STORAGEVAULT CANADA INC. reported the Corporation’s full year 2020 audited results. Iqbal Khan, Chief Financial Officer, commented:
“StorageVault continues to show the resiliency of our business and the strength of our amazing team across the country delivering solid growth in fiscal 2020. These results were achieved in spite of the pandemic where for a portion of the year we experienced lower rental activity and paused rent increases and all fees. Our focus continues to be on growing free cash flow through integrating, improving and innovating operations and completing accretive acquisitions. We significantly beat our acquisition target with $232.7 million in acquisitions. We exceeded expectations by finishing Q42020 with same store revenue and NOI growth of over 6%, resulting in year over year same store NOI growth of 5%. Looking ahead, we expect to do $100 million of acquisitions in 2021, expand and renovate existing stores, and continue to increase our cash flow through integration, occupancy growth and revenue management.”
2020 Full Year Audited Results
StorageVault achieved significant growth in 2020 with $232.7 million in acquisitions; $118.1 million of mature stores, $111.3 million of new build and lease-up stores and $3.3 million of adjacent raw land for expansion. The benefits from $114.6 million of these acquisitions will not be realized until 2022 and beyond. Over the past six years, StorageVault has completed $1.6 billion of acquisitions.
Revenue increased to $155.5 million in 2020 from $135.0 million in 2019 and net operating income (“NOI”), a non-IFRS measure, grew to $104.2 million in 2020 from $90.1 million in 2019. Cash flow from operations grew to $38.5 million in 2020 from $32.0 million in 2019 and when combined with our financing and investing activities resulted in a cash balance of $25.5 million at the end of the year. The net loss of $33.3 million for the year (net loss of $46.1 million for 2019) is after $82.6 million in depreciation and amortization, $6.3 million in stock based compensation and are offset by the recovery of $10.9 million of deferred tax and $9.3 million of unrealized gain on interest rate swap contracts, all non-cash items, recorded in 2020.
In spite of the impacts of COVID-19, our strong revenue management platform and occupancy growth resulted in Revenue and NOI growth from existing self storage, a non-IFRS measure, of 4.8% and 5.0%, over the prior year. Funds from operations (“FFO”), a non-IFRS measure, were $35.4 million in 2020 compared to $29.7 million for 2019, a 19.3% increase year over year. Adjusted funds from operations (“AFFO), a non-IFRS measure, were $42.8 million for 2020 compared to $36.7 million for 2019, a 16.8% increase year over year. Both the FFO and AFFO are muted for the $114.6 million in new build, lease-up and raw land acquisitions made in fiscal 2020. The Corporation expects to start realizing the benefits from these acquisitions in fiscal 2022 and beyond.
Annualizing results from our 2020 acquisitions would have resulted in revenue of $165.6 million, NOI of $110.0 million, FFO of $37.8 million and AFFO of $45.2 million. See “Annualized Information” below. This annualization is muted by the $114.6 million in new build and lease-up stores and raw land acquisitions made in fiscal 2020. The Corporation expects to realize the benefits from these acquisitions in fiscal 2022 and beyond.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see pages 12 through 18 of the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2020 filed on SEDAR at www.sedar.com.
2020 Fourth Quarter Results
Revenue for Q42020 increased to $42.2 million compared to $37.2 million in Q4 2019 and NOI grew to $28.4 million from $24.7 million for the comparative period. As mentioned above, our cash flow from operations increased year over year and when combined with our financing and investing activities resulted in a cash balance of $25.5 million at the end of the year. The Q4 2020 net loss of $10.0 million (net loss of $11.6 million for Q4 2019) is after $21.1 million of depreciation and amortization, $6.3 million in stock based compensation and is offset by the recovery of $1.9 million of deferred tax and $9.3 million of unrealized gain on interest rate swap contracts. All amounts are non-cash items.
As a result of our revenue management program, strong occupancy and operational efficiency, Revenue and NOI from existing self storage stores increased by 6.2% and 6.3%, compared to the same period last year. Funds from operations were $6.3 million for Q4 2020 compared to $8.7 million in Q4 2019 (impacted by $5.0 million of acquisition and integration costs incurred on $221.2 million of acquisitions completed in Q42020 versus $0.7 million for the same period in 2019). Adjusted funds from operations were $11.3 million for Q4 2020 compared to $9.4 million in Q4 2019, a 20.4% increase.
For a reconciliation of the above NOI, FFO, and AFFO amounts to IFRS, please see pages 12 through 18 of the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2020 filed on SEDAR at www.sedar.com.
Increased Dividend
Based on the strong quarterly and year over year results, StorageVault is increasing its quarterly dividend by 0.5% beginning Q1 2021 to $0.002720 per common share.
The COVID-19 Pandemic
Throughout fiscal 2020 and for the future benefit of the Corporation, we modified our operating platform to continue to meet the strong demand for our services – these changes included improving our virtual systems to offer no-contact rental processes, installation of plexiglass partitions and limiting the number of customers in our offices to one at a time. Our teams are fully employed and clients are able to safely store and access their valuables. We continue to be extremely proud of our team for continuing to adapt to new processes and for being committed to providing exceptional client and community service.
As fiscal 2020 year progressed and to date in fiscal 2021, we experienced a significant increase in leads and rentals which has resulted in higher occupancies and rental rates across the portfolio. These positive trends resulted in the Corporation achieving strong same store revenue and NOI growth. While clients may be further impacted, including through unemployment, the Corporation has experienced no meaningful increases in accounts receivable.
Since the start of the COVID-19 pandemic, the Corporation continued to execute on our strategies to attract clients through search engine marketing, improving our online presence, virtual community connection programs and the development of a national platform and initiatives to fulfill last mile storage needs. These efforts have allowed us to attract clients who are leveraging our national footprint to offer a complete storage, inventory management and mobilization solution through our self and portable storage and records management infrastructures.
As at December 31, 2020, we continue to generate significant cash flows from our operations, with $25.5 million in cash on hand. Our balance sheet, along with our strong relationships with our lenders, provides us with sufficient borrowing capacity, refinancing and liquidity options to take advantage of acquisition opportunities that meet our requirements, evidenced by the $232.7 million in acquisitions completed in fiscal 2020.
Our Strategy
StorageVault is focused on owning and operating stores in the top markets in Canada. Our goal is to have multiple stores in each market, with complementary portable storage units and records management storage services, to take advantage of economies of scale. Our growth strategy is focused on acquisitions, organic growth, expansion of our existing stores and expansion of our portable storage and records management businesses.
Further Information
For comprehensive disclosure of StorageVault’s performance for the year ended December 31, 2020 and its financial position as at such date, please see StorageVault’s Consolidated Financial Statements and Management’s Discussion and Analysis for the year ended December 31, 2020 filed on SEDAR at www.sedar.com.
Non-IFRS Measures
Management uses both IFRS and Non-IFRS Measures to assess the financial and operating performance of the Company’s operations. These Non-IFRS Measures are not recognized measures under IFRS, do not have a standardized meaning under IFRS and are unlikely to be comparable to similar measures presented by other companies. The Non-IFRS Measures referenced in this news release include the following:
NOI, FFO, AFFO and Existing Self Storage, should not be viewed as an alternative to, in isolation from, or superior to, net income or cash flow from operations, or results from StorageVault’s comprehensive operations, respectively, or other measures calculated in accordance with IFRS. NOI, FFO and AFFO should not be interpreted as an indicator of cash generated from operating activities and is not indicative of cash available to fund operating expenditures, or for the payment of cash distributions. Existing Self Storage should not be considered a measure of StorageVault’s comprehensive operations. NOI, FFO, AFFO and Existing Self Storage are simply additional measures of operating performance which highlight trends in StorageVault’s core business that may not otherwise be apparent when relying solely on IFRS financial measures. StorageVault’s management also uses these non-IFRS measures in order to facilitate operating performance comparisons from period to period and to prepare operating budgets. In addition, the Corporation’s definitions of NOI, FFO, AFFO and Existing Self Storage may differ from that of other issuers.
Annualized Information
The Corporation purchased 16 stores and one vacant land during fiscal 2020 and the revenues and operating expenses from each acquisition are reflected in the December 31, 2020 financial statements from the date of acquisition forward for these properties. In order to provide the reader with a greater understanding of potential results from a full year of operations with the acquired assets, the Corporation has prepared an unaudited estimated Annualized NOI and FFO statement annualizing the revenues and expenses estimated as if the properties were purchased as of January 1, 2020 and owned for the entire 12 month period. For further information on the estimated annualized results referenced above in this news release, please refer to “Annualized Net Operating Income and Funds from Operations” set forth in the Corporation’s Management’s Discussion & Analysis for the year ended December 31, 2020 filed on SEDAR at www.sedar.com.
About StorageVault Canada Inc.
StorageVault owns and operates 212 storage locations in the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, and Nova Scotia. StorageVault owns 167 of these locations plus over 4,400 portable storage units representing over 9.2 million rentable square feet on over 500 acres of land.
For further information, contact Mr. Steven Scott or Mr. Iqbal Khan:
Tel: 1-877-622-0205
ir@storagevaultcanada.com