Big Yellow Group Annual Report 2015

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FY2015 Annual Report · Big Yellow Group

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bigyellow.co.uk

Big Yellow Group PLC

2 The Deans, Bridge Road,
Bagshot, Surrey GU19 5AT

Tel: 01276 470190
Fax: 01276 470191
e-mail: info@bigyellow.co.uk

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Big Yellow Group PLC
Annual Report & Accounts 2015

Why ?

think…

Big Yellow

Because we are
about more than
just storage.

people
service
security
locations
facilities
innovation
growth

Get some space in your life.™

think… people
service
security
locations
facilities
innovation
growth

Big Yellow Group PLC is the UK’s brand leader in
self storage. Big Yellow now operates from a platform

of 84 stores, including 14 stores branded as Armadillo

Self Storage, in which the Group has a 20% interest.

We own a further five Big Yellow self storage

development sites, of which two have planning

consent. The current maximum lettable area of this

platform is 5.1 million sq ft. When fully built out the

portfolio will provide approximately 5.4 million sq ft of

flexible storage space. 96% of the Big Yellow stores and

sites are held freehold and long leasehold (by value);

with the remaining 4% short leasehold.

We have pioneered the development of the latest

generation of self storage facilities, which utilise state

of the art technology and are located in high profile,

accessible, main road locations. Our focus on the

location and visibility of our buildings, coupled with

excellent customer service, has created by far the most

recognised brand name in the UK self storage industry.

We remain …
Britain’s favourite self storage company.

Welcome / Please take a Closer Look

We are the innovative leaders in the UK self storage industry
providing individuals and businesses with an unrivalled product,

the best locations, the best quality facilities and the strongest brand.

We have great people who deliver the best customer service.

We achieve this because we encourage a culture of partnership

within the business and reward our people for their contribution.

Contents

A Year of Further Achievement
Why? Big Yellow
Big Yellow Brand
Customer Service
Innovation
Security
Portfolio

ifc

14
16
18

Introduction
02
03
04
06
08
10
12
Highlights
Chairman’s Statement
Strategic Report
18
21
24
25
29
30
32
38
41
52

Our Strategy and Business Model
Operational and Marketing Review
Proforma Portfolio Summary – Big Yellow Stores
Our Stores
Portfolio Summary – Armadillo Stores
Store Performance
Financial Review
Risk and Uncertainties
Corporate Social Responsibility Report
Assurance Statement on the Corporate Social
Responsibility Report

54
55
58
62
64
84
87
88

92
93
94
95
95

Directors, Officers and Advisors
Directors’ Report
Corporate Governance Report
Report of the Nominations Committee
Remuneration Report
Audit Committee Report
Statement of Directors’ Responsibilities
Independent Auditors’ Report to the Members of
Big Yellow Group PLC
Consolidated Statement of Comprehensive Income
Consolidated Balance Sheet
Consolidated Statement of Changes in Equity
Consolidated Cash Flow Statement
Reconciliation of Net Cash Flow to Movement in
Net Debt

96 Notes to the Financial Statements
124 Company Balance Sheet
125 Company Cash Flow Statement
126 Company Statement of Changes in Equity
127 Notes to the Financial Statements
130 Ten Year Summary

Over the following pages:

We outline the core qualities of our business.
We explain our achievements in the year and
outline our plans for the future…

A Year of Further Achievement

Dea r All,
We have achieved a lot in the year:

Strong growth in occupancy and revenue delivering record earnings growth of 32%.

.
. A record increase in the dividend pay-out for the year to March of 32%.
. A strong performance from the Armadillo stores.
. A record year at CSC and also National accounts.
.

The successful acquisition of the 10 Armadillo stores along with our Australian JV partners.
Armadillo is now secure and prospering within the Big Yellow business and we are looking
at expanding the brand to sit alongside Big Yellow Self Storage.

The opening of a new London 70,000 sq ft store at Gypsy Corner which reached 60%
occupancy and 42,000 sq ft in its first year.

The purchase of a second 35,000 sq ft store in Oxford which we can extend in due course by
10,000 sq ft. We now have appropriate capacity in Oxford for this fast growing university city.

The successful refinancing of our bank facilities in the summer for five years and also a new
seven year £70 million facility with M&G, part of Prudential. We have one of the most secure
capital structures of all listed Real Estate Investment Trusts with over five times cash flow
cover for our annual interest expense.

The placing of 9.9% of listed Big Yellow shares to raise approximately £76m net of expenses
which, along with debt finance, was used to acquire the 66.7% of the 12 JV stores we did not
own on 1 December. These are all now 100% owned.

The purchase of our first land and building since 2007 in Cambridge. It was a Royal Mail
Depot and is capable of being converted to a 55,000 sq ft self storage centre and we hope
to have it opened in late 2015.

In December we acquired the Freehold of our store at Battersea and the retail unit next door.
We will be looking at options to build a larger store in a mixed use development in the
future. This is a central London store and we are delighted to have achieved control of this
important strategic location.

The inaugural Viewpoint employee engagement survey which had pleasing results but
also highlighted areas for improvement which we will action in 2015.

The success of Big Yellow as a business depends on all of us striving for those 1%
improvements and working together, understanding that each and every one of us
makes a critical contribution to our success.

Jim Gibson

Chief Executive Officer

Awareness and demand for self storage
in the UK is growing year on year. Our
focus on London and key metropolitan
areas means we are best placed to
capitalise on this growth from domestic
and business customers.

Ensuring Future Growth

Why ?

Big Yellow

Because we are about more than just storage.
Whether it’s a house move, setting up or running a business or a DIY project,
these are all key life moments where it can all get a bit stressful. At Big Yellow,
our people, service, security and locations all help to take the stress and
hassle away. Not add to it.

t a i n ’ s
i
B r
t e
i
f a v o u r
s t o r a g e
f
s e l
c o m p a n y

Big Yellow

/ Our Culture is our Brand

We have the market leading brand, the largest online market
share and we focus on London, the South East and large
metropolitan cities, where barriers to entry are at their highest.

52% Big Yellow

Base: All London Adults

1,035

What are the names of any
self storage companies you
can think of?

4% Access

1% Big Box

7% Safestore

6% Shurgard

32% None

13% Other

5% Don’t Know

You Gov
Awareness Survey
May 2015

Base: All UK Adults

2,040

What are the names of any
self storage companies you
can think of?

22% Big Yellow

1% Access

1% Armadillo

1% Big Box

1% Kangaroo

2% Lok n Store

3% Safestore

15% Other

58% None

6% Don't Know

Our Brand Strategy
/ A Brand based on People

By creating one powerful brand nationwide,
Big Yellow is front of mind for more customers
in our market than our competitors, with
significant potential to increase this
brand awareness.

London

“Customer at Big Yellow Oxford

I found it all a very stress free experience
during a stressful time of moving home and
needing somewhere to safely store my
belongings for a couple of months. I found
the staff friendly and helpful.”

All of our people share a passion
for delivering the service our
customers deserve, helping them
get through stressful life changes
such as moving home.

That is our Brand.

Customer Service / With a smile …

Our friendly and helpful staff are one of the main reasons
why customers choose Big Yellow. 11,600 online reviews
of our customer service are testament to this.

The wellbeing of our staff is important to
us and we provide an enjoyable working
environment without losing our commitment
to delivering the very best standards of
customer service. A continuous investment
in training and encouraging a culture of
partnership through bonus and incentive
schemes is critical to our continued success
of delivering unrivalled customer service.

We work hard to understand our customers’
storage requirements and give the best
service possible whether it is face to face,
over the phone or through our user friendly
website, mobile site or online chat.

Our customer support centre is on hand
seven days a week to provide an additional
layer of customer service. All calls are
answered promptly and the customer
support team take the time to talk people
through our service, provide quotes and
answer any questions.

Customer reviews are also published on the
website and show an extremely high level
of satisfaction. We also invite customers to
submit reviews to a third party review site
which are currently averaging 9.5 out of 10.

“Customer at Big Yellow Battersea

The experience was
an excellent one
purely due to the
flawless customer
service I received.
I particularly
appreciated the
transparency
around costs and
the detailed
information I was
given in advance.”

Chris
Assistant Manager
Bromley

Gemma
Store Manager
Orpington

Azelia
Sales Advisor
Bromley

We put the customer at
the heart of our business.
We are someone our
customers can trust.
We are proud of our
people and they are
integral to the success
of our company.

Proud of our People

Innovation

/ With an eye on staying ahead of the game

At Big Yellow, we are always looking for innovative
ways to help our customers’ lives and make
the business more environmentally sustainable.

We are continually improving our digital platforms for
our online visitors, providing a seamless and informed
user experience. We have recently relaunched our
mobile optimised website with a focus on usability for
the growing number of mobile users visiting Big Yellow
online.

We develop online tools to help our web visitors make
comfortable and informed choices about their self
storage requirements. Video store tours, comprehensive
FAQs, easy to use size guides and online chat are all
available for our online visitors. Additionally, our
customers can reserve their room and check-in online to
make life even easier for them.

Innovative building design is part of our commitment to
a more sustainable business. We look to incorporate the
latest technologies such as energy efficient lighting and
solar panels to reduce our carbon foot print and produce
our own renewable energy.

“Customer at Big Yellow Staples Corner

From the initial
website enquiry and
phone call, through
to booking, online
check-in and storage,
everything was very
quick and easy. Prices
are transparent.”

We continually analyse
and improve the web
journey for online visitors
and have re-launched a
newly designed mobile
website in 2015 to
facilitate the customers
ever-changing needs.

Customer Focussed

Check-in online

Energy efficient lighting

Updated mobile optimised website

Security

/ That is second to none

We provide the highest levels of security in the
UK self storage industry. We have invested significantly
to ensure our customers enjoy peace of mind.

We are the only major UK operator where every room
in every store is individually alarmed.

Secure perimeter fencing, electronic coded gates, intruder
alarms, PIN code entry and CCTV which is externally
monitored 24 hours a day, provide additional levels of
security for our customers.

The importance of security and the need for vigilance is
communicated to all store staff and reinforced through
regular training.

“Customer at Big Yellow Birmingham

Very impressed with
your level of service,
the cleanliness of the
facility and the
security key pads to
access each area.”

24 hour digital CCTV

PIN code access

Our digital CCTV systems are
externally monitored 24 hours a
day, providing an additional level
of security especially for customers
with extended hours access.

Ensuring Peace of Mind

Electronic
coded gates

Individually alarmed rooms

Portfolio

/ An extensive national network

Our customers like our modern, highly visible, purpose built stores
which are situated in safe and easily accessible locations.

Our customers like our modern, highly visible,
purpose built stores which are situated in safe and
easily accessible locations.

We have opened our Enfield store on the A10 in
London and our Gypsy Corner store situated next
to the A40 in London. We also acquired two stores
in Oxford and Chester. This and our other high
profile store locations contribute to the growing
awareness of self storage and our brand.

We have an unrivalled portfolio across London,
the South East and large metropolitan cities, with
a network of 84 stores..

Gypsy Corner

Peterborough

Enfield

DUNDEE

EDINBURGH

KEY

70 Big Yellow stores

3 Big Yellow stores
under development

14 Armadillo stores

STOCKTON

> Outside London

– 49 stores and sites

MORECAMBE

LEEDS

HULL

LIVERPOOL NORTH
LIVERPOOL
LIVERPOOL SOUTH

MANCHESTER

WARRINGTON

SHEFFIELD HILLSBOROUGH
SHEFFIELD WESTBAR
SHEFFIELD PARKWAY
SHEFFIELD BRAMALL LANE

CHESTER

STOCKPORT

CHEADLE

MACCLESFIELD

STOKE-ON-TRENT

BIRMINGHAM

DERBY

NOTTINGHAM

NORWICH

PETERBOROUGH

CAMBRIDGE

COLCHESTER

MILTON KEYNES

LUTON

CHELTENHAM

GLOUCESTER

OXFORD x2

HIGH WYCOMBE

CHELMSFORD

CARDIFF

BRISTOL CENTRAL

SWINDON

READING

SLOUGH

London
London

SOUTHEND

> London

– 38 stores

WATFORD

ENFIELD

NORTH FINCHLEY

EDMONTON

A1(M)
STAPLES CORNER

EAST FINCHLEY

HANGER LANE

EALING

GYPSY CORNER

ROMFORD

ILFORD
BARKING

BOW

DAGENHAM

M40

HOUNSLOW

CHISWICK

NORTH KENSINGTON

FULHAM

KENNINGTON

RICHMOND

TWICKENHAM

SHEEN

BATTERSEA

NEW CROSS

KINGSTON
NEW MALDEN

TOLWORTH

WANDSWORTH

MERTON

BALHAM

ELTHAM

WEST NORWOOD

BECKENHAM

BROMLEY

BYFLEET

SUTTON

CROYDON

ORPINGTON

M20

BRISTOL
ASHTON GATE

CAMBERLEY

GUILDFORD
GUILDFORD CENTRAL

TUNBRIDGE WELLS

PORTSMOUTH

BRIGHTON

POOLE

70 easy to find, high profile locations provide
convenience for customers and unmissable
exposure for the Big Yellow brand.

14 Armadillo stores further broaden our
national coverage

High profile locations.

Highlights

/ Strong operating performance delivers

32% earnings growth

Financial metrics

Revenue
Adjusted profit before tax(1)
Adjusted diluted EPRA earnings per share(2)
Dividend – final
– total
Adjusted NAV per share(3)
Cash flow from operating activities (after net finance costs)

Store metrics

Occupancy growth(4)
Occupancy (%)(4)
Average net achieved rent per sq ft(4)

Statutory metrics

Profit before tax
Basic earnings per share

Year ended

31 March

2015

£84.3m
£39.4m
27.1p
11.3p
21.7p
510.4p
£42.4m

Year ended

31 March

2014

£72.2m
£29.2m
20.5p
8.4p
16.4p
446.5p
£32.8m

267,000 sq ft
73.2%
£24.95

200,000 sq ft
67.9%
£24.32

£105.2m
72.5p

£59.8m
42.5p

Growth

17
35
32
35
32
14
29

34
8
3

76
71

1 See note 10 2 See note 12 3See notes 12 and 14 4See Portfolio Summary and Operating and Financial Review

Highlights

> Increased demand throughout UK

> Growth in all our key store metrics

> 32% increase in adjusted earnings per share and total dividend

> Acquisition of remaining two thirds of Big Yellow Limited Partnership and £76.4m placing

> Platform expanded by 234,000 sq ft:

– Two new freehold stores constructed at Gypsy Corner and Enfield

– Two existing freehold stores acquired in Oxford and Chester

> Acquisition of freehold building in Cambridge for conversion

> Acquisition of freehold interest in existing store in Battersea

> Debt refinanced – diversified pool, extended maturity, lower cost

> Two Armadillo joint ventures with Australian consortium

– April 2014: Acquisition of ten store portfolio totalling 401,000 sq ft

– February 2015: Acquisition of four store portfolio totalling 270,000 sq ft

We are pleased to report very strong results, with
demand growth across our network reflecting
improved economic growth, not just in London,
but within the UK as a whole.

Demand Growth

We have delivered occupancy, cash flow and earnings
growth for the sixth year in a row.

Occupancy (%)

Net rent (per sq ft)

73.2

69.8

64.8

63.5

59.3

75%

70%

65%

60%

55%

50%

26.78

26.49

26.15

25.23

24.65

£28.00

£27.00

£26.00

£25.00

£24.00

£23.00

£22.00

£21.00

£20.00

2011 2012 2013

2014 2015

2010 2011 2012

2013 2014

Revenue (£m)

84.3

72.2

69.7

65.7

61.9

90.0

80.0

70.0

60.0

50.0

Adjusted profit

before tax (£m)

39.4

29.2

25.5

23.6

20.2

2011 2012 2013

2014 2015

2011 2012 2013

2014 2015

Adjusted earnings

per share (pence)

Dividend per share

(pence)

27.1

20.5

19.3

18.2

15.5

21.7

16.4

11.0

10.0

9.0

25.0

20.0

15.0

10.0

5.0

0.0

2011 2012 2013

2014 2015

2011 2012 2013

2014 2015

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Chairman’s Statement

The objective is very simple; to grow earnings and dividend
at a compelling, but sustainable rate over a long period of time,
without taking undue risk.

Growth

/ Of Revenue and Earnings

Big Yellow Group PLC (“Big Yellow”, “the Group” or “the Company”),
the UK’s brand leader in self storage, is pleased to announce results
for the fourth quarter and the year ended 31 March 2015.

We are pleased to report very strong results, with demand growth
across our network reflecting improved economic growth not just in
London, but within the UK as a whole. To deliver this performance we
continue to innovate and maintain an unerring focus on all aspects
of our business, such that we grow our market share and monetise
the strength of our brand.

Financial results
Revenue for the year was £84.3 million (2014: £72.2 million),
an increase of 17%. Excluding the Partnership stores consolidated
from 1 December 2014, revenue was £80.6 million, an increase of
12% from the prior year. The stores have grown in occupancy over
the year from 67.9% to 73.2% at 31 March 2015.

Cash inflows from operating activities (after finance costs)
increased by £9.6 million (29%) to £42.4 million for the year
(2014: £32.8 million).

The Group made an adjusted profit before tax in the year of
£39.4 million (2014: £29.2 million), up 35%. This translated into a
32% increase in adjusted earnings per share to 27.1p (2014: 20.5p).

The Group made a statutory profit before tax for the year of
£105.2 million, compared to a profit of £59.8 million last year.
The revaluation gain on the investment property portfolio is
£64.5 million for the year, reflecting the improved operating
performance of the business and yield compression.

The Group has net bank debt of £277.1 million at 31 March 2015
(2014: £226.1 million). This represents approximately 27% (2014:
28%) of the Group’s gross property assets totalling £1,022.8 million
(2014: £804.8 million) and 35% (2014: 36%) of the adjusted net
assets of £801.4 million (2014: £634.4 million).

The Group’s income cover for the year (expressed as the ratio of
cash generated from operations against interest paid) was 5.4 times
(2014: 4.1 times). On an annualised basis at March the ratio was
5.9 times.

Placing and acquisition of Big Yellow Limited Partnership
We set up Big Yellow Limited Partnership with Pramerica Real Estate
Investors in November 2007 to build out our regional portfolio,
allowing us to focus the Group’s resources on developing our London
sites. The Partnership had a limited life, with Big Yellow having a
call option over Pramerica’s equity interest crystallising from the
March 2015 balance sheet.

We were therefore very pleased to have come to an agreement
with Pramerica to accelerate this process and on 1 December 2014
acquired their 66.67% share for £39.25 million and the underlying
Partnership debt (£57 million) totalling £96.25 million. This was
largely funded by a successful placing raising £76.4 million (net of
expenses) in November 2014.

The acquisition represented an opportunity to employ more capital
into prime Big Yellow branded assets and consolidate the Group’s
position as the leading UK self storage brand, where the Company
has detailed knowledge and visibility over the assets acquired.

Investment in new capacity
In the year we have made some progress in growing our self storage
platform in key target locations, although competition for land
remains high, particularly in London.

In July we acquired a freehold store in Oxford from Fort Box Self Storage
for £4.1 million. The store has been rebranded as a Big Yellow, and has
a current lettable area of 35,000 sq ft, with expansion space for a
further 10,000 sq ft. Our existing 33,000 sq ft Oxford store averages
over 85% occupied and this acquisition will allow us to drive growth in
occupancy and rental yield from our larger operating platform.

We acquired the freehold of a former Royal Mail depot in Cambridge
adjacent to the Cambridge Retail Park, Newmarket Road, completing
in April 2015, which we intend to refurbish and convert into a
55,000 sq ft self storage centre, opening in late 2015. We expect
the total investment including refurbishment to be approximately
£9.3 million.

This is our first new site acquisition for construction in seven years.
The acquisition is testament to our confidence in both Cambridge
and our business model. It should be noted, however, that the
opportunity took 14 years to present itself, despite continual
searching over that time.

We opened our 60,000 sq ft store in Enfield on 1 April 2015, on a
prominent location on the A10. We intend to construct our store in
Central Guildford over the course of the year, and anticipate it
opening in Autumn 2016.

We have acquired the freehold interest of our existing 34,000 sq ft
store in Battersea, which had 12 years remaining on the occupational
lease together with a 14,100 sq ft retail unit let to Halfords on an
annual rent of £458,000 with 7 years unexpired, part of which is
sublet to Pets at Home. The next rent review date is January 2017.
The total consideration paid was £23 million. This increases the
freehold ownership of our portfolio and protects our position in this
important central London location. In the medium term, we will
redevelop the 1.5 acre site to include a larger Big Yellow store
together with other uses.

In April 2014 we acquired the Armadillo portfolio in a joint venture
with an Australian consortium for a property value of £19.75 million.
Our equity invested in this joint venture is £1.9 million, representing
a 20% stake. The business has traded ahead of expectations since
acquisition, and, in addition to the management fees earned, we have
received a first year dividend of £178,000, representing a 9.3% yield.

In January 2015, the Group acquired the entire share capital of
Big Storage Limited, a self storage company with five stores in
the North West of England, for a property value of £24.9 million.
The Group retained the store in Chester, which will be rebranded as
Big Yellow. The Group subsequently sold the company with the
remaining four stores to a joint venture company for a property value
of £19.3 million, of which the Group owns 20% and an Australian
consortium the remaining 80%. These four stores will be rebranded
as Armadillos. This brings our Armadillo brand to 14 stores with a
total capacity of 671,000 sq ft, and blended occupancy of 69.0% at
31 March 2015.

Our people
Success in any business is ultimately driven from within and with
all making a contribution. I believe that we have a unique culture in
the business with accessible management and a non-hierarchical
structure which values and endeavours to reward everyone in the
organisation for their contribution to our success. Our strong
performance during the year was driven as always by the efforts
and loyalty of our Big Yellow team, and our people remain pivotal
to the achievement of our key medium term objectives of driving
occupancy, revenue, and cash flow growth.

Outlook
We make no attempt to judge the economic cycle as it is a fruitless
task and never more than now. We have now positioned the Group for
the long-term so that we can enjoy the benefits of a strong economy
and also adequately accommodate any reverses.

The most important contribution to performance will be growing
the occupancy and increasing rental rates in the existing platform
of stores. In addition, there is scope to add more stores but the
availability of land, and competition for it, makes this challenging.
That said, there will be opportunities and we are well positioned to
exploit them.

The objective is very simple; to grow earnings and dividend at a
compelling, but sustainable rate over a long period of time, without
taking undue risk.

Dividends
The Group’s dividend policy is to distribute 80% of full year adjusted
earnings per share. The final dividend declared is 11.3 pence per
share. The dividend declared for the year of 21.7 pence per share
represents an increase of 32% from 16.4 pence per share last year.

Nicholas Vetch
Chairman
18 May 2015

Strategic Report

Our Strategy and Business Model

The Strategic Report

discusses the following areas:

> Our strategy and business model

> Operational and marketing review

> Store performance

> Financial review

> Going concern basis

> Principal risks and uncertainties

> Corporate social responsibility

Approval
This report was approved by the Board of Directors on 18 May 2015 and signed on its behalf by:

James Gibson
Chief Executive Officer

John Trotman
Chief Financial Officer

Our Strategy
Our strategy from the outset has been to develop Big Yellow into the
market leading self storage brand, which we have achieved with
unprompted awareness of over seven times that of our nearest
competitor (source: YouGov survey, May 2015). We concentrate
on developing our stores in main road locations with high visibility,
where our distinctive branding generates high awareness of Big Yellow.

Self storage demand from businesses and individuals at any given
store is linked in part to local economic activity, consumer and
business confidence, all of which are inter-related. Fluctuations in
housing activity whether in the rented or owner occupied sector are
also a factor and in our view influence the top slice of demand over
and above a core occupancy. This has been demonstrated by the
resilience of our like-for-like stores since September 2007 despite a
collapse in housing activity and GDP over the period 2007 to 2009.

Local GDP and hence business and housing activity are greatest in
the larger urban conurbations and in particular London and the South
East. Furthermore, people and businesses are space constrained in
these more expensive areas. Barriers to entry in terms of
competition for land and difficulty around obtaining planning are
also highest in more urbanised locations.

Over the last 16 years we have created a portfolio of 70 purpose built
prime Big Yellow self storage centres, largely freehold and focussed
on London, the South East and large metropolitan cities. 61% of our
current store revenue derives from within the M25; for London and
the South East, the proportion of current store revenue is 80%.
The REVPAF performance of our stores in London was more resilient
over the downturn than in the regions.

Our Big Yellow stores are on average 63,000 sq ft, compared to an
industry average of 41,000 sq ft (source: The Self Storage
Association 2015 UK Annual Survey). The upside from filling our
larger than average sized stores is, in our view, only possible in large
metropolitan markets, where self storage demand from domestic
and business customers is the highest. As the operating costs of our

assets are relatively fixed, larger stores in bigger urban conurbations,
particularly London, drive higher revenues and higher operating margins.

We continue to believe that the medium term opportunity to create
shareholder value will be principally achieved by leasing up existing
stores to drive revenue, the majority of which flows through to the
bottom line given that our operating and central overhead costs are
already largely fixed and embedded.

Our key objectives remain:

> leveraging our market leading brand position to generate new
prospects, principally from our online mobile and desktop
platforms;

> focusing on training, selling skills, and customer satisfaction to

maximise prospect conversion and referrals;

> growing occupancy and net rent so as to drive revenue

optimally at each store;

> maintaining a focus on cost control, so revenue growth is

transmitted through to earnings growth;

> maintaining a conservative capital structure in the business
with Group pre-interest cash flow cover of a minimum of five
times annual interest expense; and

> producing sustainable returns for shareholders through a low

leverage, low volatility, high distribution REIT.

In the fifteen years since flotation in May 2000, Big Yellow has
delivered a Total Shareholder Return (“TSR”), including dividends
reinvested, of 15.2% per annum, in aggregate 740% at the closing
price of 647.5p on 31 March 2015. This compares to 7.8% per annum
for the FTSE Real Estate Index and 4.8% per annum for the FTSE All
Share index over the same period. This demonstrates the power of
compounding over the longer term.

Our Business Model

Attractive market dynamics

Our competitive advantage

. UK self storage penetration in key urban conurbations remains relatively low
. Very limited new supply coming onto the market
. Resilient through the downturn
. Sector growth is positive, with increasing domestic demand

. Industry’s most recognised brand
. Prominent stores on arterial or main roads, with extensive frontage and

high visibility

. Largest share of web traffic from mobile and desktop platforms
. Excellent customer service, customer feedback programme with store level

customer satisfaction surveys

. Largest UK self storage footprint by Maximum Lettable Area (“MLA”) capacity
. Primarily freehold estate concentrated in London and South East and other

large metropolitan cities

. Larger average store capacity – economies of scale, higher operating margins
. Secure financing structure with strong balance sheet

Evergreen income streams

Strong growth opportunities

. 47,250 customers
. Average length of stay for existing customers of 22 months
. 29% of customers in stores > two year length of stay
. Low bad debt expense (0.15% of revenue in the year)

. Driving REVPAF with a focus on occupancy growth
. Yield management as occupancy increases
. Demand increasing with improving economic activity
. Growth in national accounts and business customer base
. Increasing the platform from the Group’s resources
. Continuing investment in our 20% Armadillo joint ventures

Conversion into
quality earnings

. Freehold assets for high operating margins and operational advantage
. Low technology & obsolescence product, maintenance capex fully expensed
. Annual compound adjusted eps growth of 17% since 2004/5
. Annual compound cash flow growth of 16% since 2004/5

Strategic Report (continued)

Our Strategy and Business Model (continued)

The self storage market
In the recently published 2015 Self Storage Association UK Survey,
only 45% of those surveyed had a reasonable or good awareness of
self storage, in line with findings from our own research. Furthermore,
only 6% of the 2,151 adults surveyed were currently using self
storage or were thinking of using self storage in the next year.
This indicates a continued opportunity for growth and with
increasing use, together with the ongoing marketing efforts of
everyone in the industry, we anticipate awareness to grow.

Growth in new facilities across the industry has been limited to regional
areas of the UK, particularly in the north, whereas in London, there
were very few new openings last year and indeed capacity is expected
to fall in the next twelve months with the closures of stores for
redevelopment into alternative uses. Between 2010 and 2014 average
industry openings have been approximately nine per year, which
compares to an average of 34 per year in the preceding four years.

78% of respondents to the survey expected an improvement in
profits this year, compared to 79% last year, and 84% expect rents
for new customers to rise in 2015 compared to 87% last year.

The Self Storage Association (“SSA”) estimate that the UK industry
is made up of approximately 1,022 self storage facilities (of which
159 are purely container operations), providing 35.7 million sq ft of
self storage space, equating to 0.56 sq ft per person in the UK. This
compares to 7.3 sq ft per person in the US, 1.6 sq ft per person in
Australia and 0.1 sq ft for mainland Europe, where the roll-out of self
storage is a more recent phenomenon (source: Self Storage Association
2015 UK Annual Survey). 346 self storage facilities in the UK are held
by large operators (defined as those managing 10 facilities or more)
which represents 40% of the total number of self storage centres,
but we would estimate approximately 50 to 60% of total capacity.

Awareness of self storage will continue to grow as more businesses
and individuals use the product at a time when the supply side is
restricted, with very few store openings expected in the calendar year.

Big Yellow is well placed to benefit from the growing self storage market,
given the strength of our brand, and online platform which delivers
approximately 86% of our prospect enquiries. Our portfolio is
strategically focussed on London, the South East and large metropolitan
cities, where barriers to entry and economic activity are at their highest.

KPIs
The key performance indicators of our stores are occupancy and rental
yield, which together drive the revenue of the business. These are three
key measures which are focussed on by the Board, and are reported
on a weekly basis. Over the course of past five years, both occupancy
and revenue have grown significantly. Rental yield was relatively
stable between 2010 and 2012, reduced following the introduction
of VAT in 2013 and grew by 6.1% in the year to 31 March 2014.

It has decreased this year by 3.5%, principally reflecting the
acquisition of the Big Yellow Limited Partnership stores at a lower
average net rent per sq ft, being a regional portfolio. On a like for like
basis, net rent has grown by 2.4% this year. Our key focus is on
continuing to grow occupancy, with rental yield growth following
once the stores have reached higher occupancy levels.

Adjusted profit before tax, adjusted earnings per share and distributions
to shareholders are our other KPIs. We have delivered compound
eps growth of 15% over the past five years, and compound dividend
growth of 24% over the same period. Compound adjusted eps growth
since 2004/5 is 17%. We have illustrated the Group’s performance in
these measures over the past five years on page 15.

Capital structure
In November 2013, the Company carried out a study of debt leverage
and its impact on the long-term share performance of businesses,
with the help of an external consultant. The study covered 40 quoted
companies in the REIT space together with other consumer facing
businesses for the period from 2000 to 2013. The main objective was
to see if the results supported our long held view that lower geared
businesses outperform in the long-term.

Different business models with varying operating margins might,
at the margin, have different optimum levels of debt. However a
consistent theme emerged that excessive levels of debt have
been universally value destructive. In a narrow window between
2003 and 2006 higher levels of debt would have delivered higher
returns, but even during that period optimum levels of debt were
lower than might be expected, and would have required pinpoint
accuracy in timing. Transmission of this value destruction did result
in significant underperformance and marked increases in share
price volatility.

Optimum levels of LTV gearing (expressed as net debt to gross asset
value) ranged from 10% in moments of extreme fear (2008 to 2009)
to 43% in periods of exuberance (2003 to 2006). Using 2009 to 2013
as a base, which is more representative of the long-term norm, albeit
on a conservative basis, the optimum level of LTV was found to be 23%.

We have previously said that we believe that the Group would benefit
from lower leverage and the Board has a long-term target of Group
income cover of over 5 times. The relationship of this metric to
capital leverage is not perfectly correlated but making long-term
assumptions on values and interest is reasonably correlated.
We believe that the optimum level of LTV is 20% to 30% with a target
of mid 20s from the current level of 27%. Given the subjective nature
of valuations we prefer to express this target as net operating
income over debt costs.

80%

of revenue from London and
the South East

15.2%

per annum TSR since floatation

17%

compound EPS growth
since 2004/2005

Operational and Marketing Review

For unprompted brand awareness, our recall in London is 52%,
and for the rest of the UK it is 22%, both more than seven times
that of our nearest competitor.

Overview
We now have a portfolio of 73 Big Yellow stores and sites of which
70 are currently open (Enfield opened on 1 April 2015). In addition
we operate from 14 Armadillo Self Storage centres which are located
in northern cities. Our store in Cambridge is expected to open in
late 2015, and our store at Guildford Central is expected to open in
Summer 2016. Planning negotiations are ongoing at our site in
central Manchester.

Access to capital and bank facilities has improved in the last year for
real estate businesses, including self storage, however this is mainly
for larger well-capitalised groups, rather than necessarily the smaller,
independent operators. Growth in new openings over the last four
years has averaged 1% of total capacity per annum, down significantly
from the previous decade. Additionally, in our core markets in London
and the South East, very high land values will render the opportunity
for creating new self storage centres difficult. We believe that we are
in a relatively strong position given the strength of our balance sheet
and our proven property development expertise together with our
ability to access funding to exploit the right opportunity.

Operations
The Big Yellow store model is well established. The “typical” store has
60,000 sq ft of net lettable storage area and takes some three to five
years to achieve 80% plus occupancy. Some stores have taken longer
than this given they opened just before or during the downturn.
The average room size occupied in the portfolio is currently 67 sq ft,
compared to 68 sq ft last year.

The store is open seven days a week and is initially run by three staff,
with a part time member of staff added once the store occupancy
justifies the need for the extra administrative and sales workload.

The drive to improve store operating standards and consistency
across the portfolio remains a key focus for the Group. Excellent
customer service is at the heart of our business objectives, as a
satisfied customer is our best marketing tool. We measure customer
service standards through a programme of mystery shoppers and
online customer reviews.

The website, whether accessed by desktop,
tablet or smartphone receives the largest
share of prospects, accounting for

86% of all sales leads.

At the start of the prior year we launched a new customer-experience
programme which combines the feedback from mystery shopping
and customer reviews into the reinforcement of customer focus in
our store operations. Our net promoter scores from this programme
have increased over the year with part of the store teams’ bonus
linked to the scores they achieve.

We have a team of eight Area Managers in place who have on average
worked for Big Yellow for eleven years. They develop and support the
stores to drive the growth of the business.

The store bonus structure rewards occupancy growth, sales growth
and cost control through quarterly targets based on occupancy and
store profitability, including the contribution from ancillary sales of
insurance and packing materials. Information on bonus build up is
circulated monthly and stores are consulted in preparing their own
targets and budgets each quarter, leading to improved visibility, a
better understanding of sales lines and control of operating costs.

We believe that as a consumer-facing branded business it is
paramount to maintain the quality of our estate and customer
offering. We therefore continue to invest in preventative
maintenance, store cleaning and the repair and replacement of
essential equipment, such as lifts and gates. The ongoing annual
expenditure is approximately £30,000 per store, which is included
within cost of sales. This excludes our rolling programme of store
makeovers, which typically take place every five years, at a cost of
approximately £20,000 per store.

Demand
Of the customers moving into our stores in the last year, surveys
undertaken indicate approximately 45% are linked to the housing
market, either customers renting storage space whilst moving within
the rental sector or the owner occupied sector. During the year 12%
of our customers who moved in took storage space as a spare room
for decluttering and approximately 33% of our customers used the
product because some event has occurred in their lives generating
the need for storage; they may be moving abroad for a job, have
inherited possessions, are getting married or divorced, are students
who need storage during the holidays, or homeowners developing
into their lofts or basements. The balance of 10% of our customer
demand during the year came from businesses.

Strategic Report (continued)

Operational and Marketing Review (continued)

Our business customers range across a number of industry types,
such as retailers, e-tailers, professional service companies,
hospitality companies and importers/exporters. These businesses
store stock, documents, equipment, or promotional materials all
requiring a convenient flexible solution to their storage, either to get
started or to free up more expensive space.

We have a dedicated national accounts team for business customers
who wish to occupy space in multiple stores. These accounts are
billed and managed centrally. We have four full time members of staff
working on growing and managing our national account customers.
The national accounts team can arrange storage at short notice at any
location for our customers. In smaller towns where we do not have
representation, we have negotiated sub-contract arrangements with
other operators who meet certain operating standards. Revenue from
our national accounts increased by 48% compared to the prior year.

Business customers typically stay longer than domestic customers,
and also on average occupy larger rooms. Whilst only representing
10% of new customers during the year, businesses represent 18%
of our overall customer numbers, occupying 34% of the space in our
stores. The average room size occupied by business customers is
125 sq ft, against 54 sq ft for domestic customers. This compares
with the SSA Survey result for the industry as a whole which had
59% of space occupied by domestic customers and 41% of space
by businesses. We would expect to have a higher proportion of
domestic customers given our focus on London and other large
metropolitan cities.

We have seen solid demand from business customers, as they seek a
cost effective, flexible solution to their storage requirements, preferring
self storage to the commitment of a long lease. We believe there is an
opportunity to grow business occupancy and national accounts
in the coming year. We have improved our business offer further,
we have increased the resource of our national accounts team, and
we are increasing our marketing to drive business prospects.

Marketing and eCommerce
Our marketing strategy continues to focus on driving customer
satisfaction and response through our multiple digital platforms.

For the last nine years, we have commissioned a YouGov survey to
help us monitor our brand awareness. In our most recent survey,
conducted in May 2015, we used a statistically robust sample size
of 1,035 respondents in London and 2,040 for the rest of the UK.
The survey has shown our prompted awareness to be at 75% in
London, two and a half times our nearest competitor and 44% for the
rest of the UK, over three times higher than our nearest competitor.

Of web visits in March 2015, whether to the
Big Yellow mobile or desktop websites,

48% come from tablets
and smartphones.

For unprompted brand awareness, our recall in London is 52% and for
the rest of the UK it is 22%, both more than seven times higher than
our nearest competitor. These surveys continue to prove we are the
UK’s brand leader in self storage (source: YouGov, May 2015).

Online
The Big Yellow website, whether accessed by desktop, tablet or
smartphone, receives the largest share of prospects, accounting for
86% of all sales leads across the year ended 31 March 2015. Telephone
is the first point of contact for 9% of prospects and walk-in enquiries,
where we have had no previous contact with a prospect, represent 5%.

We have the largest online market share of web visits to self storage
company websites in the UK. Across the year ended 31 March 2015,
our online market share of web visits ranged from 33% to 39%. Our
nearest competitor ranged from 14% to 19% online market share for
the same period (source: Experian Hitwise 44 largest UK operators).

We continually monitor and improve the website user journey
to make the experience as informative, customer focussed and
intuitive as possible. Our mobile strategy is central to this. By the
end of March 2015, smartphones and tablets accounted for 48% of all
web visits. Specifically, smartphones alone accounted for 32% of web
visits in March 2015, up from 27% in March 2014.

Whether it is through desktop, tablet or mobile, our customers enjoy
a seamless experience whichever digital route they choose. We are
continually developing helpful and time saving online tools such as
check-in online, online FAQs, video store tours and online chat. These
all help the customer to make an informed choice about their self
storage requirements.

Online customer reviews
Consistent with our strategy of putting the customer at the heart
of our business, our online customer reviews generate real-time
feedback from customers as well as providing positive word of mouth
referral to our web visitors. Through our ‘Big Impressions’ customer
feedback programme, we ask our new customers to rate our product
and service and with the users’ permission, we then publish these
independent reviews on the website. There are currently over 11,600
reviews published.

The Big Impressions programme also generates customer feedback
on their experience when they move out of a Big Yellow store and
also from those prospects who decided not to store with us. In
addition, this programme reinforces best practice of customer
service at our stores where customer reviews and mystery shop
results are transparently accessible at all levels.

In addition, we also gain real-time insight from customers who
submit reviews to a third party customer review site. These reviews
are currently averaging 9.5 out of 10.

We also regularly monitor Google reviews and mentions of Big Yellow
within the social mediums of Twitter, online forums and blogs.
We use this insight to continually improve our service offering.

52%

Unprompted brand awareness
in London

22%

Unprompted brand awareness
in the rest of the UK

33-39%

Online market share

Driving online traffic
Search engines are the most important acquisition tool for us,
accounting for the majority of all traffic to the website. We continue
to invest in search engine optimisation (“SEO”) techniques both on
and off the site. This helps us to maintain our high positions for the
most popular and most searched for terms such as “storage” and
“self storage” in the organic listings on Google.

The sponsored search listings remain the largest source of paid for
traffic and we ensure our prominence in these listings is balanced
with effective landing pages to maximise site conversion.

This year, we have also continued with online display advertising
on websites which are targeted to our core audience groups. This
activity performs both a direct response and branding role.

Efficiencies in online spend are continuing into the year ending
31 March 2016, ensuring the return on investment is maximised
from all of our different online traffic sources. Online marketing
budgets will continue to remain fluid and be directed towards the
media with the best return on investment.

Social media
Social media continues to be complementary to our existing
marketing channels. Our activity is most focussed on Twitter, not
only monitoring and answering queries regarding self storage, but
also posting our own creative tweets, tips and advice. The Big Yellow
YouTube channel is used to showcase our stores to web prospects
through a video store tour. We use both domestic and business
versions to help prospects experience the quality of the product
without the need for them to visit the store in person. Our online
blog is updated regularly with tips and advice for homeowners and
businesses as well as summaries of our charitable and CSR initiatives.

PR
We have used PR stories in the year to help raise the awareness
of Big Yellow and the benefits of self storage to different audience
groups. These have focussed on the flexible benefits of using self
storage for when you are looking to sell your home, an intriguing
insight into how household clutter can damage relationships, plus
research into the growing demographic trend of the Boomerang
Generation who are returning home to live back with their parents
after having flown the nest. These stories help to promote the wider
uses of Big Yellow Self Storage against everyday issues and have
generated both national and regional media coverage online and
offline. They are also supported by radio interviews which allow us
to talk about the benefits of Big Yellow.

Budget
During the year the Group spent approximately £3.6 million on
marketing (4% of total store revenue). We have increased the budget
for the year ahead to £4 million with a focus on driving our revenue
through delivering more prospects to the website.

Strategic Report (continued)

Proforma Portfolio Summary – Big Yellow Stores

Number of stores(2)

Mature(1)

Established

Developing

2015

Total

Mature

Established

Developing

2014

Total

At 31 March
Total capacity (sq ft)
Occupied space (sq ft)
Percentage occupied
Net rent per sq ft

For the year
REVPAF(3)
Average occupancy
Average annual rent psf

3,121,000
2,350,000
75.3%
£25.89

883,000
613,000
69.4%
£22.73

340,000
215,000
63.2%
£25.05

4,344,000
3,178,000
73.2%
£25.23

3,017,000
2,146,000
71.1%
£25.62

883,000
536,000
60.7%
£22.09

270,000
150,000
55.6%
£23.83

4,170,000
2,832,000
67.9%
£24.85

£22.49
74.7%
£25.73

£18.04
67.7%
£22.33

£16.40
58.1%
£23.80

£21.09
71.9%
£24.95

£21.03
70.6%
£25.05

£15.43
58.7%
£21.63

£14.37
51.1%
£22.85

Self storage income
Other storage related income(4)
Ancillary store rental Income

Total store revenue
Direct store operating
costs (excluding depreciation)
Short and long leasehold rent(5)

Store EBITDA(6)
Store EBITDA margin

Deemed cost

To 31 March 2015
Capex to complete

Total

£000

58,695
9,871
136

68,702

(20,596)
(1,941)

46,165
67.2%

£m

311.0
–

311.0

13,355
2,519
54

15,928

(5,573)
–

10,355
65.0%

£m

145.4
1.7

147.1

£000

4,701
790
86

5,577

(2,187)
–

3,390
60.8%

£m

74.0
0.2

74.2

£000

53,367
9,272
91

62,730

(19,973)
(2,005)

40,752
65.0%

11,211
2,329
85

13,625

(5,373)
–

8,252
60.6%

76,751
13,180
276

90,207

(28,356)
(1,941)

59,910
66.4%

£m

530.4
1.9

532.3

£000

3,153
632
95

3,880

(1,732)
–

2,148
55.4%

£19.41
66.8%
£24.32

£000

67,731
12,233
271

80,235

(27,078)
(2,005)

51,152
63.8%

(1) The mature stores have been open for more than six years at 1 April 2014. The established stores have been open for between three and six years at 1 April 2014 and the

developing stores have been open for fewer than three years at 1 April 2014. The Group acquired two stores during the year in Chester and Oxford. These are shown within
mature stores in the current year as they have been open for more than six years.

(2) The Group acquired the 66.7% of Big Yellow Limited Partnership that it did not previously own on 1 December 2014. The results of the stores in the Partnership have been

included in the results above for both years to give a clearer understanding of the underlying performance of all Big Yellow stores. The table below shows the results excluding the
period when the stores were not wholly owned.

Store revenue
Store EBITDA

2015
Partnership
results as an
associate
£000

(7,476)
(4,659)

Per above
£000

90,207
59,910

Statutory
£000

82,731
55,251

Per above
£000

80,235
51,152

2014
Partnership
results as an
associate
£000

(9,529)
(5,480)

Statutory
£000

70,706
45,672

(3) Total store revenue divided by the average maximum lettable area in the year.
(4) Packing materials, insurance and other storage related fees.
(5) Rent for six mature short leasehold properties accounted for as investment properties and finance leases under IFRS with total self storage capacity of 398,000 sq ft, and a long

leasehold lease-up store with a capacity of 64,000 sq ft. The Group acquired the freehold of its Battersea store in December 2014.

(6) Store earnings before interest, tax, depreciation, amortisation, and an allocation of central overhead.

Our Stores

Our Portfolio

/ Unrivalled in the UK

An unrivalled portfolio of stores across London,
the South East and other large metropolitan cities.

Enfield, April 2015
MLA – 60,000 sq ft

Chester, February 2015
MLA – 69,000 sq ft

Oxford 2, July 2014
MLA – 35,000 sq ft

Gypsy Corner, April 2014
MLA – 70,000 sq ft

Chiswick, April 2012
MLA – 75,000 sq ft

New Cross, February 2012
MLA – 62,000 sq ft

Stockport, September 2011
MLA – 65,000 sq ft

Eltham, April 2011
MLA – 70,000 sq ft

Camberley, January 2011
MLA – 68,000 sq ft

High Wycombe, June 2010
MLA – 60,000 sq ft

Our Portfolio (continued)

Reading, December 2009
MLA – 62,000 sq ft

Sheffield Bramall Lane,
September 2009 MLA – 60,000 sq ft

Poole, August 2009
MLA – 55,000 sq ft

Nottingham, August 2009
MLA – 67,000 sq ft

Edinburgh, July 2009
MLA – 63,000 sq ft

Twickenham, May 2009
MLA – 73,000 sq ft

Liverpool, March 2009
MLA – 60,000 sq ft

Bromley, March 2009
MLA – 71,000 sq ft

Birmingham, February 2009
MLA – 60,000 sq ft

Sheen, December 2008
MLA – 64,000 sq ft

Sheffield Hillsborough,
October 2008 MLA – 60,000 sq ft

Kennington, May 2008
MLA – 66,000 sq ft

Merton, March 2008
MLA – 70,000 sq ft

Fulham, March 2008
MLA – 139,000 sq ft

Balham, March 2008
MLA – 60,000 sq ft

Barking, November 2007
MLA – 64,000 sq ft

Ealing Southall, November 2007
MLA – 57,000 sq ft

Sutton, July 2007
MLA – 70,000 sq ft

Gloucester, December 2006
MLA – 50,000 sq ft

Edmonton, October 2006
MLA – 75,000 sq ft

Kingston, August 2006
MLA – 62,000 sq ft

Bristol Ashton Gate, July 2006
MLA – 61,000 sq ft

Finchley East, May 2006
MLA – 54,000 sq ft

Tunbridge Wells, April 2006
MLA – 57,000 sq ft

Bristol Central, March 2006
MLA – 64,000 sq ft

North Kensington,
December 2005 MLA – 51,000 sq ft

Leeds, July 2005
MLA – 76,000 sq ft

Beckenham, May 2005
MLA – 71,000 sq ft

Tolworth, November 2004
MLA – 56,000 sq ft

Watford, August 2004
MLA – 64,000 sq ft

Swindon, April 2004
MLA – 53,000 sq ft

Orpington, December 2003
MLA – 64,000 sq ft

Byfleet, November 2003
MLA – 48,000 sq ft

Chelmsford, April 2003
MLA – 54 ,000 sq ft

Finchley North, March 2003
MLA – 62,000 sq ft

West Norwood, January 2003
MLA – 57,000 sq ft

Colchester, December 2002
MLA – 54,000 sq ft

Bow, November 2002
MLA – 132,000 sq ft

Brighton, October 2002
MLA – 59,000 sq ft

Guildford, June 2002
MLA – 55,000 sq ft

Our Portfolio (continued)

New Malden, May 2002
MLA – 81,000 sq ft

Hounslow, December 2001
MLA – 54,000 sq ft

Battersea, December 2001
MLA – 34,000 sq ft

Ilford, November 2001
MLA – 58,000 sq ft

Cardiff, October 2001
MLA – 74,000 sq ft

Portsmouth, October 2001
MLA – 61,000 sq ft

Norwich, September 2001
MLA – 47,000 sq ft

Dagenham, July 2001
MLA – 51,000 sq ft

Wandsworth, April 2001
MLA – 47,000 sq ft

Luton, March 2001
MLA – 41,000 sq ft

Southend, March 2001
MLA – 57,000 sq ft

Staples Corner, March 2001
MLA – 112,000 sq ft

Romford, November 2000
MLA – 70,000 sq ft

Milton Keynes, September 2000
MLA – 61,000 sq ft

Cheltenham, April 2000
MLA – 50,000 sq ft

Slough, February 2000
MLA – 67,000 sq ft

Hanger Lane, October 1999
MLA – 66,000 sq ft

Oxford, August 1999
MLA – 33,000 sq ft

Croydon, July 1999
MLA – 80,000 sq ft

Richmond, May 1999
MLA – 35,000 sq ft

Strategic Report (continued)

Portfolio Summary – Armadillo Stores

Number of stores

At 30 September
Total capacity (sq ft)
Occupied space (sq ft)
Percentage occupied
Net rent per sq ft

For the 6 month period
REVPAF
Average occupancy
Average annual rent psf

Self storage income
Other storage related income
Ancillary store rental income

Total store revenue
Direct store operating costs (excluding depreciation)

Store EBITDA
Store EBITDA margin

Cumulative capital expenditure

To 31 March 2015
To complete

Total capital expenditure

Armadillo 1(1)

March
2014

401,000
240,000
59.9%
£14.31

£10.03
58.9%
£13.84

£000

3,273
738
12

4,023
(2,016)

2,007
49.9%

March
2015

401,000
253,000
63.1%
£14.66

£11.20
62.9%
£14.53

£000

3,665
817
10

4,492
(2,035)

2,457
54.7%

£m

19.8
0.2

20.0

(1) The Group acquired an interest in Armadillo 1 on 16 April 2014. The results shown here are to provide readers with a clearer understanding of the performance of the portfolio.

Please see note 13d for the Group’s share of Armadillo 1’s results since ownership.

(2) The Group acquired an interest in Armadillo 2, a portfolio of four stores in the North West on 3 February 2015. The four stores were 77.8% occupied of their 270,000 sq ft capacity
at 31 March 2015. The trading figures for this portfolio will be presented from next year. Please see note 13d for the Group’s share of Armadillo 2’s results since ownership.

Strategic Report (continued)

Store Performance

We had a very strong quarter to June with good net move-in growth.
The second quarter peaked in August and then we saw many of our
students and short term house moves starting to vacate in
September, leading to a relatively flat quarter.

The third quarter saw student and house move vacations leading to a
net loss in units occupied and sq ft. In the final quarter we have seen
a return to growth in net occupied rooms and increased occupancy
in the stores by 82,000 sq ft. The table below illustrates the move-in
performance in the year.

Store move-ins

April to June
July to September
October to December
January to March

Total

Year ended
31 March 2015

Year ended
31 March 2014

Net move-ins
% 31 March 2015

20,196
21,873
16,897
16,131

75,097

18,685
19,946
14,848
15,464

68,943

8
10
14
4

5,613
(704)
(1,410)
1,126

4,625

In all Big Yellow stores, the occupancy growth in the current year
was 346,000 sq ft, against an increase of 200,000 sq ft in the prior
year. This growth includes 24,000 sq ft of occupancy acquired
with the acquisition of Fort Box Self Storage in Oxford (“Oxford 2”),

and 55,000 sq ft of occupancy acquired with the acquisition of
Big Storage Chester. The net occupancy growth in the year was
therefore 267,000 sq ft. This growth represents an average of
3,870 sq ft per store (2014: 3,030 sq ft per store).

Occupancy
31 March 2015
000 sq ft

Occupancy
31 March 2014
000 sq ft

Growth for
year to
31 March 2015
000 sq ft

Growth for
year to
31 March 2014
000 sq ft

2,350
613
215

3,178

2,146
536
150

2,832

204
77
65

346

109
51
40

200

As the stores lease-up, our pricing model reduces the level of
promotional discounts offered in individual stores. This squeezing
out of promotions leads to an increase in net achieved rents. The
table below illustrates this, showing the growth in net rent per sq ft
for the portfolio over the year.

Average occupancy in the year

Net rent per sq ft growth over the year

0 to 60%
60 to 70%
70 to 80%
Above 80%

1.1%
1.4%
2.0%
5.9%

Store occupancy summary

50 mature stores
14 established stores
5 developing stores

Total – all 69 stores

The 50 mature stores are 75.3% occupied compared to 71.1% at
the same time last year. The 14 established stores have grown in
occupancy from 60.7% to 69.4%. The five developing stores added
65,000 sq ft of occupancy in the year to reach closing occupancy
of 63.2%. Overall store occupancy has increased in the year from
67.9% to 73.2%.

All 69 stores open at the year end are trading profitably at the
EBITDA level.

Pricing and rental yield
We have continued our sales promotion offer throughout the year
of “50% off for up to your first 8 weeks storage”. Our Price Promise is
also used to match competitors’ prices, if the product is comparable.
Pricing is dynamically generated and takes into account customer
demand and local competition.

In the year ended 31 March 2015, net rent in the like for like
stores grew by 2.4%. This has been a combination of reducing
discounts to new customers and retaining price increases from
existing customers.

The table below shows the average key metrics across the store portfolio for the year ended 31 March 2015:

Store capacity
Sq ft occupied per store at 31 March 2015
% occupancy
Revenue per store
EBITDA per store

EBITDA margin

Mature stores

Established stores

Developing stores

62,420
47,000
75.3%
£1,374,000
£923,000

67.2%

63,071
43,786
69.4%
£1,138,000
£740,000

65.0%

68,000
43,000
63.2%
£1,115,000
£678,000

60.8%

Armadillo
In April 2014 we acquired the Armadillo portfolio of 10 stores, which
we have been managing since 2009, with an Australian consortium.
The Armadillo platform was added to in February 2015 with the
acquisition of a further four stores following the purchase of Big
Storage by the Group and its subsequent disposal to a company in
which the Group has a 20% interest, with the balance held by an
Australian consortium.

The Armadillo stores are lower-frills, but good quality, largely freehold
assets in towns where we would not typically locate a Big Yellow
store. Armadillo provides a number of operational advantages to the
Group, such as a wider platform to sell to national accounts, more
promotional opportunities for staff, more efficient use of the
Company’s overhead and benefits online. The Group will consider
other opportunities to add to the Armadillo platform if the right stores
or portfolio become available.

Development pipeline
There are two freehold sites with planning for Big Yellow stores to
be developed. We also own a 4.5 acre development site in central
Manchester where we are in planning discussions for a mixed use
scheme incorporating a new Big Yellow store.

We have acquired the freehold interest of our existing 34,000 sq ft store
in Battersea, which had 12 years remaining on the occupational lease
together with a 14,100 sq ft retail unit let to Halfords on an annual rent
of £458,000 with 7 years unexpired, part of which is sublet to Pets at
Home. The next rent review date is January 2017. The total consideration
paid was £23 million. This increases the freehold ownership of our
portfolio and protects our position in this important central London
location. In the medium term, we will redevelop the 1.5 acre site to
include a larger Big Yellow store together with other uses.

The Group also owns an office building adjacent to our Wandsworth
store which we are seeking planning permission to convert to self
storage, adding approximately 30,000 sq ft of net storage space to
the store.

The status of the development pipeline is summarised in the
table below:

City

Location

Status

Anticipated capacity

Battersea

Cambridge

Guildford

Manchester

Wandsworth

Potential redevelopment of Big Yellow
store and adjoining retail in a mixed
use residential scheme to increase our
self storage capacity

Early design discussions with the
Borough Council

Up to an additional 60,000 sq ft

Adjacent to the Cambridge Retail Park,
Newmarket Road

Existing B8 consent, detailed signage
consent required

55,000 sq ft

Prime location in centre of Guildford on
Woodbridge Meadows

Prime location on Water Street in
central Manchester

Possible extension of 30,000 sq ft to
existing 47,000 store

Consent granted

56,000 sq ft

Planning under negotiation

50,000 sq ft to 70,000 sq ft

Planning under negotiation

Additional 30,000 sq ft

The Group manages the construction and fit-out of its stores in-house, as we believe it provides both better control and quality, and we have
an excellent record of building stores on time and within budget.

Strategic Report (continued)

Financial Review

Total revenue for the year was £84.3 million, an increase
of £12.1 million (17%) from £72.2 million in the prior year.

Delivering

results

Financial results

Placing and acquisition of Big Yellow Limited Partnership
In November 2014 the Group issued 14.35 million new ordinary shares
at 547.5 pence per share raising £76.4 million (net of expenses).

Following the Placing the Group completed the buy-out of its partner
Pramerica Real Estate Investors from its existing joint venture,
Big Yellow Limited Partnership (accelerated from the option date
of 31 March 2015). The purchase price was £39.25 million, close to
the book value at 30 September 2014 and was paid in cash.

Big Yellow Limited Partnership was created in November 2007 and the
portfolio consisted of 12 stores located in Birmingham, Camberley,
Edinburgh, High Wycombe, Leeds, Liverpool, Nottingham, Poole,
Reading, Sheffield (two stores) and Stockport. At the price paid the
portfolio had an implied first year pre-admin net operating income
yield of 6.8%, rising to 8.1% if the stores achieve 85% occupancy at
today’s rental levels.

Revenue
Total revenue for the year was £84.3 million, an increase of
£12.1 million (17%) from £72.2 million in the prior year. The revenue
excluding the Partnership stores consolidated from 1 December was
£80.6 million for the year, representing an increase of 12% from last
year. The other revenue is fee income earned from Big Yellow Limited
Partnership (until 30 November), management fee income from the
Armadillo Partnerships, and tenant income on sites where we have
not started development.

Other sales (included within the above), comprising the selling of
packing materials, insurance and storage related charges, represented
16.8% of storage income for the year (2014: 17.5%) and generated
revenue of £11.8 million for the year, up 13% from £10.5 million in 2014.

The table below reconciles the quarterly store revenue compared to
the prior year, showing the impact on revenue of the Partnership
stores acquired on 1 December 2014.

Quarter

April to June
July to September
October to December
January to March

Total

Same stores*
2015
£m

Same stores
2014
£m

18.6
20.5
20.3
19.6

79.0

16.7
18.4
17.9
17.7

70.7

BYLP stores
consolidated
£m

–
–
1.0
2.7

3.7

11%
11%
13%
11%

12%

2015
total
£m

18.6
20.5
21.3
22.3

82.7

% increase
on 2014

11%
11%
19%
26%

17%

the same stores are the Big Yellow stores excluding the BYLP stores.

Operating costs
Cost of sales comprises principally of the direct store operating
costs, including store staff salaries, utilities, business rates,
insurance, a full allocation of the central marketing budget, and
repairs and maintenance.

Cost of sales in the income statement has increased by £2.4 million
(9%) to £27.4 million (2014: £25.0 million). Of this increase
£1.4 million relates to the operating costs of the Partnership stores
from 1 December 2014. The operating costs of the new stores at
Gypsy Corner, Oxford 2 and Chester account for £0.7 million of the
increase, with the remaining increase of £0.3 million due to general
inflationary pressures in part offset by rates rebates received at a
couple of stores.

Administrative expenses in the income statement have increased
by £0.9 million compared to the prior year, largely due to an increase
of £0.6 million in the share based payment charge and associated
national insurance on the vesting of share incentives. £2.1 million
of the £8.5 million administrative expense is non-cash IFRS 2
share-based payment charges.

Store EBITDA
Store EBITDA for the year was £55.3 million, an increase of
£9.6 million (21%) from £45.7 million for the year ended 31 March 2014.
Of this increase £2.3 million relates to the Partnership stores from
1 December 2014. The EBITDA after adjusting for this is £53.0 million,
an increase of 16% from the prior year.

The overall EBITDA margin for all Big Yellow stores during the year
was 66.4%, compared to 63.8% last year.

Interest expense on bank borrowings
The gross bank interest expense for the year was £10.1 million,
a decrease of £0.7 million from the prior year. This reflects the
reduction in debt costs after the refinancing during the year, partly
offset by the increase in debt in December 2014 following the
acquisition of Big Yellow Limited Partnership and the acquisition of
the freehold of our Battersea store. The average cost of borrowing
during the year was 3.9%, compared to 4.5% in the prior year.

Total interest payable has decreased in the statement of
comprehensive income from £11.3 million to £10.7 million
principally due to the decrease in the gross bank interest expense.
Capitalised interest decreased by £0.1 million from the prior year,
with the Group constructing its store at Enfield in the current year,
compared with constructing Gypsy Corner during the prior year.

Profit before tax
The Group made a profit before tax in the year of £105.2 million,
compared to a profit of £59.8 million in the prior year.

After adjusting for the gain on the revaluation of investment
properties and other matters shown in the table below, the Group
made an adjusted profit before tax in the year of £39.4 million,
up 35% from £29.2 million in 2014.

Profit before tax analysis

Profit before tax
Gain on revaluation of
investment properties
Movement in fair value on
interest rate derivatives
Gains on surplus land
Share of non-recurring
(gains)/losses in associates

Adjusted profit before tax

2015
£m

105.2

2014
£m

59.8

(64.5)

(28.3)

2.3
(1.3)

(2.3)

39.4

(2.7)
–

0.4

29.2

The movement in the adjusted profit before tax from the prior year is
illustrated in the table below:

Adjusted profit before tax – year ended 31 March 2014
Increase in gross profit
Reduction in net interest payable
Increase in administrative expenses
Increase in share of recurring profit of associates
Decrease in capitalised interest

Adjusted profit before tax – year ended 31 March 2015

£m

29.2
9.8
0.8
(0.9)
0.6
(0.1)

39.4

Diluted EPRA earnings per share based on adjusted profit after tax
was up 32% to 27.1p (2014: 20.5p) (see note 12). Basic earnings per
share for the year was 72.5p (2014: 42.5p) and fully diluted
earnings per share was 71.9p (2014: 42.2p).

REIT status
The Group converted to a Real Estate Investment Trust (“REIT”) in
January 2007. Since then the Group has benefited from a zero tax
rate on the Group’s qualifying self storage earnings. The Group only
pays tax on the profits attributable to our residual business,
comprising primarily of the sale of packing materials and insurance,
and fees earned from Big Yellow Limited Partnership and from the
management of the Armadillo portfolio.

REIT status gives the Group exemption from UK corporation tax on
profits and gains from its qualifying portfolio of UK stores. Future
revaluation gains on developments and our existing open stores will
be exempt from corporation tax on capital gains, provided certain
criteria are met.

The Group has a rigorous internal system in place for monitoring
compliance with criteria set out in the REIT regulations. On a monthly
basis, a report to the Executive on compliance with these criteria is
carried out. To date, the Group has complied with all REIT regulations,
including forward looking tests.

Taxation
There is a tax credit in the current year of £0.4 million. This compares
to a tax charge in the prior year of £0.3 million.

We received a refund of £0.2 million in the year in respect of the
conversion charge paid when the Group converted to a REIT in
January 2007. This was in respect of two properties which did not
provide REITable supplies prior to their disposal. The balance of the
credit relates to a release of part of the prior year tax charge offset
by the current year tax provision.

Dividends
REIT regulatory requirements determine the level of Property Income
Dividend (“PID”) payable by the Group. On the basis of the full year
distributable reserves for PID purposes, a PID of 16.1 pence per share
is payable (31 March 2014: 13 pence per share PID).

The Board is recommending the payment of a final dividend of
11.3 pence per share. The table below summarises the declared
dividend for the year:

Dividend (pence per share)

Interim dividend – PID

Final dividend

Total dividend

– discretionary
– total

– PID
– discretionary
– total

31 March
2015

31 March
2014

10.4p
nil p
10.4p

5.7p
5.6p
11.3p

16.1p
5.6p
21.7p

8.0p
nil p
8.0p

5.0p
3.4p
8.4p

13.0p
3.4p
16.4p

Subject to approval by shareholders at the Annual General Meeting to
be held on 21 July 2015, the final dividend will be paid on 23 July 2015.
The ex-div date is 11 June 2015 and the record date is 12 June 2015.

Strategic Report (continued)

Financial Review (continued)

The cash flow after investing activities was a net outflow of
£43.5 million in the year, compared to an inflow of £23.9 million in
2014; the reduction being due to the increase in capital expenditure
in the year. The non-recurring finance costs in the year relate to
£1.4 million of payments made to cancel interest rate derivatives
and £2.6 million relating to arrangement fees paid for the M&G and
senior debt loans.

Balance sheet

Property
The Group’s 69 stores and four stores under development at
31 March 2015, which are classified as investment properties,
have been valued by Cushman & Wakefield (“C&W”) and this has
resulted in an investment property asset value of £1,022.8 million,
comprising £965.5 million (94.4%) for the 63 freehold (including two
long leaseholds) open stores, £41.6 million (4.1%) for the six short
leasehold open stores and £15.7 million (1.5%) for the four
investment properties under construction.

Analysis of property portfolio

Value at
31 March
2015
£m

Revaluation
movement
in year
£m

Investment property
Investment property under construction

1,007.1
15.7

Total

1,022.8

63.6
0.9

64.5

Investment property
Each Big Yellow store is reviewed and valued individually by
Cushman & Wakefield LLP (“C&W”). The Armadillo stores have been
valued by Jones Lang LaSalle.

The valuations in the current year have grown from the prior year, with
a revaluation surplus of £63.6 million on the open Big Yellow stores.
Of this increase 75% is due to an improvement in the cap rate used in
the valuations, reflecting transactional evidence and a wider shift in
the UK real estate market in the last six months. The balance of the
increase (25%) is due to the growth in cash flow from the assets.

Cash flow growth
The Group is strongly cash generative and draws down from its
longer term committed facilities as required to meet obligations.

A summary of the cash flow for the year is set out in the table below:

Cash generated from operations
Net finance costs (including tax)

Free cash flow
Capital expenditure
(including finance lease payments)
Acquisition of Big Yellow Limited
Partnership
Acquisition of Big Storage Limited
Asset sales (including Big Storage
Limited)
Receipt from Capital Goods Scheme
Investment in associates (net of
dividends received)

Cash flow after investing
activities
Ordinary dividends
Issue of share capital
Non-recurring finance costs
Net movement on Big Storage loans
Repayment of Partnership loan
Increase/(decrease) in borrowings

Net cash inflow/(outflow)
Opening cash and cash equivalents

Year ended
31 March 2015
£000

Year ended
31 March 2014
£000

51,875
(9,478)

43,290
(10,538)

42,397

32,752

(43,704)

(9,570)

(37,406)
(15,114)

10,429
3,557

(3,620)

(43,461)
(27,890)
77,094
(4,057)
4,241
(57,000)
55,966

4,893
3,301

–
–

–
756

–

23,938
(19,591)
42
–
–
–
(8,938)

(4,549)
7,850

Closing cash and cash equivalents
Debt

8,194
(285,334)

3,301
(229,368)

Net debt

(277,140)

(226,067)

Free cash flow pre-capital expenditure increased by 29% to
£42.4 million for the year (2014: £32.8 million). In the year capital
expenditure outflows were £43.7 million, up from £9.6 million in the
prior year. During the year we acquired an existing store in Oxford,
the freehold of Chester, the freehold of our store in Battersea and
paid the deposit on acquiring a site in Cambridge. We also
constructed our Enfield store and invested in Phase 2 fit outs.
Additionally, as discussed elsewhere in this report, we acquired the
two thirds share of Big Yellow Limited Partnership and acquired, and
subsequently disposed of the share capital of Big Storage Limited
with four stores excluding the leasehold interest in Chester.

The valuation is based on an average occupancy over the 10 year cash flow period of 79.9% across the whole portfolio.

Number of stores
MLA capacity (sq ft)
Valuation at 31 March 2015 (£m)
Value per sq ft (£)
Occupancy at 31 March 2015
Stabilised occupancy assumed
Net initial yield pre-admin expenses
Stabilised yield assuming no rental growth

The initial yield pre-administration expenses assuming no rental
growth is 6.4% (2014: 6.3%) rising to a stabilised yield of 7.4%
(2014: 7.8%). The stores are assumed to grow to stabilised
occupancy in 26 months on average. Note 14 contains more
detail on the assumptions underpinning the valuations.

There is very little transaction activity in the prime self storage
market, although there has been some activity for secondary assets.
As referenced in note 14, C&W’s valuation report further confirms
that the properties have been valued individually but that if the
portfolio was to be sold as a single lot or in selected groups of
properties, the total value could differ significantly. C&W state that
in current market conditions they are of the view that there could
be a material portfolio premium.

Investment property under construction
The three wholly owned development sites (excluding Gypsy
Corner which was transferred to investment property in the year)
have increased in value by £6.0 million, £5.1 million relating to
capital expenditure incurred, with the balance of £0.9 million a
revaluation surplus.

Purchaser’s cost adjustment
As in prior years, we have instructed an alternative valuation on our
assets using a purchaser’s cost assumption of 2.75% (see note
14 for further details) to be used in the calculation of our adjusted
diluted net asset value. This Red Book valuation on the basis of
2.75% purchaser’s costs, results in a higher property valuation at
31 March 2015 of £1,068.4 million (£45.6 million higher than the
value recorded in the financial statements). With the share of
uplift on the revaluation of the Armadillo stores, this translates to
29.3 pence per share.

The revised valuation translates into an adjusted net asset value per
share of 510.4 pence (2014: 446.5 pence) after the dilutive effect of
outstanding share options.

Surplus land
At 31 March 2015 the Group owned £3.3 million of land surplus to our
requirements at one site. We aim to sell this surplus land once we
have maximised its realisable value through planning improvements.
The site is held at the lower of cost and net realisable value and has
not been externally valued.

Mature

Leasehold

Freehold

Established
Freehold

Developing
Freehold

6
398,000
41.6
105
78.1%
81.2%
11.2%
12.0%

44
2,723,000
689.6
253
74.9%
80.2%
6.4%
7.0%

14
883,000
183.9
208
69.4%
82.3%
6.1%
7.6%

5
340,000
92.0
271
63.2%
84.8%
4.7%
7.7%

Total

69
4,344,000
1,007.1
232
73.2%
81.1%
6.4%
7.4%

In September, the Group sold its surplus site at Guildford Central for
£2.8 million, representing a profit over book value of £1.3 million.

Receivables
At 31 March 2015 we have a receivable of £9.2 million in respect
of payments due back to the Group under the Capital Goods Scheme
as a consequence of the introduction of VAT on self storage from
1 October 2012.

On acquisition of the remaining 66.7% of Big Yellow Limited
Partnership, the Group’s receivable under the Capital Goods Scheme
increased by £3.4 million.

The debtor has been discounted in accordance with International
Accounting Standards to the net present value using the Group’s
average cost of debt, with £0.5 million of the discount being
unwound through interest receivable in the period. The gross value
of the debtor before discounting is £10.3 million.

The Group received £3.6 million under the Capital Goods Scheme
during the year, with the October 2015 receipt accelerated to
January 2015 following the merger of the Group’s two VAT groups.

Movement in adjusted NAV
The year on year movement in adjusted net asset value (see note 12)
is illustrated in the table below:

Movement in adjusted net asset value

1 April 2014
Share placing

1 April 2014 (restated)

Adjusted profit
Equity dividends paid
Revaluation movements
(including share of associate)
Movement in purchaser’s cost adjustment
Other movements (eg share schemes)

Equity
shareholders’
funds
£m

634.4
76.4

710.8

39.4
(27.9)

67.6
8.9
2.6

EPRA
adjusted
NAV per
share
pence

446.5
7.9

454.4

25.1
(17.8)

43.2
5.7
(0.2)

31 March 2015

801.4

510.4

Strategic Report (continued)

Financial Review (continued)

Share capital
The share capital of the Company totalled £15.8 million at
31 March 2015 (2014: £14.3 million), consisting of 158,055,735
ordinary shares of 10p each (2014: 143,061,147 shares).

The Group placed 14.35 million shares in the year at 547.5 pence
per share.

Shares issued for the exercise of options during the year amounted
to 0.6 million at an average exercise price of 540p (2014: 421,500
shares at an average price of 450p).

The Group holds 1.4 million shares in treasury and 1.5 million shares
within an Employee Benefit Trust (“EBT”). These shares are shown as
a debit in reserves and are not included in calculating net asset
value per share.

Opening shares
Shares issued for the placing
Shares issued for the
exercise of options

Closing shares in issue
Shares held in EBT
Shares held in treasury

2015
No.

2014
No.

143,061,147 142,639,647
–

14,352,711

641,877

421,500

158,055,735 143,061,147
(1,500,000)
(1,418,750)

(1,500,000)
(1,418,750)

Closing shares for NAV purposes

155,136,985 140,142,397

73,136,757 shares were traded in the market during the year ended
31 March 2015 (2014: 54,249,527). The average mid-market price of
shares traded during the year was 553.4p with a high of 667.0p and a
low of 460.6p.

Big Yellow Limited Partnership
The Group acquired the remaining two thirds of Big Yellow Limited
Partnership that it did not previously own on 1 December. In the
consolidated accounts of Big Yellow Group PLC, up to the date of
acquisition the Partnership is treated as an associate. We have
provided in note 13d the balance sheet and income statement of the
Partnership up to the date of acquisition, along with the Group’s
share of the income statement captions.

The Group earned certain construction and operational fees from
the Partnership. For the year to 31 March 2015, these fees amounted
to £0.5 million (2014: £0.6 million). The Partnership bank facility
was repaid immediately following completion of the acquisition by
the Group.

Borrowings
We focus on improving our cash flows and for the year we had
healthy Group interest cover of 5.4 times (2014: 4.1 times) based on
cash generated from operations against interest paid, allied to a
relatively conservative debt structure secured principally against
the freehold estate.

During the year we completed the refinancing of our £145 million bank
facility with Lloyds and HSBC, extending the maturity to August 2019.
50% of the bank facility is term and 50% is revolving. The term loan
attracts a margin of 175 bps and the revolving loan a margin of
150 bps, reflecting a reduction of 75bps for both tranches from
the previous facility. This facility was increased to £170 million in
December 2014. The Group bank facility contains a covenant
requiring us to have 50% of all borrowings fixed.

In addition, the Group has further diversified its pool of lenders by
signing a new £70 million facility with M&G Investments Limited, the
term of which will be seven years from the date of drawdown which
can occur at any time in the period up to 29 June 2015. The loan will
be secured over a portfolio of 15 freehold self storage centres. 50% of
the seven year loan is fixed by way of a forward start interest rate
derivative, the balance of the loan is variable based on three month
LIBOR plus margin. The average cost of the M&G loan at the current
rate of LIBOR will be 3.75%.

The Group agreed a short term bridging facility of £70 million
with Lloyds Bank plc, which is repayable immediately on the
drawdown of the M&G loan.

The Group has a £100 million 15 year loan with Aviva Commercial
Finance Limited. The loan has a fixed interest rate of 4.9% and
amortises to £60 million over the course of the 15 years. The loan
outstanding at 31 March 2015 was £94.3 million.

During the year the Group cancelled £40 million of its existing interest
rate derivatives at a cash cost of £1.4 million, leaving £30 million
fixed at 2.8% plus applicable margin.

As a result of this refinancing, and prior to the drawing of the M&G
facility, our average cost of debt has decreased from 4.6% to 3.3% at
the end of the financial year. Following the M&G facility being drawn
and the Lloyds bridging loan being repaid we would expect the
average cost to be approximately 3.8% based on the current levels of
LIBOR and current levels of drawn debt.

The Group was in compliance with its banking covenants at
31 March 2015. The Group currently has a net debt to gross property
assets ratio of 27%, and a net debt to adjusted net assets ratio of 35%.

At 31 March 2015, the fair value on the Group’s interest rate
derivatives was a liability of £3.7 million. The Group does not hedge
account its interest rate derivatives. As recommended by EPRA
(European Public Real Estate Association), the fair value movements
are eliminated from adjusted profit before tax, diluted EPRA earnings
per share, and adjusted net assets per share.

Treasury continues to be closely monitored and its policy approved
by the Board. We maintain a keen watch on medium and long-term
rates and the Group’s policy in respect of interest rates is to maintain
a balance between flexibility and hedging of interest rate risk.

Cash deposits are only placed with approved financial institutions in
accordance with the Group’s Treasury policy.

In the consolidated accounts of Big Yellow Group PLC, our investment
in Armadillo 2 is treated as an associate using the equity accounting
method. The four stores will be rebranded as Armadillo stores. The
occupancy of the stores is 210,000 sq ft, against a total capacity of
270,000 sq ft, with growth of 13,000 sq ft over the year. The stores’
occupancy at 31 March 2015 was 77.8% and the net rent achieved at
31 March 2015 is £15.90 per sq ft.

Armadillo 2 made an operating profit of £0.2 million in the period, of
which Big Yellow’s share is £0.04 million. After net interest costs, the
revaluation of investment properties, deferred tax on the revaluation
surplus and interest rate derivatives, the profit for the period from
acquisition for Armadillo 2 was £0.7 million, of which the Group’s
share was £0.1 million.

Big Yellow has a five year management contract in place. For the
period from acquisition to 31 March 2015 fees amounted to
£0.2 million (including fees in relation to due diligence carried
out on acquisition).

Going Concern
A review of the Group’s business activities, together with the factors
likely to affect its future development, performance and position are
set out in the Strategic Report. The financial position of the Group, its
cash flows, liquidity position and borrowing facilities are shown in
the balance sheet, cash flow statement and accompanying notes in
the financial statements. Further information concerning the Group’s
objectives, policies and processes for managing its capital; its
financial risk management objectives; details of its financial
instruments and hedging activities; and its exposures to credit risk
and liquidity risk can be found in this Report and in the notes to the
financial statements.

After reviewing Group and Company cash balances, borrowing
facilities, forecast valuation movements and projected cash flows,
the Directors believe that the Group and Company have adequate
resources to continue operations for the foreseeable future. In
reaching this conclusion the Directors have had regard to the Group’s
operating plan and budget for the year ending 31 March 2016 and
projections contained in the longer-term business plan which covers
the period to March 2022. The Directors have considered carefully
the Group’s trading performance and cash flows as a result of the
uncertain global economic environment and the other principal risks
to the Group’s performance and are satisfied with the Group’s
positioning. For this reason, they continue to adopt the going
concern basis in preparing the financial statements.

Armadillo Self Storage
In April 2014 we acquired the Armadillo portfolio with an Australian
consortium for a total property value of £19.75 million. The Group
initially invested £3.6 million representing a stake of 38% in the
business (“Armadillo 1”). Our partners had a right to increase their
share from 62% to 80% at par, which they exercised in July 2014,
reducing the Group’s investment to £1.9 million (20% of the
business). In the consolidated accounts of Big Yellow Group PLC, our
investment in the vehicle is treated as an associate using the equity
accounting method. Armadillo 1 has an £11 million loan from Lloyds
Bank which expires in April 2019.

The occupancy of the stores is 253,000 sq ft, against a total capacity
of 401,000 sq ft, with growth of 13,000 sq ft over the year. The stores’
occupancy at 31 March 2015 was 63.1% (31 March 2014: 59.9%).
The net rent achieved at 31 March 2015 by the Armadillo 1 stores is
£14.66 per sq ft, an increase of 2.4% from the same time last year.
The revenue of the portfolio increased by 12% to £4.5 million for the
year to 31 March 2015 compared to £4.0 million last year.

Armadillo 1 made an operating profit of £2.0 million in the period
from acquisition, of which Big Yellow’s share is £0.5 million
(representing 38% until July and 20% thereafter). After net interest
costs, the revaluation of investment properties, deferred tax on the
revaluation surplus and interest rate derivatives, the profit for the
period from acquisition for Armadillo 1 was £9.0 million, of which the
Group’s share was £1.8 million. There has been a significant increase
in the valuation of the portfolio due to the growth in cash flow and
additionally cap rate compression in the valuation of secondary
assets following transactional evidence in the year.

Big Yellow has a five year management contract in place. For the period
from acquisition to 31 March 2015 fees amounted to £0.6 million
(including fees in relation to due diligence carried out on acquisition).

The Group’s share of the dividend declared for the year is £178,000,
representing a 9.3% yield on our investment, which together, with our
ongoing management fees of £400,000 per annum, gives a first year
cash return of approximately 30% on the investment.

Big Storage
In January 2015 the Group acquired the entire share capital of
Big Storage Limited for a property value of £24.9 million. The net
consideration was £15.1 million, taking into account the existing
bank debt in the company and adjusted for working capital.
The Group repaid the bank debt through a £13.9 million loan
from Lloyds Bank, which expires in January 2020.

The company owned five self storage centres in North West England.
The Group transferred the store at Chester to another subsidiary
company of the Group, and the store will be rebranded as a
Big Yellow. The Group has subsequently acquired the freehold of
the store in Chester.

In February 2015, the Group subsequently sold the share capital of
Big Storage Limited to a company (“Armadillo 2”) in which it has a
20% interest, with the balance of the equity owned by an Australian
consortium, for a net consideration of £7.6 million. This represents a
property value of £19.3 million less the £13.9 million Lloyds loan and
adjusted for working capital.

Strategic Report

Risks and uncertainties

Principal risks and uncertainties
The section below details the principal risks and uncertainties that are considered to have the most material impact on the Group’s strategy
and objectives. These key risks are monitored on an ongoing basis by the Executive Directors, and considered fully by the Board in its annual
risk review.

Risk and impact

Self storage market risk
There is a risk to the business that the
self storage market does not grow in line
with our projections, and that economic
growth in the UK is below expectations,
which could result in falling demand and
a loss of income.

Property risk
There is a risk that we will be unable to
acquire new development sites which
meet management’s criteria. This would
impact on our ability to grow the overall
store platform.

Mitigation
The UK economy is projected to grow at approximately 2.5% in 2015, and is expected to go ahead
of the level of output last achieved in 2007 before the global financial crisis. Self storage has
proved relatively resilient through the crisis, with our revenue and earnings increasing over the
last five years. As the economy has recovered in the past couple of years, the market risk has
fallen in line with increasing occupancy.

Self storage is a relatively immature market in the UK compared to other self storage markets such
as the United States and Australia, and we believe has further opportunity for growth. Awareness of
self storage and how it can be used by domestic and business customers is relatively low throughout
the UK, although higher in London. The rate of growth of branded self storage on main roads in good
locations has historically been limited by the difficulty of acquiring sites at affordable prices and
obtaining planning consent. The lack of availability of credit within the economy has further reduced
this rate of growth since the start of the downturn, and over the last three or so years new store
openings within the sector have slowed to an average of nine stores per year over the past five years,
down from a peak of 34 per year in 2005-2009.

Our performance during the downturn has been relatively resilient, although not immune.
We believe that the resilience of our performance is due to a combination of factors including:

> a prime portfolio of freehold self storage properties;
> a focus on London and the South East and other large metropolitan cities, which have proved
more resilient during the downturn and where the drivers in the self storage market are at
their strongest and the barriers to competition are at their highest;

> the strength of operational and sales management;
> continuing innovation to deliver the highest levels of customer service;
> the UK’s leading self storage brand, with high public awareness and online strength; and
> strong cash flow generation and high operating margins, from a secure capital structure.

We have a large current storage customer base of over 47,000 spread across the portfolio of
stores and many thousands more who have used Big Yellow over the years. In any month,
customers move in and out at the margin resulting in changes in occupancy. This is a seasonal
business and typically we see growth over the spring and the summer months, with the
seasonally weaker periods being the winter months.

The Group’s occupancy has increased by 5.3% in the year from 67.9% to 73.2%.

Our management has significant experience in the property industry generated over many years
and in particular in acquiring property on main roads in high profile locations and obtaining
planning consents. We do take planning risk where necessary, that said the availability of land,
and competition for it makes acquiring new sites challenging.

The planning process remains difficult with some planning consents taking in excess of twelve
months to achieve, although given we have planning consent on all bar one site, the risk to the
Group has reduced significantly from prior years.

We manage the construction of our properties very tightly. The building of each site is handled
through a design and build contract, with the fit out project managed in-house using an established
professional team of external advisors and sub-contractors who have worked with us for many
years to our Big Yellow specification.

Valuation risk
The valuations of the Group’s investment
properties may fall due to external
pressures or the impact of performance.

Lack of transactional evidence in the
self storage sector leads to more
subjective valuations.

Treasury risk
The Group may face increased costs from
adverse interest rate movements.

Credit risk
The Group is exposed to a credit risk from
its customers.

The valuations are carried out by independent, qualified external valuers who value a significant
proportion of the UK self storage industry.

The portfolio is diverse with over 47,000 customers using the product for a wide variety of reasons.

There is significant headroom on our loan to value banking covenants.

Our financing policy is to fund our current needs through a mix of debt, equity and cash flow to
allow us to selectively build out the remaining development pipeline and achieve our strategic
growth objectives, which we believe improve returns for shareholders. We have made it clear that
we believe optimal leverage for a business such as ours should be LTV in the range 20% to 30%
and this informs our management of treasury risk.

We aim to ensure that there are sufficient medium-term facilities in place to finance our
committed development programme, secured against the freehold portfolio, with debt serviced
by our strong operational cash flows.

We have a fixed rate loan in place from Aviva Commercial Finance Limited, with 12 years remaining.
For our bank debt, we borrow at floating rates of interest and use swaps to hedge our interest
rate exposure. Our policy is to have at least 50% of our total borrowings fixed, with the balance
floating paying margin over LIBOR. At 31 March 2015 56% of the Group’s total borrowings were
fixed or subject to interest rate derivatives (including forward start derivatives). The Group’s
income cover ratio on an annualised basis at 31 March 2015 was 5.9 times.

The Group reviews its current and forecast projections of cash flow, borrowing and interest cover
as part of its monthly management accounts. In addition, an analysis of the impact of significant
transactions is carried out regularly, as well as a sensitivity analysis assuming movements in
interest rates and occupancy in the stores on gearing and interest cover.

The Group regularly monitors its counterparty risk. The Group monitors compliance with its
banking covenants closely. During the year it complied with all its covenants, and is forecast to
do so for the foreseeable future.

Our customers are required to pay a deposit when they start to rent a self storage room and
are also required to pay in advance for their four-weekly storage charges. The Group is therefore
not exposed to a significant credit risk. 82% of our current customers pay by direct debit;
however of new customers moving into the business in the last year 85% have paid by direct
debit. Businesses often prefer to pay by cheque or BACS. Since 2007 we have not seen an
increase in the levels of bad debts and arrears. In the year to 31 March 2015 our bad debt
expense represented 0.15% of revenue in the year (2014: 0.10%).

Taxation risk
The Group is exposed to changes in
the tax regime affecting the cost of
corporation tax, VAT and Stamp Duty Land
Tax (“SDLT”), for example the imposition of
VAT on self storage from 1 October 2012.

We regularly monitor proposed and actual changes in legislation with the help of our professional
advisors, through direct liaison with HMRC, and through trade bodies to understand and, if
possible, mitigate or benefit from their impact.

The Government announced a review of property rates earlier this year. This is a significant cost
to the business, and we are monitoring any potential impact from a revision in the basis of
assessment or taxation.

Strategic Report (continued)

Risks and Uncertainties (continued)

Real Estate Investment Trust
(“REIT”) risk
The Group is exposed to potential tax
penalties or loss of its REIT status by
failing to comply with the REIT legislation.

The Group has internal monitoring procedures in place to ensure that the appropriate rules and
legislation are complied with. To date all REIT regulations have been complied with, including
projected tests.

Human resources risk
Our people are key to our success and as
such we are exposed to a risk of high
staff turnover, and a risk of the loss of
key personnel.

We have developed a professional, lively and enjoyable working environment and believe our
success stems from attracting and retaining the right people. We encourage all our staff to build
on their skills through appropriate training and regular performance reviews. We believe in an
accessible and open culture and everyone at all levels is encouraged to review and challenge
accepted norms, so as to contribute to the performance of the Group.

With the economy improving and
unemployment falling, the risk of higher
staff turnover and difficulty in finding the
right employees increases.

Security risk
The Group is exposed to the risk of the
damage or loss of store due to vandalism,
fire, or natural incidents such as flooding.
This may also cause reputational damage.

The safety and security of our customers, their belongings, and stores remains a key priority.
To achieve this we invest in state of the art access control systems, individual room alarms,
digital CCTV systems, intruder and fire alarm systems and the remote monitoring of all our stores
outside of our trading hours. We are the only major operator in the UK self storage industry that
has every room in every store individually alarmed.

We have implemented customer security procedures in line with advice from the Police and
continue to work with the regulatory authorities on issues of security, reviewing our operational
procedures regularly. The importance of security and the need for vigilance is communicated
to all store staff and reinforced through training and routine operational procedures. We have
continued to run courses for all our staff to enhance the awareness and effectiveness of our
procedures in relation to security.

Internal audit
The Group does not have a formal internal audit function because the Board has concluded that the internal controls systems are sufficient
for the Group at this time. However, the Group employs a Store Compliance Manager responsible for reviewing store operational and financial
controls. He reports to the Chief Financial Officer, and also meets with the Audit Committee Chairman at least once a year. This role is
supported by an Assistant Store Compliance Manager, enabling additional work and support to be carried out across the Group’s store
portfolio. The Store Compliance team visit each operational store twice a year to carry out a detailed store audit. These audits are
unannounced and the Store Compliance team carry out detailed tests on financial management within the stores, administrative standards,
and operational standards. Part of the store staff’s bonus is based on the scores they achieve in these audits. The results of each audit are
reviewed by the Chief Financial Officer, the Financial Controller and the Head of Store Operations.

Corporate Social Responsibility Report

At Big Yellow, we know the most important space of all is the
environment that surrounds us. That’s why we continue to work hard
to create an environmentally friendly business.

A big green Commitment

1.0 INTRODUCTION

Big Yellow recognises that high levels of Corporate Social Responsibility (“CSR”), linked to clear commercial objectives, will create a more
sustainable business and increase shareholder and customer value. Our CSR policy covers all of our operations, as a self storage provider,
a real estate developer, an employer and a participant in our local communities.

Big Yellow seeks to meet the demand for self storage from businesses and private individuals providing the storage space for their
commercial and/or domestic needs, whilst aiding local employment creation and contributing to local community regeneration.

2.0 SOCIAL RESPONSIBILITY

2.1 OUR PEOPLE
Our people are at the heart of Big Yellow’s business, bringing our values to life through the service that they provide, and bringing the
energy and passion that drives us to become an ever more responsible and sustainable business.

We recognise that recruiting, retaining, and motivating individuals with talent and integrity – and ensuring that we listen to our people
and maximise their skills and performance – is key to the continued success of our Company.

We encourage a culture of partnership within the business and believe in staff participating in corporate performance through benefits,
such as bonus schemes and share incentives. We recognise and reward the exceptional performance, achievements and ideas of our
people through a Points Recognition Scheme, and awarded points worth £50,000 for the year ended 31 March 2015.

Wellbeing and Support
We aim to promote employee wellbeing through a range of flexible working options which include flexitime, staggered hours, home
working and sabbaticals. We provide Childcare Vouchers along with a comprehensive range of medical support and advice though our
occupational health providers. We have arranged corporate gym membership on a national basis, as well as a “Cycle to Work” scheme and
employee Telephone ‘Help Line’ Assistance Programmes.

Communication and Engagement
We continue to recognise the importance of communication and consultation with an annual Conference, regular formal and informal
meetings, quarterly newsletters, and weekly operational updates. In addition, the Directors and Senior Management spend a significant
amount of time in the stores and are accessible to employees at all levels.

In October 2014, we ran our first externally managed Employee Engagement Survey, as we had previously carried out internal feedback
surveys. The new survey was structured to look at key areas including day to day working life, learning and development, team work,
communication, management style and leadership. The survey achieved a response rate of 91% (71% in 2012) and an “Engagement
Indicator” of 86%. Management are now utilising the feedback from the survey as the focus for their attention to further improve the
working environment at both Big Yellow and Armadillo.

Training and Development
We continue to promote the development of staff through ongoing training and regular performance appraisals. For the year ended
31 March 2015 a total of 855 days training were provided across the Company, comprising both sales and operational training and
personal and management development.

Our “Big Impressions” customer experience programme continued throughout the year, with our coaching and development initiatives
being specifically designed to further support our people to become more in touch with our customers.

During the last year, seven team members completed our personal development programme designed specifically for Assistant Store
Managers, with four of those people having subsequently been promoted to the position of Store Manager. 12 Assistant Store Managers
are currently participating in the programme, to prepare them for their future progression within the Company.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

2.0 SOCIAL RESPONSIBILITY (continued)

Community
We recognise the importance of contributing within the local community and we encourage our people to develop close links with
charities, schools and other institutions, both locally and nationally, to help to build more economically sustainable local environments.

For the year ended 31 March 2015, we recognised and supported 15 different Company charities which were elected by our store and head
office teams. Our people undertook a variety of activities for both these and other charities, with donations also being made by the Company.

Throughout the year a total of £37,000 was raised for our Company charities and £24,000 was raised for other charities.

Examples of our fundraising activities have included:

The London Marathon
One of our team members ran the London Marathon, raising £1,600 for the charity RP Fighting Blindness which supports research to find
a treatment or cure for Retinitis Pigmentosa, a disease of the eye that leads to loss of vision and blindness.

“We really value the relationship we have with Big Yellow Self Storage - the organisation has a great giving ethos and their range of ideas
for fundraising and palpable enthusiasm from the staff is just fantastic!

We’re delighted to have built such a solid partnership with Big Yellow and look forward to developing this further in the future. The strong
community spirit and great organisational skills of all of those concerned have benefitted RP Fighting Blindness so much, and we’re
extremely grateful for such support.”

Hannah Hickman, Project Fundraiser, RP Fighting Blindness

British Heart Foundation – Donation Stations
Nine of our stores have acted as “Donation Stations” for the British Heart Foundation, raising a total of just under £14,900 from bags of
unwanted clothes and household goods, which will support the charity’s pioneering heart research, as well as the care of people living
with heart disease.

“We are delighted with the support we have received from Big Yellow Self Storage staff and customers over the past year. We’re very
grateful for the unwanted items that have been donated. By selling these in British Heart Foundation shops Big Yellow have raised money
which will help fund our life saving research. It’s wonderful to have the support of Big Yellow and we are looking forward to building on an
already successful partnership”

Clare Appleby, Corporate Partnerships Account Manager, British Heart Foundation

The Three Peaks Challenge
This gruelling challenge, which involved climbing Ben Nevis, Scafell Pike and Snowdon in under 30 hours, was completed by seven of our
team members and they raised just under £2,600 for Cystic Fibrosis.

Free Storage
In addition to our fundraising activities for charities and worthy causes, we have also provided free storage space at most of our stores.
During the year the space occupied by charities in Big Yellow and Armadillo stores on this basis was 37,800 sq ft, worth approximately
£750,000 per annum at standard rents. Some of the many charities that have benefited from this free storage include the National
Childbirth Trust, Cancer Research, British Heart Foundation, and a number of food bank charities and local community charities.

Young Enterprise
A number of team members within our head office and stores are currently supporting students in schools and colleges within their local
communities in conjunction with Young Enterprise, a charitable organisation that creates and develops programmes that complement the
school experience and encourages young people to realise the extent of their own talents. Our volunteering has taken the form of providing
classroom support, mentoring students to create their own businesses and participating in Young Enterprise regional board meetings.

“For three years I have been a member of the Reading Area Board for Young Enterprise. The role of the voluntary local board members is
to support Young Enterprise in delivering a learning environment for school students on the skills and roles required to lead a successful
business. Using my business knowledge to guide the students in various local schools / colleges to establish and trade their companies
is hugely motivating, as is the knowledge that I am supporting the development of the business skills of these young people within their
local community.”

Nicola Crosby, Head of Store Operations, Big Yellow Self Storage

We recognise the importance of
contributing within the local community

to help build more economically
sustainable environments.

During the year the space occupied
by charities in our stores was worth

approximately £750,000.

2.2 OUR HEALTH & SAFETY
Big Yellow recognises the importance of maintaining high standards of health and safety for everyone who may be affected by our
business. The Group’s Health and Safety Policy (for Big Yellow Self Storage and Armadillo Self Storage) is reviewed on an ongoing basis.
It is applied in two distinct areas – our construction activities and our routine store operations. The policy states that all employees have
a responsibility for health and safety, but that managers have special responsibilities. Additional duties are placed on Adrian Lee,
Operations Director, to keep the Board advised on health and safety issues and ensure compliance with the Policy in respect of both
construction activity and store operations, respectively.

The Group has a Health and Safety Committee, which meets quarterly and comprises of Adrian Lee and appointed Department Heads
and other relevant Managers. They meet to discuss any issues that have been reported from meetings held at head office, Maidenhead
(our distribution warehouse), the stores and any construction sites.

In addition, the Group has appointed an external consultant to review our Policy and to perform audits of our stores on a rolling
programme; to ensure the implementation of the Group’s Health and Safety policies. Any actions recommended by our consultant is then
considered by the Committee and, if required, then implemented into the operations or construction systems. Health and Safety audits
are also carried out by external consultants on each construction site prior to the opening of a store.

Our Health and Safety Policy covers all of our stores, our head office, Maidenhead and our ‘Fit-out’ construction sites. Incidents are
recorded for staff, customers, contractors and visitors. The Board receives reports every other month which monitor Health and Safety
performance in all these areas. Annual Store Health and Safety Meetings take place for all stores and Maidenhead. Agendas are provided
for these meetings via the intranet from the Facilities team and the minutes are reviewed by Area Managers to raise any issues with
Facilities or Human Resources where necessary.

Health and Safety performance and incidents are reported and are displayed in the tables below.

2.2.1 Big Yellow Self Storage Customers, Contractors and Visitors
The number of customer move ins, including Armadillo Self Storage, continued to increase this year by 9%, to 79,424. There were a total
of 75 reported incidents this year, of which 52 were Minor Injuries sustained by customers, contractors and visitors, and 18 were Minor
Incidents sustained by staff. Five of these were reportable injuries (“RIDDOR”) in total; four due to customers and one due to staff,
including breaks, cuts and bruises from falls, relating to self storage activities and one personal health problem.

Store customer, contractor and visitor health and safety

2011

2012

2013

2014

2015

Number of customer move-ins during the year
Number of minor injuries
Number of reportable injuries (RIDDOR)
RIDDOR* per 100,000

51,049
41
–
–

57,604
43
–
–

65,807
34
3
4.6

72,772
31
3
5.5

79,424
52+
4+
4.8

+
*

Indicates data reviewed by Deloitte LLP as part of their assurance work. See page 52 for the independent assurance report.
RIDDOR – Reporting of Injuries, Diseases and Dangerous Occurrences Regulation 1995.

Note – customer move-ins have included Armadillo Self Storage since 2014.

The majority of Minor Injuries were predominantly related to the handling of personal or business possessions by our customers.
There were no ‘Fatal Injuries’, ‘Notices+’ or ‘Prosecutions’ during the year ended 31 March 2015.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

2.2.2 Big Yellow Self Storage Staff

Store and head office staff health and safety
Year ended 31 March

Average number of staff
Number of Minor Injuries
Number of Reportable Injuries (“RIDDOR”)
Annual injury incidence rate (“AIIR”)* /100,000 staff

2011

273
19
1
366

2012

279
12
–
–

2013*

315
16
3
949

2014

318
15
1
312

2015

329+
18+
1+
304+

+
*

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
From 2013 we included Armadillo staff in our ‘Average number of staff’. In addition, following updated data, we have restated the 2014 ‘Average number of
staff’, and in line with reporting assurance, corrected and restated the AIIR (Annual Injury Incidence Rate).

Staff numbers increased by 3.5% in 2015 with only one Reportable Injury. There were 18 Minor Injuries, and one reportable foot injury,
relating to storage activities. There were no ‘Fatal Injuries’, ‘Notices+’ or ‘Prosecutions’. Staff, ‘Annual Injury Incidence Rate’ decreased by
2.6%, mainly due to training and increased health and safety awareness.

2.2.3 Big Yellow Construction Company Limited
During the year, Big Yellow’s new store at Gypsy Corner was opened and the Enfield stores ‘fit out works’ were completed. ‘Strip out’ works
were also started at a property acquired in Cambridge. Four existing stores had Phase 2 storage partition extensions installed.

Construction fit-out contractors and visitor health and safety
Year ended 31 March

Number of total Man Days
Number of Minor Injuries
Number of Reportable Injuries (RIDDOR)

2011

6,431
1
1

2012

6,511
1
–

2013

610
–
–

2014

3,315
2
––

2015

3,005
1

The number of ‘Man Days’ worked was 9% less than the previous year, with our high safety standards being maintained. The Enfield site
was also managed under the ‘Considerate Constructors Scheme’ (“CCS”) which also promotes high standards of health and safety
management. One ‘Minor Injury’ and one ‘Near Miss’ was reported over 3,005 ‘Man Days’ in the year. No ‘Fatal Injuries’, ‘Notices’,
‘Reportable Injuries’ or ‘Prosecutions’ occurred, indicating a well-controlled environment for staff, contractors and visitors on our
construction sites. Health and safety performance continues to be reviewed in preparation for our next new store development at
Guildford in 2016.

A limited level of assurance is provided for our health and safety data. This assurance was undertaken by Deloitte LLP in accordance with
the International Standards on Assurance Engagements 3000 (ISAE 3000).

3.0 ENVIRONMENTAL RESPONSIBILITY

Our Corporate Social Responsibility (“CSR”) Policy sets out how we manage the impact of our business on society and the local
environment, to control our risks and manage our opportunities in a sustainable way.

Big Yellow has been classified as having a “low environmental impact” by the Ethical Investment Research Index Series (“EIRIS”) because
it is involved in Support Services. Notwithstanding this, and in order to maintain an efficient and sustainable business for its Stakeholders,
Big Yellow has continued to commit significant resources to the environmental and social aspects of its storage operations, real estate
portfolio, new store developments and site acquisitions.

This year we report again on our energy use and in compliance with the Companies Act, Climate Change Regulation on Reporting
Greenhouse Gas (“GHG”) Emissions for listed companies. For the detailed application of our report see our ‘Basis of Reporting’ at:
http://corporate.bigyellow.co.uk/csr.

We therefore provide a summary in the Directors’ Report of Scope 1 (onsite gas, solar electricity generation and refrigerant use) and
Scope 2 (off site power station grid supplied use) for carbon dioxide equivalent (CO2e) emissions. We have used the DEFRA DECC
Version 2.1 (2014 Expiry 31 May 2015) conversion factors, for annual GHG emission calculations.

Solar electricity generation has
increased by 193% since 2011.

Electricity use reduced by 30.8% from
our 2011 peak, due to our energy
efficient re-lamping and increased
solar electricity generation.

3.1 Energy Reductions from Financial Year 2011, (Peak Electricity Benchmark Year)
Our materiality threshold for energy use is 5% and for carbon emissions is > 1%. A limited level of assurance is provided for our Scope 1
and 2 energy use and GHG emissions. This assurance was undertaken by Deloitte LLP in accordance with the International Standard on
Assurance Engagements 3000 (ISAE 3000).

Total Electricity and Gas Use
Year ended 31 March

Electric use (kWh)
Electric Reductions (%)
Gas use (kWh)
Gas Reductions (%)
Total Use (kWh)
Total Reductions (%)
**Gas Materiality %

2011*

2012

2013

2014

2015

–
656,017
–

(2.4%)
742,086
+13.1%

13,925,217 13,588,703 13,153,960 11,688,629
(16.1%)
652,181
(0.6%)

9,643,341+
(30.8%)
602,563
(8.1%)
14,581,234 14,330,789 13,870,468 12,340,810 10,245,904
(29.7%)
5.8%

(5.5%)
716,508
+9.2%

(15.4%)
5.3%

(1.7%)
5.2%

(4.9%)
5.2%

–
4.5%

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
The year ended 31 March 2011 is our peak total electricity and gas use benchmark for medium term assessment.

+
*
** Gas materiality = > 5%.

The year ended 31 March 2015 showed electricity use reduced by 30.8% from our 2011 peak. Pre 2011, electricity use was also decreased
due to the installation of energy efficient motion sensor lighting (“MSL”) and “Power Saver Fittings” on older lamps. From 2012, larger
capacity (50 kWp) solar panels were installed on new stores; and from 2013, energy efficient LED lamps were installed across the whole
portfolio. Gas use is variable due to winter heating demand from flexi offices at eight of our stores. This year our gas use threshold for
reporting gas as a percentage of total energy use is just above the materiality level (>5%). The reductions in gas consumption were largely
due to a milder winter in 2015, as flexi-office occupancy has been relatively constant over the years.

Last year we set a programme target to reduce electricity by 12% by 2015. We have reduced electricity use by 17.5% from 2014.

3.2 Mandatory GHG Emissions Statement – Summary
The ISAE 3000 Standard provides an evaluation of both quantitative and qualitative aspects of our CSR management and reporting.
We report our energy use for our wholly owned stores; our head office in Bagshot, Surrey; and our packing materials warehouse in
Maidenhead, Berkshire. Our environmental report does not include any of the 14 Armadillo stores, in which the Group has a 20% interest.

This year Big Yellow acquired and now wholly owns the 12 Big Yellow Limited Partnership (Joint Venture) stores, and continues to manage
the buildings and utilities at these sites. In previous years we had opted to capture their energy and carbon operational footprint and have
voluntarily reported this in our previous annual emissions reporting. A new store construction ‘fit out’ at Enfield was completed and we
also acquired two additional existing stores at Oxford and Chester, to add to our wholly owned Big Yellow portfolio.

The year ended 31 March 2011 is our peak energy use and carbon emission benchmark year, due to a previous period of new store
openings and increased occupancy. This benchmark is the best year to present information on the most comparable basis.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

Scope 1 GHG emissions from our real estate portfolio (‘on site’ sources)
Scope 1 GHG emissions originate from ‘on site’ natural gas use, which is a variable use for us depending upon winter heating demand for
heating flexi-offices. ‘On site’ refrigerant ‘top up’ and / or replacement, in air conditioning units is also very variable. Refrigerant use for
cooling store reception areas is only ‘topped up’ when required.

Scope 1 Gas and Refrigerant GHG Emissions
Year ended 31 March

Gas Use (kWh)
Emission (tCO2e)
Refrigerant Use (Kg)
Emissions (tCO2e)
Total Scope 1 (tCO2e)

2011

2012 *

2013

2014**

2015

656,017
121.5
–
–
121.5

742,086
137.8
2.8
4.3
142.1

716,508
133.0
66.5
286.3
419.0

652,181
120.0
112.4
354.8
474.8

602,563
111.5+
11.92
20.6+
132.0+

% change
from
peak

(18.8%)
(19.1%)
(89.4%)
(94.2%)
(72.2%)

+
*
**

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
2012 peak year for gas use;
2014 peak year for gas emissions, refrigerant emissions, and Total Scope 1 Emissions.

The direct emissions from our stores represent only approximately 5% of our combined Scope 1 and 2 emissions that are under our
control. In the year ended 31 March 2015, less refrigerant replacement was required and the type used, also had a lower GHG emission
conversion factor, resulting in a significant reduction in GHG Emissions. GHG emissions from flexi office gas heating are variable and
reduced in the year ended 31 March 2015, due to a mild winter.

Our Scope 1 ‘onsite’ roof mounted solar panel generation (on 17 stores) provides an increasing source of annual electricity supply for
newer stores.

Solar Electricity Generation Materiality for GHG Emission Reporting
Year ended 31 March

Solar Generation (kWh)
Solar % of electric use (kWh)

2011

2012

2013

2014

2015

107,074
0.8%

134,297
1.0%

208,807
1.6%

285,832
2.4%

314,068+
3.3%+

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.

Solar generation has increased our self-supply to 3.3% of our total Scope 2 (Grid supplied) electricity in 2015. We have set a target last
year of 5% self-supply, but this has not yet been achieved due to the opportunity to invest in more efficient LED re-lamping at our stores.
However, we did generate more than our 10% target (+12.5%) of solar electricity (314,068 kWh), as a percentage of the sixteen solar
stores Grid supplied electricity (2,505,045 kWh). Low carbon solar electricity reduces our GHG emissions but is still below the materiality
threshold of > 5% of Scope 1 and 2 energy use combined (3.1%) for annual reporting requirements.

Scope 2 Offsite ‘Grid Supplied’ Electricity and Emissions
This electricity supply from ‘off site’ power station emissions remains at around 95% of our annual energy consumption, in the year ended
31 March 2015.

Scope 2 ‘Grid Supplied’ Electricity GHG Emissions
Year ended 31 March

2011 *

2012

2013

2014

2015

Electric use (kWh)
Emissions (tCO2e)

13,925,217
6,758

13,588,703 13,153,960 11,688,629
5,207

6,143

6,051

9,643,341+
4,776+

% change
from
peak

(30.8%)
(29.3%)

+
*

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
Peak energy use and benchmark year for future reductions.

Electricity use has reduced by 30.8% and Scope 2 GHG emissions have reduced by 29.3%. This reduction is due to our continued
investments in energy efficient technologies, such as LED re-lamping and larger capacity roof top solar installations at our new stores.
Our annual average carbon emission reduction over the last four years has been around 7% per year, double what the commercial
property sector needs to do to meet the UK Government’s GHG emissions reduction target of 34% by 2020 (or 3.5% per year to 2050).
Over a seven year period, from our longer term peak electricity use benchmark (2008), our GHG emission reductions have averaged
around 4% per year, and were mainly reduced by earlier motion sensor lighting, power saver fitting to lighting and small scale renewable
energy trails.

Total Scope 1 + 2 Emissions
In the year ended 31 March 2015 total Scope 1 and 2 GHG emissions achieved a reduction of 28.7% from peak energy use in 2011,
exceeding our target of 25% from last year’s report.

Total GHG Emission reductions
Year ended 31 March

Scope 1 Totals
Scope 2 Totals
Total (tCO2e)

2011

2012

2013

2014

2015

121.5
6,758.0
6,879.5*

140.6
6,143.0
6,283.6

419.0
6,051.0
6,470.0

474.8*
5,207.0
5,681.8

132.0+
4,776.0+
4,908.0+

% change
from peak
year

(72.2%)
(29.3%)
(28.7%)

+
*

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
Peak energy use and benchmark year for medium term performance assessment.

There results were mainly due to the significant reductions in Scope 2 supplied electricity emissions. Our energy use strategy of
reduction, efficiency and low carbon solar generation has reduced our annual energy costs and carbon taxation by proportional
percentages. It has also created an income from energy company payments for generation and exporting excess electricity to the Grid for
“deemed” export payments.

GHG Emission Intensity, (Scope 1 + 2)
Key emission intensity indicators can be assessed by taking into account annual growth using customer occupancy and revenue, both of
which includes new store portfolio growth.

GHG Emission Intensity (tCO2e) /
Occupied Space (m2) And Revenue (£000)
Year ended 31 March

Total (tCO2e)
Occupancy (m2)
kgCO2e / Occupancy
Revenue (£000)
kgCO2e / £ Revenue

2011 *

2012

2013

2014

2015

6,879.5*
197,884
24.8
61,885
0.11

6,283.6
228,356
27.5
65,663
0.10

6,470.0
244,521
26.5
69,671
0.09

5,681.8
263,101
21.6
72,196
0.08

4,908.0+
283,732
17.3+
84,276
0.06+

% change
from peak
2011

(28.7%)
43.4%
(30.6%)
35.9%
(45.5%)

+
*

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
Peak GHG emissions year.

Over the medium term, from our peak electricity use in 2011, kgCO2e emissions have reduced per customer occupied space by 30.6% and
45.5% per revenue.

Our future GHG carbon reduction programme is to assess further LED re-lamping and low carbon solar electricity generation investments
where viable.

3.3 Emission Reduction Targets

Year ended 31 March

2011 *

Emissions tCO2e
% reductions

6,758
–

2012

6,143
-9%

2013

2014

2015

2016

2017

2018

6,051
-10.5%

5,207
-23.4%

4,776+
-29.3%

4,537
-32.9%

4,310
-36.2%

4,095
-39.4%

+
*

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
Peak Electricity use year.

Our future programmes for continuing re-lamping stores internally and externally with energy efficient LED lighting is to be reviewed
during the year ending 31 March 2016. Additional investment in solar PV installations at our new and existing stores will also be assessed
in the year ending 31 March 2016. Our target is to reduce our GHG emissions from peak energy use in 2011, by 39% in 2018.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

4.0 SCOPE 3 VOLUNTARY SUPPLY CHAIN EMISSIONS

GHG Emissions
Scope 3 supply chain emissions represent GHG emissions during electricity supplier transmission and distribution to our stores.

Scope 3 Electric Supply and Distribution GHG Emission Losses
Year ended 31 March

2011 *

2012

2013

2014

2015

Electric use (kWh)
Scope 2 (tCO2e)
Scope 3 (tCO2e)
Total (tCO2e)

13,925,217
6,758
544
7,302

13,588,703 13,153,960 11,688,629
5,207
445
5,652

6,143
525
6,668

6,051
501
6,552

9,643,341+
4,776+
417**

5,193

% change
from
2011

(31.8%)
(28.0%)
(23.4%)
(28.9%)

+
*
**

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
Peak energy use and benchmark year.
Transmission and Distribution Conversion Factor 2015 (0.04322).

Our energy efficiency programmes within our stores have reduced electricity demand and emission from our supplier’s power stations.
Transmission and distribution losses have reduced by 23.4% since 2011. In total, Scope 2 and 3 emissions have reduced by 28.9% since
2011, compared to a 22.6% reduction last year.

Scope 3 Store Waste Supply Chain Recycling and Landfill GHG Emissions
Year ended 31 March

Waste Recycling (t)
Landfill waste (t)
Landfill GHG tCO2e*

FY 2015 Landfill gas conversion factor = 0.2892.

2011

266
37.3
10.8

2012

263
36.8
10.7

2013

259
34.6
10.0

2014

265
37.0
10.7

2015

273
38.2
11.0

Waste generation in self storage is assessed as a “low environmental impact”. The majority of non-hazardous bulk office waste is
segregated by our staff and then further recycling by our waste contractor takes place after collection. This year 86% of our waste was
recycled and 14% went to landfill. Landfill GHG emissions are estimated to be 11.0 tCO2e. These emission levels represent a negligible
percentage of our combined Scope 1 and 2 emissions, well below the materiality threshold for carbon emissions.

New Store Construction ‘Fit-Out’ Waste Management Performance
Year ended 31 March

Tonnage
Waste Recycled (%)
Plasterboard Recycled (%)

2011

147.5
93.2
100

2012

152.3
96.0
34.0

2013

12.9
100
–

2014

78.9
95
100

2015

14.5
100
100

In January 2015, our new Enfield store ‘Fit Out’ contractors recycled 100% of our waste (14.5 tonnes) as follows: hard-core (38.3%);
soil (26.7%); ‘waste to energy’ (15.5%); wood (9.3%); metal (4.4%); concrete (3.9%); plaster-board (2.0%) and residual cardboard
and paper. All of our new stores sign up to the ‘Considerate Constructors Scheme’, and aim for high Energy Performance Certification
(EPC ‘B’ rating).

Water use has been assessed as a “low environmental impact” for self storage (28,486 m3). Our data has provided an average of
20.3 tCO2e emissions per year. This represents less than 0.4% of combined Scope 1 and 2 emissions, which is below the materiality
threshold for carbon emissions. Water use monitoring will be continued in order to review water use efficiency.

5.0 STAKEHOLDERS

Big Yellow engages with its main stakeholders to provide information and gain useful feedback from a variety of groups, as described below.

Government Legislation and Standards

EU Energy Efficiency Directive, The UK Energy Savings Opportunities Scheme (“ESOS”)
ESOS is enforced by the Environment Agency (“EA”) and involves reporting our annual energy savings once every four years in order to
identify cost effective energy saving measures. Big Yellow is required to comply with the ESOS scheme as we are ‘a large undertaking’
(> 250+ employees) and have an annual turnover of > €50 million. We have appointed an accredited assessor, measured all our energy
consumption, determined significant areas of use and will complete the audit before December 2015.

Climate Change Act 2008; Carbon Reduction Commitment (“CRC”) Tax Reporting
The Department of Energy and Climate Change (“DECC”) and the Environment Agency (“EA”) are stakeholders in the policy for reducing
energy demand from large private sector organisations (energy use > 6,000 MWh / year).

The Carbon Reduction Commitment (“CRC”) Tax Reporting
Year ended 31 March

Electric Use (kWh)
Gas Use (kWh)
Carbon (tCO2)
Tax Rate (£ / tCO2)
CRC Tax (£)

2013

2014

2015

13,153,960 11,688,629
652,181
6,415
£12.00
£76,980

716,508
7,598
£12.00
£91,176

9,643,341+
602,563
4,784
£16.40
£78,464

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.

The scheme uses carbon dioxide (CO2) conversion factors, and so is not directly comparable to the Companies Act GHG reporting.
The current CRC Tax Rate has risen from £12.00 to £16.40 per ton of CO2 for 2015; this will rise again in 2016 to £16.90/tCO2). The CRC is
another financial driver for energy and carbon emission reductions and for investing in energy efficient technologies. From 2013, we have
reduced CRC tCO2 carbon emissions by 37% and an average of 18.5% per year and are reducing CRC tax payments against future increase
in the tax rate. Last year we set a programme target to reduce CRC carbon emission by 10% and we have exceeded this with a reduction of
25.4% from 2014.

UK Government Climate Change Act (2008)

National Target to Reduce GHG (tCO2e) Carbon Emissions by 34% by 2020
As part of the UK commercial property sector, Big Yellow has been reducing its energy use by energy efficient technology since its first
electricity peak use in 2008.

Big Yellow Electricity Use (kWh)
Long Term Peak Use Benchmark
Year ended 31 March

2008*

2009

2010

2011

2012

2013

2014

2015

kWh
tCO2e

13,899,604 12,866,186 12,730,855 13,925,217 13,588,703 13,153,960 11,688,629

6,487

6,383

6,287

6,758

6,143

6,051

5,207

9,643,341+
4,766+

% change
from
2008

(30.6%)

(26.5%)

+
*

Indicates data reviewed by Deloitte LLP. See page 52 for their independent assurance report.
In 2008 the Government set a national target to reduce carbon emissions by 80% by 2050 (against a 1990 base line).

Considering approximately 95% of our ‘material’ energy use is Grid supplied electricity, we can estimate an absolute carbon reduction
from 2008, of 27%. We can also estimate over the last seven years, an annual average reduction of approximately 4% per year. The UK
commercial property sector ‘Real Estate Environmental Benchmark’ recommends a 3.5% annual reduction target to align with the
Government’s 2050 goal set in 2008. Our more immediate target is to reduce emissions by 34% by 2020. Last year we set a programme
target to reduce electricity and GHG tCO2e by 12 %. We have reduced electricity use by 17.5% and GHG tCO2e emissions by 8.5% from 2014.

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

Investor Communications

The Carbon Disclosure Project (“CDP”) 2014
The CDP is a global initiative by investors designed to encourage companies and their suppliers to publish information on their carbon
emissions and climate change strategies.

Big Yellow CDP Performance

Disclosure Score
Performance Score
Number of Investors

Note 1: we did not enter CDP in 2011.

Note 2: CDP score – a higher number is good.

2010

65
B
534

2011

–
–
–

2012

67
C
655

2013

71
D
722

2014

85
B
799

Reporting Transparency Disclosure Score
Our disclosure scores have improved from 2010 and last year the CDP Corporate Environmental Report for ‘Financials’ ranked us within
the upper quartile of 73 companies’. Only 7 ‘A’ rated ‘Financials’ were ranked above Big Yellow. Last year we set a program target to
improve upon our 2013 our ‘Disclosure Score’ of 71 and achieved 85/100 for ‘reporting transparency’ which improved by 20% and the
2014 score was also above the Financials average of 82/100. Our scores were also above the 75/100 average for all other sectors.

Addressing Climate Change Performance Rating
Our ‘B’ Band performance rating for ‘how we are addressing climate change’ was also above the average ‘C’ Band for ‘Financials’ and other
sectors. Big Yellow’s ‘number of investors’ has also been increasing by approximately 10% per year since 2010.

The Global Real Estate Sustainability Benchmark (“GRESB”)
‘Green Star Status’
GRESB collects information regarding the sustainability performance of property companies and funds. This includes information on
performance indicators, such as energy, GHG emissions, water and waste. The Survey also covers broader issues such as sustainability
risk assessments, performance improvement, and engagement with employees, customers, suppliers and the community. GRESB
continued to rate Big Yellow with a ‘Green Star Status’ in 2014.

‘Top Quartile’ Management and Policy
In Europe and globally, we were ranked with sustainability scores in the top quartile of ‘management and policy’ and ‘implementation and
measurement’. The benchmark results allow us to identify the areas we can improve, both in absolute terms and relative to our peers.
We are able to provide our existing and potential investors with information regarding our Environmental and Social Governance
performance, in the current real estate investment market.

6.0 CSR PROGRAMME FOR THE YEAR ENDING 31 MARCH 2016

Big Yellow will continue to focus on its most significant environmental and financial aspects of its business impact, energy use and
carbon emissions. Energy efficiency and low carbon supply programmes have been trialled and have been implemented since 2008.
We will review and consider further energy reduction strategies within our store operations for carbon and financial savings. This year our
programmes, objectives and targets are highlighted in the table below.

CSR Strategy

Programme Performance against
Peak kWh / CO2e / CO2 / £

2016 Objectives and Targets
From 2011 Benchmark

Mandatory Greenhouse Gas Emission
Reduction by Energy Efficiency

Assess remaining store portfolio energy
efficient LED kWh / tCO2e re-lamping
program viability (-28%, 2015).

Remaining reception and external areas
for LED re-lamping programme target of
-33%, 2016.

Carbon Reduction Commitment (CRC)
by carbon and tax

Review potential tax reduction from initial
2013 CRC tax year, based on kWh
Reductions and £ CRC tax (-14%, 2015).

Reduce night time internal and external
‘lighting on’ hour settings for a reduction
target (-5%, 2016).

Increase Solar Energy
Generation and Revenue

Solar electricity generation and revenue to
increase with new portfolio additions of
solar installations and selected retrofit from
first Feed in Tariff year (measured from
107,074 kWh 2011).

New Solar generation on Enfield and
Cambridge to generate (+19%), from (2015)
314,068 kWh to 374,975 kWh (2016).

FTSE4 Good Investor Environmental,
Social, Governance positioning

Provide data on: Governance; Risk; Tax;
Bio-diversity; Community; Climate Change;
Health & Safety (public domain).

Maintain position in the FTSE4 Good
Index Series ratings by providing links
for analyst review.

Carbon Disclosure Project (CDP)
Investor Communications

Global Real Estate Sustainability
Benchmark

Health and Safety

Staff and CSR awareness

Use our carbon data in the CDP survey
2015, to improve on ratings: ‘85’ (%) for
‘carbon reporting transparency’; and a
‘B’ rating for ‘Climate Change’ strategy.

In Europe and globally, we were ranked
with sustainability scores in the top
quartile of ‘management and policy’ and
‘implementation and measurement’.

Maintain current high standards of
recording and reporting customer, staff,
visitor, and contractor incidents.

Continue raising CSR awareness through
presentation of energy performance
improvements.

To increase or maintain our high score
(85% +) and rating ‘A’ / ‘B’, and interest form
a wider range of investors.

Strengthen and maintain the leading
‘Green Star’ position in the ‘upper quartile’
of the GRESB quadrant.

Invest in continued training of staff in routine
health and safety.

Regular staff meetings and information
bulletins on CSR progress.

More details of CSR policies, previous reports and awards can be found on our investor relations web site at
www.corporate.bigyellow.co.uk/csr.aspx

Strategic Report (continued)

Corporate Social Responsibility Report (continued)

Assurance statement
Independent assurance statement by Deloitte LLP (“Deloitte”) to Big Yellow Group PLC (“Big Yellow”) on their Corporate
Social Responsibility Report 2015 (“Report”)

What we looked at: scope of our work
Big Yellow engaged us to perform limited assurance procedures on selected corporate social responsibility (CSR) performance
indicators for the year ended 31 March 2015. The assured data are indicated by the + symbol in the Report.

Carbon footprint indicators:
> Store electricity (tCO2e)
> Store flexi-office gas emissions (tCO2e)
> Refrigerant emissions (tCO2e)
> Absolute carbon dioxide emissions (tCO2e)
Store electricity use, CO2 emissions and carbon intensity:
> Electricity use (kWh)
> Absolute carbon emissions (tCO2e)
> Carbon intensity (kgCO2e/m2 gross internal area)
> Carbon intensity (kgCO2e/m2 occupied space)
> Carbon intensity (kgCO2e/£ revenue)
Renewable energy generation and CO2 emissions reductions:
> Total renewable energy (kWh)
> Carbon dioxide saved by renewable energy (tCO2e)
> Renewable energy percentage of total store use (%)

Staff health and safety:
> Average number of employees
> Minor Injuries
> Reportable injuries (RIDDOR)
> Annual Injury Incidence rate (AIIR) per 100,000 staff
> Notices

What we found: our assurance opinion
Based on the assurance work we performed, nothing has come to our attention that causes us to believe that the selected CSR
performance indicators, as noted above, are materially misstated.

What standards we used: basis of our work and level of assurance
We carried out limited assurance in accordance with the International Standards on Assurance Engagements 3000 (ISAE 3000).
To achieve limited assurance ISAE 3000 requires that we review the processes and systems used to compile the areas on which
we provide assurance. It does not include detailed testing of source data or the operating effectiveness of processes and internal
controls. This is designed to give a similar level of assurance to that obtained in the review of interim financial information.

The evaluation criteria used for our assurance are the Big Yellow definitions and basis of reporting as described at:
http://corporate.bigyellow.co.uk/csr.aspx

What we did: our key assurance procedures
Considering the risk of material error, our multi-disciplinary team of CSR assurance specialists planned and performed our work to
obtain all the information and explanations we considered necessary to provide sufficient evidence to support our assurance
conclusion. Our work was planned to mirror Big Yellow’s own group level compilation processes, tracing how data for each indicator
within our assurance scope was collected, collated and validated by corporate head office and included in the Report.

Key procedures we carried out included:

> gaining an understanding of Big Yellow’s systems through interview with management responsible for CSR management and

reporting systems at corporate head office;

> reviewing the systems and procedures to capture, collate, validate and process data for the assured performance data included

in the Report. We did not test back to source data; and

> reviewing the content of the 2015 CSR Report against the findings of our work and making recommendations for improvement

where necessary.

Big Yellow’s responsibilities
The Directors are responsible for the preparation of the Report and for the information and statements contained within it. They are
responsible for determining the CSR goals, performance and for establishing and maintaining appropriate performance
management and internal control systems from which the reported information is derived.

Deloitte’s responsibilities, independence and team competencies
Our responsibility is to independently express a conclusion on the performance data for the year ended 31 March 2015.
We performed the engagement in accordance with Deloitte’s independence policies, which cover all of the requirements of the
International Federation of Accountants Code of Ethics and in some cases are more restrictive. We confirm to Big Yellow that we have
maintained our independence and objectivity throughout the year, including the fact that there were no events or prohibited
services provided which could impair that independence and objectivity in the provision of this engagement.

This report is made solely to Big Yellow in accordance with our engagement letter. Our work has been undertaken so that we might
state to the company those matters we are required to state to them in an assurance report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone other than Big Yellow for our work, for this report, or
for the conclusions we have formed.

Deloitte LLP
London, United Kingdom
18 May 2015

Governance

Directors, Officers and Advisors

Executive Directors
Nicholas Vetch, aged 54, Executive Chairman, is a co-founder of Big Yellow in September 1998. Prior to that, he was joint Chief Executive of Edge Properties plc,
which he co-founded in 1989 which was subsequently listed on the Official List of the London Stock Exchange in 1996 and then taken over by Grantchester
Properties plc in 1998. He is also a Non-Executive Director of Local Shopping REIT plc.

James Gibson, aged 54, Chief Executive Officer, is a co-founder of Big Yellow in September 1998. He is a Chartered Accountant having trained with Arthur
Andersen & Co. where he specialised in the property and construction sectors, before leaving in 1989. He was Finance Director of Heron Property
Corporation Limited and then Edge Properties plc which he joined in 1994. Edge Properties was listed on the Official List of the London Stock Exchange in
1996 and then taken over by Grantchester Properties plc in 1998. He is also a Non-Executive Director and shareholder of AnyJunk Limited, and a member
of the Development Board of the London Children’s Ballet.

Adrian Lee, aged 49, Operations Director, was previously a Senior Executive at Edge Properties plc, which he joined in 1996. Prior to that he was a corporate
financier at Lazard for five years, having previously qualified as a surveyor at Knight Frank. He was appointed to the Board in May 2000.

John Trotman, aged 37, Chief Financial Officer, is a Chartered Accountant having trained with Deloitte LLP, where he specialised in the real estate sector and
self storage. On leaving Deloitte in 2005, John worked for a subsidiary of the Kajima Corporation. He joined Big Yellow in June 2007, and was appointed to the
Board in September 2007. He is a Director of the UK Self Storage Association.

Non-Executive Directors
Tim Clark, aged 64, Non-Executive Director. He was a partner in Slaughter and May, one of the leading international law firms in the world, for 25 years;
initially working as a corporate and M&A advisor to a range of companies and institutions and then for the last seven years as senior partner (before retiring
in April 2008). He is the Chair of Water Aid UK, and a Senior Advisor to G3, and to Chatham House. He is also a member of the International Chamber of
Commerce UK Governing Body, the Advisory Board of Uria Menendez, the Board of the Royal National Theatre and the Development Committee of the
National Gallery. He is Chairman of the trustees of the Economist Trust and a member of the Audit Committee of the Wellcome Trust. He was appointed to the
Board in August 2008, and is Chairman of the Remuneration and Nomination Committees, and the Senior Independent Director.

Richard Cotton, aged 59, Non-Executive Director, headed the real estate corporate finance team at JP Morgan Cazenove until April 2009, and subsequent to
that was a Managing Director of Forum Partners. Richard is currently the Chairman of Centurion Properties and a Non-Executive Director of Hansteen
Holdings plc. Richard joined the Board in July 2012.

Georgina Harvey, aged 50, Non-Executive Director, started her media career at Express Newspapers plc where she was appointed Advertising Director in
1994. She joined IPC Media Ltd in 1995 and went on to form IPC Advertising in 1998, where she was Managing Director. She was a member of the Board of
IPC Media from 2000 and was Managing Director of the Regionals division of Trinity Mirror from 2005 to 2012, overseeing its transition to a digital platform.
She is currently a Non-Executive Director of William Hill plc and McColl's Retail Group plc. She joined the Board in July 2013.

Steve Johnson, aged 51, Non-Executive Director, started his career at Bain in the 1980s before joining Asda in 1993, where he carried out a number of roles,
culminating in Marketing Director. He left Asda in 2000, to join GUS as a Sales & Marketing Director, departing in 2002 to take up his first CEO role at Focus DIY,
where he remained until 2007. He joined Woolworths as part of the final turnaround team in late 2008. He has most recently been working as an operating
executive for TPG, and was also the Executive Chairman of Dreams plc between July 2011 and October 2012. He joined the Board in September 2010.

Mark Richardson, aged 58, Non-Executive Director, retired from Deloitte in 2008 after a career there of 29 years, the last 19 as an audit partner specialising
in clients in the Real Estate and Construction sectors. Mark is a co-opted member of the Audit and Risk Committee of the Natural History Museum, a trustee
of the Natural History Museum Development Trust, a trustee of WWF-UK, and he is also a trustee and treasurer of the children’s communication charity ICAN.
He was appointed to the Board in July 2008 and is chairman of the Audit Committee.

Secretary and Registered office
Shauna Beavis
2 The Deans
Bridge Road
Bagshot
Surrey
GU19 5AT

Company Registration No. 03625199

Bankers
Lloyds Bank plc
HSBC Bank plc
Aviva Commercial Finance Limited
M&G Investments Limited

Solicitors
CMS Cameron McKenna LLP
Lester Aldridge LLP

Financial advisors and stockbrokers
J P Morgan Cazenove

Independent Auditor
Deloitte LLP
Chartered Accountant and Statutory Auditors

Valuers
Cushman & Wakefield LLP
Jones Lang LaSalle

Directors’ Report

The Directors present their annual report on the affairs of the Group, together with the audited financial statements and auditor’s report for the year ended
31 March 2015. The Report on Corporate Governance on pages 58 to 61 forms part of this report.

Details of significant events since the balance sheet date are included in note 25 to the financial statements. An indication of likely future developments
in the business of the Company is included in the strategic report.

Information about the use of financial instruments by the Company and its subsidiaries is given in note 18 to the financial statements.

Dividends
The Directors are recommending the payment of a final dividend of 11.3 pence per share for the year (2014: 8.4 pence per ordinary share). An interim
dividend of 10.4 pence per share was paid in the year (2014: 8 pence per share).

A property income dividend of 16.1 pence is payable for the year, of which 10.4 pence per share was paid with the interim dividend, and 5.7 pence per share
was proposed for the final dividend.

Subject to approval by shareholders at the Annual General Meeting to be held on 21 July 2015, the final dividend will be paid on 23 July 2015. The Ex-div date
is 11 June 2015 and the Record date is 12 June 2015.

Disclosure of Greenhouse Gas (“GHG”) Emissions
Companies Act 2006; Climate Change, the GHG Emissions Director’s Reports Regulations 2013
From October 2013, all listed companies are required to report annual quantities of GHG emissions (measured as Carbon Dioxide Equivalent (CO2e)) as
follows:

> Scope 1 – significant direct emission sources, such as our flexi-office gas heating and air conditioner coolant replacement – currently fit out ‘gas oil’

use emissions and one Company van diesel fuel use emissions are assessed as ‘not material’*;
> Scope 2 – significant indirect or off-site power station electricity supply emissions to our stores; and
> Scope 3 – Electricity supplier ‘transmission and distribution’ emissions – currently, voluntary GHG emissions, from our waste and water supply chains

are not assessed as material.

Summary of Scope 1 and 2 Total Carbon Footprint (GHG carbon equivalent emissions (tCO2e))
Including store electricity, gas, coolant, generator gas oil and van diesel

2011**

2012

2013

2014

2015

Total Scope 1 and 2 GHG Emissions (tCO2e)
Scope 3 Electricity Transmission Losses
Kg CO2e/Annual Revenue (£)
Kg CO2e/Customer Occupancy (m2)

6,879.5
544
0.11
32.0

6,283.6
525
0.10
26.0

6,470.0
501
0.09
26.5

5,681.8
445
0.08
22.6

4,908.0
417
0.06
17.3

*
**

Our materiality threshold for carbon emissions is > 1%.
Reductions of GHG emissions following the Peak Energy Use/Baseline year (2011) have been restated using the more accurate DEFRA/DECC conversion factors, revised from 5
year, to 1 year, rolling averages.

Further information on GHG emissions and on other sustainability initiatives at Big Yellow is provided in our Corporate Social Responsibility Report.

Capital structure
Details of the authorised and issued share capital, together with details of the movements in the Company's issued share capital during the year are shown
in note 22. The Company has one class of ordinary shares which carry no right to fixed income. Each share carries the right to one vote at general meetings
of the Company.

There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles
of Association and prevailing legislation. The Directors are not aware of any agreements between holders of the Company's shares that may result in
restrictions on the transfer of securities or on voting rights.

Details of employee share schemes are set out in note 23, and details of shares held in treasury and by the Company’s Employee Benefit Trust are set out
in note 22.

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

With regard to the appointment and replacement of Directors, the Company is governed by its Articles of Association, the Corporate Governance Code, the
Companies Acts and related legislation. The Articles themselves may be amended by special resolution of the shareholders. The powers of Directors are
described in the Report on Corporate Governance on page 58.

There are a number of agreements that take effect, alter or terminate upon a change of control of the Company such as commercial contracts, bank loan
agreements, property lease arrangements and employees' share plans. Furthermore, the Directors are not aware of any agreements between the Company
and its Directors or employees that provide for compensation for loss of office or employment that occurs because of a takeover bid.

During the year the Company issued 641,877 shares to satisfy the exercise of share options (2014: 421,500).

Directors’ Report (continued)

Directors
The Directors of the Company who served throughout the year and to the date of approval of the financial statements were as follows:

Tim Clark
Richard Cotton
James Gibson
Georgina Harvey
Steve Johnson
Adrian Lee
Mark Richardson
John Trotman
Nicholas Vetch

Senior Independent Director
Non-Executive Director
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Operations Director
Non-Executive Director
Chief Financial Officer
Executive Chairman

Biographical details of the Executive and Non-Executive Directors standing for re-election are set out on page 54.

Directors’ indemnities
The Company purchases liability insurance covering the Directors and officers of the Company and its subsidiaries.

Political contributions
No political donations were made by the Company in either the current or preceding financial year.

Substantial shareholdings
The Company had been notified, in accordance with Chapter 5 of the Disclosure and Transparency rules, of the following voting rights as a shareholder of the
Company at 31 March 2015 and 18 May 2015.

Cohen & Steers Inc
Blackrock Inc
Old Mutual Plc
Standard Life Investments
PGGM Investments
State Street Global Advisors Limited

No. of
ordinary shares
31 March 2015

12,689,564
11,032,565
9,485,313
6,082,913
5,380,776
4,973,460

Percentage of
voting rights
and issued
share capital
31 March 2015

No. of
ordinary shares
18 May 2015

Percentage of
voting rights
and issued
share capital
18 May 2015

8.1% 13,073,943
7.0% 11,042,722
9,395,078
6.1%
6,082,913
3.9%
5,380,776
3.4%
4,952,931
3.2%

8.3%
7.0%
6.0%
3.9%
3.4%
3.2%

The interest of the Directors in the share capital of the Company is shown on page 81 of the Remuneration Report.

Purchase of own shares
The Company was granted authority at the AGM in 2014 to purchase its own shares up to a total aggregate value of 10% of the issued nominal capital. That
authority expires at this year’s AGM and a resolution will be proposed for its renewal. During the year the Company made no purchases of its own shares.

Employee consultation
The Group seeks to ensure employee commitment to its objectives in a number of ways. Strategic changes are communicated directly to all staff who are
encouraged to address queries to the Executive Directors. The Directors’ executive meetings are frequently held in stores and in addition Directors and
senior management visit the stores on a regular basis. Furthermore, there are regular team briefings at store level to provide employees with information
about the performance of and initiatives in their store. A wide range of information is also communicated across the Group’s Intranet, including the
e-publication of the Group’s financial results and all press releases, the publication of a quarterly newsletter, and the publication of a weekly operations bulletin.

Employees are encouraged to participate in the Group’s performance through Employee Share Schemes and performance related bonuses. 39% of eligible
employees participate in the Group’s Sharesave Scheme.

The Group’s recruitment policy is committed to promote equality, judging neither by race, nationality, religion, age, gender, disability, sexual orientation,
nor political opinion and to treat all stakeholders fairly.

Disabled employees
Applications for employment by disabled persons are always fully considered, bearing in mind the aptitudes of the applicant concerned. In the event
of members of staff becoming disabled every effort is made to ensure that their employment with the Group continues and that appropriate training is
arranged. It is the policy of the Group that the training, career development and promotion of disabled persons should, as far as possible, be identical to
that of other employees.

Human Rights
Big Yellow respects Human Rights and aims to provide assurance to internal and external stakeholders that we are committed to human rights and the
principles of the Universal Declaration of Human Rights.

We are committed to creating and maintaining a positive and professional work environment that reflects and respects the basic rights of freedom
to lead a dignified life, free from fear or want, and where stakeholders are free to express their independent beliefs. Our employment policies and practices
reflect a culture where decisions are made solely on the basis of individual capability and potential in relation to the needs of the business.

Auditor
In respect of each Director of the Company, at the date when this report was approved, to the best of their knowledge and belief:

> so far as each Director is aware, there is no relevant audit information of which the Company’s auditor is unaware; and
> each Director has taken all the steps that he might have reasonably been expected to take as a Director in order to make himself aware of any relevant

audit information and to establish that the Company’s auditor is aware of that information.

This confirmation is given and should be interpreted in accordance with s418 of the Companies Act 2006.

The auditor, Deloitte LLP has expressed their willingness to continue in office as auditor and a resolution to reappoint them will be proposed at the
forthcoming Annual General Meeting.

Approved by the Board of Directors and signed on behalf of the Board

Shauna Beavis
Secretary
18 May 2015

Corporate Governance Report

INTRODUCTION
The Company is committed to the principles of corporate governance contained in the UK Corporate Governance Code that was issued in 2010 by the
Financial Reporting Council (“the Code”) for which the Board is accountable to shareholders. The Board also takes account of the corporate governance
guidelines of institutional shareholders and their representative bodies.

At Big Yellow, we aim to create a culture in which integrity, openness and fairness are rewarded.

We continue to review the composition of the Board to ensure that it has the appropriate skills, knowledge and balance for the effective stewardship of the
Company. There have been no changes to the composition of the Board in the year.

The Board has overall responsibility for the manner in which the Company runs its affairs.

Statement of compliance with the Code
Throughout the year ended 31 March 2015, the Company has been in compliance with the Code provisions set out in section 1 of the 2010 UK Corporate
Governance Code.

Statement about applying the principles of the Code
The Company has applied the principles set out in the Code, including both the main principles and the supporting principles, by complying with the Code as
reported above. Further explanation of how the principles and supporting principles have been applied is set out below and in the Nominations Committee
Report, the Remuneration Report and the Audit Committee Report.

LEADERSHIP
The Board’s role is to provide entrepreneurial leadership of the Company within a framework of prudent and effective controls which enables risk to be
assessed and managed.

Chairman and Chief Executive
The division of responsibilities between the Chairman and the Chief Executive has been agreed by the Board and encompasses the following parameters:

> the Chairman’s role is to provide continuity, experience, governance and strategic advice, while the Chief Executive provides leadership, drives the

day-to-day operations of the business and works with the Chairman on overall strategy;

> the Chairman, working with the Senior Independent Non-Executive Director, is viewed by investors as the ultimate steward of the business and the

guardian of the interests of all the shareholders;

> the Board believes that the Chairman and the Chief Executive work together to provide effective and complementary stewardship;
> the Chairman:

> takes overall responsibility for the composition and capability of the Board; and
> consults regularly with the Chief Executive and is available on a flexible basis for providing advice, counsel and support to the Chief Executive.

> the Chief Executive:

> manages the Executive Directors and the Group’s day-to-day activities;
> prepares and presents to the Board strategic options for growth in shareholder value;
> sets the operating plans and budgets required to deliver agreed strategy; and
> ensures that the Group has in place appropriate risk management and control mechanisms.

The Directors believe it is essential for the Group to be led and controlled by an effective Board that provides entrepreneurial leadership within a framework
of sound controls which enables risk to be assessed and managed. The Board is responsible for setting the Group’s strategic aims, its values and standards
and ensuring the necessary financial and human resources are in place to achieve its goals. The Board ensures that its obligations to shareholders and
other stakeholders are understood and met. The Board also regularly reviews the performance of management.

EFFECTIVENESS
Composition of the Board
The Nominations Committee is responsible for reviewing the Board Composition, and makes recommendations to the Board on the appointment of
Directors. There are five independent Non-Executive Directors on the Board, with Tim Clark being the Senior Independent Director. The Company complies
with the Combined Code in that at least half of The Board is comprised of independent Non-Executive Directors.

All of the Non-Executive Directors bring considerable knowledge, judgement and experience to Board deliberations. Non-Executive Directors do not
participate in any of the Company’s share option or bonus schemes and their service is non-pensionable. The Non-Executive Directors are encouraged
to communicate directly with Executive Directors between formal Board meetings. The Non-Executive Directors meet at least once a year without the
Executive Directors being present.

The Non-Executive Directors scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.
They are required to satisfy themselves on the integrity of the financial information and that financial controls and systems of risk management are robust
and defensible. They are responsible for determining appropriate levels of remuneration for Executive Directors and have a prime role in appointing and,
where necessary, removing Executive Directors, and in succession planning.

EFFECTIVENESS (continued)
Composition of the Board (continued)
The tenure of the independent Non-Executive Directors at 31 March 2015 is set out below:

Georgina Harvey

1.7

Richard Cotton

Steve Johnson

Tim Clark

Mark Richardson

2.7

4.6

6.7

6.8

years

THE BOARD AND ITS COMMITTEES
Standing committees of the Board
The Board has Audit, Remuneration and Nominations Committees, each of which has written terms of reference. They deal clearly with the authorities and
duties of each Committee and are formally reviewed annually. Copies of these terms of reference are available on the Company’s website. Each of these
Committees is comprised of Independent Non-Executive Directors of the Company who are appointed by the Board on the recommendation of the
Nominations Committee.

All of the Committees are authorised to obtain legal or other professional advice as necessary; to secure, where appropriate, the attendance of external
advisors at its meetings and to seek information required from any employee of the Company in order to perform its duties.

The Chairman of each Committee reports the outcome of the meetings to the Board. The Company Secretary is secretary to each Committee.

Attendance at meetings of the individual Directors at the Board Meetings that they were eligible to attend is shown in the table below:

Number of meetings attended

Director

Tim Clark
Richard Cotton
James Gibson
Georgina Harvey
Steve Johnson
Adrian Lee
Mark Richardson
John Trotman
Nicholas Vetch

attended
absent

Position

Non-Executive Director
Non-Executive Director
Chief Executive Officer
Non-Executive Director
Non-Executive Director
Operations Director
Non-Executive Director
Chief Financial Officer
Executive Chairman

The Board meets approximately once every two months to discuss a whole range of significant matters including strategic decisions, major asset
acquisitions and performance. A procedure to enable Directors to take independent professional advice if required has been agreed by the Board and
formally confirmed by all Directors.

There is a formal schedule of matters reserved for the Board’s attention including the approval of Group strategy and policies; major acquisitions and
disposals, major capital projects and financing, Group budgets and material contracts entered into other than in the normal course of business. The Board
also considers matters of non-financial risk as part of its review of the Group’s risk register.

At each Board meeting, the latest available financial information is produced which consists of detailed management accounts with the relevant
comparisons to budget. A current trading appraisal is given by the Executive Directors.

Corporate Governance Report (continued)

Information and professional development
All Directors are provided with detailed financial information throughout the year. On a weekly basis they receive a detailed occupancy report showing
the performance of each of the Group’s open stores. Management accounts are circulated to the Executive monthly and a detailed Board pack is distributed
a week prior to each Board meeting.

All Directors are kept informed of changes in relevant legislation and changing commercial risks with the assistance of the Company’s legal advisors and
auditors where appropriate. The professional development requirements of Executive Directors are identified and progressed as part of each individual’s
annual appraisal. All new Directors are provided with a full induction programme on joining the Board.

Non-Executive Directors are encouraged to attend seminars and undertake external training at the Company’s expense in areas they consider to be
appropriate for their own professional development. Each year, the programme of senior management meetings is tailored to enable meetings to be held
at the Company’s properties. During the year, the Executive Directors made visits to all of the Group’s open stores.

Evaluation
The Board conducts an annual review of its performance and of its Committees to ensure they are operating effectively. During the prior year an external
evaluation of the Board was carried out. The Board intends to carry out an externally facilitated review every three years.

In the intervening years the Board undertakes an evaluation of its own performance and that of its Committee and its individual members, with reference
to the most recent external evaluation of its performance. During the year, the Chairman evaluated the performance of the Executive Directors, and the
performance of the Chairman was evaluated by the Senior Independent Non-Executive Director. It was considered that the individuals, the Committees and
the Board as a whole were operating effectively, with appropriate procedures put in place for minor areas identified for improvement.

ACCOUNTABILITY
Risk management and internal control
The Group operates a rigorous system of risk management and internal control, which is designed to ensure that the possibility of misstatement or loss
is kept to a minimum. There is a comprehensive system in place for financial reporting and the Board receives a number of reports to enable it to carry out
these functions in the most efficient manner. These procedures include the preparation of management accounts, forecast variance analysis and other
ad hoc reports. There are clearly defined authority limits throughout the Group, including those matters which are reserved specifically for the Board.

The Board has applied principle C.2 of the UK Corporate Governance Code by establishing a continuous process for identifying, evaluating and managing the
significant risks the Group faces and for determining the nature and extent of the significant risks it is willing to take in achieving its strategic objectives.
The Board regularly reviews the process, which has been in place from the start of the year to the date of approval of this report and which is in accordance
with revised guidance on internal control published in October 2005 (the Turnbull Guidance). The Board is also responsible for the Group's system of
internal control and for reviewing its effectiveness. Such a system is designed to manage rather than eliminate the risk of failure to achieve business
objectives, and can only provide reasonable and not absolute assurance against material misstatement or loss.

In compliance with provision C.2.1 of the Code, the Board regularly reviews the effectiveness of the Group's risk management and internal control systems.
The Board's monitoring covers all controls, including financial, operational and compliance controls and risk management. It is based principally on
reviewing reports from management to consider whether significant risks are identified, evaluated, managed and controlled and whether any significant
weaknesses are promptly remedied and indicate a need for more extensive monitoring. The Board has also performed a specific assessment for the
purpose of this annual report. This assessment considers all significant aspects of risk management and internal control arising during the period covered
by the report, including the work carried out by the Group’s Store Compliance team. The Audit Committee assists the Board in discharging its review
responsibilities.

A formal risk identification and assessment exercise has been carried out resulting in a risk framework document summarising the key risks, potential
impact and the mitigating factors or controls in place. The Board have a stated policy of reviewing this risk framework at least once a year or in the event
of a material change. The risk identification process also considered significant non-financial risks.

During the reviews, the Directors:

> challenged the framework to ensure that the list of significant risks to business objectives is still valid and complete;
> considered new and emerging risks to business objectives and included them in the framework if significant;
> ensured that any changes in the impact or likelihood of the risks are reflected in the risk framework; and
> ensured that there are appropriate action plans in place to address unacceptable risks.

The results of the exercise have been communicated to the Board and the Audit Committee. This was in the form of a summary report which included:

> a prioritised summary of the key risks and their significance;
> any changes in the list of significant risks or their impact and likelihood since the last assessment;
> new or emerging risks that may become significant objectives in the future;
> progress on action plans to address significant risks; and
> any actual or potential control failures or weaknesses during the period (including “near misses”).

During the course of its review of the risk management and internal control systems, the Board has not identified, nor been advised of any failings or
weaknesses which it has determined to be significant, consistent with the prior year. Therefore, a confirmation in respect of necessary actions has not been
considered appropriate.

GOING CONCERN
The Group’s activities, and a fair review of the business, are included in the Strategic Report on pages 18 to 40. The financial position of the Group, including
its cash flow, liquidity, and committed debt facilities are discussed in the Financial Review on pages 32 to 37.

The Directors have a reasonable expectation that the Group and Company have adequate resources to continue operations for the foreseeable future. They
have therefore continued to adopt the going concern basis in preparing the financial statements.

REMUNERATION
The information on remuneration is included in the Remuneration Reports on pages 64 to 83.

AUDIT COMMITTEE AND AUDITORS
A Separate Audit Committee Report starts on page 84 and provides details of the role and activities of the Committee and its relationship with the external auditors.

SHAREHOLDER RELATIONS
The Board aims to achieve clear reporting of financial performance to all shareholders and acknowledges the importance of an open dialogue by both
Executive and Non-Executive Directors with its institutional shareholders. The Board believes that the Annual Report and Accounts play an important
part in presenting all shareholders with an assessment of the Group’s position and prospects.

The Company has an active dialogue with its shareholders through a programme of investor meetings which include formal presentation of the full and half
year results. The Executive Directors have participated in investor conferences and meetings during the year, throughout the United Kingdom, and also in
the United States and the Netherlands. During the year ended 31 March 2015, the Chief Executive and other Executive Directors carried out 142 meetings
with UK and overseas institutional shareholders and potential investors. These meetings comprised group and individual presentations and tours of our stores.

The Board also welcomes the interest of private investors and believes that, in addition to the Annual Report and the Company’s website, the Annual General
Meeting is an ideal forum at which to communicate with investors and the Board encourages their participation. At each Board Meeting, the Board is
updated on any shareholding meetings that have taken place, and any views expressed or issues raised by the shareholders in these meetings.

Any queries raised by a shareholder, either verbally or in writing, are answered immediately by whoever is best placed on the Board to do so. Directors are
introduced to shareholders at the AGM, including the identification of Non-Executive Directors and Committee Chairmen. The number of proxy votes cast in
the resolution is announced at the AGM.

SHARE CAPITAL
Detail on the share capital structure is provided in the Directors’ Report on page 55.

Report of the Nominations Committee

Introduction
The Committee is responsible for reviewing the Composition of the Board. It also makes recommendations for membership of the Board and considering
succession planning for Directors. The Committee is also responsible for evaluating Board and Committee performance.

Committee members and attendance

Member

Tim Clark
Richard Cotton
Georgina Harvey
Steve Johnson
Mark Richardson

attended
absent

Position

Number of meetings attended

Chairman and Senior Independent Director
Member
Member
Member
Member

The Nominations Committee is responsible for regularly reviewing the structure, size and composition of the Board and giving consideration to succession
planning for Directors and other senior Executives. Where changes are required, it is also responsible for the identification, selection and proposal to the
Board for approval of persons suitable for appointment or reappointment to the Board, whether as Executive or Non-Executive Directors and to seek
approval from the Remuneration Committee to the remuneration and terms and conditions of service of any proposed Executive Director appointment.
The Chairman of the Committee presents reports to the Board as appropriate to enable the Board as a whole to agree the appointments of new Directors.
The Committee meets at least once a year and otherwise as required and as determined by its members.

The terms and conditions of appointment for the Non-Executive Directors is available for inspection at the Company’s Head Office during normal working
hours. They are also available for inspection at the Company’s AGM.

Board performance evaluation
In the prior year, the Board engaged Lomond Consulting to undertake an evaluation of the performance of the Board and its Committees. The aim was to
seek to identify areas where the performance and the procedures of the Board may be improved. The scope of the review was agreed between the Chairman
of the Committee and the Chief Executive.

Each Director completed a questionnaire on the performance of the Board, its Committees and the Chairman. The responses were anonymous to enable an
open and honest sharing of views. Lomond Consulting then produced a reporting showing the results of the review. The Board has committed to carry out an
external performance evaluation every three years. In the intervening years the Board undertakes an evaluation of its own performance and that of its
Committee and its individual members, with reference to the most recent external evaluation of its performance.

During the current year, the Chairman evaluated the performance of the Executive Directors, and the performance of the Chairman was evaluated by the
Senior Independent Non-Executive Director. It was considered that the individuals, the Committees and the Board as a whole were operating effectively, with
appropriate procedures put in place for minor areas identified for improvement.

Succession planning
The Board comprises a team of four Executive Directors, two of whom were co-founders of the Company, complemented by Non-Executive Directors who
have wide business experience and skills as well as a detailed understanding of the Group’s philosophy and strategy. Continuity of experience and
knowledge, particularly of self storage, within the executive team is particularly important in a focused long-term business such as Big Yellow.

It is a key responsibility of the Committee to advise the Board on succession planning. The Committee ensures that any future changes in the Board’s
composition are foreseen and effectively managed. In the event of unforeseen changes, the Committee ensures that management and oversight of the
Group’s business and long-term strategy will not be affected.

The Committee also addresses the development and continuity of the Senior Management team below Board level.

Policy on diversity
All aspects of diversity, including gender are considered at every level of recruitment. All appointments to the Board are made on merit. The Board’s policy
states that the Board seeks a composition with the right balance of skills and diversity to meet the demands of the business. The Board does not consider
that quotas are appropriate for its representation and has therefore chosen not to set targets. Gender diversity of the Board and Company is set out below
(senior management are defined to be Heads of Department):

100%

11%

90%

80%

70%

60%

50%

40%

30%

20%

10%

45%

41%

89%

55%

59%

Female

Male

Board

Senior
Management

All
employees

Directors standing for re-election
All of the Directors will retire in accordance with the UK Corporate Governance Code and will offer themselves for re-election at the Annual General Meeting.

Following a performance appraisal process, the Board has concluded that the Directors retiring by rotation are effective, committed to their roles and
operate as effective members of the Board.

The Board, on the advice of the Committee, therefore recommends the re-election of each Director standing for re-election. Full biographical details of each
Director are available on page 54.

Tim Clark
Nominations Committee Chairman
18 May 2015

Remuneration Report
For the year ended 31 March 2015

INTRODUCTION
This report is on the activities of the Remuneration Committee for the period from 1 April 2014 to 31 March 2015. It sets out the remuneration policy and
remuneration details for the Executive and Non-Executive Directors of the Company. It has been prepared in accordance with Schedule 8 of the Large and
Medium-size Companies and Groups (Accounts and Reports) Regulations 2008 (as amended) (the “Regulations”).

The report is divided into three main areas:

> the annual statement by the Remuneration Committee Chairman;
> the report on Directors’ Remuneration Policy; and
> the annual report on Directors’ remuneration.

The Companies Act 2006 requires the auditor to report to the shareholders on certain parts of the Remuneration Report and to state whether, in their
opinion, those parts of the report have been properly prepared in accordance with the Regulations. The parts of the annual report on Directors’ remuneration
that are subject to audit are indicated in the report. The annual statement by the Remuneration Committee Chairman and the Directors’ remuneration policy
report are not subject to audit.

ANNUAL STATEMENT BY THE REMUNERATION COMMITTEE CHAIRMAN
Dear Shareholder,

I am very pleased to present the Directors’ Remuneration Report for the year ended 31 March 2015. This report has been prepared by the
Remuneration Committee and approved by the Board.

Business conditions and Group performance in the year ended 31 March 2015
The business conditions and performance of the Group in the year ended 31 March 2015 are described more fully in the Chairman's Statement
on pages 16 and 17 of this Annual Report. In summary:

> the business of the Group performed strongly;
> in an improving economic environment, Big Yellow remained the clear UK brand leader in self storage and delivered occupancy, cash flow and

earnings growth for the sixth year in a row;

> revenue, cash flow and adjusted profit before tax increased by 17%, 29% and 35% respectively;
> occupancy was increased by 5.3%;
> the Group completed the acquisition of the two thirds of Big Yellow Limited Partnership it did not previously own; and
> dividends are being increased by 32%.

Over the past three years, the Group’s revenue has increased by 28%, with adjusted eps increasing by 49% and dividends declared by 117%.

Policy on executive remuneration
The policy of the Company is to ensure that the executive remuneration packages are designed to attract, motivate and retain Directors of high
calibre and reward the Executive Directors for protecting and enhancing value for shareholders.

As a result, a substantial element of the remuneration of the Executive Directors – up to 71% of their potential total remuneration for the next
financial year – is structured to be dependent on the performance of the Company.

The Company aims to provide remuneration to the Directors which is fair to the Directors both generally and in the context of the remuneration of
other staff of the Company and the returns to shareholders. Remuneration consists of a balance of short and long term incentives which provide a
strong link between reward and individual and Group performance to align the interests of the Executive Directors with the interests of shareholders.

The Remuneration Committee is also concerned to ensure that the Executive Directors have significant interests in the shares of the Company.
Each Executive Director has an interest in shares with a value in excess of two times his base salary and, together, and including share incentives,
the Executive Directors are interested in shares comprising approximately 9.3% of the share capital of the Company.

In the view of the Remuneration Committee, the success of the remuneration policy has been reflected in the length of service and stability of the
Executive Director team and the progress of the Company over a number of years, including the recent years of significant and challenging
economic slowdown. Two of the Executive Directors were founders of the Company while the other two have been Executive Directors for 16 years
and eight years respectively.

The Committee noted last year that it was concerned about the total remuneration levels of the Executive Directors when compared with other
FTSE 250 companies. In the light of this, and the impending expiry of the vesting period for the 2012 awards under the Long Term Bonus
Performance Plan, the Remuneration Committee has reviewed executive remuneration during the year ended 31 March 2015. The Committee
appointed PwC to benchmark the Executive Directors’ salaries against a comparable peer group.

The findings of the remuneration review highlighted to the Committee the following:

Total remuneration “gap” to market – the current remuneration opportunity for Executive Directors is positioned very conservatively, below
the lower quartile of other FTSE 250 companies.

2. Alignment with the business strategy – our strategic business plan is designed to deliver long-term sustainable, profitable growth and this
should be reflected in the performance measures on the LTIP. The Committee concluded that the focus solely on relative TSR against the
FTSE Real Estate Index in the current LTIP (with an EPS underpin) is not sufficiently aligned with the business strategy.

3. Corporate governance best practice – the Committee is keen to adopt the emerging best practice corporate governance requirements around
executive remuneration, including simplification of equity-based incentives, and the wider introduction of clawback and malus provisions
(the 2014 LTIP includes clawback provisions).

Changes proposed

2015 Long Term Bonus Performance Plan
In order to address these issues, the Committee wishes to develop a remuneration structure which is focussed around pay for performance to
ensure that any increase in reward for Executive Directors is aligned to the value being delivered to shareholders. Hence, it is proposed, subject to
shareholder approval, that the remuneration gap is addressed by developing our Long Term Bonus Performance Plan structure which only delivers
increased rewards to Executive Directors when the Company has delivered year-on-year corporate performance in line with its business plans.

The Long Term Bonus Performance Plan was first introduced in 2009 to bring overall levels of remuneration towards mid-market levels but
maintaining the desire to ensure there was a strong performance-based culture within the organisation. Since the inception of the plan, the
scheme has helped to align remuneration of the Executive Directors to the performance of the stores and value created to shareholders.

The market benchmarking against other FTSE 250 companies of a comparable size to Big Yellow has indicated that current arrangements for the
executives are well below lower quartile, which allows scope for incentive levels to be increased without creating a high pay environment.

We seek approval from shareholders on the proposed new LTBPP. The table below details the proposed changes compared with the current LTBPP
(further details of the new LTBPP are provided in our Notice of AGM):

Key change

Description

Quantum of awards

Currently, the maximum award levels do not exceed c.330% of base salary for executives over the three year
performance period.

Removal of the Joint
Ownership Structure
(JOS)

Remove the “cap”
structure (reducing
dilution)

The proposal is to increase the total quantum of the one-off 2015 award to 4 x 450% of base salary across the
four Executive Directors, over the same (i.e. 3 year) performance period. Each individual Director will have
the opportunity to be awarded a maximum of 675% of base salary, so long as the total maximum of 4 x 450%
base salary is not exceeded. This brings the Company’s overall package more in line with the market range.
See below for details of the proposed 2015 award.

This structure gave the Executive Directors the opportunity to receive part of their award in a tax efficient
manner by acquiring an interest in the underlying shares jointly with the EBT.

It is not proposed to provide this opportunity for the 2015 award, but to simplify the structure and reduce the
administrative burden.

Although the LTBPP is expressed as an award over a number of shares, the actual value received by the
participants was capped at a value of £2 per share, which resulted in a highly dilutive mechanism.

The proposal is to remove the £2 capped value for the 2015 LTBPP and, instead, the incentive value will be
articulated as a “maximum” award as a % of salary, rather than as a maximum number of shares. This has no
impact on the commercial value of the awards.

Removing the cap will eradicate the need for the Company to hold the initial shares under consideration,
increasing the efficiency of the share usage of the Company and decreasing the dilution of the award.

Remove the “cash
top-up”

Under the 2012 award, if the value in the share interests is not enough to cover the value of the award, there is a
cash “top-up”. This is intended to remove the risk for executives as it effectively ensures a guaranteed minimum
level of payout (as long as Company share price remains above £1).

The proposal is to remove the cash “top-up” from the new LTBPP in order to simplify the incentive structure, and
also to act as a trade-off from the Company with respect to the proposed increase in incentive opportunity.

Removing the cash top up, given the current share price, would have minimal impact on participants and will
increase the pay for performance alignment.

Remuneration Report (continued)
For the year ended 31 March 2015

Key change

Description

Adopt governance
best practice

It is proposed to bring the plan in line with emerging UK corporate governance best practice.

It is proposed that the new LTBPP will incorporate clawback and malus provisions (the 2014 LTIP included malus
provisions when renewed last year).

It is proposed to retain the two year holding period post vesting. This is in line with the prevailing shareholder
sentiment of longer holding and vesting periods.

The Committee sets the performance targets annually, on the basis of business objectives and priorities which it has identified. The performance
conditions are not disclosed for the year ahead, given the commercially sensitive nature of a number of the targets. A report on performance
targets for the year under review (other than those which remain commercially sensitive) is provided in the Annual Report relating to that year.

2015 Awards proposed to be made under the 2015 LTBPP
The table below shows the maximum award value under the 2015 LTBPP for each executive director (subject to the satisfaction of performance
conditions) at the end of the three year performance period. This amount is then converted into shares at the prevailing share price (delivered as
nil-cost options). Subject to shareholder approval, it is proposed that the 2015 Awards will be made shortly after the AGM.

Executive Director

Nicholas Vetch

James Gibson

Adrian Lee

John Trotman

Total

Role

Maximum award value after three years

Maximum award value at vesting as % of
2015/16 salary

Executive Chairman

Chief Executive Officer

Operations Director

Chief Financial Officer

£996,900

£1,440,000

£996,900

£4,430,700

377%

496%

464%

Long Term Incentive Plan
Our focus on ensuring alignment with our business strategy is reflected by the proposed change to our LTIP performance measures, with EPS
governing 70% of the award and 30% relative TSR (previously the award was wholly determined by relative TSR against the FTSE Real Estate Index
with an EPS underpin). The Committee will ensure that the payouts under the LTIP are provided only when the Company hits stretching EPS
conditions (with 100% vesting at RPI plus 8% over a three year period), and stretching TSR conditions. This provides alignment to our core strategic
priorities of delivering on our growth opportunities and conversion of our competitive advantages into quality earnings.

We will seek approval from our shareholders at the 2015 AGM for the adoption of the revised vesting criteria of 70% related to EPS performance and
30% related to relative TSR performance. The previous vesting criteria was 100% based on relative TSR performance with an EPS hurdle.

Shareholders will note that the individual limit under the plan is 200% of base salary. The Committee has determined that this increased limit will
not form part of the Directors’ remuneration policy to be adopted at the 2015 AGM.

Pension contributions
The Committee has noted that a pension contribution of 10% of each Executive Director’s base salary is below market. The Committee has therefore
increased the maximum annual pension payment to 20% of base salary. The planned payment for the year ended 31 March 2016 is 15% of each
Executive Director’s salary.

The Committee has increased the minimum shareholding requirement of the Executive Directors from 100% of base salary to 200% of base salary.

The Committee is mindful of the current climate around executive pay and guidance from shareholder bodies against upwards pay ratcheting, and
has designed these changes with this in mind. The views of the Company’s shareholders are very important to the Remuneration Committee (and
the Board). The Committee has actively consulted its major shareholders on the proposed remuneration policy outlined in this report.

Full details of the remuneration policy for the Directors of the Company are set out in the Directors Remuneration Policy section of the Directors’
Remuneration Report.

Remuneration changes during the year
During the year ended 31 March 2015, the aggregate remuneration of the Executive Directors (calculated on the basis of the remuneration
regulations introduced in 2013) increased from £1,751,000 to £5,593,000 – an increase of 219%. The increase is due to the vesting of the 2011
LTIP during the year which produced a gain to the Executive Directors of £1,469,000, and the assessment of the three year LTBPP which produced
a gain to the Executive Directors of £2,910,000. The 2010 LTIP tested in the prior year, partly vested, producing a lower gain than in the current year
to the Executive Directors. This increase compares with significant increases in the year in adjusted profit before tax (35%), adjusted EPS (32%)
and declared dividends (32%).

Within the overall figure for Executive Director remuneration, the detailed changes were:

> Base salary: increased by £35,000 (3.8%) – of which the main change was an increase to the salary of one Director to reflect his progress

in the role; the other increases were 2%.
> Taxable benefits: decreased by £350 (2%).
> Annual bonus: increased to 12.5% of base salary from 10% of base salary in the prior year (being in line with the average for all staff of the

Company) and increased by £27,000 (30%).

> Pension contributions: remained at 10% of base salary and increased, as a result of the increase in base salaries, by £3,500 (3.8%).
> Sharesave Scheme: two Directors’ Sharesave scheme vested in the year, producing a gain of £30,000 (2014: £10,000).
> Long term incentives: following the application of the performance conditions (EPS growth compared to RPI and relative TSR), the 2011 award
of shares granted under the LTIP vested as to 100% (representing a total gain of £1,470,000). As in the previous year, each of the Executive
Directors was granted an award equal to 100% of his base salary (or average salary) subject to performance conditions. The value of these
awards was £954,000 – an increase of £35,000 (3.8%) No awards under the LTBPP were made in the year (2014: no awards). The Remuneration
Committee reviewed the performance targets for the year and concluded that the awards under the Plan granted in 2012 have vested as to
100% in respect of the year ended 31 March 2015. The final determination of the vesting for the whole three year period of the LTBPP has been
determined against performance conditions in the period 2012 to 2015 at 97%.

In considering the relative importance of the spend on pay see page 83:

> Total employee pay: increased by 18% (and amounted to £13.1 million).
> Profit distributed by way of dividend: increased by 42% (and amounted to £27.9 million).
> Retained profit for the year: increased by 94% (and amounted to £77.7 million).

More details of the changes in the remuneration of the Directors in the year ended 31 March 2015 are set out in the Annual Report on Remuneration
section of the Remuneration Report.

Recommendation
The Remuneration Committee has carefully considered the policy on executive remuneration and the implementation of the approach underlying
that policy during the year ended 31 March 2015 and recommends this Remuneration Report to you.

I hope that, at the Annual General meeting in July, you will support:

> the binding resolution on the revised remuneration policy set out in the Remuneration Policy Report section of this Remuneration Report;
> the advisory resolution on the remuneration paid to the Directors in the last financial year set out in the Annual Remuneration Report section

of this Remuneration Report; and

> the resolution to approve the adoption of the 2015 Long Term Bonus Performance Plan and the 2015 awards to Executive Directors thereunder.

Tim Clark
Chairman of the Remuneration Committee

Remuneration Report (continued)
For the year ended 31 March 2015

REPORT ON DIRECTORS’ REMUNERATION POLICY
This section of the Remuneration Report contains details of the Company’s Directors’ Remuneration Policy which will govern the Company’s approach to
remuneration. Following a remuneration review conducted by the Committee, a revised Remuneration Policy is being proposed which will be put to
shareholders for approval at the Company’s AGM on 21 July 2015. If approved, the policy will be applicable from that date until the date of the Company’s
2018 AGM, unless shareholder approval is sought within that period to amend the policy.

It is the policy of the Company to ensure that the executive remuneration packages are designed to attract, motivate and retain Directors of a high calibre
and reward the executives for enhancing value to shareholders.

As a result, a substantial element of the remuneration of the Executive Directors is structured to be dependent on the performance of the Company. The
policy aims to support a performance culture where there is appropriate reward for the achievement of strong Company performance without creating
incentives which will encourage excessive risk-taking or unsustainable Company performance.

The Committee’s aim is to design a total package that rewards the Executive Directors to a median level that is appropriate for the size and nature of the
business, and its business strategy. The Committee deals with all aspects of remuneration of the Executive Directors including:

> setting salaries;
> agreeing conditions and coverage of annual incentive schemes and long term incentives;
> policy and scope for pension arrangements;
> determining targets for performance related schemes;
> scope and content of service contracts; and
> deciding extent of compensation (if any) on termination of service contracts.

The Committee’s members are currently Tim Clark (Committee Chairman), Richard Cotton, Georgina Harvey, Steve Johnson and Mark Richardson.

The Remuneration Committee’s Terms of Reference are available on the Company website. The Committee met four times during the year.

Statement of consideration of shareholders’ views
The views of our shareholders are very important to us and the Committee and we have actively consulted with our major shareholders to help formulate our
amended Remuneration Policy and arrangements proposed in this report.

Any consultations on remuneration with shareholders and institutional investors will usually be led by the Chairman of the Remuneration Committee.

The Remuneration Committee considers shareholder feedback received in relation to the AGM each year at its first meeting following the AGM. This feedback,
as well as any additional feedback received during any other meetings with shareholders throughout the year, is then considered as part of the Company’s
annual review of remuneration policy.

The Remuneration Committee notes that shareholders do not speak with a single voice, but we engage with our largest shareholders to ensure we
understand the range of views which exist on remuneration issues. When any material changes are proposed to the Remuneration Policy, the Remuneration
Committee chairman will inform major shareholders in advance, and will offer a meeting to discuss these.

Shareholder voting
The Group is committed to ongoing shareholder dialogue and takes an active interest in voting outcomes. Where there are substantial votes against
resolutions in relation to Directors’ remuneration, the reasons for that voting will be sought and any actions in response will be detailed here. There have
been no significant issues raised by shareholders in respect of remuneration in the year.

The table below shows the advisory vote on the 2014 Remuneration Report and the binding vote on the Remuneration Policy at the AGM held
on 16 July 2014.

2014 Remuneration Report
2014 Remuneration Policy

Votes for

Votes against

Votes withheld

101,289,643
101,536,726

99.45
99.72

547,449
271,900

0.54
0.27

1,953
30,419

Policy table
The main components of the Directors’ Remuneration Policy, and how they are linked to and support the Company’s business strategy, which will take
effect subject to approval from shareholders at the AGM on 21 July 2015, are summarised below:

Executive Directors

Purpose and link to strategy

Operation

Maximum potential value

Base salary

To provide competitive
fixed remuneration that
will attract and retain
key employees and
reflect their experience
and position in the
Company.

Base salary is normally set annually
on 1 April.

When considering any increases to
base salaries in the normal course
(as opposed to a change in role or
responsibility), the Committee will
take into consideration:

> level of skill, experience, scope of
responsibilities and performance;
> business performance, economic
climate and market conditions;
> increases provided to Executive

Directors in comparable companies;
and

> pay and employment conditions of
employees throughout the Group,
including increases provided to
staff; and inflation.

Salaries are typically set after
considering the salary levels in
companies of a similar size and
complexity in the FTSE 250.

Our overall policy is normally to target
salaries at close to (but generally
below) median levels.

Base salaries are intended to increase in
line with inflation and general employee
increases in salary.

Higher increases may apply if there is a
change in role, level of responsibility or
experience or if the individual is new to
the role.

There is no maximum salary cap in place.

Annual bonus

The annual bonus
aligns reward to key
Group strategic
objectives and drives
short-term
performance.

Cash payments.

Bonus potential:

Executive Directors participate in an
annual performance-related bonus
scheme.

Maximum: 25% of base salary.

Target: 10% of base salary

Threshold performance: 0% of
base salary.

Performance conditions
and assessment

None

Assessed annually
and determined by
the Committee based
on corporate
performance against
the Group’s business
plan for each
financial year.

The bonuses are
directly linked to the
Group’s profit and
operating cash flow
performance in the
stores (see note 1).

Remuneration Report (continued)
For the year ended 31 March 2015

Executive Directors (continued)

Purpose and link to strategy

Operation

Maximum potential value

Maximum annual grant is 100% of base
salary, with normal awards of 100% of
annual salary for the Executive
Directors.

Minimum vesting is 25% of salary
assuming achievement of threshold
performance, and the maximum vesting
is 100% of salary.

Long Term
Incentive Plan

The Long Term Incentive
Plan aligns Executive
Director interests with
those of shareholders
and rewards value
creation.

Awards are made annually to the
Executive Directors (and certain senior
managers who are in a position to
influence significantly the performance
of the Group) in the form of nil-paid
options.

The awards granted under the Long Term
Incentive Plan are subject to
performance conditions to be met over
a performance period of three years.

The performance conditions have been
chosen to align the LTIP with the
performance of the business.

Awards granted prior to the 2014 AGM
will vest in accordance with the
provisions of the previous LTIP rules.

The LTIP contains clawback and malus
provisions.

Performance conditions
and assessment

Vesting under the
LTIP is based on 70%
on EPS performance
and 30% on relative
TSR performance to
focus executives on
value creation in the
Company.

Vesting will be as
follows for the TSR
element:

25% vesting for
median TSR
performance and
100% vesting for
upper quartile
performance.
Straight-line vesting
between these
points. (Note 2)

Vesting for the EPS
element will be as
follows:

RPI plus 3% – 25%
vesting, and RPI plus
8% – 100% vesting,
with straight line
vesting in between.

Performance conditions
and assessment

Please see pages 77
and 78 for the review
of the performance
conditions in the
financial year.
(Note 3)

Executive Directors (continued)

Purpose and link to strategy

Operation

Maximum potential value

The total maximum incentive value
awarded across all four Executive
Directors will not exceed 4 x 450% of
base salary (over a 3 year performance
period); however each individual will
have the potential to be awarded a
maximum of 675% of base salary
(so long as the total maximum is
not exceeded).

Long Term
Bonus
Performance
Plan

To ensure that the total
remuneration package
is more competitive and
supports the
Company’s strategy
and its ability to react
to changing economic
and business
circumstances.

To retain key individuals
in the medium term
and align rewards with
Group performance.

Participants are awarded an incentive
value which will be articulated as a
“maximum” award as a % of salary.
The number of shares awarded will be
calculated on vesting of the scheme.

The awards to the Executive Directors
under the plan are made every three
years, although the Committee has
discretion to make awards to new
Directors outside of this period.

Vesting depends on an annual
assessment of performance (over three
years but reviewed annually) against a
series of financial and non-financial
targets aligned with the annual
business plan.

The value accrued to participants may
be subject to clawback if subsequent
performance reflects adversely on
achievement of the targets.

Following vesting, the award will be
converted into nil-cost options based on
the market value of the shares and the
vested value at that time. A further
holding period will apply to 50% of the
award, such that 25% will be released
one year after vesting, and the
remaining 25% will be released two
years after vesting, so that full release
of vested entitlements takes place over
five years.

Pension

To provide competitive
levels of retirement
benefit.

Contribution made into Executive
Directors personal pension plan, or a
cash supplement of equivalent value
paid in lieu of pension contribution.

Maximum contribution of 20% of salary,
target of 15% of salary.

None

Other
benefits

To provide competitive
levels of employment
benefits.

Shareholding
policy

To ensure that
Executive Directors’
interests are aligned
with those of
shareholders over a
longer time horizon.

Benefits include:

> Private fuel
> Private medical insurance
> Permanent health insurance
> Life assurance of four times

base salary

> Relocation allowances

The level of benefits provided is
reviewed annually to ensure they
remain market competitive.

Vested shares cannot be sold,
other than to pay tax and NI, until
the shareholding requirement has
been met.

There is no time requirement in
relation to this policy.

Maximum opportunity is the total cost
of providing the benefits. There is no
monetary cap on benefits.

None

N/A

Requirement to build and maintain a
holding of at least 200% of salary in
shares of the Company, through
retaining at least 50% of shares vesting
in Executive incentive plans if this
guideline has not been met.

Remuneration Report (continued)
For the year ended 31 March 2015

Executive Directors (continued)

Purpose and link to strategy

Operation

Maximum potential value

Sharesave
Scheme

To encourage share
ownership by all
employees. This allows
them to align their
interests with those of
investors and also to
share in the long-term
success of the Company.

Executive Directors may participate in
the Big Yellow Group Sharesave Scheme,
which is an all-employee tax-favoured
share plan open to employees based in
the UK. Sharesave Scheme saving
periods are in line with HMRC rules as
three year contracts.

Executive Directors are able to
participate in an all-employee share
plan on the same terms as other
employees in line with the tax-favoured
monthly contribution limits.

Performance conditions
and assessment

None

Notes to the policy table
The key principle for the short and long term incentives is to provide a strong link between reward and individual and Group performance to align the
interests of Executive Directors with those of shareholders.

1. Annual bonus performance measures and targets

Annual bonuses for the Executive Directors are based on the average of the stores’ performance against their quarterly targets providing direct
alignment of the Directors’ bonuses to performance (and the bonus levels) of the staff. The four Key Performance Indicators used to assess store
performance are occupancy growth, net contribution, customer satisfaction and store standards. Store targets are set every quarter and an average
of the four quarters is taken.

2. Long Term Incentive Plan performance measures and targets

The Committee selected the performance conditions on the LTIP as they provide a direct link between the incentive for the Executive Directors and the
value created for shareholders. The two metrics for the award are:

ii.

Relative TSR against the FTSE Real Estate Index, as Big Yellow Group’s historic performance has been closely aligned to the performance of this Index.

The adjusted EPS figure is as reported in the audited results of the Group for the last complete financial year ending before the start of the
performance period and the last complete financial year ending before the end of the performance period.

3. Long Term Bonus Performance Plan performance measures and targets

The Committee sets the performance targets for the Long Term Bonus Performance Plan annually, against a series of financial and non-financial targets
aligned with the annual business plan. A report on performance targets for the year under review (other than those which remain commercially
sensitive) is provided in the accounts for that year.

Awards to executive directors are made on a three year cycle, and the Company’s practice is to seek shareholder approval of these awards. Awards may
be also made under the Long Term Bonus Performance Plan without separate shareholder approval under the terms approved by shareholders at
adoption, though in practice this is only expected to be used for new joiners and following internal promotions.

4. Malus and clawback

The LTIP and LTBPP includes best practice malus and/or clawback provisions.

Malus is the adjustment of outstanding LTIP and LTBPP awards as a result of the occurrence of one or more circumstances listed below. The adjustment
may result in the value being reduced to zero. Malus will apply for the three year period from grant to vesting for the LTIP and the LTBPP.

Clawback is the recovery of payments under the LTIP and LTBPP as a result of the occurrence of one or more circumstances listed below. Clawback will
apply for three years post vesting for the LTIP and the LTBPP.

The circumstances in which malus and clawback could apply are as follows:

> discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company;
> the assessment of any performance target or condition in respect of an award was based on error, or inaccurate or misleading information;
> the discovery that any information used to determine the amount of an award was based on error, or inaccurate or misleading information;
> action or conduct of an award holder which, in the reasonable opinion of the Board, amounts to employee misbehaviour, fraud or gross misconduct; and
> events or behaviour of an award holder which have led to the censure of the Company by a regulatory authority or have had a significant

detrimental impact on the reputation of any Group Company provided that the Board is satisfied that the relevant award holder was responsible for
the censure or reputational damage and that the censure or reputational damage is attributable to the award holder.

5. Discretion

The Committee has discretion in several areas of policy as set out in this report. The Committee may also exercise operational and administrative
discretions under relevant plan rules approved by shareholders as set out in those rules. In addition, the Committee has the discretion to amend policy
with regard to minor or administrative matters where it would be, in the opinion of the Committee, disproportionate to seek or await shareholder approval.

In certain circumstances, the Committee will be required to exercise its discretion, taking into consideration the particular circumstances of an
Executive Director’s departure and/or the recent performance of the Company in determining the specific level of payments to be made.

Executive Directors (continued)
5. Discretion (continued)

In addition to the discretions under the terms of the annual bonus plan, Long Term Incentive Plan and the Long Term Bonus Performance Plan, the
Committee has discretion to determine whether an individual is classified as a “good leaver”.

It should be noted that it is the Committee’s policy to only apply its discretion if the circumstances at the time are, in its opinion, sufficiently
exceptional, and to provide a full explanation to shareholders where discretion is exercised. The Committee does not currently intend to amend or waive
any performance conditions.

6. Differences in remuneration policy for all employees

All employees are entitled to base salary, benefits, pensions and the Sharesave Scheme. Additionally, all employees are eligible for annual bonuses with
the maximum opportunity available based on the seniority and responsibility of the role held.

Illustrations of application of Remuneration Policy
The graph below seeks to demonstrate how pay varies with performance for the Executive Directors based on our stated Remuneration Policy, which is
subject to shareholder approval.

Element

Fixed

Annual variable

Description

Total amount of salary, pension and benefits.

Money or other assets received or receivable for the reporting period as a result of the achievement of performance
conditions that relate to that period (i.e. annual bonus payments).

Multiple period
variable

Money or other assets received or receivable for multiple reporting periods as a result of the achievement of performance
conditions over a given period under the LTIP and LTBPP.

Assumptions used in determining the level of pay out under given scenarios are as follows:

Scenario

Minimum

On-target

Maximum

Description

Fixed pay only (no variable payments under annual bonus and Company’s LTIP or LTBPP).

40% of annual bonus award being paid (i.e. 10% of basic salary), 50% vesting of the LTIP and 50% vesting
of the three year LTBPP.

100% of annual bonus award being paid (i.e. 25% of basic salary) and 100% vesting of the LTIP, 100% vesting of the three
year LTBPP.

Executive Chairman

CEO

£1,200,000

£1,000,000

£800,000

£600,000

£975,000

£637,000

61%

£400,000

£312,000

£200,000

100%

47%

49%

32%

£0

Minimum

Median

Maximum

Multi-period variable

Annual variable

Fixed elements

£1,400,000

£1,200,000

£1,000,000

£800,000

£600,000

£400,000

£200,000

£0

£1,185,000

£756,000

£342,000

100%

51%

45%

65%

29%

Minimum

Median

Maximum

Operations Director

CFO

£855,000

£549,000

£254,000

100%

50%

46%

64%

30%

£900,000

£800,000

£700,000

£600,000

£500,000

£400,000

£300,000

£200,000

£100,000

£0

Multi-period variable

Annual variable

Fixed elements

£855,000

£549,000

£254,000

100%

50%

46%

64%

30%

£900,000

£800,000

£700,000

£600,000

£500,000

£400,000

£300,000

£200,000

£100,000

£0

Minimum

Median

Maximum

Minimum

Median

Maximum

Multi-period variable

Annual variable

Fixed elements

Multi-period variable

Annual variable

Fixed elements

Remuneration Report (continued)
For the year ended 31 March 2015

Non-Executive Directors

Fees

Objective and link
to the strategy

To attract Non-Executive
Directors with the
requisite skills and
experience

Operation

Maximum potential value

Fee levels are normally reviewed
annually in March.

The Non-Executive Director fee structure
is a matter for the full Board.

The fees may be paid in the form of
shares

Fee levels are set at broadly median
levels for comparable roles at
companies of a similar size and
complexity within the FTSE 250.

Fees are intended to increase in line
with inflation.

Performance conditions
and assessment

N/A

Non-Executive Directors’ fees comprises of a base fee, with an additional £2,500 for a Committee Chairman, and an additional £2,500 for the Senior
Independent Non-Executive Director. Where a Non-Executive Director provides significant specialist advice to the Group, and hence additional time
commitment to the Group, an additional fee of £2,500 may be paid.

Approach to recruitment remuneration
The table below summarises our key policies with respect to recruitment remuneration:

Salary and
benefits

Maximum
variable
incentive

Sign-on
payments

> Set by reference to market and taking into account individual experience and expertise in the context of the role.
> Salary would also be set with reference to the salary of the departing Executive Director and the remaining Executive Directors.
> The Executive Director would be eligible to receive benefits in line with Big Yellow Group’s benefits policy as set out in the
remuneration policy table – this includes either a contribution to a personal pension scheme or cash allowance in lieu of
pension benefits in line with the policies set out in the policy table.

> Annual bonus of up to 25% of base salary in line with our current policy for Executive Directors.
> Long term incentive plan award of equivalent to 100% of base salary in line with our current policy for Executive Directors.
> An award under the Long Term Bonus Performance Plan (which equates to an annual maximum opportunity of 225% of salary
over the life of the plan) may also be made on appointment, recognising that the Company’s basic remuneration is below median.

> The Company does not provide sign-on payments to Executive Directors.

Share buy-outs

> Any previous outstanding share awards which the Executive Director holds which would be forfeited on cessation of his or her

previous employment may be compensated.

> Where this is the case, the general principle is that the outstanding award will be valued based on the consideration of the

following factors:
> The proportion of the performance period completed on the date of the Director’s cessation of employment;
> The performance conditions attached to the vesting of the incentives and the likelihood of them being satisfied; and
> Any other terms and conditions having a material impact on their value.

> The valuation will be conducted using a recognised valuation methodology by an independent party and the equivalent

‘fair value’ may be awarded as a one-off LTIP on date of joining under the Company’s existing long term incentive plan. To the
extent that this is not possible, a bespoke arrangement will be used.

> To ensure effective retention of the Executive Director upon recruitment, any new award will be granted subject to

performance conditions and vesting may be over the same period as those forfeited from the previous employer or a new
three year period.

> The exact terms will be determined by the Remuneration Committee on a case-by-case basis taking into account all

relevant factors.

Relocation
policies

> In instances where the new Executive Director is relocating from one work location to another, the Company may provide, as a

one-off or otherwise, a relocation allowance as part of the Director’s relocation benefits.

> The level of the relocation package will be assessed on a case-by-case basis but will take into consideration any cost of living

differences, housing allowance and schooling.

Service contracts
The Company’s policy on Directors’ service contracts is that they should be on a rolling basis without a specific end-date providing for one year’s notice.
All Executive Directors have contracts which reflect this policy.

The Non-Executive Directors do not have service contracts with the Company. Their appointments are governed by letters of appointment which are
available for inspection on request at the Company’s registered office and which will be available for inspection at the Company’s AGM. Each appointment
is for a period of up to three years, although the continued appointment of all Directors is put to shareholders at the AGM on an annual basis. In addition,
the appointment is terminable by either party giving notice of three months.

Payments for loss of office

Element

Approach

Salary and
benefits

Salary and benefits may be paid in lieu of notice. In cases where a contract is terminated other than on the terms of the service
contract, the Company will seek to mitigate any damages payable.

There will be no compensation for normal resignation or in the event of termination by the Company due to misconduct.

Annual bonus

If the individual is a good leaver, bonus will be paid on a pro-rata basis in respect of the period from the start of the financial year.

Good leaver is defined as an individual ceasing employment as a result of ill-health, disability, redundancy or retirement or in any
other circumstances which the Committee permits.

A bad leaver is an Executive Director who does not fall within the category of “good leaver” and bad leavers will forfeit any
entitlement to a bonus payment in respect of the current financial year or any completed financial year in respect of which the
bonus has not been paid at the cessation date.

Long term
incentives
(LTIP and
LTBPP)

A proportion of the LTIP or LTBPP awards held by good leavers will vest at the Committee’s discretion determined by taking into
account whether, and to what extent, any performance conditions have been satisfied and the length of time the LTIP or the LTBPP
award has been held at the date of cessation of employment.

The LTIP awards will not normally vest until the end of the performance period with performance tested at that time, although
exceptionally such awards may, at the discretion of the Committee, vest at cessation of employment.

Under the LTBPP awards vest at cessation of employment.

Good leaver is defined as an individual ceasing employment as a result of death, ill-health, injury, disability, redundancy, retirement,
or the sale out of the Group of his employing business for any other reason which the Committee in its absolute discretion permits.

A bad leaver is an Executive Director who does not fall within the category of good leaver and bad leavers will forfeit any
unvested awards.

Other
contractual
obligations

None.

Payments for Change of Control

Element

Annual
bonus
plan

Long term
incentives
(LTIP and
LTBPP)

Other
contractual
obligations

Change of Control

On a change of control, the Executive Director may receive a bonus payment based on performance level achieved during the
performance period and up to the date of change of control.

The Committee will take into account such factors as it consider relevant in relation to the bonus plan payment for the year in
which the event occurs, including the proportion of the bonus plan year elapsed at the date of the event.

On a change of control, a proportion of LTIP or LTBPP Awards will vest at the time of the relevant event.

The proportion of LTIP or LTBPP Awards which vest on a change of control event will be determined by the Committee taking into
account any relevant factors, including whether, and to what extent, any performance conditions have been satisfied.

For the 2014 and 2015 LTIPs, the amount of time the LTIP Awards have been held on the date of the relevant change of control
event will also be considered to determine the final vesting of the Awards.

None.

Approval
This policy report was approved by the Board of Directors on 18 May 2015 and signed on its behalf by

Tim Clark
Remuneration Committee Chairman

Remuneration Report (continued)
For the year ended 31 March 2015

ANNUAL REPORT ON REMUNERATION
This section of the Remuneration Report contains details of how the Remuneration Policy for Directors was implemented during the year ended 31 March 2015.
Note that the whole Annual Report is not subject to Audit – the regulations specify individual sections which are subject to audit, which are:

> Single figure table and notes;
> Scheme interests awarded during the financial year;
> Payments to past directors;
> Payments for loss of office; and
> Statement of directors’ shareholding and share interests

Single total figure of remuneration
Executive Directors
The table below sets out the single total figure of remuneration and breakdown for each Executive Director paid in the year ended 31 March 2015. The figures
have been calculated in accordance with the remuneration disclosure regulations (The Large and Medium-sized Companies and Groups (Accounts and
Reports) (Amendment) Regulations 2013).

Year ended
31 March 2015

Nicholas Vetch

James Gibson

Adrian Lee

John Trotman

Salary
£

Taxable benefits
£

Annual bonus
£

Long term incentives
£

Pensions
£

Sharesave Scheme
£

Total
£

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

2015

2014

259,300

254,200

284,400

278,800

210,600

206,400

200,000

180,000

3,960

4,676

3,765

1,866

3,853

4,840

3,859

2,066

32,412

35,550

26,325

25,000

25,420 1,071,925

179,509

27,880 1,403,224

196,862

20,640

952,137

145,736

18,000

952,137

101,205

25,930

28,440

21,060

20,000

25,420

27,880

20,640

18,000

–

15,250

9,821 1,393,527

498,223

– 1,756,290

536,262

– 1,229,137

397,275

– 1,214,253

319,271

Total

954,300

919,400

14,267

14,618

119,287

91,940 4,379,423

623,312

95,430

91,940

30.500

9,821 5,593,207 1,751,031

Taxable benefits comprise medical cover, permanent health insurance, life insurance and private fuel usage. James Gibson receives salary in lieu of pension
contributions.

The value shown in long term incentives is:

> the LTIP award granted in 2011 which vested on 19 July 2014 to 100% of its maximum value and is valued using the share price on that date of 521p.

The award granted for 2015 is 100% of salary for each Executive Director; and

> the three-year Long Term Bonus Performance Plan granted in 2012, which has been assessed to 97% of its maximum value. The plan will formally vest

in November 2015.

The average salary increase across the Group in the year was 2%. The Executive Directors increases were also 2%, with the exception of John Trotman (11%).
The salary increase for John Trotman reflects the Committee’s strategy to bring his salary in line with Adrian Lee’s salary, which has been achieved for the
year to 31 March 2016.

The value shown for the Sharesave Scheme is the value of the shares under option at vesting less each Director’s contributions to the scheme.

Annual Bonus Plan awards
In respect of the year under review, the Executive Directors’ performance was carefully reviewed by the Committee, in consultation with the Executive
Chairman in respect of the other Executive Directors. The bonus paid to the Executive Directors of 12.5% of salary in the year is directly linked to the awards
paid to the stores on achieving their targets during the course of the year. The weighting of each target to the bonus paid in the year is: occupancy and net
contribution (68%), customer satisfaction (24%) and store standards (8%).

Long Term Incentive Plan (“LTIP”) awards
The awards granted under the LTIP are subject to performance conditions to be met over a performance period of three years. There is no retesting of
performance conditions and if they are not satisfied, the awards will lapse.

The performance conditions applicable to the LTIP which vested in the year are set out below. Vesting is conditional on the achievement of an underpin EPS
growth of an average of 3% above RPI per annum. This hurdle was met for the 2011 awards.

The Committee assessed the extent to which the performance conditions have been satisfied for the 2011 award which vested in 2014, with the following results:

Condition

Relative TSR

Weighting

100%

Total

100%

Threshold
performance
required

Median of
comparator group
of real estate
companies

Maximum
performance
required

Upper quartile of
the comparator
group

LTIP value for meeting
threshold and maximum
performance (% salary)

Performance
achieved

25% – 100%

8 out of 32 in
comparator group

Vesting %

100%

Long term incentives awarded in year ended 31 March 2015
The table below sets out the details of the long term incentive awards granted in the year ended 31 March 2015 where vesting will be determined according
to the achievement of performance conditions that will be tested in future reporting periods.

Director

Award type

LTIP awarded

Nicholas V etch

James Gibson

Adrian Lee

John Trotman

LTIP – annual
cycle of awards

100% of salary

Face value
of award(1)

£259,300

£284,400

£210,600

£200,000

Percentage of award
vesting at threshold
performance

Maximum
percentage of face
value that could vest

Performance
period end date

Performance
conditions

25%

100%

28 July 2017

EPS growth and
relative TSR

The face value of the award is calculated using the average share price three days prior to the grant date.

The performance conditions applicable to the awards granted in the year ended 31 March 2015 are set out below:

Condition

Relative TSR

Weighting

100%

Total

100%

Threshold
performance
required

Median of
comparator group
of real estate
companies

Maximum
performance
required

Upper quartile of
the comparator
group

LTIP value for meeting
threshold and maximum
performance (% salary)

25% to 100%

Basis for measurement

Average of the Group’s closing mid-market
share price over the three months
preceding the start of the performance
period and preceding the end of the
performance period will be used.

Between threshold and maximum performance, vesting will take place on a straight-line basis.

In respect of the EPS underpin (of growth in adjusted EPS of RPI plus 3%), the adjusted EPS figure reported in the audited results of the Group for the last
complete financial year ending before the start of the performance period and the last complete financial year ending before the end of the performance
period will be used.

Long Term Bonus Performance Plan review
The performance targets for the LTBPP are not disclosed for the year ahead, given the commercially sensitive nature of a number of the targets (which are
derived from the Group’s business plan). Shortly after the end of each year, the Committee assesses the key targets and the extent to which management
has been able to meet these targets for that year and reports on this assessment (excluding any that are still commercially sensitive). The targets are only
adjusted during the year if material events occur that necessitate a change to the business plan. The report on the targets for the years ended 31 March 2013
and 31 March 2014 were included in the annual report for those years. The report on the targets for the year ended 31 March 2015 is summarised in the
table below:

Objective

Committee comment

Grow the Group’s annual free cash flow for the year to 31 March 2015 to
£35.7 million from £32.7 million in the year to 31 March 2014

Complete the refinancing of the Group’s banking facilities through
extending the bank facility to 5 years, and securing a new seven year loan
from M&G Investments.

The Group’s free cash flow for the year to 31 March 2015 was £42.4 million.

The Group completed on the refinancing of its bank facilities in August 2014,
extending the term to 5 years, and reducing the margin by 75 bps.

The Group also secured a seven year £70 million loan from M&G Investments
secured on a portfolio of 15 stores.

Comply with all banking covenants and maintain a net worth in excess of
£590 million.

All banking covenants were complied with during the year. Net worth has
grown by £156.8 million to £750.9 million.

Grow the occupancy of the wholly owned stores from 69.8% at 31 March
2014 to 75% by 31 March 2015.

The like-for-like wholly owned stores increased in occupancy to 74.3% at
31 March 2015. All stores, including the Partnership stores increased in
occupancy by 5.3% from 67.9% to 73.2% over the year, which is ahead of the
targeted occupancy growth.

Grow the average net rent per square foot across the wholly owned stores
from £26.15 per square foot by 2.5% to £26.80 by 31 March 2015.

The net rent per sq ft of the like for like wholly owned stores was £26.78 at
31 March 2015, an increase of 2.4% from the prior year.

Remuneration Report (continued)
For the year ended 31 March 2015

Long Term Bonus Performance Plan review (continued)

Objective

Committee comment

Meet budgeted revenue (£78.1 million) and profit (£34.1 million) targets.

Revenue for the year was £84.3 million, 8% ahead of budget. Adjusted profit
for the year was £39.4 million, 16% ahead of budget.

Maintain the Group’s online market share measured against the top
35 self storage operators by Experian Hitwise, at 35 to 38%.

The Group’s average market share over the course of the financial year was
37%. Our nearest competitor had a market share of 17% for the year.

Complete on the acquisition of the Armadillo portfolio with an initial
38% stake.

Reduce the Group’s investment to 20% once the Australian consortium
has completed their second round of fundraising.

The Group acquired a 38% stake in the Armadillo portfolio in April 2014. The
Australian consortium were successful in their second round of fundraising
and increased their stake to 80% in July 2014.

Review potential sites (in London and key target towns outside of
London) for store acquisition with a view of acquiring at least one new site
in the year.

The Group acquired a site for refurbishment in Cambridge in November 2014.
The Group also acquired the freehold of its existing store in Battersea and
adjoining retail units.

Construct Enfield on time and on budget, with the store due to open in
April 2015.

The store was constructed on budget, and opened as planned on 1 April 2015.

Sell the surplus land at Guildford Central now that retail planning consent
has been obtained.

The surplus land at Guildford Central was sold for £2.8 million in September
2014, realising a profit of £1.3 million.

Reduce the carbon intensity for the year to 31 March 2015 (KgCO2/m2
of occupied space) by 5% from the year to 31 March 2014.

Carbon intensity was reduced by 21% for the year to 31 March 2015.

The other targets, covering areas such as real estate, staffing and certain financial targets, were met in all material respects.

Following careful consideration of the performance targets and actual performance of the Group and the Executive Directors, the Committee has concluded
that the award in respect of the financial year ended 31 March 2015 has provisionally vested as to 100% of its potential amount for the year. The Committee
has also then assessed the vesting for the three years of the plan and has determined an overall vesting of 97% for the whole period of the plan. In reaching
this determination, the Committee took into account the fact that, over the three years of the plan, substantially all of the annual targets set at the outset of
each year (by reference to the relevant business plan) had been met as well as the significant progress which has been made by the Group over the past
three years. By way of illustration, over the past three years, the Group’s revenue has increased by 28%, with adjusted eps increasing by 49% and dividends
declared by 117%. The plan will formally vest in November 2015.

Sharesave Scheme
The Group’s Sharesave Scheme is open to all UK employees (including Executive Directors) with a minimum of six months’ service and meets UK HMRC
approval requirements, thus enabling all eligible employees the opportunity to acquire shares in the Company in a tax efficient manner. Three of the
Executive Directors participated in the scheme during the financial year.

Pension entitlements
The Company pays pension contributions into the Executive Directors’ personal pension plans or makes a cash contribution in lieu of pension contributions.
They do not participate in any defined benefit scheme. For the year ended 31 March 2015, the Company contribution was 10% of salary for the Executive Directors.

Payments to past Directors
No payments of money or any other assets were made to any former Director of the Company in the financial year ended 31 March 2015 (2014: no payments).

Payments on loss of office
No payments were made to any Directors in respect of loss of office during the financial year ended 31 March 2015 (2014: no payments).

Non-Executive Directors
The table below sets out the single total figure of remuneration and breakdown for each Non-Executive Director paid in the year ended 31 March 2015.

Fees
£

Taxable benefits
£

Total
£

Year ended 31 March 2015

2015

2014

2015

2014

2015

2014

Philip Burks (to 19 July 2013)
Tim Clark
Richard Cotton
Georgina Harvey (from 1 July 2013)
Steve Johnson
Mark Richardson

–
41,900
39,300
36,800
36,800
39,300

9,000
41,000
38,500
27,000
36,000
38,500

Total

194,100

190,000

Non-Executive Director fees were increased by 2% for the year ended 31 March 2015.

–
–
–
–
–
–

–

–
–
–
–
–
–

–

–
41,900
39,300
36,800
36,800
39,300

9,000
41,000
38,500
27,000
36,000
38,500

194,100

190,000

Implementation of policy in coming year
The main elements of Executive Director remuneration effective from 21 July 2015 (being the date of the AGM at which shareholder approval for this report
will be sought) for the forthcoming financial year are summarised below:

Base salary

Executive

Role

2015/16 salary

2014/15 salary

% increase

Nicholas Vetch
James Gibson
Adrian Lee
John Trotman

Executive Chairman
Chief Executive
Operations Director
Chief Financial Officer

£264,500
£290,100
£215,000
£215,000

£259,300
£284,400
£210,600
£200,000

2%
2%
2%
7.5%

The Committee’s policy for John Trotman has been to bring his salary in line with that of Adrian Lee over the short to medium term and this has now
been achieved.

Pension
Contribution of 15% of salary made into Executive Directors personal pension plan, or a cash supplement of equivalent value paid in lieu of pension contribution.

Annual Bonus
Maximum bonus opportunity of 25% of base salary

The annual bonus is based on the stores’ average performance against targets over the four quarters of the year which is then taken and applied to
calculate the head office bonus percentage. Performance in the stores is assessed on four Key Performance Indicators of occupancy growth, net
contribution, customer satisfaction and store standards.

For the year ended 31 March 2015:

> Occupancy and net contribution together represent 68% of bonus with the weighting between the two dependent on stores’ occupancy levels, and

therefore their sales focus.

> Customer satisfaction makes up 24% of bonus; and
> Store standards the balance of 8%.

The Committee is of the opinion that further disclosure of the performance targets for the bonus plan are commercially sensitive and that it would be
detrimental to the interests of the Company to disclose them before the start of the financial year. Actual targets, performance achieved and awards made
will be disclosed at the end of the performance period.

Remuneration Report (continued)
For the year ended 31 March 2015

Long Term Incentive Plan

Plan operation

Maximum opportunity of 100% of base salary

The proposed grants for the Executive Directors as a percentage of salary are:-

> Executive Chairman – 100%
> CEO – 100%
> Operations Director – 100%
> Chief Financial Officer – 100%

Long Term Bonus Performance Plan

Performance metrics used, weightings and time period applicable

> 70% adjusted EPS – adjusted EPS growth of RPI+3% for 25% of this

element of the award to vest with full vesting occurring for adjusted EPS
growth of RPI+8% p.a.;

> 30% – relative TSR performance vs. FTSE Real Estate Index with 25% of

this element of the award vesting for median TSR comparative
performance with full vesting at upper quartile.

Plan operation

Performance metrics used, weightings and time period applicable

The total maximum incentive value awarded across all four Executive
Directors will not exceed an aggregate of 450% of base salary (over a
3 year performance period)

The performance targets for the LTBPP are not disclosed for the year ahead,
given the commercially sensitive nature of a number of the targets (which
are derived from the Group’s business plan).

Each individual will have the potential to be awarded a maximum value
of 675% of base salary (so long as the total Award Pool maximum is
not exceeded).

The proposed grants for the Executive Directors as a percentage of salary are:-

> Executive Chairman – 383% (award value £996,900)
> CEO – 504% (award value £1,440,000)
> Operations Director – 471% (award value £996,900)
> Chief Financial Officer – 471% (award value £996,900)

The Committee sets the performance targets annually, and a review of
performance is included in the annual report of the following year.

Non-Executive Directors

Executive

Richard Cotton
Tim Clark
Georgina Harvey
Mark Richardson
Steve Johnson

2015/16 fee

£40,100
£42,800
£37,600
£40,100
£37,600

2014/15 fee

£39,300
£41,900
£36,800
£39,300
£36,800

% increase

2%
2%
2%
2%
2%

Fees retained for external non-executive directorships
The Executive Directors’ contracts do not allow them to engage in any other business outside the Group except where prior written consent from the Board is
received. The Company recognises that Executive Directors may be invited to become Non-Executive Directors of other companies and that this can help
broaden the skills and experience of a Director. Executive Directors are normally permitted to accept external appointments with the approval of the Board
and may retain the fees for the appointment.

Nicholas Vetch is a Non-Executive Director of The Local Shopping REIT plc for which he receives a fee of £30,000 per annum. James Gibson is a
Non-Executive Director of AnyJunk Limited; he does not receive any fees for his services.

Statement of Directors’ shareholding
The Executive Directors are required to build and maintain a holding of 200% of base salary (an increase from 100% in the prior year). These requirements
have been met by all Executive Directors during the year. Non-Executive Directors are not subject to a shareholding requirement. Details of the Directors’
interests in shares are set out below (all interests are beneficial interests).

No changes took place in the interests of the Directors in the shares of the Company between 31 March 2015 and the date of this report.

The table below shows, in relation to each Director, the total number of shares and share options in which he is interested.

Director

Nicholas Vetch
James Gibson
Adrian Lee
John Trotman
Richard Cotton
Mark Richardson
Tim Clark
Steve Johnson
Georgina Harvey

Share
ownership
requirement
(% of salary)

Share
ownership
requirements
met

200%
200%
200%
200%
N/a
N/a
N/a
N/a
N/a

Yes
Yes
Yes
Yes
N/a
N/a
N/a
N/a
N/a

Beneficially
owned
shares

8,960,483
2,538,358
785,547
101,914
68,485
27,225
18,652
10,000
13,013

LTIP
awards
subject to
performance
conditions

194,951
213,812
148,858
146,795
–
–
–
–
–

LTBPP
awards
subject to
performance
conditions

337,500
487,500
337,500
337,500
–
–
–
–
–

Unexercised
sharesave
options

Options
exercised in the
financial year

–
2,965
–
–
–
–
–
–
–

80,072
87,807
60,825
60,825
–
–
–
–
–

Directors’ share options
To provide further context on the shareholding of Directors, options in respect of ordinary shares for Directors who served in the year are as below:

Name

Nicholas Vetch

James Gibson

Adrian Lee

John Trotman

No. of
shares
under
option at
31 March
2014

80,072
84,218
60,266
–

87,807
92,362
66,098
–

57,080
62,065
45,804
–

Date option
granted

19 July 2011
11 July 2012
22 July 2013
29 July 2014

Granted
during the
year

–
–
–
50,467

–
–
–
55,352

–
–
–
40,989

–
–
–
38,926

Exercised
during the
year

(80,072)
–
–
–

(87,807)
–
–

(57,080)
–
–
–

No. of
shares
under
option at
31 March Exercise
price

2015

Lapsed
during the
year

–
–
–
–

–
–
–

–
–
–
–

–
84,218
60,266
50,467

–
92,362
66,098
55,352

–
62,065
45,804
40,989

–
62,065
45,804
38,926

nil p
nil p
nil p
nil p

Market
price at
date of
exercise

617.5p
–
–
–

514.6p
–
–
–

Date from
which first
exercisable

19 July 2014
11 July 2015
22 July 2016
29 July 2017

Expiry date

18 July 2021
10 July 2022
21 July 2023
28 July 2024

Remuneration Report (continued)
For the year ended 31 March 2015

Performance and pay
The graph below shows the Group’s performance, measured by TSR, compared with the performance of the FTSE All Share Real Estate Index and the FTSE All
Share Index over the last ten years. The FTSE All Share Real Estate Index is used for the assessment of the Company’s LTIP.

TSR Performance from flotation

900

800

700

600

500

400

300

200

100

0
5 May
2000

Big Yellow Group

FTSE 350 Real Estate Index

FTSE All Share Index

Mar
2001

Mar
2002

Mar
2003

Mar
2004

Mar
2005

Mar
2006

Mar
2007

Mar
2008

Mar
2009

Mar
2010

Mar
2011

Mar
2012

Mar
2013

Mar
2014

Mar
2015

Source: Thomson Reuters Datastream

CEO Remuneration
The table below sets out the details of remuneration of the CEO over the past five financial years.

Year

2015
2014
2013
2012
2011
2010

CEO single figure of
total remuneration
(£)

Annual bonus pay out
% against maximum
of 25% of salary

Long term incentive vesting rates
against maximum opportunity
%

1,756,290
536,262
335,891
1,400,570
325,968
875,593

50% (12.5% of salary)
40% (10% of salary)
40% (10% of salary)
40% (10% of salary)
40% (10% of salary)
40% (10% of salary)

98%
53%
0%
89%
0%
100%

The single figure of remuneration for 2015 is higher than in previous years due to the vesting of the 2012 three year Long Term Bonus Performance Plan in
this year delivering a reward of £945,750 (similarly for 2012 where the plan delivered a reward of £900,000) for the three year period ended in that year.

Percentage increase in the CEO’s remuneration
The table below compares the percentage increase in the CEO’s remuneration (including salary, fees, benefits and annual bonus) with the remuneration of
Big Yellow Group employees.

Salary and fees
All taxable benefits
Annual bonuses

Total

% increase in remuneration in
2015 compared with 2014

CEO

Employees

2%
(3%)
25%

2%
2%
25%

Statement of consideration of employment conditions elsewhere in the Group
The Committee reviews the reward and retention of the whole employee population periodically throughout the year to ensure that it can attract and retain
top talent. Particular consideration is given to the general basic salary increase, remuneration arrangements and employment conditions. Furthermore, the
Annual Bonus Plan award for Executive Directors is directly linked to the bonuses award to all staff.

The Directors are invited to be present at this review of the proposals for salary increase for the employee population generally and on any other changes to
remuneration policy within the Company. The information presented at this review is taken into consideration when setting the pay levels of the executive
population. Additionally the Committee has guidelines for the grant of all LTIP awards across the Company and responsibility for approving the total annual
bonus cost of the Company. The Company does not invite employees to comment on the Directors’ remuneration policy.

Relative importance of spend on pay
The graph below sets out the relative importance of spend on pay in the year ended 31 March 2015 and 31 March 2014 compared with other disbursements
from profit, being the distributions to shareholders and retained earnings (comprehensive gain for the year less dividends).

90,000

80,000

70,000

60,000

50,000

40,000

30,000

20,000

10,000

+94%

+42%

+18%

2014

2015

0
Total employee pay
(including Directors)

Profit distributed
by way of dividend

Retained
earnings

Advisors to the Remuneration Committee
The Committee consults with the Executive Chairman, Nicholas Vetch, about proposals on a range of matters relating to the remuneration of the Executive
Directors including the levels of overall remuneration, salary and bonus and awards and distributions under the share incentive and bonus plans.

The Committee relies upon remuneration data provided by PwC. In addition, PwC has provided advice to the Committee on the preparation of this report as
well as on market practice and trends. PwC is a member of the Remuneration Consultants Group and, as such, voluntarily operates under the Code of
Conduct in relation to executive remuneration consulting in the UK.

PwC also provided advisory work during the year on pensions auto-enrolment. The Committee is satisfied that advice received from PwC during the year
was objective and independent.

Advisor

PwC

Appointed by

Services provided to the Committee in 2014/15

Remuneration
Committee in 2008

Advice on executive remuneration market practice and trends, including
benchmarking of Director remuneration.

Fees in relation to
remuneration advice

£52,000

Support with shareholder consultation for the amendments to the Remuneration
Policy.

Advice on new Long Term Bonus Performance Plan.

Audit Committee Report

INTRODUCTION
The Audit Committee is appointed by the Board from the Non-Executive Directors of the Group. The Audit Committee’s terms of reference include all matters
indicated by Disclosure and Transparency Rule 7.1 and the UK Corporate Governance Code. The terms of reference are considered annually by the Audit
Committee and are then referred to the Board for approval.

The Audit Committee is responsible for:

> monitoring the integrity of the financial statements of the Group and any formal announcements relating to the Group’s financial performance and

reviewing significant financial reporting judgements contained therein;

> reviewing the Group’s internal financial controls and the Group’s internal control and risk management systems, including consideration of the need for

an internal audit function;

> making recommendations to the Board for a resolution to be put to the shareholders for their approval in general meetings, on the appointment of the

external auditor and the approval of the remuneration and terms of engagement of the external auditor;

> reviewing and monitoring the external auditor’s independence and objectivity and the effectiveness of the audit process, taking into consideration

relevant UK professional and regulatory requirements; and

> developing and implementing a policy on the engagement of the external auditor to supply non-audit services, taking into account relevant guidance

regarding the provision of non-audit services by the external audit firm.

The Audit Committee is required to report its findings to the Board, identifying any matters on which it considers that action or improvement is needed, and
make recommendations on the steps to be taken.

This year, the Committee has continued to focus on the narrative reporting and corporate governance disclosures in the Annual Report. The Committee was
asked by the Board to review the statement by the Directors that the Annual report presents a fair, balance and understandable view of the Group’s
performance, strategy and business model.

Mark Richardson
Audit Committee Chairman

Committee Members and Attendance

Member

Tim Clark
Richard Cotton
Georgina Harvey
Steve Johnson
Mark Richardson

attended
absent

Position

Member
Member
Member
Member
Chairman

Number of meetings attended

The Audit Committee structure requires the inclusion of one financially qualified member (as recognised by the Consultative Committee of Accountancy
Bodies). Currently Mark Richardson, as a Fellow of the Institute of Chartered Accountants of England and Wales, fulfils this requirement. All Audit Committee
members are expected to be financially literate.

The Group provides an induction programme for new Audit Committee members and ongoing training to enable all of the Committee members to carry out
their duties. The induction programme covers the role of the Audit Committee, its terms of reference and expected time commitment by members and an
overview of the Group’s business, including the main business and financial dynamics and risks. New Committee members also meet some of the Group’s
staff. Ongoing training includes attendance at formal conferences, internal company seminars and briefings by external advisors.

Meetings
The Audit Committee is required to meet three times per year and has an agenda linked to events in the Group’s financial calendar. The agenda is
predominantly cyclical and is therefore approved by the Audit Committee Chairman on behalf of his fellow members. Each Audit Committee member has the
right to require reports on matters of interest in addition to the cyclical items.

The Audit Committee invites the Chief Executive, Chief Financial Officer, Financial Controller, and senior representatives of the external auditor to attend all
of its meetings in full, although it reserves the right to request any of these individuals to withdraw. Other senior management are invited to present such
reports as are required for the Committee to discharge its duties.

Overview of the actions taken by the Audit Committee to discharge its duties
Since the beginning of the financial year the Audit Committee has:

> reviewed published financial information including the year end results, Annual Report, half year results and the Interim Management Statements;
> considered whether the Annual Report provides a fair, balanced and understandable view of the Group’s performance, strategy and business model;
> considered the output from the Group-wide process used to identify, evaluate and mitigate risks;
> reviewed the effectiveness of the Group’s internal controls and disclosures made in the annual report and financial statements on this matter;
> reviewed and agreed the scope of the audit work to be undertaken by the external auditor;

Overview of the actions taken by the Audit Committee to discharge its duties (continued)
> agreed the fees to be paid to the external auditor for their audit of the March 2015 financial statements and September half-yearly report;
> undertaken an assessment of the qualification, expertise and resources, and independence of the external auditor and the effectiveness of the

audit process;

> considered the audit partner and audit firm rotation;
> undertaken an evaluation of the performance of the external auditor;
> considered the need for an internal audit function;
> reviewed the arrangements for “whistleblowing” by employees to ensure that there is a consistent policy in the Group to enable employees to voice

concerns particularly in respect of possible financial reporting improprieties. A whistleblowing policy is included in the employee handbook;

> met the Group’s external valuers;
> met the Group’s Store Compliance Manager;
> reviewed the Audit Committee’s Report; and
> reviewed its own effectiveness.

Financial reporting and significant financial judgements
The Committee reviews all financial information published by the Group in year end and half-year financial statements, including the presentation and
disclosure of the financial information. It also considers the appropriateness of the accounting policies adopted by the Group and the accounting
judgements made by management in the preparation of the financial information.

The Committee has considered whether the Annual Report for the year ended 31 March 2015 provides a fair, balance and understandable view of the Group’s
performance, strategy and business model and whether it provides the necessary information to enable shareholders and prospective shareholders to
assess the Group’s performance, strategy and business model. The Committee is satisfied that the Annual Report for the year ended 31 March 2015
provides a fair, balanced and understandable view and included the necessary information as set out above. The Committee has confirmed this to the
Board, whose statement is included in the Statement of Directors’ Responsibilities on page 87.

The Committee focuses on matters it considers important in their impact on the reported results of the Group, and on matters where there is a high degree
of complexity and/or judgement.

The key area of judgement that the Committee focuses on at the reporting date is the valuation of the investment property portfolio. This is carried out by
independent external valuers, but by its nature it is subjective, with significant judgement applied to the valuation, particularly given the lack of
transactional evidence for prime self storage assets. Members of the Committee met the external valuers to discuss the valuations, review the key
judgements and discussed whether there were any disagreements with management. This year the Committee reviewed and challenged the valuers on the
cap rates, rental growth assumptions and stabilised occupancy levels, to agree on the appropriateness of the assumptions adopted. The Committee also
challenged the valuers, and satisfied itself on, their independence, their quality control processes (including peer partner review) and qualifications to carry
out the valuations. Management also have processes in place to review the external valuations. In addition, the external auditors use specialists to review
the valuations and report their findings and conclusions to the Audit Committee.

The Committee has considered the accounting for the acquisition of Big Yellow Limited Partnership. The key judgements include the fair value of the pre-
existing interest of the associate, the fair values of the net assets acquired and the consideration of any identifiable and separable intangibles.

The Committee has also considered a number of other judgements made by management in the preparation of the financial statements. It has concluded
that there is not a significant level of judgements involved.

Management have reported to the Audit Committee that they are satisfied that they are not aware of any material misstatements in the financial
statements. The auditors confirmed in their report to the Audit Committee that they had not found any material misstatements during their audit work.

Based on the above, the Committee concluded that the financial statements appropriately apply the key estimates and critical judgements, in respect of the
disclosures and the amounts reported. The Committee also concluded that the annual report and financial statements, taken as a whole, are fair, balanced
and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy.

External auditor
The Audit Committee is responsible for the development, implementation and monitoring of the Group’s policy on external audit. The policy assigns oversight
responsibility for monitoring the independence, objectivity and compliance with ethical and regulatory requirements to the Audit Committee, and day-to-day
responsibility to the Chief Financial Officer. The policy states that the external auditor is jointly responsible to the Board and the Audit Committee and that
the Audit Committee is the primary contact.

To fulfil its responsibility regarding the independence of the external auditor, the Audit Committee reviewed:

> the external auditor’s plan for the current year, noting the role of the senior statutory audit partner, who signs the audit report and who, in accordance

with professional rules, has not held office for more than five years, and any changes in the key audit staff;

> the arrangements for day-to-day management of the audit relationship;
> a report from the external auditor describing their arrangements to identify, report and manage any conflicts of interest;
> the overall extent of non-audit services provided by the external auditor, in addition to its case-by-case approval of the position of non-audit services by

the external auditor; and

> the past service of the auditor who was first appointed in 2000.

Audit Committee Report (continued)

Annual auditor assessment
The Audit Committee has adopted a formal framework in its review of the effectiveness of the external audit process and audit quality which include the
following areas:

> the arrangements for ensuring the external auditor’s independence and objectivity;
> the lead audit engagement partner and the audit team;
> the external auditor’s fulfilment of the agreed audit plan and variations from the plan;
> the quality of the formal audit report to shareholders;
> the robustness and perceptiveness of the auditor in his handling of the key accounting and audit judgements; and
> the content of the external auditor’s comments on control improvement recommendations.

Regard is paid to the nature of, and remuneration received, for other services provided by Deloitte LLP to the Group and, inter alia, confirmation is sought
from them that the fee payable for the annual audit is adequate to enable them to perform their obligations in accordance with the scope of the audit. Where
non-audit services are provided, the fees are based on the work undertaken and are not success related.

The Committee considers that the relationship with the auditor is working well, and that they are effective in their role, and the audit process is working well
with open dialogue and early discussion of judgements. As a consequence of its satisfaction with the results of the activities outlined above, the Audit
Committee has recommended to the Board that the external auditor is re-appointed.

Non-audit work
The Group’s policy on external audit sets out the categories of non-audit services which the external auditor will and will not be allowed to provide to the
Group, including those that are pre-approved by the Audit Committee and those which require specific approval before they are contracted for, subject to de
minimis levels. They may not provide a service which places them in a position where they may be required to audit their own work. Specifically, they are
precluded from providing services relating to bookkeeping, financial information system design and implementation, appraisal or evaluation services,
actuarial services, any management functions, investment banking services, legal services unrelated to the audit or advocacy services.

In respect of the year ended 31 March 2015, the auditor’s remuneration comprised £191,000 for audit work and £267,000 for other work, principally relating
to VAT and corporation tax work. The Committee has considered the level of fees, noting that non-audit fees are in excess of audit fees. The Committee is
satisfied this does not undermine auditor independence given informed management scoped and oversaw the delivery of these services, different delivery
teams were used for tax advisory services and the Committee were satisfied that the risk of self review by the auditor was minimal. Over a three year rolling
period, the level of non-audit fees is below the audit fee.

Audit rotation
The auditor, Deloitte LLP, has been in tenure since 2000 and the current audit partner has been in place since the audit of the 2013 financial statements.

The Committee is supportive of the new provision in the UK Code in respect of auditor rotation. The Committee has reviewed the performance of the external
auditor and the audit process and is satisfied that currently Deloitte LLP provides an appropriate level of service delivered by a team with an in-depth
understanding of our business and the broader real estate sector. The Committee’s present intention therefore is that they will tender the external audit by
2022 when required by the new regulations. There are no contractual obligations that act to restrict the Audit Committee’s choice of external auditor.

Risk management and internal control
The Committee and the Board reviewed the internal control processes of the business and the Group’s risk register during the year. The risks and
uncertainties facing the Group, and its internal control processes are considered in the Strategic Report on pages 38 to 40.

Internal audit
The Committee has considered the Board’s view that, given the relatively straightforward nature of the Group’s business and the control environment in
place, no formal internal audit function is required. The Committee concurs with management’s view.

Overview
As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with its terms of reference and has ensured the
independence and objectivity of the external auditor.

The Chairman of the Audit Committee will be available at the Annual General Meeting to answer any questions about the work of the Committee.

Approved by the Audit Committee and signed on its behalf by:

Mark Richardson
Audit Committee Chairman
18 May 2015

Statement of Directors’ Responsibilities

Directors’ responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable laws and regulations.

Company law requires the Directors to prepare such financial statements for each financial year. Under that law the Directors are required to prepare the
Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and Article 4 of the
IAS Regulation and have also chosen to prepare the parent Company financial statements under IFRSs as adopted by the European Union. Under Company law
the Directors must not approve the accounts unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the
profit or loss of the Company for that period. In preparing these financial statements, International Accounting Standard 1 requires that the Directors:

> properly select and apply accounting policies;
> present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
> provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of

particular transactions, other events and conditions on the entity’s financial position and financial performance; and

> make an assessment of the Company’s ability to continue as a going concern.

The Directors are responsible for keeping proper accounting records that are sufficient to show and explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the Companies
Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation
in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Directors' responsibility statement
We confirm that to the best of our knowledge:

the financial statements, prepared in accordance with International Financial Reporting Standards give a true and fair view of the assets, liabilities,
financial position and profit or loss of the Company and the undertakings included in the consolidation taken as a whole;

the strategic report includes a fair review of the development and performance of the business and the position of the Company and the undertakings
included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

the annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary for
shareholders to assess the Company’s performance, business model and strategy.

By order of the Board

James Gibson
Chief Executive Officer
18 May 2015

John Trotman
Chief Financial Officer
18 May 2015

Independent Auditors’ Report to the Members of Big Yellow Group PLC

Opinion on financial
statements of
Big Yellow Group PLC

In our opinion the financial statements:

> the financial statements give a true and fair view of the state of the Group’s and of the parent Company’s

affairs as at 31 March 2015 and of the Group’s profit for the year then ended;

> the Group financial statements have been properly prepared in accordance with International Financial

Reporting Standards (IFRSs) as adopted by the European Union;

> the parent Company financial statements have been properly prepared in accordance with IFRSs as

adopted by the European Union and as applied in accordance with the provisions of the Companies Act
2006; and

> the financial statements have been prepared in accordance with the requirements of the Companies Act

2006 and, as regards the Group financial statements, Article 4 of the IAS Regulation.

The financial statements comprise the Consolidated Income Statement, the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and Company
Statements of Changes in Equity, the Consolidated and Company Cash Flow Statements and the related
notes 1 to 34. The financial reporting framework that has been applied in their preparation is applicable law
and IFRSs as adopted by the European Union and, as regards the parent company financial statements, as
applied in accordance with the provisions of the Companies Act 2006.

Going concern

As required by the Listing Rules we have reviewed the Directors’ statement contained within the Strategic
Report that the Group is a going concern. We confirm that:

> we have concluded that the Directors’ use of the going concern basis of accounting in the preparation of

the financial statements is appropriate; and

> we have not identified any material uncertainties that may cast significant doubt on the Group’s ability to

continue as a going concern.

However, because not all future events or conditions can be predicted, this statement is not a guarantee as to
the Group’s ability to continue as a going concern.

Our assessment of risks
of material misstatement

The assessed risks of material misstatement described below are those that had the greatest effect on our
audit strategy, the allocation of resources in the audit and directing the efforts of the engagement team:

Risk

Investment property valuation

See also note 14 to the financial statements, and the Audit Committee’s
Report on pages 84 to 86.

At 31 March 2015, the Group held wholly-owned investment properties
and investment properties under construction valued at £1,022.8 million.
In addition the Group acquired a 20% equity share in two associate
entities, Armadillo Storage Holding Company Limited (the “Armadillo
portfolio”) and Armadillo Storage Holding Company 2 Limited (the “Big
Store Portfolio”) (together “the Associates”), for which equity accounting
has been applied – see note 13. The Associates control investment
properties with a combined value of £53.3 million.

Investment properties are held at fair value on the balance sheet. The net
valuation gain, relating to Group held properties was £64.5 million, which
was recognised through the Consolidated Income Statement during the
year. The net valuation gain relating to the properties held by the Associates
was £11.5 million on a gross basis (£2.3 million Group share). The fair
values at 31 March 2015 are calculated using actual and forecast inputs,
such as occupancy, capitalisation rates, an assessment of cost to complete
for investment properties under construction and net rent per square foot
by property. In addition, the valuers apply professional judgment
concerning market conditions and factors impacting individual properties.

The valuation process is inherently judgemental, which is why we consider
this to be a risk of material misstatement. In particular, changes in
assumptions such as the capitalisation rates, forecast rent per square foot,
forecast occupancy levels and in the case of investment property under
construction, cost to complete, can lead to significant movements in the
value of the property, as can changes in the underlying market conditions.

How the scope of our audit responded to the risk

We assessed the design and implementation of controls around the property
valuations by considering the level of management oversight and review of
the valuations prepared by the external valuation specialists engaged by
management, who have been named in note 14;

We tested the integrity of the information provided by management to the
valuers by agreeing key inputs such as actual occupancy and net rent per
square foot to underlying records and source evidence;

We modelled eight years of valuations and key valuation inputs of the
investment property portfolio, to understand the historical trends of key
inputs and compared these against the key forecast assumptions included
in the property valuation;

We met with the valuers covering both the Group and Associate portfolios.
We assessed their independence, the scope of the work they were
requested to perform by management, and the valuation methodology
applied. For each property we identified as having significant or unusual
valuation movements (compared to market data or previous periods), we
challenged the valuers on the key assumptions applied. Our challenge was
informed by input from our internal valuation specialists, utilising their
knowledge and expertise in the market at a macro level and the relevant
geographies to challenge the key judgmental inputs noted adjacent. We also
researched comparable transactions and understood trends in analogous
industries. We understood the rationale for outlying valuations or
movements and obtained corroborative evidence. We also assessed the
valuations for a sample of other properties; and

We visited a sample of properties to assess the condition of the buildings.

Risk

How the scope of our audit responded to the risk

Fair value assessments in the acquisition of the Partnership

See also note 13 to the financial statements and the Audit Committee’s
Report on pages 84 to 86.

On 1 December 2014 (the “Acquisition Date”), the Group acquired the
residual 66.7% interest in the Big Yellow Partnership Limited (“the
Partnership”). The Group had a pre-existing interest of 33.3%. IFRS 3:
Business Combinations require management to make the following
assessments as part of the step acquisition accounting;

> Determine the fair value of the consideration;
> Determine the fair value of the pre-existing associate interest;
> Determine the fair value of the net assets acquired; and
> Identify and recognise any intangible assets that are identifiable

and separable.

The material asset was the investment property assets acquired. The fair
valuation of the pre-existing associate interest and the fair value of the
investment properties acquired are particularly subjective in that they
rely on the application of management’s judgment.

We tested the design and implementation of controls associated with
business combination accounting. This centred around assessing whether
the financial accounting was subject to sufficient management and
technical review;

We reviewed in detail the acquisition agreement and related documents to
understand the commercial terms of the transaction;

We agreed the consideration to the cash paid;

We considered management’s assessment of the factors which impact the
fair value of the pre-existing interest and consulted with our valuation
specialists to challenge these assumptions;

We challenged the Directors’ valuation prepared by management and met
with the valuers of the investment properties, given the Directors’ valuation
was based on the September 2014 valuations, adjusted for two months
growth to the Acquisition Date. We have challenged the valuers and
management on the assumptions incorporated in the investment property
valuation;

We tested the completeness of management’s assessment of intangibles by
considering the application guidance offered in IFRS 3 and, including a
consultation with our valuation specialists, to challenge the conclusion that
there were no identifiable and separable intangible assets; and

We have tested the other material components of the acquisition balance
sheet in detail.

Last year, our report included one other risk which is not included in our report this year:

> Valuation of VAT capital goods scheme (CGS) receivable – the complexity arising from the VAT structure of the Group and in particular its impact on the
recovery of the capital goods scheme receivable of £9.2m (2014: £9.0m), was simplified in the year ended 31 March 2015 due to the merging of VAT
groups. Furthermore, the successful claim by a competitor of Big Yellow has established a precedent for Big Yellow’s proposed basis of recovery.
> The only fluctuation in this balance in the year ended 31 March 2015 relates to the unwinding of the discount applied on initial recognition and annual

repayment of the receivable, neither of which are judgmental in nature.

The description of risks above should be read in conjunction with the significant issues considered by the Audit Committee discussed on pages 84 to 86.

Our audit procedures relating to these matters were designed in the context of our audit of the financial statements as a whole, and not to express an
opinion on individual accounts or disclosures. Our opinion on the financial statements is not modified with respect to any of the risks described above, and
we do not express an opinion on these individual matters.

Our application
of materiality

We define materiality as the magnitude of misstatement in the financial statements that makes it probable that
the economic decisions of a reasonably knowledgeable person would be changed or influenced. We use
materiality both in planning the scope of our audit work and in evaluating the results of our work.

We determined materiality for the Group to be £6.9 million (2014: £4.2 million), based on professional
judgment, the requirements of auditing standards and the financial measures most relevant to users of the
financial statements. We have used 1.0% of net assets (2014: 0.5% of non-current assets) as the benchmark
for determining materiality. We concluded that determining materiality based on net assets was more
consistent with industry peers, in particular real estate investment trusts, and because it reflects the measure
of most interest to investors. We note the change in base accounted for £1.7m of the £2.7m increase in
materiality.

In addition to net assets, we consider adjusted profit before tax to be a critical financial performance measure
for the Group on the basis that it is a key metric to analysts and investors and has substantial prominence in
the Annual Report. Adjusted profit before tax is £39.4m (2014: £29.2m), which is reconciled to IFRS profit
after tax attributable to equity holders of the parent in Note 10 of the financial statements. We applied a lower
threshold of £1.9 million (2014: £1.4 million) for testing all balances impacting adjusted profit before tax. This
lower threshold was based on 5% (2014: 5%) of adjusted profit before tax.

We agreed with the Audit Committee that we would report to the Committee all audit differences in excess of
£138,000 (2014: £80,000), which in both years equates to 2% of materiality, as well as differences below that
threshold that, in our view, warranted reporting on qualitative grounds. We also reported to the Audit
Committee on disclosure matters that we identified when assessing the overall presentation of the financial
statements.

Independent Auditors’ Report to the Members of Big Yellow Group PLC (continued)

An overview of the
scope of our audit

Our audit was scoped by obtaining an understanding of the Group and its environment, including group-wide
controls, and assessing the risks of material misstatement.

As in the prior year the Group audit team performed the audits of all non-dormant entities within the Group
given they are all located in the United Kingdom and operate from a single location with consistent financial
systems. As such, the scope of our audit covered 100% of both consolidated profit before tax and
consolidated net assets.

During the year, the Group acquired 20% of the equity of the Associates. The Group equity accounts for
these interests and the equity interest in Armadillo Storage Holding Company Limited and Armadillo Storage
Holding Company 2 Limited amounts to £3.6m and £1.9m respectively. The Group also manages these
portfolios. We have performed audit procedures on the significant balances and transactions in these entities
for the purposes of supporting the Group audit opinion. In each case, we have attended a valuation meeting
with the external valuer to challenge key assumptions and obtain comfort over the investment property values
in these vehicles.

The Group audit team continued to follow a programme of planned visits. At each site visited we undertook a
stock count, tested the design and implementation of key controls around cash such as bank reconciliations
and cash holding limits, agreed cash balances to bank reconciliations and held discussions with store staff.
We also verified a sample of fixed assets.

In our opinion:

> the part of the Directors’ Remuneration Report to be audited has been properly prepared in accordance

with the Companies Act 2006; and

> the information given in the Strategic Report and the Directors’ Report for the financial year for which the

financial statements are prepared is consistent with the financial statements.

Under the Companies Act 2006 we are required to report to you if, in our opinion:

> we have not received all the information and explanations we require for our audit; or
> adequate accounting records have not been kept by the Parent Company, or returns adequate for our

audit have not been received from branches not visited by us; or

> the Parent Company financial statements are not in agreement with the accounting records and returns.

We have nothing to report in respect of these matters.

Under the Companies Act 2006 we are also required to report if in our opinion certain disclosures of
Directors’ remuneration have not been made or the part of the Directors’ Remuneration Report to be
audited is not in agreement with the accounting records and returns. We have nothing to report arising
from these matters.

Under the Listing Rules we are also required to review the part of the Corporate Governance Statement
relating to the Company’s compliance with nine provisions of the UK Corporate Governance Code. We have
nothing to report arising from our review.

Under International Standards on Auditing (UK and Ireland), we are required to report to you if, in our opinion,
information in the annual report is:

> materially inconsistent with the information in the audited financial statements; or
> apparently materially incorrect based on, or materially inconsistent with, our knowledge of the group

acquired in the course of performing our audit; or

> otherwise misleading.

In particular, we are required to consider whether we have identified any inconsistencies between our
knowledge acquired during the audit and the Directors’ statement that they consider the annual report is fair,
balanced and understandable and whether the annual report appropriately discloses those matters that we
communicated to the audit committee which we consider should have been disclosed. We confirm that we
have not identified any such inconsistencies or misleading statements.

Opinion on other matters
prescribed by the
Companies Act 2006

Matters on which we are required
to report by exception

Adequacy of explanations
received and accounting records

Directors’ remuneration

Corporate Governance
Statement

Our duty to read other
information in the
Annual Report

Respective responsibilities
of Directors and auditor

Scope of the audit of the
financial statements

As explained more fully in the Directors’ Responsibilities Statement, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our
responsibility is to audit and express an opinion on the financial statements in accordance with applicable law
and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board’s Ethical Standards for Auditors. We also comply with International Standard on Quality
Control 1 (UK and Ireland). Our audit methodology and tools aim to ensure that our quality control procedures
are effective, understood and applied. Our quality controls and systems include our dedicated professional
standards review team, strategically focused second partner reviews and independent partner reviews.

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of
the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s
members those matters we are required to state to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company
and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient
to give reasonable assurance that the financial statements are free from material misstatement, whether
caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to
the Group’s and the Parent Company’s circumstances and have been consistently applied and adequately
disclosed; the reasonableness of significant accounting estimates made by the Directors; and the overall
presentation of the financial statements. In addition, we read all the financial and non-financial information in
the annual report to identify material inconsistencies with the audited financial statements and to identify any
information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge
acquired by us in the course of performing the audit. If we become aware of any apparent material
misstatements or inconsistencies we consider the implications for our report.

Darren Longley FCA (Senior Statutory Auditor)
For and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Reading, United Kingdom
18 May 2015

Consolidated Statement of Comprehensive Income
Year ended 31 March 2015

Revenue
Cost of sales

Gross profit
Administrative expenses

Operating profit before gains and losses on property assets
Gain on the revaluation of investment properties
Profit on disposal of surplus land

Operating profit
Share of profit of associates
Investment income – interest receivable

Finance costs

– fair value movement of derivatives
– interest payable
– fair value movement of derivatives

Profit before taxation
Taxation

Profit for the year (attributable to equity shareholders)

Total comprehensive income for the year (attributable to equity shareholders)

Basic earnings per share

Diluted earnings per share

EPRA earnings per share are shown in Note 12.

All items in the consolidated statement of comprehensive income relate to continuing operations.

Note

13a,14
15

13d
7
7
8
8, 18

2015
£000

84,276
(27,351)

56,925
(8,505)

48,420
64,465
1,318

114,203
3,516
495
–
(10,704)
(2,274)

105,236
351

2014
£000

72,196
(25,040)

47,156
(7,619)

39,537
28,350
–

67,887
180
415
2,681
(11,315)
–

59,848
(300)

105,587

59,548

105,587

59,548

72.5p

42.5p

71.9p

42.2p

Consolidated Balance Sheet
Year ended 31 March 2015

Non-current assets
Investment property
Investment property under construction
Interests in leasehold property
Plant, equipment and owner-occupied property
Goodwill
Investment in associates
Capital Goods Scheme receivable

Current assets
Surplus land
Inventories
Trade and other receivables
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables
Borrowings
Obligations under finance leases

Non-current liabilities
Derivative financial instruments
Borrowings
Obligations under finance leases

Total liabilities

Net assets

Equity
Called up share capital
Share premium account
Reserves

Equity shareholders’ funds

Note

13a
13a
13a
13b
13c
13d
16

17
19
21

2015
£000

2014
£000

1,007,110
15,681
20,829
3,050
1,433
5,572
9,039

776,390
22,303
23,814
2,985
1,433
17,861
7,620

1,062,714

852,406

3,315
304
16,379
8,194

28,192

6,059
290
13,531
3,301

23,181

1,090,906

875,587

(32,612)
(72,136)
(1,705)

(26,818)
(2,034)
(1,615)

(106,453)

(30,467)

18c
19
21

(3,679)
(210,736)
(19,124)

(2,813)
(226,044)
(22,199)

(233,539)

(251,056)

(339,992)

(281,523)

750,914

594,064

15,806
44,922
690,186

14,306
44,278
535,480

750,914

594,064

The financial statements were approved by the Board of Directors and authorised for issue on 18 May 2015. They were signed on its behalf by:

James Gibson
Director

John Trotman
Director

Company Registration No. 03625199

Consolidated Statement of Changes in Equity
Year ended 31 March 2015

At 1 April 2014
Total comprehensive gain for the year
Issue of share capital
Dividend
Credit to equity for equity-settled

share based payments

Share
capital
£000

14,306
–
1,500
–

Share
premium
account
£000

44,278
–
644
–

Other non-
distributable
reserve
£000

Capital
redemption
reserve
£000

–
–
74,950
–

1,653
–
–
–

Retained
earnings
£000

539,450
105,587

(27,890)

Own
shares
£000

(5,623)
–
–
–

Total
£000

594,064
105,587
77,094
(27,890)

–

2,059

–

2,059

At 31 March 2015

15,806

44,922

74,950

1,653

619,206

(5,623)

750,914

The other non-distributable reserve arose in the year following the placing of 14.35 million ordinary shares.

Year ended 31 March 2014

At 1 April 2013
Total comprehensive gain for the year
Issue of share capital
Dividend
Credit to equity for equity-settled share based payments

At 31 March 2014

Share
capital
£000

14,264
–
42
–
–

14,306

Share
premium
account
£000

44,278
–
–
–
–

44,278

Capital
redemption
reserve
£000

1,653
–
–
–
–

1,653

Retained
earnings
£000

498,056
59,548
–
(19,591)
1,437

Own
shares
£000

(5,623)
–
–
–
–

Total
£000

552,628
59,548
42
(19,591)
1,437

539,450

(5,623)

594,064

Consolidated Cash Flow Statement
Year ended 31 March 2015

Operating profit
Gain on the revaluation of investment properties
Profit on disposal of surplus land
Depreciation
Depreciation of finance lease capital obligations
Employee share options
(Increase)/decrease in inventories
Increase in receivables
Increase in payables

Cash generated from operations
Interest paid
Interest received
Tax credit received

Cash flows from operating activities

Investing activities
Sale of surplus land
Purchase of non-current assets
Additions to surplus land
Receipts from Capital Goods Scheme
Acquisition of Big Yellow Limited Partnership (net of cash acquired)
Acquisition of Big Storage Limited
Disposal of Big Storage Limited
Net investment in associates
Dividend received from associate

Cash flows from investing activities

Financing activities
Issue of share capital
Payment of finance lease liabilities
Equity dividends paid
Payments to cancel interest rate derivatives
Refinancing fees
Repayment of Big Yellow Limited Partnership loan
Repayment of Big Storage AIB loan
Drawing of Big Storage Lloyds loan
Increase/(reduction) in borrowings

Cash flows from financing activities

Net increase/(decrease) in cash and cash equivalents
Opening cash and cash equivalents

Closing cash and cash equivalents

Reconciliation of Net Cash Flow to Movement in Net Debt
Year ended 31 March 2015

Net increase/(decrease) in cash and cash equivalents in the year
Cash flow from (increase)/decrease in debt financing

Change in net debt resulting from cash flows

Movement in net debt in the year
Net debt at the start of the year

Net debt at the end of the year

Note

13a, 14
15
13b
13a
6

13d
13a
13a
13d
13d

13a
11

2015
£000

114,203
(64,465)
(1,318)
566
918
2,059
(14)
(1,172)
1,098

51,875
(9,692)
27
187

2014
£000

67,887
(28,350)
–
526
974
1,437
10
(1,652)
2,458

43,290
(10,558)
20
–

42,397

32,752

2,815
(42,555)
(231)
3,557
(37,406)
(15,114)
7,614
(3,709)
89

(84,940)

77,094
(918)
(27,890)
(1,408)
(2,649)
(57,000)
(9,659)
13,900
55,966

–
(8,460)
(136)
756
–
–
–
–
–

(7,840)

42
(974)
(19,591)
–
–
–
–
–
(8,938)

47,436

(29,461)

4,893
3,301

8,194

(4,549)
7,850

3,301

Note

2015
£000

4,893
(55,966)

(51,073)

2014
£000

(4,549)
8,938

4,389

(51,073)
(226,067)

4,389
(230,456)

(277,140)

(226,067)

Notes to the Financial Statements
Year ended 31 March 2015

1. GENERAL INFORMATION

Big Yellow Group PLC is a Company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is
2 The Deans, Bridge Road, Bagshot, Surrey, GU19 5AT. The nature of the Group’s operations and its principal activities are set out in note 4 and in the
Strategic Report on pages 18 to 40.

These financial statements are presented in pounds sterling because that is the currency of the economic environment in which the Group operates.

2. SIGNIFICANT ACCOUNTING POLICIES

Adoption of new and revised standards
The following new and revised Standards and Interpretations have been adopted in the current year, but have not had a material impact on the Group:

> IAS 1 (amendment) – Presentation of Financial Statements
> IAS 12 (amendment) – Income Tax
> IFRS 7 (amendment) – Financial Instruments: Disclosures

Below are details of accounting standards and interpretations which have been issued but are not yet effective, or have not yet been endorsed by the
EU, which may be relevant to the Group. None of these standards or interpretations have been early adopted by the Group. The Group is in the process of
assessing the impact of these new standards and interpretations on its financial reporting. None of these standards are expected to have a significant
impact on the Group’s reporting, although some may require additional disclosures to be included in the notes to the financial statements.

Issued, not yet effective and not yet endorsed for use in the EU:

> IFRS 9 – Financial Instruments
> IFRS 15 – Revenue from contracts with customers

Issued and endorsed for use in the EU, but not yet effective:

> IAS 36 (amendment) – Impairment of Assets
> IAS 39 (amendment) – Financial Instruments: Recognition and Measurement
> IFRS 10 – Consolidated Financial Statements
> IFRS 11 – Joint Arrangements
> IFRS 12 – Disclosure of Interests in Other Entities
> IAS 27 (revised) – Separate Financial Statements
> IAS 28 (revised) – Associates and Joint Ventures
> Amendments to IFRS 10, IFRS 11, IFRS 12 (transition guidance)
> IAS 24 (amendments resulting from Annual Improvements 2010-2012 Cycle)
> IAS 40 (amendments resulting from Annual Improvements 2011-2013 Cycle)
> IAS 16 (amendments regarding the clarification of acceptable methods of depreciation and amortisation)

Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs). The financial statements have
also been prepared in accordance with IFRSs adopted by the European Union and therefore the Group financial statements comply with Article 4 of the
EU IAS Regulation.

The financial statements have been prepared on the historical cost basis, except for the revaluation of certain properties and financial instruments.
Historical cost is generally based on the fair value of the consideration given in exchange for the assets. The principal accounting policies adopted,
which have been applied consistently to the results, other gains and losses, assets, liabilities and cash flows of entities included in the consolidated
financial statements in the current and preceding year, are set out below:

Going concern
A review of the Group’s business activities, together with the factors likely to affect its future development, performance and position are set out on in
the Strategic Report. The financial position of the Group, its cash flows, liquidity position and borrowing facilities are shown in the balance sheet, cash
flow statement and accompanying notes to the financial statements. Further information concerning the Group’s objectives, policies and processes for
managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk
and liquidity risk can be found in the Strategic Report and in the notes to the financial statements.

After reviewing Group and Company cash balances, borrowing facilities, forecast valuation movements and projected cash flows, the Directors believe
that the Group and Company have adequate resources to continue operations for the foreseeable future. In reaching this conclusion the Directors have
had regard to the Group’s operating plan and budget for the year ending 31 March 2016 and projections contained in the longer term business plan
which covers the period to March 2022. The Directors have considered carefully the Group’s trading performance and cash flows as a result of the
uncertain global economic environment and the other principal risks to the Group’s performance, and are satisfied with the Group’s positioning. For this
reason, they continue to adopt the going concern basis in preparing the financial statements.

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company made up to
31 March each year. Control is achieved where the Company has the power to direct the relevant activities of an investee entity so as to obtain
benefits from its activities.

The Group consolidates the financial results and balance sheets of Big Yellow Group PLC and all of its subsidiaries at the year end using acquisition
accounting principles. All intra-Group transactions, balances, income and expenses are eliminated on consolidation. Where necessary, adjustments are
made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the Group. The results of subsidiaries
acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition or
up to the effective date of disposal, as appropriate.

The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values,
at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the
acquiree. Any costs directly attributable to the business combination are recognised in the income statement. The acquiree’s identifiable assets,
liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair value at the acquisition date, except
for non-current assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Non-Current Assets Held for Sale and
Discontinued Operations, which are recognised and measured at the lower of their carrying amount and fair value less costs to sell.

Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over
the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group’s
interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the
excess is recognised immediately in the statement of comprehensive income.

Investment in subsidiaries
These are recognised at cost less provision for any impairment.

Investment in associates
An associate is an entity over which the Group is in a position to exercise significant influence, but not control or joint control, through participation in
the financial and operating policy decisions of the investee. Significant influence is the power to participate in the financial and operating policy
decisions of the investee but is not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these financial statements using the equity method of accounting except when
classified as held for sale. Investments in associates are carried in the balance sheet at cost as adjusted by post-acquisition changes in the Group’s
share of the net assets of the associate, less any impairment in the value of individual investments. Losses of an associate in excess of the Group’s
interest in that associate (which includes any long-term interests that, in substance, form part of the Group’s net investment in the associate) are
recognised only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate. Where
necessary, adjustments are made to the financial statements of associates to bring the accounting policies used into line with those used by the Group.

Where a Group Company transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s interest in the relevant
associate. Losses may provide evidence of an impairment of the asset transferred in which case appropriate provision is made for impairment.

Goodwill
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of the identifiable assets and
liabilities of a subsidiary at the date of acquisition.

Goodwill is recognised as an asset and reviewed for impairment at least annually. Any impairment is recognised immediately in the statement of
comprehensive income and is not subsequently reversed. The goodwill in the balance sheet has an indefinite useful economic life.

Revenue recognition
Revenue represents amounts derived from the provision of services which fall within the Group’s ordinary activities after deduction of trade discounts
and any applicable value added tax. Income is recognised over the period for which the storage room is occupied by the customer on a straight-line
basis. The Group recognises non-storage income on a straight-line basis over the period in which it is earned.

Interest income is accrued on a time basis, by reference to the principal outstanding and the effective interest rate applicable, which is the rate that
exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount.

Management fees earned are recognised on a straight-line basis over the period for which the services are provided.

Notes to the Financial Statements (continued)
Year ended 31 March 2015

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

Operating leases
Rentals payable under operating leases are charged to the statement of comprehensive income on a straight-line basis over the term of the relevant
lease. In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit
of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of
the time pattern in which economic benefits from the leased asset are consumed.

Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease.

Borrowings
Interest-bearing loans and overdrafts are recorded at the proceeds received, net of direct issue costs. Premiums payable on settlement or redemption
and direct issue costs are accounted for on an accruals basis in the statement of comprehensive income using the effective interest rate method and
are added to the carrying value amount of the instrument to the extent that they are not settled in the period in which they arise.

Finance costs
All borrowing costs are recognised in the statement of comprehensive income in the period in which they are incurred, unless the costs are incurred
as part of the development of a qualifying asset, when they will be capitalised. Commencement of capitalisation is the date when the Group incurs
expenditure for the qualifying asset, incurs borrowing costs and undertakes activities that are necessary to prepare the assets for their intended use
when it is probable that they will result in future economic benefits to the entity and the costs can be measured reliably. In the case of suspension of
activities during extended periods, the Group suspends capitalisation. The Group ceases capitalisation of borrowing costs when substantially all of the
activities necessary to prepare the asset for use are complete.

Operating profit
Operating profit is stated after gains and losses on surplus land, movements on the revaluation of investment properties and before the share of results
of associates, investment income and finance costs.

Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from the net profit as reported in the statement of comprehensive
income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable
or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary differences arise from goodwill or from the initial recognition (other than in a business combination) of other assets and
liabilities in a transaction that affects neither the tax profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries and associates except where the Group
is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax is calculated at the tax rates substantively enacted at the balance sheet date that are expected to apply in the period when the liability is
settled or the asset is realised. Deferred tax is charged or credited in the statement of comprehensive income, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when
they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.

2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Plant, equipment and owner occupied property
All property, plant and equipment, not classified as investment property, are carried at historic cost less depreciation and any recognised impairment loss.

Depreciation is charged so as to write off the cost or valuation of assets, other than land and investment properties, over their estimated useful lives,
using the straight-line method, on the following bases:

Freehold property
Leasehold improvements
Plant and machinery
Motor vehicles
Fixtures and fittings
Computer equipment

50 years
Over period of the lease
10 years
4 years
5 years
3 years

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount
of the asset and is recognised in income.

Investment property
The criteria used to distinguish investment property from owner-occupied property is to consider whether the property is held for rental income and
for capital appreciation. Where this is the case, the Group recognises these owned or leased properties as investment properties. Investment property
is initially recognised at cost and revalued at the balance sheet date to fair value as determined by professionally qualified external valuers. In
accordance with IAS 40, investment property held as a leasehold is stated gross of the recognised finance lease liability.

Gains or losses arising from the changes in fair value of investment property are included in the statement of comprehensive income of the period in
which they arise. In accordance with IAS 40, as the Group uses the fair value model, no depreciation is provided in respect of investment properties
including integral plant.

Leasehold properties that are leased under operating leases are classified as investment properties and included in the balance sheet at fair value.
The obligation to the lessor for the buildings element of the leasehold is included in the balance sheet at the present value of the minimum lease
payments at inception, and is shown within note 21. Lease payments are apportioned between finance charges and a reduction of the outstanding
lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.

Investment property under construction
Investment property under construction is initially recognised at cost and revalued at the balance sheet date to fair value as determined by
professionally qualified external valuers.

Gains or losses arising from the changes in fair value of investment property under construction are included in the statement of comprehensive
income in the period in which they arise.

Surplus land
Surplus land, which can include assets held for development and future sale, is recognised at the lower of cost and net realisable value. Any gains and
losses on surplus land are recognised through the statement of comprehensive income.

Impairment of assets
At each balance sheet date, the Group reviews the carrying amounts of its assets to determine whether there is any indication that those assets have
suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any). The recoverable amount is the higher of an asset’s net selling price and its value-in-use (i.e. the net present value of its future
cash flows discounted at the Group’s average pre-tax interest rate that reflects the borrowing costs and risk for the asset).

Inventories
Inventories, representing the cost of packing materials, are stated at the lower of cost and net realisable value.

Financial instruments
Financial assets and financial liabilities are recognised on the Group’s balance sheet when the Group becomes a party to the contractual provisions
of the instrument. Financial assets at FVTPL are stated at fair value, with any gains or losses arising on re-measurement recognised in profit or loss.
The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains
and losses’ line item in the income statement.

Notes to the Financial Statements (continued)
Year ended 31 March 2015

2. SIGNIFICANT ACCOUNTING POLICIES (continued)

A – Derivative financial instruments and hedge accounting
The Group’s activities expose it primarily to the financial risks of interest rates. The Group uses interest rate swap contracts to hedge these exposures.
The Group does not use derivative financial instruments for speculative purposes. The use of financial derivatives is governed by the Group’s policies
approved by the Board of Directors. The policy in respect of interest rates is to maintain a balance between flexibility and the hedging of interest rate risk.

Derivatives are initially recognised at fair value and are subsequently reviewed at each balance sheet date. The fair value of interest rate derivatives
at the reporting date is determined by discounting the future cash flows using the forward curves at the reporting date and the credit risk inherent in
the contract.

Changes in the fair value of derivative financial instruments are recognised in the statement of comprehensive income as they arise. The Group has not
adopted hedge accounting. Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their
risks and characteristics are not closely related to those of host contracts and the host contracts are not carried at fair value with unrealised gains or
losses reported in the statement of comprehensive income.

B – Loans and receivables
Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans
and receivables. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is
recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

C – Impairment of financial assets
Financial assets are assessed for indicators of impairment at each balance sheet date. Financial assets are impaired where there is objective evidence
that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment
have been impacted.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables,
where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off
against the allowance account.

Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance
account are recognised in profit or loss.

D – Cash and cash equivalents
Cash and cash equivalents comprises cash on hand and demand deposits, and other short term highly liquid investments that are readily convertible to a
known amount of cash and are subject to an insignificant risk of changes in value. The carrying amounts of these assets approximates to the fair value.

E – Financial liabilities and equity
Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

F – Equity instruments
Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

G – Trade payables
Trade payables are not interest bearing and are stated at their nominal value.

Retirement benefit costs
Pension costs represent contributions payable to defined contribution schemes and are charged as an expense to the statement of comprehensive
income as they fall due. The assets of the schemes are held separately from those of the Group.

Share-based payments
The Group issues equity-settled share-based payments to certain employees. These are measured at fair value at the date of grant. The fair value
determined at the grant date of the share-based payment is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of
shares that will eventually vest.

Fair value is measured by use of the Black-Scholes model and excludes the effect of non-market based vesting conditions. The expected life used in the
model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural
considerations. At each balance sheet date, the Group revises its estimate of the number of equity instruments expected to vest as a result of the effect
of non-market based vesting conditions. The impact of the revision of the original estimates, if any, is recovered in profit and loss such that the
cumulative expenses reflects the revised estimate with a corresponding adjustment to equity reserves.

For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability.
At each balance sheet date until the liability is settled, and at the date of settlement, the fair value of the liability is re-measured, with any changes in
fair value recognised in profit or loss for the year.

100

2. SIGNIFICANT ACCOUNTING POLICIES (continued)
Critical accounting estimates and judgements
In the application of the Group’s accounting policies, which are described above, the Directors are required to make judgements, estimates and
assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated
assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which
the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and
future periods.

a) Estimate of fair value of Investment Properties and Investment Property Under Construction (critical accounting estimate)

The Group’s self storage centres and stores under development are valued using a discounted cash flow methodology which is based on
projections of net operating income. The Group employs expert external valuers, Cushman & Wakefield LLP, who report on the values of the Group’s
stores on a biannual basis. The stores within the Armadillo Partnerships are valued by Jones Lang LaSalle. Principal assumptions underlying the
estimation of the fair value are those related to: stabilised occupancy levels; the absorption period to these stabilised levels; expected future
growth in storage rents and operating costs; maintenance requirements; capitalisation rates and discount rates. A more detailed explanation of the
background and methodology adopted in the valuation of the Group’s investment properties is set out in note 14 to the accounts.

b) Acquisition of Big Yellow Limited Partnership (critical accounting judgement)

The key judgements include the fair value of the pre-existing interest of the associate, the fair values of the net assets acquired and the
consideration of any identifiable and separable intangibles. Prior to accounting for the acquisition of the assets of the Partnership, an assessment
of fair value is required of the pre-existing 33% interest in the Partnership. In particular in relation to assessing whether a control premium or
discount is attached to the pre-existing interest with reference to the rights attached to the minority interest.

The fair value of net assets acquired requires an assessment of the market value that a third party would pay to obtain control over the identified
assets and liabilities. Finally, IFRS 3 Business Combinations requires an assessment of whether any identified and separable intangible assets
require separate recognition on balance sheet at the Acquisition Date.

3. REVENUE

Analysis of the Group’s operating revenue can be found below and in the Portfolio Summary on page 24.

Open stores
Self storage income
Other storage related income
Ancillary store rental income

Other revenue
Non-storage income
Fees earned from Big Yellow Limited Partnership
Other management fees earned

Revenue per statement of comprehensive income

Interest receivable on bank deposits (see note 7)

Total revenue per IAS 18

2015
£000

2014
£000

70,631
11,849
251

82,731

268
458
819

59,994
10,475
237

70,706

420
640
430

84,276

72,196

84,303

72,216

Non-storage income derives principally from rental income earned from tenants of properties awaiting development.

4. SEGMENTAL INFORMATION

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the
Chief Executive to allocate resources to the segments and to assess their performance. Given the nature of the Group’s business, there is one segment,
which is the provision of self storage and related services.

Revenue represents amounts derived from the provision of self storage and related services which fall within the Group's ordinary activities after
deduction of trade discounts and value added tax. The Group’s net assets, revenue and profit before tax are attributable to one activity, the provision of
self storage and related services. These all arise in the United Kingdom in the current year and prior year.

101

Notes to the Financial Statements (continued)
Year ended 31 March 2015

5. PROFIT FOR THE YEAR

a) Profit for the year has been arrived at after charging/(crediting):

Depreciation of plant, equipment and owner-occupied property
Leasehold property depreciation
Gain on the revaluation of investment property
Profit on disposal of surplus land
Cost of inventories recognised as an expense
Employee costs (see note 6)
Operating lease rentals
Auditor’s remuneration for audit services (see below)

b) Analysis of auditor’s remuneration:

Fees payable to the Company’s auditor for the audit of the Company’s annual accounts
Other services – audit of the Company’s subsidiaries’ annual accounts

Total audit fees

Interim review
Tax services – advisory
Assurance of CSR report
Other services
Real estate advice (planning)

Total non-audit fees

2015
£000

566
918
(64,465)
(1,318)
977
13,084
95
191

2014
£000

526
974
(28,350)
–
923
11,075
188
167

2015
£000

160
31

191

34
131
22
80
–

267

2014
£000

140
27

167

33
21
20
21
1

Fees payable to Deloitte LLP and their associates for non-audit services to the Company are not required to be disclosed because the consolidated
financial statements are required to disclose such fees on a consolidated basis. Fees charged by Deloitte LLP to Armadillo Storage Holding Company
Limited and Armadillo Storage Holding Company 2 Limited in the year amounted to £211,000, of which £156,000 related to non-audit services.

6. EMPLOYEE COSTS

The average monthly number of full-time equivalent employees (including Executive Directors) was:

2015
Number

2014
Number

256
44

300

2015
£000

8,982
1,655
388
2,059

246
43

289

2014
£000

8,007
1,275
356
1,437

13,084

11,075

Sales
Administration

At 31 March 2015 the total number of Group employees was 337 (2014: 325).

Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Other pension costs
Share-based payments

Details of Directors’ Remuneration is given on pages 64 to 83.

102

INVESTMENT INCOME

Bank interest receivable
Unwinding of discount on Capital Goods Scheme receivable

Total interest receivable

Fair value movement on interest rate derivatives

Total investment income

8. FINANCE COSTS

Interest on bank borrowings
Capitalised interest
Interest on obligations under finance leases

Total interest payable

Change in fair value of interest rate derivatives

Total finance costs

9. TAXATION

2015
£000

27
468

495

–

495

2014
£000

20
395

415

2,681

3,096

2015
£000

10,080
(399)
1,023

2014
£000

10,768
(484)
1,031

10,704

11,315

2,274

–

12,978

11,315

The Group converted to a REIT in January 2007. As a result the Group does not pay UK corporation tax on the profits and gains from its qualifying rental
business in the UK provided that it meets certain conditions. Non-qualifying profits and gains of the Group are subject to corporation tax as normal.
The Group monitors its compliance with the REIT conditions. There have been no breaches of the conditions to date.

UK current tax
Current tax:
– Current year
– Prior year
– Conversion charge refund

A reconciliation of the tax (credit)/charge is shown below:

Profit before tax

Tax charge at 21% (2014 – 23%) thereon
Effects of:
Revaluation of investment properties
Share of results of associates
Permanent differences
Profits from the tax exempt business
Gain on disposal of surplus land
Utilisation of brought forward losses
Movement on other unrecognised deferred tax assets

Current year tax charge

Prior year adjustment

Total tax (credit)/charge

2015
£000

90
(254)
(187)

(351)

2015
£000

105,236

22,100

(12,109)
(739)
(1,475)
(7,234)
(278)
(438)
263

(441)

(351)

2014
£000

300
–
–

300

2014
£000

59,848

13,765

(6,368)
–
147
(6,386)
–
(41)
(817)

300

–

300

At 31 March 2015 the Group has unutilised tax losses of £32.8 million (2014: £36.5 million) available for offset against certain types of future taxable
profits. All losses can be carried forward indefinitely.

103

Notes to the Financial Statements (continued)
Year ended 31 March 2015

10. ADJUSTED PROFIT BEFORE TAX AND ADJUSTED EBITDA

Profit before tax
(Gain)/loss on revaluation of investment properties – wholly owned

– in associate (net of deferred tax)

Change in fair value of interest rate derivatives – Group

– in associate

Profit on disposal of surplus land
Share of non-recurring losses in associate

Adjusted profit before tax

Net bank interest
Depreciation (see note 13b)

Adjusted EBITDA

2015
£000

105,236
(64,465)
(2,731)
2,274
124
(1,318)
285

39,405

9,654
566

49,625

2014
£000

59,848
(28,350)
662
(2,681)
(258)
–
–

29,221

10,264
526

40,011

Adjusted profit before tax which excludes gains and losses on the revaluation of investment properties, changes in fair value of interest rate derivatives,
net gains and losses on surplus land, and non-recurring items of income and expenditure have been disclosed to give a clearer understanding of the
Group’s underlying trading performance. EPRA earnings are £39,756,000 for the year after the tax credit of £351,000 (2014: £28,921,000 after a tax
charge of £300,000).

11. DIVIDENDS

Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 March 2014 of 8.4p
(2013: 6.0p) per share.
Interim dividend for the year ended 31 March 2015 of 10.4p
(2014: 8.0p) per share.

Proposed final dividend for the year ended 31 March 2015 of
11.3p (2014: 8.4p) per share.

2015
£000

2014
£000

11,774

8,384

16,116

27,890

11,207

19,591

17,541

11,774

Subject to approval by shareholders at the Annual General Meeting to be held on 21 July 2015, the final dividend will be paid on 23 July 2015. The ex-div
date is 11 June 2015 and the record date is 12 June 2015.

The Property Income Dividend (“PID”) payable for the year is 16.1 pence per share (2014: 13 pence per share).

104

12. EARNINGS AND NET ASSETS PER SHARE

Earnings per ordinary share

Basic
Dilutive share options

Diluted

Adjustments:
Gain on revaluation of investment properties
Change in fair value of interest rate derivatives
Profit on disposal of surplus land
Share of associate non-recurring (gains)/losses

EPRA – diluted

EPRA – basic

Year ended 31 March 2015

Year ended 31 March 2014

Earnings
£m

105.6
–

105.6

(64.5)
2.3
(1.3)
(2.3)

39.8

Shares
million

145.7
1.2

146.9

–
–
–
–

146.9

145.7

Pence per
share

Earnings
£m

72.5
(0.6)

71.9

(43.9)
1.6
(0.9)
(1.6)

27.1

27.3

59.5
–

59.5

(28.3)
(2.7)
–
0.4

28.9

Shares
million

139.9
1.2

141.1

–
–
–
–

141.1

139.9

Pence per
share

42.5
(0.3)

42.2

(20.1)
(1.9)
–
0.3

20.5

20.7

The calculation of basic earnings is based on profit after tax for the year. The weighted average number of shares used to calculate diluted earnings per
share has been adjusted for the conversion of share options.

EPRA earnings and earnings per ordinary share before non-recurring items, movements on revaluation of investment properties, gains on surplus land,
the change in fair value of interest rate derivatives, and share of associate non-recurring gains and losses (including deferred tax on revaluation
surpluses) have been disclosed to give a clearer understanding of the Group’s underlying trading performance.

The European Public Real Estate Association (“EPRA”) has issued recommended bases for the calculation of net assets per share information and this is
shown in the table below:

Basic net asset value
Exercise of share options

EPRA NNNAV
Adjustments:
Fair value of derivatives
Fair value of derivatives – share of associate
Share of deferred tax in associates

EPRA NAV

Basic net assets per share (pence)
EPRA NNNAV per share (pence)
EPRA NAV per share (pence)
EPRA NAV (as above) (£000)
Valuation methodology assumption (see note 14) (£000)

Adjusted net asset value (£000)
Adjusted net assets per share (pence)

Shares in issue
Own shares held in treasury
Own shares held in EBT

Basic shares in issue used for calculation
Exercise of share options

Diluted shares used for calculation

31 March
2015
£000

750,914
452

31 March
2014
£000

594,064
483

751,366

594,547

3,679
46
425

2,813
(26)
–

755,516

597,334

484.0
478.5
481.1
755,516
45,927

801,443
510.4

423.9
418.5
420.5
597,334
37,057

634,391
446.5

No. of shares

158,055,735 143,061,147
(1,418,750)
(1,500,000)

(1,418,750)
(1,500,000)

155,136,985 140,142,397
1,926,527

1,896,437

157,033,422 142,068,924

Net assets per share are shareholders’ funds divided by the number of shares at the year end. The shares currently held in the Group’s Employee
Benefit Trust and in treasury are excluded from both net assets and the number of shares. Adjusted net assets per share include the effect of those
shares issuable under employee share option schemes and the effect of alternative valuation methodology assumptions (see note 14).

105

Notes to the Financial Statements (continued)
Year ended 31 March 2015

13. NON-CURRENT ASSETS

a) Investment property, investment property under construction and interests in leasehold property

At 31 March 2013
Additions
Capital Goods Scheme adjustment
Transfer to surplus land
Adjustment to present value
Revaluation (see note 14)
Depreciation

At 31 March 2014
Additions
Acquisition of Partnership stores
Transfer from surplus land
Reclassification
Adjustment to present value
Acquisition of Big Storage
Disposals
Revaluation (see note 14)
Depreciation

At 31 March 2015

Investment
property
under
construction
£000

Interests in
leasehold
property
£000

17,277
5,860
–
–
–
(834)
–

22,303
5,157
–
–
(12,650)
–
–
–
871
–

21,803
–
–
–
2,985
–
(974)

23,814
–
–
–
–
(2,067)
–
–
–
(918)

Investment
property
£000

745,605
1,745
1,186
(1,330)
–
29,184
–

776,390
36,343
111,055
1,478
12,650
–
24,900
(19,300)
63,594
–

Total
£000

784,685
7,605
1,186
(1,330)
2,985
28,350
(974)

822,507
41,500
111,055
1,478
–
(2,067)
24,900
(19,300)
64,465
(918)

1,007,110

15,681

20,829

1,043,620

The income from self storage accommodation earned by the Group from its investment property is disclosed in note 3. Direct operating expenses,
which are all applied to generating rental income, arising on the investment property in the year are disclosed in the Portfolio Summary on page 24.
Included within additions is £0.4 million of capitalised interest (2014: £0.5 million), calculated at the Group’s average borrowing cost for the year of
3.9%. 55 of the Group’s investment properties are pledged as security for loans, with a total external value of £861.0 million.

The adjustment to present value in leasehold properties in the year arises due to the acquisition of the freehold of the Battersea store and
extinguishment of the lease liability.

Accounting for the acquisition of Big Storage Limited
In January 2015 the Group acquired the entire share capital of Big Storage Limited for a property value of £24.9 million. The net consideration is
shown below. The company owned five self storage centres in North West England. The Group subsequently transferred the store at Chester to
another subsidiary company of the Group. This store will be rebranded as a Big Yellow.

To determine the assets and liabilities acquired at the date of completion of Big Storage Limited the Group have used the balance sheet at the date
of acquisition. The following provides a breakdown of the fair value of the assets and liabilities acquired.

Investment property
Other non-current assets
Current assets
Current liabilities
Non-current liabilities

Net assets (100%)

Net assets acquired (100%)
Satisfied by cash consideration

106

£000

24,900
17
1,701
(1,619)
(9,885)

15,114

£000

15,114
(15,114)

–

13. NON-CURRENT ASSETS (continued)

a) Investment property, investment property under construction and interests in leasehold property (continued)

In February 2015, the Group sold the share capital of Big Storage Limited to a company (“Armadillo 2”) in which it has a 20% interest, with the
balance of the equity owned by an Australian consortium. The disposal was at book and fair value, so there was no profit or loss recorded on
disposal. The following provides a breakdown of the assets and liabilities disposed of. Between transactions the Group controlled Big Storage
Limited and contractually controlled the assets.

Investment property
Other non-current assets
Current assets
Current liabilities
Non-current liabilities

Net assets (100%)

Net assets disposed (100%)
Satisfied by cash consideration

On a net basis, the Group acquired property of £5.6 million, cash of £1.9 million and invested £1.8 million into Armadillo 2.

b) Plant, equipment and owner occupied property

Freehold
property
£000

Leasehold
improvements
£000

Plant and
machinery
£000

Motor
vehicles
£000

Fixtures,
fittings & office
equipment
£000

Cost
At 31 March 2013
Reclassification
Retirement of fully depreciated assets
Additions

At 31 March 2014
Retirement of fully depreciated assets
Additions

At 31 March 2015

Depreciation
At 31 March 2013
Reclassification
Retirement of fully depreciated assets
Charge for the year

At 31 March 2014
Retirement of fully depreciated assets
Charge for the year

At 31 March 2015

Net book value
At 31 March 2015

At 31 March 2014

c) Goodwill

1,867
(9)
(15)
–

1,843
–
42

1,885

(261)
2
15
(49)

(293)
–
(35)

(328)

1,557

1,550

44
9
–
–

53
–
–

(44)
(2)
–
(3)

(49)
–
(1)

(50)

826
–
(418)
17

425
(52)
171

544

(609)
–
418
(27)

(218)
52
(53)

(219)

325

207

25
–
–
–

25
–
–

(15)
–
–
(7)

(22)
–
(3)

(25)

–

6,958
–
(5,813)
744

1,889
(891)
418

1,416

(6,041)
–
5,813
(440)

(668)
891
(474)

(251)

1,165

1,221

£000

19,300
17
3,942
(1,519)
(14,126)

7,614

£000

7,614
(7,614)

–

Total
£000

9,720
–
(6,246)
761

4,235
(943)
631

3,923

(6,970)
–
6,246
(526)

(1,250)
943
(566)

(873)

3,050

2,985

The goodwill relates to the purchase of Big Yellow Self Storage Company Limited in 1999. The asset is tested bi-annually for impairment. The
carrying value remains unchanged from the prior year as there is considered to be no impairment in the value of the asset.

107

Notes to the Financial Statements (continued)
Year ended 31 March 2015

13. NON-CURRENT ASSETS (continued)

d) Investment in associates

The table below shows the movement for all associates in the period and reconciles to the income statement and the balance sheet.

At the beginning of the year
Subscription for partnership capital and advances
Part disposal of Partnership interest
Share of results (see below)
Dividends
Acquisition of remaining interest

Investment at the end of year

Big Yellow
Limited
Partnership

17,861
–
–
1,564
–
(19,425)

–

Armadillo 1

Armadillo 2

–
3,648
(1,728)
1,807
(89)
–

3,638

–
1,789
–
145
–
–

1,934

Total
associates

17,861
5,437
(1,728)
3,516
(89)
(19,425)

5,572

Big Yellow Limited Partnership
At the start of the year the Group had a 33.3% interest in Big Yellow Limited Partnership. This interest was accounted for as an associate, using
equity accounting. The Partnership commenced trading on 1 December 2007. On 1 December 2014, the Group acquired the remaining 66.7% of the
Partnership interest that it did not previously own. From this date, the Partnership is accounted for as a wholly owned subsidiary of the Group. The
results up to this date are equity accounted as shown in the note below:

At the beginning of the year
Share of results (see below)
Acquisition of remaining interest

31 March
2015
£000

17,861
1,564
(19,425)

–

31 March
2014
£000

17,681
180
–

17,861

The figures below show the trading results of Big Yellow Limited Partnership, and the Group’s share of the results and the net assets of the
Partnership.

Big Yellow Limited Partnership

Income statement (100%)
Revenue
Cost of sales
Administrative expenses

Operating profit
Gain/(loss) on the revaluation of investment properties
Net interest payable
Fair value movement of interest rate derivatives

Profit before and after tax

Balance sheet (100%)

Investment property
Other non-current assets
Current assets
Current liabilities
Derivative financial instruments
Non-current liabilities

Net assets (100%)

108

1 April 2014 to
30 November
2014
£000

Year ended
31 March
2014
£000

7,476
(3,367)
(86)

4,023
2,473
(1,569)
(233)

4,694

31 March
2015
£000

–
–
–
–
–
–

–

9,529
(4,846)
(112)

4,571
(1,985)
(2,820)
774

540

31 March
2014
£000

108,110
3,588
3,009
(3,201)
77
(58,000)

53,583

13. NON-CURRENT ASSETS (continued)

d) Investment in associates (continued)

Group share of (33.3%)

Operating profit
Gain/(loss) on the revaluation of investment properties
Net interest payable
Fair value movement of interest rate derivatives

Profit for the year

Associate net assets

1 April 2014 to
30 November
2014
£000

Year ended
31 March
2014
£000

1,341
824
(523)
(78)

1,564

1,524
(662)
(940)
258

180

–

17,861

Accounting for the acquisition
The following provides a breakdown of the fair value of the assets and liabilities acquired. The investment properties have been valued by the
Directors with regard to the September 2014 property valuations performed by Cushman & Wakefield LLP uplifted for the capital movement in the
two month period to the Acquisition date.

Investment property
Other non-current assets
Current assets
Current liabilities
Non-current liabilities

Net assets (100%)

Net assets acquired (66.67% of £58.9 million)
Satisfied by cash consideration

£000

111,055
3,566
3,312
(2,058)
(57,000)

58,875

£000

39,250
(39,250)

–

From the date of acquisition of the Partnership on 1 December 2014 to 31 March 2015, the revenue of the Partnership was £3.7 million, and the
statutory profit before tax was £4.3 million. The profit for the Partnership for the full year from 1 April 2014 was £9.0 million. Excluding the share of
results of the Partnership as an associate of £1.6 million, the combined statutory profit before tax of the Group and the Partnership for the full year
would have been £112.6 million.

Armadillo
The Group has a 20% interest in Armadillo Storage Holding Company Limited (“Armadillo 1”) and a 20% interest in Armadillo Storage Holding
Company 2 Limited (“Armadillo 2”). Both interests are accounted for as associates, using the equity method of accounting.

At the beginning of the year
Subscription for partnership capital and advances
Part disposal of Partnership interest
Share of results (see below)
Dividends

Armadillo 1

Armadillo 2

31 March
2014
£000

31 March
2015
£000

31 March
2014
£000

–
–
–
–
–

–

–
1,789
–
145
–

1,992

–
–
–
–
–

–

31 March
2015
£000

–
3,648
(1,728)
1,807
(89)

3,638

The Group’s total subscription for partnership capital and advances in Armadillo Storage Holding Company Limited is £1,920,000 and £1,789,000
in Armadillo Storage Holding Company 2 Limited.

The investment properties owned by Armadillo 1 and Armadillo 2 have been valued at 31 March 2015 by Jones Lang LaSalle.

109

Notes to the Financial Statements (continued)
Year ended 31 March 2015

13. NON-CURRENT ASSETS (continued)

d) Investment in associates (continued)

The figures below show the trading results of the Partnerships, and the Group’s share of the results and the net assets of the Partnerships.

Armadillo
Storage 1

Armadillo
Storage 2

Period from
Period from
16 April 2014 3 February 2015
to
31 March 2015
£000

to
31 March 2015
£000

4,321
(2,258)
(100)

1,963
10,078
(504)
(467)
(197)
(1,833)

9,040
(447)

8,593

30,125
1,005
1,132
(2,151)
(197)
(11,721)

627
(335)
(75)

217
1,449
(73)
(540)
(35)
(290)

728
–

728

23,175
1,465
1,256
(1,406)
(35)
(14,785)

18,193

9,670

471
2,042
(123)
(177)
(39)
(367)

1,807
(89)

1,718

3,638

43
290
(15)
(108)
(7)
(58)

145
–

145

1,934

Income statement (100%)
Revenue
Cost of sales
Administrative expenses

Operating profit
Gain on the revaluation of investment properties
Net interest payable
Acquisition costs written off
Fair value movement of interest rate derivatives
Deferred tax

Profit attributable to shareholders
Dividends paid

Retained profit

Balance sheet (100%)
Investment property
Other non-current assets
Current assets
Current liabilities
Derivative financial instruments
Non-current liabilities

Net assets (100%)

Group share
Operating profit
Gain on the revaluation of investment properties
Net interest payable
Acquisition costs written off
Fair value movement of interest rate derivatives
Deferred tax

Profit attributable to shareholders
Dividends paid

Retained profit

Associates’ net assets

110

14. VALUATION OF INVESTMENT PROPERTY

Freehold stores
At 31 March 2014
Transfer from surplus land
Acquisition of Partnership stores
Transfer from investment property under construction
Transfer on freehold acquisition
Movement in year

At 31 March 2015

Leasehold stores
At 31 March 2014
Transfer on freehold acquisition
Movement in year

At 31 March 2015

Total of open stores
At 31 March 2014
Transfer from surplus land
Acquisition of Partnership stores
Transfer from investment property under construction
Movement in year

At 31 March 2015

Investment property under construction
At 31 March 2014
Transfer to investment property
Movement in year

At 31 March 2015

Valuation of all investment property
At 31 March 2014
Transfer from surplus land
Acquisition of Partnership stores
Movement in year

At 31 March 2015

Deemed cost
£000

Revaluation on
deemed cost
£000

373,503
1,478
111,055
12,990
1,762
41,678

352,857
–
–
(340)
6,948
63,609

Valuation
£000

726,360
1,478
111,055
12,650
8,710
105,287

542,466

423,074

965,540

16,199
(1,762)
265

33,831
(6,948)
(15)

50,030
(8,710)
250

14,702

26,868

41,570

389,702
1,478
111,055
12,990
41,943

386,688
–
–
(340)
63,594

776,390
1,478
111,055
12,650
105,537

557,168

449,942

1,007,110

29,642
(12,990)
5,157

(7,339)
340
871

22,303
(12,650)
6,028

21,809

(6,128)

15,681

419,344
1,478
111,055
47,100

379,349
–
–
64,465

798,693
1,478
111,055
111,565

578,977

443,814

1,022,791

The Group has classified the fair value investment property and the investment property under construction within Level 3 of the fair value hierarchy.
There has been no transfer to or from Level 3 in the year.

The wholly owned freehold and leasehold investment properties have been valued at 31 March 2015 by external valuers, Cushman & Wakefield LLP
(“C&W”). The valuation has been carried out in accordance with the RICS Valuation – Professional Standards, published by The Royal Institution of
Chartered Surveyors (“the Red Book”). The valuation of each of the investment properties and the investment properties under construction has been
prepared on the basis of either Fair Value or Fair Value as a fully equipped operational entity, having regard to trading potential, as appropriate.

The valuation has been provided for accounts purposes and as such, is a Regulated Purpose Valuation as defined in the Red Book. In compliance with
the disclosure requirements of the Red Book, C&W have confirmed that:

> Of the members of the RICS who have been the signatories to the valuations provided to the Group for the same purposes as this valuation, one has

done so since September 2004 and the other has done so since September 2014;

> C&W have been carrying out this bi-annual valuation for the same purposes as this valuation on behalf of the Group since September 2004;
> C&W do not provide other significant professional or agency services to the Group;
> In relation to the preceding financial year of C&W, the proportion of the total fees payable by the Group to the total fee income of the firm is less

than 5%; and

> The fee payable to C&W is a fixed amount per store, and is not contingent on the appraised value.

111

Notes to the Financial Statements (continued)
Year ended 31 March 2015

14. VALUATION OF INVESTMENT PROPERTYS (continued)

Market uncertainty
C&W’s valuation report comments on valuation uncertainty resulting from low liquidity in the market for self storage property. C&W note that in the UK
since Q1 2013 there have only been four transactions involving multiple assets and 8 single asset transactions. C&W state that due to the lack of
comparable market information in the self storage sector, there is greater uncertainty attached to their opinion of value than would be anticipated
during more active market conditions.

Portfolio Premium
C&W’s valuation report further confirms that the properties have been valued individually but that if the portfolio was to be sold as a single lot or in
selected groups of properties, the total value could differ significantly. C&W state that in current market conditions they are of the view that there could
be a material portfolio premium.

Valuation methodology
C&W have adopted different approaches for the valuation of the leasehold and freehold assets as follows:

Freehold and long leasehold

The valuation is based on a discounted cash flow of the net operating income over a ten year period and notional sale of the asset at the end of the
tenth year.

Assumptions
A. Net operating income is based on projected revenue received less projected operating costs together with a central administration charge of 6% of
the estimated annual revenue subject to a cap and a collar. The initial net operating income is calculated by estimating the net operating income in
the first 12 months following the valuation date.

The net operating income in future years is calculated assuming either straight-line absorption from day one actual occupancy or variable absorption
over years one to four of the cash flow period, to an estimated stabilised/mature occupancy level. In the valuation the assumed stabilised
occupancy level for the 69 trading stores (both freeholds and leaseholds) open at 31 March 2015 averages 81.1% (31 March 2014: 81.1%).
The projected revenues and costs have been adjusted for estimated cost inflation and revenue growth. The average time assumed for the
69 stores to trade at their maturity levels is 24 months (31 March 2014: 31.5 months).

The capitalisation rates applied to existing and future net cash flow have been estimated by reference to underlying yields for industrial and retail
warehouse property, yields for other trading property types such as student housing and hotels, bank base rates, ten year money rates, inflation
and the available evidence of transactions in the sector. The valuation included in the accounts assumes rental growth in future periods. If an
assumption of no rental growth is applied to the external valuation, the net initial yield pre-administration expenses for the 69 stores is 6.4%
(31 March 2014: 6.3%) rising to a stabilised net yield pre-administration expenses of 7.4% (31 March 2014: 7.8%).

The future net cash flow projections (including revenue growth and cost inflation) have been discounted at a rate that reflects the risk associated
with each asset. The weighted average annual discount rate adopted (for both freeholds and leaseholds) is 10.4% (31 March 2014: 11.0%).

E. Purchaser’s costs of 5.8% (see below) have been assumed initially and sale plus purchaser’s costs totalling 6.8% are assumed on the notional sales

in the tenth year in relation to the freehold stores.

Short leasehold
The same methodology has been used as for freeholds, except that no sale of the assets in the tenth year is assumed but the discounted cash flow is
extended to the expiry of the lease. The average unexpired term of the Group’s six short leasehold properties is 16.5 years (31 March 2014: seven short
leasehold properties with 16.8 years unexpired).

Investment properties under construction
C&W have valued the stores in development adopting the same methodology as set out above but on the basis of the cash flow projection expected for
the store at opening and after allowing for the outstanding costs to take each scheme from its current state to completion and full fit-out. C&W have
allowed for holding costs and construction contingency, as appropriate. One scheme does not yet have planning consent and C&W have reflected the
planning risk in their valuation.

112

14. VALUATION OF INVESTMENT PROPERTYS (continued)

Immature stores: value uncertainty
C&W have assessed the value of each property individually. However, two of the Group’s stores are relatively immature and have low initial cash flows.
C&W have endeavoured to reflect the nature of the cash flow profile for these properties in their valuation, and the higher associated risks relating to
the as yet unproven future cash flows, by adjustment to the capitalisation rates and discount rates adopted. However, immature low cash flow stores of
this nature are rarely, if ever, traded individually in the market, unless as part of a distressed sale or similar situation. Although, there is more evidence
of immature low cash flow stores being traded as part of a group or portfolio transaction.

Please note C&W’s comments in relation to market uncertainty in the self storage sector due to the lack of comparable market transactions and
information. The degree of uncertainty relating to the two immature stores is greater than in relation to the balance of the properties due to there being
even less market evidence that might be available for more mature properties and portfolios.

C&W state that in practice, if an actual sale of the properties were to be contemplated then any immature low cash flow stores would normally be
presented to the market for sale lotted or grouped with other more mature assets owned by the same entity, in order to alleviate the issue of negative or
low short term cash flow. This approach would enhance the marketability of the group of assets and assist in achieving the best price available in the
market by diluting the cash flow risk.

C&W have not adjusted their opinion of Fair Value to reflect such a grouping of the immature assets with other properties in the portfolio and all stores
have been valued individually. However, they highlight the matter to alert the Group to the manner in which the properties might be grouped or lotted in
order maximise their attractiveness to the market place.

C&W consider this approach to be a valuation assumption but not a Special Assumption, the latter being an assumption that assumes facts that differ
from the actual facts existing at the valuation date and which, if not adopted, could produce a material difference in value.

As noted above, C&W have not assumed that the entire portfolio of properties owned by the entity would be sold as a single lot and the value for the
whole portfolio in the context of a sale as a single lot may differ significantly (either higher or lower) from the aggregate of the individual values for each
property in the portfolio, reflecting the lotting assumption described above.

Valuation assumption for purchaser’s costs
The Group’s investment property assets have been valued for the purposes of the financial statements after deducting notional purchaser’s cost of 5.8%
of gross value, as if they were sold directly as property assets. The valuation is an asset valuation which is entirely linked to the operating performance
of the business. They would have to be sold with the benefit of operational contracts, employment contracts and customer contracts, which would be
very difficult to achieve except in a corporate structure.

This approach follows the logic of the valuation methodology in that the valuation is based on a capitalisation of the net operating income after allowing
a deduction for operational cost and an allowance for central administration costs. Sale in a corporate structure would result in a reduction in the
assumed Stamp Duty Land Tax but an increase in other transaction costs reflecting additional due diligence resulting in a reduced notional purchaser’s
cost of 2.75% of gross value. All the significant sized transactions that have been concluded in the UK in recent years were completed in a corporate
structure. The Group therefore instructed C&W to carry out a Red Book valuation on the above basis, and this results in a higher property valuation at
31 March 2015 of £1,068.4 million (£45.6 million higher than the value recorded in the financial statements). The total valuations in the two Armadillo
Partnerships performed by Jones Lang LaSalle are £1.6 million higher than the value recorded in the financial statements, of which the Group’s share is
£0.3 million. The sum of these is £45.9 million and translates to 29.3 pence per share. We have included this revised valuation in the adjusted diluted
net asset calculation (see note 14).

15. SURPLUS LAND

At 31 March 2014
Transfer to investment property
Disposal
Additions

At 31 March 2015

During the year a gain of £1,318,000 arose on the disposal of surplus land at one site (2014: no disposals).

£000

6,059
(1,478)
(1,497)
231

3,315

113

Notes to the Financial Statements (continued)
Year ended 31 March 2015

16. TRADE AND OTHER RECEIVABLES

Current
Trade receivables
Capital Goods Scheme receivable
Other receivables
Prepayments and accrued income

Non-current
Capital Goods Scheme receivable

31 March
2015
£000

31 March
2014
£000

3,062
184
371
12,762

16,379

2,594
1,344
384
9,209

13,531

9,039

7,620

Trade receivables are net of a bad debt provision of £19,000 (2014: £42,000). The Directors consider that the carrying amount of trade and other
receivables approximates their fair value.

The Financial Review contains commentary on the Capital Goods Scheme receivable.

Trade receivables
The Group does not typically offer credit terms to its customers, requiring them to pay in advance of their storage period and hence the Group is not
exposed to significant credit risk. A late charge of 10% is applied to a customer’s account if they are greater than 10 days overdue in their payment. The
Group provides for receivables on a specific basis. There is a right of lien over the customers’ goods, so if they have not paid within a certain time frame,
we have the right to sell the items they store to recoup the debt owed by the customer. Trade receivables that are overdue are provided for based on
estimated irrecoverable amounts determined by reference to past default experience.

For individual storage customers, the Group does not perform credit checks, however this is mitigated by the fact that these customers are required to
pay in advance, and also to pay a deposit ranging from between one week to four weeks’ storage income. Before accepting a new business customer
who wishes to use a number of the Group’s stores, the Group uses an external credit rating to assess the potential customer’s credit quality and defines
credit limits by customer. There are no customers who represent more than 5% of the total balance of trade receivables.

Included in the Group’s trade receivable balance are debtors with a carrying amount of £210,000 (2014: £285,000) which are past due at the reporting
date for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable.
The average age of these receivables is 43 days past due (2014: 37 days past due).

Ageing of past due but not impaired receivables

1 – 30 days
30 – 60 days
60 + days

Total

Movement in the allowance for doubtful debts

Balance at the beginning of the year
Amounts provided in year
Amounts written off as uncollectible

Balance at the end of the year

2015
£000

44
33
133

210

2015
£000

42
99
(122)

2014
£000

136
52
97

285

2014
£000

45
73
(76)

The concentration of credit risk is limited due to the customer base being large and unrelated. Accordingly, the Directors believe that there is no further
credit provision required in excess of the allowance for doubtful debts.

114

16. TRADE AND OTHER RECEIVABLES (continued)

Ageing of impaired trade receivables

1 – 30 days
30 – 60 days
60 + days

Total

17. TRADE AND OTHER PAYABLES

Current
Trade payables
Other payables
Accruals and deferred income
Amounts owed to associate
VAT repayable under Capital Goods Scheme

2015
£000

–
3
16

2014
£000

–
5
37

31 March
2015
£000

31 March
2014
£000

11,653
7,286
13,640
–
33

32,612

10,758
5,647
10,330
2
81

26,818

The Group has financial risk management policies in place to ensure that all payables are paid within the credit terms. The Directors consider the
carrying amount of trade and other payables and accruals and deferred income approximates fair value.

18. FINANCIAL INSTRUMENTS

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to
stakeholders through the optimisation of the debt and equity balance. The capital structure of the Group consists of debt, which includes the
borrowings disclosed in note 19, cash and cash equivalents and equity attributable to equity holders of the parent, comprising issued capital, reserves
and retained earnings. The Group’s debt facilities require 50% of total drawn debt to be fixed. The Group has complied with this during the year.

With the exception of derivative instruments which are classified as a financial liability at fair value through the profit and loss (“FVTPL”), financial
liabilities are categorised under amortised cost. All financial assets are categorised as loans and receivables.

Exposure to credit, interest rate and currency risks arises in the normal course of the Group’s business. Derivative financial instruments are used to
manage exposure to fluctuations in interest rates, but are not employed for speculative purposes.

Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on
which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2
to the financial statements.

A. Balance sheet management
The Group’s Board reviews the capital structure on an ongoing basis. As part of this review, the Board considers the cost of capital and the risks
associated with each class of capital. The Group seeks to have a conservative gearing ratio (the proportion of net debt to equity). The Board considers at
each review the appropriateness of the current ratio in light of the above. The Board is currently satisfied with the Group’s gearing ratio.

The gearing ratio at the year end is as follows:

Debt
Cash and cash equivalents

Net debt
Balance sheet equity
Net debt to equity ratio

31 March
2015
£000

(285,334)
8,194

(277,140)
750,914
36.9%

31 March
2014
£000

(229,368)
3,301

(226,067)
594,064
38.1%

Debt is defined as long-term and short-term borrowings, as detailed in note 19, excluding finance leases and debt issue costs. Equity includes all capital
and reserves of the Group attributable to equity holders of the Company. Net debt is defined as gross bank borrowings less cash and cash equivalents.

115

Notes to the Financial Statements (continued)
Year ended 31 March 2015

18. FINANCIAL INSTRUMENTS (continued)

B. Debt management

The Group currently borrows through a senior term loan, secured on 40 self storage assets and sites, and through a 15 year loan with Aviva
Commercial Finance Limited secured on a portfolio of 15 self storage assets. The Group also has a short term bridging loan from Lloyds of £70 million,
which is to be repaid through a £70 million seven year loan from M&G Investments Limited, which will be drawn in June 2015, and secured on a
portfolio of 15 self storage assets. Borrowings are arranged to ensure an appropriate maturity profile and to maintain short term liquidity. Funding
is arranged in the Group through banks and financial institutions with whom the Group has a strong working relationship.

C. Interest rate risk management

The Group is exposed to interest rate risk as entities in the Group borrow funds at both fixed and floating interest rates. The risk is managed by the
Group by maintaining an appropriate mix between fixed and floating rate borrowings, and by the use of interest rate swap contracts. Hedging
activities are evaluated regularly to align with interest rate views and defined risk appetite; ensuring optimal hedging strategies are applied, by
either positioning the balance sheet or protecting interest expense through different interest rate cycles.

At 31 March 2015 the Group had two interest rate derivatives in place; £30 million fixed at 2.80% (excluding the margin on the underlying debt
instrument) until September 2016, and £35 million fixed at 2.635% (excluding the margin on the underlying debt instrument) with a forward start
date of 29 June 2015. This forward start swap is included in the total amount of fixed debt for the purposes of meeting the requirement to have at
least 50% of debt fixed.

Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on
agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing interest rates on the fair value of issued fixed
rate debt held and the cash flow exposures on the issued variable rate debt held. The fair value of interest rate swaps at the reporting date is
determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contract, and is disclosed
below. The average interest rate is based on the outstanding balances at the end of the financial year.

The £30 million interest rate swap settles on a monthly basis. The floating rate on the interest rate swap is one month LIBOR. The Group settles the
difference between the fixed and floating interest rate on a net basis.

The £35 million forward start interest rate swap settles on a three-monthly basis. The floating rate on the interest rate swap is three month LIBOR.
The Group will settle the difference between the fixed and floating interest rate on a net basis.

The Group does not hedge account for its interest rate swaps and states them at fair value, with changes in fair value included in the statement of
comprehensive income. The loss in the statement of comprehensive income for the year on the fair value of interest rate derivatives was
£2,274,000 (2014: gain of £2,681,000).

The fair value of the above derivatives at 31 March 2015 was a liability of £3,679,000 (2014: liability of £2,813,000).

D. Interest rate sensitivity analysis

In managing interest rate risks the Group aims to reduce the impact of short-term fluctuations on the Group’s earnings, without jeopardising its
flexibility. Over the longer term, permanent changes in interest rates may have an impact on consolidated earnings.

At 31 March 2015, it is estimated that an increase of 0.5 percentage points in interest rates would have reduced the Group’s adjusted profit before
tax and net equity by £805,000 (2014: reduced adjusted profit before tax by £315,000) and a decrease of 0.5 percentage points in interest rates
would have increased the Group’s adjusted profit before tax and net equity by £805,000 (2014: increased adjusted profit before tax by £315,000).
The sensitivity has been calculated by applying the interest rate change to the variable rate borrowings, net of interest rate swaps, at the year end.

The Group’s sensitivity to interest rates has increased during the year, following the drawing of further floating rate debt. The Board monitors closely
the exposure to the floating rate element of our debt.

E. Cash management and liquidity

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management
framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages
liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual
cash flows and matching the maturity profiles of financial assets and liabilities. Included in note 19 is a description of additional undrawn facilities
that the Group has at its disposal to further reduce liquidity risk.

Short term money market deposits are used to manage liquidity whilst maximising the rate of return on cash resources, giving due consideration
to risk.

F. Foreign currency management

The Group does not have any foreign currency exposure.

116

18. FINANCIAL INSTRUMENTS (continued)

G. Credit risk

The credit risk management policies of the Group with respect to trade receivables are discussed in note 16. The Group has no significant
concentration of credit risk, with exposure spread over 47,000 customers in our stores.

The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies.

H. Financial maturity analysis

In respect of interest-bearing financial liabilities, the following table provides a maturity analysis for individual elements.

2015 Maturity

Debt
Aviva mortgage
Bank loan payable at variable rate
Debt fixed by interest rate derivatives

Total

Total
£000

Less than
one year
£000

One to
two years
£000

Two to
five years
£000

More than
five years
£000

94,334
161,000
30,000

285,334

2,136
70,000
–

72,136

2,243
–
–

2,243

7,427
91,000
30,000

128,427

82,528
–
–

82,528

The £70 million loan showing as due within one year will be repaid through the drawing of the seven year £70 million facility from M&G
Investments Limited in June 2015.

2014 Maturity

Debt
Aviva mortgage
Bank loan payable at variable rate
Debt fixed by interest rate derivatives

Total

I. Fair values of financial instruments

Total
£000

Less than
one year
£000

One to
two years
£000

Two to
five years
£000

More than
five years
£000

96,368
63,000
70,000

229,368

2,034
–
–

2,034

2,136
–
–

2,136

7,073
63,000
70,000

140,073

85,125
–
–

85,125

The fair values of the Group’s cash and short term deposits and those of other financial assets equate to their book values. Details of the Group’s
receivables at amortised cost are set out in note 16. The amounts are presented net of provisions for doubtful receivables, and allowances for
impairment are made where appropriate. Trade and other payables, including bank borrowings, are carried at amortised cost. Finance lease
liabilities are included at the fair value of their minimum lease payments. Derivatives are carried at fair value.

For those financial instruments held at valuation, the Group has categorised them into a three level fair value hierarchy based on the priority of the
inputs to the valuation technique in accordance with IFRS 7. The hierarchy gives the highest priority to quoted prices in active markets for identical
assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). If the inputs used to measure fair value fall within different
levels of the hierarchy, the category level is based on the lowest priority level input that is significant to the fair value measurement of the
instrument in its entirety. The fair value of the Group’s outstanding interest rate derivative, as detailed in note 18C, has been estimated by
calculating the present value of future cash flows, using appropriate market discount rates, representing Level 2 fair value measurements as
defined by IFRS 7. There are no financial instruments which have been categorised as Level 1 or Level 3.

117

Notes to the Financial Statements (continued)
Year ended 31 March 2015

18. FINANCIAL INSTRUMENTS (continued)

J. Maturity analysis of financial liabilities

The contractual maturities based on market conditions and expected yield curves prevailing at the year end date are as follows:

Interest rate
swaps
£000

Borrowings
and interest
£000

2015

From five to twenty years
From two to five years
From one to two years

Due after more than one year
Due within one year

Total

2014

From five to twenty years
From two to five years
From one to two years

Due after more than one year
Due within one year

Total

Trade
and other
payables
£000

–
–
–

–
32,612

32,612

Trade
and other
payables
£000

–
–
–

–
26,818

26,818

885
1,213
916

3,014
1,175

4,189

Interest rate
swaps
£000

–
306
1,062

1,368
1,558

2,926

Finance
leases
£000

24,529
5,207
1,735

31,471
1,735

Total
£000

140,042
164,586
15,306

319,934
117,789

114,628
158,166
12,655

285,449
82,267

367,716

33,206

437,723

Borrowings
and interest
£000

115,534
155,696
12,279

283,509
12,279

Finance
leases
£000

28,355
6,308
1,646

36,309
1,646

Total
£000

143,889
162,310
14,987

321,186
42,301

295,788

37,955

363,487

K. Reconciliation of maturity analyses

The maturity analysis in note 18J shows non-discounted cash flows for all financial liabilities including interest payments. The table below
reconciles the borrowings column in note 19 with the borrowings and interest column in the maturity analysis presented in note 18J.

Borrowings
£000

82,528
128,427
2,243

213,198
72,136

285,334

Borrowings
£000

85,125
140,073
2,136

227,334
2,034

229,368

Unamortised
borrowing
costs
£000

1,210
1,252
–

2,462
–

2,462

Unamortised
borrowing
costs
£000

1,290
–
–

1,290
–

1,290

Interest
£000

30,890
28,487
10,412

69,789
10,131

79,920

Interest
£000

29,119
15,623
10,143

54,885
10,245

65,130

Borrowings
and interest
£000

114,628
158,166
12,655

285,449
82,267

367,716

Borrowings
and interest
£000

115,534
155,696
12,279

283,509
12,279

295,788

2015

From five to twenty years
From two to five years
From one to two years

Due after more than one year
Due within one year

Total

2014

From five to twenty years
From two to five years
From one to two years

Due after more than one year
Due within one year

Total

118

19. BORROWINGS

Secured borrowings at amortised cost

Current liabilities
Aviva mortgage
Bank borrowings

Non-current liabilities
Bank borrowings
Aviva mortgage
Unamortised loan arrangement costs

Total non-current borrowings

Total borrowings

31 March
2015
£000

2,136
70,000

72,136

31 March
2014
£000

2,034
–

2,034

121,000
92,198
(2,462)

133,000
94,334
(1,290)

210,736

226,044

282,872

228,078

The weighted average interest rate paid on the borrowings during the year was 3.9% (2014: 4.5%).

The Group has £49,000,000 in undrawn committed bank borrowing facilities at 31 March 2015, which expire between four and five years
(2014: £22,000,000 expiring between two and three years). Additionally, the Group has a £70 million committed facility from M&G Investments
Limited which it intends to draw in June 2015 to repay the bridging facility from Lloyds. The M&G facility expires in June 2022.

In April 2012, the Group completed a £100 million 15 year fixed rate loan with Aviva Commercial Finance Limited. The loan is secured over a portfolio of
15 freehold self storage centres. The annual fixed interest rate on the loan is 4.9%.

The loan amortises to £60 million over the course of the 15 years. The debt service is payable monthly based on fixed annual amounts. The loan
outstanding on the fifth anniversary will be £89.8 million; £76.7 million outstanding on the tenth anniversary, with £60 million remaining at expiry in
April 2027.

The Group has a £170 million 5 year bank facility with Lloyds and HSBC expiring in August 2019. £85 million of the facility is term loan with £85 million
revolving. The blended margin on the facility is 1.625%.

The Group was in compliance with its banking covenants at 31 March 2015 and throughout the year.

Interest rate profile of financial liabilities

At 31 March 2015
Gross financial liabilities

At 31 March 2014
Gross financial liabilities

Total
£000

Floating
rate
£000

Fixed
rate
£000

Weighted
average
interest
rate

Period for
which the
rate is
fixed

Weighted
average
period
until
maturity

285,334

161,000

124,334

3.3%

8.0 years

5.0 years

229,368

63,000

166,368

4.5%

7.4 years

6.1 years

All monetary liabilities, including short term receivables and payables are denominated in sterling. The weighted average interest rate includes the
effect of the Group’s interest rate derivatives. The Directors have concluded that the carrying value of borrowings equates to its fair value.

Narrative disclosures on the Group’s policy for financial instruments are included within the Strategic Report and in note 18.

20. DEFERRED TAX

Deferred tax assets in respect of share based payments (£0.2 million), interest rate swaps (£0.7 million), corporation tax losses (£5.4 million),
capital allowances in excess of depreciation (£0.4 million) and capital losses (£1.1 million) in respect of the non-REIT taxable business have not
been recognised due to uncertainty over the projected tax liabilities arising in the short term within the non-REIT taxable business.

119

Notes to the Financial Statements (continued)
Year ended 31 March 2015

21. OBLIGATIONS UNDER FINANCE LEASES

Amounts payable under finance leases:
Within one year
Within two to five years inclusive
Greater than five years

Less: future finance charges

Present value of lease obligations

Minimum lease payments

2015
£000

2014
£000

Present value
minimum of lease payments

2015
£000

2014
£000

1,735
6,942
24,529

33,206

1,646
7,954
28,355

37,955

1,705
6,077
13,047

20,829

1,615
6,973
15,226

23,814

(12,377)

(14,141)

20,829

23,814

All lease obligations are denominated in sterling. Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no
arrangements have been entered into for contingent rental payments. The carrying amount of the Group’s lease obligations approximates their
fair value.

22. SHARE CAPITAL

Authorised

2015
£000

2014
£000

Called up,
allotted and fully paid

2015
£000

2014
£000

Ordinary shares of 10 pence each

20,000

15,806

14,306

Movement in issued share capital
Number of shares at 31 March 2013
Exercise of share options – Share option schemes

Number of shares at 31 March 2014
Exercise of share options – Share option schemes
Share placing

Number of shares at 31 March 2015

The Company has one class of ordinary shares which carry no right to fixed income.

At 31 March 2015 options in issue to Directors and employees were as follows:

Date option
Granted

9 July 2008
3 August 2009
12 July 2010
28 February 2011
19 July 2011
12 March 2012
11 July 2012
12 March 2013
19 July 2013
25 February 2014
29 July 2014
16 March 2015

Option
price per
ordinary
share

nil p**
nil p**
nil p**
263p*
nil p**
240p*
nil p**
305.5p*
nil p**
442.6p*
nil p**
494.6p*

Date first
exercisable

9 July 2011
3 August 2012
12 July 2013
28 February 2014
19 July 2013
1 April 2015
11 July 2015
1 April 2016
19 July 2016
1 April 2017
29 July 2017
1 April 2018

Date on which the
exercise period expires

8 July 2018
2 August 2019
11 July 2020
29 August 2014
19 July 2021
1 October 2015
10 July 2022
1 October 2016
19 July 2023
1 October 2017
29 July 2024
1 October 2018

* SAYE (see note 23) ** LTIP (see note 23)

142,639,647
421,500

143,061,147
641,877
14,352,711

158,055,735

Number of
ordinary
shares
2015

–
2,075
5,807
–
14,587
92,347
616,977
32,254
511,821
24,711
511,091
106,541

Number of
ordinary
shares
2014

7,320
5,625
14,049
24,471
485,582
99,088
621,977
38,954
514,821
25,686
–
–

1,918,211

1,837,573

120

22. SHARE CAPITAL (continued)

Own shares
The own shares reserve represents the cost of shares in Big Yellow Group PLC purchased in the market, and held by the Big Yellow Group PLC
Employee Benefit Trust, along with shares issued directly to the Employee Benefit Trust. 1,500,000 shares are held in the Employee Benefit Trust
(2014: 1,500,000), and 1,418,750 shares are held in treasury (2014: 1,418,750).

23. SHARE-BASED PAYMENTS

The Company has four equity share-based payment arrangements, namely approved and unapproved share option schemes, an LTIP scheme,
an Employee Share Save Scheme (“SAYE”) and a Long Term Bonus Performance Plan. The Group recognised a total expense in the year related to
equity-settled share-based payment transactions of £2,059,000 (2014: £1,437,000).

Equity-settled share option plans
The Group granted options to employees under Approved and Unapproved Inland Revenue Share option schemes between November 1999 and
November 2003. Since 2004 the Group has operated an Employee Share Save Scheme (“SAYE”) which allows any employee who has more than six
months service to purchase shares at a 20% discount to the average quoted market price of the Group shares at the date of grant. The associated
savings contracts are three years at which point the employee can exercise their option to purchase the shares or take the amount saved, including
interest, in cash. The scheme is administered by Yorkshire Building Society.

On an annual basis since 2004 the Group awarded nil-paid options to senior management under the Group’s Long Term Incentive Plan (“LTIP”). The
awards are conditional on the achievement of challenging performance targets as described on page 70 of the Remuneration Report. The awards
granted in 2004, 2005 and 2006 vested in full. The awards granted in 2007 and 2009 lapsed, and the awards granted in 2008 and 2010 partially
vested. The awards granted in 2011 fully vested in the year. The weighted average share price at the date of exercise for options exercised in the year
was £5.40 (2014: £4.50).

14,350 options were exercised in the prior year for the “ESO” share option scheme. These were the last options remaining under this scheme.

LTIP scheme

Outstanding at beginning of year
Granted during the year
Lapsed during the year
Exercised during the year

Outstanding at the end of the year

Exercisable at the end of the year

The weighted average fair value of options granted during the year was £907,000 (2014: £759,000).

2015
No. of options

2014
No. of options

1,649,374
724,345
(93,955)
(617,406)

1,746,765
514,821
(213,310)
(398,902)

1,662,358

1,649,374

22,469

–

Employee Share Save Scheme (“SAYE”)

Outstanding at beginning of year
Granted during the year
Forfeited during the year
Exercised during the year

Outstanding at the end of the year

Exercisable at the end of the year

2015
Weighted
average
exercise price
£

2.84
4.95
2.83
2.63

3.74

–

2015
No. of
options

188,199
106,541
(14,416)
(24,471)

255,853

–

2014
Weighted
average
exercise price
£

2.61
3.04
2.74
2.55

2.84

–

2014
No. of
options

198,646
25,686
(27,885)
(8,248)

188,199

–

121

Notes to the Financial Statements (continued)
Year ended 31 March 2015

23. SHARE-BASED PAYMENTS (continued)

Options outstanding at 31 March 2015 had a weighted average contractual life of 2 years (2014: 1.8 years).

The inputs into the Black-Scholes model are as follows:

Expected volatility
Expected life
Risk-free rate
Expected dividends

LTIP

SAYE

22%
3 years
0.7%
4.1%

24%
3 years
0.7%
4.1%

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the year prior to grant.

Long Term bonus performance plan
The Group has a joint share ownership plan in place. This is accounted for as an equity instrument. The plan was set up in November 2012. Directors
have a partial interest in 1,500,000 shares with the Group’s Employee Benefit Trust. The fair value of each award is £2 subject to the vesting criteria as
set out in the Directors’ Remuneration Report. At 31 March 2015 the weighted average contractual life was 0.6 years.

24. CAPITAL COMMITMENTS

At 31 March 2015 the Group had capital commitments of £4.4 million in respect of the acquisition of a property in Cambridge, which completed on
1 April 2015. There were no other amounts contracted but not provided in respect of the Group’s properties as at 31 March 2015 (2014: no capital
commitments).

25. EVENTS AFTER THE BALANCE SHEET DATE
There are no reportable post balance sheet events.

26. RELATED PARTY TRANSACTIONS

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed in
this note.

Transactions with Big Yellow Limited Partnership
As described in note 13, the Group had a 33.3% interest in Big Yellow Limited Partnership, and entered into transactions with the Partnership during the
year on normal commercial terms as shown in the table below. From 1 December 2014 the Partnership was wholly owned by the Group and therefore
from this date activity with the Partnership is no longer shown in this note.

Transactions with Armadillo Storage Holding Company Limited
As described in note 13, the Group has a 20% interest in Armadillo Storage Holding Company Limited, and entered into transactions with Armadillo
during the period on normal commercial terms as shown in the table below. In the prior year fees earned from Armadillo were not a related party transaction.

Transactions with Armadillo Storage Holding Company 2 Limited
As described in note 13, the Group has a 20% interest in Armadillo Storage Holding Company 2 Limited, and entered into transactions with Armadillo
during the period on normal commercial terms as shown in the table below.

Fees earned from Big Yellow Limited Partnership (to 30 November 2014)
Fees earned from Armadillo 1 (since 16 April 2014)
Fees earned from Armadillo 2
Balance due from the Partnership
Balance due from Armadillo 1
Balance due from Armadillo 2

31 March
2015
£000

31 March
2014
£000

458
560
208
–
287
71

640
–
–
338
–
–

122

26. RELATED PARTY TRANSACTIONS (continued)

The remuneration of the Executive and Non-Executive Directors, who are the key management personnel of the Group, is set out below in aggregate.
Further information on the remuneration of individual Directors is found in the audited part of the Directors’ Remuneration Report on pages 76 to 83.

Short term employee benefits
Post-employment benefits
Share based payments

31 March
2015
£000

1,282
95
4,410

5,787

31 March
2014
£000

1,216
92
633

1,941

AnyJunk Limited
James Gibson is a Non-Executive Director and shareholder in AnyJunk Limited and Adrian Lee is a shareholder in AnyJunk Limited. During the year
AnyJunk Limited provided waste disposal services to the Group on normal commercial terms, amounting to £24,000 (2014: £32,000).

No other related party transactions took place during the years ended 31 March 2015 and 31 March 2014.

123

Company Balance Sheet
Year ended 31 March 2015

Non-current assets
Plant, equipment and owner-occupied property
Investment in subsidiary companies

Current assets
Trade and other receivables
Cash and cash equivalents

Total assets

Current liabilities
Trade and other payables

Non-current liabilities
Derivative financial instruments
Bank borrowings

Total liabilities

Net assets

Equity
Called up share capital
Share premium account
Reserves

Equity shareholders’ funds

Note

29a
29b

2015
£000

2014
£000

1,557
13,157

14,714

1,551
9,443

10,994

606,104
33

504,280
1,055

606,137

505,335

620,851

516,329

(2,757)

(2,096)

32
32

(955)
(189,747)

(2,813)
(133,000)

(190,702)

(135,813)

(193,459)

(137,909)

427,392

378,420

15,806
44,922
366,664

14,306
44,278
319,836

427,392

378,420

The financial statements were approved by the Board of Directors and authorised for issue on 18 May 2015. They were signed on its behalf by:

James Gibson
Director

John Trotman
Director

Company Registration No. 03625199

124

Company Cash Flow Statement
Year ended 31 March 2015

Operating loss
Depreciation
(Increase)/decrease in receivables
Increase in payables

Cash (used)/generated by operations

Interest paid
Interest received
Tax credit received

Cash flows from operating activities

Purchase of non-current assets

Cash flows from investing activities

Financing activities
Issue of share capital
Equity dividends paid
Payments to cancel interest rate derivative
Refinancing fees
Increase/(reduction) in borrowings

Cash flows from financing activities

Net decrease in cash and cash equivalents
Opening cash and cash equivalents

Closing cash and cash equivalents

2015
£000

(974)
36
(100,333)
661

2014
£000

(529)
34
31,097
623

(100,610)

31,225

(5,126)
9
184

(5,784)
8
–

(105,543)

25,449

(41)

–

77,094
(27,890)
(1,408)
(1,234)
58,000

42
(19,591)
–

(7,000)

104,562

(26,549)

(1,022)
1,055

(1,100)
2,155

1,055

125

Company Statement of Changes in Equity
Year ended 31 March 2015

At 1 April 2014
Total comprehensive loss for the year
Equity dividends paid
Issue of share capital
Credit to equity for equity-settled

share based payments

Share
capital
£000

14,306
–
–
1,500

Share
premium
accounts
£000

44,278
–
–
644

Other non-
distributable
reserve
£000

Capital
redemption
reserve
£000

–
–
–
74,950

1,653
–
–
–

Retained
earning
£000

323,806
(2,291)
(27,890)
–

Own
shares
£000

(5,623)
–
–
–

Total
£000

378,420
(2,291)
(27,890)
77,094

–

2,059

–

2,059

At 31 March 2015

15,806

44,922

74,950

1,653

295,684

(5,623)

427,392

The Company’s share capital is disclosed in note 22.

The own shares balance represents amounts held in treasury and by the Employee Benefit Trust (see note 22).

The other non-distributable reserve arose in the year following the placing of 14.35 million ordinary shares.

Year ended 31 March 2014

At 1 April 2013
Total comprehensive gain for the year
Equity dividends paid
Issue of share capital
Credit to equity for equity-settled

share based payments

Share
capital
£000

14,264
–
–
42

Share
premium
account
£000

44,278
–
–
–

Capital
redemption
reserve
£000

1,653
–
–
–

Retained
earnings
£000

339,054
2,906
(19,591)
–

Own
shares
£000

(5,623)
–
–
–

Total
£000

393,626
2,906
(19,591)
42

–

1,437

–

1,437

At 31 March 2014

14,306

44,278

1,653

323,806

(5,623)

378,420

126

Notes to the Financial Statements (continued)
Year ended 31 March 2015

27. (LOSS)/PROFIT FOR THE YEAR

As permitted by section 408 of the Companies Act 2006, the statement of comprehensive income of the Company is not presented as part of these
financial statements. The loss for the year attributable to equity shareholders dealt with in the financial statements of the Company was £2.3 million
(2014: profit of £2.9 million).

28. BASIS OF ACCOUNTING

The separate financial statements of the Company are presented as required by the Companies Act 2006. As permitted by that Act, the separate
financial statements have been prepared in accordance with International Financial Reporting Standards.

The financial statements have been prepared on the historic cost basis except that derivative financial instruments are stated at fair value.

The Company’s principal accounting policies are the same as those applied in the Group financial statements. See note 23 for details of share based
payments affecting the Company.

Going concern
See note 2 for the review of going concern for the Group and the Company.

IFRIC 11, IFRS 2 Group and Treasury Share Transactions
The Company makes equity settled share based payments to certain employees of certain subsidiary undertakings. Equity settled share based
payments that are made to the employees of the Company’s subsidiaries are treated as increases in equity over the vesting period of the award,
with a corresponding increase in the Company’s investments in subsidiaries, based on an estimate of the number of shares that will eventually vest.
This is the only addition to investment in subsidiaries in the current year. The Company does not have any employees.

29. NON-CURRENT ASSETS

a) Plant, equipment and owner occupied property

Cost
At 31 March 2014
Additions

At 31 March 2015

Accumulated depreciation
At 31 March 2014
Charge for the year

At 31 March 2015

Net book value
At 31 March 2015

At 31 March 2014

b) Investments in subsidiary companies

Cost
At 31 March 2014
Additions

At 31 March 2015

Freehold
property
£000

Leasehold
improvements
£000

1,843
42

1,885

(293)
(35)

(328)

1,557

1,551

18
–

(17)
(1)

(18)

–

Total
£000

1,861
42

1,903

(310)
(36)

(346)

1,557

1,551

Investment in
subsidiary
undertakings
£000

9,443
3,714

13,157

127

Notes to the Financial Statements (continued)
Year ended 31 March 2015

29. NON-CURRENT ASSETS (continued)

b) Investments in subsidiary companies (continued)

The Group comprises a large number of companies so has taken advantage of the exemption under section 410(2) of the Companies Act 2006 in
providing information only in relation to subsidiary undertakings whose results or financial position, in the opinion of Directors, principally affect
the financial statements. The principal subsidiaries, wholly-owned and, except where stated, registered and operating in England and Wales, are:

Name of subsidiary

.Big Yellow Self Storage Company Limited
Big Yellow Self Storage Company A Limited
Big Yellow Self Storage Company 8 Limited
BYSSCo Limited
Big Yellow Limited Partnership
Big Yellow Self Storage Company M Limited
Big Yellow Holding Company Limited
BYRCo Limited
Big Yellow Construction Company Limited
.Big Yellow Self Storage (GP) Limited

Place of
incorporation
ownership
(or registration)
and operation

Proportion
of ownership
interest
%

Proportion
of voting
power held
%

Principal
activity

UK
UK
UK
UK
UK
UK
UK
UK
UK
UK

100
100
100
100
100
100
100
100
100
100

Self storage
100
Self storage
100
Self storage
100
Self storage
100
Self storage
100
Self storage
100
Holding Company
100
100
Property management
100 Construction management
General Partner
100

Details of the Company’s associates at 31 March 2015 are as follows:

Name of associate

Armadillo Storage Holding Company Limited
Armadillo Storage Holding Company 2 Limited

Place of
incorporation
ownership
(or registration)
and operation

Proportion
of ownership
interest
%

Proportion
of voting
power held
%

Principal
activity

UK
UK

20
20

20 Self Storage
20 Self Storage

Big Yellow Limited Partnership was a 33.3% associate until its acquisition by the Group on 1 December 2014.

31 March
2015
£000

606,001
103

31 March
2014
£000

504,174
106

606,104

504,280

31 March
2015
£000

31 March
2014
£000

2,277
480

2,757

1,631
465

2,096

30. TRADE AND OTHER RECEIVABLES

Amounts owed by Group undertakings
Prepayments and accrued income

31. TRADE AND OTHER PAYABLES

Current
Other payables
Accruals and deferred income

128

32. BANK BORROWINGS AND FINANCIAL INSTRUMENTS

Interest rate derivatives
The Company has one interest rate swap in place at the year end; £30 million fixed at 2.80% (excluding the margin on the underlying debt instrument)
until September 2016. The floating rate at 31 March 2015 was paying a margin of 1.4% above one month LIBOR, the fixed rate debt was paying a
weighted average margin of 1.75%. The Group’s policy on risk management is set out in the Report on Corporate Governance on page 60 and in note 18.

Bank borrowings
Unamortised loan arrangement fees

Maturity profile of financial liabilities

Between one and two years
Between two and five years

Gross financial liabilities

31 March
2015
£000

191,000
(1,253)

31 March
2014
£000

133,000
–

189,747

133,000

2015
Financial
liabilities
£000

70,000
121,000

2014
Financial
liabilities
£000

–
133,000

191,000

133,000

The fair value of interest rate derivatives at 31 March 2015 was a liability of £955,000 (2014: liability of £2,813,000). See note 18 for detail of the
interest rate profile of financial liabilities.

33. FINANCIAL INSTRUMENTS

The disclosure relating to the Company’s financial instruments are disclosed in note 18 to the Group financial statements. These disclosures are
relevant to the Company’s bank borrowings and derivative financial instruments. In addition, the Company has trade and other payables of £2,757,000
in the current year (2014: £2,096,000), which are held at amortised cost in the financial statements.

34. RELATED PARTY TRANSACTIONS

Included within these financial statements are amounts owing from Group undertakings of £606,001,000 (2014: £504,174,000), including
intercompany interest receivable of £5,892,000 (2014: £6,545,000).

129

Ten Year Summary
Year ended 31 March 2015

Results

Revenue

Operating profit before

gains and losses
on property assets

Cash flow from
operating activities

Profit/(loss) before

taxation

Adjusted profit

before taxation

2015
£000

2014
£000

2013
£000

2012
£000

2011
£000

2010
£000

2009
£000

2008
£000

2007
£000

2006
£000

84,276

72,196

69,671

65,663

61,885

57,995

58,487

56,870

51,248

41,889

48,420

39,537

37,454

35,079

32,058

29,068

30,946

29,342

27,067

21,645

42,397

32,752

30,186

27,388

23,534

19,063

10,203

14,388

16,726

16,125

105,236

59,848

31,876

(35,551)

6,901

10,209

(71,489)

102,618

152,837

118,547

39,405

29,221

25,471

23,643

20,207

16,514

13,791

15,006

14,233

12,601

Net assets

750,914

594,064

552,628

494,500

544,949

547,285

502,317

580,886

487,979

244,139

EPRA earnings

per share
Declared total
dividend per share

Key statistics
Number of stores open
Sq ft occupied (000)
Occupancy increase
in year 000 sq ft)

Number of customers
Average no.

of employees
during the year

27.1p

20.5p

19.3p

18.2p

15.5p

13.0p

11.9p

11.7p

10.0p

8.9p

21.7p

16.4p

11.0p

10.0p

9.0p

4.0p

9.5p

9.0p

5.0p

69
3,178

66
2,832

66
2,632

65
2,458

62
2,130

60
1,915

54
1,775

48
1,850

43
1,835

37
1,672

346
47,250

200
41,800

174
38,500

328
36,300

215
32,800

140
30,500

(75)
28,500

15
30,500

163
30,100

202
27,800

300

289

286

279

273

252

239

218

191

178

130

The paper used in this report is produced with FSC® mixed sources pulp which is partially recyclable, biodegradable,
pH Neutral, heavy metal absence and acid-free. It is manufactured within a mill which complies with the international
environmental ISO 14001 standard.

Pureprint Ltd is FSC certified, PEFC certified and ISO 14001 certified showing that it is committed to all round
excellence and improving environmental performance is an important part of this strategy. We aim to reduce
at source the effect our operations have on the environment, and are committed to continual improvement,
prevention of pollution and compliance with any legislation or industry standards.

Pureprint Ltd is a Carbon Neutral® Printing Company.

Designed and produced by MAGEE
www.magee.co.uk

Printed by Pureprint Ltd

You can access
more information
about us on our website

bigyellow.co.uk

Big Yellow Group PLC

2 The Deans, Bridge Road,
Bagshot, Surrey GU19 5AT

Tel: 01276 470190
Fax: 01276 470191
e-mail: info@bigyellow.co.uk

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Big Yellow Group PLC
Annual Report & Accounts 2015

Why ?

think…

Big Yellow

Because we are
about more than
just storage.

people
service
security
locations
facilities
innovation
growth

Get some space in your life.™

think… people
service
security
locations
facilities
innovation
growth