Share Code: SSS – Market Cap: R7.5bn – P/B: 0.9x – DY: 7%

FY 25 Results & Thoughts: Well Run, Well Positioned & Globally Competitive

• Stor-Age owns a well-managed, growing self-storage property portfolio that was built out of a strong SA-base (that remains robust and growing) and is increasingly allocating capital towards the UK (offering Rand Hedge benefits) while cleverly leveraging the capital-light policy of JV funding structures to build out what will likely become a substantial portfolio.
• FY 25 rental income growth has been strong, historically outpacing inflation; SA achieving +10.2% and the UK +6.5% in the period. FY 25 occupancies remain high in owned properties—exceeding 90% in South Africa and around 84% in the UK—while JV properties are still in their lease-up period with occupancies around 74% in SA (FY24: 65%) and 63% in the UK (FY24: 57%).
• The Group’s Net Property Operating Income (NPOI) margin has consistently been around 74% since FY19. A 65% EBITDA margin remains strong and underpinned by solid cash flows with a history of distributing nearly all distributable earnings as dividends. The Group did recently shift its distribution policy from 100% to 90~95% of distributable income—retaining some capital for growth—thus, FY 25’s payout ratio is 90%.
• Distributable income rose 4% in FY25 and management has indicated a 5% to 6% expected increase for FY26, which we think may prove to be slightly conservative (our forecast is fractionally above the high-end of this range).
• Net Asset Value (NAV) per share increased by 5.6% in FY25 (c. 7% per year for the past four years). We note that the Rand/Pound exchange rate has been very stable over the past two financial years. Theoretically, the Rand should depreciate against the Pound by the annual inflation differential. Should this revert to the theory, there will be upside when and as the Pound assets and earnings are converted to Rand earnings & distributions.
• We consider the Group’s balance sheet comfortably/lowly geared though comparable international peers do have somewhat lower average gearing.

Valuation and 12m TP: Relative Model and Dividend Discount Model Used

• Stor-Age’s share price has not kept pace with its NAV growth, leading to a Price/Book (“PB”) ratio of 0.8-0.9x. The Group’s quality, its potential for both Rand Hedge benefits from its UK portfolio, optionality from organic and acquisitive growth informs our view that the share should (at least) track its historic 1.0x PB over time.

• Stor-Age’s share price has not kept pace with its NAV growth, leading to a Price/Book (“PB”) ratio of 0.8~0.9x. The Group’s quality, its potential for both Rand Hedge benefits from its UK portfolio, optionality from organic and acquisitive growth informs our view that the share should (at least) track its historic 1.0x PB over time.
• We determined the fair value for Stor-Age by using a Relative Valuation Model and a Dividend Discount Model (31 March 2025):
  • Relative Value: Our fair value is R16.71 per share,
  • Dividend Discount Model: Our fair value is R16.71 per share, &
  • Equal-weighted average valuation: R16.71 per share.
• Rolling this fair value forward, we arrive at a 12m Target Price—factoring in dividends—of R17.80 (Previously: R17.10); we expect this to generate a 12m return of c.19% at the 30 June 2025 share price of R15.95.