Rising occupancy rates and increased unit pricing boosted net profit by more than a fifth for Lok’nStore (LOK) during the first half, as the group continued to capitalise on the lack of self-storage supply. Two new stores were acquired in Stevenage and Wolverhampton, while sites in Cardiff and Exeter were added after the period-end. Together with two further sites in progress with the lawyers, those eight will increase trading space by 27 per cent.
Openings are focused on ‘landmark’ stores – prominent locations, with four or five stories and more likely to drive footfall, says chief executive Andrew Jacobs. An increase in the proportion of freehold and managed stores bumped up the adjusted cash profit margin to 58.8 per cent on a like-for-like basis, from 58.6 per cent, although these types of stores do require more up-front capital. The self-storage specialist expects the proportion of leasehold properties to fall to around a fifth of those it manages.
The sale of the non-core document storage business and sale and manage back of the Crawford site also helped push the portfolio loan-to-value ratio down to just 14.2 per cent, although with no further disposals planned that is unlikely to reduce any further, says Mr Jacobs.
Analysts at FinnCap expect adjusted net asset value (NAV) of 510p a share at the July 2019 year-end, up from 480p in the prior year.
| LOK'NSTORE (LOK) | ||||
| ORD PRICE: | 497.5p | MARKET VALUE: | £147m | |
| TOUCH: | 495-500p | 12-MONTH HIGH: | 504p | LOW: 353p |
| DIVIDEND YIELD: | 2.3% | TRADING PROP: | £23.8m | |
| PREMIUM TO NAV: | 3% | |||
| INVESTMENT PROP: | £120m | NET DEBT: | 29% | |
| Half-year to 31 Jan | Net asset value (p)* | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2018 | 418 | 2.24 | 5.9 | 3.33 |
| 2019 | 485 | 2.68 | 7.2 | 3.67 |
| % change | +16 | +20 | +22 | +10 |
| Ex-div: | 9 May | |||
| Payment: | 14 Jun | |||
| *Adjusted net asset value | ||||
