
Annual Report and Accounts 2024 Big Yellow Group PLC76
Quality and reliability of specified
performance information
During the verification process some examples of good practice as well
as some opportunities for improvement in underlying processes were
identified and reported to Big Yellow Group PLC with the aim of enabling
a process of continual improvement in collection and reporting KPI data.
It may be possible to roll out examples of good practice to other KPIs, or
parts of the business and the opportunities for improvement identified
may be considered for implementation during future reporting cycles.
Good Practices
– Big Yellow operates a robust data collection process and the GHG data
reporting platform used was found to be robust enough to provide
accurate and consistent data reporting when tested. There has been
a large improvement in water data quality and reporting from the
previous reporting period.
– Overall readiness of data managers and data owners for this
assurance engagement was found to be high and at a mature level.
Processes and procedures in place for data collection, manipulation,
and reporting are combinations of automated/manual systems, with
good risk management procedures.
Opportunities for Improvement
– In line with best practice, Big Yellow Group PLC should consider a
formal review of material impacts and issues, to ensure consideration
and inclusion of issues that are of core concern to key stakeholders.
– It is recommended to integrate sustainability and ESG KPIs into
business and corporate objectives for further dissemination through
functional levels for accountability at all levels. Current KPIs and
metrics are void of short, medium, or long-term objectives and targets.
– We recommend that in designing its 2024/25 report Big Yellow Group
PLC takes the opportunity to review report content – including KPIs –
against accepted sustainability reporting standards/frameworks.
Signed:
For and on behalf of SGS United Kingdom Ltd
Terry Coyle
Business Enhancement Manager
SGS United Kingdom Ltd
15 May 2024
www.sgs.com
Annual Report and Accounts 2024 Big Yellow Group PLC 77
Strategic Report Governance Report Financial Statements
Dear Shareholder,
I am pleased to present the Corporate Governance Report for
2024. This report should be read in conjunction with the report
onpages 83 to 89, which set out how we have complied with the
UK Corporate Governance Code in 2024.
As outlined in my report on pages 14 to 15, 2024 has been
another year of growth for the Company, with revenue, cash
flowand adjusted profit all up on the prior year.
Governance
The Board believes that the effective delivery of the Company’s
strategy requires the underpinning of strong corporate
governance. The governance of the Group is supported by a
robust structure which allows for constructive debate and
challenge by its members. This allows the Directors to make
effective decisions.
Engagement with our stakeholders
The Board is conscious that there are a number of stakeholders
in our business and considers the interests of each of our
stakeholder groups in its discussions.
We have a comprehensive investor relations programme
inplace,with the Executive team carrying out a significant
number of meetings with our shareholders during the year.
The Non-Executive Directors engage with our shareholders as
appropriate. Independent feedback on presentations by the
Executive Board Directors to major shareholders is provided to
the Non-Executive Directors on a regular basis.
The culture of the business is a key part of our success. In the
year to 31March 2024, the Executive Board Directors have
continued to visit each of the Group’s stores and maintain a
flat,apolitical, non-hierarchical culture within the business.
We continue to monitor the Net Promoter Score that we receive
from our customers, which remains at a very high level of 80.5
(2023:78.9).
Looking ahead
Following our performance this year, our attention for the
coming year is focussed on continuing to drive the operating
performance of the business to deliver shareholder value.
We willcontinue to invest in our Big Yellow Foundation and its
partner charities and also work with local charities throughout
our network assisting with space which they need to deliver
theirprogrammes.
We will continue to focus on delivering attractive long-term
shareholder returns, behaving responsibly to our stakeholders
including employees, customers, suppliers, and the community,
and appropriately managing risk.
Nicholas Vetch CBE
Executive Chairman
20 May 2024
Executive Chairman’s Introduction
Annual Report and Accounts 2024 Big Yellow Group PLC78
How We Are Structured
The Board has overall responsibility for the manner in which
the Company runs its affairs.
Position Responsible for More information
The Board
Nicholas Vetch
Executive Chairman
− setting the strategic direction of the business
− setting the culture and the values of the Big Yellow
− overseeing the internal control system of the Group and
its risk management
− approving the annual business plan for the Group
− approving site and store acquisitions and major items of
capital expenditure
− approving the Group’s financing structure
− ensuring a positive dialogue with our stakeholders is maintained
Executive Directors
− implementing the Group’s business plan and strategy
− managing the risk of the business
− focussing on financial performance
See page 84 for more info.
Nomination Committee
− reviewing the structure, size and composition of the Board
− succession planning for Directors and other senior Executives
− promoting diversity
See pages 90 to 93 for more info.
Audit Committee
− overseeing the Group’s financial reporting
− overseeing the Group’s internal control framework and risk
management process
− overseeing the relationship with the external auditor and monitoring
their independence
See pages 120 to 123 for more info.
Remuneration Committee
− setting, reviewing and recommending the policy on
the remuneration of the Executive Directors
− overseeing the senior management team and general
workforce remuneration approach
− monitoring the implementation of the Remuneration policy
− overseeing the alignment of reward, incentives and culture
See pages 96 to 119 for more info.
Sustainability Committee
− overseeing the Group’s sustainability framework and strategy
− monitoring sustainability performance
− providing guidance on emerging environmental issues, including
environmental risks, and their impact on the Group’s business
− overseeing the Group’s ESG reporting, including external
audit/assurance mechanisms
See page 94 to 95 for more info.
Annual Report and Accounts 2024 Big Yellow Group PLC 79
Strategic Report Governance Report Financial Statements
Directors, Officers and Advisers
Executive Directors
Nicholas Vetch CBE
Executive Chairman
Appointment to the Board
Nicholas was a co-founder
of BigYellow in September
1998 andheld the position of
CEO untilJuly 2003, when he
becameExecutive Chairman.
Jim Gibson
Chief Executive Officer
Appointment to the Board
Jim was a co-founder of BigYellow
in September 1998, initially
as Finance Director and he
was subsequently appointed
ChiefExecutive in July 2003.
John Trotman
Chief Financial Officer
Appointment to the Board
John joined Big Yellow in June 2007
and was appointed to the Board in
September 2007.
Background and relevant experience
Prior to Big Yellow, Nicholas was joint
Chief Executive of Edge Properties
plc, which he co-founded in 1989, was
subsequently listed on the Official
List of the London Stock Exchange in
1996 and then sold to Grantchester
Properties plc in 1998. Nicholas was
appointed a Commander of the British
Empire (“CBE”) in the 2023 New Year’s
Honours List.
Other appointments
Nicholas is a Trustee of Global
HumanRights, Global Human Rights
UK, the Royal Drawing School, and
the Ukrainian Sponsorship Pathway
UK, and a Non-Executive Director of
ConduitHoldco Limited.
Committee Membership
None.
Skills and contribution
The Company under Nicholas Vetch’s
leadership has an outstanding track
record for delivering consistently
strong returns and share price
outperformance. Nicholas, along with
his co-founder Jim Gibson, developed
the strategy of the business and
this continues to this day. He is also
responsible for leading the property
team and has over 35 years’ experience
working within the UK property sector.
Further details on Nicholas’ contribution
to the business is included in the annual
report on page 83.
Background and relevant experience
Jim is a Chartered Accountant by
background having trained with Arthur
Andersen & Co. where he specialised in
the property and construction sectors,
before leaving in 1989. He was Finance
Director of Heron Property Corporation
Limited and then Edge Properties
plc which he joined in 1994. Edge
Properties was listed on the Official
List of the London Stock Exchange in
1996 and then sold to Grantchester
Properties plc in 1998.
Other appointments
Jim is a Non-Executive Director and
shareholder of AnyJunk Limited, a
Non-Executive Director and shareholder
of CityStasher Limited, an investor
in Moby Self Storage, a Brazilian Self
Storage business, and is the Chairman
of Trustees of the London Children’s
Ballet, and a Trustee of the Bede’s
Development Foundation.
Committee Membership
None.
Skills and contribution
Jim has been with Big Yellow since its
formation, and along with his co-founder
Nicholas Vetch, has been instrumental
in developing the strategy of the
business. He leads the day-to-day
running of the business and brings
substantial knowledge of self storage
to the Board, which is invaluable to
Big Yellow as it continues to grow.
As CEO, the Board believes Jim has
demonstrated outstanding leadership
and drive, notably in managing the
business through the recent geo-
political uncertainties. He will continue
to be instrumental in maintaining Big
Yellow’s market-leading position.
Background and relevant experience
John is a Chartered Accountant having
trained with Deloitte LLP, where he
specialised in the real estate sector
and self storage. On leaving Deloitte in
2005, John worked for a subsidiary of
the Kajima Corporation until he joined
Big Yellow.
Other appointments
None.
Committee Membership
None.
Skills and contribution
John brings strong financial experience
to the Group from his 17 years with Big
Yellow and prior to that in his previous
roles. As CFO, in addition to dealing with
the traditional aspects of the role, John
is involved in strategy, and in all aspects
of the day-to-day operations of the
business. He has extensive knowledge
of the self storage sector.
Annual Report and Accounts 2024 Big Yellow Group PLC80
N
Nominations Committee
A
Audit Committee
R
Remuneration Committee
S
Sustainability Committee Committee Chair
Committee key
Non-Executive Directors
Dr Anna Keay OBE
Non-Executive Director
N
A
R
S
Appointment to the Board
Anna joined the Board
inMarch2018.
Background and relevant experience
Anna has been CEO of the Landmark
Trust since 2012, operating a portfolio
of 200 historic buildings let for holidays.
She has a PhD from London University,
starting her career at Historic Royal
Palaces and from 2002 to 2012 she was
Curatorial Director of English Heritage.
She was a trustee of Leeds Castle
Foundation from 2009 to 2016 and was
a Governor and Chair of the Buildings
and Projects Committee at Bedales
School until November 2021.
She writes and broadcasts widely,
presenting on history and buildings
forChannel 4.
Other appointments
Anna is a Trustee of the Royal Collection
Trust, a Director of Architrave Historical
Services and of the Lundy Company.
Committee Membership
Member of Audit, Nominations,
Remuneration and Sustainability
Committees. Anna is the
designatedNon-Executive Director
forworkforce engagement.
Skills and contribution
Anna, as a historian, and with significant
experience in the third sector, adds
another dimension to the Board
alongside her operational experience
from her current role as CEO of the
Landmark Trust. In her role as the
designated Non-Executive Director for
workforce engagement, she has worked
closely with the HR team in all aspects
of employee engagement reporting
back to the Board on a regular basis.
Background and relevant experience
Vince was the Global Managing Partner
Audit for Deloitte. He previously held a
number of senior leadership roles within
Deloitte including as a member of the
UK Board of Partners and of the Global
Executive Group and the UK Executive
Group before his retirement from
Deloitte in May 2015.
Other appointments
Vince is also a Non-Executive Director
and Chair of the Audit Committee of
Forterra plc, a Non-Executive Director of
Target Healthcare REIT plc, and a Trustee
of the Ruth Strauss Foundation.
Committee Membership
Senior Independent Non-Executive
Director, Chair of the Nominations
Committee and Member of
the Audit,Remuneration and
SustainabilityCommittees.
Skills and contribution
Vince has many years of financial and
commercial experience gained from his
leadership roles at Deloitte, which he
brings to his role as Senior Independent
Non-Executive Director.
Vince Niblett
Senior Independent
Non-Executive Director
N
A
R
S
Appointment to the Board
Vince was appointed to the Board
inJune 2017.
Background and relevant experience
Laela has 17 years' experience in
corporate finance and is currently
the Finance Director of Consumer
Converged at Virgin Media O2. She was
previously the Chief Financial Officer of
OpenClassrooms, an online educational
platform, the Group Chief Financial
Officer of MotorK, a venture-backed
software as a service tech scale-up, the
Group CFO of VistaJet, the global private
jet operator, and before that worked
in Structured Finance for BNP Paribas.
Sheis a graduate of the Institut d'Etudes
Politiques de Paris (Sciences-Po) and
the London School of Economics.
Other appointments
Laela also currently serves as
aNon-Executive Director of an
award-winning East London women's
refuge charity called Ashiana Network
and as a Trustee of the British Library,
where she sits on the audit Committee
and Remuneration Committee.
Committee Membership
Chair of Audit Committee and Member
of Nominations, Remuneration and
Sustainability Committees.
Skills and contribution
Laela has significant corporate and
financial experience in high growth
businesses. She is the Chair of the audit
committee, which involved monitoring
KPMG LLP as auditors to the Company,
and meeting with the external valuers of
the Company. She has maintained close
dialogue with the external auditors and
the senior finance team throughout
the year.
Laela Pakpour Tabrizi
Non-Executive Director
N
A
R
S
Appointment to the Board
Laela was appointed to the Board
inJuly 2020.
Annual Report and Accounts 2024 Big Yellow Group PLC 81
Strategic Report Governance Report Financial Statements
Background and relevant experience
Heather was Vice President of
Engineering and Operations for 3Dlabs,
a high-tech start-up delivering the
world's first semiconductor 3D-graphics
accelerators for consumer devices and
moved on into leadership and advisory
roles for high-tech UK SMEs. Heather then
worked in various senior government
roles including as Director General for
Data Capability at the Office for National
Statistics which she modernised through
a cross-organisation digital, data and
workforce transformation. She was also
co-Chair of the United Nations Global
Working Group on Big Data, developing
innovative global data solutions to assist
with the measurement and delivery
of the United Nations 2030 Agenda for
Sustainable Development.
Other appointments
Heather serves as a Non-Executive
Director of the UK House of
LordsInformation Authority, as a
Non-Executive Director and Chair of the
Audit and Risk Assurance Committee
for His Majesty's Prison and Probation
Service (HMPPS), as a Non-Executive
Director on the Ministry of Justice Audit
and RiskAssurance Committee, as a
Trusteeofthe Ukrainian Sponsorship
Pathway Charity (USPUK) and on
several Not-for-Profit Advisory Boards.
Committee Membership
Chair of the Sustainability Committee,
Member of Audit, Nominations and
Remuneration Committees.
Skills and contribution
Heather brings a track record on
sustainability to Big Yellow, following
herwork with the UN. She has a
wealthof experience in the private
andpublic sectors.
Heather Savory
Non-Executive Director
N
A
R
S
Appointment to the Board
Heather joined the board of the
BigYellow in March 2021.
Company Secretary
and registeredoffice
Shauna Beavis
2 The Deans
Bridge Road
Bagshot
Surrey
GU19 5AT
Company Registration No.
03625199
Bankers
Aviva Commercial Finance Limited
Bank of Ireland
Barclays Bank plc
HSBC Bank plc
Lloyds Bank plc
M&G Investments Limited
Pricoa Private Capital
Solicitors
CMS Cameron McKenna Nabarro Olswang LLP
Lester Aldridge LLP
Slaughter and May
Financial advisers
and stockbrokers
Barclays Bank plc
J P Morgan Cazenove
Statutory Auditor
KPMG LLP
Chartered Accountant and Statutory Auditors
Valuers
Jones Lang LaSalle
Background and relevant experience
Michael is a former Managing Director of
LGV Capital, a private equity firm. He has
a particular focus on the healthcare and
business services sectors. Past roles
include as a Non-Executive Director, and
chair of the Remuneration Committee,
of Helical plc.
Other appointments
Through his company, Ebbtide Partners,
which he started in 2009, Michael acts
as a consultant/director to, and investor
in, private companies. He is also the
Chair of Home REIT plc with effect from
January 2024.
Committee Membership
Chair of the Remuneration Committee
and Member of Audit, Nominations, and
Sustainability Committees.
Skills and contribution
Michael has a wealth of experience in
the private equity sector, with a focus
on high growth businesses.
Michael O’Donnell
Non-Executive Director
N
A
R
S
Appointment to the Board
Michael joined the board of the
BigYellow in September 2021.
Directors, Officers and Advisers continued
Annual Report and Accounts 2024 Big Yellow Group PLC82
Introduction
The Board also takes account of the Corporate Governance guidelines of
institutional shareholders and their representative bodies.
The Board continues to monitor external governance developments and
in particular, oversees the Company’s preparations to ensure compliance
with, and effective reporting against, the new UK Corporate Governance
Code, which was published by the FRC in January 2024. The new Code will
first apply to the Company in its financial year beginning on 1 April 2025.
At Big Yellow, we aim to create a culture in which integrity, openness and
fairness are rewarded.
We continue to review the composition of the Board to ensure that it
has the appropriate skills, knowledge, and balance for the effective
stewardship of the Company. The Board has overall responsibility for
themanner in which the Company runs its affairs.
Statement of compliance with the Code
Throughout the year ended 31March 2024, the Company has been in
compliance with the Code provisions set out in section 1 of the 2018 UK
Corporate Governance Code, with the exception of Provision 19 in that the
Executive Chairman of the Company has served in position for longer than
the recommended period of nine years.
Chairman’s position
During the year ended 31March 2020, which was the Company’s first
operating under the principles of the new UK Corporate Governance
Code, Richard Cotton (then Senior Independent Non-Executive Director)
and Vince Niblett consulted with a number of the Company's largest
shareholders about the length of Nicholas Vetch's tenure as Executive
Chairman (21 years), which is in contravention of the UK Corporate
Governance Code. It is advised as governance best practice that the
Chairman should serve for a maximum of nine years. It is the view of
the Board that it is in the Company's best interest for Nicholas Vetch
tocontinue as Executive Chairman for the foreseeable future.
In arriving at this conclusion, the Non-Executive Directors have carefully
considered the leadership position that Nicholas Vetch fulfils in the
Company and also his leadership of the property team. Moreover, they
looked at the governance checks and balances, which are, in their
opinion, strong and effective. It is recognised that having a founder
Director in post as Chairman for considerably longer than advised, needs
justification and the reasons detailed below should inform shareholders
that this has been given very thorough scrutiny.
1. The Company under Nicholas Vetch’s leadership has an outstanding
track record for delivering consistently strong returns and share price
outperformance. In the twenty four years since flotation in May 2000,
Big Yellow has delivered a Total Shareholder Return (“TSR”), including
dividends reinvested, of 13.6% per annum, in aggregate 1,770.4% at
the closing price of £10.64 on 31March 2024. This compares to 4.8%
per annum for the FTSE Real Estate Index and 5.4% per annum for the
FTSE All Share index over the same period. He has been an integral
part of the business since inception.
2. Big Yellow has a strong culture, which has benefited from stable and
consistent leadership of the business.
3. The Board has five independent NEDs, three of whom have been
appointed within the past four years, providing fresh perspective and
challenge. The NEDs have a wide range of corporate experience and
provide effective challenge to the Chairman and the other Executive
Directors, which was endorsed by the external appraisal undertaken
by Simon Robertson Associates in the prior year.
4. The Board has separate committees for Audit, Nomination,
Remuneration and Sustainability, each of which are chaired by a
Non-Executive Director, and we have a Senior Independent Director
who is considered important in sharing the role of Chairman’s duties.
Specific examples of the board discussion include examination and
engagement in the acquisition of new sites, funding decisions, and
the Group’s net zero carbon plan.
5. As a Board, we have contingency plans in place in the event one of the
Executive Directors cannot fulfil their responsibilities, with a matrix of
who would step in to cover their roles. Considerable thought has been
given by the Board to succession, which has been approached in the
context of a very successful senior team of whom the majority have
been in post since the Company was listed in 2000. More detail is
provided in the Nominations Committee Report.
The Board has been encouraged by the support of its major independent
shareholders as it chooses to explain rather than comply with the Code on
this issue.
The FRC has made it very clear in its guidance that departures from
the Code are acceptable, specifically stating in a guidance paper the
following: “The Code establishes best practice, but importantly it offers
flexibility. This flexibility is an opportunity, not a threat; it allows boards
to take a thoughtful approach to governance. Where companies depart
from the Provisions of the Code they need to provide clear and compelling
explanations for why the approach taken is the right one for the particular
circumstances of the company.” (Source: FRC Review of Corporate
Governance Reporting November 2020). The Company believes that the
reasons set out above for Nicholas Vetch serving as Executive Chairman
do provide that clear and compelling explanation.
Corporate Governance Report
The Company is committed to the principles of corporate governance
contained in the UK Corporate Governance Code issued by the Financial
Reporting Council in 2018.
Annual Report and Accounts 2024 Big Yellow Group PLC 83
Strategic Report Governance Report Financial Statements
Corporate Governance Report continued
Statement about applying the principles
ofthe Code
The Company has applied the principles set out in the Code, including
both the main principles and the supporting principles, by complying with
the Code as reported above. Further explanation of how the principles
and supporting principles have been applied is set out below and in the
Nominations Committee Report, the Remuneration Report, and the Audit
Committee Report.
Leadership
The Board’s role is to provide entrepreneurial leadership of the Company
within a framework of prudent and effective controls which enables risk
to be assessed and managed.
Chairman and Chief Executive
The division of responsibilities between the Chairman and the Chief
Executive has been agreed by the Board and encompasses the following
parameters:
– the Chairman’s role is to provide continuity, experience, governance,
and strategic advice, while the Chief Executive provides leadership,
drives the day-to-day operations of the business, and works with the
Chairman on overall strategy;
– the Chairman, working with the Senior Independent Non-Executive
Director, is viewed by investors as the ultimate steward of the
business and the guardian of the interests of all the shareholders;
– the Board believes that the Chairman and the Chief Executive work
together to provide effective and complementary stewardship;
– the Chairman:
– takes overall responsibility for the composition and capability
ofthe Board;
– takes overall executive responsibility for the property
development team; and
– consults regularly with the Chief Executive and is available on a
flexible basis for providing advice, counsel, and support to the
Chief Executive.
– the Chief Executive:
– manages the CFO and Operations Director and the Group’s
day-to-day activities;
– prepares and presents to the Board strategic options for growth
in shareholder value;
– sets the operating plans and budgets required to deliver agreed
strategy; and
– ensures that the Group has in place appropriate risk management
and control mechanisms.
The Directors believe it is essential for the Group to be led and controlled
by an effective Board that provides entrepreneurial leadership within
a framework of sound controls which enables risk to be assessed and
managed. The Board is responsible for setting the Group’s strategic aims,
its values and standards and ensuring the necessary financial and human
resources are in place to achieve its goals. The Board ensures that its
obligations to shareholders and other stakeholders are understood and
met. The Board also regularly reviews the performance of management.
Effectiveness
Composition of the Board
The Nominations Committee is responsible for reviewing the
BoardComposition and makes recommendations to the Board on
theappointment of Directors. There are presently five independent
Non-Executive Directors on the Board, with Vince Niblett being the Senior
Independent Director. The Company complies with the UK Corporate
Governance Code in that at least half of the Board, excluding the Chair,
iscomprised of independent Non-Executive Directors.
All of the Non-Executive Directors bring considerable knowledge,
judgement, and experience to Board deliberations. Non-Executive
Directors do not participate in any of the Company’s share option or
bonus schemes and their service is non-pensionable. The Non-Executive
Directors are encouraged to communicate directly with Executive
Board Directors between formal Board meetings. The Non-Executive
Directors meet at least once a year without the Executive Board Directors
beingpresent.
The Non-Executive Directors scrutinise the performance of management
in meeting agreed goals and objectives and monitor the reporting of
performance. They are required to satisfy themselves on the integrity
of the financial information and that financial controls and systems of
risk management are robust and defensible. They are responsible for
determining appropriate levels of remuneration for Executive Board
Directors and have a prime role in appointing and, where necessary,
removing Executive Board Directors, and in succession planning.
The tenure of the independent Non-Executive Directors at 31March 2024
is set out below:
2.6
3.1
3.8
6.1
6.8
0 1 2 3 4 5 76
Michael O’Donnell
Heather Savory
Laela Pakpour Tabrizi
Anna Keay
Vince Niblett
Changes to the Board and its Committees
There have been no changes to the composition of the Board and its
Committees during the year.
Annual Report and Accounts 2024 Big Yellow Group PLC84
The board and its committees
Standing committees of the Board
The Board has Audit, Remuneration, Nominations and Sustainability
Committees, each of which has written terms of reference. They deal
clearly with the authorities and duties of each Committee and are formally
reviewed annually. Copies of these terms of reference are available
on the Company’s website. Each of these Committees is comprised of
Independent Non-Executive Directors of the Company who are appointed
by the Board on the recommendation of the Nominations Committee.
Other members of the senior leadership team attend Board meetings
oninvitation.
The Board meets approximately once every two months to discuss a
whole range of significant matters including strategic decisions, major
asset acquisitions and performance. A procedure to enable Directors to
take independent professional advice if required has been agreed by the
Board and formally confirmed by all Directors.
There is a formal schedule of matters reserved for the Board’s attention
including the approval of Group strategy and policies; major acquisitions
and disposals, major capital projects and financing, Group budgets and
material contracts other than in the normal course of business. The Board
also considers matters such as cyber security, reputational risks, and
other non-financial risks as part of its review of the Group’s risk register.
At each Board meeting, the latest available financial information is
produced which consists of detailed management accounts with the
relevant comparisons to budget. A current trading appraisal is given by
the Executive Board Directors.
Attendance at meetings of the individual Directors at the Board Meetings that they were eligible to attend is shown in the table below:
Director Position Number of meetings attended
Jim Gibson Chief Executive Officer
Anna Keay Non-Executive Director
Vince Niblett Non-Executive Director
Michael O’Donnell Non-Executive Director
Laela Pakpour Tabrizi Non-Executive Director
Heather Savory Non-Executive Director
John Trotman Chief Financial Officer
Nicholas Vetch Executive Chairman
attended absent not applicable
All the Committees are authorised to obtain legal or other professional
advice as necessary; to secure, where appropriate, the attendance of
external advisers at its meetings and to seek information required from
any employee of the Company in order to perform its duties.
The Chair of each Committee reports the outcome of the meetings to the
Board. The Company Secretary is secretary to each Committee.
Information and professional development
All Directors are provided with detailed financial information throughout
the year. On a weekly basis they receive a detailed occupancy
report showing the performance of each of the Group’s open stores.
Management accounts are circulated to the Executive monthly and a
detailed Board pack is distributed a week prior to each Board meeting.
All Directors are kept informed of changes in relevant legislation and
changing commercial risks with the assistance of the Company’s legal
advisers and auditor where appropriate. All Directors have access to the
advice of the Company Secretary on governance matters.
The professional development requirements of Executive Board
Directorsare identified and progressed as part of each individual’s annual
appraisal. All new Directors are provided with a full induction programme
on joining the Board.
Non-Executive Directors are encouraged to attend seminars and
undertake external training at the Company’s expense in areas they
consider to be appropriate for their own professional development.
Eachyear, the programme of senior management meetings is tailored
toenable meetings to be held at the Company’s stores. During the year,
the Executive Board Directors made visits to all the Group’s stores.
Annual Report and Accounts 2024 Big Yellow Group PLC 85
Strategic Report Governance Report Financial Statements
Corporate Governance Report continued
Accountability
Risk management and internal control
The Group operates a rigorous system of risk management and internal
control, which is designed to ensure that the possibility of misstatement
or loss is kept to a minimum. There is a comprehensive system in place
for financial reporting and the Board receives a number of reports to
enable it to carry out these functions in the most efficient manner.
Theseprocedures include the preparation of management accounts,
forecast variance analysis and other ad hoc reports. There are clearly
defined authority limits throughout the Group, including those matters
which are reserved specifically for the Board.
The Board has established a continuous process for identifying,
evaluating, and managing the significant risks the Group faces and for
determining the nature and extent of the significant risks it is willing to
take in achieving its strategic objectives. The Board regularly reviews the
process, which has been in place from the start of the year to the date of
approval of this report and which is in accordance with the FRC’s guidance
on risk management, internal control and related reporting that was
issued in September 2014. The Board is also responsible for the Group’s
system of internal control and for reviewing its effectiveness. Such a
system is designed to manage rather than eliminate the risk of failure
to achieve business objectives and can only provide reasonable and not
absolute assurance against material misstatement or loss.
The Board regularly reviews the effectiveness of the Group’s risk
management and internal control systems. The Board’s monitoring
covers all controls, including financial, operational and compliance
controls and risk management. It is based principally on reviewing
reports from management to consider whether significant risks are
identified, evaluated, managed, and controlled and whether any
significant weaknesses are promptly remedied and indicate a need for
more extensive monitoring. The Board has also performed a specific
assessment for the purpose of this annual report. This assessment
considers all significant aspects of risk management and internal control
arising during the period covered by the report, including the work carried
out by the Group’s Store Compliance team. The Audit Committee assists
the Board in discharging its review responsibilities.
A formal risk identification and assessment exercise has been carried
out resulting in a risk framework document summarising the key risks,
potential impact and the mitigating factors or controls in place. The key
risks the Group faces are detailed on pages 44 to 48 in the Operating
and Financial Review. The Board has a stated policy of reviewing this risk
framework at least once a year or in the event of a material change. The risk
identification process also considered significant non-financial risks.
During the reviews in the year, the Directors:
– challenged the framework to ensure that the list of significant risks
tobusiness objectives is still valid and complete;
– considered new and emerging risks to business objectives and
included them in the framework if significant;
– ensured that any changes in the impact or likelihood of the risks are
reflected in the risk framework; and
– ensured that there are appropriate action plans in place to address
unacceptable risks.
The results of this exercise have been communicated to the Board
andthe Audit Committee. This was in the form of a summary report
whichincluded:
– a prioritised summary of the key risks and their significance;
– any changes in the list of significant risks or their impact and
likelihood since the last assessment;
– new or emerging risks that may become significant to business
objectives in the future;
– progress on action plans to address significant risks; and
– any actual or potential control failures or weaknesses during the
period (including “near misses”).
During the course of its review of the risk management and internal
control systems, the Board has not identified, nor been advised of
any failings or weaknesses which it has determined to be significant,
consistent with the prior year. Therefore, a confirmation in respect of
necessary actions has not been considered appropriate.
All management are encouraged to stay abreast of all technical and
othercompetitive advances that could impact the business.
Going concern
The Group’s activities, and a fair review of the business, are included
in the Strategic Report on pages 16 to 30. The financial position of the
Group, including its cash flow, liquidity, and committed debt facilities are
discussed in the Financial Review on pages 38 to 43.
The Directors have a reasonable expectation that the Group and Company
have adequate resources to continue operations for the foreseeable
future. They have therefore continued to adopt the going concern basis
inpreparing the financial statements.
Engagement with stakeholders
The long-term success of our business is dependent on the way we
work with our various stakeholders. The table below shows our key
stakeholder groups, how we engage with them, and how the results of
this engagement are reported up to the Board and influence the decision
making with the business. Not all the information is reported directly to
the Board, however it informs business-level decisions with an overview
of developments being reported on a regular basis to the Board.
The Board has identified a number of key stakeholders which it seeks to
engage with on a regular basis. The key stakeholders are our employees,
our shareholders, our customers, our suppliers, and our communities.
Annual Report and Accounts 2024 Big Yellow Group PLC86
Stakeholder Group Form of engagement How this influenced the Board during the year
Our employees
We carried out an engagement survey of our staff in May 2023,
which showed a very pleasing engagement score of 88% and a
response rate of 92%.
The Directors have continued to visit every store in the portfolio
over the course of the year.
Further detail is provided below on how Anna Keay, the
designated Workforce Engagement Director has carried out
herrole during the year.
Some of the changes resulting from the survey have included
reviewing and relaunching our Bright Ideas Suggestion Scheme,
reviewing our salary bands for Store employees, and personal
safety training having been provided for all team members
withinour stores. We also introduced a new Employee Assistance
Programme, re-trained our Wellbeing Experts and set up a specific
Wellbeing sub-site on our Intranet.
In order to improve communication and the sharing of ideas, we have
introduced a weekly “Anchor Day” within our Head Office, where all
team members are present on a regular day each week, with the aim of
promoting communication, collaboration and involvement. In addition,
we have also introduced a new Intranet to facilitate improved
communication both within Head Office and across the Stores.
There is further detail on how the Board engage with our
people on page 89.
Our shareholders
The Company has an active dialogue with its shareholders
through a programme of investor meetings which include formal
presentation of the full and half year results. The Executive
Board Directors have participated in a number of investor
conferences and meetings during the year. During the year
ended 31March 2024, the Chief Executive and other
ExecutiveBoard Directors carried out 230 meetings with UK
andoverseas institutional shareholders and potential investors.
These meetings comprised group and individual presentations.
The Board also welcomes the interest of private investors
andbelieves that, in addition to the Annual Report and the
Company’s website, the Annual General Meeting is an ideal
forumat which to communicate with investors and the Board
encourages their participation.
The Board receives regular feedback on investor perceptions
aboutthe Company. After each set of results, key investors are
interviewed on their perceptions of the performance of the business
and management. The findings are reviewed by the Board. At each
Board Meeting, the Board is updated on any shareholder meetings
that have taken place, and any views expressed, or issues raised by
the shareholders in these meetings.
Our customers
The Group sends surveys to all customers who have moved in
and moved out of the business. A high response rate is received
to these surveys, which show a net promoter score of 80.5.
The net promoter scores are reported to the Board at each Board
meeting and any recurring themes highlighted to allow discussion
around the approach to our customers.
The Directors discuss net promoter scores and customer feedback
with store teams on their regular visits to the Group’s stores.
The net promoter scores achieved from our customers are used as one
of the metrics in the bonus plan of the Executive Board Directors.
Annual Report and Accounts 2024 Big Yellow Group PLC 87
Strategic Report Governance Report Financial Statements
Corporate Governance Report continued
Stakeholder Group Form of engagement How this influenced the Board during the year
Our suppliers
Regular meetings are held between suppliers and their Big Yellow
contact. Appropriate external tendering is carried out for any
new suppliers.
On anti-corruption and anti-bribery matters, we expect all our
suppliers to be compliant with the Modern Slavery Act and we
work closely with our suppliers to promote best practice. During
the year this included engaging with suppliers we had identified
as being within potentially high-risk categories and carrying out
audits of their compliance with these regulations and providing
support to them.
The Board annually approves the Group’s Modern Slavery statement.
The Group is a member of the Prompt Payment Code, supporting our
smaller suppliers with on time payments.
During the prior year we worked with 27 of our suppliers,
representing 80% of our supply chain value, on supply chain ethics.
No material issues were noted, albeit we have been working with
them during the year to improve standards further.
We have also engaged with a number of our suppliers during the year
as part of our double materiality assessment for CSRD alignment.
Our communities
We demonstrate Big Yellow’s culture and commitment to our
communities through the work of the Big Yellow Foundation
which aims to help vulnerable people lead better lives, working
inpartnership with several charities.
Big Yellow matches any donations from our customers at
move-in and move-out. We also match any funds raised by our
employees and allow each member of our team one paid day per
year for volunteering.
We also support approximately 200 local charities with free or
discounted space throughout our network.
The Board receives regular updates regarding the Foundation’s
activities. The Board endorses the culture of giving back time to
support these charities and the financial commitment made by
BigYellow.
Jim Gibson, CEO, is the Chair of the Trustees of the
BigYellowFoundation.
Our Environment
We engage relevant subject matter experts to assess the
impactour business has in the first instance as part of the
planning and construction process. Our partners perform
detailed assessment on likely impacts on land, water,
biodiversity, air quality and other key aspects. It is our aim to not
just minimize any negative aspects, but also ‘listen’ carefully
and enhance where possible, through the installation of green
roofs or bird or bat nesting boxes for example. We extensively
report on our Operational impacts, such as energy consumption,
carbon emissions, waste we create and water we use as part of
our Full ESG Report and have systems and processes in place to
manage material aspects, such as energy.
The Board receives regular updates on our environmental
performance and activities.
The Board endorses the Group’s commitment to investing at
allstages of our stores’ lifespan to ensure our impact on the
Environment is minimised. It signs off on the budgets to deliver
solarinstallations and electric vehicle charging pods for example.
The Board established a formal Sustainability Committee in 2020
chaired by Non-Executive Director Heather Savory.
Annual Report and Accounts 2024 Big Yellow Group PLC88
Employee relations and
companyculture
Our teams are a key resource of the business. From the start we have
always aimed to create a culture which is accessible, apolitical, inclusive,
non-hierarchical, socially responsible, and very importantly, an enjoyable
place to work. We believe in the employees benefiting from the success
of the business. All staff are eligible for an annual bonus; a Sharesave
scheme is open to all employees; and the Company’s Long Term Incentive
Plan is provided to a significant number of employees.
The Executive Board Directors spend a considerable amount of time
meeting with the Group’s employees and visit every store at least once a
year. We recognise the value of the culture of the business and these visits
create an opportunity for it to be cascaded from the boardroom. The Group’s
Non-Executive Directors also participate in some of these visits, allowing
them to develop and maintain a greater insight into the business, producing
an informed and higher quality Board discussion on employee matters.
The Group carries out regular engagement surveys of its staff and
carried out a full survey in May 2023. These surveys tell us what
our staff value about the business and the importance of continued
personal development. Detailed action plans are created following these
engagement surveys and a number of changes to the way we operate
have been made as a result of these surveys. The level of employee
engagement evidenced by these surveys remained very high.
Regular training is provided to the Group’s employees, and detailed
courses are provided to allow employees to further their careers and
seekpromotion opportunities within the business.
The Board has, in conjunction with the work of the Audit Committee,
reviewed the whistleblowing policies that are in place for the Group’s
employees. There have been no significant issues raised under the
Group’s whistleblowing arrangements during the financial year.
Workforce Engagement Director
The Code requires that the Board should understand the views of its
key stakeholders, with a particular reference to engagement with the
workforce. Specifically, it states that for engagement with the workforce,
one or a combination of the following methods should be used:
– A Director to the main Board should be appointed from the workforce;
– A formal workforce advisory panel should report to the Board; and / or
– A designated Non-Executive Director should sit on the workforce
advisory panel.
A designated Non-Executive Director, Anna Keay, has been chosen as the
primary method of workforce engagement for Big Yellow.
She oversees and is responsible for the following:
– Involvement in the Workforce Engagement Group discussions and
occasional attendance at Workforce Engagement Group meetings;
– Involvement in key employee project groups where for example
employee views are sought on the business or policy and
proceduralchanges;
– Maintaining an awareness of the suggestions made under
the Company’s Bright Ideas Scheme to include key trends and
awardsmade;
– Along with all the Company’s Non-Executive Directors, participation
on store tours (pre-planned visits to individual stores);
– Along with all the Company’s Non-Executive Directors attending the
Annual Sales Conference;
– Provision of feedback to the Board on the bi-annual employee
engagement survey, with assistance from the Human Resources
team and our survey partner;
– Receiving detailed feedback from the Executive Board Directors on
their interaction with employees;
– Regular meetings with the Head of HR to discuss employee relations
and issues;
– Annual face-to-face sessions with groups of employees in different
areas of the business to hear views and concerns;
– Acting as an alternative contact to whom employees can report
confidential matters and raise concerns under the Company’s
Whistleblowing Policy; and
– Reporting back to the Board and Non-Executive Directors on
theabove.
Annual Report and Accounts 2024 Big Yellow Group PLC 89
Strategic Report Governance Report Financial Statements
Committee members
and attendance
Member
Number
of meetings
attended
Vince Niblett – Chair and Senior IndependentDirector
Anna Keay – Member
Michael O’Donnell – Member
Laela Pakpour Tabrizi – Member
Heather Savory – Member
attended
absent
not applicable
Nominations Committee Report
The Committee is responsible for reviewing the Composition
of the Board. It also makes recommendations for membership
of the Board and considers succession planning for Directors.
The Committee is also responsible for evaluating Board and
Committee performance.
Introduction
The Nominations Committee is responsible for reviewing the structure,
size and composition of the Board and giving consideration to succession
planning for Directors and other senior Executives. Where changes
are required, it is also responsible for the identification, selection and
proposal to the Board for approval of persons suitable for appointment
or reappointment to the Board, whether as Executive or Non-Executive
Directors and to seek approval from the Remuneration Committee of
the remuneration and terms and conditions of service of any proposed
Executive Director appointment. The Chair of the Committee reports to
the Board as appropriate to enable the Board as a whole to agree the
appointments of new Directors. The Committee meets at least once a
yearand otherwise as required and as determined by its members.
The terms and conditions of appointment for the Non-Executive Directors
are available for inspection at the Company’s Head Office during normal
working hours. They are also available for inspection at the Company’s AGM.
Board performance evaluation
During 2023, the effectiveness of the Board and its Committees was
evaluated by Simon Robertson Associates LLP (“SRA”). Simon Robertson
Associates have no other business relationship with the Group or any
of the Company’s Directors. SRA met each Director individually, the
Company Secretary, many of the senior management team and certain
external advisers to the Company. They also attended Board and
Committee meetings, with the results of the evaluation presented to
thefull Board.
This was the second consecutive external Board evaluation that SRA
has undertaken for the Company. The decision to use SRA again was
to provide continuity and context for their observations given material
changes to the Board in recent years. There had been three new NED
appointments and a new SID. Consequently, the dynamics of the
Board have altered but SRA noted that it operates just as effectively,
with the new NEDs strengthening skills and experience, particularly
around the ESG agenda. SRA was positive about the implementation
ofrecommendations made following the last review.
Annual Report and Accounts 2024 Big Yellow Group PLC90
Findings
The overall conclusion was that the Board operates with a high degree
of efficiency, with a good level of leadership and in a way that promotes
honest discussion and healthy debate. High-priority business is
unanimously recognised and given the appropriate allocation of time for
detailed discussion. This does not detract from other tabled business
which is well covered; conversations are straightforward and substantive.
SRA was complimentary of the comprehensive approach to governance,
noting that the Board is appropriately structured and balanced, with
its Committees both well-defined and purpose-driven. SRA noted that a
distinct entrepreneurial culture and set of values are evident at Board
level, a sentiment echoed by others who were part of the review process.
SRA’s main recommendations were:
– consider internal deep-dive exercises on risk management systems
and financial controls to test the robustness of current processes;
– continue open dialogue around Board evolution to help with
succession planning;
– nurture board dynamics through opportunities for the Board to meet
independently of main meetings; and
– restructure the NEDs induction process to allow for a more extensive
introduction to senior management and continue the NEDs education
and visibility around the business.
Current year board evaluation
During the current year, the Senior Independent Director led an internal
evaluation of the Board’s performance. This consisted initially of a round
table discussion on the Board’s performance. The Senior Independent
Director then sent a detailed questionnaire to the each of the Board
asking them to assess the effectiveness of the Board and its discussions,
and to raise any suggestions for improvement. As part of this review the
recommendations from SRA in the prior year were revisited to ensure
these had been implemented. The Senior Independent Director provided
a paper summarising the results of these exercises to the Board. It was
considered that the Board was operating effectively, with some minor
areas identified for improvement.
Director evaluation
During the current year, the Executive Chairman evaluated the performance
of the other Executive Board Directors, and the performance of the Chairman
was evaluated by the Senior Independent Non-Executive Director. It was
considered that the individuals were operating effectively, with appropriate
procedures put in place for minor areas identified for improvement.
Succession planning
It is a key responsibility of the Committee to advise the Board on
succession planning. The Committee ensures that any future changes
inthe Board’s composition are foreseen and effectively managed.
The Board comprises a team of three Executive Board Directors,
twoofwhom were co-founders of the Company, complemented by
Non-Executive Directors who have wide business experience and skills as
well as a detailed understanding of the Group’s philosophy and strategy.
The Executive Board Directors have worked together for a significant
length of time. Continuity of experience and knowledge, particularly
of self storage, within the executive team is important in a long-term
focussed business such as Big Yellow.
The team has confirmed individually and collectively that they all remain
committed to the business for the foreseeable future. Each Executive
has a significant personal financial interest in the Company. The risk of
unforced succession within the business is therefore low.
Given the financial interest of each member of the team in the Company,
any planned change in the team in the medium-term (e.g. upon retirement)
will be staggered to ensure there is not significant disruption to the overall
team. This will be in a similar way to how the Company has managed the
replacement of the Non-Executive Directors over recent years.
The Directors work closely together across the various departments
that each manages, and so each carries knowledge of the way the whole
business operates and would be able to take over the running of that
department in the short-term should a vacancy arise. Equally important
is the strength of the Senior Management team within the business.
The majority of department heads have worked for the business
for a substantial period of time and are highly capable individuals.
TheCommittee has confidence that they would be able to step up if
thereis a gap in the Executive Director team at any point.
In the event of unforeseen changes, the Committee ensures that
management and oversight of the Group’s business and long-term
strategy will not be affected.
The Committee also addresses the development and continuity of
the Senior Management team below Board level and has considered
succession planning for this team during the year.
Annual Report and Accounts 2024 Big Yellow Group PLC 91
Strategic Report Governance Report Financial Statements
Nominations Committee Report continued
Big Yellow Executive team
Big Yellow operates with a leadership team of fourteen, comprising of
three Executive Board Directors, supported by eleven key executives
within the business. The Group does not have a formal Executive
Committee or formal Operating Board, as a more flexible approach to
theday-to-day management of the business is used within a relatively
flat management structure.
In addition to the three Executive Board Directors, the other members
of the Executive team cover finance, sales and marketing, operations,
facilities, construction, property acquisitions, human resources,
information technology and digital security, and ESG.
The business is run through small sub-groups of decision-making
committees, which meet regularly throughout the year around
particularkey delivery areas which contribute to our growth and success.
Thesecommittees are attended by members across the leadership team
and other employees as required. All of these meetings are also attended
by at least one of the Executive Board Directors, and in many cases more
than one Executive Director. All strategic and acquisition decisions are
made at the PLC Board level and then the Committees implement and
take the detailed decisions to drive operational performance and deliver
growth. There are also specific thematic executive committees, such as
an Environmental Committee and a Health and Safety Committee.
Gender identity reporting under
LR9.8.6R(9) and LR9.8.GR(10)
All aspects of diversity, including gender are considered at every level of
recruitment. All appointments to the Board are made on merit. The Board’s
policy states that the Board seeks a composition with the right balance
of skills and diversity to meet the demands of the business. Thelisting
rules set out a target of 40% representation of the Board as women. The
Company at 31March 2024 had 38% of the Board as women, and this
requirement will be an important consideration in future board level
appointments. The listing rules also target Boards to have at least one
woman in the roles of Chair, Senior Independent Director ("SID") and/or
as CEO or CFO. It is our intention to have at least one woman in one of the
defined roles above by 2025.
Gender diversity of the Board, Key Executives and Company at 31March
2024 is set out below:
Number
of board
members
% of the
board
Number
of senior
positions
(CEO, CFO,
SID and
Chair)
Number in
executive
management
Percentage
of executive
management
Men 5 62.5% 4 6 55%
Women 3 37.5% 5 45%
Not specified/
prefer not to say
The data in the table was collected via written submissions completed by
each relevant individual within scope of the reporting requirements set
out in Listing Rule 9.8.6R(10).
100
70
80
90
60
30
40
50
20
0
10
Board Key
Executives
Board
and Key
Executives
All
employees
37.5%
3
62.5%
5
45%
5
55%
6
42%
8
58%
11
44%
227
56%
284
Female
Male
Annual Report and Accounts 2024 Big Yellow Group PLC92
Ethnic background identity
reporting under LR9.8.6R(9)
andLR9.8.6R(10)
As at 31March 2024, being the relevant reference date for the purposes
of Listing Rule 9.8.6R(9)(a), two of the Board’s eight members identified
as non-white (25%), exceeding the target set in the Listing Rules and the
Parker Review.
Number
of board
members
% of the
board
Number
of senior
positions
(CEO, CFO,
SID and
Chair)
Number in
executive
management
Percentage
of executive
management
White British
or other White
(including
minority-white
groups) 6 75% 3 11 100%
Mixed/Multiple
Ethnic Groups 1 12.5% 1
Asian/Asian
British
Black/African/
Caribbean/Black
British
Other ethnic
group, including
Arab 1 12.5%
Not specified/
prefer not to say
The data in the table was collected via written submissions completed by
each relevant individual within scope of the reporting requirements set
out in Listing Rule 9.8.6R(10).
External appointments
On making new appointments, the Board takes into account the other
demands on a Director’s time. Prior to any appointment, significant
commitments are disclosed with an indication of the time involved.
Anyadditional external appointments are only undertaken with prior
approval of the Board. The Group’s Executive Board Directors may not
take on more than one non-executive Directorship within a FTSE 350
company or other significant and time-consuming appointment.
Directors standing for re-election
All of the Directors will retire in accordance with the UK Corporate
Governance Code and will offer themselves for re-election at the Annual
General Meeting.
Following a performance appraisal process, the Board has concluded that
the Directors retiring are effective, committed to their roles and operate
as effective members of the Board.
The Board, on the advice of the Committee, therefore recommends the
re-election of each Director standing for re-election. Full biographical
details of each Director are available on pages 80 to 82.
Vince Niblett
Nominations Committee Chair
20 May 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 93
Strategic Report Governance Report Financial Statements
Committee members
and attendance
Member
Number
of meetings
attended
Heather Savory – Chair
Anna Keay – Member
Vince Niblett – Member
Michael O’Donnell – Member
Laela Pakpour Tabrizi – Member
attended
absent
not applicable
Introduction
The Sustainability Committee is responsible for:
– overseeing the Group’s sustainability framework and strategy;
– monitoring the sustainability performance;
– providing guidance on emerging environmental issues, including
environmental risks, and their impact on the Group’s business; and
– overseeing the Group’s ESG reporting, including external audit and
assurance mechanisms.
The Sustainability Committee has determined its scope as:
– material, covering all environmental aspects of Big Yellow’s business,
i.e. the ‘E’ in ESG; and
– comprehensive, from energy to waste, considered in order of their
impact on the business.
The scope of the Sustainability Committee excludes:
– social and personnel aspects of ESG, which the Big Yellow Board
considers elsewhere, under the guidance of Non-Executive Director
Anna Keay; and
– governance aspects of ESG which are considered directly by the
BigYellow Board.
Sustainability Committee Report
Annual Report and Accounts 2024 Big Yellow Group PLC94
Overview
The Sustainability Committee meets twice a year: in September and in March,
attended by all Big Yellow Board Members and the Head of Sustainability.
The Head of Sustainability and the delivery of Big Yellow’s Sustainability
Strategy are supported through an executive-level, cross-disciplinary
Environmental Committee of Big Yellow staff, with external experts called
in to assist as and when required.
Big Yellow’s Sustainability Strategy, setting out pathways to become
NetRenewable Energy Positive by 2030 and Net Zero Emissions by
2032,remains unchanged since it was updated in 2022 to include full
Science-Based Targets.
The Sustainability Committee commends the excellent progress made
against the Sustainability Strategy during the year ended 31March 2024.
Big Yellow now has two Science-Based Targets set and verified by the
Science-Based Target initiative (SBTi). These have been put in place to
help us decarbonise our Scope 1, 2 and 3 activities.
In addition to the work to gain formal approval for the Science-Based
Targets this year we have also seen:
– Strong progress on the Solar Retrofit programme – now standing
at 35 retrofit installations, which contribute to a total generating
capacity of 6.6 Megawatts across 68 stores.
– Extension of the Battery Pilot – although the initial battery pilot was
successfully installed, aspects of its operation have been challenging
as the battery was designed for domestic use, making it difficult
to collect the data we need. A second phase of the pilot has been
commissioned with a second, commercial use, battery going into our
new store at Slough Farnham Road next year.
– The recent achievement of the improved CDP score of an A with an A-
for our Supplier Engagement Score.
This year we have continued to work to understand our Scope 3 emissions.
We have carried out multistage Life Cycle Assessments of our construction
activities and, moving forward, we are committed to having our Scope 3
footprint externally calculated and verified. The information we gather from
these activities will be used to understand how our design decisions impact
our carbon emissions and influence future construction specifications.
In July 2023 the European Commission adopted the European Sustainability
Reporting Standards for use by all companies subject to the Corporate
Sustainability Reporting Directive (“CSRD”). We have taken the decision
to align to these requirements to be as transparent as possible in our
sustainability reporting.
I am pleased to confirm that Big Yellow is continuing to deliver well against
its Sustainability Strategy, whilst maintaining a flexible approach in
light of new developments in the sustainability space. The business is
continually seeking to innovate and make the best of new opportunities
as they arise, in its work to meet the long-term targets of the strategy.
Heather Savory
Sustainability Committee Chair
20 May 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 95
Strategic Report Governance Report Financial Statements
Attendance at Remuneration
Committee meetings
Attendance at meetings of the individual Directors at the
Remuneration Committee Meetings that they were eligible
toattend is shown in the table below:
Committee members
and attendance
Member
Number
of meetings
attended
Michael O’Donnell – Chair
Anna Keay – Member
Vince Niblett – Member
Laela Pakpour Tabrizi – Member
Heather Savory – Member
attended
absent
not applicable
This report has been prepared by the Remuneration Committee
and approved by the Board. It has been prepared in accordance
with Schedule 8 of the Large and Medium-size Companies and
Groups (Accounts and Report) (Amendment) Regulations 2013
(the“Regulations”).
Introduction
The report is divided into three main sections:
– The Annual Statement – which summarises the remuneration
outcomes in the year ended 31March 2024 and how the
Remuneration Policy will be operated in the year ending
31March2025;
– The Remuneration Policy Report – which sets out a summary of the
current Remuneration Policy which was approved by shareholders at
the 2022 AGM and which remains unchanged; and
– The Annual Report on Remuneration – which sets out how the
Committee intends to operate the Remuneration Policy for the year
ending 31March 2025, the link between Company performance and
remuneration and payments and awards made to the Directors in
respect of the year just ended.
The Companies Act 2006 requires the auditor to report to the shareholders
on certain parts of the Remuneration Report and to state whether, in
their opinion, those parts of the report have been properly prepared
in accordance with the Regulations. The parts of the Annual Report on
Remuneration that are subject to audit are indicated in the report.
Remuneration Committee Report
Annual Report and Accounts 2024 Big Yellow Group PLC96
The Committee and its Work During the Year
Committee Chair: Michael O’Donnell
Current Committee members: Vince Niblett, Anna Keay, Laela Pakpour Tabrizi and Heather Savory
Terms of Reference: https://corporate.bigyellow.co.uk/investors/corporate-governance
The Committee met three times during the year under review. The Committee’s main activities during the year ended 31March 2024 (full details
are set out in the relevant sections of this report) included:
– Agreeing Executive Director base salary increases from 1 April 2024;
– Agreeing the cash annual bonus awards for the year ended 31March 2023 and setting the targets for the year ended 31March 2024;
– Agreeing the deferred annual bonus plan awards for the year ended 31March 2023 and setting the targets for the year ended 31March 2024;
– Reviewing the EPS and Total Shareholder Return (“TSR”) performance targets and determining the percentage vesting for the 2020 LTIP
awards which vested in 2023;
– Reviewing the CEO Pay Ratio calculations and disclosures;
– Reviewing the Company’s Gender Pay calculations and disclosures;
– Reviewing the Company’s Ethnicity Pay calculations and disclosures; and
– Reviewing the 2023 AGM voting results and considering shareholder feedback received.
In addition, during the year ended 31March 2024, the Committee has considered how the Policy and practices are consistent with the six
factors set out in Provision 40 of the UK Corporate Governance Code:
Clarity
Our Policy is understood by our senior executive team and is clearly articulated to our shareholders and representative bodies (both on an
ongoing basis and when changes are proposed).
Simplicity
The Committee is mindful of the need to avoid overly complex remuneration structures which can be misunderstood and deliver unintended
outcomes. Therefore, a key objective of the Committee is to ensure that our executive remuneration policies and practices continue to be
straightforward to communicate and operate.
Risk
Our Policy has been designed to ensure that inappropriate risk-taking is discouraged and will not be rewarded via: (i) the balanced use of annual
and long-term pay which employ a blend of financial, non-financial and shareholder return targets; (ii) the significant role played by equity in our
incentive plans; and (iii) malus/clawback provisions.
Predictability
Our incentive plans are subject to individual caps, our share plans are also subject to market standard dilution limits.
Proportionality
There is a clear link between individual awards, delivery of strategy and our long-term performance. In addition, the significant role played
byincentive/‘at-risk’ pay, together with the structure of the Executive Board Directors’ service contracts, ensures that poor performance is
notrewarded.
Alignment to culture
Our executive pay policies are fully aligned to Big Yellow’s culture through the use of metrics in both the annual bonus, deferred bonus and
LTIPthat measure how we perform against our KPIs.
Annual Report and Accounts 2024 Big Yellow Group PLC 97
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Annual Statement
Dear Shareholder
I am pleased to present the Directors’ Remuneration Report for the year
ended 31March 2024.
Performance, Decisions and Reward
Outcomes for the year ended 31March 2024
The business conditions and performance of the Group in the year ended
31March 2024 are described more fully in the Chairman’s Statement and
the Operating and Financial Review of this Annual Report. In summary:
– The business of the Group performed strongly despite the current
economic headwinds;
– Big Yellow remains the clear UK brand leader in self storage and
delivered growth in revenue, cash flow and adjusted profit for the
fifteenth year in a row;
– Revenue, operating cash flow and adjusted profit before tax
increased 6%, 1% and 1% respectively; and
– Dividends are in line with the prior year.
Payments made to the Executive Board Directors under the cash annual
bonus plan for the year ended 31March 2024 amounted to 8.5% of salary
(out of a maximum of 25% of salary), based on performance against
pre-set targets for occupancy, store profitability, store audits and
customer satisfaction. The targets set, and the out-turn, were identical
tothe average bonus awarded across the stores and head office.
Awards made to the Executive Board Directors under the deferred annual
bonus plan for the year ended 31March 2024 amounted to 67.25% of
salary (out of a maximum of 125% of salary), based on performance
against financial and non-financial performance targets linked to the
business plan.
In respect of the Long Term Incentive Plan (“LTIP”) awards granted in
2022, which vested in July 2023, three-year EPS and TSR performance
resulted in 95% of awards vesting.
Further details of the targets, and performance against the targets, for
cash and deferred annual bonus plans and share award vesting levels are
set out in the Annual Report on Remuneration.
Operation of the Policy and use of discretion
The Remuneration Policy operated as intended for the year ended
31March 2024, and no discretion was applied.
Implementing the Policy for the
Year Ending 31March 2025
Base salary
The Committee continues to operate a policy of targeting base salaries
“close to (but generally just below) median” although current base salary
levels are well below the market level for a FTSE 250 company of Big
Yellow’s size and complexity.
From 1 April 2024, Executive Director salary levels were increased by 4%
which was in line with the increase across the wider workforce (albeit a
proportion of lower paid team members received a higher increase).
Chief Executive
(Jim Gibson)
Executive
Chairman
(Nicholas Vetch)
Chief Financial
Officer
(John Trotman)
From 1 April 2023 £490,100 £417,700 £362,000
From 1 April 2024 £509,725 £434,425 £376,500
% increase 4% 4% 4%
Pension and benefits
Pension provision for the Executive Directors will continue at 6%
of salary, which is in line with the pension offered to the general
workforce. Benefit provision will remain unchanged (private fuel,
private medical insurance, permanent health insurance, life
assurance and relocation allowances, where relevant).
Annual bonus
Annual bonus potential will continue to be capped at 150% of salary
for the year ending 31March 2025.
Up to 25% of salary will continue to be aligned to the workforce annual
bonus (measured against store performance, through occupancy growth,
store profitability, store audits and customer satisfaction scores).
Anybonus earned under this part will be payable in cash, following the
year ending 31March 2025.
The remaining 125% of salary will continue to be measured against
financial, operational, real estate and strategic targets measured over
the financial year ending 31March 2025. Any award under this part will
be deferred into Big Yellow shares for three years (with vesting subject
tocontinued employment).
Annual Report and Accounts 2024 Big Yellow Group PLC98
LTIP
The LTIP will continue to operate in its current form with the award
potential at up to 200% of salary (albeit award levels will remain below
market in value terms given the below market salary levels). As per the
2023 LTIP awards, 80% of awards will be measured against Earnings Per
Share (“EPS”) and relative Total Shareholder Return (“TSR”) and 20% will be
based on ESG related performance metrics. Details of the proposed targets
for the 2024 LTIP awards are set out in the Annual Report on Remuneration.
Shareholding guidelines – in employment
The guideline to build and maintain a holding of at least 200% of salary
in shares of the Company will continue to apply and has been met by
all of the current Executive Board Directors. Where a newly appointed
Executive Director does not meet the 200% of salary ‘in employment’
shareholding guideline in the future, 100% of the net of tax shares which
vest under any discretionary share award are to be retained.
Shareholding guidelines – post employment
The post-cessation shareholding guideline whereby Executive Directors
will need to retain shares equal to 100% of the shareholding guideline
(orthe actual number of shares held against the guideline if the guideline
is not met at cessation) up until the second anniversary of cessation will
continue to apply.
Conclusion
I hope that, at the AGM on 18 July 2024, you will support the resolution on
the remuneration paid to the Directors in the last financial year, and the
implementation of the new Remuneration Policy for the forthcoming year.
I would like to extend my thanks to my fellow colleagues on the
Committee for their support and work in 2023/24.
Michael O’Donnell
Chair of the Remuneration Committee
20 May 2024
Directors’ Remuneration Policy
This section of the Remuneration Report contains a summary of the
Company’s Directors’ Remuneration Policy (the “Policy”) which governs
the Company’s approach to remuneration. The full Policy as approved by
shareholders is set out in the Annual Report and Accounts for the year
ended 31March 2022.
It is the policy of the Company to ensure that the executive remuneration
packages are designed to attract, motivate, and retain Directors of a high
calibre and reward the executives for enhancing value to shareholders.
As a result, a substantial element of the remuneration of the Executive
Board Directors is structured to be dependent on the performance of
the Company. The policy aims to support a performance culture where
there is appropriate reward for the achievement of strong Company
performance without creating incentives which will encourage excessive
risk-taking or unsustainable Company performance.
Policy scope
The Policy applies to the Executive Board Directors and
Non-Executive Directors.
Policy duration
The current Directors’ Remuneration Policy Report was approved by
abinding shareholder vote at the AGM on 21 July 2022.
Annual Report and Accounts 2024 Big Yellow Group PLC 99
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Summary Policy table (Executive Board Directors)
The main components of the Directors’ Remuneration Policy, and how they are linked to and support the Company’s business strategy are
summarised below:
Executive Board Directors
Purpose and link
tostrategy Operation Maximum potential value
Performance conditions
andassessment
Base salary
To provide competitive
fixed remuneration that
will attract and retain
key employees and
reflect their experience
and position in the
Company.
Base salary is normally set annually on 1 April.
When considering any increases to base salaries
in the normal course (as opposed to a change in
role or responsibility), the Committee will take
intoconsideration:
• level of skill, experience, scope of responsibilities
and performance;
• business performance, economic climate, and
market conditions;
• pay and employment conditions of employees
throughout the Group, including increases
provided to staff;
• inflation; and
• increases provided to Executive Board Directors
in comparable companies (although such data
would be used with caution).
Salaries are typically set after
considering the salary levels in
companies of a similar size and
complexity in the FTSE 250.
Our overall policy is normally to target
salaries at close to (but generally just
below) median levels.
Base salaries are intended to increase
in line with inflation and general
employee increases in salary.
Higher increases may apply if there is
a change in role, level of responsibility
or experience or if the individual is new
to the role.
There is no maximum salary cap
inplace.
None
Annual bonus
The annual bonus
aligns reward to
key Group strategic
objectives and
drives short-term
performance.
Executive Board Directors participate in an annual
performance-related bonus scheme.
Up to 25% of salary will be paid in cash. Up to
125%of salary will be deferred into shares for
threeyears.
Dividend equivalents may be payable on deferred
share awards.
The annual bonus plan rules contain clawback and
malus provisions.
150% of salary. Assessed annually
and determined by the
Committee based on
financial, strategic and/
or personal performance
against the Group’s
business plan for each
financial year.
Long Term
Incentive Plan
The Long Term
Incentive Plan aligns
Executive Director
interests with those
of shareholders and
rewards value creation.
Awards are made annually to the Executive
BoardDirectors (and certain senior managers
who are in a position to significantly influence
theperformance of the Group) in the form of
nil-paid options.
The awards granted under the Long Term Incentive
Plan are subject to performance conditions to be
met over a performance period of three years.
Dividend equivalents may be payable on LTIP
awards during the vesting period, to the extent
awards vest.
The LTIP contains malus and clawback provisions.
A two year post vesting holding period applies
to LTIP awards granted to Executive Directors
following the 2018 AGM.
200% of salary, albeit actual award
levels may be lower.
Vesting under the LTIP
will be based on financial,
share-price, strategic
and/or ESG related
performance measures.
Pension
To provide competitive
levels of retirement
benefit.
Contribution made into Executive Director’s personal
pension plan, or a cash supplement of equivalent
value paid in lieu of pension contribution.
Workforce aligned
(currently 6% of salary)
None
Annual Report and Accounts 2024 Big Yellow Group PLC100
Purpose and link
tostrategy Operation Maximum potential value
Performance conditions
andassessment
Other benefits
To provide competitive
levels of employment
benefits.
Benefits include:
• Private fuel;
• Private medical insurance;
• Permanent health insurance;
• Company car via salary sacrifice;
• Life assurance of four times base salary; and
• Relocation allowances (where relevant).
Other benefits may be provided where appropriate.
The type and level of benefits provided is reviewed
annually to ensure they remain market competitive.
Maximum opportunity is the total cost
of providing the benefits. There is no
monetary cap on benefits.
None
Shareholding
policy – in
employment
To ensure that
Executive Board
Directors’ interests are
aligned with those of
shareholders over a
longer time horizon.
Requirement to build and maintain a holding
of shares in the Company, through retaining at
least100% of shares vesting in discretionary
share-based incentive plans if this guideline has
not beenmet.
200% of salary. N/A
Shareholding
policy – post
employment
Requirement to retain shares equal to 100% of the
shareholding guideline (or the actual number of
shares held against the guideline if the guideline
is not met at cessation) up until the second
anniversary of cessation.
Own shares purchased and share awards granted
prior to the 2021 AGM are excluded from the post-
cessation guideline.
All Employee
Scheme
To encourage share
ownership by all
employees. This allows
them to align their
interests with those of
investors and to share
in the long-term success
of the Company.
Executive Board Directors may participate in any
HMRC tax favoured all employee arrangements.
In line with the prevailing HMRC limits. None
Annual Report and Accounts 2024 Big Yellow Group PLC 101
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Notes to the policy table
The key principle for the short and long-term incentives is to provide a strong link between reward and individual and Group performance to align the
interests of Executive Board Directors with those of shareholders.
1. Annual bonus performance measures and targets
Annual bonuses for the Executive Board Directors are based on:
– 25% of salary cash bonus: the average of the stores’ performance against their quarterly targets providing direct alignment of the Directors’
bonuses to performance (and the bonus levels) of the staff. The four Key Performance Indicators used to assess store performance are occupancy
growth, store profitability, store audits and customer satisfaction. Store targets are set every quarter and an average of the four quarters is taken.
– 125% of salary deferred share bonus: measured against pre-set financial, operational, real estate, strategic and ESG-related targets.
2. Long Term Incentive Plan performance measures and targets
Performance metrics and targets for LTIP awards will provide a direct link between the incentive for the Executive Board Directors and the long-term
value created for shareholders. The main two performance metrics, which may be supplemented by strategic and/or ESG-related metrics are:
– Relative TSR against the constituents of the FTSE Real Estate Index, given that Big Yellow’s historic performance has been closely aligned to the
performance of this Index.
– Adjusted EPS figure as reported in the audited results of the Group for the last complete financial year ending before the start of the performance
period and the last complete financial year ending before the end of the performance period.
3. Malus and clawback
The cash annual bonus, deferred annual bonus plan and LTIP include malus and clawback provisions.
Malus is the adjustment of outstanding deferred bonus and LTIP awards as a result of the occurrence of one or more of the circumstances listed below.
The adjustment may result in the value being reduced to zero. Malus will apply for the three year period from grant to vesting for the deferred bonus and
LTIP awards.
Clawback is the recovery of payments/vestings under the cash bonus and LTIP as a result of the occurrence of one or more circumstances listed below.
Clawback will apply for three years post payment of a cash bonus/grant of deferred share awards and three years post vesting for LTIP awards.
The circumstances in which malus and clawback could apply are as follows:
– discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company;
– the assessment of any performance target or condition in respect of an award was based on error, or inaccurate or misleading information;
– the discovery that any information used to determine the amount of an award was based on error, or inaccurate or misleading information;
– corporate failure or the occurrence of an insolvency event;
– action or conduct of an award holder which, in the reasonable opinion of the Board, amounts to fraud or gross misconduct; and
– events or behaviour which have led to the censure of the Company by a regulatory authority or have had a significant detrimental impact on the
reputation of any Group Company.
4. Discretion
The Committee has discretion in several areas of policy as set out in this report. The Committee may also exercise operational and administrative
discretion under relevant plan rules approved by shareholders as set out in those rules. In addition, the Committee has the discretion to amend
policywith regard to minor or administrative matters where it would be, in the opinion of the Committee, disproportionate to seek or await
shareholderapproval.
In certain circumstances, the Committee will be required to exercise its discretion, taking into consideration the particular circumstances of an
Executive Director’s departure and/or the recent performance of the Company in determining the specific level of payments to be made.
In addition to the discretion under the terms of the annual bonus plan (both cash and deferred shares) and LTIP, the Committee has discretion to
determine whether an individual is classified as a “good leaver”.
It should be noted that it is the Committee’s policy to only apply its discretion if the circumstances at the time are, in its opinion, sufficiently
exceptional,and to provide a full explanation to shareholders where discretion is exercised. The Committee does not currently intend to amend
orwaiveany performance conditions.
Annual Report and Accounts 2024 Big Yellow Group PLC102
5. Differences in remuneration policy for all employees
All employees are currently entitled to base salary, benefits, pensions, and the Sharesave Scheme. Additionally, all employees are eligible for annual
bonuses with the maximum opportunity available based on the seniority and responsibility of the role held.
The Company’s LTIPs are granted to a number of key team members within Head Office, the area manager team and also to store managers.
Illustrations of application of Remuneration Policy
The graphs below seek to demonstrate how pay varies with performance for the Executive Board Directors based on the current Remuneration Policy.
The assumptions used in determining the level of pay out under given scenarios are as follows:
Scenario Description
Fixed Pay
Chief Executive Executive Chairman Chief Financial Officer
Base salary (from 1 April 2024) £509,725 £434,425 £376,500
Estimated Benefits £5,000 £5,000 £2,000
Pension (% of salary) 6% 6% 6%
On-target
50% of annual bonus award being paid and 50% vesting of the LTIP.
Maximum
100% of annual bonus award being paid (i.e. 150% of salary) and 100% vesting of the LTIP
(i.e. 200% of salary, albeit actual awards levels may be lower).
Maximum Plus 50%
share price growth
As per the Maximum scenario but assuming 50% share price growth on LTIP awards.
Chief Executive Executive Chairman Chief Financial Officer
£3,000
£2,500
£2,000
£1,000
£1,500
£0
£500
Minimum Target Maximum Maximum
with share
price growth
£545,309
£1,437,327
£2,329,346
£2,839,071
28%
33% 27%
35%
44% 36%
18%
100% 37% 23% 19%
Share price growth
LTIP
Annual Bonus
Fixed Pay
Minimum Target Maximum Maximum
with share
price growth
£401.090
£1,059.965
£1,718.840
£2,095.340
27%
33% 26%
36%
44% 36%
19%
100% 37% 23% 19%
Minimum Target Maximum Maximum
with share
price growth
£465.491
£1,243.111
£2,003.355
£2,437.780
26%
33% 27%
36%
43% 36%
17%
100%
38% 24% 20%
Annual Report and Accounts 2024 Big Yellow Group PLC 103
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Summary Policy table (Non-Executive Directors)
Objective and link
to the strategy Operation Maximum potential value
Performance conditions
and assessment
Fees
To attract Non-Executive
Directorswith the
requisite skills
andexperience.
Fee levels are normally reviewed annually
inMarch.
The Non-Executive Director fee structure is
amatter for the full Board.
Non-Executive Directors may be entitled
to benefits relating to travel and office
support and such other benefits as may
beconsideredappropriate.
The fees may be paid in the form of shares.
Fee levels are normally set at broadly median
levels for comparable roles at companies of a
similar size and complexity within the FTSE 250.
Fees are normally intended to increase in line
with inflation.
N/A
Non-Executive Directors’ fees comprise of a base fee, with an additional fee for Committee Chairs, the Senior Independent Non-Executive Director and
the Employee Representative Director.
Approach to recruitment remuneration
The table below summarises our key policies with respect to recruitment remuneration:
Salary and
benefits
• Set by reference to market and taking account of individual experience and expertise in the context of the role.
• Salary would also be set with reference to the salary of any departing Executive Director and the remaining Executive Board Directors.
• The Executive Director would be eligible to receive benefits in line with Big Yellow Group’s benefits policy as set out in the remuneration policy
table – this includes either a contribution to a personal pension scheme or cash allowance in lieu of pension benefits in line with the policies set out
inthe policy table.
Maximum
variable
incentive
• Annual bonus of up to 150% of base salary.
• Long term incentive plan award of equivalent to 200% of base salary.
Sign-on
payments
• The Company does not provide sign-on payments to Executive Board Directors.
Share
buy-outs
• Any previous outstanding share awards which the Executive Director holds which would be forfeited on cessation of his or her previous employment
may be compensated.
• Where this is the case, the general principle is that the outstanding award will be valued based on the consideration of the following factors:
• The proportion of the performance period completed on the date of the Director’s cessation of employment;
• The performance conditions attached to the vesting of the incentives and the likelihood of them being satisfied; and
• Any other terms and conditions having a material impact on their value.
• The valuation will be conducted using a recognised valuation methodology by an independent party and the equivalent ‘fair value’ may be awarded
as a one-off LTIP on date of joining under the Company’s existing long-term incentive plan. To the extent that this is not possible, a bespoke
arrangement will be used.
• To ensure effective retention of the Executive Director upon recruitment, any new award will be granted subject to performance conditions and
vesting may be over the same period as those forfeited from the previous employer or a new three year period.
• The exact terms will be determined by the Remuneration Committee on a case-by-case basis taking into account all relevant factors.
Relocation
policies
• In instances where the new Executive Director is relocating from one work location to another, the Company may provide, as a one-off or otherwise,
arelocation allowance as part of the Director’s relocation benefits.
• The level of the relocation package will be assessed on a case-by-case basis but will take into consideration any cost of living differences, housing
allowance and schooling.
Annual Report and Accounts 2024 Big Yellow Group PLC104
Service contracts
The Company’s policy on Directors’ service contracts is that they should be on a rolling basis without a specific end-date providing for one year’s notice.
All Executive Board Directors have contracts which reflect this policy.
The Non-Executive Directors do not have service contracts with the Company. Their appointments are governed by letters of appointment which are
available for inspection on request at the Company’s registered office and which will be available for inspection at the Company’s AGM. Each appointment
is for a period of up to three years, although the continued appointment of all Directors is put to shareholders at the AGM on an annual basis. In addition,
the appointment is terminable by either party giving notice of three months.
Payments for loss of office
Element Approach
Salary and
benefits
Salary and benefits may be paid in lieu of notice. In cases where a contract is terminated other than on the terms of the service contract, the Company
will seek to mitigate any damages payable.
There will be no compensation for normal resignation or in the event of termination by the Company due to misconduct.
Annual
bonus
If the individual is a good leaver, any bonus will be paid/awarded on a pro-rata basis in respect of the period from the start of the financial year.
Deferred share awards would normally vest at the normal vesting date (although may vest at the date of cessation).
A good leaver is defined as an individual ceasing employment due to ill-health, disability, redundancy, or retirement or in any other circumstances which
the Committee permits.
A bad leaver is an Executive Director who does not fall within the category of “good leaver” and bad leavers will forfeit any entitlement to a bonus
payment in respect of the current financial year or any completed financial year in respect of which the bonus has not been paid at the cessation date.
Long term
incentives
(LTIP)
A proportion of the LTIP awards held by good leavers will vest at the Committee’s discretion determined by taking into account whether, and to what
extent, any performance conditions have been satisfied and the length of time the LTIP award has been held at the date of cessation of employment.
The LTIP awards will not normally vest until the end of the performance period with performance tested at that time, although exceptionally such awards
may, at the discretion of the Committee, vest at cessation of employment.
A good leaver is defined as an individual ceasing employment as a result of ill-health, injury, disability, redundancy, retirement, or the sale out of the
Group of his employing business or any other reason which the Committee in its absolute discretion permits.
A bad leaver is an Executive Director who does not fall within the category of good leaver, and bad leavers will forfeit any unvested awards.
Other
The Group may meet relocation and other incidental expenses on termination of employment, the fees of legal or other professional advisers,
outplacement, compensation in respect of statutory rights under relevant employment protection legislation and accrued but untaken holiday.
Itmayalso elect to continue to provide certain benefits rather than making payment in lieu of the benefit in question.
Statement of consideration of shareholders’ views
The views of our shareholders are very important to the Committee and we actively consulted with our major shareholders and the main representative
bodies to help formulate the current Remuneration Policy.
Any consultations on remuneration with shareholders and representative bodies will usually be led by the Chair of the Remuneration Committee.
The Remuneration Committee also considers shareholder feedback received in relation to the AGM each year at its first meeting following the relevant
AGM. This feedback, as well as any additional feedback received during any other meetings with shareholders throughout the year, is then considered
aspart of the Company’s annual review of remuneration policy.
The Remuneration Committee notes that shareholders do not speak with a single voice, but we engage with our largest shareholders to ensure
we understand the range of views which exist on remuneration issues. When any material changes are proposed to the Remuneration Policy,
theRemuneration Committee Chair will consult major shareholders in advance and will offer a meeting to discuss these.
Annual Report and Accounts 2024 Big Yellow Group PLC 105
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Shareholder voting
The Company has an annual advisory vote from shareholders on its Remuneration Report, and a binding vote on its Remuneration Policy when a
new policy is proposed. The Group is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are
substantial votes against resolutions in relation to Directors’ remuneration, the reasons for that voting will be sought and any actions in response
willbedetailed here. There have been no significant issues raised by shareholders in respect of remuneration in the year.
The table below shows the advisory vote on the 2023 Remuneration Report at the AGM held on 20 July 2023, and the binding vote on the Remuneration
Policy at the AGM held on 21 July 2022.
Votes for % Votes Against % Votes withheld
2023 Remuneration Report 149,388,647 98.2% 2,794,254 1.8% 1,464,140
2022 Remuneration Policy 146,535,231 9 7. 9 % 3,210,946 2.1% 2,662,664
Annual Report on Remuneration
This section of the Remuneration Report contains details of how the Directors’ Remuneration Policy will be implemented for the year ending 31March
2025 and how it was implemented during the year ended 31March 2024.
Implementing the Policy for the Year Ending 31March 2025
Base salary
The Committee continues to operate a policy of targeting base salaries “close to (but generally just below) median” although current base salary levels
are well below the market level for a FTSE 250 company of Big Yellow’s size and complexity.
From 1 April 2024, Executive Director salary levels were increased by 4% which was in line with the increase across the wider workforce (albeit a
proportion of lower paid team members received a higher increase).
Chief Executive
(Jim Gibson)
Executive
Chairman
(Nicholas Vetch)
Chief Financial
Officer
(John Trotman)
From 1 April 2023 £490,100 £417,700 £362,000
From 1 April 2024 £509,725 £434,425 £376,500
% increase 4% 4% 4%
Pension & benefits
Pension provision for the Executive Directors will continue at 6% of salary, which is in line with the pension offered to the general workforce. Benefit
provision will remain unchanged (private fuel, private medical insurance, permanent health insurance, life assurance, company car via salary sacrifice,
and relocation allowances, where relevant).
Annual bonus
Annual bonus potential will continue to be capped at 150% of salary for the year ending 31March 2025.
Up to 25% of salary will continue to be aligned to the workforce annual bonus (measured against store performance, through occupancy growth, store
profitability, store audits and customer satisfaction scores). Any bonus earned under this part will be payable in cash, following the year ending
31March 2025.
The remaining 125% of salary will be measured against financial, operational, real estate and strategic targets measured over the financial year ending
31March 2025. Any award under this part will be deferred into Big Yellow shares for three years (with vesting subject to continued employment).
Annual Report and Accounts 2024 Big Yellow Group PLC106
LTIP
The LTIP will continue to operate in its current form and the targets for the 2024 LTIP awards are as follows:
Weighting
Threshold
(25% of this part of an award vests)
Maximum
(100% of this part of an award vests)
Adjusted EPS 50% 4% p.a. 9% p.a.
Relative TSR 30% Median Upper Quintile
Retrofitting of solar panels on the Group’s estate 10% Retrofitting of solar panels on
30 of the Group’s stores
Retrofitting of solar panels on
40 of the Group’s stores
Proportion of Group’s external debt facilities that are green loans 10% 30% of the Group’s total debt
facilities being green loans
50% of the Group’s total debt
facilities being green loans
Shareholding guidelines – in employment
The guideline to build and maintain a holding of at least 200% of salary in shares of the Company will continue to apply and has been met by all of the
current Executive Board Directors. Where an Executive Director has not met the 200% of salary ‘in employment’ shareholding guideline, the Committee
requires 100% of the net of tax discretionary share awards which vest to be retained until the shareholding guideline is met.
Shareholding guidelines – post employment
Executive Directors are required to retain shares equal to 100% of the shareholding guideline (or the actual number of shares held against the guideline
if the guideline is not met at cessation) up until the second anniversary of cessation.
Non-Executive Directors
Non-Executive Director base fees for the year ending 31March 2025 have been increased by 4% (in line with the general workforce increase) to
£48,100. The increment for Committee Chairs and additional responsibilities has also been increased by 4% to £11,960 for the year ending 31March
2025. These increases took effect from 1 April 2024.
Annual Report and Accounts 2024 Big Yellow Group PLC 107
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Single total figure of remuneration (Audited)
The table below sets out the single total figure of remuneration and breakdown for each Executive Director paid in the year ended 31March 2024.
Year ended 31March 2024
Fixed pay
Salary
£
Taxable benefits
2
£
Pensions
3
£
Total fixed pay
£
2024 2023 2024 2023 2024 2023 2024 2023
Nicholas Vetch 417,7 0 0 397,800 5,999 4,693 25,062 23,868 448,761 426,361
Jim Gibson 490,100 466,750 8,502 7,643 29,406 28,005 528,008 502,398
Adrian Lee
1
– 92,768 – 2,054 – 5,566 – 100,388
John Trotman 362,000 344,750 2,154 2,111 21,720 20,685 385,874 367,546
Total 1,269,800 1,302,068 16,655 16,501 76,188 78,124 1,362,643 1,396,693
Variable pay Total pay
Annual bonus – cash
£
Annual
bonus – deferred
£
Long term incentive
4
£
Total variable pay
£ £
2024 2023 2024 2023 2024 2023 2024 2023 2024 2023
Nicholas Vetch 35,505 39,382 280,903 440,066 370,645 419,119 687,053 898,567 1,135,814 1,324,928
Jim Gibson 41,659 46,208 329,592 516,342 436,494 478,993 8 07, 74 5 1,041,543 1,335,753 1,543,941
Adrian Lee
1
– 9,184 – 102,625 – 323,326 – 435,135 – 535,523
John Trotman 30,770 34,130 243,445 381,380 324,428 359,244 598,643 774,754 984,517 1,142,300
Total 107,934 128,904 853,940 1,440,413 1,131,567 1,580,682 2,093,441 3,149,999 3,456,084 4,546,692
(1)
Adrian Lee stepped down from the Board on 21 July 2022. His remuneration is shown up to that date.
(2)
Taxable benefits comprise medical cover, permanent health insurance, life insurance, company car via salary sacrifice, and private fuel usage.
(3)
The Directors receive a cash supplement in lieu of their full pension contributions.
(4)
The values shown in long-term incentives in the current year are the LTIP award granted in 2020 which vested on 5 August 2023 to 95% of its maximum value and is valued using the share price on that
date of £10.56.
The average salary increase across the Group in the year was 5.6%.
Cash Annual Bonus Plan awards – cash (25% of salary maximum)
The policy of the Company is that the cash bonus paid to the Executive Board Directors is the same as the average of the bonus awards (as a % of salary)
paid to all the Group’s stores on achieving their targets during the course of the year. It is an important part of the Group’s culture that the Executive
team are rewarded with the same level of annual bonus as the average for all staff.
In respect of the year under review, and in line with the average bonus as a percentage of salary paid across the stores the Executive Board Directors
received a cash bonus of 8.5% of salary (out of a maximum of 25% of salary).
Overview of the staff (and Executive Director) cash bonus scheme
The staff bonus scheme is designed, on a quarterly basis, to reward each store with a bonus of up to 25% of their quarterly salary, made up of the
following four key elements set out below.
Following feedback received from our shareholders on previous remuneration reports to increase the disclosure around the annual bonus, we have
shown the average annual distribution of performance against target for each of the bonus measures across our stores and the corresponding average
pay-out as a percentage of salary which directly corresponds to the bonus percentage pay-out for the Executive Board Directors. The individual store
targets have not been disclosed as it would be impractical and commercially sensitive to disclose the targets for every one of our stores in this report.
Annual Report and Accounts 2024 Big Yellow Group PLC108
The average performance against the four key targets and the associated bonus reward for the stores totalling 8.5% were as follows:
1. Occupancy
Stores that have recently opened receive occupancy targets on a quarterly basis, and their performance against this occupancy target contributes to
their bonus. The bonus awarded to each store increases as the store moves further ahead of target. No bonus is awarded if the store fails to meet its
target. The significant majority of the Group’s stores are bonused solely on profitability. The weighted average bonus paid to the newly opened stores for
performance against occupancy targets was 0.3% of salary for the year.
2. Profitability
Each store is set a quarterly target for profitability. The weighting of the contribution of these metrics to the bonus varies based on store occupancy,
with higher occupied stores having a higher weighting towards their performance against their profitability target.
The bonus awarded to each store increases as the store moves further ahead of target. The performance distribution of the stores’ performance against
their individual targets are provided below.
Performance against target Below target
0 to 1% ahead
of target
1 to 2% ahead
of target
2 to 3% ahead
of target
>3% ahead
of target Total
No of stores 64 23 13 5 4 109
Average bonus paid 0.4% 6.0% 14.7% 19.8% 14.6% 4.8%
The weighted average bonus paid to stores for performance against profitability targets is therefore 4.8% of salary for the year.
3. Store audits
Stores receive a bonus if they receive a certain audit score based on visits carried out by the Group’s store compliance team. There were 88 instances
ofstores receiving an audit bonus score across the year, leading to a weighted average bonus paid to the stores of 1.6% of salary.
4. Customer satisfaction
Stores are rewarded based on two elements of customer satisfaction, net promoter scores and individual customer service awards. The awards based
on net promoter scores are summarised in the table below.
NPS score <75 >75 Total
No of stores 28 81 109
Average bonus paid 0% 2.5% 1.8%
The weighted average bonus paid to stores for performance against net promoter scores is therefore 1.8% of salary for the year.
Summary
The bonus received by the stores against their targets in the year is summarised as follows.
Category
Actual %
weighting for
category
Average % of
salary bonus paid
across stores
1. Occupancy 0.3% 3.1%
2. Profitability 4.8% 56.0%
3. Store audits 1.6% 19.3%
4. Customer satisfaction 1.8% 21.6%
Total 8.5% 100%
In line with the Remuneration Policy an award of 8.5% of salary has therefore also been paid to the Executive Board Directors for the year, which equated
to the following payments:
Nicholas Vetch £35,505
Jim Gibson £41,659
John Trotman £30,770
Annual Report and Accounts 2024 Big Yellow Group PLC 109
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Deferred Annual Bonus Plan awards – deferred shares (125% of salary maximum)
The Group operates a deferred annual bonus plan. The Remuneration Committee sets targets at the start of the financial year across a broad range of
financial and non-financial targets. Targets are either on a sliding scale or binary. The targets and the performance against them in the year is shown in
the table below:
Sliding scale targets (55% weighting):
Pay-out 0% 100% Performance Pay-out
1. Revenue
Weight: 22.5% <£198m >£205.0m
The Group’s revenue for the year was £199.6million,
an increase of 6% from the prior year.
23%
2. Adjusted Earnings per share
Weight: 22.5% <54.0p >59.0p
The Group’s earnings per share for the year was 55.9p,
a decrease of 1% from the prior year.
38%
3. Staff Turnover
Weight: 5% >35 <28 Staff turnover for the year was 27.8%, an improvement from 29.6% in 2023. 100%
4. Net promoter score
Weight: 5% <74 >79
The Group’s net promoter score for the year was 80.5, which is a very strong
consumer-facing benchmark result.
100%
Binary targets (45% weighting):
Fail Pass
Pay-out 0% 100% Actual performance Pay-out
5. Property Acquisitions
Weight: 10% Acquire at least two new sites for the Group during the year, either
through new site acquisitions, or through the purchase of existing
selfstorage centres, which complement the existing portfolio and
which are consistent with the Group’s strategy and long-term plans.
The Group acquired a development site in Leicester
during the year, and subsequent to the year-end has
acquired a site in Leamington Spa.
50%
6. Planning
Weight: 10% Obtain planning consent on at least two of the Group’s development
sites during the year, consistent with the strategy to continue to add
high quality capacity to the Group’s existing open store portfolio.
The Group has obtained planning consent on its
development sites at Wapping and Epsom during the
year. The Group now has planning consent on eight of
its 14 development sites.
100%
7. Disposal of Battersea
Weight 10% Complete the sale of the Battersea retail units during the year. The disposal of the Battersea retail units had not
completed by the year end.
0%
8. Equity raise
Weight: 10% A successful equity raise during the year raising 5% of the Group’s
equity to fund growth.
The Group carried out an equity raise in October
2023, via a placing of 6.3% of the Group’s issued
share capital. This raised £107million (net of
expenses), and has allowed the Group to expand
capacity in London, our strongest market, and
monetise land that we already own.
100%
9. Foundation
Weight 5% Raise sufficient funds through our store network and matched
contributions from the Group sufficient to provide grants of a
minimum of £140,000 to our partner charities.
The income raised through fundraising, matching
donations, customer donations, move-in donations
and gift-aid enabled us to provide grants of £256,000
to our seven charity partners over the year.
100%
Annual Report and Accounts 2024 Big Yellow Group PLC110
Summary table
The performance against each target, and its contribution to the deferred bonus payable is summarised in the table below:
Target % achieved Weighting
Contribution to
plan vesting (%)
Revenue 23% 22.5% 5.2%
Earnings per share 38% 22.5% 8.6%
Staff turnover 100% 5% 5%
Net promoter score 100% 5% 5%
Property acquisitions 50% 10% 5%
Planning 100% 10% 10%
Disposal of Battersea 0% 10% 0%
Equity raise 100% 10% 10%
Foundation 100% 5% 5%
Total 100% 53.8%
The above performance assessment of 53.8% translates into a 67.25% award, of the 125% maximum potential. In addition to performance against the
targets detailed above, the Committee has also reviewed the stakeholder experience in respect of the year ended 31March 2024. Based on this review,
theCommittee considers the 67.25% of maximum award level to be appropriate.
The value of award for each of the Executive Board Directors is shown below:
Director Value of award
Nicholas Vetch £280,903
Jim Gibson £329,592
John Trotman £243,445
The number of shares will be calculated by reference to the closing share price on the date of grant, which will be after the Company’s Preliminary
Announcement in May 2024. The awards will vest three years after the date of grant of each award.
Long Term Incentive Plan (“LTIP”) awards (Audited)
The awards granted under the LTIP are subject to performance conditions to be met over a performance period of three years. There is no retesting of
performance conditions and, if they are not satisfied, the awards will lapse.
The performance conditions applicable to the LTIP which vested in the year, which relate to EPS and TSR, are set out below. The Committee assessed the
extent to which the EPS and TSR performance condition has been satisfied for the 2020 award which vested in 2023, with the following results:
Condition Weighting
Threshold Performance
required
Maximum Performance
Required
LTIP value for meeting
threshold and maximum
performance (% salary) Performance achieved Vesting %
Adjusted eps growth 30% Adjusted EPS
growthofRPI +
3%perannum
Adjusted EPS growth
ofRPI + 8% per annum
25% to 100% 13.54% adjusted EPS growth,
compared to 9.65% (RPI
+3%), and 14.65% (RPI plus
8%). Adjusted EPS has been
normalised for the impact of
the placing in April 2020.
83.3%
Relative TSR 70% Median of
comparatorgroup of
real estate companies
Upper quartile of the
comparator group
25% to 100% 4 out of 46 in comparator
group of companies in the
FTSE Real Estate Index
100%
Total 100% 95%
Annual Report and Accounts 2024 Big Yellow Group PLC 111
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
The vesting of the 2020 LTIP award in 2023, equated to the following value for the Executive Board Directors based on the share price at the date
ofvesting:
Director Shares Awarded
Shares Vested
(based on 95%
vesting) Value at Vesting
Nicholas Vetch 36,946 35,099 £370,645
Jim Gibson 43,350 41,183 £434,892
John Trotman 32,020 30,419 £321,225
LTIP awards granted in year ended 31March 2024 (Audited)
The table below sets out the details of the long-term incentive awards granted in the year ended 31March 2024 where vesting will be determined
according to the achievement of performance conditions that will be tested in future reporting periods.
Director Award Type
Awards as a %
of salary
Face value
of award
(1)
Percentage of award
vesting at threshold
performance
Maximum percentage
of face value that
could vest
Performance
Period end date
Performance
conditions
Nicholas Vetch
Annual cycle of
awards over nil
cost options
200% of salary £835,400
25% 100% 20 July 2026
Adjusted EPS growth,
relative TSR, ESG
performance
Jim Gibson 200% of salary £980,200
John Trotman 150% of salary £543,000
(1)
The face value of the award is calculated using the average share price three days prior to the grant date of 20 July 2023 (average share price of £10.68).
The performance conditions applicable to the awards granted in July 2023 are set out below:
Condition Weighting
Threshold Performance
required
Maximum Performance
Required
LTIP value for meeting
threshold and max
performance (% salary) Basis for measurement
Relative TSR 30% Median of
comparatorgroup of
real estate companies
Upper quintile of the
comparator group
25% to 100% The average of the Group’s closing mid-market share
price over the three months preceding the start of
the performance period and preceding the end of the
performance period will be used, including dividends
re-invested.
Adjusted EPS 50% Adjusted average
annual compound
EPSgrowth of 4%
Adjusted average
annual compound EPS
growth of 9%
25% to 100% The adjusted EPS figure reported in the audited results
of the Group for the last complete financial year ending
before the start of the performance period and the last
complete financial year ending before the end of the
performance period will be used.
Retrofitting of
solar panels on the
Group’s estate
10% Retrofitting of solar
panels on 30 of the
Group’s stores
Retrofitting of solar
panels on 40 of the
Group’s stores
25% to 100% Based on the number of completed retrofits over the
award period.
Proportion of Group’s
external debt facilities
that are green loans
10% 30% of the Group’s
totaldebt facilities
being green loans
50% of the Group’s
totaldebt facilities
being green loans
25% to 100% Based on the Group’s external debt facilities at
31March 2026.
Sharesave Scheme
The Group’s Sharesave Scheme is open to all UK employees (including Executive Board Directors) with a minimum of six months’ service and meets UK
HMRC requirements, thus giving all eligible employees the opportunity to acquire shares in the Company in a tax efficient manner. All of the Executive
Board Directors participated in the scheme during the financial year. The details of the Sharesave scheme options are shown on page 114.
Pension entitlements
The Company pays pension contributions into the Executive Board Directors’ personal pension plans or makes a cash contribution in lieu of pension
contributions. They do not participate in any defined benefit scheme. For the year ended 31March 2024, the Company contribution was 6% of salary for
the Executive Board Directors, in line with the contribution for the Company’s employees.
Annual Report and Accounts 2024 Big Yellow Group PLC112
Board Changes (Audited)
There were no board changes during the year. No payments:
– of money or any other assets were made to any former Director of the Company in the financial year ended 31March 2024 in respect of qualifying
services as a Director (2023:no payments); and
– were made to any Director in respect of loss of office during the financial year ended 31March 2024 (2023:no payments).
Non-Executive Directors (Audited)
The table below sets out the single total figure of remuneration and breakdown for each Non-Executive Director paid in the year ended 31March 2024.
2024
£
2023
£
Richard Cotton
(1)
– 20,232
Anna Keay 57,75 0 55,000
Vince Niblett 69,250 65,935
Michael O’Donnell 57,75 0 55,000
Laela Pakpour Tabrizi 57,75 0 55,000
Heather Savory 57,75 0 55,000
Total 300,250 306,167
(1)
Until retirement from the Board on 21 July 2022.
Non-Executive Directors received no taxable benefits for the year ended 31March 2024.
Statement of Directors’ shareholding (Audited)
The Executive Board Directors are required to build and maintain a holding of two times base salary. These requirements have been met by all Executive
Board Directors throughout the year. Non-Executive Directors are not subject to a shareholding requirement. Details of the Directors’ interests in shares
are set out below (all interests are beneficial interests).
The table below shows, in relation to each Director, the total number of shares and share options in which they have an interest at 31March 2024:
Executive Director
Share ownership
requirement
(multiple of
salary)
Share ownership
requirements
met
Holding as
multiple of March
2024 salary
Beneficially
owned shares
LTIP awards
subject to
performance
conditions
Deferred bonus
plan awards
Unexercised LTIP
options
Unexercised
Sharesave
options
Options
exercised in the
financial year
Nicholas Vetch 2x Yes 167x 6,536,764 163,963 158,484 85,682 1,697 –
Jim Gibson 2x Yes 40x 1,847,066 192,383 183,197 98,356 1,844 –
John Trotman 2x Yes 7x 240,904 112,558 135,823 73,140 1,992 –
Non-Executive Directors’ shareholdings (Audited)
Non-Executive
Beneficially
owned shares
Michael O’Donnell 6,000
Vince Niblett 3,000
Anna Keay –
Laela Pakpour Tabrizi –
Heather Savory –
Annual Report and Accounts 2024 Big Yellow Group PLC 113
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Directors’ share awards (Audited)
To provide further context on the shareholding of the Executive Board Directors, options in respect of ordinary shares for Directors who served in the
year are as below:
Name
Date option
granted Scheme
No. of shares
under option
at 31March
2023
Granted
during the
year
Exercised
during the
year
(1)
Lapsed
during the
year
No. of shares
under option
at 31March
2024
Exercise
price
Market price
at date of
exercise
Date from
whichfirst
exercisable Expiry Date
Nicholas Vetch 19 July 2018 LTIP 20,035 – – – 20,035 nil p – 19 July 2021 18 July 2028
23 May 2019 DBP 30,519 – – – 30,519 nil p – 23 May 2022 22 May 2029
19 July 2019 LTIP 30,548 – – – 30,548 nil p – 19 July 2022 18 July 2029
15 June 2020 DBP 20,691 – – – 20,691 nil p – 15 June 2023 14 June 2030
5 August 2020 LTIP 36,946 – – (1,847) 35,099 nil p – 5 August 2023 4 August 2030
22 July 2021 DBP 31, 616 – – – 31,616 nil p – 22 July 2024 21 July 2031
22 July 2021 LTIP 2 7, 617 – – – 2 7, 617 nil p – 22 July 2024 21 July 2031
8 June 2022 DBP 34,442 – – – 34,442 nil p – 8 June 2025 7 June 2032
21 July 2022 LTIP 58,103 – – – 58,103 nil p – 21 July 2025 20 July 2032
8 August 2022 SAYE 1,697 – – – 1,697 1060.3p – 8 August 2025 8 February 2026
20 July 2023 DBP – 41,216 – – 41,216 nil p – 20 July 2026 19 July 2033
20 July 2023 LTIP – 78,243 – – 78,243 nil p – 20 July 2026 19 July 2033
Jim Gibson 19 July 2018 LTIP 22,261 – – – 22,261 nil p – 19 July 2021 18 July 2028
23 May 2019 DBP 33,910 – – – 33,910 nil p – 23 May 2022 22 May 2029
19 July 2019 LTIP 34,912 – – – 34,912 nil p – 19 July 2022 18 July 2029
15 June 2020 DBP 23,647 – – – 23,647 nil p – 15 June 2023 14 June 2030
5 August 2020 LTIP 43,350 – – (2,167) 41,183 nil p – 5 August 2023 4 August 2030
1 March 2021 SAYE 996 – – – 996 903.2p – 1 April 2024 1 October 2024
22 July 2021 DBP 36,868 – – – 36,868 nil p – 22 July 2024 21 July 2031
22 July 2021 LTIP 32,404 – – – 32,404 nil p – 22 July 2024 21 July 2031
8 June 2022 DBP 40,412 – – – 40,412 nil p – 8 June 2025 7 June 2032
21 July 2022 LTIP 68,174 – – – 68,174 nil p – 21 July 2025 20 July 2032
8 August 2022 SAYE 848 – – – 848 1060.3p – 8 August 2025 8 February 2026
20 July 2023 DBP – 48,360 – – 48,360 nil p – 20 July 2026 19 July 2033
20 July 2023 LTIP – 91,805 – – 91,805 nil p – 20 July 2026 19 July 2033
John Trotman 19 July 2018 LTIP 16,537 – – – 16,537 nil p – 19 July 2021 18 July 2028
23 May 2019 DBP 25,190 – – – 25,190 nil p – 23 May 2022 22 May 2029
19 July 2019 LTIP 26,184 – – – 26,184 nil p – 19 July 2022 18 July 2029
15 June 2020 DBP 17, 7 3 5 – – – 17,735 nil p – 15 June 2023 14 June 2030
5 August 2020 LTIP 32,020 – – (1,601) 30,419 nil p – 5 August 2023 4 August 2030
1 March 2021 SAYE 1,992 – – – 1,992 903.2p – 1 April 2024 1 October 2024
22 July 2021 DBP 27, 329 – – – 2 7, 329 nil p – 22 July 2024 21 July 2031
22 July 2021 LTIP 23,935 – – – 23,935 nil p – 22 July 2024 21 July 2031
8 June 2022 DBP
29,850 – – – 29,850 nil p – 8 June 2025 7 June 2032
21 July 2022 LTIP 37,76 6 – – – 3 7, 76 6 nil p – 21 July 2025 20 July 2032
20 July 2023 DBP – 35,719 – – 35 ,719 nil p – 20 July 2026 19 July 2033
20 July 2023 LTIP – 50,857 – – 50,857 nil p – 20 July 2026 19 July 2033
(1)
The aggregate gains made by Directors for the year ended 31March 2024 on share options totals £nil (2023:£39,126).
Annual Report and Accounts 2024 Big Yellow Group PLC114
Performance and pay
The graph below shows the Group’s performance, measured by TSR, compared with the performance of the FTSE All Share Real Estate Index and the FTSE
All Share Index for the period since flotation. The FTSE All Share Real Estate Index is used for the assessment of the Company’s LTIP.
CEO Remuneration
The table below sets out the details of remuneration of the CEO over the past ten financial years.
Year
CEO single figure
of total remuneration
(£)
Annual bonus (cash)
pay-out % against maximum
of25% of salary
Annual bonus (deferred)
pay-out % against maximum
of125% of salary
Long term incentive
weighted average
vestingrates against
maximum opportunity
%
2024 1,335,753 34% (8.5% of salary) 53.8% (67.25% of salary) 95%
2023 1,543,941 39.6% (9.9% of salary) 88.85% (110.6% of salary) 90.1%
2022 1,380,532 41.2% (10.3% of salary) 95.4% (119.25% of salary) 61.6%
2021 1,393,490 62.8% (15.7% of salary) 95% (118.75% of salary) 83.6%
2020 1,136,633 37.2% (9.3% of salary) 47.5% (59.4% of salary) 100%
2019 1,182,482 40.8% (10.2% of salary) 81.875% (102.3% of salary) 100%
2018 2,178,066 51.6% (12.9% of salary) n/a 95%
2017 850,619 40% (10% of salary) n/a 100%
2016 988,811 48% (12% of salary) n/a 100%
2015 1,756,290 50% (12.5% of salary) n/a 98%
The single figure of remuneration for 2015 and 2018 are higher than in other years due to the vesting of the three year Long Term Bonus Performance Plan
in those years delivering a reward of £945,750 (97% vesting) and £1,343,995 (93.33% vesting) respectively for the three year period ended in that year.
FTSE All Share Index
Big Yellow Group
FTSE 350 Real Estate Index
Source: Datastream
at 29 March 2024
1,770.4%
(13.6% p.a.)
191.2%
(4.8% p.a.)
232.1%
(5.4% p.a.)
0
500
1,000
1,500
3,000
2,000
2,500
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2022 202420232020
Annual Report and Accounts 2024 Big Yellow Group PLC 115
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Percentage change in the Director remuneration
The table below compares the percentage change in each Director’s annual remuneration (i.e. salary/fees, benefits, and annual bonus) with the
remuneration of Big Yellow Group employees.
% Change from 2019/2020 to
2020/2021
% Change from 2020/2021 to
2021/2022
% Change from 2021/2022 to
2022/2023
% Change from 2022/2023 to
2023/2024
Salary/Fee Benefits Bonus Salary/Fee Benefits Bonus Salary/Fee Benefits Bonus Salary/Fee Benefits Bonus
Nicholas Vetch 5% (13%) 78% 4% 3% (30%) 4% (6%) 0% 5% 28% (10%)
Jim Gibson 8% 9% 81% 4% 6% (30%) 4% 17% 0% 5% 11% (10%)
John Trotman 6% (26%) 79% 4% 18% (30%) 4% 10% 0% 5% 2% (10%)
Adrian Lee 4% 9% 76% 3% 11% (30%) n/a n/a n/a n/a n/a n/a
Anna Keay 2% n/a n/a 3% n/a n/a 4% n/a n/a 5% n/a n/a
Vince Niblett 2% n/a n/a 3% n/a n/a 23% n/a n/a 5% n/a n/a
Michael O’Donnell n/a n/a n/a n/a n/a n/a n/a n/a n/a 5% n/a n/a
Laela Pakpour Tabrizi n/a n/a n/a 3% n/a n/a 9% n/a n/a 5% n/a n/a
Heather Savory n/a n/a n/a 3% n/a n/a 4% n/a n/a 5% n/a n/a
Average employees 3% 2% 74% 2% 2% (29%) 5% 5% 1% 5.6% 21% (9%)
Where a Director has not served on the Board for the full financial year, “n/a” is shown in the salary/fee column of the above table. The Committee will
continue to build up this analysis until it displays a five-year history.
CEO pay ratio
The data shows how the CEO’s single figure remuneration for the year ended 31March 2024 (as taken from the single figure remuneration table)
compares to equivalent single figure remuneration for full-time equivalent UK employees, on a Group basis, ranked at the 25th, 50th and 75thpercentile.
Year Method
25
th
percentile
pay ratio
Median
pay ratio
75
th
percentile
pay ratio
2024 Option A 50 to 1 42 to 1 28 to 1
2023 Option A 55 to 1 49 to 1 31 to 1
2022 Option A 58 to 1 50 to 1 36 to 1
No components of pay and benefits have been omitted for the purpose of the above calculations. Option A was selected given that this method
of calculation was considered to be the robust approach in respect of gathering the required data. The underlying quartiles for salary and total
remuneration numbers for full-time equivalent UK employees are set out below. The CEO’s remuneration in each year includes LTIPs that have vested
(but not yet been exercised); for employees the total pay includes proceeds from LTIP exercises, rather than vested LTIPs.
Salary Total pay and benefits
Year 25
th
%tile Median 75
th
%tile 25
th
%tile Median 75
th
%tile
2024 £24,375 £28,392 £38,251 £26,876 £31,864 £47,516
2023 £23,005 £26,790 £ 37,4 4 0 £28,148 £31,398 £48,746
2022 £21,278 £24,669 £34,445 £23,535 £27,286 £38,098
Annual Report and Accounts 2024 Big Yellow Group PLC116
Statement of consideration of employment conditions elsewhere in the Group
The Committee reviews the reward and retention of the whole employee population periodically throughout the year to ensure that it can attract and
retain top talent. Consideration is given to the general basic salary increase, remuneration arrangements and employment conditions. Furthermore, the
annual cash bonus awarded to Executive Board Directors is directly linked to the bonuses awarded to all staff.
The Directors are invited to be present at this review of the proposals for salary increase for the employee population generally and on any other
changes to remuneration policy within the Company. The information presented at this review is taken into consideration when setting the pay levels
of the executive population. Additionally, the Committee has guidelines for the grant of all LTIP awards across the Company and responsibility for
approving the total annual bonus cost of the Company.
The Company, through the Workforce Engagement Non-Executive Director, invited employees to comment on the remuneration of Directors during
the year, and has engaged with the workforce to explain how executive remuneration aligns with the wider company pay policy. When considering
remuneration levels to apply, the Committee takes into account base pay increases, bonus payments and share awards made to the Company’s
employees generally.
Relative importance of spend on pay
The graph below sets out the relative importance of spend on pay in the year ended 31March 2024 and 31March 2023 compared with other
disbursements from profit, being the distributions to shareholders and retained earnings (comprehensive gain for the year less dividends).
180,000
£000s
80,000
120,000
140,000
160,000
60,000
40,000
20,000
0
Total employee
pay (including
Directors)
Profit distributed
by way of
dividend
Retained
earnings
2%
8%
2,421%
2023
2024
Gender and ethnicity pay
The Group has reported on its gender pay gap for April 2023. The full report can be found on our investor relations website http://corporate.bigyellow.
co.uk/investors.aspx. The Group’s mean gender pay gap was 24% (2022:24%), with a median gap of 3% (2022:6%). Excluding Executive Board Directors,
the mean gender pay gap falls to 10% (2022:13%) with a median gap of 3% (2022:6%). The reduction in the median gap is due to a greater representation
of women in the upper quartile following salary increases. The representation of women within the Upper Middle Quartile has also increased which has
resulted from an increase in recruitment of female team members into this quartile. All staff are paid equally according to job role.
The Group has also analysed its ethnicity pay for April 2023. The Group’s mean ethnicity pay gap was 6% (2022:0%), with a median gap of 4% (2022:5%).
Whilst it was pleasing to see that we recruited a greater number of ethnic minority employees across all of the pay quartiles, the increase in our Mean
Gap has resulted from recruiting a higher number of ethnic minority employees into the Lower and Lower Middle Quartiles. All staff are paid equally
according to job role.
We believe that diversity and inclusion are key to a successful and sustainable business, and we are committed to creating a culture where all team
members can be themselves, feel empowered to succeed and deliver a customer experience that is second to none. We encourage and enable all
employees, regardless of their gender, race, background, or any other characteristics, to reach their full potential as we believe that having a diverse
workforce with fair representation is strategically important and generates value to our stakeholders.
In the year we have continued to collect ethnicity data to better understand the ethnic mix of our workforce. To date, 99% of our team have volunteered
their ethnicity data. This data indicates that 21% of Big Yellow’s team members belong to a Black, Asian, Mixed or other ethnic group, compared with
18.3% of people who make up this group in the UK (2021 census data).
Annual Report and Accounts 2024 Big Yellow Group PLC 117
Strategic Report Governance Report Financial Statements
Remuneration Committee Report continued
Over the last 12 months we have continued the work of our Inclusivity and Diversity Committee, actively listening to feedback from our colleagues
across the business to drive change and improve awareness. Here are just some of our key achievements during this time:
Policy and Strategy
– Following the introduction of our Menopause Policy last year, we introduced a Menopause Risk Assessment and trained three team members as
Menopause Experts, one of whom is a man.
– We introduced a Fertility Treatment Policy to raise awareness and understanding of fertility treatment across all employees and to help create an
environment where individuals feel confident enough to discuss such matters and ask for the support that they need.
– In line with our strategy of improving our brand awareness and recognition as an employer of different diverse groups, we have included posts on
Facebook and LinkedIn throughout the year relating to our culture, religious festivals and celebrations, LGBTQ+, gender and mental health.
– We introduced a Domestic Abuse Support Policy to support team members who are experiencing or have experienced domestic abuse and promote
their health, safety and wellbeing at work.
– We have reviewed our inclusivity and diversity data against the Census data at our Inclusivity and Diversity meetings to monitor our progress and
identify areas on which to focus our attention.
Recruitment / Talent
– Our Big Yellow Foundation supports seven charities who work with vulnerable adults to help find them sustainable employment. During the year we
provided 12 work placements within our Distribution Centre and stores.
– The number of females promoted internally has increased to 64% in 2024 (2023:36%).
– The proportion of our female Store Managers increased to 34% (2023:32%).
– 33% of new starters in our stores in the year ended 31March 2024 were of an ethnic minority group (2023:36%).
– 19% of our team members in stores are over 50, an increase from 14% in 2023.
Learning and Development
– We held a Mindfulness Mental Health Development Day for our Wellbeing Experts, the content of which they could utilise for their own personal
benefit, as well as the benefit of those they are supporting.
– We have supported our neurodiverse employees by reflecting our neurodiverse communication standards in all course materials, creating
accessible learning initiatives, providing dyslexia support materials, carrying out neurodiversity assessments and introducing Dyslexia Mentors.
– Our investments in e-learning have resulted in females completing 15% more hours per individual of eLearning.
Whilst our Gender Pay Gap is reducing on a gradual basis and we will continue to work to reduce it further, we recognise that it would be unrealistic to
close this gap quickly, given that all three of the Executive Directors are male and two of them were founders of the business nearly 25 years ago.
We have however, made significant progress in relation to inclusion and diversity initiatives over the last two years and will continue to challenge our
thinking around how we recruit new skills and manage and develop existing talent going forward.
We will continue to drive change via our Inclusivity and Diversity Committee and through listening to feedback from our people.
Our future initiatives include developing new recruitment policies for people with convictions and disabilities and providing training for our hiring
managers and mentors. We will continue to use social media to develop our brand recognition as a truly inclusive and diverse employer. We will also
beretraining our Wellbeing Experts to enable them to carry on providing support to team members with physical and mental health conditions.
We will continue to work with our seven Big Yellow Foundation charity partners to help vulnerable people such as ex-offenders, refugees, ex-service
personnel and people living with disabilities to find employment and create a better future for themselves. We also intend to create a programme of
volunteering opportunities through which our team members can support the charities themselves, for which they will be given time off during their
working day.
Annual Report and Accounts 2024 Big Yellow Group PLC118
Advisers to the Remuneration Committee
In undertaking its responsibilities, the Committee seeks independent external advice as necessary. FIT Remuneration Consultants LLP have been
advisers to the Committee since 2017. The Committee is comfortable that the FIT team provides independent remuneration advice to the Committee
anddoes not have any other connections with Big Yellow that may impair their independence. FIT is a founding member and signatory of the Code of
Conduct for Remuneration Consultants, details of which can be found at www.remunerationconsultantsgroup.com.
During the year, FIT provided independent advice on a wide range of remuneration matters including on the renewal of the Company’s LTIP plan.
FITprovides no other services to the Company. The fees paid to FIT in respect of work carried out for the year under review were £20,000 (ex VAT).
Approval
This policy report was approved by the Board of Directors on 20 May 2024 and signed on its behalf by
Michael O’Donnell
Remuneration Committee Chair
Annual Report and Accounts 2024 Big Yellow Group PLC 119
Strategic Report Governance Report Financial Statements
Committee members
and attendance
Member
Number
of meetings
attended
Laela Pakpour Tabrizi – Chair
Anna Keay – Member
Vince Niblett – Member
Michael O’Donnell – Member
Heather Savory – Member
attended
absent
not applicable
The Audit Committee is appointed by the Board from the Non-
Executive Directors of the Company. The Audit Committee’s terms
of reference include all matters indicated by Disclosure Guidance
and Transparency Rule 7.1, the UK Corporate Governance Code,
and the new FRC ethical standard.
Introduction
The terms of reference are considered annually by the Audit Committee
and are then referred to the Board for approval. The terms of reference are
available on the Company’s website. https://corporate.bigyellow.co.uk/
investors/corporate-governance
The Audit Committee is responsible for:
– monitoring the integrity of the financial statements of the Group
and any formal announcements relating to the Group’s financial
performance and reviewing significant financial reporting
judgements contained therein;
– reviewing the Group’s internal financial controls and the Group’s
internal control and risk management systems, including
consideration of the need for an internal audit function;
– making recommendations to the Board, for a resolution to be put
to the shareholders for their approval in general meetings, on
the appointment of the external auditor, and the approval of the
remuneration and terms of engagement of the external auditor;
– assessing and challenging estimates and judgements included within
the financial statements;
– reviewing and monitoring the external auditor’s independence
and objectivity and the effectiveness of the audit process, taking
into consideration relevant UK professional and regulatory
requirements; and
– ensuring the external auditor only provides those services permitted
by the Ethical Standard of the FRC.
The Audit Committee is required to report its findings to the Board,
identifying any matters on which it considers that action or improvement
is needed, and make recommendations on the steps to be taken.
This year the Committee has continued to focus on the narrative
reporting and corporate governance disclosures in the Annual Report.
The Committee was asked by the Board to review the statement by
the Directors that the Annual Report presents a fair, balanced, and
understandable view of the Group’s position and performance, strategy,
and business model. The Committee also reviewed the Group’s going
concern and viability statements.
Audit Committee Report
Annual Report and Accounts 2024 Big Yellow Group PLC120
All Audit Committee members are expected to be financially literate.
Furthermore, the Audit Committee structure requires the inclusion
of one financially qualified member (as recognised by the Consultative
Committee of Accountancy Bodies). Vince Niblett, as a Fellow of the
Institute of Chartered Accountants of England and Wales and Laela
Pakpour Tabrizi as an experienced Finance Director, currently
carrying out that role at Consumer Converged at Virgin Media O2,
fulfil that requirement.
The Group provides an induction programme for new Audit Committee
members and ongoing training to enable all of the Committee members
to carry out their duties. The induction programme covers the role of the
Audit Committee, its terms of reference and expected time commitment
by members and an overview of the Group’s business, including the main
business and financial dynamics and risks. New Committee members
also meet some of the Group’s staff. Ongoing training includes attendance
at formal conferences, internal company seminars and briefings by
external advisers.
Meetings
The Audit Committee is required to meet three times per year and has an
agenda linked to events in the Group’s financial calendar. The agenda is
predominantly cyclical and is therefore approved by the Audit Committee
Chair on behalf of her fellow members. Each Audit Committee member
has the right to require reports on matters of interest in addition to the
cyclical items.
The Audit Committee invites the Chief Executive, Chief Financial Officer,
Financial Controller, and senior representatives of the external auditor
to attend its meetings in full, although it reserves the right to request
any of these individuals to withdraw. The Committee meets as required
with the external auditor without the Executive Board Directors or senior
management present. Other senior management are invited to present
such reports as are required for the Committee to discharge its duties.
Overview of the actions taken by
the Audit Committee to discharge
its duties
Since the beginning of the financial year the Audit Committee has:
– reviewed published financial information including the year-end
results, Annual Report, half year results and the Quarterly Trading
Statements, including review of Alternative Performance Measures
used by the Group;
– considered whether the Annual Report provides a fair, balanced,
and understandable view of the Group’s position and performance,
strategy, and business model;
– assessed and concluded on the Group’s viability statement and
thegoing concern assessment for the annual and half yearly
financialstatements;
– considered the output from the Group-wide process used to identify,
evaluate, and mitigate risks;
– reviewed the effectiveness of the Group’s internal controls
and disclosures made in the annual report and financial statements
on this matter, and considered the impact of the BEIS review on
the Group;
– reviewed and agreed the scope of the audit work to be undertaken by
the external auditor;
– agreed the fees to be paid to the external auditor for their audit of the
financial statements and review of the half-yearly report;
– considered and agreed the approach of performing Directors’
valuations of investment properties for the half-year report;
– undertaken an assessment of the qualification, expertise and
resources, and independence of the external auditor and the
effectiveness of the audit process;
– considered the audit partner and audit firm rotation;
– undertaken an evaluation of the performance of the external auditor
and assessed their effectiveness;
– held discussions with the auditors on key judgements;
– considered the need for an internal audit function;
– considered the FRC ethical standard governing non-audit services
and audit committees;
– reviewed the arrangements for “whistleblowing” by employees
to ensure that there is a consistent policy in the Group to enable
employees to voice concerns particularly in respect of possible
financial reporting improprieties. A whistleblowing policy is included
in the employee handbook and there is an external whistleblowing
monitoring service;
– met the Group’s external valuers and considered their competence
and independence;
– met the Group’s Store Compliance Manager;
– reviewed the Audit Committee’s Report; and
– reviewed its own effectiveness.
Annual Report and Accounts 2024 Big Yellow Group PLC 121
Strategic Report Governance Report Financial Statements
Audit Committee Report continued
Based on the above, the Committee concluded that the financial
statements appropriately apply the key estimates and critical
judgements, in respect of the disclosures and the amounts reported.
The Committee also concluded that the annual report and financial
statements, taken as a whole, are fair, balanced, and understandable
andprovide the information necessary for shareholders to assess the
Group's position and performance, strategy, and business model.
External auditor
The Audit Committee is responsible for the development, implementation,
and monitoring of the Group’s policy on external audit. The policy assigns
oversight responsibility for monitoring the independence, objectivity,
and compliance with ethical and regulatory requirements to the Audit
Committee, and day-to-day responsibility to the Chief Financial Officer.
The policy states that the external auditor is jointly responsible to the
Board and the Audit Committee and that the Audit Committee is the
primary contact.
To fulfil its responsibility regarding the independence of the external
auditor, the Audit Committee reviewed:
– the external auditor’s plan for the current year, noting the role of the
senior statutory audit partner, who signs the audit report and who,
inaccordance with professional rules, has not held office for more
than five years, and any changes in the key audit staff;
– the arrangements for day-to-day management of the audit relationship;
– a report from the external auditor describing their arrangements to
identify, report and manage any conflicts of interest; and
– the overall extent of non-audit services provided by the external
auditor, in addition to its case-by-case approval of the position of
non-audit services by the external auditor.
Audit rotation
During 2016 following a robust tender process, the Committee appointed
KPMG LLP as auditors, with effect from the year ended 31March 2018.
As part of the tender process, the Committee reviewed KPMG’s proposals
for the audit and determined that they had an appropriate plan in place
to carry out an effective audit. KPMG confirmed to the Committee that it
maintained appropriate internal safeguards to ensure its independence
and objectivity. Anna Jones is the current audit partner, and this is the third
year that she has been the signatory to the Group’s financial statements.
The Company’s policy is to rotate audit partners every five years, and to
tender its audit to include new firms at least every ten years.
The Company complies with the requirements of the Statutory Audit
Services for Large Companies Market Investigation (Mandatory Use of
Competitive Tender Processes and Audit Committee Responsibilities)
Order 2014 and the Code. To comply with the Order the Company intends
to conduct a formal tender process for audit services during the financial
year ending 31March 2027, so that should a new firm be appointed,
they will be able to shadow KPMG during the audit of the 31March 2027
financial statements.
Financial reporting and significant
financial judgements
The Committee reviews all financial information published by the Group in
year-end and half-year financial statements, including the presentation
and disclosure of the financial information. It also considers the
appropriateness of the accounting policies adopted by the Group and the
accounting judgements made by management in the preparation of the
financial information.
The Committee has considered whether the Annual Report for the year
ended 31March 2024 provides a fair, balanced, and understandable
view of the Group’s position and performance, strategy, and business
model and whether it provides the necessary information to enable
shareholders and prospective shareholders to assess the Group’s
position and performance, strategy, and business model. The Committee
is satisfied that the Annual Report for the year ended 31March 2024
provides a fair, balanced, and understandable view and includes the
necessary information as set out above. The Committee has confirmed
this to the Board, whose statement is included in the Statement of
Directors’ Responsibilities on page 129.
The Committee focuses on matters it considers important in their impact
on the reported results of the Group, and on matters where there is a high
degree of complexity and/or judgement.
The critical accounting estimate that the Committee focuses on at the
reporting date is the valuation of the investment property portfolio.
This is carried out by independent external valuers, but by its nature
it is subjective, with significant judgement applied to the valuation,
particularly given the lack of transactional evidence for prime self
storage assets. The Chair of the Committee met the external valuers
to discuss the valuations, review the key judgements, and discussed
whether there were any disagreements with management. This year
the Committee reviewed and challenged the valuers on the cap rates,
rental growth assumptions and stabilised occupancy levels, to agree on
the appropriateness of the assumptions adopted. The Committee also
met with the external valuers and satisfied itself on their independence,
their quality control processes (including peer partner review) and
qualifications to carry out the valuations. Management also have
processes in place to review the external valuations. In addition, the
external auditors use valuation specialists to review the valuations and
report their findings and conclusions to the Audit Committee.
The Committee has also considered a number of other judgements
made by management in the preparation of the financial statements.
The Committee has concluded that there are not significant levels of
judgements involved, other than the valuation described above.
There has been no change to the other key judgement included in
the financial statements, which is that the Group’s stores should be
accounted for as Investment Property.
Management has reported to the Audit Committee that they are satisfied
that they are not aware of any material misstatements in the financial
statements. The external auditors confirmed in their report to the Audit
Committee that they had not found any material misstatements during
their audit work.
Annual Report and Accounts 2024 Big Yellow Group PLC122
Annual auditor assessment
The Audit Committee has adopted a formal framework in its review of
the effectiveness of the external audit process and audit quality which
include the following areas:
– the arrangements for ensuring the external auditor’s independence
and objectivity;
– the senior statutory auditor and the audit team;
– the external auditor’s fulfilment of the agreed audit plan and
variations from the plan;
– the quality of the formal audit report to shareholders;
– the effectiveness of the external audit process, taking into
consideration relevant UK professional and regulatory requirements;
– the robustness and perceptiveness of the auditor in his handling of
the key accounting and audit judgements; and
– the content of the external auditor’s comments on control
improvement recommendations.
Regard is paid to the nature of, and remuneration received, for other
services provided by KPMG LLP to the Group and, inter alia, confirmation
is sought from them that the fee payable for the annual audit is adequate
to enable them to perform their obligations in accordance with the scope
of the audit. The only non-audit service provided is the auditors’ review of
the half year report.
Non-audit work
The Group’s policy on external audit sets out the categories of non-audit
services which the external auditor will and will not be allowed to
provide to the Group, including those that are pre-approved by the Audit
Committee and those which require specific approval before they are
contracted for, subject to de minimis levels. The Group’s non-audit policy
reflects the Ethical Standard on Non-Audit Services which came into effect
on 15March 2020. The Committee’s policy is that the auditors will not
be asked to carry out non-audit work with the exception of the half year
review and regulatory and bank required reporting.
More generally, the auditors may not provide a service which places
them in a position where they may be required to audit their own work.
Specifically, they are precluded from providing services relating to
bookkeeping, financial information system design and implementation,
appraisal or evaluation services, actuarial services, any management
functions, taxation advisory services, investment banking services, legal
services unrelated to the audit or advocacy services.
In respect of the year ended 31March 2024, the auditor’s remuneration
comprised £593,000 for audit work and £64,000 for other work, solely
relating to the interim review. Over a three year rolling period, the level of
non-audit fees is below the audit fee, with non-audit fees representing
11% of audit fees in 2023 and 14% in 2022.
Risk management and
internal control
The Committee and the Board reviewed the internal control processes of
the business and the Group’s risk register during the year. The risks and
uncertainties facing the Group, and its internal control processes are
considered in the Strategic Report on page 44.
The Committee remains focused on ensuring that finance and risk
capability is appropriate to the scale of the business, whilst also
acknowledging an increasingly regulated environment. As the UK’s
regulatory landscape continues to evolve, the Committee will continue to
monitor developments from the review led by the Department for Business
and Trade into restoring trust in audit and corporate governance, and the
impact the recommendations may have on the Group. In particular, the
Committee will spend time working with management to prepare to report
on the updated UK Corporate Governance Code, published by the FRC
in January 2024, with particular attention to the changes introduced in
respect of audit, risk and internal control.
Internal audit
The Committee has considered the Board’s view that, given the
relatively straightforward nature of the Group’s business and the
controlenvironment in place, no formal internal audit function is required.
TheGroup has a store compliance team, which effectively carries out an
internal audit role for the Group’s stores, visiting each store twice a year.
This provides the Committee comfort over the store related aspects of
the Group’s business. The Committee meets with the Store Compliance
Manager as required, and at least once a year.
Additionally, on a regular cycle, the Board appoints external consultants
to assess specific business areas of risk and provide a report to the
Board and the Committee on this area. The cycles covered by this activity
include construction expenditure, treasury, taxation, and facilities
management. This gives the Committee comfort over the controls over
key business cycles within the Company.
With the combination of the store internal audit and the external
assessment of the key business cycles, the Committee considers that
this provides a robust internal audit assessment for the Group.
Overview
As a result of its work during the year, the Audit Committee has
concludedthat it has acted in accordance with its terms of reference and
has ensured the independence and objectivity of the external auditor.
The Chair of the Audit Committee will be available at the Annual General
Meeting to answer any questions about the work of the Committee.
Approved by the Audit Committee and signed on its behalf by:
Laela Pakpour Tabrizi
Audit Committee Chair
20 May 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 123
Strategic Report Governance Report Financial Statements
The Directors present their annual report on the affairs of the
Group, together with the audited financial statements and
auditor’s report for the year ended 31March 2024. The Report on
Corporate Governance on pages 84 to 89 forms part of this report.
Details of significant events since the balance sheet date are included
in note 25 to the financial statements. An indication of likely future
developments in the business of the Company is included in the
strategicreport.
Included in note 18 are the Group’s financial risk management objectives
and policies and an indication of the Group’s exposure to certain risks.
Those elements of that note form part of this report and are incorporated
by reference.
Dividends
The Directors are recommending the payment of a final dividend of
22.6pence per share for the year (2023:22.9 pence per ordinary
share). An interim dividend of 22.6 pence per share was paid in the
year(2023:22.3 pence per share).
All of the 45.2 pence per share payable for the year is a Property
IncomeDistribution.
Subject to approval by shareholders at the Annual General Meeting to
beheld on 18 July 2024, the final dividend will be paid on 26 July 2024.
The Ex-div date is 4 July 2024 and the Record date is 5 July 2024.
From April 2018 dividend tax credits have been replaced by an annual
£2,000 tax-free allowance on dividend income across an individual’s
entire share portfolio. Above this amount, individuals will pay tax on their
dividend income at a rate dependent on their income tax bracket and
personal circumstances. The Company will continue to provide registered
shareholders with a confirmation of the dividends paid by Big Yellow
Group PLC, and this should be included with any other dividend income
received when calculating and reporting total dividend income received.
It is the shareholder’s responsibility to include all dividend income when
calculating any tax liability.
Directors’ Report
SECR and Mandatory
GHG Reporting
The Companies (Directors’ Report) and Limited Liability Partnerships
(Energy and Carbon Report) Regulations 2018 (‘SECR’) came into force
on 1 April 2019 and apply to companies with financial years starting on or
after 1 April 2019.
The 2018 Regulations define what must be included in the Directors’
Report, namely:
– Annual Greenhouse Gas (GHG) emissions from activities for which the
Company is responsible including combustion of fuel and operation
of any facility, such as such as our flexi-office gas heating, reception
area air conditioner coolant replacement, one Company van diesel
fuel use emissions and fit-out ‘diesel’ use emissions (assuming
qualifying fit-out activities have taken place during the year);
– Annual emissions from the purchase of electricity, heat, steam or
cooling by the Company for its own use, such as the electricity for
ourstores and construction fit-out activities;
– Underlying global energy use;
– Previous year’s figures for energy use and GHG;
– At least one intensity ratio metric;
– Energy efficiency action taken; and
– Methodology used.
We will also continue to report on our Scope 3 emissions: Electricity
supplier ‘transmission and distribution’ emissions and ‘employee
business travel (from car mileage claims only). We also include grid bought
electricity used and measured by third party telecom masts. Consumption
is reported bi-annually and deducted from Big Yellow’s Scope 2 data. The
standard grid bought electricity conversion factors are applied. Voluntary
GHG emissions, from our waste and water supply chains, are assessed as
‘not material’. We will also retain the practice of reporting our previous few
years of performance to show longer term trends.
The ‘Market-based emission’ reported here reflect the emissions associated
with the electricity tariff we have purchased; whereas ‘Location-based
emissions’ are emissions associated with the UK grid and applies the
required DEFRA conversion factors. Where we have not indicated market-
based or location-based figures, location-based can beassumed.
Please note, our operations are solely based in the UK, and we therefore
will be reporting a single geographical scope – UK and offshore area only.
Annual Report and Accounts 2024 Big Yellow Group PLC124
a) Data
Financial Year 2021/22
2022/23
(originally
published)
2022/23
restated 2023/24
GHG scope 1 total tonnes CO
2
e Total Scope 1 Emissions (location-based) store and non-store 338.2 232.8 254.0
(1)
114.9
GHG scope 2 total tonnes CO
2
e Total Scope 2 Emissions (location-based) store and non-store 2,308.6 2,130.1 2,141.7
(1)
2,136.3
GHG scope 2 total tonnes CO
2
e Total Scope 2 Emissions market-based
(2)
store and non-store 0.0 0.0 0.0 0.0
Total GHG scope 1 & 2 Total tonnes CO
2
e Total Scope 1 and 2 Emissions (location-based) store and non-store 2,646.8 2,362.9 2,394.7 2,251.2
Total GHG scope 1 & 2 Total tonnes CO
2
e Total Scope 1 and 2 Emissions (market-based) store and non-store 338.2 232.8 254.0 114.9
Scope 3 total tonnes CO
2
e
Electricity Transmission Losses 204.1 192.8 192.0 183.6
Telecoms emissions on our sites 174.0 177. 0 198.1
(2)
220.0
Employee Business travel 92.7 140.9 177. 0
(3)
150.5
TOTAL Scope 3 total tonnes CO
2
e Electricity Transmission Losses, Telecoms emissions,
Employee Bus Travel 470.8 510.7 567.2 554.1
kgCO
2
e/ revenue (£000s) – location-based Greenhouse Gas (GHG) emissions intensity from building
energy consumption 15.0 12.5 12.7
(1)
11.3
kgCO
2
e/ revenue (£000s) – market-based Greenhouse Gas (GHG) emissions intensity from building
energy consumption 1.9 1.2 1.3
(1)
0.6
kgCO
2
e/ Occupied space (1,000m
2
) Greenhouse Gas (GHG) emissions intensity from building energy
consumption (scope 1 and 2 location-based) 5.4 5.0 5.1
(1)
4.8
kgCO
2
e/ CLA (1,000m
2
) Greenhouse Gas (GHG) emissions intensity from building energy
consumption (scope 1 and 2 location-based) 4.7 4.0 4.1
(1)
3.8
Energy data
(4)
underpinning Scope 1 and 2 emissions data (kWh) 12,891,941 12,271,496 12,151,251
(1)
10,941,846
(1) Non-store emissions included in the restated value and prior year data anomaly included in restated figure.
(2) Number of sites with telecoms increased and value restated to include emissions in the year ended 31March 2023
(3) The methodology updated in line with updated scope 3 calculations, the restated figure captures these changes.
(4) Includes store only values for electricity.
Please note:
Regarding restating each year, the last 3 months of our emissions data is reported using prior year’s conversion factors, due to an emission factor publication lag – we operate on a ‘best available data’
principle and will therefore restate each year.
Regarding Market-based emissions, we purchase REGO backed 100% renewable energy, so are able to provide both location-based and market- based CO
2
e emissions.
The three location-based intensity metrics are calculated from the location-based Scope 1 and 2 totals. The one market-based intensity metric is calculated from the market-based Scope 1 and 2 totals.
b) Methodology for Calculating Emissions
Scope 1
Gas
Data collection: Big Yellow gas data – and some of our Armadillo gas data
– is metered and automatically transmitted into our energy and emission
reporting platform, Envizi. Gas use for the remaining stores with gas
is obtained from supplier invoices and manually uploaded onto Envizi.
Thisprocess is part of the assurance work undertaken by SGS each year.
Any gaps are accrued.
Calculations: Our software platform, Envizi, contains our consumption
data as well as the current BEIS emission factors. These are used to
calculate emissions automatically when our reports are produced.
Ourannual data straddles two emission factor years; as soon as the
latest factors are released, our partners ensure Envizi contains the
mostup to date set and this is applied against the relevant data set.
Scope 1
Van
Data collection: our maintenance manager records any miles driven
to service our stores. The data is collected quarterly and sent to our
partners for uploading into Envizi. Envizi commutes the mileage data
intoemissions.
Calculations: km travelled x emission conversion factor for a diesel
average van (up to 3.5 tonnes) in km/kgCO
2
e / 1000 to convert to tCO
2
e.
Scope 1
Fit-out diesel
Data collection: diesel consumption used on our fit-out construction
projects is collected manually by the construction team and reported
weekly in the Construction Fit-Out report. The final report for the financial
year is used to assess the overall diesel consumption during the year.
Calculation: the total diesel consumption in litres converted to kWh using
the gross CV kWh/litre for Diesel (average biofuel blend) x emission
conversion factor in kWh (Gross CV)/kgCO
2
e for a Diesel (average biofuel
blend) / 1000 to convert to tCO
2
e.
Annual Report and Accounts 2024 Big Yellow Group PLC 125
Strategic Report Governance Report Financial Statements
Scope 2
Location-based, electricity
Data collection: Big Yellow electricity data – and most of our Armadillo
electricity data – is metered and automatically transmitted into our
energy and emission reporting platform, Envizi. Electricity used for
the remaining stores is obtained from supplier invoices and manually
uploaded onto Envizi. This process is part of the assurance work
undertaken by SGS each year. Any gaps are accrued.
Calculations: Our software platform, Envizi, contains our consumption
data as well as the current DEFRA emission factors. These are used to
calculate emissions automatically when reports are produced. Our annual
data straddles two emission factor years; as soon as the latest factors
are released, our partners ensure Envizi contains the most up to date set
and this is applied against the relevant data set.
Scope 2
Market-based, electricity
Data collection: the same as for location-based electricity.
Calculations: instead of applying the location-based emission factors,
we manually set electricity emissions at 0 as we have been purchasing
100% Rego backed electricity since 1st October 2019. For total Scope 1 &
2 emissions, market-based, we set Scope 2 at 0 and Scope 1 the same as
per above.
Scope 3
Electricity Transmission and Distribution losses
Data collection: we use data collected for the location-based grid bought
electricity data.
Calculation: the total grid supplied electrical consumption in kWh x T&D
emission conversion factor in kWh/kgCO
2
e / 1000 to convert to tCO
2
e.
Scope 3
Telecom masts
Data collection: we use the data collected by the company who installs
and operates 18 third party telecom masts at 14 of our store locations.
The consumption for these masts is reported bi-annually via spreadsheet
and manually uploaded into our software platform, Envizi.
Calculations: The standard grid-bought electricity conversion factors
are applied.
Please note, when the consumption data is uploaded into Envizi it is
posted as a negative amount to ensure it is deducted from our own,
grid-bought electricity consumption.
Scope 3
Employee business travel
Data collection: we use our employee expenses reimbursement data held
in our Finance system to calculate business miles travelled.
Calculation: using ‘cars (by size) Average car’ conversion factors, we
multiply the miles travelled reimbursed with the BEIS/DEFRA factor to
arrive at the emissions, for business travel.
Please note that we produce a yearly Basis of Reporting document
which sets out the methodology we use for all of our KPIs, including
GHG emissions.
We have included a special section for the Companies (Directors’
Report) and Limited Liability Partnerships (Energy and Carbon Report)
Regulations 2018.
c) Energy Efficiency Measures
Background
We have a long-standing strategy of pro-actively managing our energy
consumption and seeking to become an ever more efficient business.
Wehave reported progress over the years both in our Annual Reports
as well as in our standalone annual ESG Reports; all these are available
online in our Investor and Sustainability sections respectively.
Between 2012 and 2017 we undertook a company-wide upgrade of our
lighting to LED and to install motion sensor controls to ensure lights
are only used when customers need them; plus a small amount of the
permanent emergency lighting was improved to LED.
Although most of that work has been completed, a small number of ‘mop-up’
LED activities continue to take place, especially where we have not been
able to gain access to customers’ units to execute the changeover.
All other stores’ electricity meters and gas meters are fitted with HH
automatic meter readers; the data is available to us via an externally
hosted platform and used by the internal Environmental Committee to
review our performance on a quarterly basis.
Two years ago, we commenced on a programme to remove the gas central
heating and hot water boilers at a number of our stores with the aim of
decarbonising our business by 2030. This programme is ongoing.
We have completed 35 stores in the first 3 phases of our solar retrofitting
programme. We have also committed to expanding this programme to
cover all stores that are able to hold solar. This year we have added a
further 2,640kWp of capacity to 17 stores.
The one new store that was opened during the year (Kings Cross) was
fitted with 51.03kWp solar installation.
Directors’ Report continued
Annual Report and Accounts 2024 Big Yellow Group PLC126
Most recent ESOS assessment findings & resulting actions
We are currently in the process of our ESOS Phase 3 assessment.
The assessment has continued to emphasise the limited amount
of potential energy saving measures we are able to undertake. Our
independent ESOS assessor recommendations have remained similar
to that of our Phase 2 assessor; we have continued to focus on
increasing our Solar PV estate in line with our sustainability strategy.
During the year, we have installed solar systems at 17 stores:
– One newly build/acquired store, with a total installed capacity
of 51.03kWp.
– 16 stores were retrofitted with solar totalling a capacity of 2,551 kWp.
During the year, we have generated 3,395,736 kWh of solar energy
(anincrease of 102% from the previous year), thereby (a) reducing our
energy demand from the grid by the kWh we are using on site and (b)
increasing the grid’s renewable mix by exporting part of our energy as
thesize of our solar installations exceed our demand.
Capital structure
Details of the authorised and issued share capital, together with details of
the movements in the Company’s issued share capital during the year are
shown in note 22. The Company has one class of ordinary shares which
carry no right to fixed income. Each share carries the right to one vote at
general meetings of the Company.
There are no specific restrictions on the size of a holding nor on the
transfer of shares, which are both governed by the general provisions of
the Articles of Association and prevailing legislation. The Directors are not
aware of any agreements between holders of the Company’s shares that
may result in restrictions on the transfer of securities or on voting rights.
Details of employee share schemes are set out in note 23, and details
of shares held by the Company’s Employee Benefit Trust are set out in
note 22.
No person has any special rights of control over the Company’s share
capital and all issued shares are fully paid.
With regard to the appointment and replacement of Directors, the
Company is governed by its Articles of Association, the Corporate
Governance Code, the Companies Acts and related legislation. The Articles
themselves may be amended by special resolution of the shareholders.
The powers of Directors are described in the Report on Corporate
Governance on page 84.
There are a number of agreements that take effect, alter, or terminate
upon a change of control of the Company such as commercial contracts,
bank loan agreements, property lease arrangements and employee
share plans. The Directors are not aware of any agreements between the
Company and its Directors or employees that provide for compensation
for loss of office or employment that occurs because of a takeover bid.
During the year the Company issued 289,102 shares to satisfy the
exercise of share options (2023:298,595).
Directors
The Directors of the Company who served throughout the year and to the
date of approval of the financial statements were as follows:
Jim Gibson Chief Executive Officer
Anna Keay Non-Executive Director
Vince Niblett Senior Independent Director
Michael O’Donnell Non-Executive Director
Heather Savory Non-Executive Director
Laela Pakpour Tabrizi Non-Executive Director
John Trotman Chief Financial Officer
Nicholas Vetch Executive Chairman
The Company’s policy is that all Directors who are seeking re-election will
be put forward to a shareholder vote at each Annual General Meeting.
Biographical details of the Executive and Non-Executive Directors
standing for re-election are set out on pages 80 to 82.
Directors’ indemnities
The Company purchases liability insurance covering the Directors and
officers of the Company and its subsidiaries, which remains in force at
thedate of these accounts.
Political contributions
No political donations were made by the Company in either the current or
preceding financial year.
Substantial shareholdings
The Company had been notified, in accordance with Chapter 5 of the
Disclosure Guidance and Transparency rules, of the following voting rights
as a shareholder of the Company at 31March 2024 and 16 May 2024.
No. of ordinary shares
31March 2024
Percentage of
votingrights and
issuedshare capital
31March 2024
No. of ordinary shares
16 May 2024
Percentage of
votingrights and
issuedshare capital
16 May 2024
Blackrock Inc 21,673,264 11.1% 21,841,432 11.1%
Resolution Capital 13,558,547 6.9% 13,906,415 7.1 %
The Vanguard Group Inc 10,070,036 5.1% 10,160,433 5.2%
MFS Investment Management 8,594,136 4.4% 8,711,149 4.4%
CPP Investment Board 6,546,548 3.3% 6,608,487 3.4%
T Rowe Price 6,235,714 3.2% 6,215,357 3.2%
FMR LLC n/d n/d 6,125,200 3.1%
n/d – interest not disclosable at the applicable date.
The interest of the Directors in the share capital of the Company is shown on page 113 of the Remuneration Report.
Annual Report and Accounts 2024 Big Yellow Group PLC 127
Strategic Report Governance Report Financial Statements
Purchase of own shares
The Company was granted authority at the AGM in 2023 to purchase its
own shares up to a total aggregate value of 10% of the issued nominal
capital. That authority expires at this year’s AGM and a resolution will
be proposed for its renewal. During the year the Company made no
purchases of its own shares.
Suppliers and customers
Details on how the Group engages with Suppliers, Customers, and
othersin business relationships with the Company can be found
on pages 87 to 88.
Employee consultation
The Group seeks to ensure employee commitment to its objectives in a
number of ways. Strategic changes are communicated directly to all
staff who are encouraged to address queries to the Executive Directors.
The Directors’ executive meetings are frequently held in stores and in
addition Directors and senior management visit the stores on a regular
basis. Furthermore, there are regular team briefings at store level to
provide employees with information about the performance of and
initiatives in their store. A wide range of information is also communicated
across the Group’s Intranet, including the e-publication of the Group’s
financial results and all press releases, and regular updates from
each Department.
As discussed in the Corporate Governance Report, the Board has
appointed a designated Non-Executive Director, Anna Keay, to act as the
primary method of workforce engagement for Big Yellow in accordance
with the Corporate Governance Code.
Employees are encouraged to participate in the Group’s performance
through Employee Share Schemes and performance related bonuses.
54%of eligible employees participate in the Group’s Sharesave Scheme.
The Group’s recruitment policy is committed to promote equality, judging
neither by race, nationality, religion, age, gender, disability, sexual
orientation, nor political opinion and to treat all stakeholders fairly.
Disabled employees
Applications for employment by disabled persons are always fully
considered, bearing in mind the aptitudes of the applicant concerned.
Inthe event of members of staff becoming disabled every effort is
madeto ensure that their employment with the Group continues and
that appropriate training is arranged. It is the policy of the Group that
thetraining, career development and promotion of disabled persons
should, as far as possible, be identical to that of other employees.
Human Rights
Big Yellow respects Human Rights and aims to provide assurance to
internal and external stakeholders that we are committed to human rights
and the principles of the Universal Declaration of Human Rights.
We are committed to creating and maintaining a positive and professional
work environment that reflects and respects the basic rights of freedom
to lead a dignified life, free from fear or want, and where stakeholders are
free to express their independent beliefs. Our employment policies and
practices reflect a culture where decisions are made solely on the basis of
individual capability and potential in relation to the needs of the business.
Modern Slavery Act
The Group is committed to ensuring that there is no modern slavery or
human trafficking in our supply chains or in any part of our business.
Our Anti-slavery Policy reflects our commitment to acting ethically and
with integrity in all our business relationships and to implementing and
enforcing effective systems and controls to ensure slavery and human
trafficking is not taking place anywhere in our supply chains. Our policy
ispublished in full on our website.
Auditor
In accordance with Section 489 of the Companies Act 2006, a resolution
for the re-appointment of KPMG LLP as auditor of the Company is to be
proposed at the forthcoming Annual General Meeting.
Disclosure of information to auditor
The Directors who held office at the date of approval of this Directors’
Report confirm that, so far as they are each aware, there is no relevant
audit information of which the Company’s auditor is unaware; and each
Director has taken all the steps that he/ she ought to have taken as a
Director to make himself/ herself aware of any relevant audit information
and to establish that the Company’s auditors is aware of that information.
This confirmation is given and should be interpreted in accordance with
s418 of the Companies Act 2006.
Approved by the Board of Directors and signed on behalf of the Board.
Shauna Beavis
Company Secretary
20 May 2024
Directors’ Report continued
Annual Report and Accounts 2024 Big Yellow Group PLC128
Statement of Directors’ Responsibilities in Respect
of the Annual Report and the Financial Statements
The Directors are responsible for preparing the Annual Report and the
Group and parent Company financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare Group and parent
Company financial statements for each financial year. Under that law they
are required to prepare the Group financial statements in accordance
with UK-adopted international accounting standards and applicable law
and have elected to prepare the parent Company financial statements in
accordance with UK accounting standards and applicable law, including
FRS 101 Reduced Disclosure Framework.
Under company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and parent Company and of the Group’s
profit or loss for that period. In preparing each of the Group and parent
Company financial statements, the Directors are required to:
– select suitable accounting policies and then apply them consistently;
– make judgements and estimates that are reasonable, relevant, and
reliable and, in respect of the parent Company financial statements
only, prudent;
– for the Group financial statements, state whether they have
beenprepared in accordance with UK-adopted international
accounting standards;
– for the parent Company financial statements, state whether
applicable UK accounting standards have been followed, subject
to any material departures disclosed and explained in the parent
Company financial statements;
– assess the Group and parent Company’s ability to continue as a
goingconcern, disclosing, as applicable, matters related to going
concern; and
– use the going concern basis of accounting unless they either intend
to liquidate the Group or the parent Company or to cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent Company’s
transactions and disclose with reasonable accuracy at any time the
financial position of the parent Company and enable them to ensure that
its financial statements comply with the Companies Act 2006. They are
responsible for such internal control as they determine is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error, and have general
responsibility for taking such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the Directors are also responsiblefor
preparing a Strategic Report, Directors’ Report, Directors’ Remuneration
Report and Corporate Governance Statement that complies with that law
and those regulations.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company’s website.
Legislation in the UK governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and Transparency Rule (“DTR”)
4.1.16R, the financial statements will form part of the annual financial
report prepared under DTR 4.1.17R and 4.1.18R. The auditor’s report
on these financial statements provides no assurance over whether
theannual financial report has been prepared in accordance with
thoserequirements.
Responsibility statement of the
Directors in respect of the annual
financial report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the applicable
set of accounting standards, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole; and
– the strategic report includes a fair review of the development and
performance of the business and the position of the issuer and
the undertakings included in the consolidation taken as a whole,
togetherwith a description of the principal risks and uncertainties
that they face.
We consider the annual report and accounts, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the Group’s position and performance, business
model and strategy.
This responsibility statement was approved by the Board of Directors on
20 May 2024 and is signed on its behalf by:
Jim Gibson John Trotman
Chief Executive Officer Chief Financial Officer
Annual Report and Accounts 2024 Big Yellow Group PLC 129
Strategic Report Governance Report Financial Statements
1. Our opinion is unmodified
We have audited the financial statements of Big Yellow Group PLC
(“theCompany”) for the year ended 31March 2024 which comprise the
Consolidated Statement of Comprehensive Income, Consolidated Balance
Sheet, Consolidated Statement of Changes in Equity, Consolidated
Cash Flow Statement, Company Balance Sheet, Company Statement
of Changes in Equity, and the related notes, including the accounting
policies in notes 2 and 29.
In our opinion:
– the financial statements give a true and fair view of the state of the
Group’s and of the parent Company’s affairs as of 31March 2024 and
of the Group’s profit for the year then ended;
– the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
– the parent Company financial statements have been properly
prepared in accordance with UK accounting standards, including
FRS101 Reduced Disclosure Framework; and
– the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities are
described below. We believe that the audit evidence we have obtained
is a sufficient and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were first appointed as auditor by the shareholders on 20 July 2017.
The period of total uninterrupted engagement is for the seven financial
years ended 31March 2024. We have fulfilled our ethical responsibilities
under, and we remain independent of the Group in accordance with, UK
ethical requirements including the FRC Ethical Standard as applied to
listed public interest entities. No non-audit services prohibited by that
standard were provided.
Overview
Materiality:
group financial statements
as a whole
£20.4m (2023:£20.3m)
0.70% (2023:0.74%) of Total Assets
Coverage 100% (2023:100%) of Total Assets
Key audit matters vs 2023
Recurring risks
Valuation of Investment Property,
including Investment Property
Under Construction 
Parent Company: Recoverability of
amounts owed by group undertakings 
2. Key audit matters:
our assessment of risks
of material misstatement
Key audit matters are those matters that, in our professional judgement,
were of most significance in the audit of the financial statements and
include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those which
had the greatest effect on the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team.
We summarise below the key audit matters (unchanged from 2023), in
decreasing order of audit significance, in arriving at our audit opinion
above, together with our key audit procedures to address those matters
and, as required for public interest entities, our results from those
procedures. These matters were addressed, and our results are based
on procedures undertaken, in the context of, and solely for the purpose
of, our audit of the financial statements as a whole, and in forming our
opinion thereon, and consequently are incidental to that opinion, and we
do not provide a separate opinion on these matters.
Independent Auditor's Report to the
Members of Big Yellow Group PLC
Annual Report and Accounts 2024 Big Yellow Group PLC130
The risk Our response
Valuation of
Investment Property,
including Investment
Property under
Construction
Investment Property
£2,718.5 million;
(2023: £2,449.6
million)
Investment Property
Under Construction
£146.5 million;
(2023: £260.7m)
Refer to page 122
(Audit Committee
Report), page 147
(accounting policy)
and pages 155 – 159
(financial disclosures).
Subjective valuation:
Investment property valuation is subjective and inherently
judgmental in nature and therefore results in a risk of
error and fraud. We considered in our risk assessment that
the economic environment has remained volatile in the
current year.
Investment property values are calculated using actual
data and subjective assumptions inputs such as store
occupancy, future growth in net rent, discount rates and
exitcapitalisation rates for investment property and, in
addition, capital expenditure forecasts for investment
property under construction.
The Group engages an external valuation firm to apply
professional judgment concerning market conditions and
factors impacting individual properties, which performs its
work in accordance with the Royal Institution of Chartered
Surveyors (“RICS”) Valuation Professional Standards.
The investment market for prime self storage is
subject tomarket uncertainty due to the low volume
ofcomparabletransactions.
The effect of these matters is that, as part of our risk
assessment, we determined that the value of investment
properties including investment property under
construction has a high degree of estimation uncertainty,
with a potential range of reasonable outcomes greater
than our materiality for the financial statements as a
whole, and possibly many times that amount.
Disclosure quality:
The financial statements (note 15) disclose the
sensitivityestimated by the Group.
The Directors’ assessment of the extent of the
disclosureis based on an evaluation of the inherent
risksto the valuation.
The risk for our audit is whether or not those disclosures
adequately address the uncertainties within the valuation,
and if so, whether those uncertainties are fundamental to
the users’ understanding of the financial statements.
Our procedures included:
• Assessment of accounting policy application: We compared the valuation, presentation
and disclosure of Investment Properties and Investment Property under Construction
with the Group’s accounting policy and the applicable accounting standards.
• Assessment of valuer’s credentials: We assessed the external valuer’s qualifications
and expertise and read its terms of engagement with the Group to determine whether
there were any matters that may have affected its independence and objectivity or
imposed scope limitations upon their work.
• Methodology choice: We read the external valuation report as prepared by the external
valuation firm engaged by the Group which covers 100% of the investment properties
(including those under construction) and assessed whether the valuation approach
was in accordance with RICS standards and suitable for use in determining the value
forthe purpose of the financial statements.
• Inquiries held: We met with the external valuation firm engaged by the Group, the
Group’s senior Management and the audit committee chair with our own internal
valuation specialists to discuss the valuation process, key assumption inputs such as
occupancy, capital expenditure forecasts for investment property under construction
and discount rates, and the rationale behind significant or unusual valuation
movements during the year.
• Our sector experience: We used our knowledge of the entity, our experience of the real
estate industry and observed industry norms when assessing the key assumptions
and the significant or unusual valuation movements and, for investment property under
construction, we considered the judgment made by the Directors and external valuation
firm engaged by the Group for planning risk for non- consented sites.
• Data input testing: We performed property visits and tested the accuracy of current
and historical information used to generate key inputs to the valuation such as
maximum lettable area, store occupancy and net rental income by physically
inspecting a sample of storage units and inspecting a sample of customer storage
licence agreements.
• Independent re-performance: Using our own internally produced model and the
external valuer and Directors’ inputs we assessed the accuracy of the valuation as
produced by the external valuer.
• Tests of detail: For investment property under construction, we compared
Management’s forecast construction costs with actual spend on similar completed
construction projects in the past three years. We checked that supporting information
for construction contracts and budgets such as original construction cost reports,
which the Directors supplied to the external valuer, was consistent with the Group’s
records. We assessed whether externally available pricing and inflation data inclusive
of allowance for risk in development valuations were appropriately factored into the
costs to complete forecast provided to the valuer. We also obtained approved planning
permission to evidence that planning had been granted for those development sites for
which this was applicable.
• Assessed valuation changes: To address the risk of fraud, we critically assessed the
changes between the draft external valuation report subject to Director review, and
the final external valuation report including tie through to the financial statements,
toensure changes were appropriate and substantiated.
• Assessed transparency: We assessed whether the group’s disclosures about the
sensitivity of the valuation of investment properties to changes in key assumptions
adequately reflected the related risks.
We performed the detailed tests above rather than seeking to rely on any of the Group’s
controls because our knowledge of the design of these controls indicated that we would
not be able to obtain the required evidence to support reliance on controls.
Our results
We found the valuation of investment properties, and investment properties under
construction and the disclosure of the associated level of uncertainty to be acceptable
(2023:acceptable).
Annual Report and Accounts 2024 Big Yellow Group PLC 131
Strategic Report Governance Report Financial Statements
The risk Our response
Recoverability of
amounts owed by
Groupundertakings
(Parent Company only)
£765.4million;
(2023:£800.4million)
Refer to page 148
(accounting policy)
and page 179
(financial disclosures).
Low risk, high value:
The carrying amount of the amounts owed by Group
undertakings represents 95% (2023:96%) of the
Company’s total assets at 31March 2024.
Recoverability of amounts owed by Group undertakings
are not at a high risk of significant misstatement or
subject to significant judgment. However, due to their
materiality in the context of the Company financial
statements, this is considered to be the area that had
thegreatest effect on our overall parent Company audit.
Our procedures included:
Tests of detail: We assessed 100% of amounts owed by Group undertakings to identify,
with reference to the relevant debtors’ draft balance sheet, whether they have a positive
net asset value and therefore coverage of the debt owed, as well as assessing whether
those debtor companies have historically been profit-making.
We performed the tests above rather than seeking to rely on any of the Company’s controls
because the nature of the balance is such that we would expect to obtain audit evidence
primarily through the detailed procedures described.
Our results
We found the conclusion that there is no impairment of the amounts owed by Group
undertakings balance to be acceptable (2023:acceptable).
Independent Auditor's Report to the Members
of Big Yellow Group PLC continued
Annual Report and Accounts 2024 Big Yellow Group PLC132
3. Our application of materiality
and an overview of the scope of
our audit
– Materiality for the Group financial statements as a whole was set at
£20.4m (2023:£20.3m), determined with reference to a benchmark
of total assets (of which it represents 0.70% (2023:0.74%).
– In addition, we applied materiality of £4.7m (2023:£4.9m) to all
balances and classes of transactions impacting adjusted profit
before tax of £107m (2023:£106m) (as reconciled to profit before
tax in note 10 of the financial statements) for which we believe
misstatements of lesser amounts than materiality for the financial
statements as a whole could be reasonably expected to influence
theCompany’s members’ assessment of the financial performance
of the Group.
– Materiality for the parent Company financial statements was set at
£8.4m (2023:£8.8m), determined with reference to a benchmark of
Company total assets, of which it represents 1% (2023:1%).
– In line with our audit methodology, our procedures on individual
account balances and disclosures were performed to a lower
threshold, performance materiality, so as to reduce to an acceptable
level the risk that individually immaterial misstatements in individual
account balances add up to a material amount across the financial
statements as a whole.
– Performance materiality was set at 75% (2023:75%) of materiality
for the financial statements as a whole, which equates to £15.3m
(2023:£15.2m) for the Group, £3.5million (2023:£3.6million) for
balances audited to a lower materiality and £6.3m (2023:£6.6m) for
the parent Company. We applied this percentage in our determination
of performance materiality because we did not identify any factors
indicating an elevated level of risk.
– We agreed to report to the Audit Committee any corrected or
uncorrected identified misstatements exceeding £1.0m (2023:£1m)
and those exceeding £230K (2023:£245K) for those impacting
adjusted profit, in addition to other identified misstatements that
warranted reporting on qualitative grounds.
– The Group team performed the audit of the Group as if it was a
singleaggregated set of financial information. The audit was
performed using the materiality and performance materiality
levelsset out above.
– The scope of the audit work performed was predominately
substantive as we placed limited reliance upon the Group’s internal
control over financial reporting.
£20.4m
Whole financial statements
materiality
(2023: £20.3M)
£15.3m
Whole financial statements
performance materiality
(2023: £15.2m)
£1.0m
Misstatements reported
to the audit committee
(2023: £1m)
Total assets
£2,908m (2023: £2,752m)
Group materiality
£20.4m (2023: £20.3m)
Total assets
Group materiality
Group revenue
100
100
100%
(2023: 100%)
Group profit before tax
100
100
100%
(2023: 100%)
Group total assets
Full scope audit performed at Group level for 2024
Full scope for group audit purposes 2023
100
100
100%
(2023: 100%)
Annual Report and Accounts 2024 Big Yellow Group PLC 133
Strategic Report Governance Report Financial Statements
4. The impact of climate change
on our audit
In planning our audit, we have considered the potential impact of
risksarising from climate change on the Group’s business and its
financialstatements. Further information is provided in the Group’s
strategic report (pages 49 to 72) and the corporate governance
report(pages 83 – 89) which have been incorporated into the 2024
Annual Report.
Climate change risks and opportunities have had a limited impact
ontheGroup. There is enhanced narrative in the Annual Report on
climatematters.
As part of our audit, we performed a risk assessment of the impact of
climate change risk on the Group’s Financial statements and our audit
approach. In doing this we performed the following:
– Understanding management's processes: we made enquiries
to understand management's risk assessment process and its
assessment of the potential impact of climate change risk on the
Group's Annual Report and Financial statements and the Group's
preparedness for this.
– Annual report narrative: We made enquiries of management to
understand the process by which climate-related narrative is
developed including the primary sources of data used and the
governance process in place over the narrative. As a part of our risk
assessment, we read the climate-related information in the front half
of the Annual Report and considered consistency with the financial
statements, in particular the accounting policy “climate change”
within Note 2, and our wider audit knowledge.
On the basis of the procedures performed above, we concluded that the
risk of climate change was not significant when we considered the nature
of the assets and relevant contractual terms. As a result, there was no
material impact from this on our key audit matters.
5. Going concern
The directors have prepared the financial statements on the going
concern basis as they do not intend to liquidate the Group or the Company
or to cease their operations, and as they have concluded that the Group’s
and the Company’s financial position means that this is realistic.
They have also concluded that there are no material uncertainties that
could have cast significant doubt over their ability to continue as a going
concern for at least 18 months from the date of approval of the financial
statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the general
economic and geopolitical environment to identify the inherent risks to
its business model and analysed how those risks might affect the Group’s
and Company’s financial resources or ability to continue operations over
the going concern period. The risks that we considered most likely to
adversely affect the Groups and Company’s available financial resources
and metrics relevant to debt covenants over this period were:
– The impact of macro-economic trends on customer activity,
particularly customer occupancy rates.
– Increase in SONIA rates, increasing Group interest rates.
We considered whether these risks could plausibly affect the liquidity
and covenant compliance in the going concern period by assessing the
director’s sensitivities over the level of available financial resources and
covenant thresholds indicated by the Group’s financial forecasts taking
account of severe, but plausible adverse effects that could arise from
these risks individually and collectively.
Our procedures also included:
– Critically assessing assumptions in base case and downside
scenarios relevant to covenant metrics, in particular in relation to
customer performance (namely occupancy rates and net rent levels)
by comparing to historical trends in severe economic situations and
overlaying knowledge of the entity’s trading performance to date and
our knowledge of the entity and the sector in which it operates.
– We also compared past budgets to actual results to assess the
directors' track record of budgeting accurately.
– We inspected confirmations from the lender to confirm the level of
committed financing, the associated covenant requirements, and
restrictions on the use of funds, alongside loan agreements.
– We challenged the Directors’ assessment of the refinancing of loans
due for expiry within the going concern period and considered the
liquidity of the Group in a severe but plausible downside should no
new facilities be obtained.
– We assessed the completeness of the going concern disclosures.
Our conclusions based on this work:
– We consider that the directors’ use of the going concern basis of
accounting in the preparation of the financial statements
is appropriate.
– We have not identified and concur with the directors’ assessment
that there is not, a material uncertainty related to events or
conditions that, individually or collectively, may cast significant
doubt on the Group or Company's ability to continue as a going
concern for the going concern period.
– We have nothing material to add or draw attention to in relation to
the directors’ statement in note 2 to the financial statements on
the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and
Company’s use of that basis for the going concern period, and we
found the going concern disclosure in note 2 to be acceptable; and
– The related statement under the Listing Rules set out on
pages 48 – 49 is materially consistent with the financial
statements and our audit knowledge.
However, as we cannot predict all future events or conditions and as
subsequent events may result in outcomes that are inconsistent with
judgements that were reasonable at the time they were made, the above
conclusions are not a guarantee that the Group or the Company will
continue in operation.
Independent Auditor's Report to the Members
of Big Yellow Group PLC continued
Annual Report and Accounts 2024 Big Yellow Group PLC134
6. Fraud and breaches of laws and
regulations – ability to detect
6.1 Identifying and responding to risks of
material misstatement due to fraud
To identify risks of material misstatement due to fraud (“fraud risks”)
we assessed events or conditions that could indicate an incentive or
pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
– Enquiring of directors, the audit committee, and the store compliance
function and inspection of policy documentation as to the Group’s
high-level policies and procedures to prevent and detect fraud,
including the Group’s channel for “whistleblowing”, as well as whether
they have knowledge of any actual, suspected, or alleged fraud.
– Reading Board and audit committee minutes.
– Considering remuneration incentive schemes and performance
targets for directors and management including the adjusted
EPS target, LTIP scheme (long term incentive plan), SAYE scheme
(employee share save scheme) and the deferred bonus plan.
– Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the audit team and
remained alert to any indications of fraud throughout the audit.
As required by auditing standards, we perform procedures to address the
risk of management override of controls, in particular the risk that Group
management may be in a position to make inappropriate accounting
entries and the risk of bias in accounting estimates and judgements such
as the valuation of investment property and investment property under
construction. On this audit we do not believe there is a fraud risk related to
revenue recognition because there are limited judgmental aspects to the
Group’s low value, high volume revenue streams.
We also identified a fraud risk related to valuation of investment
property and investment property under Construction in response to the
subjective and inherently judgmental nature of this area.
Further detail in respect of valuation of investment property, including
investment property under construction is set out in the key audit matter
disclosures in section 2 of this report.
We performed procedures including:
– Identified journal entries to test based on high-risk criteria and
obtained and corroborated supporting documentation for the
identified entries. These included those posted to the investment
property and investment property under construction account, those
posted by super and privileged users, those posted to the cash and
borrowings and unexpected revenue and expense pairings.
– Assessed whether the judgements made in making accounting
estimates are indicative of a potential bias including assessing
fair value of investment property and investment property under
construction for bias.
6.2 Identifying and responding
to risks of material misstatement
due to non-compliance with laws
and regulations
We identified areas of laws and regulations that could reasonably be
expected to have a material effect on the financial statements from our
general commercial and sector experience and through discussion with
the directors and other management (as required by auditing standards)
and discussed with the directors and other management the policies and
procedures regarding compliance with laws and regulations.
As the Group is regulated, our assessment of the risks involved gaining
an understanding of the control environment including the entity’s
procedures for complying with regulatory requirements.
We communicated identified laws and regulations throughout our team and
remained alert to any indications of non- compliance throughout the audit.
The potential effect of these laws and regulations on the financial
statements varies considerably.
Firstly, the Group is subject to laws and regulations that directly affect the
financial statements including financial reporting legislation (including
related companies’ legislation), distributable profits legislation, Real
Estate Investment Trust (REIT) legislation and taxation legislation, and
we assessed the extent of compliance with these laws and regulations as
part of our procedures on the related financial statement items.
Secondly, the Group is subject to many other laws and regulations where
the consequences of non-compliance could have a material effect on
amounts or disclosures in the financial statements, for instance through
the imposition of fines or litigation. We identified the following areas as
those most likely to have such an effect: health and safety, anti-bribery,
employment law, data protection laws and certain aspects of company
legislation recognising the financial nature of the Company’s activities and
its legal form. Auditing standards limit the required audit procedures to
identify non-compliance with these laws and regulations to enquiry of the
directors and inspection of regulatory and legal correspondence, if any.
Therefore, if a breach of operational regulations is not disclosed to
us or evident from relevant correspondence, an audit will not detect
that breach.
6.3 Context of the ability of the
audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable
risk that we may not have detected some material misstatements in
the financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example,
the further removed non- compliance with laws and regulations is from
the events and transactions reflected in the financial statements,
the less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of non-detection
of fraud, as these may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal controls. Our audit
procedures are designed to detect material misstatement. We are not
responsible for preventing non-compliance or fraud and cannot be expected
to detect non- compliance with all laws and regulations.
Annual Report and Accounts 2024 Big Yellow Group PLC 135
Strategic Report Governance Report Financial Statements
7. We have nothing to report
on the other information in the
Annual Report
The directors are responsible for the other information presented in
the Annual Report together with the financial statements. Our opinion
on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly
stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work, the
information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge. Based solely on that work
we have not identified material misstatements in the other information.
7.1 Strategic report and directors’ report
Based solely on our work on the other information:
– We have not identified material misstatements in the
– strategic report and the directors’ report.
– In our opinion the information given in those reports for the financial
year is consistent with the financial statements; and
– In our opinion those reports have been prepared in accordance with
the Companies Act 2006.
7.2 Directors’ remuneration report
In our opinion the part of the Directors’ Remuneration Report to be audited
has been properly prepared in accordance with the Companies Act 2006.
7.3 Disclosures of emerging and principal
risks and longer-term viability
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ disclosures in respect of
emerging and principal risks and the viability statement, and the financial
statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw
attention to in relation to:
– The directors’ confirmation within the Viability Statement on page49
that they have carried out a robust assessment of the emerging and
principal risks facing the Group, including those that would threaten its
business model, future performance, solvency, and liquidity.
– The principal risks and uncertainties disclosures describing these
risks and how emerging risks are identified, and explaining how they
are being managed and mitigated; and
– The directors’ explanation in the Viability Statement of how they have
assessed the prospects of the Group, over what period they have
done so and why they considered that period to be appropriate, and
their statement as to whether they have a reasonable expectation
that the Group will be able to continue in operation and meet its
liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary
qualifications or assumptions.
We are also required to review the Viability Statement, set out on page49
under the Listing Rules. Based on the above procedures, we have concluded
that the above disclosures are materially consistent with the financial
statements and our audit knowledge.
Our work is limited to assessing these matters in the context of only the
knowledge acquired during our financial statements audit. As we cannot
predict all future events or conditions and as subsequent events may
result in outcomes that are inconsistent with judgements that were
reasonable at the time they were made, the absence of anything to report
on these statements is not a guarantee as to the Group’s and Company’s
longer-term viability.
Corporate governance disclosures
We are required to perform procedures to identify whether there is a
material inconsistency between the directors’ corporate governance
disclosures and the financial statements and our audit knowledge.
Based on those procedures, we have concluded that each of the following is
materially consistent with the financial statements and our audit knowledge:
– the directors’ statement that they consider that the annual report
and financial statements taken as a whole is fair, balanced and
understandable, and provides the information necessary for
shareholders to assess the Group’s position and performance,
business model and strategy;
– the section of the annual report describing the work of the Audit
Committee, including the significant issues that the audit committee
considered in relation to the financial statements, and how these
issues were addressed; and
– the section of the annual report that describes the review of
theeffectiveness of the Group’s risk management and internal
control systems.
We are required to review the part of the Corporate Governance Statement
relating to the Group’s compliance with the provisions of the UK Corporate
Governance Code specified by the Listing Rules for our review.
We have nothing to report in this respect.
Independent Auditor's Report to the Members
of Big Yellow Group PLC continued
Annual Report and Accounts 2024 Big Yellow Group PLC136
8. We have nothing to report on
the other matters on which we are
required to report by exception.
Under the Companies Act 2006, we are required to report to you if,
in our opinion:
– Adequate accounting records have not been kept by the parent
Company, or returns adequate for our audit have not been received
from branches not visited by us; or
– The parent Company financial statements and the part of the
Directors’ Remuneration Report to be audited are not in agreement
with the accounting records and returns; or
– Certain disclosures of directors’ remuneration specified by law is not
made; or
– We have not received all the information and explanations we require
for our audit.
We have nothing to report in these respects.
9. Respective responsibilities
9.1 Directors’ responsibilities
As explained more fully in their statement set out on page 127, the
directors are responsible for: the preparation of the financial statements
including being satisfied that they give a true and fair view; such internal
control as they determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether
due to fraud or error; assessing the Group and parent Company’s ability
to continue as a going concern, disclosing, as applicable, matters related
to going concern; and using the going concern basis of accounting unless
they either intend to liquidate the Group or the parent Company or to
cease operations, or have no realistic alternative but to do so.
9.2 Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the
financial statements are free from material misstatement, whether
due tofraud or error, and to issue our opinion in an auditor’s report.
Reasonable assurance is a high level of assurance but does not guarantee
that an audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions
ofusers taken based on the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website
at www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in
an annual financial report prepared under Disclosure Guidance and
Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides
noassurance over whether the annual financial report has been prepared
in accordance with those requirements.
10. The purpose of our audit
work and to whom we owe
our responsibilities
This report is made solely to the Company’s members, as a body,
inaccordance with Chapter 3 of Part 16 of the Companies Act 2006.
Ouraudit work has been undertaken so that we might state to the
Company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted
by law, we do not accept or assume responsibility to anyone other than
the Company and the Company’s members, as a body, for our audit work,
for this report, or for the opinions we have formed.
Anna Jones (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
2 Forbury Place
33 Forbury Road Reading
RG1 3AD
20 May 2024
Annual Report and Accounts 2024 Big Yellow Group PLC 137
Strategic Report Governance Report Financial Statements
Consolidated Statement of Comprehensive Income
Year ended 31March 2024
20242023
Note£000£000
Revenue
3
1 99,6 19
18 8, 829
Cost of sales
(55,994)
(54 ,30 7)
Gross profit
1 43,62 5
1 34,5 22
Administrative expenses
(1 5,2 1 9)
(1 4,5 1 9)
Operating profit before fair value changes on property assets
128,406
1 2 0,003
Gain/(loss) on the revaluation of investment properties
14a,15
131 ,1 5 9
(29,86 1)
Operating profit
25 9,565
90, 1 42
Other income
3
6,5 1 7
2 ,185
Investment income – interest receivable
7
45
9
Finance costs
– interest payable
8
(22,946)
(1 6,894)
– fair value movement on derivatives
8
(2,1 46)
(1 3 3)
Profit before taxation
241 , 03 5
7 5,309
Taxation
9
(1,20 2)
(1,9 7 7)
Profit for the year (attributable to equity shareholders)
5
2 39,833
73,3 32
Total comprehensive income for the year (attributable to equity shareholders)
239,8 33
7 3,33 2
Basic earnings per share
12
1 2 7. 1 p
40. 1p
Diluted earnings per share
12
1 26.4p
3 9.8p
Adjusted earnings per share are shown in Note 12.
All items in the statement of comprehensive income relate to continuing operations.
The accompanying notes on pages 142 to 182 form part of the financial statements.
Annual Report and Accounts 2024 Big Yellow Group PLC138
Consolidated Balance Sheet
31March 2024
20242023
Note£000£000
Non-current assets
Investment property
14a
2,7 1 8,525
2,44 9,64 0
Investment property under construction
14a
146,48 5
2 6 0 , 72 0
Right-of-use assets
14a
17,1521 8 , 14 8
Plant, equipment, and owner-occupied property
14b
3,87 0
4,003
Intangible assets
14c
1,4 33
1 ,433
Investment
14d
588
588
2,888,05 3
2,7 34,5 3 2
Current assets
Derivative financial instruments
18c
–
316
Inventories
486
49 6
Trade and other receivables
16
10 , 116
8 , 3 14
Cash and cash equivalents
9,356
8 , 329
1 9,958
17, 4 5 5
Total assets
2,908,0 1 1
2,7 5 1 ,98 7
Current liabilities
Trade and other payables
17
(49,396)
(57 ,27 5)
Borrowings
19
(3,3 1 7)
(3,1 5 9)
Obligations under lease liabilities
21
(2,25 3)
(2,0 20)
(54,966)
(6 2,4 54)
Non-current liabilities
Borrowings
19
(38 6,3 7 1)
(489, 4 1 1)
Obligations under lease liabilities
21
(16,47 4)
(1 7 ,6 7 6)
Derivative financial instruments
18c
(1,8 30)
–
(404,6 7 5)
(507 ,087)
Total liabilities
(4 59,64 1)
(56 9,5 4 1)
Net assets
2,448,37 0
2,1 8 2,446
Equity
Share capital
22
1 9,62 0
18 , 4 27
Share premium account
39 7 ,686
29 0,8 5 7
Reserves
2,031,064
1,8 7 3, 1 6 2
Equity shareholders’ funds
2,448,37 0
2,1 8 2,446
The financial statements were approved by the Board of Directors and authorised for issue on 20 May 2024. They were signed on its behalf by
Jim Gibson John Trotman
Director Director
Company Registration No. 03625199
The accompanying notes on pages 142 to 182 form part of the financial statements.
Annual Report and Accounts 2024 Big Yellow Group PLC 139
Strategic Report Governance Report Financial Statements
Consolidated Statement of Changes in Equity
Year ended 31March 2024
ShareOther non-Capital
Sharepremiumdistributable redemption RetainedOwn
capitalaccountreservereserveearningssharesTotal
£000£000£000£000£000£000£000
At 1 April 2023
18 ,4 27
29 0,8 5 7
7 4,950
1 ,79 5
1 , 7 9 7, 4 3 6
(1,0 1 9)
2, 1 8 2,446
Total comprehensive income for the year
–
–
–
–
2 3 9,8 33
–
2 3 9,8 3 3
Issue of share capital
1 ,19 3
1 06,82 9
–
–
–
–
1 08,022
Dividend
–
–
–
–
(86,0 1 3)
–
(86,0 1 3)
Use of own shares to satisfy share options
–
–
–
–
(22)
22
–
Credit to equity for equity-settled
share-based payments
–
–
–
–
4,08 2
–
4,082
At 31March 2024
1 9,620
397,686
7 4,950
1 ,79 5
1,955,3 1 6
(997)
2,448,37 0
The other non-distributable reserve arose in the year ended 31March 2015 following the placing of 14.35million ordinary shares.
The issue of share capital is net of expenses.
Year ended 31March 2023
ShareOther non-Capital
Sharepremiumdistributable redemption RetainedOwn
capitalaccountreservereserveearningssharesTotal
£000£000£000£000£000£000£000
At 1 April 2022
18, 3 97
28 9,92 3
74,950
1, 795
1,800,3 29
(1,0 1 9)
2 , 184 , 375
Total comprehensive income for the year
–
–
–
–
7 3,33 2
–
7 3,3 3 2
Issue of share capital
30
934
–
–
–
–
9 64
Dividend
–
–
–
–
(7 9,960)
–
(79,960)
Credit to equity for equity-settled
share-based payments
–
–
–
–
3 ,735
–
3 , 735
At 31March 2023
18 ,4 27
29 0,8 5 7
7 4,950
1 ,79 5
1 , 7 9 7, 4 3 6
(1,0 1 9)
2, 1 8 2,446
The accompanying notes on pages 142 to 182 form part of the financial statements.
Annual Report and Accounts 2024 Big Yellow Group PLC140
Consolidated Cash Flow Statement
Year ended 31March 2024
20242023
Note£000£000
Cash generated from operations
26
129,826
12 8 , 9 73
Bank interest paid
(24,069)
(1 6,48 6)
Interest on obligations under lease liabilities
(5 7 5)
(706)
Interest received
45
8
Loss of income insurance proceeds
1,56 1
2,03 2
Tax paid
(1,996)
(1 ,844)
Cash flows from operating activities
1 04,7 92
111 , 97 7
Investing activities
Purchase of non-current assets
(30,91 0)
(1 06,4 1 3)
Disposal of non-current asset
5,400
–
Insurance proceeds on fit-out
4,7 22
–
Receipts from Capital Goods Scheme
–
182
Cash flows from investing activities
(2 0,7 88)
(1 06,2 3 1)
Financing activities
Issue of share capital
1 08,022
9 64
Payment of lease liabilities
(1,829)
(1,2 6 7)
Equity dividends paid
(85,2 59)
(7 9, 1 40)
Receipt from termination of interest rate derivatives
–
436
Loan arrangement fees paid
(3,7 52)
(1,50 7)
(Decrease)/increase in borrowings
26b
(1 0 0,1 59)
74 , 4 9 2
Cash flows used in financing activities
(82,9 77)
(6,0 22)
Net increase/(decrease) in cash and cash equivalents
1, 027
(2 7 6)
Opening cash and cash equivalents
8, 32 9
8, 605
Closing cash and cash equivalents
9,3 56
8 , 329
The accompanying notes on pages 142 to 182 form part of the financial statements.
Annual Report and Accounts 2024 Big Yellow Group PLC 141
Strategic Report Governance Report Financial Statements
1. General information
Big Yellow Group PLC is a Company incorporated in the United Kingdom under the Companies Act 2006, with registration number 03625199,
and limited by shares. The address of the registered office is 2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT. The nature of the Group’s
operations and its principal activities are set out in note 4 and in the Strategic Report on pages 16 to 30.
2. Significant accounting policies
Basis of preparation of financial statements
The Group financial statements have been prepared in accordance with UK-adopted international accounting standards.
The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”).
The financial statements are presented in Sterling, being the currency of the primary economic environment in which the Group operates.
Unless otherwise stated, figures are rounded to the nearest thousand.
The accounting policies adopted are consistent with those of the previous financial year.
New and revised IFRSs adopted in year
The Group has applied the following new and revised IFRSs during the year:
IFRS 17 – Insurance Contracts
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2
Definition of Accounting Estimate – Amendments to IAS 8
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
The impact of these standards has not been material on the financial statements of the Group.
New and revised IFRSs in issue but not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following new and revised IFRSs that have been issued
but are not yet effective:
Non-current Liabilities with Covenants – Amendments to IAS 1
Classification of Liabilities as Current or Non-Current – Amendments to IAS 1
Lease Liability in a Sale and Leaseback – Amendments to IFRS 16
Sale of Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)
The Directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group
in future periods.
There are no other Standards or Interpretations yet to be effective that would be expected to have a material impact on the financial statements
of the Group.
Notes to the Financial Statements
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC142
2. Significant accounting policies continued
Basis of accounting
The financial statements have been prepared on the historical cost basis, except for the revaluation of investment properties and derivative
financial instruments. Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal
accounting policies adopted, which have been applied consistently to the results, other gains and losses, assets, liabilities, and cash flows
of entities included in the consolidated financial statements in the current and preceding year, are set out below:
Going concern
A review of the Group’s business activities, together with the factors likely to affect its future development, performance and position are set
out in the Strategic Report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are shown in the balance
sheet, cash flow statement and accompanying notes to the financial statements. Further information concerning the Group’s objectives, policies,
and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and
its exposures to credit risk and liquidity risk can be found in this Report and in the notes to the financial statements.
At 31 March 2024 the Group had available liquidity of approximately £190 million, from a combination of cash and undrawn bank debt facilities.
The Group additionally has a $225 million credit approved shelf facility with Pricoa Private Capital to be drawn in fixed sterling notes. The Group
can draw the debt in minimum tranches of £10 million over the next two and half years with terms of between 7 and 15 years at short notice,
typically 10 days. The Group is cash generative and for the year ended 31 March 2024, had operational cash flow of £110.1 million, with capital
commitments at the balance sheet date of £3.9 million.
The Directors have prepared cash flow forecasts for a period of 18 months from the date of approval of these financial statements, taking into
account the Group’s operating plan and budget for the year ending 31 March 2025 and projections contained in the longer-term business plan
which cover the 18 month going concern assessment period. After reviewing these projected cash flows together with the Group’s and Company’s
cash balances, borrowing facilities and covenant requirements, and potential property valuation movements over that period, the Directors
believe that, taking account of severe but plausible downsides, the Group and Company will have sufficient funds to meet their liabilities as they
fall due for that period.
In making their assessment, the Directors have carefully considered the outlook for the Group’s trading performance and cash flows as a
result of the current economic environment, taking into account the trading performance of the Group over the recent dislocations in the global
economy from Covid-19 and the Russian invasion of Ukraine. The Directors have also considered the performance of the business during the
Global Financial Crisis. The Directors modelled several different scenarios, including material reductions in the Group’s occupancy rates and
property valuations, and assessed the impact of these scenarios against the Group’s liquidity and the Group’s banking covenants. The scenarios
considered did not lead to breaching any of the banking covenants, and the Group retained sufficient liquidity to meet its financial obligations as
they fall due.
Consequently, the Directors continue to adopt the going concern basis in preparing the Group and Company financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to
31 March each year. Control is achieved where the Company has the power to direct the relevant activities of an investee entity so as to obtain
benefits from its activities.
The Group consolidates the financial results and balance sheets of Big Yellow Group PLC and all of its subsidiaries at the year-end using
acquisition accounting principles. All intra-group transactions, balances, income, and expenses are eliminated on consolidation. Where
necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by
the Group. The results of subsidiaries acquired or disposed of during the year are included in the statement of comprehensive income from the
effective date of acquisition or up to the effective date of disposal, as appropriate.
The acquisition of subsidiaries is accounted for using the acquisition method. The cost of the acquisition is measured at the aggregate of the
fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for
control of the acquiree. Any costs directly attributable to the business combination are recognised in the statement of comprehensive income.
The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their
fair value at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5
Non-Current Assets Held for Sale and Discontinued Operations, which are recognised and measured at the lower of their carrying amount and fair
value less costs to sell (excluding investment property which is measured at fair value).
Annual Report and Accounts 2024 Big Yellow Group PLC 143
Strategic Report Governance Report Financial Statements
2. Significant accounting policies continued
Intangible assets
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at their
acquisition date (which is typically regarded as their cost). Subsequent to their initial recognition, intangible assets with indefinite useful lives
are carried at cost less accumulated impairment losses. Intangible assets with finite useful lives that are acquired separately are carried at cost
less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight line basis over their estimated
useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period with the effect of any changes
in estimate being accounted for on a prospective basis.
Revenue recognition
Revenue represents amounts derived from the provision of services which fall within the Group’s ordinary activities after deduction of trade
discounts and any applicable value added tax. Self storage income is recognised over the period for which the storage room is occupied by the
customer on a straight-line basis. Any future revenue is recognised as deferred income at the balance sheet date. The opening offer discount
of 50% off for up to 8 weeks is spread evenly over the term of the discount period.
Other storage related income comprises:
– packing material sales are recognised at the point of sale, as there is no further ongoing performance obligation beyond the point of sale; and
– enhanced liability service income (previously insurance income) which is recognised on a straight-line basis over the period a customer
occupies their room. The Group recognises ELS income as a principal, as the ELS contract is between the Group and the customer.
Under the Group’s ELS policy, routine customer claims (with an individual customer limit of £100,000) under the policy are settled by the Group
directly, but in the event of a major loss, the Group has third party insurance in place which will pay the aggregate customer claims to the extent
that they exceed £250,000.
The Group recognises non-storage income, which is principally rental income from tenants of properties awaiting development, on a straight-line
basis over the period in which it is earned.
Borrowings
Interest-bearing loans and overdrafts are initially measured at fair value, net of direct issue costs. Premiums payable on settlement or
redemption and direct issue costs are accounted for on an accruals basis in the statement of comprehensive income using the effective interest
rate method and are added to the carrying value amount of the instrument to the extent that they are not settled in the period in which they arise.
Borrowings are subsequently held at amortised cost.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC144
2. Significant accounting policies continued
Finance costs and income
All borrowing costs are recognised in the statement of comprehensive income in the period in which they are incurred, unless the costs are
incurred as part of the development of a qualifying asset, when they will be capitalised. Commencement of capitalisation is the date when the
Group incurs expenditure for the qualifying asset, incurs borrowing costs and undertakes activities that are necessary to prepare the assets for
their intended use when it is probable that they will result in future economic benefits to the entity and the costs can be measured reliably. In the
case of suspension of activities during extended periods, the Group suspends capitalisation. The Group ceases capitalisation of borrowing costs
when substantially all of the activities necessary to prepare the asset for use are complete, typically when a store opens.
Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.
The Group classifies finance costs and income as operating cash flow in the cash flow statement.
Debt modification
A change in debt carried at amortised cost that is considered substantial is accounted for as an extinguishment, which means that the original
debt is derecognised, with any gain or loss recorded in the statement of comprehensive income, and a new financial liability recorded based
on the new terms. If the change is not considered to be substantial (substantial is defined as a change in the net present value of the cash
flows of more than 10%), the original debt remains on the books and any modification gain or loss arising will be recognised in the statement of
comprehensive income.
Operating profit
Operating profit is stated after gains and losses on surplus land, movements on the revaluation of investment properties and before the share of
results of associates, investment income and finance costs.
Taxation
The Group is a REIT and as a result the Group does not pay UK corporation tax on the profits and gains from its qualifying rental business in the UK
provided that it meets certain conditions. Non-qualifying profits and gains of the Group are subject to corporation tax as normal. The tax expense
represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from the net profit as reported in the statement of
comprehensive income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items
that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively
enacted by the balance sheet date.
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit and is accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for taxable temporary differences and deferred tax assets are recognised to the extent
that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other
assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates except where
the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates substantively enacted at the balance sheet date that are expected to apply in the period when the
liability is settled, or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates
to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities,
and when the deferred tax assets and liabilities have been levied by the same taxation authority on either the same taxable entity or different
taxable entities which intend either to settle current tax liabilities on a net basis or to realise the assets and settle the liabilities simultaneously
in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.
Annual Report and Accounts 2024 Big Yellow Group PLC 145
Strategic Report Governance Report Financial Statements
2. Significant accounting policies continued
Leases
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at
cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, less
any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the
useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same
basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted
for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using
the interest rate implicit in the lease, or if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group
uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the following:
– fixed payments, including in-substance fixed payments;
– variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
– amounts expected to be payable under a residual value guarantee; and
– the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if
the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably
certain not to terminate early.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease
payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a
residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension, or termination option.
Where the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
Alternative Performance Measures (APMs)
The Group uses a number of APMs to monitor the performance of the business. Adjusted profit before tax and adjusted earnings per share are
the Group’s primary profit measures and reflect underlying profit by excluding capital and non-recurring items such as revaluation movements,
gains or losses on the disposal of properties and the fair value movement of interest derivatives in accordance with EPRA guidelines. In addition,
the Group adjusts for items such as refinancing costs and insurance proceeds on the fit-out of stores.
These adjusted measures should not be considered in isolation from, or as substitutes for, or superior to the financial measures prepared in
accordance with IFRS.
Plant, equipment, and owner-occupied property
All property, plant, and equipment, not classified as investment property, is carried at historic cost less depreciation and any recognised
impairment loss.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and investment properties, less any residual value
over their estimated useful lives, using the straight-line method, on the following bases:
Freehold property 50 years
Leasehold improvements over period of the lease
Plant and machinery 10 years
Motor vehicles 4 years
Fixtures and fittings 5 years
Computer equipment 3 to 5 years
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC146
2. Significant accounting policies continued
The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in the statement of comprehensive income.
Investment property
The criteria used to distinguish investment property from owner-occupied property is to consider whether the property is held for rental income
and/or for capital appreciation. Where this is the case, the Group recognises these owned or leased properties as investment properties.
Investment property is initially recognised at cost and revalued at the balance sheet date to fair value as determined by professionally qualified
external valuers. In accordance with IAS 40, investment property held as a leasehold is stated gross of the recognised right-of-use liability.
Gains or losses arising from the changes in fair value of investment property are included in the statement of comprehensive income for the
period in which they arise. In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment
properties including integral plant.
Leasehold properties are classified as investment properties and included in the balance sheet at fair value. The obligation to the lessor for the
buildings element of the leasehold is included in the balance sheet at the present value of the minimum lease payments at inception and is shown
within note 21. Note 21 does also include leases which are not classified as investment properties.
When the Group redevelops an existing investment property for continued future use as investment property, the property remains an
investment property measured at fair value and is not reclassified.
Investment property under construction
Investment property under construction is initially recognised at cost and revalued at the balance sheet date to fair value as determined by
professionally qualified external valuers.
Gains or losses arising from the changes in fair value of investment property under construction are included in the statement of comprehensive
income in the period in which they arise.
Impairment of assets
At each balance sheet date, the Group reviews the carrying amounts of its assets (excluding investment property and derivative financial
instruments which are carried at fair value) to determine whether there is any indication that those assets have suffered an impairment loss.
If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
The recoverable amount is the higher of an asset’s net selling price and its value-in-use (i.e. the net present value of its future cash flows
discounted at the Group’s average pre-tax interest rate that reflects the borrowing costs and risk for the asset).
Inventories
Inventories, representing the cost of packing materials, are stated at the lower of cost and net realisable value.
Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual
provisions of the instrument. Financial assets at fair value through profit and loss (“FVTPL”) are stated at fair value, with any gains or losses
arising on re-measurement recognised in the statement of comprehensive income. The net gain or loss recognised in the statement of
comprehensive income incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains and losses’
line item in the statement of comprehensive income.
A – Derivative financial instruments
The Group’s activities expose it primarily to the financial risks of interest rates. The Group uses interest rate swap contracts to hedge these
exposures. The Group does not use derivative financial instruments for speculative purposes. The use of financial derivatives is governed by
the Group’s policies approved by the Board of Directors. The policy in respect of interest rates is to maintain a balance between flexibility and
the hedging of interest rate risk.
Derivatives are initially recognised at fair value and are subsequently reviewed at each balance sheet date. The fair value of interest rate
derivatives at the reporting date is determined by discounting the future cash flows using the forward curves at the reporting date and the
credit risk inherent in the contract.
Changes in the fair value of derivative financial instruments are recognised in the statement of comprehensive income as they arise. The Group
has not adopted hedge accounting.
Annual Report and Accounts 2024 Big Yellow Group PLC 147
Strategic Report Governance Report Financial Statements
2. Significant accounting policies continued
B – Financial assets
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities
are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value
plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant
financing component is initially measured at the transaction price.
On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment; or FVTPL.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing
financial assets in which case all affected financial assets are reclassified on the first day of the first reporting period following the change
in the business model.
A financial asset is measured at amortised cost if it meets both of the following conditions:
– it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
A debt investment is measured at FVOCI if it meets both of the following conditions:
– it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
– its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes
in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative
financial assets.
Subsequent measurement and gains and losses
Financial assets at FVTPL – these assets (other than derivatives designated as hedging instruments) are subsequently measured at fair value.
Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial assets at amortised cost – these assets are subsequently measured at amortised cost using the effective interest method. The
amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or
loss. Any gain or loss on derecognition is recognised in profit or loss.
Debt investments at FVOCI – these assets are subsequently measured at fair value. Interest income calculated using the effective interest
method, foreign exchange gains and losses and impairment are recognised in profit or loss. Other net gains and losses are recognised in OCI.
On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
Equity investments at FVOCI – these assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless
the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never
reclassified to profit or loss.
C – Impairment of financial assets
Loss allowances for trade receivables are always measured at an amount equal to lifetime expected credit losses (“ECLs”). When determining
whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Company
considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative
and qualitative information and analysis, based on the Company’s historical experience and informed credit assessment and including forward-
looking information. The Company considers a financial asset to be in default when the borrower is unlikely to pay its credit obligations to the
Company in full.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC148
2. Significant accounting policies continued
Measurement of ECLs
ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Company expects to receive).
ECLs are discounted at the effective interest rate of the financial asset.
Write-offs
The gross carrying amount of a financial asset is written off (either partially or in full) to the extent that there is no realistic prospect of recovery.
D – Cash and cash equivalents
Cash and cash equivalents comprises cash on hand and demand deposits, and other short-term highly liquid investments that are readily
convertible to a known amount of cash and are subject to an insignificant risk of changes in value. The carrying amounts of these assets
approximate to the fair value.
E – Financial liabilities and equity
Financial instruments issued by the Company are treated as equity only to the extent that they meet the following two conditions:
a. they include no contractual obligations upon the Company to deliver cash or other financial assets or to exchange financial assets or financial
liabilities with another party under conditions that are potentially unfavourable to the Company; and
b. where the instrument will or may be settled in the Company’s own equity instruments, it is either a non-derivative that includes no obligation
to deliver a variable number of the Company’s own equity instruments or is a derivative that will be settled by the Company exchanging a
fixed amount of cash or other financial assets for a fixed number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so classified takes
the legal form of the Company’s own shares, the amounts presented in these financial statements for called up share capital and share premium
account exclude amounts in relation to those shares.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-
trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and
losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost
using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on
derecognition is also recognised in profit or loss.
Retirement benefit costs
Pension costs represent contributions payable to defined contribution schemes and are charged as an expense to the statement of
comprehensive income as they fall due. The assets of the schemes are held separately from those of the Group.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. These are measured at fair value at the date of grant. The fair
value determined at the grant date of the share-based payment is expensed on a straight-line basis over the vesting period, based on the Group’s
estimate of shares that will eventually vest.
Fair value is measured by use of the Black-Scholes model and excludes the effect of non-market-based vesting conditions. The expected life used in
the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of
the effect of non-market-based vesting conditions. The impact of the revision of the original estimates, if any, is recovered in the statement of
comprehensive income such that the cumulative expense reflects the revised estimate with a corresponding adjustment to equity reserves.
For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the
liability. At each balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is re-measured, with
any changes in fair value recognised in the statement of comprehensive income for the year.
Annual Report and Accounts 2024 Big Yellow Group PLC 149
Strategic Report Governance Report Financial Statements
2. Significant accounting policies continued
Climate change
In preparing the financial statements, the Directors have considered the impact of climate change, particularly in the context of the climate
change risks identified in the Sustainability section of the Strategic Report and the Group’s stated target of net zero carbon emissions by 2032.
These considerations did not have a material impact on the financial reporting judgements and estimates in the current year. This reflects the
conclusion that climate change is not expected to have a significant impact on the Group’s short-term or medium-term cash flows including
those considered in the going concern and viability assessments, the valuation of the Group’s investment property portfolio, the carrying value
of non-current assets and the estimates of future profitability used in our assessment of the recoverability of deferred tax assets.
Critical accounting estimates and judgements
In the application of the Group’s accounting policies, which are described above, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both
current and future periods.
Estimate of fair value of Investment Properties and Investment Property under Construction
(critical accounting estimate)
The Group’s self storage centres and stores under development are valued using a discounted cash flow methodology which is based on
projections of net operating income. The Group employs expert external valuers, JLL, who report on the values of the Group’s stores on an annual
basis. The principal assumptions underlying the estimation of the fair value are those related to: stabilised occupancy levels; expected future
growth in storage rents; capitalisation rates; and discount rates. For investment property under construction, the Group estimates the total
costs to complete the construction of each store based on its latest assessment of costs for each development, which is based off the most
recent market evidence the Group obtains from tender returns and discussion with key suppliers. JLL also consider climate change in their
valuations, and the impacts that this could have on each of the Group’s investment properties. A more detailed explanation of the background
and methodology adopted in the valuation of the Group’s investment properties is set out in note 15 to the financial statements.
3. Revenue
Analysis of the Group’s operating revenue can be found below and in the Portfolio Summary on page 31.
2024 2023
£000 £000
Open stores
Self storage income
173,147
162,911
Insurance income
–
3,047
Enhanced liability service income
17,64
9
14,272
Packing materials income
2,854
3,286
Other income from storage customers
2,051
2,010
Ancillary store rental income
1,411
1,213
19 7,112
186,739
Other revenue
Non-storage income
2,507
2,090
Total revenue
199,619
188,829
Please see the commentary in the Financial Review on page 38 on insurance income and enhanced liability service income.
Non-storage income derives principally from rental income earned from tenants of properties awaiting development.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC150
3. Revenue continued
The Group has also earned other income of £6.5 million in the year (2023: £2.2 million). £1.8 million relates to insurance proceeds for loss of
income following the destruction of the Group’s Cheadle store by fire in 2022 (2023: £1.4 million). The balance of £4.7 million in the current year
is the insurance proceeds for the fit-out of the Cheadle store.
The prior year amount also included £0.6 million relating to insurance proceeds for loss of income following a fire at the Group’s Fulham store wine
storage area in 2021 and £0.2 million following the extinguishment of the right-of-use asset and liability following the acquisition of the freehold
of our Oxford store.
4. Segmental information
IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by
the Chief Executive to allocate resources to the segments and to assess their performance. Given the nature of the Group’s business, there is one
segment, which is the provision of self storage and related services.
Revenue represents amounts derived from the provision of self storage and related services which fall within the Group's ordinary activities after
deduction of trade discounts and value added tax. The Group’s non-current assets, revenue and profit before tax are attributable to one activity,
the provision of self storage and related services. These all arise in the United Kingdom in the current year and prior year.
5. Profit for the year
a) Profit for the year has been arrived at after charging/(crediting):
2024 2023
Note £000 £000
Depreciation of plant, equipment, and owner-occupied property
14b
864
888
Depreciation of interest in leasehold properties
1,707
1,542
(Gain)/loss on the revaluation of investment property
(131,159)
29,861
Cost of inventories recognised as an expense
1,411
1,643
Employee costs
6
25,250
24,709
b) Analysis of auditor’s remuneration:
2024 2023
£000 £000
Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
539
487
Fess payable to the Company’s auditor for the subsidiaries’ annual accounts
54
50
Total audit fees
593
537
Audit related assurance services – interim review
64
60
Total non-audit fees
64
60
Total audit and non-audit fees paid to KPMG LLP
657
597
Annual Report and Accounts 2024 Big Yellow Group PLC 151
Strategic Report Governance Report Financial Statements
6. Employee costs
The average monthly number of full-time equivalent employees (including Executive Directors) was:
2024 2023
Number Number
Sales
402
403
Administration
62
62
464
465
At 31 March 2024 the total number of Group employees was 503 (2023: 515).
2024 2023
£000 £000
Their aggregate remuneration comprised:
Wages and salaries
18,647
17, 475
Social security costs
1,692
2,759
Other pension costs
829
740
Share-based payments
4,082
3,735
25,250
24,709
Details of Directors’ Remuneration is given on pages 96 to 119. The Directors and the Director of our trading subsidiaries are the employees
assessed as key management personnel.
7. Investment income
2024 2023
£000 £000
Bank interest receivable
45
8
Unwinding of discount on Capital Goods Scheme receivable
–
1
Total investment income
45
9
8. Finance costs
2024 2023
£000 £000
Interest on bank borrowings
25,624
18,156
Capitalised interest
(3,254)
(2,761)
Interest on obligations under lease liabilities
575
706
Other interest payable
1
61
Loan refinancing costs
–
732
Total interest payable
22,946
16,894
Fair value movement on derivatives
2,146
133
Total finance costs
25,092
17, 0 27
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC152
9. Taxation
As a REIT, the Group does not pay UK corporation tax on the profits and gains from its qualifying rental business in the UK provided that it meets
certain conditions. Non-qualifying profits and gains of the Group are subject to corporation tax as normal. The Group monitors its compliance with
the REIT conditions. There have been no breaches of the conditions to date.
The main rate of corporation tax has increased to 25% from 1 April 2023.
UK current tax
2024 2023
£000 £000
•
Current year
2,270
2,296
•
Prior year
(1,068)
(319)
1,202
1,977
A reconciliation of the tax charge is shown below:
2024 2023
£000 £000
Profit before tax
241,035
75,309
Tax charge at 25% (2023 – 19%) thereon
60,259
14,309
Effects of:
Revaluation of investment properties
(32,790)
5,674
Other permanent differences
111
626
Utilisation of brought forward losses
(284)
(76)
Profits from the tax-exempt business
(25,026)
(18,237)
Current year tax charge
2,270
2,296
Prior year adjustment
(1,068)
(319)
Total tax charge
1,202
1,977
The prior year adjustment arose due to prudent assumptions made during the assessment of the corporation tax provision for the prior year
accounts. On completion of the tax computations for the year, the actual charge for the year ended 31 March 2023 was £1.1 million lower than
had been provided in the accounts (2023: £0.3 million lower).
At 31 March 2024 the Group has unutilised tax losses from the non-REIT taxable business of £33.1 million (2023: £33.8 million) available for
offset against certain types of future taxable profits. All losses can be carried forward indefinitely.
10. Adjusted profit
2024 2023
£000 £000
Profit before tax
241,035
75,309
(Gain)/loss on revaluation of investment properties
(131,159)
29,861
Change in fair value of interest rate derivatives
2,146
133
EPRA adjusted profit before tax
112,022
105,303
Cheadle fit-out insurance proceeds
(4,723)
–
Refinancing fees
–
732
Adjusted profit before tax
107,299
106,035
Tax
(1,202)
(1,977)
Adjusted profit after tax
106,097
104,058
Adjusted profit before tax which excludes gains and losses on the revaluation of investment properties, changes in fair value of interest rate
derivatives, refinancing fees, fit-out insurance proceeds receipts, and net gains and losses on disposal of investment property has been
disclosed to give readers a clear picture of the underlying performance of the business.
Annual Report and Accounts 2024 Big Yellow Group PLC 153
Strategic Report Governance Report Financial Statements
11. Dividends
2024 2023
£000 £000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 March 2023 of 22.9p (2022: 2 1.4p) per share.
41,939
39,136
Interim dividend for the year ended 31 March 2024 of 22.6p (2023: 22.3p) per share.
44,074
40,824
86,013
79,960
Proposed final dividend for the year ended 31 March 2024 of 22.6p (2023: 22.9p) per share.
44,104
41,939
Subject to approval by shareholders at the Annual General Meeting to be held on 18 July 2024, the final dividend will be paid on 26 July 2024.
The ex-div date is 4 July 2024 and the record date is 5 July 2024.
The Property Income Distribution (“PID”) payable for the year is 45.2 pence per share (2023: 45.2 pence per share).
12. Earnings per share
Year ended 31 March 2024
Year ended 31 March 2023
Pence Pence
Earnings Shares per share Earnings Shares per share
£m £m £m £m £m £m
Basic
239.8
188.7
127. 1
73.3
183.0
40.1
Dilutive share options
–
1.1
(0.7)
–
1.1
(0.3)
Diluted
239.8
189.8
126.4
73.3
184.1
39.8
Adjustments:
(Gain)/loss on revaluation of investment properties
(131.2)
–
(69.1)
30.0
–
16.2
Change in fair value of interest rate derivatives
2.2
–
1.1
0.1
–
0.1
EPRA earnings
110.8
189.8
58.4
103.4
184.1
56.1
Cheadle fit-out insurance proceeds
(4.7)
–
(2.5)
–
–
–
Refinancing fees
–
–
–
0.7
–
0.4
Adjusted – diluted
106.1
189.8
55.9
104.1
184.1
56.5
Adjusted – basic
106.1
188.7
56.2
104.1
183.0
56.9
The calculation of basic earnings is based on profit after tax for the year. The weighted average number of shares used to calculate diluted
earnings per share has been adjusted for the conversion of share options.
13. Net assets per share
EPRA’s Best Practices Recommendations guidelines for Net Asset Value (NAV) metrics are EPRA Net Tangible Assets (NTA), EPRA Net
Reinstatement Value (NRV) and EPRA Net Disposal Value (NDV).
EPRA NTA is considered to be most consistent with the nature of Big Yellow’s business which provides sustainable long-term progressive returns.
EPRA NTA is shown in the table below. This measure is further adjusted by the adjustment the Group makes for purchaser’s costs, which is the
Group’s Adjusted Net Asset Value (or Adjusted NAV).
Net assets per share are equity shareholders’ funds divided by the number of shares at the year end. The shares currently held in the Group’s
Employee Benefit Trust are excluded from both net assets and the number of shares. Adjusted net assets per share include the effect of those
shares issuable under employee share option schemes and the effect of alternative valuation methodology assumptions (see note 15).
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC154
13. Net assets per share continued
Year ended 31 March 2024
Year ended 31 March 2023
Equity Equity
attributable attributable
to ordinary Pence to ordinary Pence
shareholders Shares per share shareholders Shares per share
£000 £000 £000 £000 £000 £000
Basic NAV
2,448,370
195,096,601
1,255.0
2,182,446
183,143,066
1,191.7
Share and save as you earn schemes
2,019
2,515,556
(15.0)
1,909
1,705,121
(10.0)
Diluted NAV
2,450,389
197,612,157
1,240.0
2,184,355
184,848,187
1,181.7
Fair value of derivatives
1,830
–
0.9
(316)
–
(0.2)
Intangible assets
(1,433)
–
(0.7)
(1,433)
–
(0.7)
EPRA NTA
2,450,786
197,612,157
1,240.2
2,182,606
184,848,187
1,180.8
Valuation methodology assumption (see note 15) (£000)
111,095
–
56.2
104,605
–
56.5
Adjusted NAV
2,561,881
197,612,157
1,296.4
2,287,211
184,848,187
1,237.3
14. Non-current assets
a) Investment property, investment property under construction and right-of-use assets
Investment
Investment property under Right-of-use
property construction assets Total
£000 £000 £000 £000
At 31 March 2022
2,342,199
285,400
19 ,174
2,646,773
Additions
40,559
72,063
2,034
114,656
Transfer on opening
39,288
(39,288)
–
–
Acquisition of Oxford freehold
–
–
(1,597)
(1,597)
Revaluation (see note 15)
27, 59 4
(57,455)
–
(29,861)
Depreciation
–
–
(1,463)
(1,463)
At 31 March 2023
2,449,640
260,720
18,148
2,728,508
Additions
13,705
15,126
604
29,435
Transfer on opening
115,166
(115,166)
–
–
Reclassification from plant, equipment and owner-occupied property
–
60
–
60
Disposal
(5,400)
–
–
(5,400)
Revaluation (see note 15)
145,414
(14,255)
–
131,159
Depreciation
–
–
(1,600)
(1,600)
At 31 March 2024
2,718,525
146,485
17,1
5 2
2,882,162
The right-of-use assets represent the present value of minimum lease payments for leasehold properties that meet the definition of IAS 40
and are accounted for as investment properties – see note 21 for further details of the obligations under lease liabilities. The fair value of
the leasehold properties (including long leaseholds), on which the Group pays rent, of £78.4 million (2023: £74.6 million) is included within
the investment property total.
The credit to right-of-use assets in the prior year of £1.6 million is due to the acquisition of the freehold of our Oxford store, and hence the
extinguishment of the lease liability and associated right-of-use asset.
The transfer on opening during the year is the Kings Cross store and the Harrow Industrial Estate moving from investment property under
construction to investment property at valuation on completion of the developments.
The disposal in the year is the proceeds from a land swap transaction at our Kings Cross store realising the Group £5.4 million.
Annual Report and Accounts 2024 Big Yellow Group PLC 155
Strategic Report Governance Report Financial Statements
14. Non-current assets continued
The income from self storage accommodation earned by the Group from its investment property is disclosed in note 3. Direct operating
expenses, which are all applied to generating rental income, arising on the investment property in the year are disclosed in the Portfolio
Summary on page 31. Included within additions is £3.3 million of capitalised interest (2023: £2.8 million), calculated at the Group’s
average borrowing cost for the year of 5.5%. 97 of the Group’s investment properties are pledged as security for loans, with a total
external value of £2.35 billion.
b) Plant, equipment, and owner-occupied property
Fixtures,
Freehold Leasehold Plant and Motor fittings & office Right-of-use
property improvements machinery vehicles equipment assets Total
£000 £000 £000 £000 £000 £000 £000
Cost
At 31 March 2022
2,290
59
447
32
1,640
872
5,340
Retirement of fully depreciated assets
–
–
(83)
–
(687)
–
(770)
Additions
116
–
283
–
738
3
1,140
At 31 March 2023
2,406
59
647
32
1,691
875
5 ,710
Reclassification to investment property
under construction
(60)
–
–
–
–
–
(60)
Retirement of fully depreciated assets
–
–
(133)
–
(686)
–
(819)
Additions
23
–
255
–
516
131
925
At 31 March 2024
2,369
59
769
32
1,521
1,006
5,756
Depreciation
At 31 March 2022
(636)
(16)
(135)
(32)
(347)
(317)
(1,483)
Retirement of fully depreciated assets
–
–
83
–
687
–
770
Charge for the year
(46)
(4)
(158)
–
(680)
(106)
(994)
At 31 March 2023
(682)
(20)
(210)
(32)
(340)
(423)
(1,707)
Retirement of fully depreciated assets
–
–
133
–
686
–
819
Charge for the year
(50)
(4)
(181)
–
(629)
(134)
(998)
At 31 March 2024
(732)
(24)
(258)
(32)
(283)
(557)
(1,886)
Net book value
At 31 March 2024
1,637
35
511
–
1,238
449
3,870
At 31 March 2023
1,724
39
437
–
1,351
452
4,003
c) Intangible assets
The intangible asset relates to the Big Yellow brand, which was acquired through the acquisition of Big Yellow Self Storage Company Limited
in 1999. The carrying value remains unchanged from the prior year as there is considered to be no impairment in the value of the asset.
The asset has an indefinite life and is tested annually for impairment or more frequently if there are indicators of impairment.
d) Investment
The Group has a £0.6 million investment in Doncaster Security Operations Centre Limited, a company which provides out-of-hours monitoring
and alarm receiving services, including for the Group’s stores. The investment is carried at cost and tested annually for impairment.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC156
15. Valuation of investment property
Revaluation on
Deemed cost deemed cost Valuation
£000 £000 £000
Freehold (including long leasehold)
At 31 March 2023
97 7, 874
1,440,741
2,418,615
Transfer from investment property under construction
92,200
22,966
115,166
Disposals
(5,400)
–
(5,400)
Movement in year
13,631
144,338
157, 9 69
At 31 March 2024
1,078,305
1,608,045
2,686,350
Leasehold
At 31 March 2023
20,824
10,201
31,025
Movement in year
74
1,076
1,150
At 31 March 2024
20,898
11,277
32,175
Total investment property
At 31 March 2023
998,698
1,450,942
2,449,640
Transfer from investment property under construction
92,200
22,966
115,166
Disposals
(5,400)
–
(5,400)
Movement in year
13,705
145,414
159,119
At 31 March 2024
1,099,203
1,619,322
2,718,525
Investment property under construction
At 31 March 2023
255,775
4,945
260,720
Transfer to investment property
(92,200)
(22,966)
(115,166)
Movement in year
15,186
(14,255)
931
At 31 March 2024
178,761
(32,276)
146,485
Valuation of all investment property
At 31 March 2023
1,254,473
1,455,887
2,710,360
Disposals
(5,400)
–
(5,400)
Movement in year
28,891
131,159
160,050
At 31 March 2024
1,277,964
1,587,046
2,865,010
The Group has classified the fair value investment property and the investment property under construction within Level 3 of the fair value
hierarchy. There has been no transfer to or from Level 3 in the year.
The Group’s freehold and leasehold investment properties have been valued at 31 March 2024 by external valuers, Jones Lang Lasalle (“JLL”).
The Valuation has been prepared in accordance with the version of the RICS Valuation – Global Standards (incorporating the International
Valuation Standards) and the UK national supplement (“the Red Book”) current as at the valuation date. The valuation of each of the investment
properties and the investment properties under construction has been prepared on the basis of either Fair Value or Fair Value as a fully equipped
operational entity, having regard to trading potential, as appropriate.
The valuation has been provided for financial reporting purposes and as such, is a Regulated Purpose Valuation as defined in the Red Book.
In compliance with the disclosure requirements of the Red Book, JLL have confirmed that:
– this is JLL’s third annual valuation for these purposes on behalf of the Group;
– JLL do not provide other significant professional or agency services to the Group;
– in relation to the preceding financial year of JLL, the proportion of the total fees payable by the Group to the total fee income of the firm is less
than 5%; and
– the fee payable to JLL is a fixed amount per asset and is not contingent on the appraised value.
Annual Report and Accounts 2024 Big Yellow Group PLC 157
Strategic Report Governance Report Financial Statements
15. Valuation of investment property continued
The self storage properties have been valued on the basis of Fair Value as fully equipped operational entities, having regard to trading potential.
Due to the specialised nature and use of the buildings the approach is to adopt a profits method of valuation in an explicit Discounted Cash Flow
calculation and then consider the results in the context of recent comparable evidence of transactions in the sector.
The profits method requires an estimate of the future cash flow that can be generated from the use of the building as a self storage facility,
assuming a reasonably efficient operator. Judgements are made as to the trading potential and likely long term sustainable occupancy. Stable
occupancy depends upon the nature of demand, size of property and nearby competition, and allows for a reasonable vacancy rate to enable the
operator to sell units to new customers. The cash flow runs for an explicit period of 10 years, after which it is capitalised at an all risks yield which
reflects the implicit future growth of the business, or a hypothetical sale. This is a valuer’s shortcut: maintaining the cash flow into perpetuity
would provide the same result. The comparison with recent transactions requires the evidence to be considered in terms of the multiple on net
operating profit (or EBITDA/EBITDAR), value per square foot, yield profile etc and then adjusted to reflect differences in location, building factors,
tenure, trading maturity and trading risk.
This mirrors the typical approach of purchasers in the self storage market. However, in view of the relatively limited availability of comparable
market evidence this requires a degree of valuer judgment. In particular, most of the transactions have comprised share sales due to the nature
of the asset class and the terms of those transactions have mostly been kept confidential between the parties.
Portfolio Premium
JLL’s valuation report confirms that the properties have been valued individually but that if the portfolio was to be sold as a single lot or in
selected groups of properties, the total value could differ. JLL state that in current market conditions they are of the view that there could be
a portfolio premium.
Assumptions
A. Net operating income is based on projected revenue received less projected operating costs, which include a management fee to take account
of central/head office costs. The initial net operating income is calculated by estimating the net operating income in the first 12 months
following the valuation date.
B. The net operating income in future years is calculated assuming either straight-line absorption from day one actual occupancy or variable
absorption over years one to five of the cash flow period, to an estimated stabilised/mature occupancy level. In the valuation the assumed
stabilised occupancy level for the 109 trading stores (both freeholds and leaseholds) open at 31 March 2024 averages 88% (31 March
2023: 88%). The projected revenues and costs have been adjusted for estimated cost inflation and revenue growth.
C. The future rental growth incorporated into the valuation averages 2.5% per annum (2023: 2.6% per annum).
D. The capitalisation rates applied to existing and future net cash flow have been estimated by reference to underlying yields for asset types such
as industrial, distribution and retail warehousing, yields for other trading property types such as student housing and hotels, bank base rates,
ten-year money rates, inflation and the available evidence of transactions in the sector. The valuation included in the accounts assumes rental
growth in future periods. The net initial yield for the 109 stores is 5.2% (31 March 2023: 5.3%). The weighted average exit capitalisation rate
adopted (for both freeholds and leaseholds) is 5.4% (31 March 2023: 5.6%).
E. The future net cash flow projections (including revenue growth and cost inflation) have been discounted at a rate that reflects the risk
associated with each asset. The weighted average annual discount rate adopted (for both freeholds and leaseholds) is 7.1%
(31 March 2023: 7.1%).
F. Purchaser’s costs of 6.8% have been adopted reflecting current progressive Stamp Duty Land Tax rates.
Short leasehold
The same methodology has been used as for freeholds, but the exit capitalisation rate is adjusted to reflect the unexpired lease term at exit.
The average unexpired term of the Group’s six short leasehold properties is 10.4 years (31 March 2023: 11.4 years unexpired).
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC158
15. Valuation of investment property continued
Sensitivities
As noted in ‘Significant judgements and key estimates’ on page 150, self storage valuations are complex, derived from data which is not widely
publicly available and involve a degree of judgement. For these reasons we have classified the valuations of our property portfolio as Level 3
as defined by IFRS 13. Inputs to the valuations, some of which are ‘unobservable’ as defined by IFRS 13, include capitalisation yields, stable
occupancy rates, and rental growth rates. The existence of an increase of more than one unobservable input would augment the impact on
valuation. The impact on the valuation would be mitigated by the inter-relationship between unobservable inputs moving in opposite directions.
For example, an increase in stable occupancy may be offset by an increase in yield, resulting in no net impact on the valuation. A sensitivity
analysis showing the impact on the investment property valuation of changes in yields and stable occupancy is shown below:
Impact of a change in Impact of a change in
capitalisation rates stabilised occupancy assumption
25 bps decrease
25 bps increase
1% increase
1% decrease
2024
4.8%
(4.4%)
0.9%
(1.0%)
2023
4.7%
(4.3%)
1.1%
(1.2%)
A sensitivity analysis has not been provided for a change in the rental growth rate adopted as there is a relationship between this measure and
the discount rate adopted. So, in theory, an increase in the rental growth rate would give rise to a corresponding increase in the discount rate and
the resulting value impact would be limited.
Investment properties under construction
JLL have valued the stores in development adopting the same methodology as set out above but on the basis of the cash flow projection
expected for the store at opening and after allowing for the outstanding costs to take each scheme from its current state to completion and full
fit-out. JLL have allowed for holding costs and construction contingency, as appropriate. Five of the schemes valued do not yet have planning
consent and JLL have reflected the planning risk in their valuation. The cost to complete for the investment property under construction amounts
to £214.4 million (2023: £217 million).
Valuation assumption for purchaser’s costs
The Group’s investment property assets have been valued for the purposes of the financial statements after deducting notional weighted
average purchaser’s cost of 6.8% on the net value, as if they were sold directly as property assets. The valuation is an asset valuation which
is entirely linked to the operating performance of the business. The assets would have to be sold with the benefit of operational contracts,
employment contracts and customer contracts, which would be very difficult to achieve except in a corporate structure. This approach follows
the logic of the valuation methodology in that the valuation is based on a capitalisation of the net operating income after allowing a deduction
for operational cost and an allowance for central administration costs. Sale in a corporate structure would result in a reduction in the assumed
Stamp Duty Land Tax but an increase in other transaction costs reflecting additional due diligence resulting in a reduced notional purchaser’s
cost of 2.75% of gross value. All the significant sized transactions that have been concluded in the UK in recent years were completed in a
corporate structure. The Group therefore instructed JLL to carry out an additional valuation on the above basis, and this results in a higher
property valuation at 31 March 2024 of £2,976.1 million (£111.1 million higher than the value recorded in the financial statements) translating
to 56.2 pence per share. We have included this revised valuation in the adjusted diluted net asset calculation (see note 13).
Annual Report and Accounts 2024 Big Yellow Group PLC 159
Strategic Report Governance Report Financial Statements
16. Trade and other receivables
31 March 2024 31 March 2023
£000 £000
Current
Trade receivables
6,250
5,181
Other receivables
312
209
Prepayments and accrued income
3,554
2,924
10,116
8,314
Trade receivables are net of a bad debt provision of £579,000 (2023: £1,070,000). The Directors consider that the carrying amount of trade and
other receivables approximates their fair value.
Trade receivables
The Group does not typically offer credit terms to its customers, requiring them to pay in advance of their storage period and hence the Group
is not exposed to significant credit risk. A late charge of 10% is applied to a customer’s account if they are more than 10 days overdue in their
payment. The Group provides for receivables on a specific basis. There is a right of lien over the customers’ goods, so if they have not paid within
a certain time frame, we have the right to sell the items they store to recoup the debt owed. Trade receivables that are overdue are provided for
based on estimated irrecoverable amounts determined by reference to past default experience.
For individual storage customers, the Group does not perform credit checks, however this is mitigated by the fact that these customers are
required to pay in advance, and also to pay a deposit ranging from one week to four weeks’ storage income. Before accepting a new business
customer who wishes to use a number of the Group’s stores, the Group uses an external credit rating to assess the potential customer’s credit
quality and defines credit limits by customer. There are no customers who represent more than 5% of the total balance of trade receivables.
Included in the Group’s trade receivables balance are debtors with a carrying amount of £782,000 (2023: £779,000) which are past due at
the reporting date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still
considered recoverable. The average age of these receivables is 18 days past due (2023: 16 days past due).
The creation and release of credit loss allowances have been included in cost of sales in the income statement.
The Group measures the loss allowance for the trade receivables at an amount equal to lifetime expected credit loss. The expected credit losses
on trade receivables are estimated using a provision matrix by reference to past default experience of the debtor. The Group has reviewed its
assessment of the ECL provision for debtors over 45 days in the year from 100% provision to 53% provision, reflecting the actual loss experience.
The Group writes off a trade receivable when there is information indicating that the debtors are in severe financial difficulty and there is no
realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC160
16. Trade and other receivables continued
The following table details the risk profile of trade receivables based on the Group’s provision matrix:
Year ended 31 March 2024
Not past due
<31 days
31-45 days
>45 days
Total
Expected credit loss rate (%)
0.3%
7.5%
25.4%
52.8%
8.5%
Gross carrying amount (£000)
4,963
892
63
911
6,829
Lifetime ECL (£000)
(15)
(67)
(16)
(481)
(579)
Net trade receivables at 31 March 2024
4,948
825
47
430
6,250
ear ended 31 March 2023
Not past due
<31 days
31-45 days
>45 days
Y
Total
Expected credit loss rate (%)
0.2%
16.2%
19.9%
100%
17.1 %
Gross carrying amount (£000)
4,413
850
84
904
6,251
Lifetime ECL (£000)
(11)
(138)
(17)
(904)
(1,070)
Net trade receivables at 31 March 2023
4,402
712
67
–
5,181
The above balances are short term and therefore the difference between the book value and the fair value is not significant. Consequently, these
have not been discounted.
Movement in the credit loss allowance
2024 2023
£000 £000
Balance at the beginning of the year
1,070
563
Amounts (released)/provided in year
(192)
826
Amounts written off as uncollectible
(299)
(319)
Balance at the end of the year
579
1,070
The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no
further credit provision required in excess of the credit loss allowance.
17. Trade and other payables
31 March 2024 31 March 2023
£000 £000
Current
Trade payables
2,437
4,208
Other payables
18,166
18,199
Accruals and deferred income
28,793
34,868
49,396
57, 275
The Group has financial risk management policies in place to ensure that all payables are paid within the credit terms. The Directors consider the
carrying amount of trade and other payables and accruals and deferred income approximates fair value. The main items within other payables are
VAT, customer deposits and withholding tax on the PID.
The Group invoices its customers in advance, and hence any deferred income balance primarily relates to amounts paid by customers for
rental periods beyond the balance sheet date. The Groups’ deferred income balance at 31 March 2024 was £17.7 million, an increase of 2%
from 31 March 2023 (£17.3 million).
Annual Report and Accounts 2024 Big Yellow Group PLC 161
Strategic Report Governance Report Financial Statements
18. Financial instruments
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the
borrowings disclosed in note 19, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital,
reserves and retained earnings.
With the exception of derivative instruments which are classified as a financial liability at fair value through the statement of comprehensive
income, financial liabilities are categorised under amortised cost. The Group has the following classes of financial assets:
– Trade and other receivables – trade receivables are initially recognised at transaction price. Other receivables are initially recognised at
fair value. Subsequently these assets are measured at amortised cost using the effective interest method, less provision for expected
credit losses.
– Cash and cash equivalents – cash and cash equivalents represent only liquid assets with maturity of 90 days or less. Bank overdrafts
that cannot be offset against other cash balances are shown with borrowings in current liabilities on the balance sheet. Cash and cash
equivalents are also classified as amortised cost. They are subsequently measured at amortised cost. Cash and cash equivalents include
cash in hand, deposits at call with banks, and other short term highly liquid investments with original maturities of three months or less.
Exposure to credit and interest rate risks arise in the normal course of the Group’s business. Derivative financial instruments are used to manage
exposure to fluctuations in interest rates but are not employed for speculative purposes.
A. Balance sheet management
The Group’s Board reviews the capital structure on an ongoing basis. As part of this review, the Board considers the cost of capital and the
risks associated with each class of capital. The Group seeks to have a conservative gearing ratio (the proportion of net debt to equity).
The Board considers at each review the appropriateness of the current ratio in light of the above. The Board is currently satisfied with the
Group’s gearing ratio.
The gearing ratio at the year-end is as follows:
2024 2023
£000 £000
Debt
(394,768)
(494,927)
Cash and cash equivalents
9,356
8,329
Net debt
(385,412)
(486,598)
Balance sheet equity
2,448,370
2,182,446
Net debt to equity ratio
15.7%
22.3%
B. Debt management
The Group currently borrows through a senior term loan, secured on 62 self storage assets, a loan with Aviva Commercial Finance Limited
secured on a portfolio of 20 self storage assets, a £120 million loan from M&G Investments Limited secured on a portfolio of 15 self
storage assets. The Group also has a $225 million shelf facility available from Pricoa Private Capital (see note 19). Borrowings are arranged
to ensure an appropriate maturity profile and to maintain short-term liquidity. Funding is arranged through banks and financial institutions
with whom the Group has a strong working relationship.
C. Interest rate risk management
The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed
by the Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts.
Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring optimal hedging strategies
are applied, by either positioning the balance sheet or protecting interest expense through different interest rate cycles.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC162
18. Financial instruments continued
At 31 March 2024 the Group had one interest rate derivative in place – £35 million fixed at 4.5% (excluding the margin on the underlying
debt instrument) until September 2029.
Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts
calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair
value of issued fixed rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps
at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent
in the contract and is disclosed below. The average interest rate is based on the outstanding balances at the end of the financial year.
The £35 million interest rate swap settles on a three-monthly basis. The floating rate on the interest rate swap is three month SONIA.
The Group settles the difference between the fixed and floating interest rate on a net basis.
The Group does not hedge account for its interest rate swaps and states them at fair value, with changes in fair value included in the
statement of comprehensive income. A reconciliation of the movement in derivatives is provided in the table below:
2024 2023
£000 £000
At 1 April
316
885
Receipt from cancellation of interest rate derivatives
–
(436)
Fair value movement in the year
(2,146)
(133)
At 31 March
(1,830)
316
The interest rate derivative liability is shown within non-current liabilities at the year end, as the interest rate derivative expires in 2029.
The tables below reconcile the opening and closing balances of the Group’s finance related liabilities for the current and prior year:
Financial
liabilities
Financial liabilities measured measured at
at amortised cost fair value
Obligations
under lease Interest rate
Loans liabilities derivatives Total
£000 £000 £000 £000
At 1 April 2023
(494,927)
(19,696)
316
(514,307)
Cash movement in the year
100,159
1,829
–
101,988
Lease variations
–
(860)
–
(860)
Fair value movement
–
–
(2,146)
(2,146)
At 31 March 2024
(394,768)
(18,727)
(1,830)
(415,325)
The difference between the loans balance above and the balance sheet is loan arrangement fees of £5,080,000.
Annual Report and Accounts 2024 Big Yellow Group PLC 163
Strategic Report Governance Report Financial Statements
18. Financial instruments continued
Financial
liabilities
Financial liabilities measured measured at
at amortised cost fair value
Obligations
under lease Interest rate
Loans liabilities derivatives Total
£000 £000 £000 £000
At 1 April 2022
(420,435)
(20,676)
885
(440,226)
Acquisition of Oxford freehold
–
1, 671
–
1,671
Cash movement in the year
(74,492)
1,267
(436)
(73,661)
Lease variations
–
(1,958)
–
(1,958)
Fair value movement
–
–
(133)
(133)
At 31 March 2023
(494,927)
(19,696)
316
(514,307)
The difference between the loans balance above and the balance sheet is loan arrangement fees of £2,357,000.
D. Interest rate sensitivity analysis
In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings, without
jeopardising its flexibility. Over the longer term, permanent changes in interest rates may have an impact on consolidated earnings.
At 31 March 2024, it is estimated that an increase of 0.25 percentage points in interest rates would have reduced the Group’s adjusted
profit before tax and net equity by £510,000 (2023: reduced adjusted profit before tax by £753,000) and a decrease of 0.25 percentage
points in interest rates would have increased the Group’s adjusted profit before tax and net equity by £510,000 (2023: increased adjusted
profit before tax by £753,000). The sensitivity has been calculated by applying the interest rate change to the variable rate borrowings,
net of interest rate swaps, at the year end.
The Group’s sensitivity to interest rates has reduced during the year, following the reduction in the amount of floating rate debt. The Board
monitors closely the exposure to the floating rate element of our debt.
E. Cash management and liquidity
Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity
risk management framework for the management of the Group’s short, medium, and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities
by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
Included in note 19 is a description of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.
Short term money market deposits are used to manage liquidity whilst maximising the rate of return on cash resources, giving due
consideration to risk.
F. Foreign currency management
The Group does not have any foreign currency exposure.
G. Credit risk
The credit risk management policies of the Group with respect to trade receivables are discussed in note 16. The Group has no
significant concentration of credit risk, with exposure spread over 73,000 occupied rooms in our stores.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international
credit-rating agencies.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC164
18. Financial instruments continued
H. Financial maturity analysis
In respect of interest-bearing financial liabilities, the following table provides a maturity analysis for individual elements.
Less than One to Two to More than
Total one year two years five years five years
2024
Maturity
£000 £000 £000 £000 £000
Debt
Aviva loan
155,768
3,317
3,483
148,968
–
M&G loan payable at variable rate
85,000
–
–
–
85,000
M&G loan fixed by interest rate derivatives
35,000
–
–
–
35,000
Bank loan payable at variable rate
119,000
–
–
119,000
–
Total
394,768
3,317
3,483
267,968
120,000
Less than One to Two to More than
Total one year two years five years five years
2023
Maturity
£000 £000 £000 £000 £000
Debt
Aviva loan
158,927
3,159
3,317
7, 451
145,000
M&G loan payable at variable rate
85,000
–
–
–
85,000
M&G loan fixed by interest rate derivatives
35,000
–
–
–
35,000
Bank loan payable at variable rate
216,000
–
216,000
–
–
Total
494,927
3,159
219,317
7, 451
265,000
I. Fair values of financial instruments
The fair values of the Group’s cash and short-term deposits and those of other financial assets equate to their book values. Details of the
Group’s receivables at amortised cost are set out in note 16. The amounts are presented net of provisions for doubtful receivables, and
allowances for impairment are made where appropriate. Trade and other payables, including bank borrowings, are carried at amortised cost.
Obligations under lease liabilities are included at the present value of their minimum lease payments. Derivatives are carried at fair value.
For those financial instruments held at valuation, the Group has categorised them into a three-level fair value hierarchy based on the
priority of the inputs to the valuation technique in accordance with IFRS 7. The hierarchy gives the highest priority to quoted prices in active
markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure
fair value fall within different levels of the hierarchy, the category level is based on the lowest priority level input that is significant
to the fair value measurement of the instrument in its entirety. The fair value of the Group’s outstanding interest rate derivatives, as
detailed in note 18C, have been estimated by calculating the present value of future cash flows, using appropriate market discount rates,
representing Level 2 fair value measurements as defined by IFRS 7. There are no financial instruments which have been categorised as
Level 1 or Level 3. The fair value of the Group’s debt equates to its book value.
Annual Report and Accounts 2024 Big Yellow Group PLC 165
Strategic Report Governance Report Financial Statements
18. Financial instruments continued
J. Maturity analysis of financial liabilities
The contractual maturities based on market conditions and expected yield curves prevailing at the year-end date are as follows:
Trade and Interest Borrowings Obligations under
other payables rate swaps and interest lease liabilities Total
2024 £000 £000 £000 £000 £000
From five to twenty years
–
(98)
124,225
20,784
144,911
From two to five years
–
(1,089)
309,503
3,247
311,661
From one to two years
–
(195)
30,000
2,279
32,084
Due after more than one year
–
(1,382)
463,728
26,310
488,656
Due within one year
20,603
106
24,520
2,279
47,508
Total
20,603
(1,276)
488,248
28,589
536,164
Trade and Interest Borrowings Obligations under
other payables rate swaps and interest lease liabilities Total
2023 £000 £000 £000 £000 £000
From five to twenty years
–
–
278,104
21,766
299,870
From two to five years
–
–
40,726
4,101
44,827
From one to two years
–
–
237,652
2,048
239,700
Due after more than one year
–
–
556,482
27, 915
584,397
Due within one year
22,407
(289)
26,566
2,048
50,732
Total
22,407
(289)
583,048
29,963
635,129
K. Reconciliation of maturity analyses
The maturity analysis in note 18J shows non-discounted cash flows for all financial liabilities including interest payments. The table below
reconciles the borrowings column in note 19 with the borrowings and interest column in the maturity analysis presented in note 18J.
Unamortised Borrowings
Borrowings Interest borrowing costs and interest
2024 £000 £000 £000 £000
From five to twenty years
120,000
3,673
552
124,225
From two to five years
267,968
37, 0 07
4,528
309,503
From one to two years
3,483
26,517
–
30,000
Due after more than one year
391,451
67,197
5,080
463,728
Due within one year
3,317
21,203
–
24,520
Total
394,768
88,400
5,080
488,248
Unamortised Borrowings
Borrowings Interest borrowing costs and interest
2023 £000 £000 £000 £000
From five to twenty years
265,000
11,316
1,788
278,104
From two to five years
7, 4 51
33,275
–
40,726
From one to two years
219,317
17, 76 6
569
237,652
Due after more than one year
491,768
62,357
2,357
556,482
Due within one year
3,159
23,407
–
26,566
Total
494,927
85,764
2,357
583,048
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC166
19. Borrowings
31 March 2024 31 March 2023
Secured borrowings at amortised cost £000 £000
Current liabilities
Aviva loan
3,317
3,159
3,317
3,159
Non-current liabilities
Bank borrowings
119,000
216,000
Aviva loan
152,451
155,768
M&G loan
120,000
120,000
Unamortised loan arrangement costs
(5,080)
(2,357)
Total non-current borrowings
386,371
489,411
Total borrowings
389,688
492,570
The weighted average interest rate paid on the borrowings during the year was 5.5% (2023: 4.2%).
The Group has £181 million in undrawn committed bank borrowing facilities at 31 March 2024, which expire after between two and three years
(2023: £24 million expiring after between one and two years).
The Group has a £155.8 million fixed rate loan with Aviva Commercial Finance Limited, expiring in September 2028. The loan is secured over a
portfolio of 20 freehold self storage centres. The annual fixed interest rate on the loan is 3.3%. The loan has an amortising element of £10.8 million
which runs to April 2027.
The Group has a secured £300 million Sustainability-linked three year revolving bank facility with Lloyds, HSBC, Barclays and Bank of Ireland
expiring in December 2026, with a margin of 1.25%. The Group has the option to extend the facility by two additional one-year terms through to
December 2028, subject to lender approval.
The Group has a £120 million loan with M&G Investments Limited, with a bullet repayment in September 2029. The loan is secured over a portfolio
of 15 freehold self storage centres.
In addition to the facilities above the Group has a $225 million credit approved shelf facility with Pricoa Private Capital (“Pricoa”), to be drawn in
fixed sterling notes. The Group can draw the debt in minimum tranches of £10 million over the next year and a half with terms of between 7 and
15 years at short notice.
The movement in the Group’s loans are shown net in the cash flow statement as the bank loan is a revolving facility and is repaid and redrawn
each month. The movement has been shown net in the cash flow statement. The other Group loans are not revolving, and any movements in
those loans are disclosed in a footnote to note 26B.
The Group was in compliance with its banking covenants at 31 March 2024 and throughout the year. The principal covenants are summarised
in the table below:
Covenant
Covenant level
At 31 March 2024
Consolidated EBITDA to net finance costs
Minimum 1.5x
5.4x
Consolidated net tangible assets
Minimum £500m
£2,448.4m
Bank loan interest cover
Minimum 1.75x
6.6x
Net debt to EBITDA ratio
Maximum 8x
3.0x
Aviva loan interest service cover ratio
Minimum 1.5x
6.4x
Aviva loan debt service cover ratio
Minimum 1.2x
4.0x
M&G interest cover
Minimum 1.5x
2.9x
The Consolidated EBITDA covenant is calculated by dividing the consolidated EBITDA generated by the Group’s stores by the Group’s consolidated
net finance costs.
The bank loan interest cover, the Aviva loan interest service cover ratio and the M&G interest cover covenants are calculated by dividing the
EBITDA generated by each loan’s security pool by the interest payable for each loan for each defined time period. The Aviva loan debt service
cover ratio is calculated by taking the EBITDA generated by the Aviva security pool and dividing by the Aviva loan interest payable and facility
amortisation. The Aviva and M&G loans consolidated net tangible assets covenant is a minimum of £250 million.
Annual Report and Accounts 2024 Big Yellow Group PLC 167
Strategic Report Governance Report Financial Statements
19. Borrowings continued
Interest rate profile of financial liabilities
Weighted Period for Weighted
Total Floating rate Fixed rate average which the average period
£000 £000 £000 interest rate rate is fixed until maturity
At 31 March 2024
Gross financial liabilities
394,768
204,000
190,768
5.4%
4.6 years
4.2 years
At 31 March 2023
Gross financial liabilities
494,927
301,000
193,927
4.7%
4.8 years
3.9 years
All monetary liabilities, including short-term receivables and payables are denominated in sterling. The weighted average interest rate includes
the effect of the Group’s interest rate derivatives. The Directors have concluded that the carrying value of borrowings approximates to its fair value.
Narrative disclosures on the Group’s policy for financial instruments are included within the Strategic Report and in note 18.
20. Deferred tax
Deferred tax assets in respect of share based payments £0.1 million (2023: £0.1 million), corporation tax losses £6.2 million (2023: £6.3 million),
capital allowances in excess of depreciation £0.1 million (2023: £0.2 million) and capital losses £2.1 million (2023: £2.1 million) in respect of
the non-REIT taxable business have not been recognised as it is not considered probable that sufficient taxable profits will arise in the relevant
taxable entity. The unused tax losses can be carried forward indefinitely.
21. Obligations under lease liabilities
Present value of minimum
Minimum lease payments lease payments
2024 2023 2024 2023
£000 £000 £000 £000
Amounts payable under lease liabilities:
Within one year
2,279
2,048
2,253
2,020
Within two to five years inclusive
5,526
6,149
5,112
5,652
Greater than five years
20,784
21,766
11,362
12,024
28,589
29,963
18,727
19,696
Less: future finance charges
(9,862)
(10,267)
Present value of lease liabilities
18,727
19,696
All obligations under lease liabilities are denominated in sterling. Interest rates are fixed at the contract date. All leases are on a fixed repayment
basis and no arrangements have been entered into for contingent rental payments. The carrying amount of the Group’s lease obligations
approximates their fair value.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC168
22. Share capital
Called up, allotted, and fully paid
2024 2023
£000 £000
Ordinary shares of 10 pence each
Movement in issued share capital
19,620
18,427
Number of shares at 31 March 2022
183,967,378
Exercise of share options – Share option schemes
298,595
Number of shares at 31 March 2023
184,265,973
Issues of shares – placing
11,640,212
Exercise of share options – Share option schemes
289,102
Number of shares at 31 March 2024
196,195,287
The share capital of the Company consists only of fully paid ordinary shares with a nominal (par) value of £0.10 per share. There are no restrictions
on the ability of shareholders to receive dividends, nor on the repayment of capital. All ordinary shares are equally eligible to receive dividends
and the repayment of capital in accordance with the Company’s Articles of Association and represent one vote at shareholders’ meetings
of the Company.
At 31 March 2024 options in issue to Directors and employees were as follows:
Number of Number of
Date option Option price per Date on which the ordinary shares ordinary shares
Granted
ordinary share
Type of option
Date first exercisable
exercise period expires 2024 2023
21 July 2015
nil p
LTIP
21 July 2018
21 July 2025
989
989
22 July 2016
nil p
LTIP
22 July 2019
21 July 2026
1,415
1,944
2 August 2017
nil p
LTIP
2 August 2020
2 August 2027
9,217
5,809
24 July 2018
nil p
LTIP
24 July 2021
24 July 2028
53,697
54,441
19 July 2019
nil p
LTIP
19 July 2022
19 July 2029
148,587
170,545
2 March 2020
947.0p
SAYE
1 April 2023
1 October 2023
–
43,016
5 August 2020
nil p
LTIP
5 August 2023
5 August 2030
189,504
372,757
1 March 2021
903.2p
SAYE
1 April 2024
1 October 2024
77,395
81, 216
22 July 2021
nil p
LTIP
22 July 2024
22 July 2031
285,440
300,444
21 July 2022
nil p
LTIP
21 July 2025
21 July 2032
425,523
443,218
8 August 2022
060.3p
SAYE
1 September 2025
1 March 2026
57,665
72,429
1
20 July 2023
nil p
LTIP
20 July 2026
19 July 2033
590,931
–
1 August 2023
891.5p
SAYE
1 September 2026
1 March 2027
79,382
–
1,919,745
1,546,808
Own shares
The own shares reserve represents the cost of shares in Big Yellow Group PLC purchased in the market and held by the Big Yellow Group PLC
Employee Benefit Trust, along with shares issued directly to the Employee Benefit Trust. 1,098,686 shares are held in the Employee Benefit Trust
(2023: 1,122,907), and no shares are held in treasury.
Annual Report and Accounts 2024 Big Yellow Group PLC 169
Strategic Report Governance Report Financial Statements
23. Share-based payments
The Company has three equity share-based payment arrangements, namely an LTIP scheme (with approved and unapproved components),
an Employee Share Save Scheme (“SAYE”) and a Deferred Bonus Plan. The Group recognised a total expense in the year related to equity-settled
share-based payment transactions of £4,082,000 (2023: £3,735,000).
Equity-settled share option plans
Since 2004 the Group has operated an Employee Share Save Scheme (“SAYE”) which allows any employee who has more than six months service
to purchase shares at a 20% discount to the average quoted market price of the Group shares at the date of grant. The associated savings
contracts are three years at which point the employee can exercise their option to purchase the shares or take the amount saved, including
interest, in cash. The scheme is administered by Globalshares.
On an annual basis since 2004 the Group awarded nil-paid options to senior management under the Group’s Long Term Incentive Plan (“LTIP”).
The awards are conditional on the achievement of challenging performance targets as described on page 107 of the Remuneration Report.
The weighted average share price at the date of exercise for options exercised in the year was £10.77 (2023: £13.13).
2024 2023
LTIP scheme No. of options No. of options
Outstanding at beginning of year
1,350,147
1,179,562
Granted during the year
678,088
504,431
Lapsed during the year
(72,932)
(83,846)
Exercised during the year
(250,000)
(250,000)
Outstanding at the end of the year
1,705,303
1,350,147
Exercisable at the end of the year
403,409
107,656
The weighted average fair value of options granted during the year was £3,230,000 (2023: £2,795,000).
Participants pay the nominal value of the shares when exercising options under the LTIP scheme.
Options outstanding at 31 March 2024 had a weighted average contractual life of 7.8 years (2023: 7.9 years).
2024 2023
Weighted average Weighted average
2024 exercise price 2023 exercise price
Employee Share Save Scheme (“SAYE”) No. of options (£) No of options (£)
Outstanding at beginning of year
196,661
9.71
183,506
8.75
Granted during the year
82,656
8.91
72 ,715
10.60
Forfeited during the year
(25,773)
9.99
(10,965)
9.29
Exercised during the year
(39,102)
9.47
(48,595)
7. 5 0
Outstanding at the end of the year
214,442
9.41
196,661
9 .71
Exercisable at the end of the year
–
–
Options outstanding at 31 March 2024 had a weighted average contractual life of 1.7 years (2023: 1.7 years).
The inputs into the Black-Scholes model for the options granted during the year are as follows:
LTIP
SAYE
Expected volatility
n/a
27%
Expected life
3 years
3 years
Risk-free rate
0.04%
0.04%
Expected dividends
2.6%
2.9%
Expected volatility was determined by calculating the historical volatility of the Group’s share price over the year prior to grant.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC170
23. Share-based payments continued
Deferred bonus plan
The Executive Directors receive awards under the Deferred Bonus Plan. This is accounted for as an equity instrument. The plan was set up in
July 2018. The vesting criteria and scheme mechanics are set out in the Directors’ Remuneration Report.
24. Capital commitments
At 31 March 2024 the Group had £3.9 million of amounts contracted but not provided in respect of the Group’s properties (2023: £6.1 million
of capital commitments).
25. Events after the balance sheet date
In April 2024, the Group exchanged contracts to acquire a development site in Leamington Spa for £3 million, with completion having taken place
on 13 May 2024.
26. Cash flow notes
a) Reconciliation of profit after tax to cash generated from operations
2024 2023
Note £000 £000
Profit after tax
239,833
73,332
Taxation
1,202
1,977
Other income
3
(6,517)
(2,185)
Investment income
(45)
(9)
Finance costs
25,092
17, 0 2 7
Operating profit
259,565
90,142
(Gain)/loss on the revaluation of investment properties
14a, 15
(131,159)
29,861
Depreciation of plant, equipment, and owner-occupied property
14b
864
888
Depreciation of right-of-use assets
14a,14b
1,734
1,569
Employee share options
6
4,082
3,735
Cash generated from operations pre working capital movements
135,086
126,195
Decrease/(increase) in inventories
10
(13)
Increase in receivables
(1,650)
(740)
(Decrease)/increase in payables
(3,620)
3,531
Cash generated from operations
129,826
128,973
Annual Report and Accounts 2024 Big Yellow Group PLC 171
Strategic Report Governance Report Financial Statements
26. Cash flow notes continued
b) Reconciliation of net cash flow movement to net debt
2024 2023
Note £000 £000
Net increase/(decrease) in cash and cash equivalents in the year
1,027
(276)
Cash flow from decrease/(increase) in debt financing
100,159
(74,492)
Change in net debt resulting from cash flows
101,186
(74,768)
Movement in net debt in the year
101,186
(74,768)
Net debt at the start of the year
(486,598)
(411,830)
Net debt at the end of the year
18A
(385,412)
(486,598)
1
(1)
Made up of a net decrease of £97.0 million in the RCF facility and repayments of the Aviva facility of £3.2 million (2023: Made up of a
net increase of £117.0 million in the RCF facility, repayment of the Armadillo loans of £39.5 million and repayments of the Aviva facility
of £3.0 million).
27. Related party transactions
Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed
in this note.
Key management personnel remuneration
Key management personnel are made up of our Executive and Non-Executive Directors, and a key Director of our main trading subsidiaries.
The remuneration of the key management personnel of the Group, is set out below in aggregate. Further information on the remuneration of
individual Directors is found in the audited part of the Directors’ Remuneration Report on pages 108 to 116.
31 March 2024 31 March 2023
£000 £000
Short term employee benefits
1,959
1,989
Post-employment benefits
90
91
Share-based payments
2,267
3,253
4,316
5,333
AnyJunk Limited
Jim Gibson is a Non-Executive Director and shareholder in AnyJunk Limited. During the year AnyJunk Limited provided waste disposal services to
the Group on normal commercial terms, amounting to £17,000 (2023: £16,000).
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC172
27. Related party transactions continued
London Children’s Ballet
The Group signed a Section 106 agreement with Wandsworth Council relating to the development of our Battersea store, which required the Group
to provide cultural space to Wandsworth Borough Council. In 2021, the Group granted a twenty year lease over this space to London Children’s
Ballet at a peppercorn rent, who in turn have agreed to enter into a Social Agreement with Wandsworth Borough Council coterminous with the
lease. Jim Gibson is the Chairman of Trustees of the London Children’s Ballet. London Children’s Ballet rent storage space from the Group on
normal commercial terms, amounting to £4,000 during the year (2023: £3,000). The Group sponsored a London Children’s Ballet development
programme during the year, amounting to £8,000 (2023: £8,000).
Doncaster Security Operations Centre Limited (“DSOC”)
The Group has invested £588,000 in DSOC. DSOC provided alarm and CCTV monitoring services to the Group under normal commercial terms
during the year, amounting to £319,000 (2023: £301,000).
Treepoints Limited
Jim Gibson is a Non-Executive Director and an investor in City Stasher Limited, which in turn has a minority investment in Treepoints Limited.
Treepoints Limited provided offsetting tree planting services in respect of our online packing material sales, under normal commercial terms
during the period, amounting to £2,000 (2023: £8,000).
Ukrainian Sponsorship Pathway UK
Nicholas Vetch and Heather Savory are trustees of the charity Ukrainian Sponsorship Pathway UK (“USPUK”) to help Ukrainians displaced by the
war to travel to the UK as part of the “Homes for Ukraine” scheme. The charity has set up offices in Warsaw and Krakow and is one of the few that
has been recognised for this purpose by the UK Government. We are proud to be financial supporters of this charity and the Board approved a
donation which was made in the year of £50,000 (2023: £50,000).
No other related party transactions took place during the years ended 31 March 2024 and 31 March 2023.
Annual Report and Accounts 2024 Big Yellow Group PLC 173
Strategic Report Governance Report Financial Statements
Note
2024
£000
2023
£000
Non-current assets
Plant, equipment, and owner-occupied property 30a 1,608 1,681
Investment in subsidiary companies 30b 39,167 35,085
Amounts owed by Group undertakings 31 765,420 800,436
806,195 8 37, 2 0 2
Current assets
Trade and other receivables 31 912 853
Cash and cash equivalents 1 1
913 854
Total assets 8 07,10 8 838,056
Current liabilities
Trade and other payables 32a (7,680) (6,806)
Amounts owed to Group undertakings 32a (43,068) –
Obligations under lease liabilities (30) (30)
(50,778) (6,836)
Non-current liabilities
Obligations under lease liabilities (16) (44)
Bank borrowings 32b (115,359) (215,431)
(115,375) (215,475)
Total liabilities (166,153)
(222,311)
Net assets 640,955
615,745
Equity
Share capital 22 19,620 18,427
Share premium account 397,686 290,857
Reserves 28 223,649 306,461
Equity shareholders’ funds 640,955 615 ,745
The Company reported a loss for the financial year ended 31March 2024 of £0.9million (2023:loss of £2.6million). The financial statements and the
income statement were approved by the Board of Directors and authorised for issue on 20 May 2024. They were signed on its behalf by:
Jim Gibson John Trotman
Director Director
Company Registration No. 03625199
The accompanying notes form part of the financial statements.
Company Balance Sheet
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC174
Company Statement of Changes in Equity
Year ended 31March 2024
Share
capital
£000
Share
premium
account
£000
Other non-
distributable
reserve
£000
Capital
redemption
reserve
£000
Retained
earnings
£000
Own
shares
£000
Total
£000
At 1 April 2023 18,427 290,857 74,950 1,795 230,735 (1,019) 615,745
Total comprehensive loss for the year – – – – (881) – (881)
Issue of share capital 1,193 106,829 – – – – 108,022
Dividend – – – – (86,013) – (86,013)
Use of own shares to satisfy share options – – – – (22) 22 –
Credit to equity for equity-settled
share-based payments – – – – 4,082 – 4,082
At 31March 2024 19,620 397,686 74,950 1,795 147,901 (997) 640,955
The Company’s share capital is disclosed in note 22.
The own shares balance represents amounts held by the Employee Benefit Trust (see note 22).
Year ended 31March 2023
Share
capital
£000
Share
premium
account
£000
Other non-
distributable
reserve
£000
Capital
redemption
reserve
£000
Retained
earnings
£000
Own
shares
£000
Total
£000
At 1 April 2022 18,397 289,923 74,950 1,795 309,536 (1,019) 693,582
Total comprehensive loss for the year – – – – (2,576) – (2,576)
Issue of share capital 30 934 – – – – 964
Dividend – – – – (79,960) – (79,960)
Credit to equity for equity-settled
share-based payments – – – – 3,735 – 3,735
At 31March 2023 18,427 290,857 74,950 1,795 230,735 (1,019) 615,745
The accompanying notes form part of the financial statements.
Annual Report and Accounts 2024 Big Yellow Group PLC 175
Strategic Report Governance Report Financial Statements
28. Loss for the year
As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the Company is not presented as part of
these financial statements. The loss for the year attributable to equity shareholders dealt with in the financial statements of the Company was
£0.9million (2023:loss of £2.6million).
29. Basis of accounting
These financial statements were prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (“FRS 101”).
In preparing these financial statements, the Company applies the recognition, measurement and disclosure requirements of UK-adopted
international accounting standards (“Adopted IFRSs”), but makes amendments where necessary in order to comply with Companies Act 2006
and has set out below where advantage of the FRS 101 disclosure exemptions has been taken:
– Cash Flow Statement and related notes;
– Comparative period reconciliations for plant, equipment and owner-occupied property and investment properties;
– Disclosures in respect of transactions with wholly owned subsidiaries;
– Disclosures in respect of capital management;
– The effects of new but not yet effective IFRSs; and
– Disclosures in respect of the compensation of Key Management Personnel.
As the consolidated financial statements include the equivalent disclosures, the Company has also taken the exemptions under FRS 101
available in respect of the following disclosures:
– IFRS 2 Share-Based Payments in respect of group settled share-based payments; and
– Certain disclosures required by IFRS 13 Fair Value Measurement and the disclosures required by IFRS 7 Financial Instrument Disclosures.
The financial statements have been prepared on the historic cost basis except that derivative financial instruments are stated at fair value.
The Company’s principal accounting policies are the same as those applied in the Group financial statements.
The parent Company financial statements present information about the Company as a separate entity and not about its Group.
Going concern
See note 2 for the review of going concern for the Group and the Company.
Investment in subsidiaries
These are recognised at cost less provision for any impairment.
Bank borrowings
This is the Revolving Credit Facility Loan which is held by the Company. Please see note 19 for further information.
IFRIC 11, IFRS 2 Group and Treasury Share Transactions
The Company makes equity settled share-based payments to certain employees of certain subsidiary undertakings. Equity settled share-based
payments that are made to the employees of the Company’s subsidiaries are treated as increases in equity over the vesting period of the award,
with a corresponding increase in the Company’s investments in subsidiaries, based on an estimate of the number of shares that will eventually
vest. This is the only addition to investment in subsidiaries in the current year.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC176
30. Non-current assets
a) Plant, equipment, and owner-occupied property
Freehold
property
£000
Leasehold
improve-ments
£000
Fixtures,
fittings & office
equipment
£000
IFRS 16
leases
£000
Total
£000
Cost
At 31March 2023 2,241 46 9 177 2,473
Additions 2 – – – 2
At 31March 2024 2,243 46 9 177 2,475
Accumulated depreciation
At 31March 2023 (678) (8) (2) (104) (792)
Charge for the year (45) (1) (2) (27) (75)
At 31March 2024 (723) (9) (4) (131) (867)
Net book value
At 31March 2024 1,520 37 5 46 1,608
At 31March 2023 1,563 38 7 73 1,681
b) Investments in subsidiary companies
Investmentin
subsidiary
undertakings
£000
Cost
At 31March 2023 35,085
Additions 4,082
At 31March 2024 39,167
The additions in the year relate to the capitalisation of share-based payments in accordance with IFRS 2.
The Directors assessed the carrying value of the investment in subsidiary undertakings for indicators of impairment.
There were no indications of impairment.
Annual Report and Accounts 2024 Big Yellow Group PLC 177
Strategic Report Governance Report Financial Statements
30. Non-current assets continued
The Group’s subsidiaries are all wholly-owned, the Group holds 100% of the voting power and the companies are incorporated, registered,
andoperate in England and Wales. The registered office of all subsidiaries is 2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT.
All subsidiaries are included in the consolidated accounts. The subsidiaries at 31March 2024 are listed below:
Name of subsidiary Principal activity
Apollo Self Storage Limited Self storage
Armadillo Self Storage Limited Self storage
Armadillo Self Storage 2 Limited Self storage
Armadillo Storage Holding Company Limited Dormant
Armadillo Storage Holding Company 2 Limited Dormant
Armadillo Storage One Limited Holding Company
.Big Yellow Self Storage (GP) Limited General Partner
.Big Yellow Self Storage Company Limited Self storage
Big Yellow (Battersea) Limited Self storage
The Big Yellow Construction Company Limited Construction management
The Big Yellow Holding Company Limited Dormant
Big Yellow Limited Partnership Self storage
Big Yellow Nominee No. 1 Limited Dormant
Big Yellow Nominee No.2 Limited Dormant
Big Yellow Self Storage Company 1 Limited Dormant
Big Yellow Self Storage Company 2 Limited Dormant
Big Yellow Self Storage Company 3 Limited Dormant
Big Yellow Self Storage Company 4 Limited Dormant
Big Yellow Self Storage Company A Limited Self storage
Big Yellow Self Storage Company M Limited Self storage
Big Yellow (Wapping 2) Limited Self storage
BYRCO Limited Property management
BYSSCO A Limited Dormant
BYSSCO Limited Self storage
The Last Mile Company Limited Holding Company
Quickstore Storage Limited Self storage
In addition, the Group has a 100% interest in Pramerica Bell Investment Trust Jersey, a trust registered in Jersey, its registered office
is First Island House, Peter Street, St Helier, Jersey, Channel Islands, JE2 4SP.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC178
30. Non-current assets continued
Audit exemption statement
All subsidiary undertakings of Big Yellow Group PLC are included in the consolidated Financial Statements of the Group. The subsidiary
undertakings noted below are exempt from the Companies Act 2006 (the ‘Act’) requirements relating to the audit of their individual accounts
by virtue of Section 479A of the Act, as Big Yellow Group PLC has guaranteed the liabilities of them under Section 479C of the Act. The members
of these companies have not required them to obtain an audit of their financial statements for the year ended 31March 2023:
Name of subsidiary Name of subsidiary
Apollo Self Storage Limited Big Yellow Nominee No.2 Limited
Armadillo Self Storage Limited Big Yellow Self Storage Company 1 Limited
Armadillo Self Storage 2 Limited Big Yellow Self Storage Company 2 Limited
Armadillo Storage Holding Company Limited Big Yellow Self Storage Company 3 Limited
Armadillo Storage Holding Company 2 Limited Big Yellow Self Storage Company 4 Limited
Armadillo Storage One Limited Big Yellow (Wapping 2) Limited
.Big Yellow Self Storage (GP) Limited BYRCO Limited
Big Yellow (Battersea) Limited BYSSCO Limited
The Big Yellow Construction Company Limited BYSSCO A Limited
The Big Yellow Holding Company Limited The Last Mile Company Limited
Big Yellow Nominee No. 1 Limited Quickstore Storage Limited
Under paragraph 7 of SI 2008 No 569 Big Yellow Limited Partnership is exempt from the requirement under paragraph 4 of that SI to prepare their
annual accounts and reports, and have them audited, on the basis that the partnership is dealt with on a consolidated basis in the consolidated
financial statements of the Company.
31. Trade and other receivables
31March
2024
£000
31March
2023
£000
Non-current
Amounts owed by Group undertakings
765,420 800,436
Current
Prepayments and accrued income 912 853
Amounts owed by Group undertakings are unsecured. The Company recharges its external interest cost to its subsidiaries. Amounts owed
by Group undertakings have historically had immaterial levels of bad debt, and the Directors have assessed for Expected Credit Losses and
concluded that it is immaterial, and has therefore not been recognised.
Annual Report and Accounts 2024 Big Yellow Group PLC 179
Strategic Report Governance Report Financial Statements
32. Creditors
a) Trade and other payables
31March
2024
£000
31March
2023
£000
Current (all due within one year)
Other payables 7,10 2 6,348
Amounts owed to Group undertakings 43,068 –
Accruals and deferred income 578 458
50,748 6,806
Amounts owed to Group undertakings are repayable on demand and accrues interest bi-annually at a rate of 1.25% over the Bank
of England base rate during the period, based on the average outstanding balance during the period.
At March 2023, amounts owed to Group undertakings of £27million was offset against amounts owed by Group undertakings in note
31 rather than presented separately. As the Directors do not consider the effect on the prior period financial statements to be material,
the comparative numbers have not been adjusted. However, amounts owed to Group undertakings for the current period has been
appropriately presented.
b) Bank borrowings
31March
2024
£000
31March
2023
£000
Bank loan 119,000 216,000
Unamortised loan arrangement costs (3,641) (569)
115,359 215 ,431
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC180
33. Glossary
Absorption
The rate of growth in occupancy assumed within the external property valuations from the current occupancy level
to the assumed stable occupancy level.
Adjusted earnings
The IFRS profit after taxation attributable to shareholders of the Company excluding investment property revaluations,
one-off items of income and costs, gains/losses on investment property disposals and changes in the fair value
of financial instruments.
Adjusted earnings growth
The increase in adjusted eps year-on-year.
Adjusted NAV
EPRA NTA adjusted for an investment property valuation carried out at purchasers’ costs of 2.75%, see note 13.
Adjusted earnings per share
Adjusted earnings divided by the average number of shares in issue during the financial year, see note 12.
Adjusted Profit Before Tax
The Company’s pre-tax EPRA earnings measure with additional Company adjustments, see note 10.
APMs
Additional performance measures that help financial statement users to better understand the Group’s performance
and position.
Average net achieved rent per sq ft
Storage revenue divided by average occupied space over the financial year.
Average occupancy
The average space occupied by customers divided by the MLA expressed as a %.
Average rental growth
The growth in average net achieved rent per sq ft year-on-year.
BREEAM
An environmental rating assessed under the Building Research Establishment’s Environmental Assessment Method.
Cap rates
The exit capitalisation rates used in the external investment property valuation.
Carbon intensity
Carbon emissions divided by the Group’s average occupied space.
Closing net rent per sq ft
Annual storage revenue generated from in-place customers divided by occupied space at the balance sheet date.
Closing occupancy %
The space occupied by customers divided by the MLA at the balance sheet date expressed as a %.
Closing occupancy sq ft
The space occupied by customers at the balance sheet date in sq ft.
Committed facilities
Available undrawn debt facilities plus cash and cash equivalents.
Consolidated EBITDA
Consolidated EBITDA calculated in accordance with the terms of the Group’s Revolving Credit Facility Agreement.
Debt
Long-term and short-term borrowings, as detailed in note 19, excluding lease liabilities and debt issue costs.
Earnings per share (eps)
Profit for the financial year attributable to equity shareholders divided by the average number of shares in issue during
the financial year.
EBITDA
Earnings before interest, tax, depreciation, and amortisation.
EPRA
The European Public Real Estate Association, a real estate industry body. This organisation has issued Best Practice
Recommendations with the intention of improving the transparency, comparability, and relevance of the published results
of listed real estate companies in Europe.
EPRA earnings
The IFRS profit after taxation attributable to shareholders of the Company excluding investment property revaluations,
gains/losses on investment property disposals and changes in the fair value of financial instruments.
EPRA earnings per share
EPRA earnings divided by the average number of shares in issue during the financial year, see note 12.
EPRA NTA per share
EPRA NTA divided by the diluted number of shares at the year end.
EPRA net tangible asset value (EPRA NTA)
IFRS net assets excluding the mark-to-market on interest rate derivatives, deferred taxation on property valuations
where it arises, and intangible assets. It is adjusted for the dilutive impact of share options.
Equity
All capital and reserves of the Group attributable to equity holders of the Company.
Gross property assets
The sum of investment property and investment property under construction.
Gross value added
The measure of the value of goods and services produced in an area, industry, or sector of an economy.
Interest cover
The ratio of operating cash flow divided by interest paid (before working capital movements, exceptional finance costs,
capitalised interest, and changes in fair value of interest rate derivatives). This metric is provided to give readers a clear
view of the Group’s financial position.
Like-for-like occupancy
Excludes the closing occupancy of new stores acquired, opened, or closed in the current financial year in both the current
financial year and comparative figures. In 2024 this excludes Aberdeen, Harrow, Kingston North, and Kings Cross, and
additionally the Armadillo stores for the Big Yellow like-for-like occupancy.
Like-for-like store revenue
Excludes the impact of new stores acquired, opened or stores closed in the current or preceding financial year in both the
current year and comparative figures. In 2024 this excludes Aberdeen, Harrow, Kingston North, and Kings Cross.
Annual Report and Accounts 2024 Big Yellow Group PLC 181
Strategic Report Governance Report Financial Statements
33. Glossary continued
LTV (loan to value)
Net debt expressed as a percentage of the external valuation of the Group’s investment properties.
Maximum lettable area (MLA)
The total square foot (sq ft) available to rent to customers.
Move-ins
The number of customers taking a storage room in the defined period.
Move-outs
The number of customers vacating a storage room in the defined period.
NAV
Net asset value.
Net debt
Gross borrowings less cash and cash equivalents.
Net initial yield
The forthcoming year’s net operating income expressed as a percentage of capital value, after adding notional purchaser’s
costs pre administrative expenses.
Net operating income
Store EBITDA after an allocation of central overhead.
Net operating income on stabilisation
The projected net operating income delivered by a store when it reaches a stable level of occupancy.
Net promoter score (NPS)
The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of customers to recommend
a company’s products or services to others. The Company measures NPS based on surveys sent to all its move-ins
and move-outs.
Net Renewable Energy Positive
Big Yellow’s strategy is that by 2030 the Group will generate as much renewable energy as it is able to across its store
portfolio and meet any remaining Scope 1 and Scope 2 emissions via the retirement of REGOs from offsite energy generation.
Net rent per sq ft
Storage revenue generated from in place customers divided by occupancy.
Net Zero Strategy
The Group’s published strategy to have Net Zero Scope 1, 2 and 3 Emissions.
Non like-for-like stores
Stores excluded from like-for-like metrics, as they were acquired, opened or closed in the current or preceding financial year.
In 2024 this excludes Aberdeen, Harrow, Kingston North, and Kings Cross, and additionally the Armadillo stores for the
Big Yellow like-for-like occupancy.
Occupancy
The space occupied by customers divided by the MLA expressed as a %.
Occupied space
The space occupied by customers in sq ft.
Other storage related income
Packing materials, insurance, and other storage related fees.
Pipeline
The Group’s development sites.
Property Income Distribution (PID)
A dividend, generally subject to withholding tax, that a UK REIT is required to pay from its tax-exempt property rental
business, and which is taxable for UK-resident shareholders at their marginal tax rate.
REGO
Renewable Energy Guarantees of Origin
REIT
Real Estate Investment Trust. A tax regime which in the UK exempts participants from corporation tax both on UK rental
income and gains arising on UK investment property sales, subject to certain conditions.
REVPAF
Total store revenue divided by the average maximum lettable area in the period.
Store EBITDA Store earnings before interest, tax, depreciation, and amortisation, see reconciliation in the portfolio summary on page 31.
Store revenue
Revenue earned from the Group’s open self storage centres.
TCFD
Task Force on Climate-related Financial Disclosure.
Total shareholder return (TSR)
The growth in value of a shareholding over a specified period, assuming dividends are reinvested to purchase additional
units of shares.
Notes to the Financial Statements continued
Year ended 31March 2024
Annual Report and Accounts 2024 Big Yellow Group PLC182
Ten Year Summary
2024
£m
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
2018
£m
2017
£m
2016
£m
2015
£m
Results
Revenue 199.6 188.8 171.3 135.2 129.3 125.4 116.7 109.1 101.4 84.3
Operating profit before gains and losses
on property assets 128.4 120.0 106.6 81.5 80.0 76.7 70.9 65.3 59.9 48.4
Cash flow from operating activities 104.8 112.0 107. 1 76.7 73.6 72.2 63.0 55.9 55.5 42.4
Profit before taxation 241.0 75.3 698.9 265.8 93.4 126.9 134.1 99.8 112.2 105.2
Adjusted profit before taxation 107. 3 106.0 96.8 74.6 71. 0 67. 5 61.4 54.6 49.0 39.4
Net assets 2,448.4 2,182.4 2,184.4 1,453.9 1,163.9 1,123.9 981.1 890.4 829.4 750.9
Diluted adjusted earnings per share 55.9p 56.5p 52.5p 42.4p 42.1p 41.4p 38.5p 34.5p 31.1p 2 7. 1 p
Declared total dividend per share 45.2p 45.2p 42.0p 34.0p 33.8p 33.2p 30.8p 27.6p 24.9p 21.7p
Key statistics
Number of stores open** 109 108 105 78 75 74 74 73 71 69
Store MLA (000 sq ft) 6,419 6,292 6,098 4,930 4,688 4,622 4,631 4,551 4,464 4,344
Sq ft occupied (000)** 5,029 5,088 5,107 4,201 3,781 3,810 3,730 3,551 3,363 3 ,178
Occupancy (decrease)/ increase in year
(000 sq ft)* (59) (19) 906 420 (29) 80 179 188 185 346
Closing net rent per sq ft** £34.14 £32.48 £29.92 £ 28.71 £28.15 £27.28 £26.74 £26.03 £25.90 £25.23
Number of occupied rooms** 73,000 73,000 73,000 62,000 56,500 56,000 55,000 52,500 50,000 4 7, 25 0
Average number of employees during
the year** 464 465 427 370 361 347 335 329 318 300
* the occupancy growth in 2015, 2017, 2022 and 2023 includes the acquisition of existing stores.
** from 2022 this includes the Armadillo stores, which the Group acquired the remaining 80% of which it did not previously own on 1 July 2021.
Annual Report and Accounts 2024 Big Yellow Group PLC 183
Strategic Report Governance Report Financial Statements
This report is printed on paper certified in accordance with the FSC® (Forest Stewardship Council®) and is recyclable
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environmental performance is an important part of this strategy.
Pureprint Ltd aims to reduce at source the effect its operations have on the environment and is committed to continual
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Pureprint Ltd is a Carbon / Neutral® Printing Company.
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Annual Report and Accounts 2024 Big Yellow Group PLC184
Big Yellow Group PLC
2 The Deans, Bridge Road,
Bagshot, Surrey GU19 5AT
01276 470190
info@bigyellow.co.uk
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