KSS January eKourier

FEATURE

HOW WELL IS MY CENTRE OPERATING FINANCIALLY?

We often ask ourselves - how is my centre going? What indicates that a centre is going well? How do we compare a large centre to a small or a city centre to a regional centre?

“First time moving stuff into storage and the legendary Team here at North Melbourne made it the most positive experience. Super clear with the process. Super friendly. Only presented solutions to my needs. If you come across Adam or Suzanne get them a beer because they are legends!" Chi "Thank you so much Dee! I must confess that as long as you will all work in Kennards Storage Thebarton we will never change for any other! You are a great Manager! Thank you so much for all your managerial skills Dee, this storage centre is really an amazing place with a very pleasant atmosphere. I believe it’s because of all the beautiful people working there. When we came for the first time we met Darryl. Darryl was so helpful and nice and because of this great customer service he offered to us we decided to store our stock with you. Since we moved in to storage Darryl has helped us many times and he is always so optimistic and problem solving. You make a difficult day much easier for us! Thank you so much! It’s amazing to know that we can always count on you.” Katarzyna "Customer service second to none! Outrank local competitors on all fronts: service, price, cleanliness, lack of red tape and/or hidden costs. This is my second long term store with Kennards Self Storage Panorama and not only did I return as a customer, but I also received a massive discount for doing so. A big thanks to Luke and the Team." Rachel

T here are so many areas that vary between centres. One measure that is uniform across all centres is the EBITDA margin percentage. What EBITDA stands for is Earnings Before Interest Tax Depreciation and Amorti - sation. In simple speak it is the profit before interest and tax. This is then divided by the revenue for the period to give a percentage. The EBITDA margin percentage shows what percentage is left after taking all expenses off the revenue. This is one measure that can be used to compare storage centres. Let’s break this down to see if it makes sense. Revenue – the same for all centres • Storage Income • Merchandise • Insurance • Other Income Expenses • Very similar types of expenses are incurred for all sites such as Advertising, Insurance, Land Tax, Council, Labour etc. • The costs would generally be lower for smaller centres and higher for larger sites. How do we improve our EBITDA margin percentage? This is simple mathematics – grow income or reduce expenses. Every dollar added to income or every dollar

reduced from expenses has a benefit to the EBITDA percentage margin.

Compare your EBITDA margin percentage for the last three years and see if you are improving

In times where revenue is flat and expenses are going up – we will see the EBITDA Margin percentage dropping. The ideal situation is growing occupancy and rental rates and expenses are flat or decreasing. Note – some centres have rental income for Telecom Towers or expenses for rent – this would impact the EBITDA margin vs a centre that does not have this income stream or expense. Compare your EBITDA margin percentage for the last three years and see if you are improving or ask a neighbouring centre how they are going and see where you can improve your EBITDA percentage margin or assist them to improve theirs. Any input or questions, do not hesitate to ask anyone in the Finance Team. Anthony Rous Chief Financial Officer

9 Kennards Kourier Jan 2022