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National Storage (ASX: NSR) shares dipped 1.4 per cent this morning to $1.63 after the company cut its earnings forecast for FY20.
The Brisbane-based company's shares have bounced overall back since the last of its takeover talks fell through a month ago, buoyed by its status as an essential service in Australia and New Zealand.
The company announced today those talks led to a deferral of some projects, while any uncommitted projects prior to March 2020 have been put on hold for the immediate future; both factors that will impact acquisition and development-related income for the current half.
The group has also moderated its same-centre earnings forecast due to a weakening in overall economic conditions, customer sentiment and discretionary spending, together with an expected increase in unemployment.
This combination of factors have led National Storage to cut its earnings per share (EPS) target of 9.98 cents (based on an EPS growth target of 4 per cent) down to 8.5-9 cents.
"Despite our revised guidance, we believe that the resilient nature of our business is exemplified through this result in such a challenging and volatile environment," says managing director Andrew Catsoulis.
"It is noted that a significant component of the income subject to the revised forecast is likely to be deferred only, to a later earnings period, rather than lost as we remain in advanced negotiations with our partners on numerous future acquisitions and development opportunities
"We are pleased that all centres have been able to remain open and operational throughout this time. This is a recognition of the essential nature of the services and support that our business provides to the community."
To improve the company's processes and help reduce the spread of the virus, NSR has set up a contact-free move-in process, allowing customers to book storage online, receive an email with all relevant details, and move their goods into one of NSR's facilities without the need for physical assistance from or contact with staff.
Catsoulis recognised the impact of Covid-19 on the group's more than 70,000 customers in Australia and New Zealand, and emphasised a deep appreciation for NSR's staff and "their continued commitment to this essential work".
"As always, the health, safety and wellbeing of our staff and customers is our utmost priority," he said.
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