Big Yellow placing raises £32.9m

18th May 2009 13:41

Self-storage group Big Yellow has raised £32.9m from a placing at 285p a share, 15p above Friday's closing price."The placing proceeds provide us with the financial firepower to build out our existing development pipeline over the next two to five years and take advantage of the current adverse conditions in the property market," said executive chairman Nick Vetch. JP Morgan Cazenove, as sole bookrunner, placed 11.55m Big Yellow shares with shareholders. The company wants to develop seven sites, six of which are in London, at a cost of £53m, and buy more sites in the Capital and other key towns.Board members, who own about 28% of the business, have committed to take up £680,000 of the new shares.It's thought David Ross, co-founder of the Carphone Warehouse and a director of Big Yellow until last year, splashed out £250,000.Ross resigned in November after admitting he pledged about 11.5m of its shares against personal loans. He also left Carphone and National Express for the same reason."Whilst the trading environment remains unquestionably difficult, trading conditions and lead indicators over the past two months have shown a noticeable improvement," said Vetch."We have therefore decided to raise additional capital to provide us with the extra financial firepower to further consolidate our market leading position in the UK self storage market."Separately, the company reported a loss before tax of £71.5m in the year ended 31 March 2009 versus a profit of £102.6m the year before. It blamed the reversal of revaluation gains booked in a year ago and the one off cost of unwinding interest rate hedging arrangements. Revenue rose 3% to £58.5m from £56.9m, but a 1.9% drop in adjusted net asset value in the second half to 457p a share was still above broker KBC Peel Hunt's estimate of 430p. It says 'buy'.There will be no final dividend following the demise of the interim payout last year.