Lok'n Store Share Discussion Threads

[wan] 23/4/2007 07:15

A cracking set of interim results, along with commencement of a maiden dividend at full year. LOK will now be blipping on a few more radar screens.

Quite a large article in the Sunday Times titled, 'Self-storage ready for take off in space race'. It refers mainly to Safestore and the occasional mention of BYG. Says the self-storage market is tipped to double over the next three years -

[wan] 21/4/2007 07:55

KT...See below

Vassily...The following reports, recently made available (but from late 2006), helps explain why the likes of BYG trade at a premium to nav ie reflecting the significant growth potential the immature UK self storage market offers, in other words, not just property underpinning the share price That aside self-storage properties, which are quite unique and difficult to obtain the right planning permisions and location etc, these properties offer a far higher yield than the average commercial building, and thus will be valued for their 'cash flows' rather than just another warehouse etc.

LOK has not only attained critical mass (my view that occurred at the end of 2006), but LOK has since added to that mass, property pipline and circa £10m cash, so the momentum from here will accelerate quite notably, especially via the new stores.

13 November 2006 -
30 October 2006 -
30 October 2006 -
20 October 2006 -


Regards, wan

[vassily] 21/4/2007 05:10

Good to keep in mind:

Commercial property prices are also historically high, as can be seen from their yields to investors etc. I am, therefore, wary of the recent property valuations of storage companies and the link between these valuations and share price.

I'm looking for a lower share price entry point for all storage companies in the future, though I acknowledge LOK share price is behind the pack somewhat. What are my chances? BYG seems to have stagnated. Barclay's sold off 20% of their share of BYG. SAFE share price is also hovering.

[mitzis] 20/4/2007 15:40

Great thanks wan..LOK could possibly be a bid target for the yanks then.

Added again today.

They still look very undervalued a re-rating is due.

[kievtrader] 20/4/2007 11:29

Wan. What was report you read that stated that LOK might produce dividend from 2008? KT

[wan] 20/4/2007 10:34

Mitzis...V/briefly.

Shurgard (now part of Public Storage, completed late 2006) had European revenues of $127m in 2005.

They had 158 European properties -

France - 48
Netherlands - 32
Sweden - 22
Belgium - 19
UK - 18
Germany - 11
Denmark - 8

Giving a Total Rentable sq ft of 8,309,000

The yanks are interested in the 'immature' European market, hence they bought Shurgard, which had the largest European footprint, however, they still look weak in the UK (18 properties) given that the population density of the US is only 32 per square kilometre against 246 in the UK (highlights the growth potential), I believe Europe also offers higher populaton density rates compared to the US. With LOK's focus on the S/East, it means the portfolio is nicely exposed to the UK's high density rates.

Regards, wan

[mitzis] 20/4/2007 09:25

Wan:
How much is Europe worth approx..thanks.

[wan] 20/4/2007 07:39

All...A notable retracement, a trend reversal? Fwiw I don't think so, profit taking maybe, which is quite healthy really as nothing goes up in a straight line, and having been here a while now, I have seen it all before. The downside risk for self-storge, even in a higher interest rate environment is somewhat limited if you check the revenue generation/markets etc. Furthermore any share price weakness will make LOK blip quite loud on radars at the 3 players above it in the UK Self-Storage market, especially no 2 & 3 (Access & BYG), who would then, along with their pipeline, be vying for the no 1 slot in the UK along with SAFE, interstingly Shurgarde Europe, the largest player, only had 18 UK properties in 2006, so LOK could put them on an equal UK footing with the other players. Anyway we do not want to dwell on or rely on the takeover element, because the longer term offers far greater rewards than a 20 or 30% premium. Yesterday I read a report that suggested that LOK would commence dividends in 2008, that perhaps indicates the type of growth that will be delivered, if you have the investment horizon beyond the results on Monday (I like it when results are scheduled for a Monday).

Regards, wan

[kievtrader] 18/4/2007 18:59

SAFE and BYG both fell today too (and yesterday)- SAFE found good support at 240p and bounced off that and BYG has come off the most. Looking like a good entry point on tradin grounds for LOK ahead of results on Monday.

[wan] 18/4/2007 07:18

All...Interest rates concerns rattled the property sector yesterday, which included LOK. Fwiw, I have factored in rates of up to 6% in most things I do (anything better is a bonus). 6% or the threat of getting there might also serve as a psychological threshold, but in my opinion the need for storage will be unabated. For instance if people decide not to trade up to larger houses and instead retaining their smaller homes, then their storage requirements actually become longer term, and not just hinged around moving house. Furthermore and as I highlighted before, business storage, which forms a large percentage of revenue, provides an affordable stop gap, if not a permanent one in many cases. I am sure the results will help us dissect the business element, which in my opinion could be proving 'buoyant' , with again self-storage providing businesses with an easy if not compelling choice.

Yesterday I had some spare time -

Reading planning update -

30th May 2006 planning for 120 units refused
Appeal lodged and validated 19th March 2007

New application for 112 units validated 28th March 2007, decision pending with a target/decision date 27th June 2007.

So we have an appeal lodged and a new/revised application pending, which in my book is strategically good, but please do your own research in order to make your own assessments as to the likelihood of the planning outcome. In the meantime, and strictly in my opinion only, it will be a case of brisk self-storage business.

Regards, wan

[kievtrader] 17/4/2007 10:27

Monday 23rd April next week

[gucci] 17/4/2007 08:27

when are results due

[wan] 17/4/2007 07:24

Oh and by the way, if LOK can secure pp on Reading, then the low cost housing propsed there, will be of interest to more than just a few.

[wan] 17/4/2007 07:22

To underline what I recently said about 'smaller' new houses being built and perhaps then those households dependence on long term storage, and indeed to highlight the house builders 'forward' order book as a helpful indicator, then todays results from Bellway are of note (their capitals not mine)-


HE CONCLUDED "OUR OBJECTIVE IS TO REMAIN FOCUSED ON THE DELIVERY OF LOWER VALUE
HOUSING........" AND THAT "THE BOARD BELIEVES ITS PROVEN OPERATIONAL MODEL WILL
CONTINUE TO DELIVER GROWTH FOR SHAREHOLDERS WELL INTO THE FUTURE".

Trading

Bellway has, for many years, benefited from a policy of forward selling and I am pleased to report that the Group's forward order book at the end of March was £732 million, the strongest ever and when aggregated with completions to date, results in over 95% of this year's increased target for home completions having now been secured.

[leytonorient] 16/4/2007 19:29

results soon

[vassily] 15/4/2007 04:05

Thanks Wan.
Useful information for the BB.
V

[wan] 14/4/2007 09:28

Vassily...As we know the previous property valuation (213p) did not account for any further investment in existing centres since July 2006, also I think Kingston fetched a higher price than was assumed in that valuation, and of course there has been investment/expasion since -

Planning permission granted for the new Reading store on adjacent land, land that was already owned. (that on its own should add a decent uplift, not to mention residential pp on the existing site)

On 25th September 2006, Lok'nStore Limited exchanged contracts on the purchase
of a freehold site in Portsmouth with a contractual completion date set for 27th November 2006. The purchase price is #2,025,000 and the property will be
refurbished and fitted out for a further cost of approximately #2 million. The
refurbished store will open in 2007.

Expansion of stores


Lok'nStore Group plc, the fast growing AIM listed self-storage operator is
pleased to announce significant expansion plans at two of its stores.


Fareham - to double in size

A new lease has been signed at the Company's Fareham store. By expanding into
the adjacent building, the new lease doubles the size of the store to around
60,000 square feet.


This acquisition is in line with the Company's strategy to increase the average
size of the stores, further increasing profit margins.


New Portsmouth store doubles available space and acquires freehold

The Company also recently purchased a new freehold site for the existing
leasehold business in Portsmouth. This new freehold doubles the space available
to the Portsmouth business to around 60,000 sq ft, and will replace the existing
leasehold store.


These two centres will both carry the distinctive orange livery which is proving an effective generator of business.


Together these two transactions take total lettable space for the Group to
around 980,000 sq feet, 60% of which is held freehold and 40% leasehold.


Andrew Jacobs, CEO of Lok'nStore Group plc said:

"We are pleased to announce these two acquisitions which are consistent with our strategy to increase the size of our self-storage centres, improving our profit margins, and where possible to acquire freeholds for our existing leasehold businesses. Both stores will have the distinctive orange livery which is increasing the visibility of our brand and proving so effective in maximising customer response to our prominent store locations."

Recently LOK announced that it has acquired the freehold of a new build site on Edinburgh Way, Harlow, with all the necessary planning consents in place.


Vassily, lets put it this way, LOK is no where near trading at premiums to nav that BYG (circa 80%) and SAFE are. Also with recent confirmation of self-storage suitability to REIT, which LOK have not commented on, but may update us on their intentions now that a certain precedent has been set, perhaps provides for another element yet to be realised.

It is perhaps aslo worth remembering that Town Centre Securities PLC, which recently announced they have accumulated 4.85 pct of LOK shares, also said that "We have identified a number of UK quoted companies which we believe are undervalued by the market and where we also identify a strong underlying property portfolio that is likely to outperform direct investment."

With the results just over a week away, we will get an update on the increase in fitted space, which will also be another indicator. So until we get further info it is hard to pin down the new nav, but as you can see we are already quite away above the 213p.

Regards, wan

[leytonorient] 14/4/2007 08:33

tHEY MUST BE CLOSE TO SELLING THE READING SITE?

[vassily] 14/4/2007 02:57

Wan:
What is your estimation of LOK's NAV.
V

[gucci] 13/4/2007 11:37

noticed 25k mm buy

[wan] 13/4/2007 10:41

All...Some interesting action ahead of the opening today, along with yesterdays activity, suggests their might be another round of accumulation underway, butI noted that the early pricing teased some sellers out. Fwiw, and as I have highlighted before, 'IF' LOK is starting to be re-rated on a similar formula/rating to SAFE and BYG, then we still have quite a long way to go.

I have also said before that I really rate/value Lok'n Stores brand/image. I think LOK has the potential to go European, and at the very least, to be a major player in the UK, if we are allowed to get there. For those who have the correct investment horizon/patience, I firmly belive, we will be rewarded accordingly.

Regards, wan

[mitzis] 13/4/2007 09:21

I was hoping for a 70% to 80% return on these over the next 12 months.
I have 500p in mind I may be wrong.
Noticed the large buys yesterday which I suspect is someone stake building.

Added again this am.

[leytonorient] 13/4/2007 08:10

450p target on these

[gucci] 13/4/2007 08:06

nice start