Abacus Storage King’s Profit Rises 4.8% to $71.1M with $3.7B in Assets

• Statutory net profit after tax up 4.8% to $71.1 million
• Funds from operations declined 5.3% to $41.0 million
• Portfolio valued at $3.5 billion with a 0.8% increase in valuation
• Interim distribution maintained at 3.1 cents per stapled security
• Board considering internalisation of management functions

Robust Profit Growth Despite FFO Dip

Abacus Storage King (ASK), the ASX-listed self storage operator and investor, has delivered a solid financial performance for the half-year ended 31 December 2025. The group reported a statutory net profit after tax of $71.1 million, marking a 4.8% increase compared to the same period last year. However, funds from operations (FFO), a key measure of cash earnings in real estate, declined by 5.3% to $41.0 million, reflecting some underlying operational pressures despite the profit growth.

Underlying earnings, which adjust for non-recurring items and tax effects, edged up slightly by 0.2% to $42.5 million, signalling stable core business performance. The company declared an interim distribution of 3.1 cents per stapled security, consistent with the prior period, underscoring its commitment to returning value to securityholders.

Expanding Portfolio and Strategic Acquisitions

ASK’s portfolio now comprises 204 self storage stores across Australia and New Zealand, with total assets valued at approximately $3.7 billion. The investment property portfolio alone was independently valued at $3.5 billion, reflecting a $26.5 million uplift or 0.8% increase over six months. This valuation improvement was accompanied by a slight tightening of the weighted average capitalisation rate to 5.43%, indicating sustained investor confidence in the sector.

During the period, ASK acquired four assets for a total of $58.1 million, including two operating stores in Victoria and Queensland and two development sites in Melbourne. The company maintains a development pipeline of 17 assets, expected to enhance rental rates and revenue per available metre (RevPAM) over time. Occupancy remains strong at 90.5%, with average rental rates steady at $377 per square metre.

Capital Management and Refinancing

In December 2025, ASK refinanced its $1.25 billion unsecured debt facility, extending maturities by one year and securing lower margins. The group’s gearing ratio stands at 31.9%, comfortably within its target range of 25% to 40%, and approximately 74% of drawn debt is hedged at fixed rates, providing protection against interest rate volatility. This prudent capital management positions ASK well to fund ongoing growth initiatives amid a challenging economic environment.

Potential Management Internalisation on the Horizon

Notably, ASK’s Board has resolved to explore the potential internalisation of its management functions, currently outsourced to Abacus Group. A sub-committee of independent directors has been formed to evaluate this strategic move, with discussions underway with Abacus Group. Internalisation could streamline governance and potentially reduce management costs, but the outcome and timing remain uncertain.

ASK continues to prioritise sustainability, focusing on community engagement, environmental responsibility, and strong governance. The company’s well-recognised Storage King brand remains the market leader in Australasia, supported by a dedicated team serving over 75,000 customers annually.

Bottom Line?

As ASK navigates growth and strategic shifts, investors will watch closely how management internalisation and market conditions shape its next phase.

Questions in the middle?

• What financial impact could the internalisation of management functions have on ASK’s cost structure and profitability?
• How will the slight decline in funds from operations affect ASK’s ability to sustain distributions in the medium term?
• What progress and returns can investors expect from ASK’s development pipeline over the next few years?