Lok'n Store Share Discussion Threads

[wan] 03/8/2006 07:43

Vassily.........There are things that can disrupt most markets, whether they occur remains to be seen. There are reasons for confidence in the property market both residential and commercial (see also my previous post re mortgage approvals, house builders results and order books, and the bid battle for McCarthy & Stone). In the UK, the chronic undersupply of new housing continues. The Department for Communities and Local Government estimates demand for an annual average of 209,000 new household formations per annum in England alone between 2003 and 2026, heavily outweighing the 155,000 new homes completed in England in the year to April 2005 according to data from the Office of National Statistics. Also the continuing net inward migration from the EU will increase the imbalance between demand and supply.

With the final version of the Finance Bill, which was passed last week, investors can get exposure to residential property through their self-invested personal pensions (Sipps) as long as it is through a diverse investment vehicle, ie they must have at least 10 investors and own at least three different properties worth a minimum of £1m in total. Then we also have REIT's.

LOK appears to offer a mix of residential and commercialial property exposure. Planning permission for residential development - Kingston, Reading, and others? And of course the exposure to self storage during the moving process (although not entirely reliant on that particular element alone). Commercial because of the ownership of warehouse type property. And then we have the growth area of self-storage to boot, which appears to be in the price for nothing?

Recently Bridgewell raised their fair value for LOK by 19% to 215p, a market cap of £53m, and reaffirmed its overweight rating. Today LOK has a market cap of circa £38m. Yet over a year ago, in January 2005, all freehold and leasehold properties were valued at £33.6m, there were 19 operational stores then, now there are 21 operational stores, for which the value today could conceivably be, along with Kingston, 'above' LOK's current sp?


I am very comfortable with my holding here, and may take the opportunity to add.

Regards, wan

[kievtrader] 03/8/2006 00:33

Good volume today of over 60,000. Maybe stock has been shaken out for an institutional buy order at this level. This looks like the floor to me. Need to get hold of some cash from other sources to pick ups some more.

KT

[kievtrader] 02/8/2006 14:50

RNS announcement today - grant of share options to directors.

KT

[kievtrader] 02/8/2006 13:13

looking dirt cheap. maybe market-makers trying to shake out sellers and find level

KT

[vassily] 01/8/2006 14:21

Wan:
So you don't see anything that could disrupt the housing market in the future. I wish I could be that confident.
As for LOK and Kingston, the evidence in 2005 and 2006 thus far suggests hands were not bitten off.
I remain happy to hold though, with or without Kingston.
V

[wan] 01/8/2006 07:31

In the meantime...The housing market is going along at a fair lick, with strong mortgage data released yesterday and todays news that George Wimpey reported a strengthening performance and volume growth in the UK, which sits well with the other house builders that reported recently, all of which also appear confident in the long term future of their businesses in the UK.

My estate agent colleague has not only now recorded a recrd June, he has now also recorded a record July, make of that what you will.

vassilly...I see no let up in either credit(see above) or builder enthusiasm for building projects. The bidding war for McCarthy & Stone would also perhaps indicate that enthusiasm for property/projects remains 'firmly' intact.

Regards, wan

[vassily] 31/7/2006 15:33

That would be nice!
The lack of news about Kingston is a drag. Possible cause of the drag: credit for building projects and builder enthusiasm might be on the wane. Just a feeling. DYOR.
V

[kievtrader] 31/7/2006 15:08

ANOTHER SIGN THAT DIRECTORS LOOKING TO EXIT WITH BID AT HIGHER PRICE. AS THEY ARE NOW FOCUSING MORE ATTENTION TO NEW BUSISINESS VENTURE - TRUCOST. www.trucost.com

Only matter of time before new bid approach and takeover and nearer the 240-250p level.

KT

[kievtrader] 31/7/2006 15:05

240p is key as one institution bought at that level some time ago. Bid has to be pitched at this level or higher. KT

[vassily] 31/7/2006 13:56

From a warehouse to an environmental/carbon consultancy. Seems these two are always thinking ahead.

[kievtrader] 31/7/2006 11:44

ANOTHER SIGN THAT DIRECTORS LOOKING TO EXIT WITH BID AT HIGHER PRICE. AS THEY ARE NOW FOCUSING MORE ATTENTION TO NEW BUSISINESS VENTURE - TRUCOST. www.trucost.com

Only matter of time before new bid approach and takeover and nearer the 240-250p level.

KT

[wan] 31/7/2006 07:53

Hmmm, the price appears to be below what some of the recent institutions bought at, so the end of holiday period ie fund managers returning to desks, may also see some action. Also there must be a heightened risk of a bid being tabled if the share price stays in negative asset territory?

[happyjackal] 28/7/2006 19:19

Either news, or an analyst gets his/her calculator out.

[wan] 28/7/2006 07:34

Looks like we are now well into the territory of the share price being at a discount to LOK's property assets? What will be the catalyst for change?

[wan] 25/7/2006 07:26

HJ...Maybe there was some short term money on the expected realistion of the Kingston deal (which is still firmly on the agenda)? If breaking news is the necessary ingredient then the jump from the current oversold territory could be notable.

[happyjackal] 24/7/2006 16:31

Yes, question is when will the "wake-up" come? At the preliminary results for FY to July 2006 to be announced in October-ish? I would imagine the analysts looking at next quarter's diary will have this pop-up on their radar any day soon. Might just have to wait for someone to have a eureka moment. Unless we get some breaking news beforehand?

[wan] 24/7/2006 07:41

Note to the above...BYG is trading at a 20% plus premium to Cazenoves 2007 nav.

[wan] 24/7/2006 07:08

Is it summer boredom that has pulled the share price down? Certainly the volumes concerned have been very low.

In January 2004 'just' 8 freehold properties were valued at £20.1m, now Lok has 11 freehold properties.
In January 2005 all freehold and leasehold properties were valued at £33.6m, there were 19 operational stores, now there are 21 operational stores.

If we allow an uplift to £35m, which is an uplift of just 13%, when specifically excluding Kingston (previously valued at 2.75m 'without' residential permission) that would seem a fair, if not a conservative figure, and equates to a share price of £1.39. Kingston is apparently worth anything between £8-10m, lets choose the lower figure of £8m, which equates to 32p per share, also LOK has achieved planning permission on the land it owns opposite the existing Reading site, so this land has also increased in valuation, not to mention that residential planning permission could eventually be attained on the existing self-storage site. So conservatively Lok is trading 'within' the value of its stores alone, and some might suggest at a sizeable discount to its property assets.

[wan] 14/7/2006 07:22

Shares in Big Yellow PLC have been initiated as 'overweight'

[wan] 12/7/2006 07:52

Today's very buoyant trading statement (including confirmation of conversion to REIT status in Jan 2007) from BYG and indeed their separate fund raising announcement comes hot the heels of suggestions that Safestore, will announce half-year figures showing a near 30 per cent jump in earnings and turnover to GBP11.4 million and GBP30.4 million respectively. Apparently Safestore has finalised a GBP237 million refinancing to give its private equity owner Bridgepoint a 118 per cent return on its investment.

Safestores refinancing as opposed to coming back to a FTSE listing indicates the amount of growth this sector has yet to realise. Also with a shortage in good sites, planning issues and indeed with REIT's now virtually a reality, consolidation looks more than a likely feature going forwards.

LOK's share price is currently looking, at the very least, very good value.

[wan] 05/7/2006 07:32

Todays news that several of the house builders forward order books are very healthy is encouraging for the second half. An estate agent colleague of mine doubled his sales during June when compared with last June.

MT...Thanks for the update. What I have noted is the interest in BYG stock and indeed the share price performance of BYG compared to LOK, so will LOK do some catch up? We know that BYG reported that competition is increasing from smaller operators and that the right sites are in very limited supply not to mention planning permission difficulties, so they may need to go the route of growth via acquisition? The suggestion of BYG buying LOK has often done the rounds and remains highly speculative, but nonetheless not inconceivable.

Regards, wan

[moscowtrader] 30/6/2006 08:40

KT - I have already talked to finace director of LOk re this issue. Contracts can potentially be signed from July onwards.

[wan] 28/6/2006 07:36

KT/MT...First I made a mistake by using just memory, pp was attained in 2004! I have not got time to check your indication of a 'recent' 3 month timeline yet, but I note that the planning permission was only subject to the signing of the S106 agreement!

Either way a deal will eventuallly be done, and I am very comfortable with my investment here, the returns from which (over the coming years) should be 'well worth' the effort and patience.

Regards, wan

[moscowtrader] 27/6/2006 23:05

Wan - I am not a planning expert so check facts and procedures. Yes planning permission obtained but there is some sort of three month rule during which final objections can be raised. If no objections raised project is signed off by council and there is no risk to buyer of project. In respect of the Kingston development this 3 month period runs from April to end June. In july deals can be finalised.