In the six months to 31 January - traditionally a slower period - trading at self-storage company Lok'nStore (LOK) was "fantastic", declares chief executive Andrew Jacobs. That, he says, was largely down to rapidly improving economic conditions.
Like-for-like occupancy jumped 8 per cent and adjusted like-for-like cash profit 11 per cent, even as costs hardly budged. Management says the changes in the 2012 Budget - which forced rivals Safestore (SAFE) and Big Yellow (BYG) to charge VAT - continue to help; Lok'nStore was already charging VAT and could grab market share by avoiding price hikes. Management reckons this tax-driven boost is still supporting volumes, even though price increases are now apparent at Lok'nStore - unit pricing actually rose 3 per cent year on year.
The company's expansion plans, meanwhile, suggest plenty of long-term potential. A 61,000 sq ft store was opened in Maidenhead in December, and further new stores are planned for Reading, Bristol, Aldershot and Southampton. Cash generation - not debt - should finance that expansion. The only weak spot was the small document-storage business, where cash profit fell 38 per cent to £73,000.
Broker Panmure Gordon expects full-year EPS of 5.5p (5.72p in 2013), but could upgrade its forecasts in the event of a strong second half - as now looks likely.
LOK'NSTORE (LOK) | ||||
|---|---|---|---|---|
| ORD PRICE: | 204p | MARKET VALUE: | £51.1m | |
| TOUCH: | 200-207p | 12-MONTH HIGH: | 231p | LOW: 124p |
| DIVIDEND YIELD: | 3.1% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 163p | NEBT DEBT: | 62% | |
| Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£000) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2013 | 6.6 | 771 | 2.0 | 1.67 |
| 2014 | 6.7 | 916 | 2.9 | 2 |
| % change | +2 | +19 | +45 | +20 |
Ex-div: 7 May Payment: 16 Jun | ||||
