Lok'n Store Group PLC
03 November 2004
3 November 2004
LOK'nSTORE GROUP PLC
("Lok'nStore" or "the Company")
Preliminary Results for the year ended 31 July 2004
Lok'nStore Group plc, one of the leading players in the fast growing
self-storage market, announces preliminary results for the year ended 31 July
* Turnover for the year up by 17.8% to #6.6m (2003: #5.6m)
* Operating profit* up to #121,674 (2003: #77,190)
* The 8 established '250 week' stores now generating EBITDA margins of 48.2%
* Customers up 27.5% to 5,566 from 4,365 in July 2003
* Store occupancy up by 26%, a record 96,909 sq ft
* Three new sites acquired or opened in year in Eastbourne, Tonbridge and
* 19 stores trading with 1 in development with a total store capacity up to
840,000 sq ft
* Increased financial flexibility and strength through significant increase
in freehold valuations
* Increased capital expenditure totalling #5.4m reflects commitment to
growth through site acquisition (#4.3m) and investing in existing stores
Andrew Jacobs, Chief Executive Officer commented:
"The Self Storage market continues to offer an unrivalled combination of
predictable profits and potential for growth. Lok'nStore has delivered
accelerated sales growth over the past year.
Lok'nStore's market position, leading brand, and growing cash flow make us
confident of delivering substantial growth in shareholder value."
Andrew Jacobs, CEO Lok'nStore Tel: 020 8547 2288
Ray Davies, Finance Director Lok'nStore
Jonathon Brill/ Billy Clegg Financial Dynamics Tel: 020 7831 3113
Preliminary Results for the year ended 31 July 2004
The Group has experienced accelerating sales growth over the past year. We are
particularly pleased to report that stores opened earlier in the Group's
development have contributed to this growth in combination with rapid sales
increases at more recently opened stores.
As we said in our last annual statement "the management focus is on growth" and
this strategy has underpinned the highly satisfactory outcome that has been
achieved. The recent acquisition of sites at Tonbridge and Farnborough, and
the opening of the Eastbourne store in October 2003, reflect our buoyant view of
We remain committed to finding new high quality self-storage sites while
increasing occupancy at, and enhancing the value of, existing stores. We
continue to believe that the South-East of England represents the greatest
potential for the Group's expansion, and our acquisition strategy remains driven
by prospective rates of return, site location and visibility.
GROWTH IN TURNOVER AND CUSTOMERS
Turnover for the year was #6.61 million (2003: #5.61 million), an increase of
17.8%. Annualised revenues are currently #7.7 million (2003: #6.4 million), up
20.3% compared to the previous year. The Group made an operating profit before
exceptionals for the year of #121,674 compared with a profit of #77,190 in 2003.
The Group made a small pre-tax and exceptionals loss for the year of #41,697
compared with a profit of #34,704 in 2003. Basic earnings per share before
exceptionals was a loss of 0.16p per share (2003: profit of 0.13p per share).
Packing materials, insurance and other sales kept pace with storage income at
8.2% of turnover, an increase of 20.4% over the year.
At the year end the number of customers had risen to 5,566 from 4,365 in July
2003, an increase of 27.5% over the year. The business handled 7,435 'move-ins'
during the year compared to 5,127 in 2003.
As in previous years, the Directors do not recommend the payment of a dividend.
As we said in our last annual statement we are aiming "to accelerate new site
acquisitions in the year ahead". I am delighted to report that during the year
we acquired or opened an additional 3 sites at Eastbourne, Tonbridge and
Farnborough which are located within our existing geographical coverage. They
are all located in attractive markets with little local competition, and will be
managed by our existing sales team. This will take the total number of our
stores to 20.
We also acquired the effective freehold of our Poole store, which would
otherwise have been due for lease renewal next year. This provides the store
with a further 13,567 sq. feet to expand into, as well as securing the valuable
income stream, and protecting against future rent reviews.
When fully developed, the Tonbridge and Farnborough stores will provide an
additional 90,000 sq ft of net storage capacity, taking the total for the 20
stores to 840,000 sq ft. 10 of our 20 Centres are owned freehold by the Group
with the remainder as leasehold.
During the year we increased occupancy by a record 96,909 sq. ft, with total
occupancy at 31 July 2004 of 472,028 sq ft. We have included a table below
summarising the trading performance of all our stores over the year, analysed
between stores open less than 100 weeks, between 100 and 250 weeks, and more
than 250 weeks at the beginning of the period.
EBITDA 100 to < 100
July-04 > 250 weeks old 250 weeks old weeks old
Stores Sub Sub Sub
Total Total Total
#'000 #'000 #'000
Sales 3,105 3,159 270
EBITDA 1,491 536 -271
EBITDA % 48% 17% -100%
'000 sq ft 305 365 80
The 8 stores open for more than 250 weeks made trading profits before central
and head office overheads, interest, tax, depreciation and amortisation
("EBITDA") of #1.5million in the year on turnover of #3.1 million, a margin of
48%. Also, encouragingly, revenue occupancy of these 8 stores increased 17.5%
year on year, and there is still room to further increase this in the coming
FINANCIAL STRENGTH AND BALANCE SHEET EFFICIENCY
On 31 January 2004, professional valuations were prepared by external valuers,
Cushman & Wakefield Healey & Baker, in respect of all freehold land and
properties held by the Group as operational self-storage businesses. This Report
was prepared on the basis of Market Value/Existing Use Value, as appropriate, in
accordance with RICS Appraisal and Valuation Standards but on the special
assumption that any potential for residential development was ignored. The
Report indicated a total value of #20.1 million. This is #10.2 million in excess
of the net book value of freehold property and land as disclosed in the Group's
interim financial statements as at 31 January 2004.
This increase in freehold valuations provides the Group with increased financial
flexibility and financial strength going forward enhancing the Group's ability
to borrow, as and when debt is required and, making the value created within our
operations more transparent to shareholders, potentially giving the Group the
opportunity to release more value to shareholders. These valuations do not
account for any further uplift in values, which would result from the successful
outcome of the proposed planning applications for high density housing schemes
at the Kingston and Reading sites.
Since this valuation we have also purchased the effective freehold at Poole and
the new site at Farnborough for a total of #4.4million.
With the planning applications at Kingston and Reading moving forward we will
assess the Group's attitude to reinvesting the potential proceeds from these
sales versus returning cash to shareholders as the outcome becomes clearer.
Our objective continues to be increasing our number of stores within our current
geographical coverage of South-East England. As evidenced by our recent
acquisitions and openings we believe the current market for new sites is
becoming less competitive, while the excess of untapped demand for self-storage
provides plenty of room for growth for many years.
When fully completed, our current portfolio of 20 stores and sites will provide
around 840,000 sq. ft of net storage space.
Subject to market conditions, it is our current aim to acquire between 2 and 4
stores per annum. Our current store size is typically around 40,000 lettable sq
ft per store and this may increase for new stores up to 60,000 lettable sq ft,
which would result in additional capacity of 80,000 to 240,000 sq ft per annum.
However the exact timing of store openings will largely depend on market
availability, and we will retain our disciplined approach to site acquisition.
THE SELF-STORAGE MARKET IN THE UK
The self-storage market continues to grow rapidly with both first generation
converted buildings and modern, well located, prominent stores all continuing to
show good growth. The lower cost base associated with the older converted
buildings ensures that they generate returns equal to the more highly specified,
but higher cost base new stores.
Lok'nStore's four stores in the oldest buildings with the lowest specification,
grew revenue occupancy by 19.8% over the financial year. This compares with a
company average for the year of 18.8% Those oldest four stores generated a
combined EBITDA margin of 52%.
During the year Safestore and Mentmore, 2 of the 4 UK listed self-storage
operators were bought by Bridgepoint, a private equity house who recognised the
quality of the cash flow which self-storage produces. Lok'nStore is now one of
only two quoted storage operators, ranked 4th in size in the UK (and sixth in
Following the departure of Steven Hourston in June 2003, Andrew Jacobs stepped
in to undertake the day-to-day management of the business. Andrew founded the
business in 1995 and after conducting a strategic review in early 2003 Andrew
has taken detailed control of the business, consenting to take up the role of
Chief Executive Officer from August 2004. Andrew's concentration on the sales
and marketing functions has resulted in a 15% increase in enquiries per Centre,
and conversion increasing by seven percentage points.
During the year we were very pleased to welcome Ray Davies, who replaced Chris
Stevens the departing Finance Director. We thank Chris for his work over the two
years he was with the Group. Ray, a chartered accountant, has held a number of
senior finance positions in the construction and health & fitness sectors and
brings with him a wealth of experience of both Aim and fully listed companies
which will benefit both the Board and the Group. He has a solid track record in
the finance and strategic arenas and will be an asset to the business.
We also welcomed Robert Jackson as non-executive director. Robert's experience
of finance and accounting, both inside and outside the City, and his extensive
network of contacts are already proving invaluable.
The overall cost and staff numbers of head office have been trimmed and these
resources redirected towards sales and marketing functions. This emphasis will
I would like to thank all of the people who work both in our head office and in
our stores for their commitment to our business and for their hard work over the
year. Their continued efforts will provide us with the necessary platform for
our success. I am pleased to say that 36 of them (40%) are either Employee
Benefit Trust ('EBT') share or option holders, which ensures staff and
shareholders are working towards the same objectives.
OUTLOOK: COMBINATION OF PREDICTABLE PROFITS AND POTENTIAL FOR GROWTH
The self-storage market continues to offer an unrivalled combination of
predictable profits and potential for growth. Lok'nStore's proven ability to
expand steadily within this market gives us confidence in the future performance
of the Group with growing turnover from existing stores and growth in number of
stores combining to produce attractive growth and profits.
Our priorities continue to be:
- further improve the operating performance of existing stores
- enhance the value of existing stores
- grow the number of stores
- optimise the Group's capital structure
Lok'nStore's market position, leading brand, and growing cash flow make us
confident of delivering substantial growth in shareholder value.
Simon G Thomas
2 November 2004
In the last 12 months we have raised operational standards and increasingly
focused store staff on taking responsibility for increasing turnover. This work
has improved the consistency of performance across the stores. Our central sales
team has been augmented and its role redefined. In particular the team has run
more and better sales training courses. In addition, we have revised the bonus
scheme to link performance and reward more directly to turnover growth and
consistently high quality customer service. As a result our conversion ratio of
enquiries into customers increased by 7%.
During the year we successfully opened our new Eastbourne store, and then
Tonbridge after the year-end in August, bringing the number of stores now
trading to 19. Total capacity is currently 790,000 sq. ft.
12 of the stores are now trading profitably at the pre-tax level and 14 have
positive operating cash flow. I am pleased to report that even our older stores
(over 250 weeks) increased revenue occupancy by 17.5% over the year, and there
is still room to further increase this in the coming year.
The maturity profile across the stores open at the end of the year is set out in
the Trading Summary. The new store at Farnborough will increase total capacity
to 840,000 sq. ft.
The safety and security of our customers and stores is our first priority. With
today's heightened terrorist concerns this is of particular importance .To
achieve this we invest in CCTV systems, intruder and fire alarm systems and the
remote monitoring of our stores out of hours. We have rigorous security
procedures in relation to customers. We have reviewed recent advice from the
Metropolitan Police (circulated by the Self Storage Association to members) and
have adapted our procedures where necessary to comply with their
recommendations. Furthermore, we continue to review our operational procedures
in terms of security and for example, our reception areas are monitored by
cameras. The importance of security and the need for vigilance is communicated
to all staff and reinforced through training.
A new store audit system was also implemented which has already proved its
effectiveness in terms of improved security, credit control and store
PROPERTY AND CONSTRUCTION
The total portfolio of stores and sites is now 20, of which 10 are held
freehold. We are primarily focused on acquiring freeholds and where
opportunities arise, we will seek to acquire the freehold of our leasehold
stores. Indeed we have acquired the effective freehold of our Poole store during
the year. However our overriding objective is to increase the number of stores
we operate and are prepared to take leases where necessary. Over the years
Lok'nStore has acquired the freehold interest in previously leased stores at
Horsham, Reading and Poole. This tactical approach, combines the early cash flow
advantages of leasehold stores with the long-term income security and investment
potential of freeholds.
Our new Farnborough Store is a freehold and will be purpose built. It is
expected to open in Autumn 2005.
The Company continues to focus on the efficiency of our fitting out programme in
order to bring forward the revenue stream and maximise the rate of return. We
optimise the available space in new stores by fitting mezzanine floors and
storage units as demand dictates, allowing revenue to be generated by renting
open storage space, and thereby keeping tight control on capital expenditure
until it is required.
COMPETITIVE LOW COST BASE
These and other measures keep Lok'nStore's cost base competitively low at around
#8.22 per square foot for space available at year-end. Whether or not the
self-storage market becomes price competitive this low cost base will be a
continuing advantage. This can be reduced further by spreading marketing and
head office costs across more stores as the Group continues to expand.
During the year the Company spent approximately 5.4% of turnover on advertising
and marketing. (2003: 5.4%). We anticipate our marketing costs remaining at
these levels over the next year. All the marketing materials were reviewed and
these initiatives contributed to Lok'nStore achieving a record increase in
occupancy over the year of approximately 96,909 sq. ft. Enquiries per store per
week increased 15% over the previous 5-year average.
We have significantly improved the efficiency of our marketing data and
reporting, which allows an increasingly focused approach. Our database has now
been centralised which will enable our marketing efforts to be even more
accurately targeted in the coming year. New stores will benefit from the
marketing and promotion effort already applied to our existing stores.
Our new Farnborough store with its prominent site will raise the profile of the
whole Lok'nStore brand, as well as becoming the focus for marketing our 5 stores
along the M3 corridor (Sunbury, Woking, Farnborough, Basingstoke, and
In last year's report we discussed our intention to focus our systems on "
efficiency and timely data". This has resulted in a concentration of management
reporting into one comprehensive monthly and one weekly report. The result has
been a significant reduction in time spent compiling, printing and posting at
the stores, together with a reduction of paper consumed. The reports contain
more relevant and timely data which has facilitated an increasingly focused
approach to our sales and marketing.
During the year we have introduced direct debit facilities, which will also
reduce the administrative burden and use of paper at the stores. Of course this
also is a positive service to our customers and reduces the time committed to
credit management. Direct Debits are growing rapidly as a percentage of payment
methods and will contribute to capping our already low bad debt write-off level
of less than 1/4% of total turnover.
In consultation with Trading Standards, the Self Storage Association and our own
Counsel we have introduced a new customer occupancy licence, which by clarifying
the rights and obligations of Lok'nstore and its customers enhances our ability
to enforce our lien, which is likely to further improve our credit control
At 31 July we had 92 employees. Attracting and retaining the right people is
critical to the success of Lok'nStore. We are committed to providing a positive
attitude in the business and an enjoyable working environment. Lok'nStore
encourages all staff to build their skills through appropriate training and
regular performance monitoring. We now run regular training courses to support
these objectives. The development of the Central Sales Team and the Central
Support Team provide a progressive career path for all staff.
All employees are eligible to participate in share ownership plans after 3
months of employment and 40% of our employees have EBT shares or options. 28 of
the staff are members of the contributory pension scheme
I would like to thank all of our staff for their contribution to a successful
year. The continuing progress of the Group is being achieved as a result of
their efforts and hard work.
Chief Executive Officer
During the financial year Lok'nStore has shown 17.8% growth in turnover to #6.6m
(2003: #5.6m). The continuing growth during the year and since the year-end is
demonstrated by the increase in annualised turnover to #7.7m.
Demonstrating the cash generative nature of the business, EBITDA before
exceptional items was up 15.2% to #0.83 million (2003: #0.72 million). Operating
profit before exceptional items increased to #121,674 (2003: #77,190).
The exceptional costs during the year totalled #127,407:
* Of these costs, just under a half relates to termination payments made to
senior managers, and all associated fees, as well as costs incurred
relating to a bid approach;
* The remaining #68,561 relates to the compensation for loss of office of
Christopher Stevens, who resigned as the Company's Finance Director on 25
The net interest charge increased from #39,309 to #162,501. This increase is a
consequence of the Group utilising its bank facilities to acquire the head lease
at Poole and the sites at Tonbridge and Farnborough, and to fund the buy back of
shares. Year-end borrowings of #7.6 million mean that the interest charge will
rise significantly next year on a full-year charge.
The Group made a small loss of #41,697 before tax and exceptional items (2003:
No charge to corporation tax arises a result of the Group's loss in the year.
Tax losses available to carry forward for offset against future profits amount
to some #2.7 million. In addition the business had capital losses available to
carry forward of #362,636.
Earnings per share before exceptional items showed a loss of 0.16p per share.
BORROWINGS AND CASH FLOW
The Group was cash positive at the year-end with net cash balances of #0.65
million (2002: #1.1 million). Cash flows from the Group remain encouraging, with
increasing cash flows as turnover increases continuing to demonstrate the cash
generative nature of the business. Cash Inflow from operating activities before
interest and capital expenditure was just under #1 million, compared to #0.3
million for 2003. Increased capital expenditure totalling some #5.4 million
reflects the Group's commitment to growing its business through a combination of
site acquisition (#4.3 million) and investing in our existing stores (#1.1
million). At 31 July 2004, the Group had #7.6 million of borrowings representing
gearing of 66% on net debt of #6.95 million.
Following approval by shareholders of a special resolution at the AGM on 27
November 2003, the Company has an ongoing general authority to make market
purchases of up to 9,265,848 of its ordinary shares (less any shares purchased
pursuant to a tender offer). This authority expires eighteen months after the
date on which the resolution was passed unless renewed, varied or revoked by the
Company in General Meeting.
On 23 March 2004, the Company purchased 3,420,549 of its Ordinary Shares of 1p
for cancellation at a price of 112p per Ordinary Share leaving ongoing authority
to make market purchases of up to 5,845,299 of its Ordinary Shares (subject to
any Ordinary Shares purchased pursuant to a tender offer). Of the shares
cancelled, 500,000 were owned by the employee benefit trust.
After the cancellation, the total number of shares in issue reduced to
25,048,144 Ordinary Shares.
The Group will continue to use the remainder of this authority as appropriate
in the best interests of shareholders.
Net assets at the year-end decreased to #10.6 million (2003: #14.2 million)
reflecting the effect of the share buyback.
The employee benefit trust owns 627,500 (2003: 1,127,500) shares, the costs of
which are shown as a deduction from shareholders' funds in accordance with
Urgent Issues Task Force Abstract 38.
The Company signed a new #10 million revolving credit facility in March 2004,
which gives the Company the ability to make further purchase of its own shares
as and if appropriate.
All cash deposits are placed with Royal Bank of Scotland Plc on treasury deposit
utilising either one-day or two-day money funds. The Group's cash position is
reviewed daily and cash is transferred daily between these accounts and the
company's operational current accounts as required.
The #10 million revolving credit facility agreed with The Royal Bank of Scotland
Plc is a three-year committed facility and during the year the Company complied
with all corresponding debt covenants.
CONSOLIDATED PROFIT AND LOSS ACCOUNT for the year ended 31 July 2004
Notes 2004 2004 2004 2003
# # # #
Before Exceptional Total Restated
Items Note 2
TURNOVER 6,611,911 - 6,611,911 5,612,978
Operating expenses (6,490,237) (127,407) (6,617,644) (5,600,075)
OPERATING 121,674 (127,407) (5,733) 12,903
Loss on disposal of fixed
assets (870) - (870) (404,078)
Interest receivable 36,950 - 36,950 61,748
PROFIT / (LOSS) ON
PAYABLE 157,754 (127,407) 30,347 (329,427)
Interest payable (199,451) - (199,451) (101,057)
LOSS ON ORDINARY
TAXATION (41,697) (127,407) (169,104) (430,484)
Taxation 3 - - - -
LOSS FOR THE YEAR (41,697) (127,407) (169,104) (430,484)
EARNINGS PER SHARE (0.16p) (0.64p) (1.57p)
Diluted 4 (0.16p) (0.64p) (1.57p)
The operating profit for the year arises from the Group's continuing operations.
No separate statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the profit and loss account.
BALANCE SHEETS 31 July 2004
Group Group Company Company
Notes 2004 2003 2004 2003
# # # #
Intangible assets 5 383,323 407,578 - -
Tangible assets 18,162,957 13,398,636 - -
Investments 6 - - 214,563 214,563
18,546,280 13,806,214 214,563 214,563
Stocks 103,880 101,783 - -
Debtors 1,948,711 1,527,779 5,994,621 9,982,571
Cash at bank and in hand 654,361 1,101,809 - -
2,706,952 2,731,371 5,994,621 9,982,571
CREDITORS: Amounts falling
due within one year (3,094,644) (2,336,243) - -
(LIABILITIES)/ASSETS (387,692) 395,128 5,994,621 9,982,571
TOTAL ASSETS LESS CURRENT
LIABILITIES 18,158,588 14,201,342 6,209,184 10,197,134
CREDITORS: Amounts falling due
after more than one year 7,600,000 - - -
10,558,588 14,201,342 6,209,184 10,197,134
CAPITAL AND RESERVES
Called up share capital 7 250,481 284,687 250,481 284,687
Share premium account 8 21,496 9,912,447 21,496 9,912,447
Capital redemption reserve 8 34,205 - 34,205 -
Merger reserve 8 6,295,295 6,295,295 - -
Other distributable reserve 8 5,903,002 - 5,903,002 -
Profit and loss account 8 (1,436,305) (1,267,201) - -
ESOP shares 9 (509,586) 1,023,886) - -
SHAREHOLDERS' FUNDS 10,558,588 14,201,342 6,209,184 10,197,134
Approved by the Board of Directors on 2 November 2004
and signed on its behalf by
A Jacobs Chief Executive R Davies Director
CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2004
Notes 2004 2003
Cash flow from operating activities 10a 934,854 292,975
Returns on investments and servicing of finance 10b (122,163) (39,309)
Taxation - -
Capital expenditure and financial investment 10b (5,429,344) (1,288,293)
CASH OUTFLOW BEFORE FINANCING (4,616,653) (1,034,627)
Financing 10b 4,169,204 (7,990,904)
DECREASE IN CASH IN THE PERIOD (447,449) (9,025,531)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)
Notes # #
Decrease in cash in the period (447,449) (9,025,531)
Change in net debt resulting from cash flows (7,597,153) (7,144,431)
MOVEMENT IN NET (DEBT)/FUNDS IN PERIOD (8,044,602) (1,881,100)
NET FUNDS AT 1 AUGUST 1,098,814 2,979,914
NET (DEBT)/FUNDS AT 31 JULY 10c (6,945,788) 1,098,814
NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 July 2004
1 ACCOUNTING POLICIES
The above results for the year ended 31 July 2004 are an abridged version of the
Company's statutory financial statements. The profit and loss account and
balance sheet do not constitute statutory financial statements within the
meaning of section 240 of the Companies Act 1985. These accounts have been
prepared on the basis of the same accounting policies as set out in the
statutory accounts for the year ended 31 July 2003.
2 EXCEPTIONAL ITEMS
Termination payments 20,246 -
Professional fees re bid approach 38,600 -
Director's compensation for loss of office 68,561 64,287
Loss on disposal of Swindon freehold - 400,901
Exceptional costs of #127,407 arose from termination payments to the former
finance director and senior managers, and all associated fees, as well as
professional fees relating to the approach to the Group.
There is no Corporation Tax or deferred tax charge due to the availability of
The tax assessed is lower than the standard rate of corporation tax in the UK
(30%). The differences are explained below:
Loss on ordinary activities before tax (169,104) (430,484)
Loss on ordinary activities multiplied by the standard rate of (50,731) (129,145)
corporation tax in the UK of 30% (2002 - 30%)
Expenses not deductible for tax purposes 7,492 18,084
Capital allowances for period in excess of depreciation (52,506) (96,540)
Accounting loss on disposal of capital assets - 121,223
Losses carried forward 95,745 86,378
Current tax charge for the period - -
The Group has revenue tax losses of approximately #2.7 million available to
carry forward against future taxable profits of the same trade. No value is
ascribed to these losses, due to the uncertainty as to the utilisation of the
losses in the foreseeable future.
Future tax charges may be affected by the degree to which deferred tax assets
are subject to recognition in the future.
4 EARNINGS PER ORDINARY SHARE
The calculations of earnings per share are based on the following profits and
numbers of shares.
Loss for the financial year before exceptional items (41,697) 34,704
Loss for the financial year (169,104) (430,484)
No. of shares No. of shares
Weighted average number of shares 26,300,997 27,341,193
For basic earnings per share
Exercise of share options 1,135,584 1,169,855
For diluted earnings per share 27,436,581 28,511,048
The exercise of share options would give rise to a reduction in the losses per
share. This is not considered to be dilutive.
5 INTANGIBLE FIXED ASSETS GROUP
1 August 2003 485,093
31 July 2004 485,093
1 August 2003 77,515
Charged in year 24,255
31 July 2004 101,770
Net book value
31 July 2004 383,323
31 July 2003 407,578
6 INVESTMENTS COMPANY
At 1 August 2003 and 31 July 2004
Lok'nStore Limited 214,563
The Company holds more than 20% of the share capital of the following companies,
all of which are incorporated in England and Wales:
Subsidiary undertakings Class of % of shares held
shareholding Directly Indirectly Nature of business
Lok'nStore Limited Ordinary 100 - Self-storage
Lok'nStore Trustee Limited Ordinary - 100 Trustee Company
7 SHARE CAPITAL
35,000,000 ordinary shares of 1p each (2002: 35,000,000) 350,000 350,000
Allotted, issued and fully paid:
25,048,144 ordinary shares of 1p each (2003: 28,468,693) 250,481 284,687
At the Company's EGM on 5 September 2003, shareholders gave approval for a buy-
back of shares, the cancellation of the share premium account and its
corresponding conversion into a distributable reserve.
On 23 March 2004,the Group purchased 3,420,549 of its Ordinary Shares of 1p for
cancellation at a price of 112p per Ordinary Share leaving ongoing authority to
make market purchases of up to 5,845,299 of its Ordinary Shares. The authority
expires on 26 May 2005, this being 18 months after the annual general meeting at
which the authority to purchase the shares was granted.
Profit and Total
Other Capital loss #
Share Merger Distributable Redemption account
premium reserve reserve reserve #
# # # #
1 August 2003 9,912,447 6,295,295 - - (1,267,201) 14,940,541
share premium (9,907,951) - 9,907,951 - - -
own shares - - (4,004,949) 34,205 - (3,970,744)
Options 17,000 - - - - 17,000
Loss for the - - - - (169,104) (169,104)
31 July 2003 21,496 6,295,295 5,903,002 34,205 (1,436,305) 10,817,693
The merger reserve represents the excess of the nominal value of the shares
issued by Lok'nStore Group Plc over the nominal value of the share capital and
share premium of Lok'nStore Limited as at 31 July 2001.
9 ESOP SHARES
Group Group Group Group
2004 2003 2004 2003
Number Number # #
1 August 2003 1,127,500 127,500 1,023,886 172,917
Purchased in the - 1,000,000 - 850,967
Sold in the year (500,000) - (514,300) -
31 July 2004 627,500 1,127,500 509,586 1,023,886
The ESOP shares are held by the employee benefit trust. The disposals in the
year arose from the Group's buyback of shares.
10 CASH FLOWS 2004 2003
a Reconciliation of operating profit to net cash inflow from operating
Operating (loss) / profit (5,733) 12,903
Depreciation 664,153 621,835
Amortisation 24,255 24,254
Increase in stocks (2,097) (38,816)
Increase in debtors (420,932) (271,677)
Increase / (decrease) in creditors 675,208 (48,710)
Exceptional Item - (6,814)
Net cash flow from operating activities 934,854 292,975
b Analysis of cash flows for headings netted in the cash flow 2004 2003
Returns on investments and servicing of finance
Interest received 36,950 61,748
Interest paid (158,319) (97,654)
Interest element of finance lease rental payments (794) (3,403)
Net cash outflow for returns on investments and (122,163) (39,309)
servicing of finance
Capital expenditure and financial investment (5,429,644) (2,324,045)
Purchase of tangible fixed assets
Proceeds from sale of tangible fixed assets 300 1,035,752
Net cash outflow for capital expenditure and (5,429,344) (1,288,293)
Financing 7,600,000 (7,130,998)
Capital element of finance lease rental payments (2,847) (13,433)
Exercise of share options 17,000 4,496
Purchase of ESOP shares - (850,967)
Purchase of own shares (incl. costs) (3,444,949) -
Net cash inflow / (OUTFLOW) from financing 4,169,204 (7,990,704)
c Analysis of net debt At Other non At
31 July 2003 Cash flow Cash 31 July 2004
# # changes #
Cash at bank and in hand 1,101,809 (447,448) - 654,361
Debt due after 1 year - (7,600,000) - (7,600,000)
Finance leases 2,995) 2,847 - (148)
Total 1,098,814 (8,044,602) - (6,945,788)
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