Lok'nStore scores

Lok'n Store is performing better than half-year figures suggest. In fact, add back depreciation and one-off costs relating to bank loan refinancing, and cash profits rose 12.6 per cent to £1.93m. Shareholders also benefit from a trebling of the half-year dividend to 1p a share, and with the shares still trading at a hefty discount to net asset value, we remain buyers.

Two key developments during the first half were the proposed imposition of VAT next October on self storage. Lok'nStore already pays VAT but its competitors do not. The group's project partner, Lidl, also secured planning consent for a new self-storage facility near Maidenhead, with potential footfall likely to be boosted by the inclusion of a new Lidl supermarket on the site.

Lok'nStore's average prices fell 1.2 per cent to £18.51 per sq ft during the half, but, as these are well below UK average prices of £21.97, the group has plenty of scope to increase prices, especially as its competitors are likely to as well. Occupancy rates were a shade lower at 55.9 per cent but operating margins rose from 45.9 per cent to 46.2 per cent.

Panmure Gordon is forecasting full-year pre-tax profits of £1.2m and EPS of 4.8p (EPS of 3.57p in 2010).

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