Lok'n Store Share Discussion Threads

[wan] 18/7/2005 08:07

A notable increase in volume last week especially when compared to recently! I do like it when 'both' the chart and the fundamentals appear to support positive price action, time will tell if both are right. I have been encouraged to contact Reading planners again next month for an update on any developments regarding the Reading site.

Regards, wan

[lingy] 15/7/2005 19:46

every time i predict a rise it comes to a sudden stop and heads south so this time i will just watch and wait lets hope your prediction wan comes true!

[wan] 15/7/2005 07:57

I note there were a couple of decent size delayed trades reported after the close yesterday, and level 2 is up again this morning before the open, bodes well in my opinion.

[wan] 14/7/2005 15:55

The following is perhaps of interest here, given that BYG continue to report growth and indeed how resilient the management there are seeing their business/markets. -
Big Yellow Group plc (the 'Company') announces that it was informed today that
Stephen Homer, a director of the Company, acquired 120,000 ordinary shares at
1.886 pence per share on 13 July 2005, and acquired 950 ordinary shares at 1.855 pence per share on 12 July 2005. -


On another note it will be interesting to see if those larger trades of late affect previous (increased) institutional holdings here in LOK?

[wan] 14/7/2005 08:54

It would appear that LOK has blipped on a few radar screens?

[wan] 13/7/2005 13:30

Briefly and just to be sure everyone (anyone) has spotted that the larger trades are delayed by two hours, that firmly makes them buys in my book, that apart level 2 ticked up yesterday when there were no reported trades?

[wan] 12/7/2005 12:34

Mrstock...I would think that smaller investors interested in income are unlikely to be here in the first place. Regarding paying tax on dividends it is still a more tax efficient method (not to mention no NI) -

If you pay tax at or below the basic rate, you have no tax to pay on your dividend income because the tax liability is 10 per cent: the same amount as the tax credit.

If your income, including dividends, means that you have to pay tax at the higher rate, you will have to pay more tax on your dividend income. The dividend tax rate for higher rate tax payers is 32.5 per cent (2005–2006 tax year). In practice this means that you will have to pay 22.5 per cent tax on the gross amount of dividend income that falls above the basic rate limit (£32,400 for the 2005-2006 tax year). The first 10 per cent is already covered by the tax credit.


I take your point re expansion, and indeed expansion is also highlighted in the results etc. however, I was suggesting the best of both worlds.

[mrstock] 12/7/2005 11:21

Indeed, but I would suggest that the IRR is so good that a special dividend is improbable. I would suggest that expansion would be a first priority and then share buybacks much more likely. Remembering that dividends are taxable and unrealised capital gains are not I cannot imagine why two reasonably paid major shareholders would possibly want to pay more tax. The point is here that the company seems to be run as a property investment company with potential long term gains accruing from an out and out sale to a competitor. It is not being run for the benefit of current smaller shareholders who may need income. I reiterate my snowball comment.

[wan] 12/7/2005 08:27

I am starting to ponder as to what is the tactic/point to BYG suggesting one thing and announcing another? Are they not as 'in touch' as the LOK management, who have 'not' suggested the same challenging market whilst BYG continue to. Or is it that the LOK business model/customer base is more dynamic/diverse and therefore 'even more resilient' than BYG indicates its business is proving to be to any economic slowdown?

[wan] 12/7/2005 07:58

An arguably very solid quarterly update from BYG, who 'continue to experience growth' but continue to believe that trading conditions will remain more testing. So are we to interpret that growth would have been much higher in an otherwise less challenging market, a market BYG have been calling more challenging/testing for sometime now, but then subsequently and repeatedly reporting continued growth? -

Turnover for the quarter was #9.6 million - Up 32% from #7.3 million for the same quarter last year - Up 7% from #9.0 million for the quarter to 31 March 2005 -

[wan] 11/7/2005 12:07

Mrstock...Good morning, I did actually refer to a special dividend regarding the sale/development of Kingston, and not a dividend policy! Furthermore I also said that a special dividend was speculation on my part but, not inconceivable -

"If LOK propose a special dividend/return to share holders from the sale/redevelopment of Kingston, say 10p (very conservative) that will currently yield 7% and still put £7.5m in the kitty, and that's based on a conservative sale at £10m. Although the special dividend is speculation on my part, it is far from being inconceivable as Lok has also indicated there is a chance of such."

For your (or anyones interest) -

From the FY results -
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.


From the Interim results -
This increase in property valuations provides the Group with increased financial flexibility and strength enhancing our ability to borrow. It makes the value created more transparent and gives the Group the potential to release more value to shareholders,whilst continuing to grow..


Planning permission granted

We are pleased to report that planning permission has been granted for
high-density residential development at the site of the Company's current
Kingston operation. The permission is for two 6-8 storey buildings containing 78 private flats, 16 key worker (shared equity) and 30 social units (43 one
bedroom, 75 two bedroom and 6 three bedroom), and a new GP surgery of
approximately 7,000 square feet. The planning permission is subject to the
signing of the Section 106 Agreement.


The Kingston site was purchased in 1996 for #905,000. It has been operational as one of the Companies self-storage facilities for 8 years. The book value of this site is currently #1.2 million. The Kingston site was valued by Cushman
Wakefield Healey and Baker as an operational self storage site at #2.75m

The Board is progressing discussions to maximise the proceeds and profit from
this redevelopment.(end)

I would certainly not describe that as "Not a snowball's chance in hell", and as usual time will tell.

Regards, a content holder, and stake builder, wan.

[mrstock] 11/7/2005 10:09

Dividend? Not a snowball's chance in hell at this stage I am sure. Dividends are not part of company policy.

[wan] 07/7/2005 08:25

It might also be of note (if charts count for much) that LOK's shares are 'already' deep in oversold territory, which perhaps supports my gut feel that if the shares break upwards it could be quite a significant move? On any downwards side there should be the support previously mentioned ie asset valuation, a previous bid approach, and an underdeveloped market that is set for continued high growth.

Regards, wan

[wan] 07/7/2005 08:13

Lingy?Huntie...Good morning, although patience will be an important ingredient here, news could of course come at 'anytime' from the sale/development of Kingston. Also I have just read another interesting and very positive report on commercial property sector/values which also suggested there is a wall of institutional money still looking for a home in the sector, this will of course further support values (not necessarily see the previous increases though) and indeed at the very least support the asset value in LOK. I am still of the view that LOK's current value makes it look attractive to any industry consolidators, and analysts seem to concur that the industry will further consolidate, especially given the planning constraints that are inhibiting expansion, a factor that BYG for instance also highlighted. Not that I am holding LOK purely on a takeover rationale, however, I think that it also helps supports/puts a floor under the price etc, and of course recent increased institutional holdings bode well. As I said above, in the interim of specific news here, we will get 'some' guidance from BYG's trading statement next week.

Regards, wan

[huntie2] 07/7/2005 07:52

i've held these for for ages, and a bit annoyed by the gradual price fall.......am still holding, but only a weak holder, as opportunities also exist elsewhere. when can we expect any news which could start to push the price higher?

[lingy] 06/7/2005 18:58

I`m still here holding and may top up more if this falls any further as long term this is bound to produce a nice big profit for all of us patient holders.

[wan] 06/7/2005 18:09

Konil...Good afternoon, yes the risk reward profile is actually quite a nice feature, and of course it may even produce a yield? FWIW and purely gut feel, if the share price breaks up it might be quite signifcant, so it might be worth monitoring if you are unable to wait, and see if you can catch a quick trade on the way?

Best of luck with your investments elsewhere.

PS..hope you made profits from the re-rating thus far ;-)

Regards, wan

[konil] 06/7/2005 17:20

hi wan,

i agree lok is undervalued and i would see c.200p - 240p being a more appropriate level, the top end assuming reading pp comes through but even without that c. 200p - 220p.

the big thing going for lok is its fantastic risk/reward profile, very little risk as it is backed to the gills with property assets and a good chance of decent reward if the share price ever does reach the level it should rightly be at.

but as they say, the market is never wrong, and i have been unable to wait for this to come good.

i still read your updates with interest and will continue to do so.

good luck.

[wan] 06/7/2005 13:40

Not sure if anyone is left here but, I can confirm that LOK are still in discussion with Reading planners for the residential development of the Reading site, however, nothing has yet been formalized. Also I can confirm that LOK has the right of appeal within 12 months of the refusal dated 31st May. So as previously mentioned and as indeed was the case with Kingston, some patience will be required. In the mean time its business as usual, and in the interim of 'actual' news here (don't forget Kingston) there will be an update from BYG, which I believe gives us an indicator but, not necessarily too close a correlation on performance, because I believe LOK are a more nimble astute player. I will update again on Reading in due course.

Regards, wan

[wan] 04/7/2005 10:16

"The Group announces that May and June saw a return to more normal trading conditions following a quiet April."

'Once again' it is then? ;-)

[wan] 04/7/2005 09:58

ROL...

Big Yellow Group PLC

For immediate release

4 July 2005


Result of Annual General Meeting

Big Yellow Group PLC ("The Group") announces that, at the Annual General Meeting held today, all resolutions contained
in the notice of the Annual General Meeting dated 7 June 2005 were duly passed.

The final dividend of 1.5p per Ordinary Share will be paid on 6 July.

The Group announces that May and June saw a return to more normal trading conditions following a quiet April. The Group intends to publish a trading update for the quarter to 30 June 2005 on 12 July 2005.

[wan] 04/7/2005 09:45

We appear to be at a mini inflection point? The spread is very tight and a mm buy or sell might be the catalyst for the next indication of direction ahead of any news. It has been perhaps notable that recent sellers have been soaked up by only one mm on the bid and very few buys to counter those sells. BYG give a trading statement in mid July, and of course 'once again ' they have suggested that the market is currently more challenging/muted. I say once again because they suggested the same in their interim 2004 results then 3 months later BYG delivered a very buoyant trading statement! - James Gibson, Chief Executive Officer, commented:

"In the face of testing market conditions and in our weakest trading quarter,
the Group's performance has proved relatively resilient."

FWIW and in my opinion only, there are some subtle differences (previously outlined) between LOK and BYG (time will tell there), and previously both BYG and the press have highlighted the planning constraints which are inhibiting their much sought after expansion, which in turn should put a floor firmly under a smaller and arguably astute player such as LOK, who notably has previously received a bid approach, albeit at a lower price range, but property valuation have also moved with the times.

If LOK propose a special dividend/return to share holders from the sale/redevelopment of Kingston, say 10p (very conservative) that will currently yield 7% and still put £7.5m in the kitty, and that's based on a conservative sale at £10m. Although the special dividend is speculation on my part, it is far from being inconceivable as Lok has also indicated there is a chance of such.


Anyway I am in no mind to sell down my holding, regardless of any BYG indications, as I am also focusing on the tax benefits that a long term AIM holding brings, in fact I will be monitoring for any opportunity that might present itself to increase my holding.

Regards, wan

[wan] 24/6/2005 12:55

pgetty...You are welcome, I will update on the Reading situation in due course.

[pgetty] 24/6/2005 09:19

Thank you for your comments wan

Regards,

[wan] 24/6/2005 07:36

All...Today the IC has issued a sell recommendation on Big Yellow, suggesting various bear points most of which we are familiar with and have reported/discussed here previously. They are as follows-

The fact that management indicate trading 'could' be more testing i.e the slowing housing market.

The fact that BYG's self storage is not cheap compared to other self storage companies. (cue LOK's price guarantee)

Expansion is proving difficult with both planning and price of the appropriate property playing their part.

Shares trading at 5% above net asset value. (see below)

And last but not least, the management may go on the acquisition trail.

It may also be worth noting that circa 70% per cent of BYG's revenues are from residential customers, however, Residential customers constitute about 66 per cent. of Lok'nStore's users but represent about 51 per cent. of turnover; commercial users represent the balance, generally using more space than residential users. It appears that BYG's customer focus was the rationale behind their re-structuring, with most of their stores now exempt from charging VAT -

The Board has been advised that as part of this re-structuring, the VAT election on all but one of its trading stores will be dis-applied. For those stores affected, storage charges from 1 October 2004 will be exempt from VAT. However, the Group will be unable to recover VAT on the majority of its future capital and operating expenditure. In addition, a proportion of VAT incurred and previously recovered on its historical capital expenditure will be repaid under the Capital Goods Scheme over a period of 10 years. (end)

It may also be worth noting that LOK's self storage is most certainly cheaper than BYG's.

Regarding Lok's net asset value -

Currently circa £1.34 , however, that does not include the uplift from Kingston at a conservative £10m, then discount Kingstons current valuation @ £2.75m = £7.250m which equates to a net asset value at circa £1.63 hence I have suggested in a previous post that Lok is starting to look attractive to any industry consolidators, especially when one considers the barriers to entry/expansion mentioned above.


Link to the IC article -

Note.. The IC are also showing increasing earnings per share for BYG for 2005 and 2006?

So it will be interesting to see if LOK are pulled down by any BYG affect, which should represent a buying opportunity, or whether the market will afford LOK a different rating? Be it a bid target or a better performer in self storage, or indeed 'developer' of certain assets? Time will tell.

Regards, wan