Big Yellow Group is reducing headcount and accelerating automation investment to absorb the cost of business rates and employer national insurance increases, as the FTSE 250 self-storage operator reported rising full-year profits despite a challenging operating environment.
For the year ended 31 March 2026, Big Yellow Group reported total revenue of £209.1 million, up 2% from £204.5 million the prior year, with store EBITDA of £146.5 million against £143.2 million. Adjusted profit before tax rose to £117.5 million from £115.6 million.
Big Yellow Business Rates and Operating Costs
The Chancellor’s decision to raise both national insurance contributions and the minimum wage in the 2024 Autumn Budget prompted the group to expand its automation capabilities ahead of the changes taking effect last April.
The company said automation allowed it to avoid replacing certain leavers, cutting headcount and staff costs without, in management’s words, ‘impacting customer service’. Investment in solar and broader energy efficiency is expected to ‘deliver further reductions’ in utilities spending.
Self-storage facilities carry higher energy loads than standard warehouses, given continuous requirements for temperature control, lighting and security. The group said savings on utilities should help offset some of the pressure from the business rates revaluation, under which rateable values for UK warehouses rose by an average of 21% in April.
Despite those pressures, the Big Yellow Annual Report 2026 shows that like-for-like store operating expense inflation for the full year was reduced to 0.3%, and the year-on-year like-for-like occupancy deficit had closed to 0.6 percentage points by the point of reporting. Direct store operating costs (excluding rent) were £58,954,000 for the year, up from £57,565,000, according to the Big Yellow Annual Report and Accounts 2026.
The group still expects a 4% increase in store operating costs on a like-for-like basis in the first half of the current financial year, with a lower increase in the second half.
Pipeline Growth and Harrow Sale Fund Development
For the half year ended 30 September 2025, the group reported that demand softening seen earlier in that period had subsequently stabilised, with a modest improvement in occupancy performance after the period end, per the group’s half-year RNS announcement.
Big Yellow sold its Harrow industrial estate for £38.4 million, subject to a £2 million retention from the sale price, according to Sharecast News. Proceeds will be directed into the construction and redevelopment of 12 stores in its pipeline, which the group anticipates will generate £35 million of net operating income.
The group acquired a new freehold site in Acton during the first financial quarter. It is on site for six of the 12 stores currently in construction, planning or development, with four due to open this financial year in Staples Corner, Kentish Town, Wapping and Epsom.
Quarterly revenue rose 3% to £53.2 million from £51.5 million in the prior year period. Leased store square footage grew 5% to 6,721,000 sq ft, with average net rent per square foot up 3% to £36.6 from £35.6. EPRA adjusted earnings per share for the full year were 59.0p (2025: 57.8p), and the full-year dividend was 47.2 pence per share against 46.4p.
Shares dipped 1.5% in early trading to 865.5p, extending a decline of 13.9% since January.
Chief executive Jim Gibson said the group expects the operating environment to remain challenging: ‘We recognise that the operating environment may continue to be challenging in the months ahead, given the current fiscal and budgetary uncertainties, which will likely not be clarified until the autumn.’
Mark Crouch, market analyst at eToro, said: ‘Despite another resilient quarter, Big Yellow remains stuck in storage from an investor sentiment perspective, with higher interest rates and lingering concerns over UK property valuations continuing to weigh on the shares.’
Crouch added: ‘Management continues to invest in new stores, automation and energy efficiency, while recycling capital from mature assets to fund future growth. If inflation and borrowing costs begin to ease, investors may start to look beyond the near-term headwinds and recognise that Big Yellow’s long-term growth story remains anything but boxed in.’
The investment property portfolio was valued at £2,944.5 million as of 31 March 2026, up from £2,807.5 million a year earlier. Four new store openings this financial year represent the clearest near-term test of whether the pipeline can deliver the income management is projecting.
