Big Yellow raising funds, swings into red

18th May 2009 07:16

Self-storage group Big Yellow has announced a placing of 11.6m shares to raise funds for medium term growth alongside a £71.5m full year loss.The fundraising, at an as yet undecided price, is expected to bag the company about £25m. At Friday's closing level of 270p it would bring in £31m and about £29m at 250p. The bookbuild process is expected to close today.Big Yellow 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 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, will splash out £250,000.Ross resigned as a director of the company last year 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 executive chairman Nick 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.There will be no final dividend following the demise of the interim payout last year.