Big Yellow hit by tax raid on storage space
STORAGE giant Big Yellow yesterday reported annual losses of £35.6m – triggered by writedowns linked to an impending tax rise.
The government is planning to slap VAT on self storage payments, which means that storage costs could shoot up as much as ten per cent.
The company’s losses in the year to the end of March compare with a £6.9m profit for the previous year.
Big Yellow has been forced into a £51.4m writedown on its property portfolio as a result of the tax raid, announced in the Budget and due to be introduced in October
But revenue for the year rose slightly to £65.7m compared with £61.9m in 2011.
The company is building three major new storage depots at a cost of £14.3m, it said in its trading statement, and is looking for new sites.
Chairman Nicholas Vetch said that despite the tax setback the company was strong.
He said in a statement: “The Big Yellow Self Storage business model has proved to be relatively resilient during the downturn, in line with the experience in the more established US self storage market.”
Big Yellow raised its dividend by 1p to 10p.
e company said it was eyeing new site for Big Yellow storage depots.