Lok'n Store Share Discussion Threads

[happyjackal] 23/5/2008 14:50

From the interim results RNS on 28 April:

"Adding our stores under development at cost, our total property
valuation of #90.4 million (NBV #43.2 million) translates into a net asset
value, of 270 pence per share, (31.07.2007: 270 pence). (31.01.2007: 202 pence).
This translates into a net asset value of 213 pence per share after making full
provision for deferred tax arising on the revaluations. (31.07.2007: 213 pence).
(31.01.2007: 157 pence).

The deferred tax liability arises on the revaluation of the properties and on
the rolled over gain arising from the disposal of the Kingston and Woking sites.
In due course the site of the existing Reading store is likely to be sold with
the benefit of its permission for residential development and the proceeds will
be reinvested in our new store pipeline. It is not the intention of the
directors to make any other significant disposals of operational self-storage
centres in the foreseeable future. At present, it is not envisaged that any tax
will become payable in the foreseeable future due to the trading losses brought
forward and the availability of rollover relief."

[mrstock] 23/5/2008 13:34

Which of course makes LOK a screaming BUY

[mrstock] 23/5/2008 13:33

"I thought adjusted NAV was 2.10 in the last results" - nope - last reported NAV was £2.70 as of report to Jan 31 2008

[vassily] 23/5/2008 00:00

I thought adjusted NAV was 2.10 in the last results, though, I could be wrong. I think it should be a bit lower now with a reduction in the price of property. I think the share price suggests a lower NAV.

[happyjackal] 22/5/2008 16:11

NAV £2.50

[mrstock] 22/5/2008 12:25

The NAV on LOK just has to be higher than this share price. Any one?

[vassily] 19/5/2008 22:59

A little support offered by the 100,000 share purchase of Montanaro?

[vassily] 13/5/2008 23:28

mrstock
You make some perfectly reasonable points. I was a little surprised by the share by back. I'll wait and see what happens. I don't expect the share price to rise with the news flow and economy. I look to the future. I am sure they will take advantage of the lower values of commercial/industrial properties in their own good time and with some caution.
I understand your point about the rate of growth, but this company was never going to be BYG; there really wasn't the money available to LOK that was made available to BYG. And, although I have no evidence, the rapid expansion at BYG may be hurting BYG's profits as they seek to pay back their financing in a weaker market.
Yes, I would like some more dividend.

[mrstock] 13/5/2008 12:08

vassily - once again the stock price is going down the pan. Your management is spending YOUR cash on buying back shares. What is effectively happening is that they are saying that there is no better investment than buying LOK shares. They are NOT buying any hard assets (property) that will generate more cash for the company.

I understand that you are accusing me of revising history. That is absolutely incorrect. i am not pointing out that it was impossible to make money with this company, merely that in the many years they have been listed, they have achieved precious little for the buy and hold investor.

This company need to wake up and pay a good hard dividend rather than fritter cash away by speculating on their own stock.


Oh, and I think they would probably go to jail for using a revolving credit facility to buy back stock as implied above! So I guess they haven't.

[werdna78] 09/5/2008 08:39

sorry, finger trouble on the old calculator, must have added an extra zero!

[vassily] 08/5/2008 23:18

"I presume they have utilised some of the unused revolving credit facility to fund the £14.4 million needed."

Careful. How did they need 14.4 million? Surely, it was more like 1.4 million.

Despite what has been said by some, I don't see this action as a attempt, desperate or otherwise, to bolster the share price. I think this move is more strategic, though, I cannot be sure, of course. I base my assessment on the management's cautious approach in the past and I assume the approach will be applied in the future.

When mrstock says Lok's performance has been lousy I think he is revising history.
If you bought some years back and then sold in April/May '07 there was a nice 200% profit to be had over three and half years. That is nothing to be sniffed at when the bank rate is five percent. I believe wan, a regular poster here in the past, bought low and sold high.

[mrstock] 08/5/2008 18:56

"As for the price in July 1999 what's that got to do with the price of fish? I'm more interested in the price today and if I think it will increase or decrease."

Just pointing out that the company has consistently been a lousy performer. The problem is with management growing the assets to the detriment of the profits. To compound this they are spending company money on their own shares. Stupidity in the extreme.

Of course, you may have done better investing in fish. ;-)

[werdna78] 08/5/2008 09:05

Mrstock,
I don't believe I said anywhere it would effect the share price. As pointed out in the article you posted it is just a swap of asset class from cash, to shares.

However I do see it as a statement from the management team. They are saying that the company is undervalued by the market and are taking advantage of that point. The current NAV/share of the company is 213p, after the buyback it has increased to 219p.

Assuming that they have got the valuation method of the properties correct and that the NAV of the company is correct at £55.5 million then IMO the management is doing the correct thing in buying back it's shares in the market.

They could just be compounding the error, if they have got the valuation wrong, by creating more debt for the company. But their gearing isn't massive so I'm happy to take that increased risk.

When/if the market realises that the company is undervalued the gain in the shareprice will be larger due to the share buy backs.

As for the price in July 1999 what's that got to do with the price of fish? I'm more interested in the price today and if I think it will increase or decrease.

Werdna

[mrstock] 07/5/2008 19:45

I would remind you all that this stock was at the same price in July 1999. Do you think all the share buybacks have had any effect over the last 10 years?

[mrstock] 07/5/2008 19:39

actually -- go here to read up ...

[mrstock] 07/5/2008 19:37

"It's definitley a bold move buying back 3% of the company."

Complete waste of money. It has been proven over and over again that this is an idiotic move to make. It has had absolutely no impact on the share price. Money out of your pocket sir.

[werdna78] 07/5/2008 15:24

It's definitley a bold move buying back 3% of the company. I presume they have utilised some of the unused revolving credit facility to fund the £14.4 million needed. Don't know if they were coming under pressure to use it or loose it.

I've had a small punt on them today as I think it looks a good solid business model. The property values appear to be underpinning the share price, but DYOR.

I would expect that the properties have been valued at their commercial property values based on rental yields, the interim results just say "full valuation level", so the value should be protected from any fall in the residential property market.

[vassily] 01/5/2008 01:58

Did anyone notice that LOK management bought back 3% of their company? 800,000 shares are back in the treasury. Good news -- for holders. Less dividends have to be paid out.

Nevertheless, what does it also suggest? Spare cash? No ideas? They can can sell them back to the market for more in the future?

Interesting move.

[vassily] 23/4/2008 23:21

Reminder:

Lok'nStore Group plc

Notification of Results

Lok'nStore Group plc will be announcing its Interim Results for the six month
ended 31 January 2008 on Monday 28 April 2008.

[vassily] 20/4/2008 20:58

This is the company I have seen on the M3 in a prominent location.



Seven locations; six up north; one in Eastleigh, Hampshire.

Seems to be looking for some more exposure in the south. Watch out LOK.

[vassily] 08/4/2008 02:16

How's the long talked about downturn in the UK housing market going to affect LOK?

At the current share price it seems that trouble in the housing market has been allowed for, but who knows. It could be argued that if some movement in the housing market should take place then storage could benefit. LOK's profit margins on its older stores remain very good and should offer a buffer in more difficult times. Also the less developed storage sector in the UK is a bonus. In the U.S. there seems to be storage company saturation.

I noticed that a smaller firm has started to emulate LOK's storage model. I saw a large store beside the M27 or M3. I forgot the name of the company.

Anyone any thoughts?

[mrstock] 03/4/2008 10:36

All the other self store places are putting up prices. It can only help LOK. Maybe they can now use this cash pile in a dropping real estate market. This one is a BUY at this price.

[vassily] 05/3/2008 23:02

Moving back towards 200p, but with general negativity around it may not go much higher. A few more locations wouldn't go a miss, but I think LOK will wait for commercial property prices to decline further before purchasing. Their track record suggests caution will prevail in decision-making processes. Attractive trait.

[vassily] 11/2/2008 22:35

Another 50K shares bought by management. Nice.
What's there game? Bolstering the sp? Bolstering their pockets.
LOK must be back to 25 mill. shares approx.

[vassily] 07/2/2008 22:50

Nice to have you back Happyjackal.
I did not sell at high, but have been buying now and again since mid '03.
I like to steady, boring growth. It suits me.