Admission to the Alternative Investment Market
Placing and Offer by Cazenove & Co.
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt
about the contents of this document you should immediately consult your stockbroker, bank manager, solicitor,
accountant or other independent ®nancial adviser authorised under the Financial Services Act 1986 who specialises in
advising on the acquisition of shares and other securities.
This document, which comprises a prospectus, has been drawn up in accordance with the Public Offers of Securities
Regulations 1995 and the AIM Rules. Copies of this document have been delivered to the Registrar of Companies in
England and Wales for registration in accordance with Regulation 4(2) of the POS Regulations.
Application has been made for the Ordinary Shares of 10p each in the capital of Big Yellow Group PLC (``Ordinary
Shares'') issued and to be issued to be admitted to trading on the Alternative Investment Market of the London Stock
Exchange. It is expected that trading in the Ordinary Shares will commence on AIM on 8 May 2000. It is emphasised
that no application is being made for admission of these securities to the Of®cial List of the London Stock Exchange.
AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk than that
associated with established companies tends to be attached. A prospective investor should be aware of the potential
risks in investing in such companies and should make the decision to invest only after careful consideration and
consultation with his or her independent ®nancial adviser. The rules of AIM are less demanding than those of the
Of®cial List. The London Stock Exchange has not itself approved the contents of this document.
BIG YELLOW GROUP PLC
(Incorporated in England and Wales: Registered No. 3625199)
Admission to trading on the
ALTERNATIVE INVESTMENT MARKET
and
Placing and Offer of up to 45,470,000 Ordinary Shares
at 100p per share
Nominated Adviser and Broker
Cazenove & Co.
Share capital on admission to trading on AIM
Authorised
Number
150,000,000
Issued and fully paid
Number
Amount
Amount
£15,000,000
in Ordinary Shares of 10p each
up to
96,898,560
up to
£9,689,856
Cazenove & Co. of 12 Tokenhouse Yard, London EC2R 7AN (``Cazenove''), who are regulated by The Securities and
Futures Authority Limited, are advising Big Yellow Group PLC (``Big Yellow'' or ``the Company'') and no other party
in connection with the admission of Ordinary Shares to trading on AIM and will not be responsible to anyone other than
Big Yellow for providing the protections afforded to the customers of Cazenove nor for providing advice in relation to
the admission of the Ordinary Shares to trading on AIM. In particular the information in this document has been
prepared solely for the purposes of the Placing and Offer and Admission and it is intended only to be relied upon by
persons subscribing for or purchasing Ordinary Shares in the Placing and Offer and is not intended to inform or be
relied upon by any subsequent purchasers of Ordinary Shares (whether on or off market) and accordingly no duty of
care is accepted in relation to them.
Cazenove is the Company's nominated adviser and broker for the purpose of Admission under the AIM Rules. Its
responsibilities as the Company's nominated adviser under the AIM Rules are owed solely to the London Stock
Exchange and are not owed to the Company or to any Director or to any other person in respect of his decision to
acquire Ordinary Shares in reliance upon any part of this document. Cazenove is not making any representation or
warranty, express or implied as to the contents of this document.
Neither this document nor any copy of it may be taken into, transmitted or distributed, directly or indirectly, in or into
the United States, Australia, Canada, Japan or the Republic of Ireland or distributed, directly or indirectly, in such
countries to US persons or residents of such territories except, in the case of the United States, to US persons who fall
within the exemptions set out in Regulation S, Rule 144A or any other exemption from the registration requirements of
the US Securities Act of 1933.
CONTENTS
PAGE
Expected timetable
3
Offer statistics
3
De®nitions
4
Directors and advisers
6
Part 1
± The Business
1.
Introduction
7
2.
The self-storage market
7
3.
Competition
8
4.
History
8
5.
Big Yellow's strategy
8
6.
Stores
9
7.
Customers
9
8.
Employees
9
9.
Site selection
10
10. Branding and marketing
10
11. Merchandising and insurance
10
12. Storage agreements
10
13. Management information and control systems
11
14. Directors and senior management
11
15. Corporate governance
12
16. Share option schemes
12
17. Current trading and prospects
12
18. Dividend policy
13
19. Share undertakings
13
20. CREST
13
21. The Placing and Offer
13
22. Risk factors
14
Part 2
± Accountants' Report
15
Part 3
± Unaudited proforma statement of Net Assets
31
Part 4
± Terms and conditions of application for the Public Offer
32
Part 5
± Additional Information
39
2
EXPECTED TIMETABLE
Latest time and date for receipt of completed Customer Application Forms,
Employee Application Forms and cheques ............................................................
3.00 pm on 27 April 2000
Dealings in Big Yellow Shares on AIM expected to commence ................................
8 May 2000
Ordinary Shares credited to CREST accounts .............................................................
8 May 2000
Latest date for despatch of share certi®cates ...............................................................
15 May 2000
OFFER STATISTICS
Offer Price ...................................................................................................................
100 pence
Market capitalisation of Big Yellow at the Offer Price1 .............................................
96,898,560
Number of new Ordinary Shares to be issued on Admission1.....................................
45,470,000
Gross proceeds of the Placing and Offer1 ...................................................................
45,470,000
1
Net proceeds of the Placing and Offer .......................................................................
1
43,970,000
Based on the assumption that the maximum number of Ordinary Shares are issued pursuant to the Offer, i.e. 45,470,000.
3
DEFINITIONS
The following de®nitions apply throughout this document unless the context otherwise requires.
``Act''
the Companies Act 1985 (as amended from time to time)
``Admission''
the admission of Ordinary Shares to AIM
``AIM''
the Alternative Investment Market of the London Stock Exchange
``AIM Rules''
Chapter 16 of the Rules of the London Stock Exchange
``Big Yellow'' or the ``Company''
Big Yellow Group PLC
``Big Yellow Group'' or ``Group''
Big Yellow and, where applicable, its subsidiaries and associates
``Big Yellow Shares'' or
``Ordinary Shares''
ordinary shares of 10p each in the share capital of Big Yellow
``Big Yellow Shareholders'' or
``Shareholders''
the holders of Ordinary Shares
``Board'' or ``Directors''
the directors of Big Yellow as detailed on page 6 of this document
``Cazenove''
Cazenove & Co.
``CREST''
the computerised settlement system operated by CRESTCo which facilitates
the transfer of title to shares in uncerti®cated form
``CRESTCo''
CRESTCo Limited
``Customer Application Form''
the form for use by persons eligible to apply for Ordinary Shares under the
Customer Offer
``Customer Offer''
the offer for subscription of Ordinary Shares being made to customers of
the Group in the UK, Jersey and the Isle of Man, as described in Part 4 of
this document
``Eligible Employees''
employees resident in the UK (including directors) of the Big Yellow Group
who are employed by the Big Yellow Group on 31 March 2000 (whether
on a full time or part time basis) and have not given notice to terminate
their employment on or prior to that date
``Employee Application Form''
the form for use by Eligible Employees applying for Ordinary Shares under
the Employee Offer
``Employee Offer''
the offer for subscription of Ordinary Shares being made to Eligible
Employees as described in Part 4 of this document
``London Stock Exchange''
London Stock Exchange Limited
``Nominated Adviser and Broker
Agreement''
the nominated adviser and broker agreement proposed to be entered into,
details of which are contained in paragraph 12 of Part 5 of this document
``Offer''
the offer of Ordinary Shares described in this document comprising the
Placing, the Customer Offer and the Employee Offer
``Offer Price''
the price of 100p per share at which Big Yellow Shares are to be issued
pursuant to the Offer
4
``Offer Shares''
the Ordinary Shares, the subject of the Placing, Customer Offer and
Employee Offer
``Placing''
the placing by Cazenove of 45 million Ordinary Shares as set out in the
underwriting agreement in paragraph 12 of Part 5 of this document
``POS Regulations''
the Public Offers of Securities Regulations 1995, as amended
``PRICOA''
Prudential Insurance Company of America, a shareholder of the Company
``Public Offer''
the Customer Offer and/or the Employee Offer
``Receiving Agent''
Computershare Services PLC
``Share Option Schemes''
the Big Yellow 1998 Unapproved Share Option Plan, the Big Yellow 1999
Approved Share Option Plan and the Big Yellow 2000 Unapproved Share
Option Plan
``subsidiary''
shall have the same meaning as in section 736 of the Act
``TR Property''
TR Property Investment Trust Plc, a shareholder of the Company
``Underwriting Agreement''
the underwriting agreement, details of which are contained in paragraph 12
of Part 5 of this document
5
DIRECTORS AND ADVISERS
Directors
David White (Non-executive Chairman)
David Ross (Non-executive Director)
Jonathan Short (Non-executive Director)
Nicholas Vetch (Chief Executive)
Philip Burks (Director, Property & Construction)
James Gibson (Finance Director)
Adrian Lee (Director, Operations & Human Resources)
Stephen Homer (Director, Sales & Marketing)
all of 2, The Deans, Bridge Road, Bagshot, Surrey GU19 5AT
Registered Of®ce
2, The Deans
Bridge Road
Bagshot
Surrey GU19 5AT
Company Secretary
James Gibson
Advisers
Nominated Adviser and Broker
Cazenove & Co.
12 Tokenhouse Yard
London EC2R 7AN
Registered Auditors and Reporting
Accountants
Deloitte & Touche
Hill House
1 Little New Street
London EC4A 3TR
Solicitors to the Company
CMS Cameron McKenna
Mitre House
160 Aldersgate Street
London EC1A 4DD
Tax Adviser to the Company
PricewaterhouseCoopers
89 Sandyford Road
Newcastle upon Tyne
NE99 1PL
Solicitors to Cazenove
Ashurst Morris Crisp
Broadwalk House
5 Appold Street
London EC2A 2HA
Principal Bankers
National Westminster Bank plc
Mayfair Corporate Business Centre
PO Box 2354
65 Piccadilly
London W1A 2PP
Registrars
Computershare Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol
BS99 7NH
6
PART 1 ± THE BUSINESS
1. Introduction
Big Yellow is one of the leading self-storage groups in the United Kingdom. The business operates from eight stores
concentrated in London and the South with a further four under construction or under contract.
The Group has sought to differentiate itself from the established self-storage businesses by operating from
prominent stores that are located on arterial or main roads, with extensive frontage and high visibility. The stores are
highly branded, predominantly painted yellow and carry distinctive signage. Through its choice of sites, which tend to
be in areas where there is a mobile and af¯uent local population, and selective target marketing, the Group is seeking to
increase the awareness of both its own brand and self-storage as a service .
The Group caters for both domestic and commercial customers and offers ¯exible terms on both the amount of space
and occupation periods.
The Directors believe that there is a signi®cant market opportunity in the UK for self-storage and the Group's strategy is
to establish itself as the leading branded provider with an emphasis on high standards of customer service, location,
convenience and quality of ®t out. The Directors plan a substantial expansion programme and their current aim, subject
to market conditions and ®nancing, is to grow to 50 stores within the next three years.
2. The self-storage market
Self-storage is a service offering to the general public, which provides readily accessible secure storage of either
business goods or personal belongings on a ¯exible contract. The need for customer access is a key differentiator from
other more established types of storage prevalent in the UK, including archiving, data storage and traditional removal
storage. Furthermore, unlike removal and `deep' storage companies, the service of moving the goods is not normally
provided by self-storage companies.
The UK self-storage industry appears largely undeveloped when compared to the United States and Australia where the
concept has been well established for over 25 years and 15 years respectively. The United States currently has
approximately 30,000 centres nationally while Australia and New Zealand together have over 750 centres. These
markets have seen an evolution in self-storage from being located in poor quality buildings on industrial estates to high
quality purpose built centres in prominent commercial locations, with a focus on customer service. This compares to the
UK with between 200 and 300 centres currently, the majority of these being poorly located, housed in inferior buildings
and suffering from poor customer care.
Penetration rates measured by storage square feet per head of population are over 29 times greater in the United States
and over 6 times greater in Australia than in the UK. Experience has shown that as availability and awareness is
increased this leads to higher demand for self-storage. Penetration rates in Continental Europe are even lower than those
of the UK.
Acknowledging the developments in the American and Australian self-storage markets, the Directors have established
Big Yellow to concentrate on modern purpose ®t out buildings in prime commercial locations, with an emphasis on
customer service and branding.
Big Yellow believes that the demand for self-storage is likely to expand in the UK for the following reasons:
r
Increased public awareness of self-storage as a service. The Directors believe that there is currently limited
understanding by the general public of self-storage.
r
Signi®cant pressure on the housing stock in the South of England, as a result of central government initiatives,
town planning and ®scal policy, encouraging housing development on brown®eld, space constrained urban sites.
r
A shift, predominantly in cities and towns, towards high density housing developments with
consequential pressure on storage space.
7
r
Increasing population mobility, particularly in the South of England.
r
Social factors including a high divorce rate and an ageing population resulting in demand for single occupancy
housing units, which are usually smaller than family residences.
r
An increasingly af¯uent and acquisitive society with the result that self-storage will come to be regarded as a
necessity.
r
Rapid rise of the small business community demanding ¯exible storage accommodation.
r
Ful®lment needs driven by the rise in e-commerce activity.
3. Competition
The Directors believe that in the UK only around 200 stores could be regarded as competition to the Group and the
majority of these do not offer the service proposition of the Group. Of these 200 stores, 90 are owned by the ®ve largest
operators, including Big Yellow. The sector is likely to remain dominated by groups with signi®cant capital at their
disposal, because the relatively high costs of the real estate and the `®t out' will conspire to create high barriers to entry.
This contrasts with the US where the top ®ve operators only account for 11 per cent. of the market. Similarly, the
Australian market is not dominated by a single operator.
Growth in the UK for the main operators is likely to be largely organic, as there are few attractive smaller self-storage
businesses in existence.
4. History
In 1998, Nicholas Vetch, Philip Burks and James Gibson, who had previously been the management team for Edge
Properties plc formed a private company called Cubic Self Storage Limited, (``Cubic'') which subsequently acquired
sites in Croydon and Richmond. In January 1999, Cubic acquired The Big Yellow Self Storage Company Limited
which traded from one London store at Staples Corner on the North Circular Road. The Group rebranded itself as The
Big Yellow Self Storage Company and the management team was joined by Adrian Lee and Stephen Homer, both of
whom had also worked at Edge Properties plc.
The Group has since opened a further ®ve stores at Oxford, Hanger Lane, Wandsworth, Slough and Cheltenham.
A further four stores are under development or under contract in Romford, Finchley, Ilford and Norwich.
The Company was originally ®nanced by the management together with external equity capital provided by TR
Property. In September 1999, the Company received a £12 million cash injection, £11 million of which was provided by
Prudential Insurance Company of America in a mixture of equity and debt.
5. Big Yellow's strategy
Big Yellow believes that in the next few years the UK self-storage industry will experience a signi®cant acceleration in
growth and demand, and customers will become increasingly demanding in terms of service provision.
Big Yellow intends to capitalise on this through:
r
An ambitious roll-out of new stores in London and the South.
r
Provision of high standards of customer service.
r
Locating its stores in highly visible and accessible locations.
r
Innovative and creative marketing.
The successful execution of these goals will, Big Yellow believes, result in a highly recognisable brand and market
leadership in this young but potentially signi®cant sector.
8
6. Stores
The Group operates purpose built stores in prominent, accessible, prime commercial locations. The portfolio comprises
a mix of freehold and leasehold properties and the majority of the stores have opened within the last year. The Directors
believe that a store should reach maturity between 24 and 36 months following opening.
Each store has a loading area, customer reception, customer meeting room, retail area and customer car parking. The
stores range in size from approximately 30,000 sq. ft. to 75,000 sq. ft. of rentable space, capable of accommodating, on
average, 900 customers. All the stores are multi-level with at least one lift serving the upper ¯oors and each level is subdivided into units ranging upwards from 10 sq. ft. The units are designed to be ¯exible in size and each store can offer a
wide range of different sized and priced units. The units are constructed of steel and are designed to provide secure,
clean, dry and well ventilated storage for customers' property.
The stores are manned seven days a week and the majority are intended to be accessible to customers 24 hours a day.
There is a high level of security provided including, in the majority of stores, a perimeter security fence, electronically
coded access for all gates, individually alarmed units and extensive CCTV coverage.
Big Yellow has devoted a signi®cant degree of management time to store design and merchandise display. The
Directors believe that Big Yellow is at the forefront of the UK self-storage industry in site layout and design and
merchandise display, each of which is designed to enhance the customer environment, increasing the visual appeal of
Big Yellow's stores and the returns from the storage space.
7. Customers
The customer base falls into two generic categories:
r
commercial ± spanning sole traders to multinationals
r
domestic ± principally falling into two sub categories;
4
no spacers customers who are space constrained and might include people who hae
conerted their attic or basement into liing accommodation; and
4
eent moers customers drien by, inter alia, house moes, relocation, marriage,
diorce, additional children and redecoration.
Business customers, who comprise approximately 30 per cent. of the total customer base, come from a wide range of
business types but typical customers include professional ®rms, import/export wholesalers and contractors.
The Company offers an informal collection service to its customers which it is considering expanding.
8. Employees
Big Yellow believes that it will only achieve its customer service goals if it can maintain a high degree of morale,
loyalty and motivation amongst its staff.
The Group runs extensive training programmes for the bene®t of its employees. In addition, all staff enjoy the bene®t of
bonuses linked to the Group's ®nancial performance and after six months of employment are entitled to participation in
a Group share option scheme. To date, the Group has experienced a very low turnover of staff at its stores and
absenteeism is negligible.
The Group currently has 48 employees, of whom 24 are in head of®ce and 24 are in the stores.
9
9. Site selection
The choice of location is driven by a number of factors, including the af¯uence of the local market, population mobility,
the visibility and accessibility of the location and suf®ciency of space for car parking. Big Yellow considers that high
pro®le, prominent, accessible and well-lit sites are the key to the success of the stores due to the following:
r
Approximately 30 per cent. of the Group's customers are women, who are believed to appreciate a sense of
personal security.
r
Approximately 40 per cent. of the Group's customer enquiries are derived from seeing the signage or the
buildings.
r
The need to build a recognisable brand.
The process of identifying and purchasing new sites for stores is overseen by Director Philip Burks. The team
responsible for identifying new sites have considerable experience in dealing with the property market, including 14
years of focus on the retail warehouse market. Many of the sites suitable for self-storage share similar characteristics to
the sites for retail warehouse development. The Company also has close contact and relationships with many
commercial property agents and landowners.
The Directors believe that their entrepreneurial approach enables them to make swifter commercial decisions than some
of their competitors.
10. Branding and marketing
Big Yellow believes that many potential customers' perception of the quality of the storage industry is generally low
and therefore for the Group to differentiate itself it will need to continue the process of building a recognisable brand
that is synonymous with excellent customer service in a secure, clean and accessible environment.
Big Yellow seeks to reinforce its brand and promote its stores through a number of marketing initiatives, including the
Group's web site, radio campaigns, telemarketing, advertising in the Yellow Pages, lea¯et and brochure drops, direct
mail, trade shows and a referral programme.
11. Merchandising and insurance
Each store contains a small retail display in the reception area (the ``Box and Lock'' shop) from which the Group
merchandises storage-related goods including boxes, padlocks and packaging materials. The majority of the
merchandise is branded as Big Yellow.
The Group has attracted sales of this merchandising not only to its storage customers but also to
``off the street'' customers.
Approximately 40 per cent. of customers take out contents insurance arranged by Big Yellow. Contents insurance is
sold on levels of cover per 28 days with a minimum cover of £1,000.
In the ®nancial year to 31 March 2000 approximately 5 per cent. of revenue was derived from merchandising and
insurance.
12. Storage agreements
Customers initially sign a storage agreement for the term of storage. The minimum storage period is seven days.
However, all customers must prepay the ®rst 28 days storage charge and a security deposit equivalent to a 28 day
storage charge irrespective of their proposed period of occupancy. In practice, the storage agreement endures for the
period of occupancy. The customer is entitled to give seven days notice to vacate, whereupon any outstanding fees paid
and the deposit will be returned.
Each customer undertakes that their property will be securely and properly packed, will not be perishable and will not
include any hazardous or toxic substances or living creatures. In addition, each customer agrees to inform Big Yellow
10
of any special storage requirements and agrees not to request the Company to store any property the possession or
storage of which is in breach of the law or which would require the Company to comply with any statutory duties.
Once customers have signed the storage agreement they are issued with a branded swipe card or their own PIN number
which grants them unlimited access to their unit during manned hours and 24 hour access where applicable.
Payments by customers are made from a mixture of standing order, credit card, cheque and cash. Occupancy periods
range from seven days to several years. The Company offers incentives to its customers for prepayment of the storage
charge, the prepayment is often for as long as a year.
13. Management information and control systems
Self-storage is a customer service business that requires timely and effective management information to maximise the
level of service to customers and to achieve an optimal pro®tability.
The Group has invested in a number of linked `off-the-shelf' software systems, including systems designed in the
United States speci®cally for self-storage businesses, to monitor the performance of each existing and new store within
the Group. Head of®ce is able to remote access real time operational and ®nancial data on each store and the systems
allow a ¯ow of information and suf®cient reporting as the Group requires. A number of different performance
measures, including occupancy levels and revenue, are assessed to ensure the ef®cient running of the business.
The executive Directors maintain close control over the operations of the Group and are frequent visitors to the stores.
14. Directors and senior management
Non-Executive Directors
David White, aged 57, Non-Executive Chairman, spent 18 years of his career at Cater Allen Holdings PLC where he
was from 1985 deputy chairman and managing director and from which he retired in 1997. He was non-executive
chairman of Edge Properties plc until its sale in 1998 and is currently a non-executive director of Dry®eld Trust plc.
David Ross, aged 34, Non-Executive Director, is the chief operating of®cer of The Carphone Warehouse Limited,
which he joined in 1991. In addition to managing the ongoing operations of the business, including retail, ®nance,
property and personnel, he is directly responsible for the development of the European business. Prior to that he
quali®ed as a chartered accountant with Arthur Andersen & Co.
Jonathan Short, aged 38, Non-Executive Director, is the managing director of PRICOA Property Private Equity
Limited, a wholly owned subsidiary of the Prudential Insurance Company of America. He previously headed the
European real estate mergers and acquisitions practice at Lazard Brothers & Co. His early city career was spent at
SG Warburg & Company Limited followed by eight years at ING Barings, where he was head of its European Real
Estate Group.
Mr Short was appointed to the Board on 16 February 2000. Mr White and Mr Ross were appointed to the Board on 31
March 2000.
Executive Directors
Nicholas Vetch, aged 38, Chief Executive, is a co-founder of Big Yellow with speci®c responsibility for general
management and strategy. Prior to that he was joint chief executive of Edge Properties plc, which he co-founded in
1989 which was subsequently listed on the Of®cial List of the London Stock Exchange in 1996 and then taken over by
Grantchester Properties plc in 1998.
Philip Burks, aged 41, Director of Property and Construction, is a co-founder of Big Yellow with speci®c responsibility
for property acquisitions and construction. Prior to that he was joint chief executive of Edge Properties plc which he cofounded in 1989, which was subsequently listed on the Of®cial List of the London Stock Exchange in 1996 and then
taken over by Grantchester Properties plc in 1998.
James Gibson, aged 39, Finance Director, is a co-founder of Big Yellow with speci®c responsibility for ®nance,
operational control and information technology. He is a chartered accountant having trained with Arthur Andersen &
11
Co. where he specialised in the property and construction sectors. He was ®nance director of Heron Property
Corporation Limited and then Edge Properties plc, which he joined in 1994. Edge Properties was listed on the Of®cial
List of the London Stock Exchange in 1996 and then taken over by Grantchester Properties plc in 1998.
Adrian Lee, aged 34, Director of Operations and Human Resources, was previously a senior executive at Edge
Properties plc which he joined in 1996. Prior to that he was a corporate ®nancier at Lazard Brothers for ®ve years,
having previously quali®ed as a surveyor at Knight Frank & Rutley.
Stephen Homer, aged 33, Director of Sales and Marketing, was until recently a senior executive at Edge Properties plc
which he joined in 1996. Prior to that he was a property acquisitions manager at Dixons Stores Group Ltd., being
speci®cally responsible for the acquisition of out of town retail stores.
Philip Burks and James Gibson were appointed to the Board on 26 August 1998. Nicholas Vetch was appointed on 4
September 1998. Adrian Lee and Stephen Homer were appointed on 31 March 2000.
The management structure has been reinforced with the appointment of a number of key positions including, Tom
Phillips in construction, Mike Cole as ®nancial controller, Cheryl Hathaway in human resources and Roy Rathbone in
property acquisition.
15. Corporate governance
The Board supports the Combined Code published in the Listing Rules of the London Stock Exchange. However, in
view of the size of the Big Yellow Group and the fact that the Company's shares are to be quoted on AIM, the Board
intends to conduct the governance of the Big Yellow Group in accordance with the recommendations of The City
Group for Smaller Companies (``CISCO'') which has published guidelines on Corporate Governance for smaller
companies. Nomination, remuneration and audit committees, comprising solely the non-executive Directors, have been
established.
16. Share option schemes
The Directors believe that the dedication and motivation of its employees are important for the Group's future
development and that employees should take a genuine interest in the success of the Group. In order to attract, motivate
and retain key employees, the Company has adopted the Share Option Schemes, one of which, the Big Yellow 1998
Unapproved Share Option Plan, will be terminated upon Admission without prejudice to options already granted under
it.
Conditional upon Admission, it is intended to grant options over, in aggregate, 2,523,350 Big Yellow Shares under the
Share Option Schemes. The exercise price of these options will be the Offer Price.
Further details of the options granted and proposed to be granted prior to Admission over, and existing options over,
Big Yellow Shares are set out in paragraphs 3.9 and 5.5 of Part 5 of this document and a summary of the rules of the
Share Option Schemes is set out in paragraph 6 of Part 5 of this document.
17. Current trading and prospects
The Group has eight stores open and in each case occupancy lease up rates and turnover are ahead of budget. A further
four stores are currently under construction or contract, all of which are freehold and the majority are expected to be
operational before the end of the ®nancial year. All stores are expected to be loss-making for at least the ®rst year of
their operation.
On an annualised basis revenues have risen from approximately £0.7 million immediately before the opening of the ®rst
of the new stores at the beginning of May 1999 to approximately £2.0 million at March 2000. For the ®rst full year's
trading Big Yellow made sales of £1.34 million and an operating loss of £1.65 million. Further details are set out in the
Accountants' Report in Part 2 of this document.
The Directors' current intention is that the Company seek admission to the Of®cial List before the end of 2002.
12
18. Dividend policy
For the foreseeable future most of the cash resources generated by Big Yellow's operations will be devoted to funding
the Group's store opening programme and working capital requirements. Accordingly, the Directors do not expect that
Big Yellow will declare a dividend in the early years of its development.
19. Share undertakings
The Directors have given undertakings not to dispose of their existing Big Yellow Shares for a period of at least
12 months from Admission or until the publication of the Group's audited results for the year ended 31 March 2001.
These restrictions will continue for a period of a further 12 months in relation to 50 per cent. of each of the Directors'
holdings.
The undertakings are in each case subject to certain exceptions as permitted under Rule 16.13 of the AIM Rules. Further
details are set out in paragraph 12.1 of Part 5.
20. CREST
It is intended that Big Yellow Shares may be traded on CREST. Big Yellow Shareholders who wish to hold their Big
Yellow Shares in uncerti®cated form will need to follow the appropriate CREST procedures for dematerialisation of
their holding of Big Yellow Shares. Further details on CREST are set out in paragraph 15 of Part 5 of this document.
21. The Placing and Offer
The Company believes that its customers and employees are an integral part of the Group's success and so has made
arrangements to allow them to participate in the Offer.
The Placing and Offer consists of up to 45,470,000 new Ordinary Shares. Of these, 470,000 Ordinary Shares and 1
million Ordinary Shares are being reserved to meet valid applications under the Employee Offer and Customer Offer
respectively.
PRICOA, an existing shareholder is subscribing for 13,600,000 new Ordinary Shares. In addition it will receive
5 million new Ordinary Shares in partial satisfaction of the early redemption of its £4 million convertible loan stock and
1 million of convertible preference shares. Further details of these transactions are set out in paragraphs 3.5 and 3.6 of
Part 5 of this document.
TR Property, also an existing shareholder, is subscribing for 500,000 new Ordinary Shares.
All the Offer Shares, save for those reserved for the Employee Offer and those which are being subscribed for by
PRICOA and TR Property are being underwritten by Cazenove. All the Ordinary Shares that are subject to the Placing
are being placed ®rm save for those that may be clawed back to meet valid applications under the Customer Offer.
All of the net proceeds of the Placing and Offer are being raised for the bene®t of the Company. As disclosed above, £5
million will be used to simplify the capital structure through the elimination of the Company's loan stock and
convertible preference shares. The Directors' current intention is that part of the proceeds be applied to exercise an
option relating to the purchase of the freeholds of the properties in Richmond and Croydon, which are the subject of a
sale and leaseback arrangement, which includes a two year rent free period, further details of which are set out in
paragraph 11.1 of Part 5. The balance of the proceeds will be used to support the Company's expansion programme.
22. Risk Factors
The Directors consider the following risk factors to be the most signi®cant to potential investors:
r
The Group has a limited trading history and has not reported a net pro®t over any ®nancial period. The future
success of the Company will depend on the Directors ability to implement effectively its strategy including the
13
development of the Big Yellow brand. While the Directors are optimistic about the Group's prospects, there is no
certainty that anticipated revenues or growth will be achieved.
r
A signi®cant barrier to the development of the industry and Big Yellow will be the ability to acquire suitable sites,
economically, particularly in London and the South. Big Yellow will be in competition for sites with other selfstorage operators as well as other users of retail or light industrial space. Should Big Yellow be unable to ®nd
suitable locations or should site openings be affected by delays in obtaining planning permission or consent, this
may have an adverse effect on Big Yellow's working capital and impact on its planned rate of expansion.
r
The Group is undertaking a signi®cant capital expenditure programme. Whilst every effort is made to ensure that
the costs of acquisitions, construction and ®t out are kept to budget, due to factors beyond the Group's control
there can be no guarantee that this will be achieved.
r
Self-storage is an immature market. The industry is likely to become increasingly competitive as the result of the
entry of a number of well ®nanced groups. This may lead to less opportunity for price rises and may impact on
the Group's growth and future pro®tability.
r
The Group's performance is dependent on the continued services and performance of its senior management and
other key personnel. The loss of the services of any of the executive Directors, senior management or key
employees could have a material adverse effect upon the Company's future.
r
Rising interest rates may result in a fall in the rate of growth of the economy, causing customers to question
whether they could continue to afford self-storage as a service.
r
The Directors believe that in order to achieve Big Yellow's anticipated growth rate over the medium term, Big
Yellow will need additional ®nance. There can be no assurance that additional ®nance will be available on
acceptable terms, whether provided by banks or by the issue of further equity.
r
It may be dif®cult for an investor to sell his or her Ordinary Shares and he or she may receive less than the
amount paid. In addition, the Company is unlikely to pay dividends for the foreseeable future. The Ordinary
Shares may not be suitable for a short term investment. Investment in a share which is traded on AIM might be
less realisable and might carry a higher risk than investment in a share quoted on the Of®cial List of the London
Stock Exchange.
The investment described in this document may not be suitable for all those who receive it. Before making a ®nal
decision, investors in any doubt are advised to consult an investment adviser authorised under the Financial Services
Act 1986.
14
PART 2 ± ACCOUNTANTS' REPORT
The Directors
Big Yellow Group PLC
2 The Deans
Bridge Road
Bagshot
Surrey GU19 5AT
Cazenove & Co.
12 Tokenhouse Yard
London EC2R 7AN
17 April 2000
Dear Sirs
Big Yellow Group PLC (``the Company'') and its subsidiaries (``the Group'')
We report on the ®nancial information set out below. This ®nancial information has been prepared for inclusion in the
Prospectus dated 17 April 2000 relating to the Admission of the Company on the Alternative Investment Market of the
London Stock Exchange (``the Prospectus'').
Basis of preparation
The ®nancial information set out in this report is based on the audited consolidated ®nancial statements of the Group for
the year ended 31 March 2000 and the period from 26 August 1998, the Company's date of incorporation, to 31 March
1999 to which no adjustments were considered necessary.
The audited ®nancial statements for the year ended 31 March 2000 and period from 26 August 1998 to 31 March 1999
were reported on by Deloitte & Touche.
Responsibility
Such ®nancial statements are the responsibility of the Directors of the Company who approved their issue.
The Directors of the Company are responsible for the contents of the Prospectus in which this report is included.
It is our responsibility to compile the ®nancial information set out in our report from the ®nancial statements, to form an
opinion on the ®nancial information and to report our opinion to you.
Basis of opinion
We conducted our work in accordance with the Statements of Investment Circular Reporting Standards issued by the
Auditing Practices Board. Our work included an assessment of evidence relevant to the amounts and disclosures in the
®nancial information. The evidence included that previously obtained by us relating to the audits of the ®nancial
statements underlying the ®nancial information. It also included an assessment of signi®cant estimates and judgements
made by those responsible for the preparation of the ®nancial statements underlying the ®nancial information and
15
whether the accounting policies are appropriate to the Company's circumstances, consistently applied and adequately
disclosed.
We planned and performed our work so as to obtain all the information and explanations which we considered
necessary in order to provide us with suf®cient evidence to give reasonable assurance that the ®nancial information is
free from material misstatement whether caused by fraud or other irregularity or error.
Consent
We consent to the inclusion in the Prospectus of this report and accept responsibility for this report for the purposes of
paragraph 45(1)(b)(iii) of Schedule 1 to the Public Offers of Securities Regulations 1995.
Opinion
In our opinion, the ®nancial information set out below gives, for the purposes of the Prospectus, a true and fair view of
the state of affairs of the Group as at the dates stated and of its pro®ts, cash ¯ows and recognised gains and losses for the
period and year then ended.
Consolidated pro®t and loss account
Note
TURNOVER: Continuing operations.........................................................
Cost of sales ..............................................................................................
2
Period from
26 August
1998 to
31 March
1999
£
Year ended
31 March
2000
£
181,392
(117,927)
1,342,963
(1,623,258)
63,465
(167,524)
928
(280,295)
(1,368,589)
Ð
5
(103,131)
87,307
(4,662)
(1,648,884)
304,813
(778,633)
LOSS ON ORDINARY ACTIVITIES BEFORE AND AFTER
TAXATION FOR THE FINANCIAL PERIOD/YEAR.........................
6
(20,486)
(2,122,704)
Non-equity dividends payable ...................................................................
7
GROSS PROFIT/(LOSS)...........................................................................
Administrative expenses ............................................................................
Other operating income .............................................................................
OPERATING LOSS: Continuing operations .............................................
Interest receivable and similar income ......................................................
Interest payable and similar charges..........................................................
3
Retained loss for the ®nancial period/year ................................................
Basic and diluted loss per share ................................................................
Ð
(20,486)
8
Ð
(36,750)
(2,159,454)
(5p)
There are no recognised gains or losses for the current ®nancial year and the preceding period other than as stated above
and therefore no separate statement of total recognised gains and losses has been presented.
16
Consolidated Balance Sheet
Note
31 March 1999
£
31 March 2000
£
9
10
1,888,861
4,514,915
1,820,474
17,294,810
6,403,776
19,115,284
2,133
407,250
1,417,663
31,714
1,096,409
4,528,840
1,827,046
(226,308)
5,656,963
(9,784,510)
1,600,738
(4,127,547)
8,004,514
(2,625,000)
14,987,737
(4,000,000)
5,379,514
10,987,737
4,050,376
1,349,624
(20,486)
5,242,856
7,924,821
(2,179,940)
SHAREHOLDERS' FUNDS .....................................................................
5,379,514
10,987,737
Equity shareholders' funds ........................................................................
Non-equity shareholders' funds .................................................................
5,379,514
Ð
9,987,737
1,000,000
5,379,514
10,987,737
FIXED ASSETS
Intangible assets.........................................................................................
Tangible assets...........................................................................................
CURRENT ASSETS
Stocks ........................................................................................................
Debtors ......................................................................................................
Cash at bank and in hand ..........................................................................
CREDITORS: amounts falling due within one year..................................
11
12
NET CURRENT ASSETS/(LIABILITIES) ...............................................
TOTAL ASSETS LESS CURRENT LIABILITIES ..................................
CREDITORS: amounts falling due after more than one year ...................
CAPITAL AND RESERVES
Called up share capital ..............................................................................
Share premium account .............................................................................
Pro®t and loss account...............................................................................
13
16
17
17
Reconciliation of movements in shareholders' funds
Period from
26 August
1998 to
31 March
1999
£
Loss for the ®nancial period/year .........................................................................
Dividends..............................................................................................................
Year ended
31 March
2000
£
(20,486)
Ð
(2,122,704)
(36,750)
(20,486)
(2,159,454)
Issue of shares (net of issue costs) .......................................................................
5,400,000
7,767,677
Net addition to shareholders' funds ......................................................................
5,379,514
5,608,223
Opening shareholders' funds ................................................................................
Ð
5,379,514
Closing shareholders' funds..................................................................................
5,379,514
10,987,737
17
Consolidated Cash Flow Statement
Note
£
Cash out¯ow from operating activities ........
Returns on investments and servicing of
®nance .....................................................
Capital expenditure and ®nancial
investment................................................
Acquisitions .................................................
22(1)
Cash out¯ow before ®nancing .....................
Financing
Issue of ordinary share capital (net of
expenses) .................................................
Increase in debt ...........................................
Proceeds of ®nancing transaction ................
Increase in cash in the period/year ..............
Period from
26 August
1998 to
31 March
1999
£
(385,072)
(769,163)
82,645
(43,699)
(4,413,665)
(1,891,245)
(12,038,414)
(28,024)
(6,607,337)
(12,879,300)
5,400,000
2,625,000
Ð
22(2)
£
Year ended
31 March
2000
£
7,767,677
3,491,000
4,731,800
8,025,000
15,990,477
1,417,663
3,111,177
Reconciliation of net cash ¯ow to movement in net debt
Note
£
Increase in cash in the period/year ..............
Cash in¯ow from increase in debt ®nancing
1,417,663
(2,625,000)
Change in net debt resulting from cash
¯ows ........................................................
Movement in net debt in the period/year.....
Net debt at start of period/year....................
Net debt at end of period/year.....................
18
Period from
26 August
1998 to
31 March
1999
£
22(2)
£
Year ended
31 March
2000
£
3,111,177
(8,222,800)
(1,207,337)
(5,111,623)
(1,207,337)
Ð
(5,111,623)
(1,207,337)
(1,207,337)
(6,318,960)
Notes to the Financial Information
1. Accounting policies
The ®nancial statements were prepared in accordance with applicable United Kingdom accounting standards. The
particular accounting policies adopted are described below.
Accounting convention
The ®nancial statements are prepared under the historical cost convention.
Basis of consolidation
The Group accounts consolidate the accounts of Big Yellow Group PLC and its subsidiaries at the period/year end using
acquisition accounting principles.
Goodwill and intangible assets
Purchased goodwill is capitalised in the year in which it arises and amortised over 20 years. The Directors regard 20
years as a reasonable maximum for the estimated useful life of goodwill since it is dif®cult to make projections
exceeding this period.
Capitalised purchased goodwill in respect of subsidiaries is included within intangible ®xed assets.
Tangible ®xed assets
Freehold land and buildings are included at cost less accumulated depreciation on the buildings calculated as shown
below. Interest, overhead and pre-opening launch costs are not capitalised.
Depreciation is provided on cost in equal annual instalments over the estimated useful lives of the assets. The useful
economic lives of the assets are as follows:
Freehold property
50 years
Mezzanine ¯ooring and staircases
25 years
Leasehold property
Over period of the lease
Plant and machinery
10 years
Motor vehicles
4 years
Fixtures, ®ttings and computer equipment
5 years
Investments
Investments held as ®xed assets are stated at cost less provision for any impairment.
Stocks
Stocks are held at the lower of cost and net realisable value.
Pension contributions
Pension contributions represent payments to de®ned contribution schemes, the assets of which are held separately from
those of the Group.
Deferred taxation
Deferred taxation is provided on timing differences, arising from the different treatment of items for accounts and
taxation purposes, which are expected to reverse in the future, calculated at rates at which it is estimated that tax will
arise.
Leases
Operating lease rentals are charged to income in equal annual amounts over the lease term.
19
2. Segmental information
Turnover represents amounts derived from the provision of services which fall within the Group's ordinary activities
after deduction of trade discounts and value added tax. The Group's net assets, turnover and loss before tax, all of which
arises in the United Kingdom, are attributable to one activity, the provision of self-storage space.
3. Operating loss
Period from 26
August 1998 to
31 March
1999
£
Year ended 31
March
2000
£
7,029
23,844
308,915
96,411
10,000
10,000
30,000
6,000
240,505
323,016
Operating loss is stated after charging:
Depreciation......................................................................................................................
Amortisation of goodwill..................................................................................................
Auditors' remuneration:
Ð Group audit fees ..........................................................................................................
Ð non-audit services ........................................................................................................
Operating leases:
Ð other ............................................................................................................................
Included in Group audit fees are £10,000 (1999: £5,000) in respect of the Company.
4. Information regarding directors and employees
Directors' remuneration
Nicholas Vetch .....................
Philip Burks..........................
James Gibson........................
Joanne Elliot(1)......................
Period from 26 August 1998 to 31 March 1999
Salary/fees
£
Bonus
£
Taxable
bene®ts
£
Sub total
£
Pension
£
Total
£
12,500
12,500
12,500
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
12,500
12,500
12,500
Ð
1,250
1,250
1,250
Ð
13,750
13,750
13,750
Ð
37,500
Ð
Ð
37,500
3,750
41,250
Year ended 31 March 2000
Nicholas Vetch .....................
Philip Burks..........................
James Gibson........................
Joanne Elliot(1)......................
Jonathan Short(1) ...................
David White(2) ......................
David Ross(2) ........................
Adrian Lee(2) ........................
Stephen Homer(2) ..................
Richard Mully(1) ...................
Jonathan Austen(1) ................
Salary/fees
£
Bonus
£
Taxable
bene®ts
£
Sub total
£
Pension
£
Total
£
37,500
37,500
37,500
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
30,000
30,000
30,000
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
1,079
1,766
1,179
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
68,579
69,266
68,679
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
3,750
3,750
3,750
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
72,329
73,016
72,429
Ð
Ð
112,500
90,000
4,024
206,524
11,250
217,774
Ð
Ð
Ð
Ð
Ð
(1) Shareholder Directors who receive no remuneration
(2) Appointed 31 March 2000.
Richard Mully was appointed on 21 September 1999 and resigned on 1 December 1999. Jonathan Austen was appointed
on 1 December 1999 and resigned on 16 February 2000.
Pension contributions represent amounts paid to Directors' personal pension schemes.
20
Directors' interests
The bene®cial interests of the Directors in the ordinary share capital of the Company are shown below:
``A'' ordinary shares of 10p each
At 1 April
1999 or date of
appointment
At 31 March
2000
At 17 April
2000
12,100,000
12,100,000
1,800,000
791,880
791,880
12,500,000
12,500,000
1,816,000
791,880
791,880
12,500,000
12,500,000
1,816,000
791,880
791,880
Nicholas Vetch (including trusts) .......................................................
Philip Burks (including trusts)............................................................
James Gibson......................................................................................
Adrian Lee (appointed 31 March 2000) .............................................
Stephen Homer (appointed 31 March 2000).......................................
None of the Directors had any direct interests in the share capital of any of the subsidiary undertakings of the Company
in the year.
Share option scheme
Options in respect of ordinary shares held by the Directors at 31 March 2000 under the Company's 1998 unapproved
share option scheme are as follows:
Name
James Gibson...........
Stephen Homer ........
Adrian Lee...............
Adrian Lee...............
Date option granted
24 September
18 January
18 January
5 March
1998
1999
1999
1999
Option
price per
ordinary
share
10p
13.3p
13.3p
25p
Date ®rst exercisable
24 September
18 January
18 January
5 March
2001
2002
2002
2002
Date on which the
exercise period expires
23 September
17 January
17 January
4 March
2008
2009
2009
2009
Number of
ordinary shares
1,000,000
375,940
375,940
125,000
Options issued to Directors after 31 March 2000 under the Company's 2000 unapproved share option scheme are set out
in note 23.
Employees
Wages and salaries (including Directors) .........................................................................
Social security costs .........................................................................................................
Other pension costs...........................................................................................................
The average number of employees (including Directors) employed by the Group
during the period/year:
Sales .................................................................................................................................
Administration ..................................................................................................................
Period from 26
August 1998 to
31 March 1999
£
Year ended 31
March 2000
£
78,319
7,697
5,476
894,824
69,900
32,530
91,492
997,254
Period from 26
August 1998 to
31 March 1999
No.
Year ended 31
March 2000
No.
5
4
16
10
9
26
At 31 March 2000, there were 68,000 options in issue to members of the Group's staff, with an exercise price of 62.5p
per share which were granted on 16 November 1999. These options are exercisable from 16 November 2002.
21
5. Interest payable and similar charges
Loan stock ........................................................................................................................
Bank overdraft and other borrowings ...............................................................................
Option ®nance fee (see note 18).......................................................................................
Period from
26 August
1998 to
31 March 1999
£
Year ended
31 March 2000
£
Ð
4,662
Ð
307,808
147,613
323,212
4,662
778,633
6. Taxation
No liability to corporation tax arises on the Group's result for the year as the Group made a taxable loss during the year.
The Group has unrelieved tax losses, which can be carried forward against future UK trading pro®ts, estimated at £4.4
million (1999: £3.0 million).
7. Non-equity dividends
7.5% preference shares .....................................................................................................
Period from
26 August
1998 to
31 March 1999
£
Year ended
31 March 2000
£
Ð
36,750
8. Loss per ordinary share
Loss per ordinary share has been calculated on the retained loss for the ®nancial year/period of £2,159,454 (1999:
£20,486) and on the weighted average number of shares in issue during the year/period of 46,250,504 (1999:
34,976,190). There is no dilutive effect from the conversion of share options, loan stock and preference shares.
9. Intangible ®xed assets
£
Cost:
At 26 August 1998 ..................................................................................................................................
Additions .................................................................................................................................................
Ð
1,192,705
At 31 March 1999 ...................................................................................................................................
Additions .................................................................................................................................................
1,912,705
28,024
At 31 March 2000 ...................................................................................................................................
1,940,729
Amortisation:
At 26 August 1998 ..................................................................................................................................
Charge for the period...............................................................................................................................
Ð
23,844
At 1 April 1999 .......................................................................................................................................
Charge for the year..................................................................................................................................
23,844
96,411
At 31 March 2000 ...................................................................................................................................
120,255
Net book value:
At 31 March 2000 ...................................................................................................................................
1,820,474
At 31 March 1999 ...................................................................................................................................
1,888,861
22
10. Tangible ®xed assets
Freehold
property (under
Freehold the course of
construction)
property
£
£
Short
leasehold
property
£
Plant and
machinery
£
Motor
vehicles
£
Fixtures,
®ttings and
computer
equipment
£
Total
£
Cost:
At 26 August 1998 ...............
Subsidiary acquired...............
Additions ..............................
Reclassi®cations....................
Ð
Ð
Ð
Ð
Ð
Ð
4,373,044
Ð
Ð
18,750
Ð
Ð
Ð
6,868
Ð
2,512
Ð
8,000
Ð
Ð
Ð
826,125
40,621
(2,512)
Ð
859,743
4,413,665
Ð
At 31 March 1999 ................
Ð
4,373,044
18,750
9,380
8,000
864,234
5,273,408
Additions ..............................
Reclassi®cations....................
5,317,992
4,373,044
3,385,186
(4,373,044)
2,342,141
Ð
1,622,502
764,091
Ð
Ð
420,989
(764,091)
13,088,810
Ð
At 31 March 2000 ................
9,691,036
3,385,186
2,360,891
2,395,973
8,000
521,132
18,362,218
Accumulated depreciation:
At 26 August 1998 ...............
Subsidiary acquired...............
Reclassi®cations....................
Charge for the period............
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
Ð
10,192
Ð
261
Ð
4,704
803
256
Ð
2,875
Ð
356
Ð
733,693
(803)
6,156
Ð
751,464
Ð
7,029
At 31 March 1999 ................
Reclassi®cations....................
Charge for the year ...............
Ð
Ð
143,731
Ð
Ð
Ð
10,453
Ð
42,386
5,763
678,600
98,052
3,231
Ð
2,003
739,046
(678,600)
22,743
758,493
Ð
308,915
At 31 March 2000 ................
143,731
Ð
52,839
782,415
5,234
83,189
1,067,408
Net book value:
At 31 March 2000 ................
9,547,305
3,385,186
2,308,052
1,613,558
2,766
437,943
17,294,810
At 31 March 1999 ................
Ð
4,373,044
8,297
3,617
4,769
125,188
4,514,915
The reclassi®cation from ®xtures, ®ttings and computer equipment to plant and machinery was made to better represent
the nature of these assets.
Included within freehold property are properties with a net book value of £4,720,681 which were subject to the
®nancing transaction described in note 18. The bene®cial ownership of these properties was unaffected by this
transaction.
11. Debtors
Trade debtors ....................................................................................................................
Other debtors ....................................................................................................................
Prepayments and accrued income .....................................................................................
1999
£
2000
£
45,350
317,222
44,678
88,669
574,044
433,696
407,250
1,096,409
23
12. Creditors: amounts falling due within one year
Bank loans ........................................................................................................................
Trade creditors..................................................................................................................
Taxation and social security .............................................................................................
Other creditors ..................................................................................................................
Accruals and deferred income ..........................................................................................
Dividends payable ............................................................................................................
1999
£
2000
£
Ð
1,939
9,022
58,105
157,242
Ð
2,116,000
1,109,760
12,721
4,927,518
1,581,761
36,750
226,308
9,784,510
Included within other creditors is £4,731,800 arising from the ®nancing transaction described in note 18.
13. Creditors: amounts falling due after more than one year
Bank loan .........................................................................................................................
Loan stock ........................................................................................................................
1999
£
2000
£
2,625,000
Ð
Ð
4,000,000
2,625,000
4,000,000
The bank loan was secured by a charge over the assets of .Big Yellow Self Storage Company Limited. Big Yellow
Group PLC provided a guarantee in respect of the bank loan.
The loan stock represents convertible unsecured loan stock which is repayable on 21 September 2009. The Company
may redeem all or any amount of this stock between 21 September 2001 and 21 September 2009, or earlier if agreed to
by a stockholder. Each stockholder may require the Company to redeem the stock at any time upon certain changes in
ownership of the Company's shares.
After 21 September 2002, each stockholder can by notice require the Company to convert the stock into ``B'' ordinary
shares at a rate of one share per £1 of nominal amount of stock.
Interest is payable on the loan stock at the rate of 71/2%. Additionally, on redemption or at the end of the term on 21
September 2009, the Company will pay a redemption premium such that the return on the loan stock equates to 15% on
an annualised compound basis.
14. Financial instruments
Although not required to, the Directors have decided to provide numerical disclosures in respect of ®nancial
instruments. The Group does not trade in ®nancial instruments. All monetary assets and liabilities are denominated in
sterling.
Short term debtors and creditors have been omitted from all disclosures below. Details of non-equity shares issued by
the Group are given in note 16.
Maturity pro®le of ®nancial liabilities
1999
Bank
borrowings
£
Within one year or less or
on demand ........................
More than ®ve years.............
Gross ®nancial liabilities ......
24
2000
Total
£
Bank
borrowings
£
Loan stock
£
Other
£
Total
£
Ð
2,625,000
Ð
2,625,000
2,116,000
Ð
Ð
4,000,000
4,731,800
Ð
6,847,800
4,000,000
2,625,000
2,625,000
2,116,000
4,000,000
4,731,800
10,847,800
The Group had the following undrawn borrowing facilities at 31 March.
1999
£
2000
£
Expiring in one year or less .............................................................................................
Ð
884,000
Total .................................................................................................................................
Ð
884,000
Interest rate pro®le
Weighted
average
®xed
interest rate
Weighted
average
period for
which the
rate is ®xed
Weighted
average
period until
maturity
Total
£
Floating rate
®nancial
liabilities
£
Fixed rate
®nancial
liabilities
£
2,625,000
2,625,000
Ð
Ð
Ð
2.0 years
At 31 March 2000
Gross ®nancial liabilities ........................... 10,847,800
2,116,000
8,731,800
11.7%
4.9 years
3.9 years
At 31 March 1999
Gross ®nancial liabilities ...........................
Total
£
Floating rate
®nancial assets
£
At 31 March 1999
Gross ®nancial assets........................................................................................................
1,417,663
1,417,663
At 31 March 2000
Gross ®nancial assets........................................................................................................
4,528,840
4,528,840
The interest rate on ¯oating rate assets and liabilities is linked to the Bank of England's base rate.
Fair values of ®nancial assets and liabilities
Primary ®nancial instruments held or issued to ®nance the Group's
operations
1999
Carrying
Estimated fair
amount
value
£
£
2000
Carrying
Estimated fair
amount
value
£
£
Cash at bank, in hand and other liquid investments ...........
1,417,663
1,417,663
4,528,840
4,528,840
Bank borrowings.................................................................
Loan stock ..........................................................................
Other...................................................................................
2,625,000
Ð
Ð
2,625,000
Ð
Ð
2,116,000
4,000,000
4,731,800
2,116,000
4,000,000
4,731,800
Gross ®nancial liabilities ....................................................
2,625,000
2,625,000
10,847,800
10,847,800
7% convertible preference shares .......................................
Ð
Ð
1,000,000
1,000,000
The fair values have been calculated by discounting expected cash ¯ows at prevailing interest rates at the year end.
15. Provisions for liabilities and charges
Deferred taxation
The amounts not provided in the accounts are:
Capital allowances in advance of depreciation .................................................................
Short term timing differences ...........................................................................................
Less trading losses carried forward ..................................................................................
Not provided
1999
£
Not provided
2000
£
270
Ð
(615,393)
38,325
(6,030)
(1,328,674)
(615,123)
(1,296,379)
25
16. Called up share capital
Authorised:
31,021,160 (1999: 29,255,640) ordinary ``A'' shares of 10p each ...................................
28,028,800 (1999: 13,000,000) ordinary ``B'' shares of 10p each ...................................
1,000,000 (1999: nil) preference shares of 10p each........................................................
Called up, allotted and fully paid:
28,399,760 (1999: 27,503,760) ordinary ``A'' shares of 10p each ...................................
23,028,800 (1999: 13,000,000) ordinary ``B'' shares of 10p each ...................................
1,000,000 (1999: nil) preference shares of 10p each........................................................
31 March
1999
£
31 March
2000
£
2,925,564
1,300,000
Ð
3,102,116
2,802,880
100,000
4,225,564
6,004,996
2,750,376
1,300,000
Ð
2,839,976
2,302,880
100,000
4,050,376
5,242,856
Each holder of an ``A'' or ``B'' ordinary share can appoint a director, but in all other respects the ``A'' and ``B'' shares
rank pari passu. The preference shares carry a ®xed cumulative dividend of 7% per annum and rank in priority to the
ordinary shares on any return of capital but are not entitled to a return of any excess of capital. The preference shares
carry one vote per share on any resolution. The preference shares may be converted to ordinary shares at the option of
the holder, at any time up to 21 September 2002.
On 4 September 1998, 2,600 ordinary shares were issued at par.
On 24 September 1998 the authorised share capital was increased from £500,000 divided into 5,000,000 shares of 10p
each to £4,000,000 divided into 27,000,000 ``A'' ordinary shares of 10p each and 13,000,000 ``B'' ordinary shares of
10p each. On that day 25,997,400 ``A'' ordinary shares were issued at par for a consideration of £2,599,740. On
25 September 1998 13,000,000 ``B'' ordinary shares were issued for a consideration of £2,600,000 giving rise to a share
premium reserve of £1,300,000.
On 12 January 1999 the authorised ``A'' share capital was increased by 2,255,640 shares with a nominal value of
£225,564. On that day 1,503,760 ``A'' ordinary shares were issued for a consideration of £200,000 giving rise to a share
premium reserve of £49,624.
On 20 September 1999 the authorised ``A'' share capital was increased by 1,765,520 shares with a nominal value of
£176,552. On 21 September 1999 896,000 ``A'' ordinary shares were issued for a consideration of £560,000 giving rise
to a share premium reserve of £470,400.
On 20 September 1999 the authorised ``B'' share capital was increased by 15,028,800 shares with a nominal value of
£1,502,880. On 21 September 1999 10,028,800 ``B'' ordinary shares were issued for a consideration of £6,268,000
giving rise to a share premium reserve of £5,265,120.
On 21 September 1999 1,000,000 preference shares of 10p each were issued for a consideration of £1,000,000.
All share issues were to fund the future expansion of the business.
26
17. Statement of movements on reserves
Share
premium
account
£
Pro®t and
loss
account
£
At 26 August 1998 ...........................................................................................................
Shares issued ....................................................................................................................
Retained loss for the period..............................................................................................
Ð
1,349,624
Ð
Ð
Ð
(20,486)
At 31 March 1999 ............................................................................................................
Shares issued ....................................................................................................................
Loss retained for year.......................................................................................................
1,349,624
6,575,197
Ð
(20,486)
Ð
(2,159,454)
At 31 March 2000 ............................................................................................................
7,924,821
(2,179,940)
18. Related party transactions
During the year the Group entered into a ®nancing transaction in respect of two of its properties with TR Property
Investment Trust PLC (``TRPIT''), one of the Company's shareholders. The Group sold the properties to TRPIT for
£4,731,800, but retains an option to repurchase the properties and retains the bene®cial ownership of these properties.
The price at which the Group has the option to repurchase the properties is calculated by reference to the sale price and
the increase in the IPD Annual London Standard Industrials Index less any option ®nance fee paid at the date of
repurchase and a further capital sum may therefore be payable upon exercise of the option. The pro®t and loss account
for the year includes within interest payable and similar charges a charge of £323,212 in respect of the option ®nance
fee. This amount was unpaid at the year end and is included within accruals and deferred income.
During the year the Company issued loan stock to Prudential Insurance Company of America, one of the Company's
shareholders. The terms of this loan stock are shown in Note 13 and the charge for the total return for the year in respect
of the loan stock is shown in Note 5. Of the total return charged in the year, £147,246 remains unpaid and is included
within accruals and deferred income.
19. Financial commitments
The Group has entered into operating leases and has annual commitments under these
expiring as follows:
Within two to ®ve years ...................................................................................................
After ®ve years .................................................................................................................
20. Capital commitments
Amounts contracted but not provided in respect of freehold properties ...........................
1999
Land and
Buildings
£
2000
Land and
Buildings
£
Ð
164,210
53,156
836,888
164,210
890,044
1999
£
2000
£
2,624,401
1,618,304
27
21. Acquisitions
During the prior period Big Yellow Group PLC acquired 100% of the ordinary shares of .Big Yellow Self Storage
Company Limited. The business acquired provides the same service that Big Yellow Group PLC provides, namely
provision of space for storage. The acquisition took place on 1 January 1999. The acquisition method of accounting was
used for the acquisition of this business. The acquisition was made up as follows:
Book value
£
Acquisition
adjustments
£
Fair value
£
Fixed assets................................................................................................
Debtors ......................................................................................................
Cash at bank and in hand ..........................................................................
108,278
102,441
109,755
Ð
Ð
Ð
108,278
102,441
109,755
Current liabilities .......................................................................................
Long term liabilities ..................................................................................
Goodwill ....................................................................................................
320,474
(232,179)
(601,000)
Ð
Ð
Ð
601,000
Ð
320,474
(232,179)
Ð
1,912,705
(512,705)
601,000
2,001,000
Satis®ed by cash ........................................................................................
2,001,000
The purchase was satis®ed by cash of which £601,000 related to the transfer of a parent company loan.
The summarised pro®t and loss account of the acquired entity for the years ended 31 December 1997 and 1998 were as
follows:
Turnover ...........................................................................................................................
Operating pro®t.................................................................................................................
Pro®t before and after taxation .........................................................................................
Year ended 31
December
1997
£
Year ended 31
December
1998
£
576,603
116,425
58,011
671,534
176,860
87,075
22. Notes to the Cash Flow Statement
(1)
Reconciliation of operating pro®t to net cash in¯ow from operating activities
1999
£
2000
£
Operating loss..............................................................................................................
Depreciation.................................................................................................................
Amortisation of goodwill.............................................................................................
Increase in stock ..........................................................................................................
Increase in debtors.......................................................................................................
(Decrease)/Increase in creditors...................................................................................
(103,131)
7,029
23,844
(2,133)
(304,809)
(5,872)
(1,648,884)
308,915
96,411
(29,581)
(643,585)
1,147,561
Net cash out¯ow from operating activities ..................................................................
(385,072)
(769,163)
28
(2)
Analysis of changes in net funds during the period/year
26 August
1998
£
Cash
¯ows
£
31 March
1999
£
Cash
¯ows
£
Cash at bank and in hand ............
Bank loans due within one year ..
Bank loans due after one year .....
Loan stock ...................................
Ð
Ð
Ð
Ð
1,417,663
Ð
(2,625,000)
Ð
1,417,663
Ð
(2,625,000)
Ð
3,111,177
(4,222,800)
Ð
(4,000,000)
Net funds .....................................
Ð
(1,207,337)
(1,207,337)
(5,111,623)
(3)
Reclassi®cations
£
Ð
(2,625,000)
2,625,000
Ð
Ð
31 March
2000
£
4,528,840
(6,847,800)
Ð
(4,000,000)
(6,318,960)
Analysis of cash ¯ows for headings netted in the cash ¯ow statement acquisitions
£
Returns on investments and servicing of ®nance
Interest received.........................................................
Interest paid ...............................................................
Period from
26 August 1998
to 31 March
1999
£
87,307
(4,662)
£
259,239
(302,938)
82,645
Capital expenditure and ®nancial investment
Purchase of tangible ®xed assets ...............................
Acquisitions and disposals
Purchase of subsidiary undertaking ...........................
Net cash acquired with subsidiaries...........................
(43,699)
(4,413,665)
(2,001,000)
109,755
(12,038,414)
(28,024)
Ð
(1,891,245)
Financing
Issue of ordinary share capital (net of expenses).......
Debt due within a year:
Loans repaid ..........................................................
Proceeds of ®nancing transaction (note 18) ...........
Reclassi®cation of debt..........................................
(28,024)
5,400,000
Ð
Ð
Ð
7,767,677
(509,000)
4,731,800
2,625,000
Ð
Debt due beyond a year:
New loans acquired ...............................................
Reclassi®cation of debt..........................................
Net cash in¯ow from ®nancing .................................
Year ended
31 March
2000
£
2,625,000
Ð
6,847,800
4,000,000
(2,625,000)
2,625,000
1,375,000
8,025,000
15,990,477
29
23. Post balance sheet events
On 4 April 2000 the Company announced its intention to ¯oat through an admission to the Alternative Investment
Market together with a proposed Placing and Offer. Conditional on admission to the Alternative Investment Market:
q
the 1 million preference shares will be purchased;
q
the existing authorised and issued ``A'' and ``B'' ordinary shares of 10p each will be converted into Ordinary
Shares;
q
the £4 million of convertible loan stock will be redeemed; and
q
it is currently intended that the following options will be issued to Directors after 31 March 2000 under the
Company's 2000 unapproved share option scheme:
Name
Nicholas Vetch ...........................
Philip Burks................................
James Gibson..............................
Adrian Lee..................................
Stephen Homer ...........................
Yours faithfully
Deloitte & Touche
Chartered Accountants
30
5
5
5
5
5
Date option
granted
May
May
May
May
May
2000
2000
2000
2000
2000
Option price per
ordinary share
100p
100p
100p
100p
100p
5
5
5
5
5
Date ®rst
exercisable
May
May
May
May
May
2003
2003
2003
2003
2003
Date on which
the exercise
period expires
4
4
4
4
4
May
May
May
May
May
2010
2010
2010
2010
2010
Number of
ordinary shares
1,000,000
1,000,000
100,000
100,000
150,000
PART 3 ± UNAUDITED PROFORMA STATEMENT OF
NET ASSETS
The unaudited statement of proforma net assets set out below is based on the audited consolidated balance sheet of the
Group as at 31 March 2000 set out in the Accountants' Report in Part 2 of this document after making adjustments on
the basis set out below. The table has been prepared by the Company for illustrative purposes only and, because of its
nature, it cannot give a complete picture of the ®nancial position of the Group.
Fixed assets
Intangible assets.........................................................
Tangible assets...........................................................
Current assets
Stocks ........................................................................
Debtors ......................................................................
Cash at bank and in hand ..........................................
Per Accountants'
Report
As at
31 March 2000
£'000
Net proceeds of
the Placing and
Customer Offer
£'000
Capital
Re-organisation
£'000
Proforma
£'000
1,820
17,295
Ð
Ð
Ð
Ð
1,820
17,295
19,115
Ð
Ð
19,115
32
1,096
4,529
Ð
Ð
43,500
Ð
Ð
(5,000)
32
1,096
43,029
5,657
43,500
(5,000)
44,157
Creditors: amounts falling due within one year.........
(9,784)
Ð
Net current (liabilities)/assets ....................................
(4,127)
43,500
(5,000)
34,373
Total assets less current liabilities .............................
14,988
43,500
(5,000)
53,488
Creditors: amounts falling due after more than one
year........................................................................
(4,000)
Net assets...................................................................
10,988
Ð
43,500
Ð
4,000
(1,000)
(9,784)
Ð
53,488
Notes:
1.
The proforma net assets statement has been prepared by the Company to illustrate the effect of the estimated proceeds of the Placing and
Offer and capital re-organisation and buyback of the Company's preference shares. No account has been taken of any trading since 31
March 2000.
2.
The net proceeds of the Placing and Customer Offer (receivable by the Company) are based on the gross proceeds of the Placing and
Customer Offer of £45,000,000 less estimated expenses payable by the Company of £1,500,000. This excludes any proceeds that may
arise as a result of the Employee Offer.
3.
The capital re-organisation comprises the redemption of £4 million convertible loan stock and the buyback of 1 million preference shares
at £1 each.
31
PART 4 ± TERMS AND CONDITIONS OF APPLICATION
FOR THE PUBLIC OFFER
1.
If you apply for Ordinary Shares on an Employee Application Form or a Customer Application Form, you will be
agreeing with the Company, Cazenove and the Receiving Agent, as set out below. The Customer Application
Form has been sent to you by Computershare Services PLC on 17 April 2000. The Employee Application Form
will be distributed separately to Eligible Employees.
2.
By completing and delivering an Employee Application Form or a Customer Application Form, you as the
applicant, and, if signing on behalf of another person or corporation, that person or corporation:
32
(a)
offer to acquire at the Offer Price the maximum number of Ordinary Shares that can be applied for with the
amount speci®ed in your application form as the amount that you wish to invest (or any smaller amount in
respect of which your application is accepted) provided that in respect of an application on a Customer
Application Form only your application must be for a minimum of £500, subject to these terms and
conditions, the terms of the relevant application form and accompanying guide, this document and the
Memorandum and Articles of Association of the Company. There will be no minimum limit for
applications on an Employee Application Form. Maximum applications under the Customer and Employee
Offer are capped at £10,000 each.
(b)
authorise Computershare Services PLC as the Receiving Agent, to send you a de®nitive share certi®cate
and/or a sterling cheque for any monies returnable (without interest) crossed ``Account Payee'' or your
cheque, banker's draft or money order, by post at the risk of the person(s) entitled to it, to your address (or
in the case of joint applications, to the ®rst named applicant as set out in your application form), and to
ensure that your name and, where applicable, the name of any joint applicants) is/are placed on the register
of members of the Company in respect of the Ordinary Shares for which your application is accepted.
Pending allotment of your Ordinary Shares or return of monies to you, your application monies will be held
by the Receiving Agent in a separate account.
(c)
in consideration of the Company and each of their agents agreeing that they will not, prior to the date of
Admission, or such later date as the Company and Cazenove may agree, allot, issue, sell or deliver to any
person any Ordinary Shares other than by means of the procedures referred to in this document and as a
collateral contract between you and the parties referred to in paragraph 1 above which will become binding
on despatch by post or (if delivered by hand) receipt by the Receiving Agent of your application form, you:
(i)
agree that your application cannot be revoked by you until after 15 May 2000 (or such later date as
the Company and Cazenove may agree) in the event Admission has not taken place;
(ii)
undertake to pay the Offer Price for the Ordinary Shares (payable in full on application) in respect of
which your application is accepted and warrant that your remittance will be honoured on ®rst
presentation, failing which you will not be entitled to receive a statement of entitlement or share
certi®cate, nor to enjoy or receive any rights in respect of such Ordinary Shares unless and until you
make payment in cleared funds for such Ordinary Shares and such payment is accepted by the
Receiving Agent (which acceptance shall be in its absolute discretion and on the basis that you
indemnify the Receiving Agent in respect of any costs, expenses, losses or liabilities incurred as a
result) and, pending receipt of cleared funds, the Receiving Agent, on behalf of the Company and
Cazenove may terminate the agreement to allocate Ordinary Shares to you and re-allocate the
Ordinary Shares to another person;
(iii)
agree that any statement of entitlement or share certi®cate to which you or any of the persons
speci®ed in paragraph 2(b) above may become entitled and monies returnable to you be retained
pending clearance of your remittance or pending investigation of any suspected breach of any of the
warranties contained in paragraphs 11(a), 11(b), 11(c), 11(f), 11(g), 11(i), 11(j), 11(k) and 11(l)
below and any interest accruing on such retained monies shall accrue to and for the bene®t of the
Company;
(iv)
agree, on request by Cazenove, the Receiving Agent or the Company, to disclose promptly in writing
to Cazenove, the Receiving Agent or the Company such information as they may request in
connection with your application and authorise them to disclose any information relating to your
application which it may consider appropriate;
(v)
agree that any share certi®cate or statement of entitlement in respect of any Ordinary Shares to which
you or any of the persons speci®ed in paragraph 2(b) above may become entitled and monies
returnable to you may be retained pending clearance of your remittance, investigation of any
suspected breach of these terms and conditions and any veri®cation of identity which is, or which
Cazenove or the Receiving Agent considers may be, required for the purpose of the Money
Laundering Regulations 1993 and that any interest accruing on such retained monies shall accrue to
and for the bene®t of the Company;
(vi)
agree that, if evidence of identity satisfactory to Cazenove or the Receiving Agent is not provided on
or before 27 April 2000 the Company may terminate the contract of allocation with you and, in such
case, the Ordinary Shares which would otherwise have been allocated to you will be sold as soon as
reasonably practicable (and for which purpose you hereby irrevocably authorise the Company or any
person appointed by it for this purpose to execute on your behalf any instrument of transfer which
may be necessary to effect such sale) and, as soon as is reasonably practicable after such sale, your
application monies (or, if less, an amount equal to the proceeds of such sale net of all expenses of the
sale) will be returned to the bank or other account on which the cheque or other remittance
accompanying the application was drawn and you agree that, in such event, you will have no claim
against the Company, Cazenove or the Receiving Agent or any of their respective of®cers, agents or
employees in respect of the balance of your application monies, if any (such balance being retained
by the Company as compensation for breach of contract), or for any loss arising from the price, the
timing or the manner of such sale or otherwise in connection therewith;
(vii) agree that you are not applying on behalf of a person engaged in money laundering;
(viii) undertake to ensure that, in the case of an application signed by someone else on your behalf, the
original of the relevant power of attorney (or a complete copy certi®ed by a solicitor or notary) is
enclosed with your application form; and
(ix)
agree that any future communications sent by the Company to you in your capacity as a shareholder
of the Company will be in the English language.
3.
If your application form is not completed correctly or is amended or if the accompanying cheque, banker's draft
or money order is for the wrong amount or currency or if your application form is not accompanied by a power of
attorney or other authority where required, it may still be treated as valid. In these circumstances, the Company's
decision as to whether to treat your application as valid and, how to construe, amend or complete it, shall be ®nal.
You will not, however, be treated as having offered to invest a higher amount than is indicated in your
application.
4.
Any application may be rejected in whole or in part. Applications will not be accepted in names that are, or are
suspected to be, ®ctitious, or which are otherwise unsuitable for share registration purposes.
Acceptance of your application
5.
Cazenove may on behalf of the Company accept your offer to subscribe for Ordinary Shares (if your application
is received by the due date, valid (or treated as valid), processed and not rejected) either:
(a)
by notifying the London Stock Exchange of the basis of allocation (in which case the acceptance will be on
that basis); or
(b)
by notifying acceptance to the Receiving Agent.
33
6.
The Company will endeavour to satisfy valid applications on the relevant application forms. However, if demand
for Ordinary Shares exceeds the number of Ordinary Shares available in the Public Offer, Cazenove, in
consultation with the Company will determine the basis of allocation of Ordinary Shares. Accordingly, you may
not receive all of the Ordinary Shares you apply for and you may not receive any at all.
Conditions
7.
If your application is accepted (in whole or in part) under the Public Offer there will be a binding contract entered
into by you and the Company under which you will be required to acquire the Ordinary Shares at the Offer Price
in respect of which your application has been accepted conditional upon (a) Admission becoming effective in
accordance with Chapter 16 of the Rules of the London Stock Exchange on or before 8 May 2000 or such later
date as Cazenove and the Company may agree (not being later than 1 June 2000) and (b) each of the Nominated
Adviser and Broker Agreement and the Underwriting Agreement referred to in paragraph 12 of Part 5 of this
document becoming wholly effective and, thereafter, wholly unconditional and not being terminated before
Admission in accordance with its terms and (c) the right of termination under paragraph 23 below not having
been exercised prior to Admission and (d) the Offer Price having been determined prior to Admission.
8.
You will not be entitled to exercise any remedy of rescission for innocent misrepresentation (including precontractual representations) at any time after acceptance. This does not affect any other rights you may have.
9.
Cazenove and the Company expressly reserve the right to determine at any time prior to Admission, not to
proceed with the Public Offer. If such right is exercised, the Public Offer will lapse and any monies received will
be returned to you without interest.
Return of application monies
10.
34
If an application is not accepted or if any contract created by acceptance does not become unconditional your
cheque or money order or a cheque from the Receiving Agent for the relevant amount will be returned to you
without interest by post at the risk of the applicant not later than 1 June 2000. If any application is accepted for an
amount lower than that offered, subject as hereinafter provided, the balance of the amount paid on application (as
the case may be) will be returned by cheque crossed ``Account Payee'' in favour of the relevant payee without
interest by post at the risk of the applicant(s) not later than 15 May 2000. In the meantime, application monies
will be retained in an account designated for the purposes of the Public Offer and any interest accrued on the
application monies shall be retained by and accrue for the bene®t of, the Company. The cheque and/or banker's
draft and/or money order accompanying your application may be presented on receipt and before acceptance of
your application, but this will not constitute acceptance of your application, either in whole or in part. The
proceeds of this presentation will be held pending acceptance and, if your application is accepted and the
conditions above are satis®ed, will be applied in discharging the total amount due for the Ordinary Shares you
have been allocated. Share certi®cates and statements of entitlement and surplus application monies (if any) may
be retained pending clearance of the applicant's cheque and/or banker's draft and/or money order. The right is
also reserved to reject any application in respect of which the applicant's cheque, banker's draft or, as the case
may be, money order has not been cleared on ®rst presentation and, in any event, by 12 noon on 3 May 2000. The
Company may require an applicant to pay interest or other resulting costs (or both) if the cheque, banker's draft
or money order accompanying his application is not honoured on ®rst presentation. No refund cheques will be
issued for amounts less than the Offer Price; any such amount will be donated to a charity nominated by the
Company. Sums refunded will be paid in sterling.
Warranties
11.
By completing and submitting an Employee Application Form or a Customer Application Form, you:
(a)
warrant that, if the laws of any territory outside the UK are relevant to your application, in connection with
your application, you have complied with all such laws, obtained all governmental and other consents
which may be required, complied with all requisite formalities and paid any issue, transfer or other taxes
due in connection with your application in any territory, other than the UK, and that you have not taken any
action or omitted to take any action which will or may result in Cazenove, the Company, the Receiving
Agent or any of their respective of®cers, agents or employees acting in breach of the regulatory or legal
requirements of any territory outside the UK or infringing any obligations under the Memorandum and
Articles of Association of the Company in connection with the Public Offer or your application;
(b)
warrant that, if you sign an Employee Application Form or a Customer Application Form on behalf of
somebody else or a corporation, you have the authority to do so and that such other person will be bound
accordingly and will be deemed also to have given the con®rmations, warranties and undertakings
contained in these terms and conditions and undertake to enclose your power of attorney or other authority
or a complete copy thereof duly certi®ed by a solicitor where required by the instructions contained in the
guide to completing the relevant application form and otherwise comply with such instructions;
(c)
con®rm that, in making an application, neither you nor any person on whose behalf you are applying is
relying on any information or representation in relation to the Company or to any other member of the Big
Yellow Group other than such as may be contained in this document and you agree that none of Cazenove,
the Company, the Receiving Agent or any person acting on behalf of them or any person responsible solely
or jointly for this document, or any part of it, shall have any liability for any such information or
representation;
(d)
agree that, having had the opportunity to obtain and read this document, you shall be deemed to have noted
all information and representations concerning the Company or any other member of the Big Yellow
Group contained in this document;
(e)
acknowledge that no person is authorised in connection with the Public Offer to give any information or
make any representation other than as contained in this document and, if given or made, any information or
representation must not be relied upon as having been made by Cazenove, the Company, or the Receiving
Agent;
(f)
con®rm that you have reviewed the restrictions contained in paragraph 18 below and warrant, to the extent
relevant, that you (and any person on whose behalf you apply) comply or have complied with the
provisions of paragraph 18 below;
(g)
warrant that, you are not a person who is under age (being 18 years of age or, in the case of a person
resident in Jersey, 20 years) on the date of your application;
(h)
agree that all documents in connection with the Public Offer and any returned monies will be sent at your
risk and may be sent by post to you at your address (or, in the case of joint applications in the Public Offer,
the address of the ®rst-named applicant) set out in your application form;
(i)
warrant that, in the case of an application made on an Employee Application Form, (i) you are (or, if you
are signing on behalf of another person, that other person is) an Eligible Employee and (ii) only one
application (whether in your sole name or jointly) has been made by you or on your behalf in the Offer;
(j)
warrant that, in the case of an application made on a Customer Application Form, only one application
(whether in your sole name or jointly) has been made by you or on your behalf in the Offer;
(k)
warrant that you are not applying as, or as a nominee or agent of, a person who is or may be a person
mentioned in any of sections 67, 70, 93 or 96 of the Finance Act 1986 (concerning depository receipts and
clearance services); and
35
(l)
warrant that you are a resident of the UK, Jersey or the Isle of Man and are not acting for the account or
bene®t of, a US person or persons or other entity in the United States, or a Canadian person or an
individual, corporation or other entity resident in Japan or Australia or The Republic of South Africa.
Money laundering
12.
You agree that, in order to ensure compliance with Money Laundering Regulations 1993 the Receiving Agent
may at its absolute discretion require, and you will provide, veri®cation of identity from any person lodging an
application form who either (i) tenders payment by way of banker's draft or cheque or money order drawn on, or
by way of telegraphic transfer or similar electronic means from, an account in the name of another person or
persons or (ii) appears to the Receiving Agent to be acting on behalf of some other person. In the former case,
veri®cation of identity of the applicant may be required. In the latter case, veri®cation of identity of any persons
on whose behalf the applicant appears to be acting may be required. Failure to provide the necessary evidence of
identity satisfactory to the Receiving Agent may result in application(s) being rejected or delays in the despatch
of documents.
13.
Without prejudice to the generality of paragraph 12 above, veri®cation of the identity of applicants may be
required if the value of the Ordinary Shares applied for exceeds £9,500. If, in such circumstances, you use a
building society cheque, banker's draft or money order you should ensure that the bank or building society enters
the name, address and account number of the person whose account is being debited on the reverse of the cheque,
banker's draft or money order and adds its stamp. If in such circumstances you use a cheque drawn by a third
party, you may be requested to provide a copy of the applicant's passport or driving licence certi®ed by a solicitor
or a recent original bank or building society statement or utility bill in the applicant's name and showing his
current address (which originals will be returned by post at the applicant's risk).
14.
If you are making the application as agent for one or more persons, you should indicate in your application form
whether you are a UK or EU regulated person or institution and specify your status.
15.
Whenever (a) two persons form or resolve to form a business relationship or (b) in respect of any one-off
transaction, the provisions of Regulation 7 of the Money Laundering Regulations 1993 provide that the applicant
must produce satisfactory evidence of their identity or the recipient must take such measures as will produce
satisfactory evidence of the applicant's identity. When payment is made by cheque bearing the applicant's name,
that will in most cases be capable of constituting the required evidence of identity.
16.
You agree that:
36
(i)
any share certi®cate in respect of any Ordinary Shares to which you may become entitled and monies
returnable to you may be retained (and any CREST account not credited) pending (a) clearance of your
remittance, (b) investigation of any suspected breach of these terms and conditions and (c) any veri®cation
of identity which is, or may be, required for the purposes of the Money Laundering Regulations 1993;
(ii)
such monies retained will bear no interest and neither the Company nor Cazenove nor their agents shall be
liable for any resulting loss or damage; and
(iii)
if evidence of identity satisfactory to the Company, Cazenove and their agents is not provided to any of
them on or before 3.00 p.m. on 27 April 2000 (or such later date as the Company and Cazenove may agree)
Cazenove or the Company may terminate the agreement constituted by the acceptance in whole or in part
of your application without liability and, in such case, the Ordinary Shares which are the subject of such
agreement will be reallocated or sold as soon as reasonably practicable (and for such purpose you hereby
irrevocably authorise the Company, or any person appointed by it for the purpose to execute on your behalf
any instrument of transfer or other document which may be necessary or desirable in order to effect such
reallocation or sale) and, as soon as reasonably practicable after such re-allocation or sale, your application
monies (or, if less, an amount equal to the proceeds of such reallocation or sale net of all expenses) will be
returned without interest to the bank or other account on which the cheque or other remittance
accompanying your application was drawn, and you agree that, in such event, you will have no claim
against Cazenove or the Company or their agents or any of their respective of®cers or employees in respect
of the balance of your application monies, if any (such balance being retained by the Company as
compensation for breach of contract), or for any loss arising from the price, the timing or the manner of
such reallocation or sale or otherwise in connection therewith.
Supply and disclosure of information
17.
Cazenove and the Company and their agents shall have full access to all information relating to, or deriving from,
the cheque or banker's draft accompanying your application, and its processing. If Cazenove, the Company or
their agents request any further information about your application, you must promptly disclose it to them.
Following payment in full of the Offer Price and the provision of identity required by the Receiving Agent, your
name(s) will be placed on the register of members of the Company in respect of the Ordinary Shares for which
your application has been accepted. The register of members of the Company is open to inspection by the public,
who may take copies in return for a prescribed fee. The information supplied in, or in connection with, your
application may also be disclosed to regulatory bodies and to the Company, Cazenove and their agents and
members of the police forces for compiling lists of, and otherwise taking action in respect of, suspected multiple
or other fraudulent applications. Information relating to applications will also be retained by the Receiving Agent
and may be disclosed to members of police forces, as contemplated by the Money Laundering Regulations 1993.
Overseas investors
18.
It is the responsibility of any person outside the UK wishing to make an application for the Public Offer to satisfy
himself as to full observance of the laws of the relevant territory in connection therewith, including obtaining any
requisite governmental or other consents or approvals, observing any other formalities requiring to be observed in
such territory and paying any issue, transfer or other taxes required to be paid in such territory. No person
receiving a copy of this document or an Employee Application Form or a Customer Application Form in any
territory may treat the same as constituting an invitation or offer to him nor should he in any event use such
application form unless, in the relevant territory, such an invitation or offer could lawfully be made to him or
such application form could lawfully be used by him without contravention of any registration or other
requirements. This document has not been submitted to the clearance procedures of the London Stock Exchange
or any other regulatory authority. Any application made by or on behalf of a person outside the UK, Jersey or the
Isle of Man, other than an Eligible Employee, may be rejected.
Miscellaneous
19.
To the extent permitted by law, all representations, warranties and conditions, express or implied and whether
statutory or otherwise, (including, without limitation, pre-contractual representations but excluding any
fraudulent representations) are expressly excluded in relation to the Ordinary Shares and the Offer.
20.
Reference in these terms and conditions to ``this document'' is to the prospectus dated 17 April 2000 issued by
the Company relating to the Offer. Save where the context requires otherwise, terms de®ned in this document
bear the same meaning when used in the Employee Application Form and/or the Customer Application Form and
in the guide to completing the relevant application forms. In the case of a joint application to the Public Offer,
references in these terms and conditions to ``you'' or the ``applicant'' are to each joint applicant (and ``you'' shall
be construed accordingly) and the liability of joint applicants is joint and several.
21.
The rights and remedies of the Company, Cazenove and their agents under these terms and conditions are in
addition to any rights and remedies which would otherwise be available to any of them and the exercise or partial
exercise of any one right will not prevent the exercise of others or full exercise.
22.
Cazenove reserves the right to delay the closing time of the Public Offer from 3.00 p.m. on 27 April 2000 by
giving notice to the London Stock Exchange. In this event, the revised closing time will be published in such
manner as Cazenove (following consultation with the Company) determines subject, and having regard, to the
rules of the London Stock Exchange.
37
23.
The Nominated Adviser and Broker Agreement and the Underwriting Agreement will provide that the Offer may
be terminated in certain circumstances at any time prior to Admission. If the Offer is so terminated, applications
received up to the date of termination will automatically lapse, applications received after that date will be of no
effect and any application monies relating thereto will be returned to you without interest.
24.
You agree that all applications, acceptances of applications and contracts resulting from them under the Public
Offer shall be governed by and construed in accordance with English law and that for the exclusive bene®t of
Cazenove, the Company and its agents you irrevocably submit to the jurisdiction of the English Courts and agree
that nothing shall limit the Company's right to bring any action, suit or proceedings arising out of or in
connection with any such application, acceptances or contracts in any other manner permitted by law or in any
court of competent jurisdiction.
25.
You authorise us, on your behalf, to make any appropriate returns to the Inland Revenue in relation to stamp duty
reserve tax (if any) on any contract arising on acceptance of your application and in relation to stamp duty (if any)
payable on any transfer of shares as a result of such contract.
26.
You agree that Cazenove or any other agent of the Company will not treat you as its customer by virtue of an
application being accepted and that Cazenove will not be responsible to you for providing to you the protections
afforded to its customers and that Cazenove will not owe you any duties or responsibilities concerning the price
of the Ordinary Shares or concerning the suitability of the Ordinary Shares for you as an investment or (save as
expressly set out in these terms and conditions) otherwise in connection with the Public Offer.
27.
You authorise the Receiving Agent and its agents to do all things necessary to effect registration into your
name(s) for any persons speci®ed in paragraph 2(b) above of any Ordinary Shares acquired by you and authorise
any representative of the Receiving Agent to execute and/or complete any document of title required thereof.
28.
You authorise the Company and the Receiving Agent to send a share certi®cate for the number of Ordinary
Shares for which your application is accepted and/or a cheque for any money returnable and all other documents
and remittances by post to you at the address (or, in the case of joint applicants, the address of the ®rst-named
person) stated in your application form.
29.
The dates and times referred to in these terms and conditions may be altered by the Company and Cazenove.
30.
All documents and remittances sent or delivered to or by you will be sent or delivered at your own risk.
31.
You may only apply once for your own bene®t for Ordinary Shares in the Offer.
38
PART 5 ± ADDITIONAL INFORMATION
1. Responsibility
Big Yellow Group PLC (``Big Yellow'') and the Directors of Big Yellow, whose names and addresses appear on page 6
of this document, accept responsibility for the information contained in this document. To the best of the knowledge of
the Directors of Big Yellow (who have taken all reasonable care to ensure that such is the case) the information
contained in this document is in accordance with the facts and makes no omission likely to affect the import of such
information.
2. Big Yellow and its subsidiaries
2.1
The Company was incorporated in England on 26 August 1998 under the Act as a private company limited by
shares under the name of Store Stuff Limited with registered number 3625199. The Company changed its name
to Cubic Self Storage Limited on 9 September 1999, to The Big Yellow Holding Company Limited on 12
January 1999. On 31 March 2000, the Company was re-registered as a public limited company and changed its
name to Big Yellow Group PLC.
2.2
The registered of®ce of the Company and of each of its subsidiaries is 2, The Deans, Bridge Road, Bagshot,
Surrey GU19 5AT.
2.3
The liability of the members of the Company is limited.
2.4
The Company is the holding company of the Group. Its subsidiaries, each of which is wholly owned, are:
Name
Activity
Issued and fully paid share capital
. Big Yellow Self Storage Company
Limited
Provision of self-storage facilities
1,101,500 ordinary shares of £1
each
The Big Yellow Property
Company Limited
Holding of property interests of
the Group
One ordinary share of £1
The Big Yellow Construction
Company Limited
Entering into construction
contracts concerning Group
properties
One ordinary share of £1
The Last Mile Company Limited
Dormant
One ordinary share of £1
The date of incorporation and registered number of each subsidiary (each of which is incorporated in England
under the Act and is directly held by the Company) is as follows:
Name of subsidiary
Date of incorporation
Registered number
. Big Yellow Self Storage Company Limited
12 August 1998
2286547
The Big Yellow Property Company Limited
14 April 1999
3751659
The Big Yellow Construction Company Limited
3 November 1999
3870689
The Last Mile Company Limited
11 November 1999
3765125
3. Share Capital
3.1
The Company was incorporated with an authorised share capital of £500,000 divided into 5,000,000 shares of 10
pence each, of which 2,600 ordinary shares were issued to the subscribers to the Memorandum of Association of
the Company.
39
3.2
Since incorporation of the Company, there have been the following changes in its authorised and issued share
capital:
(i)
By a resolution passed on 24 September 1998, the share capital of the Company was altered by
re-designating the 2,600 then existing issued ordinary shares of 10 pence each as ``A'' ordinary shares and
by re-designating the 4,997,400 then existing un-issued ordinary shares of 10 pence as ``A'' ordinary
shares.
(ii)
By a resolution passed on 24 September 1998, the authorised share capital of the Company was increased
from £500,000 to £4,000,000 by the creation of 22,000,000 new ``A'' ordinary shares of 10 pence each and
13,000,000 new ``B'' ordinary shares of 10 pence each.
(iii)
By a resolution passed on 24 September 1998, the Directors were generally and unconditionally authorised
pursuant to section 80 of the Act to allot relevant securities (as de®ned in that section) up to a maximum
nominal amount of £2,599,740 by way of a rights issue to holders of ``A'' ordinary shares of 10 pence each
on the basis of 9999 ``A'' ordinary shares for every ``A'' ordinary share held at the date of such written
resolution at a price of 10 pence per ``A'' ordinary share, and an additional maximum nominal amount of
£1,400,000.
(iv)
By a special resolution passed on 24 September 1998, the Directors were empowered pursuant to section
95 of the Act to allot equity securities (as de®ned in the Act) as if section 89(1) of the Act did not apply to
allotments pursuant to the authority described at paragraph (iii) above.
(v)
On 24 September 1998, the Company allotted 25,997,400 ``A'' ordinary shares of 10 pence each at par for
cash consideration.
(vi)
On 25 September 1998, the Company allotted 13,000,000 ``B'' ordinary shares of 10 pence each for a cash
consideration of 20 pence per share.
(vii) By an ordinary resolution passed on 12 January 1999, the authorised share capital of the Company was
increased from £4,000,000 to £4,225,564 by the creation of 2,255,640 new ``A'' ordinary shares of 10
pence each.
(viii) By an ordinary resolution passed on 12 January 1999, the Directors were generally and unconditionally
authorised pursuant to section 80 of the Act to allot relevant securities (as de®ned in that section) up to a
maximum amount of the authorised but unissued nominal amount of £225,564.
(ix)
By an ordinary resolution passed on 12 January 1999, the Directors were empowered pursuant to section 95
of the Act to allot equity securities (as de®ned in the Act) as if section 89(1) of the Act did not apply.
(x)
On 12 January 1999, the Company allotted 1,503,760 ``A'' ordinary shares of 10 pence each for a cash
consideration of 13.3 pence per share.
(xi)
By an ordinary resolution passed on 20 September 1999, the authorised share capital of the Company was
increased from £4,225,564 to £6,004,996 by the creation of 1,765,520 ``A'' ordinary shares of 10 pence
and 15,028,800 ``B'' ordinary shares of 10 pence each to rank pari passu in all respects with the existing
``A'' and ``B'' ordinary shares of 10 pence each of the Company and 1,000,000 preference shares of 10
pence each.
(xii) By a special resolution passed on 20 September 1999, the Directors were authorised pursuant to section 80
of the Act to allot relevant securities (as de®ned in that section) up to the maximum amount of the
authorised but unissued nominal amount of such securities, such authority to expire on the day preceding
the ®fth anniversary of the date of the passing of the resolution and allowing the Directors during the
period to make offers or agreements which could or might require the allotment of securities after the
expiry of such period.
40
(xiii) By a special resolution passed on 20 September 1999, the Directors were empowered pursuant to section
95 of the Act to allot equity securities (as de®ned in the Act) as if section 89(1) of the Act did not apply.
3.3
The authorised and issued share capital of the Company as at the date of this document is set out below:
Authorised
Amount
£
Number
Amount
£
Number
3,102,116
31,021,160 ``A''
Ordinary Shares of 10p
each
2,839,976
28,399,760
2,802,880
28,028,800 ``B'' Ordinary 2,302,880
Shares of 10p each
23,028,800
100,000
1,000,000 Preference
Shares of 10p each
1,000,000
6,004,996
3.4
Issued and fully paid
100,000
5,242,856
By the following composite special resolution passed on 17 April 2000 (such resolution being conditional on
Admission):
(a)
the 1 million preference shares of 10p each (which at the moment of Admission will be authorised but
unissued share capital by virtue of the preference share buy back that takes effect at that moment) is
converted into £100,000 of authorised but unissued share capital of 1 million Ordinary Shares and all of the
existing authorised and issued ``A'' and ``B'' ordinary shares of 10p each in the capital of the Company are
converted into Ordinary Shares;
(b)
the authorised share capital of the Company is increased to £15,000,000 by the creation of an additional
8,995,004 Ordinary Shares;
(c)
the Directors are generally and unconditionally authorised in accordance with section 80 of the Act to allot
relevant securities (de®ned in that section) up to an aggregate nominal amount of £7,776,952 such
authority to expire on the day preceding the ®fth anniversary of the date of the passing of this resolution
save that the Company may before such expiry make offers or agreements which would or might require
such securities to be allotted after such expiry and the Directors may allot securities in pursuance of such
offers or agreements as if the power conferred by this Resolution had not expired;
(d)
all prior authorities to allot relevant securities are revoked but without prejudice to the allotment of any
relevant securities already made or to be made pursuant to such authorities;
(e)
the Directors are authorised in accordance with section 95 of the Act to allot equity securities (within the
meaning of section 94 of the Act) for cash pursuant to the authority to allot conferred on the Directors by
the above resolution in paragraph (c) above as if section 89(1) of the Act did not apply to such allotment
provided that such power be limited to:
(i)
the allotment of equity securities in connection with a rights issue, in favour of the holders of
equity securities in proportion (as nearly as may be reasonably practicable in the
circumstances having regard to fractional entitlements and legal or practical problems
arising under the laws or requirements of any regulatory body, stock exchange or similar
authority in any territory or otherwise howsoever) to their holdings;
(ii)
the allotment (otherwise than pursuant to sub-paragraph (1) above) of equity securities up to
an aggregate nominal amount of 5 per cent. of the issued share capital on Admission;
such power to expire (unless renewed, varied or revoked by the Company at general meeting) at the
conclusion of the annual general meeting of the Company to be held in 2001 or 15 months after the passing
41
of this resolution (whichever is the earlier) save that the Company may before such expiry make an offer or
agreement which would or might require equity securities to be allotted after such expiry and the Directors
may allot equity securities in pursuance of such offer or agreement as if the power conferred by this
resolution had not expired; and
(f)
all prior powers granted under section 95 of the Act are revoked provided such revocation will not have
retrospective effect.
3.5
Subject to the passing of a special resolution to approve such an agreement of the shareholders of the Company at
the annual general meeting of the Company to be held on 5 May 2000, the Company and PRICOA intend to enter
into an agreement forthwith after such annual general meeting, conditional upon Admission taking place on or
before 1 June 2000, pursuant to which the Company shall acquire all of the issued preference shares in the capital
of the Company for a total aggregate purchase price of £1,044,109.54. Such purchase price shall be payable, as to
£1,000,000, by way of satisfaction of that sum owing from PRICOA to the Company pursuant to PRICOA's
agreement to subscribe for Ordinary Shares under the Placing and, as to the excess in cash from the proceeds of
the Placing. The Company has obtained irrevocable undertakings from all its shareholders to vote in favour of the
special resolution.
3.6
The Company and PRICOA have entered into an agreement, dated 17 April 2000 conditional upon Admission
taking place on or before 1 June 2000, pursuant to which the Company shall redeem £4 million of convertible
unsecured loan stock held by PRICOA for a total aggregate redemption price of £4,208,133.42. Such redemption
monies shall be payable, as to £4,000,000, by way of satisfaction of that sum owing from PRICOA to the
Company pursuant to PRICOA's obligation to subscribe for Ordinary Shares under the Placing and, as to the
excess in cash from the proceeds of the Placing.
3.7
There are no listed or unlisted securities issued by the Company not representing share capital other than the loan
stock, which is to be redeemed on Admission, referred to in paragraph 3.6 above.
3.8
Save as disclosed at 3.2 above, no share capital of the Company has been allotted for cash or for consideration
other than cash since incorporation.
3.9
In aggregate, at Admission £446,823 of the Company's authorised but unissued share capital will be reserved for
issue on the exercise of options granted under the Share Option Schemes. Other than the options granted to the
Directors which are detailed in paragraph 5.5 below, the following options have been granted to employees of the
Group under the Company's 1999 Inland Revenue Approved Scheme:
Number of Ordinary Shares
under option
68,000
Date of grant
Exercise price per share
Period of exercise
16 November 1999
62.5p
16 November 2002 15 November 2009
In addition, it is intended that options over 173,350 Ordinary Shares will be granted to Group employees under
that scheme prior to Admission at the Offer Price, subject to Inland Revenue con®rmation that the Offer Price
represents market value of an Ordinary Share. The period of exercise will be between the third and tenth
anniversaries of the grant.
3.10 Save as disclosed at paragraphs 3.9 or 5.5 of this Part 5, no new share or loan capital of the Company is proposed
to be issued or is under option or is agreed to be put under option.
4. Memorandum and Articles of Association
4.1
Memorandum of Association
The Company's principal objects, as set out in clause 3 of its Memorandum of Association, are to purchase, take on
lease, or in exchange or otherwise acquire any lands and buildings and any estate or interest in any rights connected
with any such lands or buildings, to develop and turn to account any land acquired by on which the Company is
42
interested and to act as a general commercial company and to carry on the business of a holding and investment
company. The objects of the Company are set out in full in the Memorandum of Association.
4.2
Articles of Association
The Articles of Association of the Company (``Articles'') contain, inter alia, the following provisions relating to the
Ordinary Shares:
(a)
Voting rights
Subject to any rights or restrictions attached to any shares and to any other provisions of these Articles, on a show
of hands every member who is present in person shall have one vote and on a poll every member shall have one
vote for every share of which he is the holder.
In the case of joint holders of a share, the vote of the senior who tenders a vote, whether in person or by proxy,
shall be accepted to the exclusion of the votes of the other joint holders; and seniority shall be determined by the
order in which the names of the holders stand in the register of members of the Company.
Unless the Board otherwise determines, no member, or person to whom any of that member's shareholding is
transferred other than by a transfer approved under the Articles, may vote at any general meeting or at any
separate meeting of holders of any class of shares in the Company either in person or by proxy in respect of any
share in the Company held by him if he or any other person appearing to be interested in the share has been given
a notice under Section 212 of the Act and has failed to give the Company the information required by the notice
within the applicable period and the Company has then given the holder of those shares a further notice
(``restriction notice'') to the effect that from the service of the restriction notice those shares will be subject to
some or all of the relevant restrictions.
(b)
Dividends
Subject to the provisions of every statute for the time being in force concerning companies and affecting the
Company (the ``Statutes''), the Company may by ordinary resolution declare dividends in accordance with the
respective rights of the members but not exceeding the amount recommended by the Board.
If it appears to the Board that they are justi®ed by the ®nancial position of the Company, the Board may pay:
(A) interim dividends; or (B) at intervals settled by it, any dividend payable at a ®xed date.
Except in so far as the rights attaching to any share otherwise provide, all dividends shall be declared and paid
according to the amounts paid up on the shares during any portion or portions of the period in respect of which
the dividend is paid. There are no ®xed dates on which any entitlement to dividends or interest arises.
Dividends may be satis®ed, wholly or partly, by the distribution of assets and may be declared or paid in any
currency. The Board may, if authorised by an ordinary resolution of the Company, offer the holders of Ordinary
Shares the right to elect to receive new Ordinary Shares, credited as fully paid, instead of cash for all or part of
the dividend speci®ed by that ordinary resolution.
The Company may cease to send any cheque, warrant or ®nancial instrument through the post for any dividend or
other monies payable in respect of a share if in respect of at least two consecutive dividends payable on that share
the cheques, warrants or other ®nancial instruments have been returned undelivered or remain uncashed. The
Company must resume sending cheques, warrants or other ®nancial instruments if the shareholder or person
entitled by transmission claims the arrears.
Any dividend unclaimed for 12 years from the date when it became due for payment will be forfeited and revert
to the Company.
Unless the Board determines otherwise, no member holding shares representing 0.25 per cent., or more in
nominal value of the issued shares of any class of share capital of the Company will be entitled to receive
payment of any dividend or other distribution if he or any person appearing to be interested in such shares has
43
been given notice under Section 212 of the Act and has failed to give the Company the information required by
the notice within the applicable period and the Company has then given the holder of those shares a restriction
notice to the effect that from the service of the restriction notice those shares will be subject to such restrictions.
(c)
Return of capital
On a winding up, a liquidator may, with the sanction of a special resolution of the Company and any other
sanction required by the Statutes, divide among the members the whole or any part of the assets of the Company
(whether the assets are of the same kind or not).
(d)
Purchase of own shares
Subject to the Statutes and to any rights conferred on the holder of any class of shares, the Company may
purchase all or any of its shares of any class (including any redeemable shares). The Ordinary Shares do not
however, carry any right for the holder to require redemption of his shares by the Company.
(e)
Transfer of shares
Subject to such of the restrictions of the Articles as may be applicable, a member may transfer all or any of his
shares, in the case of shares held in certi®cated form, by an instrument of transfer in any usual form or in any
other form which the Board may approve or, in the case of shares in uncerti®cated form, in accordance with the
Uncerti®cated Securities Regulations 1995 and the rules of any relevant system (as de®ned therein) (the
``Regulations''). An instrument or transfer shall be executed by or on behalf of the transferor and (unless the
share is fully paid) by or on behalf of the transferee. Subject to the Statutes, the transferor will be deemed to
remain the holder of the share until the name of the transferee is entered in the register of members in respect of
it.
Subject to the Statutes, the Board may refuse to register the transfer of a share which is not fully paid without
giving any reason for doing so.
The Board may also refuse to register the transfer of a share if: (A) it is held in certi®cated form and it is not
lodged, duly stamped (if necessary), at the Company's registered of®ce or at such other place as the Board may
appoint and accompanied by the certi®cate for the shares to which it relates (where a certi®cate has been issued in
respect of the shares) and/or such other evidence as the Board may reasonably require to show the right of the
transferor to make the transfer; (B) if it is not in respect of one class of share only; (C) if it is not in favour of four
or less transferees; and (D) if it is held in certi®cated form and it is in favour of a minor, bankrupt or person of
mental ill health. In the case of shares held in uncerti®cated form, the Board may refuse to register a transfer in
any other circumstances permitted by the regulations.
If the Board refuses to register a transfer, it shall, within two months from the date on which the transfer was
lodged, or, in the case of shares held in uncerti®cated form, the relevant operator instruction was received send to
the transferee notice of the refusal. The registration of transfers may be suspended at such times and for such
periods (not exceeding thirty days in any calendar year) as the Board may determine.
No fee shall be charged for the registration of any instrument of transfer or other document relating to or affecting
the title to any share. Any instrument of transfer, which is registered, may be retained by the Company, but any
instrument of transfer which the Board refuses to register shall be returned to the person lodging it when notice of
the refusal is given.
Unless the Board determines otherwise, no member holding shares representing 0.25 per cent., or more in
nominal value of the issued shares of any class of relevant share capital (as de®ned by Section 198(2) of the Act)
in the Company will be entitled to transfer any such shares otherwise than pursuant to an arm's length sale (as
de®ned in the Articles) if he or any person appearing to be interested in such shares has been given notice under
Section 212 of the Act and has failed to give to the Company the information required by the notice within the
applicable period and the Company has then given the holder of those shares a restriction notice to the effect that
from the service of the restriction notice those shares will be subject to such restrictions.
44
(f)
Borrowing Powers
The Board may exercise all the powers of the Company to borrow money and to mortgage or charge all or any
part of the undertaking, property and assets (present and future) and uncalled capital of the Company and, subject
to the Statutes, to issue debentures and other securities, whether outright or as collateral security, for any debt,
liability or obligation of the Company or of any third party.
The Board shall restrict the borrowings of the Company and exercise all voting and other rights or powers of
control exercisable by the Company in relation to its subsidiary undertakings (if any) so as to secure (but as
regards subsidiary undertakings only in so far as by the exercise of such rights or powers of control of the Board
can secure) that the aggregate principal amount from time to time outstanding of all borrowings by the Group
(exclusive of borrowings owing by one member of the Group to another member of the Group) shall not at any
time, without the previous sanction of an ordinary resolution of the Company, exceed an amount equal to three
times the adjusted capital and reserves (as de®ned in the Articles).
(g)
Rights of pre-emption
The Articles do not contain any provisions which set out a procedure for the exercise of pre-emption rights, in
addition to that provided for by the Act.
(h)
Variation of Rights
Except where the Act permits any change to be effected by ordinary resolution, all of the rights attaching to the
Ordinary Shares which are contained in the Articles of Association may only be varied by a special resolution of
the Company.
45
5. Directors and directors' interests
5.1.
46
In addition to the Company, the Directors hold or no longer hold but have held within the past ®ve years prior to
the date of this document the following directorships.
Director
Current directorships
Past directorships
Nicholas Vetch
. Big Yellow Self Storage Company
Limited
The Big Yellow Property Company
Limited
The Big Yellow Construction Company
Limited
The Last Mile Company Limited
Edge Properties plc
Edge Retail Properties Limited
Edge Investments (Folkestone No.2)
Limited
Edge Development (Culverhouse)
Limited
Dukers Building Management Limited
Edge Investments (Crewe) Limited
Edge Properties Holdings plc
Edge Development Limited
Edge Investments Limited
Edge Investments (Foodstores) Limited
Edge Developments (Croydon) Limited
Edge Developments (Broadstairs)
Limited
Edge Property Investment Company
Limited
Edge Investments (Glasgow) Limited
Edge Investments (Scotland) Limited
Edge Developments (Croydon No.2)
Limited
Brian Duker Associates Limited
Edge Developments (Cardiff) Limited
Edge Properties Developments Limited
Edge Investments (Camlachie) Limited
Edge Retail Investment Company
Limited
Edge Leisure Limited
Edge Developments (Maccles®eld)
Limited
Edge Investments (Folkestone No.1)
Edge Leisure Developments Limited
Thomas Barrett Partnership Ltd.
Bowerstrand Limited
Philip Burks
As above for Nicholas Vetch
As above for Nicholas Vetch
James Gibson
As above for Nicholas Vetch
As above for Nicholas Vetch
Stephen Homer
. Big Yellow Self Storage Company
Limited
None
Adrian Lee
. Big Yellow Self Storage Company
Limited
None
David White
Dry®eld Trust Plc
Cater Allen Asset Management Limited
Cater Tyndall Limited
A.C. (Nominees) Limited
Aitken Campbell & Company Limited
Roger Cunliffe Investments Limited
Ryders Discount Company Limited
Cater Allen Limited
Salix Holdings Limited
Cater Allen Pensions Limited
Director
Current directorships
Past directorships
Cater Premium Treasury Management
Limited
Cater Allen Holdings PLC
Cater Allen Lloyd's Holdings Limited
Cater Allen Syndicate Management
Limited
Syndicate Run-Off Limited
Seething Lane (Underwriting Agents)
Limited
Three Quays Underwriting Management
Limited
Emmel Management Services Limited
Guest Barnes (Underwriting Agencies)
Limited
Bee Ess Limited
Harris & Dixon (Underwriting
Agencies) Limited
Birrell Smith Underwriting Agencies
Limited
Mark Loveday Underwriting Agencies
Limited
R.D. Robertson Underwriting Agency
Limited
CA (Names Administration) Limited
CA Underwriting Limited
City Deal Services Limited
City Deal Services (Nominees) Limited
CDS (Nominees) Limited
Edge Properties plc
Premium Management Limited
David Ross
Mobile Phone Surplus Store Limited
Phone Properties Limited
The Carphone Warehouse Limited
Mobile Phone Express Limited
Tristar Cars Limited
Bodycove Plc
Worldwide Telecommunications
Limited
Reg Hayter Limited
Antika Retail Limited
Intrinsic Value Plc
CPW UK Group Limited
Trimco Finance Limited
Johnson Ross Services Limited
Tecno Holdings Limited
The Phone House Holdings (UK)
Limited
Changeslive.com Limited
The Carphone Warehouse UK Limited
Mob-Edotcom Limited
Trimco Coolair Limited
Times Finance Limited
Jonathan Short
First Sloane Street Limited
PRICOA Property PLC
PRICOA Property Private Equity
Limited
Baring Brothers Limited
Lazard Property (SLP) Limited
CIW Properties (General Partner)
Limited
Lazard Brothers & Co., Limited
Lazard Property Nominees Limited
Lazard Spear (General Partner) Limited
47
5.2
Save as disclosed above, the Directors have not held within the past ®ve years and do not hold, any other
directorships or partnerships.
5.3
Save as disclosed below, no Director has:
(i)
any unspent convictions in relation to indictable offences;
(ii)
had any bankruptcy order made against him or entered into any individual voluntary arrangement;
(iii)
been a director of a company which has been placed into receivership, compulsory liquidation, creditors'
voluntary liquidation, administration or which has entered into any company voluntary arrangement or any
composition or arrangement with its creditors generally or any class of its creditors, at the time of or within
twelve months preceding such events;
(iv)
been a partner of any partnership which has been put into compulsory liquidation, administration or entered
into partnership voluntary arrangements, at the time of or within twelve months preceding such events;
(v)
had a receivership of any assets of such Director or of a partnership where he was a partner at the time of or
within the twelve months preceding such event; or
(vi)
been publicly criticised by statutory or regulatory authorities (including recognising professional bodies)
nor has such Director ever been disquali®ed by a court from acting as a director of a company or from
acting in the management or conduct of the affairs of the company.
Philip Burks was previously a director of the property development company Citygrove plc, which went into
receivership on 24 August 1990. Mr Burks resigned as a director of that company on 29 September 1989. At the
conclusion of the receivership there were insuf®cient monies to pay the secured and preferential creditors and
accordingly the Company was put into liquidation and no dividend was paid to unsecured creditors.
48
5.4
The interests of each of the Directors and their immediate families in the issued share capital of the Company
which have been noti®ed to the Company pursuant to sections 324 to 328 of the Act or which are required to be
entered in the register of Director's interests maintained by the Company pursuant to section 325 of the Act (all
of which are bene®cial save as referred to below) including interests of persons connected (within the meaning of
section 346 of the Act) with a Director, which interests if such connected persons were Directors, would be
required to be disclosed pursuant to the Act and the existence of which is known to or could with reasonable
diligence be ascertained by the Directors, as they were as at 14 April 2000 (being the latest practicable date prior
to publication of this document) and as they will be immediately following Admission are as follows:
Name of director
David White4
David Ross
Jonathan Short
Nicholas Vetch5
Philip Burks6
James Gibson
Stephen Homer
Adrian Lee
No. of issued
Ordinary Shares
held prior to
Admission1
Percentage of
issued share
capital prior to
Admission
Ð
Ð
Ð
12,500,000
12,500,000
1,816,000
791,880
791,880
Ð
Ð
Ð
24.3
24.3
3.5
1.5
1.5
No of issued
Ordinary Shares
held after
Admission2
Percentage of
issued share
capital following
Admission
100,000
25,000
Ð
12,500,000
12,500,000
1,816,000
803,880
791,880
0.1
0.0
Ð
12.9
12.9
1.9
0.8
0.8
No. of Ordinary
Shares under
option3
Ð
Ð
Ð
1,000,000
1,000,000
1,100,000
525,940
600,940
1. The number of issued Ordinary Shares held before Admission is stated on the basis that the share reorganisation referred to in
paragraph 3.4 of this Part 5 has taken place.
2. Assuming that 96,898,560 Ordinary Shares are in issue.
3. All of the options have been, or are proposed prior to Admission to be, granted under the Share Option Schemes, as set out in
paragraph 5.5 below.
4. Of the Ordinary Shares in which David White will be interested, 80,000 will be registered in Premium Nominees Account SIP and
20,000 will be registered in Smith & Williamson Nominees Limited Ac/S66.
5. Of the Ordinary Shares in which Nicholas Vetch is interested, 12,100,000 Ordinary Shares are registered in his name; 128,000 are
registered in the name of Nicholas Vetch and Felicity Treasure acting as trustees for the Vetch Life Interest Trust No. 1; 192,000
are registered in the name of Catherine Vetch and Philip Burks acting as trustees for the Vetch Life Interest Trust No. 2; and
80,000 are registered in the name of Nicholas Vetch and Catherine Vetch as trustees for the Vetch Children's Settlement.
6. Of the Ordinary Shares in which Philip Burks is interested, 12,100,000 Ordinary Shares are registered in his name; 144,000 are
registered in the name of Philip Burks and James Gibson acting as trustees for the Burks Life Interest Trust No. 1; 80,000 are
registered in the name of Philip Burks and Davina Burks acting as trustees for the Burks Children's Settlement; and 176,000 are
registered in the name of Davina Burks and Susan Ford acting as trustees for the Burks Life Interest Trust No. 2.
5.5
Options have been granted or are proposed to be granted to the Directors by the Company over its Ordinary
Shares as follows (of which those which are not marked with an asterisk have been granted under the Company's
1998 unapproved share option plan and of which those marked with an asterisk are proposed to be granted prior
to Admission under the Company's 2000 unapproved share option plan):
Name of director
Nicholas Vetch
Philip Burks
James Gibson
Stephen Homer
Adrian Lee
Number of Ordinary
Shares under option
1,000,000
1,000,000
1,000,000
100,000
375,940
150,000
375,940
125,000
100,000
Date of grant (proposed if
asterisked)
05.05.00*
05.05.00*
24.09.98
05.05.00*
18.01.99
05.05.00*
18.01.99
05.03.00
05.05.00*
Exercise price
per share
Period of exercise
100p
100p
10p
100p
13.3p
100p
13.3p
25p
100p
05.05.03-04.05.10
05.05.03-04.05.10
24.09.01-23.09.08
05.05.03-04.05.10
18.01.02-17.01.09
05.05.03-04.05.10
18.01.02-17.01.09
05.03.03-04.03.10
05.05.03-04.05.10
5.6
Save as disclosed above, none of the Directors (or any person connected with them within the meaning of Section
346 of the Act) has any interest in the share capital of the Company.
5.7
Service contracts have been entered into between the Company and each of the executive Directors dated 17
April 2000. Each is terminable on not less than 12 months' notice and contains provision for payment in lieu of
49
notice. The contracts make provision for the respective salaries set out below, together with the right to be
considered for a discretionary bonus. Life assurance cover equal to the lesser of four times the salary or four
times the Inland Revenue pensionable earnings cap for the time being applicable to the particular individual, is
also to be provided. In addition, provision is made for membership of the Group travel and medical expenses
insurance schemes and an allowance of such amounts as the board of directors may from time to time decide is
payable in lieu of the provision of a company car. The contracts also contain customary restrictive covenants of
one year's duration from the termination of the employment (save for an undertaking of con®dentiality which is
unlimited in time).
Executive Directors
Per annum
£
Nicholas Vetch
Philip Burks
James Gibson
Adrian Lee
Stephen Homer
95,000
85,000
75,000
70,000
65,000
5.8
Save as disclosed above, there are no service agreements or proposed service agreements between the Company
and any of the Directors which will not be capable of determination by the Company without payments or
compensation within one year.
5.9
Save as disclosed in this document, no Director has or has had any interest in any transaction which is or was of
an unusual nature, contains or contained unusual terms or is or was signi®cant in relation to the business of the
Company and which was effected during the current or immediately preceding ®nancial year or remains in any
respect outstanding or unperformed.
5.10 No loans or guarantees have been granted or provided to or for the bene®t of any of the Directors by any member
of the Group and which have not been repaid or released as at the date of this document.
5.11 The total aggregate remuneration paid and the bene®ts in kind granted to the Directors of the Company during the
®nancial year ended 31 March 2000 was £217,774. The corresponding ®gure for the Directors of the Company
for the current ®nancial year based on arrangements described in this document is estimated to be £486,000.
6. Summary of the Share Option Schemes
Summary of the Big Yellow Group PLC 1998 Unapproved Share Option Plan
(``the 1998 Plan'')
1.
The 1998 Plan is a discretionary share option scheme which has not been approved by the Inland Revenue. The
Directors have resolved to terminate the 1998 Plan when trading commences on AIM and no further options will
be granted under it, without prejudice to options already granted.
2.
There are options outstanding under the 1998 Plan to subscribe for a total of 1,876,880 Ordinary Shares. These
options have been granted to the Directors as detailed in paragraph 5.5 above. No payment was required for the
grant of these options. Early exercise is permitted following cessation of employment in the case of certain
compassionate circumstances or at the discretion of the Directors and in the event of an amalgamation, takeover
or winding up of the Company.
Summary of the Big Yellow Approved Share Option Plan (``the Approved
Plan'')
1.
The Approved Plan obtained Inland Revenue approval on 14 October 1999.
2.
Options to acquire ordinary shares may be granted at the discretion of the Board to any full time or part time
employee of the Company or any Participating Company who is not within 2 years of retirement, including any
executive director required to devote 25 hours or more a week to working for the Company. Options may be
50
granted subject to satisfaction of performance conditions. Participation in the Plan is entirely separate from and
does not affect any pension right or the terms and conditions of employment of any Eligible Employee.
3.
No option may be granted to subscribe for any number of Ordinary Shares which when added to all Ordinary
Shares issued or to be issued in respect of options granted under the Approved Plan or any other discretionary
share option scheme exceeds 10% of the ordinary share capital of the Company then in issue.
4.
The following provisions apply on grant and exercise.
4.1
No option may be granted to any individual if, as a result the aggregate price payable for the ordinary shares
which may be acquired pursuant to options and other rights granted to the option holder under the Approved Plan
or any other Inland Revenue approved share option scheme (not being a savings related share option scheme) of
the Company or any associated company of the Company, which have neither lapsed, been cancelled, forfeited or
surrendered, nor been exercised, would exceed £30,000.
4.2
The Directors shall grant options by resolution. The form of the option certi®cate shall be in the prescribed form
and the certi®cate will state the number of shares comprised in the option, the date of grant, any performance
condition and the exercise price.
4.3
Any employee to whom an option is granted may renounce such option by giving written notice within 21 days
after its date of grant. Options renounced in this way shall be deemed never to have been granted.
4.4
The exercise price shall be not less than the higher of the nominal value of an ordinary share in the Company and
the market value of an ordinary share agreed with the Inland Revenue. The exercise price and the number of
ordinary shares subject to an option may be adjusted in the event of a rights issue, capitalisation issue,
consolidation of shares or reduction of capital of the Company subject, except in the case of a capitalisation issue,
to the written con®rmation of the auditors that such adjustment is fair and reasonable and the approval of the
Inland Revenue.
4.5
Options may be exercised at any time between the third and tenth anniversaries of their date of grant, provided
that any performance conditions to which they are subject have been ful®lled and that the option holder is an
employee or director of the Company or any Participating Company at the time of exercise.
4.6
Performance conditions may be set by the Directors. The Directors may amend or replace the performance
condition if, in their reasonable opinion, this will result in a fairer measure of the performance of the participant
and/or the Company, and will be no more dif®cult to satisfy than the original performance condition.
4.7
Options will become exercisable immediately on the option holder ceasing to be an eligible employee by reason
of in®rmity, redundancy, retirement, the sale or transfer out of the company's group, of the business or that part
of the business to which the option holder's employment relates, the participant's employer ceasing to be a
subsidiary or at the discretion of the Directors. The time when options which have become exercisable must be
exercised is the later of: 6 months after cessation of employment; 42 months after the date of grant, or 42 months
after the most recent exercise by an option holder of an option which bene®ted from the tax-free status under
Schedule 9 Income and Corporation Taxes Act 1988. The participant's personal representatives may exercise an
Option within 12 months of the death of the participant. Rights of exercise arise on a change of control or
reconstruction of the Company and in the event of a voluntary winding-up. Options will lapse if they are not
exercised within 10 years of their date of grant or if the option holder ceases to be employed in circumstances
other than those mentioned above unless the Directors so permit. Performance conditions to which options are
subject do not have to be satis®ed on exercise of an option pursuant to any right of exercise set out in this
paragraph 4.7.
5.
The Approved Plan also provides for the following:
5.1
Options are non-transferable.
5.2
On a change of control or reconstruction of the Company, options may, with the consent of the company
acquiring control of the Company, be released in consideration for the grant of equivalent rights over the shares
of the acquiring company or a company associated with it. The rights are equivalent if, broadly, the aggregate
51
market values of the shares under both the old and new options and the aggregate exercise price of each option
are, on the date of exchange, equal.
5.3
The Approved Plan is administered by the Board, which may amend the same by resolution. The prior approval
of shareholders in general meeting, will be required for certain amendments to the advantage of participants.
Shareholder approval is not required for minor amendments made to bene®t the administration of the Approved
Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or
regulatory treatment for participants in the Approved Plan, the Company or any participating company. The prior
approval of a majority of option holders will be required for any alterations or additions to their disadvantage. All
amendments to Approved Plan require Inland Revenue approval.
5.4
The Approved Plan may be terminated at any time by resolution of the Board or by the Company in general
meeting and shall in any event terminate on the tenth anniversary of the commencement date. Termination shall
not affect the rights of subsisting option holders at the date of termination.
6.
Following admission of the Company's Ordinary Shares to the Alternative Investment Market the following
amendments to the Approved Plan will be adopted by the Company subject to the approval of the Inland
Revenue:
6.1
Options will normally only be granted within 42 days of the announcement of the Company's annual or interim
results. The Directors may resolve to grant options outside these periods in exceptional circumstances.
6.2
The market value of the exercise price may be determined by reference to the average of the mid market price of
the Company's Ordinary Shares on the Alternative Investment Market for the three dealing days immediately
preceding the date of grant.
6.3
Options cannot be granted, exercised, released or surrendered at times which are not in accordance with the
Model Code.
6.4
The Company will apply to the Alternative Investment Market or the London Stock Exchange (as appropriate)
for admission to AIM or the Of®cial List of all Ordinary Shares allotted pursuant to the exercise of any options.
6.5
The grant of an option must be subject to obtaining any approval or consent required under the provisions of the
listing rules and the City Code.
6.6
If an option is to be granted to replace options previously granted to an employee then no other option may be
granted to subscribe for any number of Ordinary Shares which, when added to all Ordinary Shares issued or to be
issued in respect of options granted under the Approved Plan or any other discretionary share option scheme in
the preceding 4 years, exceeds 2.5 per cent. of the issued ordinary share capital of the Company then in issue.
6.7
Performance conditions, to which options are subject will have to be satis®ed on exercise of an option by reason
of retirement.
6.8
The limitation described in paragraph 3 above will be restricted as if the words ``discretionary'' and ``Option''
were omitted. In addition there will be another limitation so that at no time may Options be outstanding over
more than 10 per cent. of the ordinary share capital of the Company then in issue.
52
Summary of the Big Yellow Group PLC 2000 Unapproved Share Option Plan
(``the 2000 Plan'')
1.
The terms of the 2000 Plan are substantially the same as the Approved Plan will be following the proposed
amendments, set out in paragraph 6 above, unless expressly stated. Options granted under the 2000 Plan are
capable of exercise on such date, but not earlier than the third anniversary of the date of grant, as the Board shall
determine in its discretion. There are no individual limits on the number of options which may be granted to an
individual under the 2000 Plan.
2.
The rules of the 2000 Plan were adopted prior to application for the admission of the Company's Ordinary Shares
to the Alternative Investment Market. It is the Company's intention that the 2000 Plan will be used for the grant
of options to the Company's senior management. The Company's existing Approved Plan will be used for the
grant of options to employees below board level.
3.
Options granted under the 2000 Plan may be granted subject to the satisfaction of one or more conditions before
they can be exercised. Options initially granted under the 2000 Plan will only be exercisable if the aggregate
increase in Company total shareholder return over the three year period from the date of the grant exceeds the
increase during that period of the FTSE All Share Actuaries Total Return Index by not less than 20% on a straight
line basis. For the period subsequent to these three years, but up to a maximum of six years after the date of grant,
the options will only be exercisable if the aggregate increase in Company total shareholder return exceeds 20%
plus 6.67% per annum on a straight line basis, over the FTSE All Share Actuaries Total Return Index.
Options can only be granted during the period of 42 days after the announcement of the Company's annual and
interim results.
Option holders will not be required to satisfy an option exercise condition in the event of early exercise for
in®rmity, redundancy, the transfer of a business or company for which an option holder works or any other reason
within the discretion of the directors. An option exercise condition will also not need to be satis®ed when an
option is exercised early as a consequence of a takeover, reorganisation or winding-up.
4.
Any PAYE or national insurance contributions for which the Company must account to the Inland Revenue on
the option holder's behalf as a result of the grant or exercise of an option must be repaid to the Company by the
participant within 21 days of the date on which the liability arises.
7. Substantial shareholders
7.1
As far as the Directors are aware on Admission the following persons (excluding the Directors) will be interested
directly or indirectly in 3 per cent. or more of the issued share capital of the Company.
Shareholder
Number of issued
Ordinary Shares prior to
Admission1
Percentage of issued
share capital prior to
Admission
Number of issued
Ordinary Shares
following Admission2
Percentage of issued
share capital following
Admission2
RBSTB Nominees
Limited (a nominee
for TR Property
Investment Trust plc)
13,428,800
26.1
13,928,800
14.4
Prudential Insurance
Company of America
9,600,000
18.7
28,200,000
29.1
1. The number of Issued Ordinary Shares held before Admission is stated on the basis that the share reorganisation referred to in
paragraph 3.4 of this Part 5 has taken place.
2. Assuming no clawback under the Customer Offer and that 96,898,560 Ordinary Shares are in issue.
7.2
Save as disclosed under paragraph 5.4 and paragraph 7.1 above of this Part 5, so far as the Directors are aware,
there is no person who, directly or indirectly, jointly or severally exercises or could exercise control over the
Company or who is interested in 3 per cent. or more of the issued share capital of the Company.
53
8. Litigation
No company in the Big Yellow Group is engaged at the date of this document in any legal or arbitration
proceedings which are having or may have a signi®cant effect on the ®nancial position of the Company or any
member of the Group, nor are any such proceedings pending or threatened.
9. Stores
The following is a summary of the stores from which the Group operates:
Approximate net storage area on
completion of total ®t out
Address
Tenure
Croydon
202-216 Thornton Road
Croydon
Surrey CR0 3EU
Leasehold*
(term expiring 24 June 2024)
Subject to buyback
see note below
75,000
Richmond
Victoria Villas
Lower Mortlake Road
Richmond
Surrey TW9 2JX
Leasehold*
(term expiring 24 June 2024)
Subject to buyback
see note below
35,000
Staples Corner**
Unit 5,
100 North Circular Road
London NW2
Leasehold
(term expiring 24 December 2006)
43,400
Oxford
Unit A, Taurus
Peterley Road
Horspath Estate
Oxford OX4 2TZ
Leasehold
(term expiring 25 October 2024)
31,000
Hanger Lane
Quill Street
Hanger Lane
London W5 1PG
Freehold
63,000
Wandsworth
100 Garratt Lane
Wandsworth
London SW18 4DJ
Leasehold (Agreement for lease with
formal lease to be executed)
(term expiring 20 January 2022)
35,000
Slough**
111 Whitby Road
Slough
Berkshire SL1 3DR
Leasehold
(term expiring 18 November 2024)
68,000
Cheltenham
Princess Elizabeth Way
Cheltenham
Gloucestershire GL51 7PA
Leasehold
(term expiring 1 December 2024)
48,000
*
The Group currently intends to acquire the freehold to these two properties, applying part of the proceeds of the Offer for the
purpose, pursuant to the option agreements described in paragraph 11.1 below.
**
Includes in aggregate approximately 8,500 sq.ft. of space which is or will be available for short term office lets.
9.1
All the above leasehold titles are subject to renewal under the Landlord and Tenant Act 1954.
9.2
The Company has also acquired 4 freehold sites at Romford, Finchley, Ilford and Norwich.
9.3
In addition, the head of®ce of the Group operates from leasehold premises at 2, The Deans, Bridge Road and the
ground ¯oor, Portland House, Park Street, each at Bagshot, Surrey.
54
10. Working capital
The Company considers that, having made due and careful enquiry, the working capital available to the Company
will, from the time of Admission, be suf®cient for the Company's present requirements, that is for at least the
next 12 months.
11. Material contracts
The following contracts together with those summarised at paragraphs 3.6 and 12 of this Part 5 (not being entered
into in the ordinary course of business) have been entered into by the Big Yellow Group within a two year period
immediately preceding the date of this document and are or may be material.
11.1 The Group entered into a series of agreements on 28 June 1999. Two of these agreements were purchase contracts
for the freehold titles to the Group's premises at Richmond and Croydon, detailed in paragraph 10 above. These
purchase contracts have not yet been completed. The purchase price for the two freeholds was the market value of
£4,731,800 (exclusive of VAT) in aggregate. TR Property has leased back the two properties to the Group for an
initial two year rent free period and thereafter at an aggregate market rent of £443,581 p.a.. At the same time the
Group granted to TR Property a put option and TR Property granted the Group a call option, in each case for the
assignment of the bene®t of the purchase contracts concerning these two freehold titles. The purchase price shall
be the original purchase price as increased during the period from the date of the purchase contracts to
completion of the option by the increase in the IPD Annual London Standard Industrials Index. In the event that
neither option is exercised then TR Property may sell the freehold titles in the open market in which event the
Group is obliged to make up any shortfall in the price achieved on the sale compared with the option price
payable as described above. In addition, an option fee is payable by the Group to TR Property on an ascending
scale ranging from c.£430,000 to in excess of £900,000, depending on when the option is exercised. If the option
is not exercised then the latter amount is payable in any event on 24 June 2001.
The Company's board has resolved prior to the date of this document to exercise the options and to re-purchase
the two freehold interests, applying part of the proceeds of the Offer for this purpose.
11.2 A subscription and shareholders' agreement dated 21 September 1999 between the Company (1) and the then
existing shareholders of the Company (2) pursuant to which the Company agreed, inter alia, to carry on its
business in accordance with speci®ed obligations. Conditional upon Admission taking place, the parties to this
agreement have agreed that it shall then terminate.
12. Agreements with Cazenove
12.1 In connection with the Offer, Cazenove (1), the Company (2) and the Directors (3) have entered into an
Underwriting Agreement dated 17 April 2000 pursuant to which Cazenove has undertaken to use its reasonable
endeavours to procure subscribers for, or failing which as principal to subscribe for the Offer Shares the subject
of the Placing, other than those being subscribed by PRICOA and TR Property at the Offer Price. Under the
agreement, commissions are payable to Cazenove totalling 2.5 per cent. of the sum equal to the multiple of the
Offer Price and the number of those Offer Shares, subject to a maximum of £650,000. A further fee of £250,000
is payable to Cazenove in respect of its role in relation to the application for the Ordinary Shares to be admitted to
AIM. The agreement contains representations, warranties and indemnities given by the Company and the
Directors to Cazenove and provisions entitling Cazenove to terminate its obligations thereunder in certain
circumstances prior to Admission. The Directors have given undertakings not to dispose of their existing Big
Yellow Shares for a period of at least 12 months from Admission or until publication of the Group's audited
results for the year ended 31 March 2001. These restrictions will continue for a period of a further twelve months
in relation to 50 per cent of each of the Directors' holdings.
12.2 A Nominated Adviser and Broker Agreement dated 17 April 2000 between the Company (1) and Cazenove (2)
pursuant to which, inter alia, the Company has appointed Cazenove to act as nominated adviser and nominated
broker to the Company for the period from the date of Admission until terminated by either the Company or
Cazenove giving 90 days prior written notice. The agreement contains certain indemnities given by the Company
55
to Cazenove. The Company has agreed to pay Cazenove annual fees of £25,000 for its services as nominated
adviser and nominated broker.
13. United Kingdom taxation
The following information, which sets out the taxation treatment for holders of Ordinary Shares, is based on the
law and practice currently in force in the United Kingdom. The information is not exhaustive and if shareholders
are in any doubt as to their taxation position, they should consult their professional adviser. Shareholders should
note that the levels and bases of, and relief from, taxation may change and that changes may alter the bene®ts of
investment in the Company.
No tax is withheld from dividend payments by the Company.
Advance Corporation Tax (``ACT'') was abolished from 6 April 1999 by the Finance Act 1998. The Company
will not therefore be required to account to the Inland Revenue for ACT on dividends paid after that date. For
individual shareholders resident in the United Kingdom for tax purposes, the tax credit associated with such
dividends will be one ninth of the cash received, and the aggregate of the dividend and credit will form the
individual's top slice of income. The tax credit will satisfy the whole of the lower or basic rate tax liability but
higher rate tax payers will be liable to pay income tax at the rate of 32.5 per cent. tax on the total of the dividend
and tax credit. This means that a shareholder who receives a dividend of £90 and is liable to tax at the higher rate
will be treated as having gross income of £100 (the net dividend of £90 plus the tax credit of £10) and, after
allowing for the tax credit of £10, will have a further liability of £22.50. Generally, shareholders who are not
liable to UK tax on dividends, are no longer entitled to reclaim the tax credit attaching to dividends paid by the
Company save where their Ordinary Shares are held in a Personal Equity Plan or Individual Savings Account,
where the tax credit can be reclaimed for dividends paid on or before 5 April 2004.
For dividends paid to trustees of UK resident discretionary or accumulation trusts the gross dividend will be
subject to UK income tax at a rate of 25 per cent. with a non-refundable tax credit equal to 10 per cent. of the
gross dividend.
The amount of the tax credit in respect of a dividend paid which constitutes income of a pension fund, charity or
venture capital trust, will not be repaid. Special transitional rates will apply to charities to compensate them, on a
phased basis, for the loss of repayable tax credits.
Non-resident shareholders may be subject to tax on dividend income under any law to which they are subject
outside the UK. Non-resident shareholders should consult their own tax advisers on the possible application of
such provisions, the procedure for claiming payment and what relief or credit may be claimed for such tax credit.
A corporate shareholder (other than a share dealer) resident for tax purposes in the United Kingdom will not
generally be liable to United Kingdom corporation tax on any dividend received from the Company.
The Company has been advised that the issue and allotment of the Placing Shares by the Company pursuant to
the Placing and Offer will not give rise to a charge to the placees for stamp duty or stamp duty reserve tax.
The conveyance or transfer on sale of Ordinary Shares following the Placing and Offer will be subject to stamp
duty at the rate of 0.5% (rounded up to the nearest £5) of the amount or value of consideration. Where an
agreement to purchase Ordinary Shares is not completed by a duly stamped transfer in favour of the purchase
under the agreement, a charge for stamp duty reserve tax (at the same rate) may arise.
To the extent that a holder of Ordinary Shares subsequently disposes of those Ordinary Shares, liability to
UK taxation on chargeable gains may arise depending upon individual circumstances.
The above comments are intended as a general guide to the position under the current law and practice in the UK
and may not apply to certain classes of shareholders. Any person who is in any doubt as to his tax position, or
who is subject to tax in a jurisdiction other than the UK should consult his own professional adviser.
14. Minimum subscription
56
The minimum amount, which in the opinion of the Directors must be raised by the Offer in order to provide the
sums required to be provided pursuant to paragraph 21(a) of Schedule 1 of the POS Regulations, is £45 million
which will be applied as follows:
(a)
The purchase price of property(1)
£4.7 million
(b)
Commissions and expenses of the Offer
£1.5 million
(c)
Payment for the redemption of loan stock and buyback of preference shares
as described in paragraphs 3.5 and 3.6 above(2)
£5.3 million
(d)
1.
2.
Working capital
£33.5 million
Based on the Directors current intention to exercise an option relating to the purchase of the freeholds of the properties in
Richmond and Croydon, which are the subject of a sale and leaseback arrangement, further details of which are set out in
paragraph 11.1 above. This amount is subject to adjustment as described in that paragraph.
On the assumption that Admission takes place on 8 May 2000.
15. CREST
15.1 CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certi®cate and
to be transferred otherwise than by a written instrument. CREST started to replace the existing Talisman
settlement system of the London Stock Exchange in July 1996. The Articles of Association of the Company
permit the holding and transfer of Big Yellow Shares under the CREST system. The Directors have applied for
the Big Yellow Shares to be admitted to CREST with effect from Admission.
15.2 CREST is a voluntary system and holders of Big Yellow Shares who wish to receive and retain share certi®cates
will be able to do so. Recipients of Big Yellow Shares may, however, elect to hold Big Yellow Shares in
uncerti®cated form if, but only if, that person is a ``system member'' as de®ned in the Uncerti®cated Securities
Regulations 1995. It is expected the share certi®cates for those who wish to hold their Big Yellow Shares in
certi®cated form, will be posted to shareholders by Computershare Services PLC. No temporary documents of
title will be issued and the Big Yellow Shares will be in registered form. Holders of Big Yellow Shares who wish
to hold their Big Yellow Shares in uncerti®cated form will need to follow the appropriate CREST procedures for
dematerialisation of their Big Yellow Shares.
16. Indebtedness and Cash Balances
As at the close of business on 31 March 2000 the Group had outstanding secured loans of £2,116,000, secured
overdrafts of £nil, unsecured loan stock of £4,147,246, obligations under ®nance leases of £nil, letters of credit of
£nil and contingent liabilities under guarantees to third parties of £nil.
Save as disclosed above and apart from the intra-group indebtedness and guarantees, the Group did not have
outstanding, at the close of business 31 March 2000, any borrowings or indebtedness in the nature of borrowing,
including loan capital outstanding or unissued, bank overdrafts and liabilities under acceptances (other than
normal trade bills) or acceptance credits, mortgages or charges, obligations under ®nance leases or hire purchase
commitments, or guarantees or other material contingent liabilities.
In addition, as at the close of business on 31 March 2000, the Group had cash at bank and in hand totalling
£4,698,433.
17. General
17.1 Other than as referred to in this document, there has been no signi®cant change in the ®nancial or trading position
of the Company since 31 March 2000, being the date to which the latest audited accounts of the Company were
prepared.
17.2 Save as disclosed in this Part 5 above, no person (other than professional advisers disclosed in this document and
trade suppliers), has received, directly or indirectly, from the Company within the 12 months preceding the date
57
of this document or entered into contractual arrangements (not otherwise disclosed in this document) to receive,
directly or indirectly, from the Company on or after Admission any of the following:
(i)
fees totalling £10,000 or more;
(ii)
securities in the Company with a value of £10,000 or more (calculated by reference to the amount at which
the Big Yellow Shares will be issued to Big Yellow Shareholders credited as fully paid); or
(iii)
any other bene®t with a value of £10,000 or more at the date of this document.
17.3 The costs and expenses payable by the Company relating to the Admission are expected to amount to
approximately £1,500,000 exclusive of VAT. These include but are not limited to accountancy fees, solicitors'
fees, fees of and commissions payable to Cazenove & Co., the cost of printing this document and the fees and
expenses of registrars.
17.4 Save as disclosed in this document, there have been no signi®cant recent trends concerning the development of
the Company's business since 31 March 2000, the date on which the last audited accounts were registered at
Companies House.
17.5 The Big Yellow Group is not dependent on any patents or other intellectual property rights, licences or particular
contracts, which are or may be of fundamental importance to the Company's business save for the United
Kingdom registered trademark of ``Big Yellow'' in respect of storage activities and certain domain names in
relation to trading names under which the Group operates.
17.6 Deloitte & Touche, Chartered Accountants of Hill House, 1 Little New Street, London EC4A 3TR have been
auditors to the Company since incorporation.
17.7 Cazenove & Co. has given and has not withdrawn its written consent to the issue of this document with the
inclusion of its name in the form of context in which it appears.
17.8 The ®nancial information relating to the Company set out in Part 2 of this document does not constitute statutory
accounts within the meaning of section 240 of the Act.
18. Documents for inspection
Copies of the following documents may be inspected at the of®ces of CMS Cameron McKenna, Mitre House, 160
Aldersgate Street, London EC1A 4DD and at the Company's registered of®ce, which is at Unit 2, The Deans,
Bridge Road, Bagshot, Surrey GU19 5AT, during usual business hours on any weekdays (Saturdays and public
holidays excepted) until Admission:
58
(a)
the Memorandum and Articles of Association of the Company;
(b)
the audited accounts of Big Yellow for the ®nancial period from 26 August 1998 to 31 March 1999 and for
the year ended 31 March 2000;
(c)
the accountants report contained in Part 2 of this document;
(d)
the service contracts referred to in paragraph 5.7 of this Part 5;
(e)
the material contracts referred to in paragraph 11 of this Part 5;
(f)
the written consent referred to in paragraph 17.7 of this Part 5.
(g)
the rules of the Share Option Schemes, referred to in paragraph 6 of this Part 5.
Availability of Prospectus
Copies of this document will be available free of charge at the of®ces of Cazenove & Co., 12 Tokenhouse Yard,
London EC2R 7AN during normal business hours on any weekday (Saturdays and public holidays excepted) until the
date falling fourteen days after the date of Admission.
Dated 17 April 2000
59
Printed by Burrups, a St Ives Company
B522500