Lok’n Store (LOK) bucked the trend set within the real estate industry in the wake of the Covid 19 outbreak by recommending an increased half-year dividend, buoyed by a 5 per cent rise in cash available for distribution. The self-storage specialist is in robust financial shape, with a loan-to-value ratio of just 17 per cent and an interest cover multiple in excess of 7, against banking covenants of 60 per cent and 2.5, respectively.
While the pipeline of new stores was boosted to 16, the group is on site at just one development, in Leicester. It remains committed to buying new land when the opportunity presents itself, said chief executive Andrew Jacobs, “But we have the ability to cut that off pretty quickly if we find ourselves in a more difficult trading environment,” he said.
Unit occupancy rose 8 per cent during the period, although the level of customers moving out has risen in recent weeks. The impact of that will not be felt until the fourth quarter.
House broker FinnCap forecasts adjusted NAV of 418p a share at the July year-end, rising to 447p the same time the following year.
| LOK'N STORE (LOK) | ||||
| ORD PRICE: | 567p | MARKET VALUE: | £ 168m | |
| TOUCH: | 560-590p | 12-MONTH HIGH: | 740p | LOW: 335p |
| DIVIDEND YIELD: | 2.2% | TRADING PROPERTIES: | £22.8m | |
| PREMIUM TO NAV: | 7% | |||
| INVESTMENT PROPERTIES: | £134m | NET DEBT: | 37%* | |
| Half-year to 31 Jan | Net asset** value (p) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 (restated) | 483 | 2.57 | 6.79 | 3.67 |
| 2020 | 532 | 2.31 | 5.74 | 4.0 |
| % change | +10 | -10 | -15 | +9 |
| Ex-div: | 07 May | |||
| Payment: | 12 Jun | |||
| *Includes lease liabilities of £12m **Adjusted NAV | ||||
