Sovran Self Storage, which operates approximately 380 Uncle Bob’s self-storage facilities in the Eastern United States, on Wednesday announced plans to upgrade some of its facilities and recommence the search for select acquisitions.
During the company’s annual shareholders meeting at its headquarters in Amherst, N.Y., chief financial officer David Rogers said Sovran got “knocked around pretty good” over the past couple of years and had to change its focus from growth to survival. Hits included a 30 percent cut in its dividend, the temporary loss of its investment-grade credit rating after violating one of its debt covenants, and the suspension of its $50 million plan to upgrade some of its facilities last year.
But on top of first-quarter 2010 profit being up 1 percent, the company sold extra shares of its stock last fall, raising $114 million to pay down debt and reduce expenses. Now Sovran has $220 million in cash and borrowing capacity.
Company executives say the asking prices on self-storage properties are still too rich for their blood, but they are ready to carefully restart their upgrade and expansion program. Only half of the original amount will be devoted to this year―$25 million has been allotted, mostly for expansions that will add more climate-controlled units at 21 locations.
Sovran expects to generate about $30 million in additional cash for the company through the sale of 15 to 17 sites, which can used toward acquisitions when the time is right.
Source: The Buffalo News, Sovran gets ready to grow
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