Big Yellow reported growth in its full-year net asset value against a wider property market downturn but warned of potential weaknesses in its operating business.

The self-storage company said in its annual results that “trading conditions are likely to be difficult for some time”, but that it was well positioned and ready to take advantage of opportunities.

The company’s adjusted net asset value rose 19 per cent to 520p, beating analysts’ estimates. However, operating performance was weaker than expected because of longer than expected lease-up periods for new stores. The company opened six stores during the year, including its flagship in Fulham, and acquired some 10 freehold sites.

In the year to March 31, pre-tax profit fell from £152.8m ($298m) to £101.8m, owing to a lower revaluation surplus on investment properties. Underlying profit in the period was £13.3m, down 6 per cent, primarily due to higher interest costs.

The value of its investment property portfolio was £751m (£590m), reflecting capital expenditure and revaluation increases. Revenue rose 11 per cent to £56.9m. The final dividend is 5.5p, giving a total pay-out of 9.5p (9p). Earnings per share fell from 192.97p to 89.2p.

The shares closed 15¾p lower at 385p.

FT Comment

● Big Yellow is one of the few commercial property companies that need also worry about the residential market as people often use self-storage when they move house. The key for the company will be to increase awareness – a recent survey showed just 30 per cent of Londoners had an awareness of self-storage. The adjusted price/earnings ratio for Big Yellow is 29.2, based on full- year 2008 figures, much higher than rival Safestore, which trades on a p/e of about 17. Big Yellow has a strong property portfolio in core locations and cash to weather tough times, but its weakening operating business in a consumer slowdown means that short-term gains in share price performance are unlikely.