Empty space is getting harder to find at Sovran Self Storage’s Uncle Bob’s stores, and that’s good for the Amherst company’s profits.
Sovran’s profits rose by 13 percent, matching analyst forecasts, as occupancy rates improved at its Uncle Bob’s self storage facilities, enabling the company to raise rates by an average of 5 percent.
“We continued to drive the top line by pushing both rates and occupancy, and for the most part we’ve been able to keep costs under control,” said David Rogers, Sovran’s chief executive officer, during a conference call Thursday.
And Sovran executives said they expect the improvement to continue this year, forecasting that the company’s earnings will rise by about 11 percent.
“Borrowing from Frank Sinatra, it was a very good year,” Rogers said. “We expect nothing less in 2016.”
Sovran said its funds from operations improved to $45.8 million, or $1.26 per share, from $36.5 million, or $1.08 per share, a year ago. Excluding $2.5 million in acquisition-related and other expenses, Sovran’s earnings were $1.28 per share, which matched analyst forecasts.
The improvement was driven by a continued rise in occupancy rates at the 428 Uncle Bob’s stores that have been open for at least a year, improving to 90.5 percent from 89.3 percent a year ago.
That strengthening demand helped Sovran charge more for its space, raising rent by an average of 5 percent to $12.64 per square foot.
Sovran said its earnings, which rose 13 percent last year, are expected to increase by more than 10 percent for the sixth straight year in 2016. The company said it expects its funds from operations to range between $5.45 and $5.51 per share this year, up from $4.94 last year, and in line with analyst forecasts.
Earnings during the first quarter are expected to range between $1.17 and $1.19 per share, less than the $1.27 per share that analysts were predicting.
The company also said it has signed deals to acquire four new stores that are under construction – two in Chicago, one in Charleston, S.C., and one in Miami – for a total of $38 million.