Lok'nStore (LOK) set the tone for a confident set of annual results with a hefty hike in the annual dividend. The Aim-listed self-storage company has benefited not only from improving consumer sentiment over the summer - chief executive Andrew Jacobs says June and July were "very strong" - but also from price increases at its larger rivals.
Unlike Big Yellow (BYG) and Safestore (SAFE), Lok'nStore was already charging sales tax on its services, leaving it unaffected by the government's decision to close a VAT loophole in the 2012 Budget. As its competitors raised their rates to accommodate the tax last autumn, Lok'nStore kept prices flat. Occupancy consequently increased by 10.4 per cent over the year to end-July, with prices down 0.5 per cent.
This will have a bigger impact on earnings this year than it did last. Revenue for the period under review was only marginally higher, with adjusted cash profit up 4.1 per cent. These figures are also affected by store numbers as well as trading - Lok'nStore opened a store in Crawley during the year and sold one in Ashford (it retains the management contract). A store under construction in Maidenhead is expected to open before Christmas, too, and the company also has a joint development venture with a land-owner in Aldershot.
Broker Panmure Gordon has upgraded its pre-tax profit forecast for 2014 to £1.8m, giving EPS of 5.4p (from 3p in 2013).
LOK'NSTORE GROUP (LOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 181p | MARKET VALUE: | £44.7m | |
| TOUCH: | 178-183p | 12-MONTH HIGH: | 183p | LOW: 112p |
| DIVIDEND YIELD: | 3.3% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 162p | NET DEBT: | 56% | |
| Year to 31 Jul | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 10.0 | -0.66 | -2.39 | 1.0 |
| 2010 | 10.4 | 0.43 | 0.88 | 1.0 |
| 2011 | 10.8 | 0.94 | 3.57 | 3.0 |
| 2012 | 12.8 | 0.93 | 3.01 | 5.0 |
| 2013 | 13.0 | 1.43 | 5.75 | 6.0 |
| % change | +2 | +54 | +91 | +20 |
Ex-div: 13 Nov Payment: 16 Dec | ||||
