Broker snap: Big Yellow has the right approach

22nd Nov 2010 11:06

Although underperforming sector peers in valuation terms, KBC Peel Hunt believe that self-storage firm Big Yellow is better financed and deserving of an improved share rating."Management has skilfully steered the company through the worst of the downturn and positioned the company as the economy improves", says the broker.Although adjusted net asset value (NAV) per share at end September was slightly lower than the broker expected at 461p, revenue grew by 8% to £31.1m while adjusted earnings per share was 20% higher at 7.4p.The broker says that the group's decision to halve the number of new store rollouts, along with low costs of funding and gearing, is the right approach in light of a continued slow down in the housing market.Despite trimming its full year NAV numbers, the broker retains a 'buy'.