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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Lok'n Store Group Plc | LSE:LOK | London | Ordinary Share | GB0007276115 | ORD 1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 850.00 | 832.00 | 848.00 | 0.00 | 00:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Business Services, Nec | 28.96M | 4.69M | 0.1420 | 59.86 | 280.9M |
TIDMLOK
RNS Number : 6771L
Lok'nStore Group PLC
23 April 2018
LOK'NSTORE GROUP PLC
("Lok'nStore" or "the Group")
Lok'nStore Group Plc, the fast growing self-storage company announces interim results for the six months to 31 January 2018
"Strong cash flows and balance sheet fund growth strategy and pipeline of new landmark stores"
Highlights:
Strong trading and cash flow
-- Revenue GBP8.82 million up 5.7% (31.1.2017: GBP8.34 million) LFL(1) up 8.3% -- Group operating costs down by 1.4% at GBP4.80 million (31.1.2017: GBP4.87 million) -- Group Adjusted EBITDA(2) GBP3.85 million up 16.3% (31.1.2017: GBP3.31 million) -- Adjusted pre-tax profit GBP2.55 million up 21.3% (31.1.2017: GBP2.10 million)
Cash flow growth supports 11.0% dividend increase - progressive dividend policy
-- Cash available for Distribution (CAD) (3) GBP2.96 million up 13.0% (31.1.2017: GBP2.62 million)
-- Cash available for Distribution (CAD) per share (annualised) 20.5 pence (31.1.2017: 18.6 pence) up 10.2%
-- Interim dividend 3.33 pence per share up 11.0% (31.1.2017: 3 pence per share)
Significant growth in asset value
-- Adjusted Net Asset Value (NAV) per share(4) up 7.9% to GBP4.18 (31.1.2017: GBP3.87) -- Total assets(5) up to GBP154.5 million up 8.4% (31.1.2017: GBP142.6 million)
Strong balance sheet, efficient use of capital, low debt
-- Net debt GBP23.45 million (31.1.2017: GBP16.67 million) -- Loan to value(6) ratio 16.8% (31.1.2017: 14.4%) -- Average cost of debt 1.72% (31.1.2017: 1.69%) -- Post period-end: Bank facility increased by GBP10 million to GBP50 million
Consistent performance of the self-storage business
-- Core self-storage revenue GBP7.32 million up 4.5% (31.1.2017: GBP7.0 million) LFL up 7.6%
-- Adjusted Store EBITDA(7) GBP4.29 million up 11.6% (31.1.2017: GBP3.85 million) LFL up 14.4%
-- Store EBITDA margin increased to 58.6% from 54.5% -- Occupied units pricing up 0.4% LFL -- Unit Occupancy up 6.0% LFL
Healthy pipeline of new landmark stores(8)
-- 2 new stores opened in this period in Gillingham and Hemel Hempstead -- 2 new sites acquired in this period in Bedford and Bournemouth
-- Current pipeline of 7 contracted stores adds 26% of extra trading space to the overall portfolio, 22% to
our owned portfolio and 41% to the managed portfolio -- 4 pipeline sites are currently with lawyers
-- Following successful completion of the pipeline, we will have 11 stores under management contracts
Confident outlook
-- Positive momentum carried into second half -- The Group continues to grow strongly
Commenting on the Group's results, Andrew Jacobs CEO of Lok'nStore Group said,
"With strong trading and reduced costs Lok'nStore's profits and margins continue to grow rapidly. We are using our robust balance sheet to invest in the future growth of the business building more new landmark stores in a structurally under-supplied market. We have opened 2 new stores in the period and added 2 more to our pipeline with four more sites currently with lawyers.
"Our objective is to open more landmark stores while remaining conservatively geared delivering sustainable growth and consistently increasing dividends."
Enquiries:
Lok'nStore: Andrew Jacobs, CEO Ray Davies, Finance Director 01252 521 010 finnCap Ltd Julian Blunt / Giles Rolls, Corporate Finance Alice Lane, Corporate Broking 020 7220 0500 Camarco Billy Clegg / Tom Huddart 0203 757 4980
Notes - What we mean when we say ... (and why we use these key performance indicators (KPIs))
1. LFL- Like for like - This measure is used to give transparency on performance in the operating business unrelated to the opening of new stores or closure of old stores therefore giving visibility of the true trading picture. During December 2016 and January 2017 Lok'nStore closed its store in Staines. Our new store in Gillingham opened in December 2017. Like-for-like (LFL) growth figures for the period strip out these 2 effects.
2. Group Adjusted EBITDA - Earnings before interest, tax, depreciation and amortisation - The measure is designed to give clarity on the operating cash flow of the business stripping away non-cash charges, finance charges and tax. Adjusted EBITDA is defined as earnings before all depreciation and amortisation charges, losses or profits on disposal, share-based payments, acquisition costs, exceptional costs finance income, finance costs and taxation.
3. CAD - Cash available for Distribution - is calculated as Adjusted EBITDA minus total net finance cost, less capitalised maintenance expenses, New Works Team costs and current taxation. This measure is designed to give clarity to the capacity of the business to generate net operating cash that can be used to pay dividends to shareholders on a continuing basis.
4. NAV - Adjusted Net Asset Value per share - Adjusted net asset value per share is the net assets of the business adjusted for the valuation of leasehold stores and deferred tax divided by the number of shares at the year-end. The shares held in the Group's employee benefits trust and any treasury shares are excluded from the number of shares.
5. Total assets - Total assets of GBP154.5 million is calculated by adding the independent valuation of the leasehold properties (GBP16.7 million) less their corresponding net book value (NBV) of GBP2.8 million to the total assets as shown in the balance sheet of GBP140.6 million.
6. LTV - Loan to value ratio - measures the debt of the business expressed as a percentage of total property assets giving a perspective on the gearing of the business. The calculation is based on net debt of GBP23.5 million (31.1.2017: GBP16.7 million) as a percentage of the total properties independently valued by JLL and including development land assets totalling GBP139.7 million (31.1.2017: GBP118.5 million) as set out in the Business and Financial Review.
7. Store adjusted EBITDA is Adjusted EBITDA (see 3 above) before the deduction of central and head office costs.
8. Pipeline sites - 11 sites including 7 sites which have been contracted and 4 sites which are currently progressing to contract with lawyers.
Glossary
Abbreviation
Adjusted EBITDA Earnings before all depreciation and amortisation charges, losses or profits on disposal, share basedpayments, acquisition costs, and non-recurring professional costs, finance income, finance costs and taxation
CAD Cash available for Distribution Capex Capital Expenditure CSOP Company Share Option Plan EBT Employee Benefit Trust EMI Enterprise Management Incentive Scheme ESOP Employee Share Option Plan EU European Union HMRC Her Majesty's Revenue & Customs IAS International Accounting Standard IFRIC International Financial Reporting Interpretations Committee IFRS International Financial Reporting Standard JLL Jones Lang LaSalle LIBOR London Interbank Offered Rate LFL Like for like LTV Loan to Value Ratio NAV Net Asset Value NBV Net book value Operating Profit Earnings before interest and tax (EBIT) RICS Royal Institution of Chartered Surveyors Sq. ft. Square Feet
Store adjusted
EBITDA Adjusted EBITDA (see above) but before central and head office costs VAT Value Added Tax
Chairman's Statement
Healthy growth, increased dividend and active store opening programme
Lok'nStore continues to grow rapidly as evidenced by these strong results and the increased dividend. This growth will continue. We have the people and the balance sheet strength to buy and build many more landmark stores.
New sites can be difficult to find. The understandable desire to preserve 'greenfield' spaces and the restrictive planning laws that this necessitates leads to high land prices. This is why the UK self-storage market remains structurally undersupplied. However improvements in our store acquisition, design and development processes have resulted in the biggest pipeline of new landmark stores in the company's history.
These smart, modern buildings, which already make up over two-thirds of the space Lok'nStore owns, so the Board looks forward to further expansion with confidence.
Positive trading
For the half year period to January 2018 trading has been good with revenue, profits and assets all increasing.
An increase in Group revenue of 5.7% to GBP8.82 million (31.1.2017: GBP8.34 million) resulted mainly from occupancy growth with prices holding steady. Stripping out the effect of the Staines closure and the early trading from our new store in Gillingham, like for like Group revenue increased by 8.3%.
Progressive Dividend
Dividend payments will reflect the growth in the underlying cash generated by the business as reflected in the cash available for distribution (CAD) which is up 13% period to period.
At this interim stage we will pay one third of the previous year's total annual dividend which equates to 3.33 pence per share, up 11.0% on the 3.00 pence per share interim dividend last year. The increase in the interim dividend follows a consistent pattern of dividend growth reflecting the sustained growth of the Group. The interim dividend will be paid on 15 June 2018 to shareholders on the register on 4 May 2018. The ex-dividend date will be 3 May 2018. The final deadline for Dividend Reinvestment Election is 21 May 2018. The final dividend will be declared when the Group's full year results are announced.
Balance Sheet and financial platform strengthened to support a rapid store development programme
Lok'nStore has worked to increase the value of its assets and this is reflected in our higher NAV and low LTV metrics. Our bank facilities run until 2023 and were increased post balance sheet by GBP10 million to GBP50 million with no change to underlying covenants. We continue to benefit from low interest costs. This is all reported in more detail in the remainder of the Statement.
The growth of sales, profit and asset values combined with innovative asset management allows us to report a loan-to-value (LTV) ratio of only 16.8% (31.1.2017: 14.4%) and net debt of GBP23.5 million (31.1.2017: GBP16.7 million) while we invested GBP10.9 million in store development in this period.
The Group continues to source high quality sites. Our rapid store development programme has led to an increase in new and purpose built space to 64% of our owned portfolio. Trading at our new landmark stores has been excellent. This underpins our confidence that our strong pipeline of seven more landmark stores will add further momentum to sales and earnings growth. They will add 26% more trading space to our portfolio.
Reduced Operating Costs
We have a strong record of reducing our group operating costs each year however we cautioned at our 2017 year end results that although we maintain a disciplined approach to costs, continuing to reduce them is increasingly challenging while delivering both strong revenue growth and an acceleration of our store opening programme. Nevertheless in this period we have reduced Group operating costs which are down 1.4% and we provide a breakdown in the Business Review. Any future cost increases will be driven by the increase in number of stores, chiefly showing in local business rates, staffing and advertising. However we are not seeing significant cost pressures outside of these areas.
Group margins will increase by building more landmark freehold stores and increasing the number of managed stores we operate from a broadly unchanged central cost platform. Group Adjusted EBITDA margins in the period were 43.7% up from 39.7% in the corresponding period last year.
Lok'nStore increases its existing GBP40 million Banking Facility to GBP50 million (Post Balance sheet)
In February 2018, after the period-end the Group increased its bank facility by GBP10 million to GBP50 million. The increased facility will provide funding for landmark site acquisitions and working capital to support the Group's ambitious growth plans.
The facility was originally agreed with The Royal Bank of Scotland plc in January 2016 and the term extended in January 2017. This larger facility runs until January 2023. The interest rate is set at the London Inter-Bank Offer Rate (LIBOR) plus a 1.40%-1.65% margin based on a loan to value covenant test (currently the margin is 1.40%). Bank covenants and margin are unaffected by this increase in facility.
The cost of our debt on GBP28.8 million drawn (gross) averaged 1.72% in the period.
Positive Outlook for Growth
Lok'nStore is a dynamic business designed to deliver significant future growth with an established record of consistent profit and cash generation. It is particularly pleasing to note that the momentum reported earlier in the year has translated into a strong start to the second half.
Our main objective is to steadily increase the cash available for distribution (CAD) per share enabling a predictable growth of the dividend from a strong asset base with conservative levels of debt.
In order to achieve this our focus will be on three key areas:
1. Fill stores and improve pricing to increase cash flow from the existing stores 2. Acquire sites to build more landmark stores 3. Increase the number of stores we manage for third parties
Our current pipeline of 11 new stores will contribute to the achievement of these objectives.
Finally, I should like to thank all of our employees for the huge contribution they have made to the Group's success. Managing growth is a key challenge to organisations. It is a challenge which our staff are meeting with expertise, dedication and enthusiasm.
Simon G Thomas
Chairman
20 April 2018
Business and Financial Review
The Performance of our Stores - Self-storage business steady
-- Self-storage revenue GBP7.32 million up 3.8% (31.1.2017: GBP7.00 million) LFL up 6.9% -- Adjusted Store EBITDA GBP4.29 million up 11.6% (31.1.2017: GBP3.85 million) LFL up 14.4%
-- Unit occupancy increased 6.0% year on year on a like for like basis to 66% of current lettable area (CLA)
-- Occupied units pricing up 0.4% LFL
With operating costs firmly under control during the period (down 1.4%) steady revenue growth has translated into healthy profit growth. Total adjusted store EBITDA in the self-storage business, a key performance indicator of profitability and cash flow of the business, increased 11.6% to GBP4.29 million (31.01.2017: GBP3.85 million). Like for like growth in store EBITDA was 14.4%.
The overall adjusted EBITDA margin across all stores was up at 58.6% (31.1.2017: 54.5%) with the adjusted Store EBITDA margins of the freehold stores at 66.9% (31.1.2017: 62.9%) and the leasehold stores at 44.1% (31.1.2017: 41.3%).
Over the course of the year unit occupancy rose by a healthy 6.0% LFL and unit pricing growth was up 0.4 % LFL.
As you can see from the table below as the business develops the balance of the stores continues to shift towards landmark freehold stores and managed stores which have a higher than average store EBITDA margin (66.9% and 100% respectively versus 58.6% across all stores). The impact of this is to continue to increase the average store EBITDA margin of the Group overall, and this effect is accentuated by operating more stores from a relatively fixed central cost base. In this context the new stores in the pipeline will over time make a larger than average contribution to Group profits as they become established trading units.
At the end of January 2018, 34.8% of Lok'nStore's self-storage revenue was from business customers (31.1.2017: 34.5%) with the remainder from household customers. By number of customers 18.8% of our customers were business customers (31.1.2017: 19.7%).
When Fully Developed Portfolio Analysis Number % of Property % of Adjusted Adjusted % lettable Number Total and Performance of stores Valuation Store EBITDA Store space of stores % lettable Breakdown EBITDA Lok Owned space Margin (%) ----------- -------------- -------------- --------- ----------- ----------- ------------ As at 31 January 2018 ----------- -------------- -------------- --------- ----------- ----------- ------------ Freehold and long leasehold stores 13 87.7 72.7 66.9 65.8 17 54.3 ----------- -------------- -------------- --------- ----------- ----------- ------------ Operating Leaseholds stores 7 12.3 27.3 44.1 34.2 7 21.2 ----------- -------------- -------------- --------- ----------- ----------- ------------ Managed Stores 8 100 11 24.5 ----------- -------------- -------------- --------- ----------- ----------- ------------ Total stores trading 28 35 ----------- -------------- -------------- --------- ----------- ----------- ------------ Pipeline stores ----------- -------------- -------------- --------- ----------- ----------- ------------ Owned 4 ----------- -------------- -------------- --------- ----------- ----------- ------------ Managed 3 ----------- -------------- -------------- --------- ----------- ----------- ------------ Total Self Storage 35 100 100 58.6 100 35 100 ----------- -------------- -------------- --------- ----------- ----------- ------------ Document Storage 2 - - - - 2 - ---------------------- ----------- -------------- -------------- --------- ----------- ----------- ------------
Total freeholds and long leasehold stores account for 88% of total property values.
Ancillary Sales
Ancillary sales consisting of boxes and packaging materials, insurance and other sales increased 1.1% over the year accounting for 10.8% of self-storage revenues (31.1.2017: 11.1%). We continue to promote customer goods insurance to new customers with the result that 91% (31.1.2017: 90%) of our new customers purchased the product over the period. This has resulted in nearly 80% of our customers being insured through Lok'nStore.
Saracen - Document storage business
-- Revenue GBP1.18 million up 2.6% (31.01.2017: GBP1.15 million) -- Adjusted EBITDA GBP0.36 million up 43.6% (31.01.2017: GBP0.25 million)
In Saracen we have further reduced cost by vacating surplus property and this has helped to increase Adjusted EBITDA significantly up 43.4% from a steady increase in turnover compared to the corresponding period last year. This is part of a continuing strategy within the document storage business of optimising the utilisation of trading space which has now been consolidated into two trading units.
Our Stores
Lok'nStore has 28 freehold, leasehold and managed stores trading. Of these, 20 stores are owned with 13 freehold or long leasehold, 7 leasehold and 8 further sites operate under management contracts.
The average unexpired term of the Group's operating leaseholds is approximately 10 years and 2 months as at 31 January 2018 (11 years and 2 months: 31 January 2017). All of our current leasehold stores are inside the Landlord and Tenant Act providing us with a strong security of tenure.
Growth from new stores and more new landmark stores to come
Lok'nStore's strong operating cash flow, solid asset base, and tactical approach to its store property portfolio provide the Group with opportunities to improve the terms of its property usage in all stages of the economic cycle. Our focus on the trading business gives us many opportunities and our property decisions are always driven by the requirements of the trading business.
-- Early trading at Gillingham has been excellent -- New and purpose built stores lettable space 64% of portfolio -- 4 further new store opportunities identified and are progressing with lawyers
-- Current pipeline of 7 contracted stores adds 26% of extra trading space to the overall portfolio, 22% to our owned portfolio and 41% to the managed portfolio
Development of four new landmark stores
Wellingborough, Bedford, Bournemouth, and Leicester.
Wellingborough
The Wellingborough site is in a prominent retail location with large catchment areas and little established competition. The total capital investment of approximately GBP5 million has been financed from cash flow and our bank facility. After the period-end we completed the development and the store opened on 23 March 2018.
Purchase of the Bedford site
On 1 December 2017 contracts were completed on the purchase of a site in Bedford which will be developed as a purpose built landmark store. The site is in a prominent location to the South-East of Bedford town centre, adjacent to a modern retail park and a large food retailer on a very busy arterial road. Net capital expenditure of GBP6 million will be funded from cash flow and existing banking facilities. Subject to the completion of all planning matters the store is scheduled to open in 2019 and deliver around 55,000 sq. ft. of trading space.
Acquisition of a freehold site for a new landmark store in Bournemouth, Dorset
The 3-acre site is in a highly prominent location on Castle Lane, adjacent to a major food retailer and Bournemouth Hospital. Building work will follow completion of all relevant planning matters, and the circa GBP8 million of net capital expenditure will be funded from cash flow and existing banking facilities. Opening is scheduled for 2019. When developed, this store will add around 80,000 sq. ft. of trading space.
Post Balance Sheet: Acquisition of a freehold site for a new landmark store in Leicester (subject to planning)
The 1 acre site is in a highly prominent location opposite a major food retailer in the heart of Leicester's busy retail district. The total investment of circa GBP8.5 million will be funded from cash flow and existing banking facilities. When developed this store will add around 60,000 sq. ft. of trading space.
More Managed Stores
Over recent years we have been developing our management services to third party storage owners. We have eleven stores under management with eight of these open and trading and three in Exeter, Ipswich and Dover under development and scheduled to open in 2018/19.
In the case of managed stores Lok'nStore receives a standard monthly fee, a performance fee based on certain objectives and a fee on successful exit. In some cases we charge acquisition, planning and branding fees. This allows us to earn revenue from our expertise and knowledge of the self-storage industry without having to commit our capital, to amortise various fixed central costs over a wider operating base, and to drive more visits to our website moving it up the rankings and benefitting all the stores we both own and manage.
In this period we earned GBP0.31 million (31.1.2017: GBP0.18 million) in management fees. We expect this to increase steadily over the coming years.
Management fees Six months ended Six months ended 31 January 2018 31 January 2017 Unaudited Unaudited GBP GBP ------------------ ----------------- ----------------- Total management fees 311,524 180,881 ------------------ ----------------- -----------------
Three stores currently being developed under management contracts
ü Exeter - scheduled to open next financial year ü Ipswich - scheduled to open next financial year ü Dover - scheduled to open next financial year
Summary - Stores Property review
The most recent site acquisition in Leicester increases our pipeline of new landmark stores which are legally secured, to seven. All are in prominent locations with large catchment areas and little established competition and demonstrate the Company's ability to source high quality sites adding to future sales and earnings growth. These eye-catching buildings, with their distinctive orange Lok'nStore branded livery and prominent signage, create highly visible landmarks, which continue to be a big contributor of new customers. We are in the final stages of construction at Wellingborough and the early stages of construction at both Dover and Exeter. Bedford, Ipswich, Bournemouth and Leicester are all in the design and planning stage. All of these new stores will be open by the end of 2019. This will increase the number of stores we operate to 35 and will capitalise on our efficient operating systems and growing internet marketing presence.
Flexible approach to site acquisition
We continue our strategy of actively managing our store operating portfolio to ensure we are maximising both trading potential and asset value. This includes strengthening our distinctive brand, increasing the size and number of our stores and replacing stores or sites where it will increase shareholder value. We prefer to own freeholds if possible, and where opportunities arise we will seek to acquire the freehold of our leasehold stores. However we are happy to take leases on appropriate terms and benefit from the advantages of a lower entry cost, with further options to create value later. Our most important consideration is always the trading potential of the store rather than the type of property tenure.
Store property assets and Net Asset Value
-- Total assets now GBP154.5 million up 8.4% (31.1.2017: GBP142.6 million) -- Adjusted net asset value of GBP4.18 per share up 7.9% on last year
Financial results
-- Group Revenue GBP8.82 million up 5.7% (31.1.2017: GBP8.34 million) LFL up 8.3% -- Group Adjusted EBITDA GBP3.85 million up 16.3% (31.1.2017: GBP3.31 million) -- Average cost of debt currently 1.72% (31.1.2017: 1.69%) -- LTV still only 16.8% (31.1.2017: 14.4%)
-- Cash available for Distribution (CAD) GBP2.96 million up 13.0% (31.1.2017: GBP2.62 million)
-- Interim dividend up 11% to 3.33 pence per share (31.1.2017: 3.00 pence per share) -- Cash balances GBP5.4 million (31.1.2017: GBP12.1 million) -- Investment in new stores GBP10.9 million (31.1.2017: GBP2.8 million)
Lok'nStore is a robust business which generates an increasing cash flow from its strong asset base. With a low LTV of 16.8% and low interest margins of 1.4% on its extended banking facility the business has a firm base for growth. The value of the Group's property assets underpins a flexible business model with stable and rising cash flows and low credit risk.
Management of interest rate risk
With GBP28.8 million of gross debt currently drawn against the GBP50 million bank facility the Group is not committed to enter into hedging instruments going forwards but rather to keep such matters under review.
It is not the intention of the Group to enter into an interest rate hedging arrangement at this time given our low level of debt, low loan to value ratio and high interest cover.
Taxation
The Group has made a current tax provision against earnings in this period of GBP0.49 million (31.1.2017: GBP0.42 million) based on a corporation tax rate of 20%. The deferred tax provision which is calculated at forward corporation tax rates of 17% and is substantially a tax provision against the potential crystallisation (sales) of revalued properties and past 'rolled over' gains amounts to GBP16.63 million. (31.1.2017: GBP14.45 million) (See Note 16).
Earnings per share
Basic earnings per share were 6.70 pence (31.1.2017: 6.91 pence per share) and diluted earnings per share were 6.58 pence (31.1.2017: 6.74 pence per share) showing small declines due to the increased number of shares in issue.
Reduced Operating costs
Group operating costs amounted to GBP4.80 million for the period, a 1.4% decrease year on year (31.1.2017: GBP4.87 million).
We have a strong record of reducing our group operating costs each year however we cautioned at our 2017 year end results that although we maintain a disciplined approach to costs continuing to reduce them is increasingly challenging while delivering both strong revenue growth and an acceleration of our store opening programme.
For this period we have contained overall costs which are down 1.4% and we provide a breakdown below. Future cost increases are driven by the expansion of the business in the areas of rates, staffing and advertising (higher internet marketing costs). Overall the cost increases are mainly driven by the expansion of the business and we are seeing little other cost pressures.
Property costs which mainly constitute rent and rates have risen in recent years as we felt the effects of higher rates bills as we opened our new landmark stores particularly at Southampton and Bristol. However we have in this period been able to secure rate reductions for past periods on these sites and this has contributed to the reduction in property costs. Rents have remained broadly static but overall are lower in this period as the closure of Staines has eliminated rent costs (31.01.2017: GBP62,447) and utility costs are lower as a result of a renegotiation of our energy tariffs.
Group Increase Six months Six months Year (decrease) ended 31 ended 31 ended 31 in costs Jan Jan July % 2018 2017 2017 GBP'000 GBP'000 GBP'000 -------------------- ------------ ----------- ----------- ---------- Property costs (5.4%) 1,974 2,087 4,179 Staff costs 1.8% 2,194 2,156 4,389 Overheads 1.8% 552 542 1,098 Distribution costs (2.4%) 81 83 171 -------------------- ------------ ----------- ----------- ---------- Total (1.4%) 4,801 4,868 9,837 -------------------- ------------ ----------- ----------- ----------
Cash flow and financing
At 31 January 2018 the Group had cash balances of GBP5.4 million (31.1.2017: GBP12.1 million). Cash inflow from operating activities before investing and financing activities was GBP3.76 million (31.1.2017: GBP2.90 million). As well as using cash generated from operations to fund some capital expenditure, the Group has a five year revolving credit facility which runs until January 2023. This provides sufficient liquidity for the Group's current needs. Undrawn committed facilities at the period-end amounted to GBP11.2 million (31.1.2017: GBP11.2 million). See also Note 22 (i) (Events after the Reporting Date).
Gearing
At 31 January 2018 the Group had GBP28.8 million of gross borrowings (31.1.2017: GBP28.8 million) representing gearing of 26.1% (31.1.2017: 20.7%) on net debt of GBP23.5 million (31.1.2017: GBP16.7 million). After adjusting for the uplift in value of short leaseholds which are stated at depreciated historic cost in the statement of financial position, gearing is 22.6% (31.1.2017: 17.7%). After adjusting for the deferred tax liability carried at period end of GBP16.6 million gearing drops to 19.5% (31.1.2017: 15.3%).
Cash available for Distribution (CAD) up 13%
Cash available for Distribution (CAD) provides a clear picture of ongoing cash flow available for dividends. The CAD was up 13% in the period although at a per share level this was partially offset by the increase in the number of shares outstanding resulting from the sale of the Treasury shares. Cash available for Distribution (CAD) per share (Annualised) was up 10.2% to 20.5 pence (31.1.2017:18.6 pence).
To illustrate this fully the table below shows the calculation of CAD.
Analysis of Cash Available for Distribution (CAD)
Six months Six months Year ended ended 31 January ended 31 January 31 July 2018 2017 2017 GBP'000 GBP'000 GBP'000 Group Adjusted EBITDA 3,852 3,313 6,493 Less: Net finance costs (per Income Statement) (296) (151) (297) Capitalised maintenance expenses (45) (55) (90) New Works Team (69) (66) (138) Current tax (485) (424) (792) ------------------ ---------------------- --------------- Total deductions (895) (696) (1,317) ------------------ ---------------------- --------------- Cash Available for Distribution 2,957 2,617 5,176 ------------------ ---------------------- --------------- Increase over last period 13.0% Number Number Number Number of shares in issue (excluding treasury and EBT shares) 28,806,711 28,084,149 28,679,711 CAD per share (annualised) 20.5p 18.6p 18.0p
Capital expenditure and capital commitments
The Group has grown through a combination of building new stores, existing store improvements and relocations. We have concentrated on extracting value from existing assets and developing through collaborative projects and management contracts. As we accelerate the store development programme capital expenditure during the period increased to GBP10.9 million (31.1.2017: GBP2.8 million). This was primarily the construction and fitting out work at our development sites in Gillingham and Wellingborough as well as the acquisition of the Bedford, Bournemouth and Leicester sites.
Market Valuation of Freehold and Operating Leasehold Land and Buildings
On 31 July 2017 professional valuations were prepared by Jones Lang LaSalle (JLL) for eleven freeholds, one long leasehold and seven operating leasehold properties. This valuation has been adopted for the 31 January 2018 period-end. The valuation was prepared in accordance with the RICS Valuation - Professional Standards, published by The Royal Institute of Chartered Surveyors (the "Red Book"). The valuation has been provided for accounts purposes and, as such, is a Regulated Purpose Valuation as defined in the Red Book.
A deferred tax liability arises on the revaluation of the properties and on the rolled-over gain arising from the disposal of some properties. It is not envisaged that any tax will become payable in the foreseeable future on these disposals due to the availability of rollover relief.
It is not the intention of the Directors to make any other significant disposals of trading stores, although individual disposals may be considered where it is clear that value can be added by recycling the capital into other opportunities.
The Board will continue to commission independent valuations on its trading stores annually to coincide with its year-end reporting.
The valuations of our freehold property assets are included in the Statement of Financial Position at their fair value, but under applicable accounting standards no value is included in respect of our leasehold stores to the extent that they are classified as operating leases. The value of our operating leases in the valuation totals GBP16.7 million (31.1.2017: GBP16.6 million). Instead we have reported by way of a note the underlying value of these leasehold stores in future revaluations and adjusted our Net Asset Value (NAV) calculation accordingly to include their value. This ensures comparable NAV calculations.
Analysis of Total Property Value
31 Jan 31 Jan 2017 31 July No of 2018 Valuation No of Valuation No of 2017 Valuation stores/sites GBP'000 stores/sites GBP'000 stores/sites GBP'000 -------------- ---------------- -------------- ------------ -------------- ---------------- Freehold and long leasehold valued by JLL (1) 12 102,900 12 96,125 12 102,900 Leasehold valued by JLL (2) 7 16,725 7 16,575 7 16,725 -------------- ---------------- -------------- ------------ -------------- ---------------- Freehold land and buildings at Director valuation 1 4,148 1 3,000 1 4,195 -------------- ---------------- -------------- ------------ -------------- ---------------- Subtotal 20 123,773 20 115,700 20 123,820 Sites in development at cost 5 15,880 2 2,792 2 5,124 -------------- ---------------- -------------- ------------ -------------- ----------------
Total 25 139,653 22 118,492 22 128,945 -------------- ---------------- -------------- ------------ -------------- ---------------- (1) Includes related fixtures and fittings (refer note 9)
(2) The seven leaseholds valued by JLL are all within the terms of the Landlord and Tenant Act (1954) giving a degree of security of tenure. The average length of the leases on the leasehold stores valued was 10 years and 8 months at the date of the 2017 valuation (2016 valuation: 11 years and 8 months).
Total freeholds account for 88.0% of property values (31.1.2017: 86.0%).
Adjusted Net Asset Value per Share
Adjusted net assets per share is the net assets of the Group adjusted for the valuation of leasehold stores and deferred tax divided by the number of shares at the period-end. The shares currently held in the Group's employee benefits trust (own shares held) and in treasury are excluded from the number of shares.
At January 2018 the adjusted net asset value per share increased to GBP4.18 from GBP3.87 year on year, up 7.9%. This is a result of cash generated from operations offset in part by an increase in the shares in issue due to the sale of treasury shares and the exercise of share options during the period.
31 Jan 31 Jan 31 July 2018 2017 2017 Analysis of net asset value (NAV) GBP'000 GBP'000 GBP'000 Unaudited Unaudited Audited --------------------------------------------------- ----------- ----------- ---------- Net assets 89,775 80,733 89,119 Adjustment to include operating/short leasehold stores at valuation Add: JLL leasehold valuation 16,725 16,575 16,725 Deduct: leasehold properties and their fixtures and fittings at NBV (2,777) (3,006) (2,878) --------------------------------------------------- ----------- ----------- ---------- 103,723 94,302 102,966 --------------------------------------------------- ----------- ----------- ---------- Deferred tax arising on revaluation of leasehold properties(1) (2,371) (2,307) (2,354) --------------------------------------------------- ----------- ----------- ---------- Adjusted net assets 101,350 91,995 100,612 --------------------------------------------------- ----------- ----------- ---------- Number Number Number Shares in issue '000 '000 '000 --------------------------------------------------- ----------- ----------- ---------- Opening shares in issue 29,303 29,109 29,109 Shares issued for the exercise of options 127 90 194 --------------------------------------------------- ----------- ----------- ---------- Closing shares in issue 29,430 29,199 29,303 Shares held in treasury - (492) - Shares held in EBT (623) (623) (623) --------------------------------------------------- ----------- ----------- ---------- Closing shares for NAV purposes 28,807 28,084 28,680 --------------------------------------------------- ----------- ----------- ---------- Adjusted net asset value per share after GBP3.52 GBP3.28 GBP3.51 deferred tax provision --------------------------------------------------- ----------- ----------- ---------- Adjusted net asset value per share before deferred tax provision Adjusted net assets 101,350 91,995 100,612 Deferred tax liabilities and assets recognised by the Group 16,633 14,446 16,363 Deferred tax arising on revaluation of leasehold properties(1) 2,371 2,307 2,354 --------------------------------------------------- ----------- ----------- ---------- Adjusted net assets before deferred tax 120,354 108,748 119,329 --------------------------------------------------- ----------- ----------- ---------- Closing shares for NAV purposes 28,807 28,084 28,680 --------------------------------------------------- ----------- ----------- ---------- Adjusted net asset value per share before GBP4.18 GBP3.87 GBP4.16 deferred tax provision --------------------------------------------------- ----------- ----------- ----------
(1) A deferred tax adjustment in respect of the uplift in the value of the leasehold properties has been included. Although this is a memorandum adjustment as leasehold properties are included in the Group's financial statements at cost and not at valuation, this deferred tax adjustment is included in the adjusted net asset value calculation in order to maintain a consistency of tax treatment between freehold and leasehold properties.
Corporate and Social Responsibilities
Lok'nStore conducts its business in a manner that reflects honesty, integrity and ethical conduct. We believe that the long-term success of the business is best served by respecting the interests of all our stakeholders. Management of social, environmental and ethical issues is of high importance to Lok'nStore. These issues are dealt with on a day-to-day basis by the Group's managers with principal accountability lying with the Board of Directors. We look for opportunities to address our responsibility to the environment, and we pay close attention to our energy use, carbon dioxide emissions, water use and waste production. At each year-end Lok'nStore commissions a full assessment of the Group's environmental impact.
Customers
We believe in clarity and transparency towards our customers. Brochures and literature are written in plain English, explaining clearly our terms of business without hiding anything. We are open and honest about our products and services and do not employ pressure selling techniques or attempt to take advantage of any vulnerable groups. If we make a mistake we acknowledge it, deal with the problem quickly, and learn from our error. We listen to our customers as we know that they can help us improve our service to them.
Andrew Jacobs Ray Davies Chief Executive Officer Finance Director
Consolidated Statement of Comprehensive Income
For the six months ended 31 January 2018
Notes Six months Six months Year ended ended ended 31 July 31 January 31 January 2017 2018 2017 Audited Unaudited Unaudited GBP'000 GBP'000 GBP'000 --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Revenue 1 8,819 8,343 16,654 Total property, staff, distribution and general costs 2a (4,967) (5,030) (10,161) --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Adjusted EBITDA(1) 3,852 3,313 6,493 --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Amortisation of intangible assets (83) (83) (165) Depreciation (962) (897) (1,856) Equity settled share based payments 18 (17) (48) (97) --------------- ------ ------------------------- ----------------------- ---------------------------------------------- (1,062) (1,028) (2,118) Store relocation costs - (21) (29) Property disposal costs - (14) (15) Director retirement costs - - (69) --------------- ------ ------------------------- ----------------------- ---------------------------------------------- (1,062) (1,063) (2,231) Operating 4,262 profit 2,790 2,250 Finance income 3 71 174 309
Finance cost 4 (314) (325) (606) --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Profit before taxation 5 2,547 2,099 3,965 Income tax expense 6 (621) (229) (904) --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Profit for the period 1,926 1,870 3,061 --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Profit attributable to: Owners of the parent 19 1,926 1,870 3,061 Other Comprehensive Income Items that will not be reclassified to profit and loss Increase in property valuation 629 391 7,772 Deferred tax relating to change in property valuation (119) 499 (932) 510 890 6,840 Items that may be subsequently reclassified to profit and loss Increase in fair value of cash flow hedges - 37 37 Other comprehensive income 510 927 6,877 --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Total comprehensive income for the period 2,436 2,797 9,938 --------------- ------ ------------------------- ----------------------- ---------------------------------------------- Attributable to: Owners of the parent 2,436 2,797 9,938 --------------------------------- -------- -------- -------- Earnings per share attributable to owners of the Parent Basic 8 6.70p 6.91p 11.02p Diluted 8 6.58p 6.74p 10.64p --------------------------------- -------- -------- --------
(1) Adjusted EBITDA is defined in the accounting policies section of the notes to the interim report.
Consolidated Statement of Changes in Equity
Attributable to owners of the Parent
Share Share Other Revaluation Retained Total capital premium reserves reserve earnings equity GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- 1 August 2016 - Audited 291 3,567 8,432 45,602 13,583 71,475 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Profit for the period - - - - 1,870 1,870 Other comprehensive income: Increase in property valuation net of deferred tax - - - 890 - 890 Decrease in fair value of cash flow hedges net of deferred tax - - 37 - - 37 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Total comprehensive income for the year - - 37 890 1,870 2,797 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Transactions with Owners Dividend paid - - - - (1,778) (1,778) Share based payments - - 48 - - 48 Transfers in relation to share based payments - - (66) - 66 - Deferred tax credit relating to share options - - 221 - - 221 Sale of shares from treasury (net of costs) - 4,704 - - 3,117 7,821 Exercise of share options 1 148 - - - 149 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Total transactions with owners 1 4,852 203 - 1,405 6,461 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Transfer additional dep'n on revaluation net of deferred tax - - - (115) 115 - 31 January 2017 - Unaudited 292 8,419 8,672 46,377 16,973 80,733 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Profit for the period - - - - 1,191 1,191 Other comprehensive income: Increase in property valuation net of deferred tax - - - 5,950 - 5,950 Total comprehensive income for the year - - - 5,950 1,191 7,141 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Transactions with Owners Dividend paid - - - - (859) (859) Share based payments - - 49 - - 49 Transfers in relation to share based payments - - (73) - 73 - Deferred tax credit relating to share options - - (179) - - (179) Sale of shares from treasury (net of costs) - 1,446 - - 624 2,070 Exercise of share options 1 163 - - - 164 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Total transactions with owners 2 1,609 (203) - (162) 1,245 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Transfer additional dep'n on revaluation net of deferred tax - - - (162) 162 - 31 July 2017 - Audited 293 10,028 8,469 52,165 18,164 89,119 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Profit for the period - - - - 1,926 1,926 Other comprehensive income: Increase in property valuation net of deferred tax - - - 510 - 510 Total comprehensive income for the year - - - 510 1,926 2,436 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Transactions with Owners Dividend paid - - - - (2,016) (2,016) Share based payments - - 17 - - 17 Transfers in relation to share based payments - - (80) - 80 - Deferred tax credit relating to share options - - (16) - - (16) Exercise of share options 1 234 - - - 235 ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Total transactions with owners 1 234 (79) - (1,936) (1,780) ----------------------------------- --------- --------- ---------- ------------ -------------- ----------- Transfer additional dep'n on revaluation net of deferred tax - - - (148) 148 - 31 January 2018 - Unaudited 294 10,262 8,390 52,527 18,302 89,775 ----------------------------------- --------- --------- ---------- ------------ -------------- -----------
Consolidated Statement of Financial Position
31 January 2018
31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited Notes GBP'000 GBP'000 GBP'000 ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Assets Non-current assets Intangible assets 3,343 3,509 3,428 Property, plant and equipment 9 127,447 106,628 116,901 Development loan capital 10 - 3,319 3,463 130,790 113,456 123,792 ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Current assets Inventories 11 236 168 203 Trade and other receivables 12 4,192 3,271 4,266 Cash and cash equivalents 5,359 12,140 11,386 ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Total current assets 9,787 15,579 15,855 ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Total assets 140,577 129,035 139,647 ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Liabilities Current liabilities Trade and other payables 13 (4,912) (4,522) (5,032) Taxation (573) (597) (463) (5,485) (5,119) (5,495) ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Non-current liabilities Borrowings 15a (28,684) (28,737) (28,670) Deferred tax 16 (16,633) (14,446) (16,363) ----------------------------- ------ ------------------------------- ---------------------------- ---------------- (45,317) (43,183) (45,033) ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Total liabilities (50,802) (48,302) (50,528) ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Net assets 89,775 80,733 89,119 ----------------------------- ------ ------------------------------- ---------------------------- ---------------- Equity Equity attributable to owners of the parent Called up share capital 17 294 292 293 Share premium 10,262 8,419 10,028 Other reserves 18 8,390 8,672 8,469 Retained earnings 19 18,302 16,973 18,164 Revaluation reserve 52,527 46,377 52,165 ------------------------------- --- ------- ------- ------- Total equity 89,775 80,733 89,119 ------------------------------- --- ------- ------- -------
Approved by the Board of Directors and authorised for issue on 20 April 2018 and signed on its behalf by:
Andrew Jacobs Ray Davies Chief Executive Officer Finance Director
Consolidated Statement of Cash Flows
For the six months ended 31 January 2018
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited Notes GBP'000 GBP'000 GBP'000 --------------------------------------------- ------ ------------ ------------ ----------- Operating activities Cash generated from operations 21a 3,756 2,897 5,523 Income tax paid (375) - (502) Net cash from operating activities 3,381 2,897 5,021 Investing activities Development loan capital repaid /(invested) 3,463 (160) (304) Purchase of property, plant and equipment 9 (10,879) (2,770) (6,628) Interest received 68 18 25 --------------------------------------------- ------ ------------ ------------ ----------- Net cash used in investing activities (7,348) (2,912) (6,907) --------------------------------------------- ------ ------------ ------------ ----------- Financing activities Loans repaid from projects under management contracts - 944 944 Finance costs paid (280) (315) (574) Equity dividends paid (2,016) (1,778) (2,637) Proceeds from issuance of ordinary shares (net) 236 148 313 Proceeds from sale of treasury shares (net) - 7,821 9,891 --------------------------------------------- ------ ------------ ------------ ----------- Net cash (used in) / from financing activities (2,060) 6,820 7,937 Net (decrease) / increase in cash and cash equivalents in the period (6,027) 6,805 6,051 Cash and cash equivalents at beginning of the period 11,386 5,335 5,335 --------------------------------------------- ------ ------------ ------------ ----------- Cash and cash equivalents at end of the period 5,359 12,140 11,386 --------------------------------------------- ------ ------------ ------------ -----------
Accounting Policies
General Information
Lok'nStore Group plc is an AIM listed company incorporated and domiciled in England and Wales. The address of the registered office is One Fleet Place, London EC4M 7WS, UK. Copies of this Interim Report and Accounts may be obtained from the Company's head office at 112 Hawley Lane, Farnborough, Hants, GU14 8JE, or from the investor section of the Company's website at http://www.loknstore.co.uk.
Basis of preparation
The interim results for the six months ended 31 January 2018 have been prepared on the basis of the accounting policies expected to be used in the 2018 Lok'nStore Group Plc Annual Report and Accounts and in accordance with the recognition and measurement principles of International Financial Reporting Standards as adopted by the European Union ('EU') ('IFRS').
The same accounting policies, presentation and methods of computation are followed in these interim condensed set of financial statements as have been applied in the Group's latest annual audited financial statements.
The interim results, which were approved by the Directors on 20 April 2018, are unaudited. The interim results do not constitute statutory financial statements within the meaning of section 434A of the Companies Act 2006.
Comparative figures for the year ended 31 July 2017 have been extracted from the statutory accounts for the Group for that period, which carried an unqualified audit report, did not include a reference to any matters to which the auditor drew attention by way of emphasis of matter, did not contain a statement under section 498(2) or (3) of the Companies Act 2006 and have been delivered to the Registrar of Companies.
Going concern
The Directors can report that, based on the Group's budgets and financial projections, they have satisfied themselves that the business is a going concern. The Board has a reasonable expectation that the Company and the Group have adequate resources and facilities to continue in operational existence for the foreseeable future based on Group cash balances and cash equivalents of GBP5.4 million (31.01.2017: GBP12.1 million), undrawn committed bank facilities at 31 January 2018 of GBP11.2 million (31.01.2017: GBP11.2 million), and cash generated from operations in the period to 31 January 2018 of GBP3.76 million (31.01.2017: GBP2.90 million). The Group operates a GBP40 million five year revolving credit facility with Royal Bank of Scotland plc which provides funding for site acquisitions and working capital and which was increased to GBP50 million after the period end in February 2018. The Group is fully compliant with all bank covenants and undertakings and is not obliged to make any repayments prior to expiration. The Group had reported in its July year-end financial statements that it had agreed a two year extension on its existing banking facility with Royal Bank of Scotland plc and the facility which was due to expire in January 2021, will now run until January 2023. The financial statements are therefore prepared on a going concern basis.
Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortisation (Adjusted EBITDA) is defined as profits from operations before all depreciation and amortisation charges, share-based payments and other non-recurring costs, finance income, finance costs and taxation.
Store adjusted EBITDA
Store adjusted EBITDA is defined as adjusted EBITDA (see above) but before central and head office costs.
Notes to the Financial Statements
For the six months ended 31 January 2018
1 Revenue
Analysis of the Group's revenue is shown below:
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited Stores trading GBP'000 GBP'000 GBP'000 ----------------------------------------- --------------------------- --------------------- ---------- Self-storage revenue 6,532 6,225 12,343 Other storage related revenue 787 778 1,550 Ancillary store rental revenue - - 14 Sub-total - Self-storage revenue - owned stores 7,319 7,003 13,907 Management fees - managed stores 312 181 420 ----------------------------------------- --------------------------- --------------------- ---------- Sub-total 7,631 7,184 14,327 Stores under development Non-storage income 7 8 - ----------------------------------------- --------------------------- --------------------- ---------- Sub-total 7,638 7,192 14,327 ----------------------------------------- --------------------------- --------------------- ---------- Serviced archive and records management revenue 1,181 1,151 2,327 ----------------------------------------- --------------------------- --------------------- ---------- Total revenue per statement of comprehensive income 8,819 8,343 16,654 ----------------------------------------- --------------------------- --------------------- ----------
The segment information for the period ended 31 January 2018 and 2017 is as follows:
Serviced Serviced 2017/2018 - Unaudited archive archive and and records records Self-storage management Total Self-storage management Total six months six months six months six months six months six months ended ended ended ended ended ended 31 January 31 January 31 January 31 January 31 January 31 January 2018 2018 2018 2017 2017 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ----------------------------- ------------- ----------- ----------- ------------- ----------- --------------------- Revenue from external customers 7,638 1,181 8,819 7,192 1,151 8,343 ----------------------------- ------------- ----------- ----------- ------------- ----------- ----------------- Segment adjusted EBITDA 3,495 357 3,852 3,064 249 3,313 Depreciation (912) (50) (962) (848) (49) (897) Amortisation of intangible assets - (83) (83) - (83) (83) Equity settled share based payments (17) - (17) (48) - (48) Store relocation costs - - - (21) - (21) Costs of disposal - - - (14) - (14) Segment profit 2,566 224 2,790 2,133 117 2,250 ----------------------------- ------------- ----------- ----------- ------------- ----------- ----------------- Central costs not allocated to segments: Finance income 71 174 Finance costs (314) (325) ----------------------------- ------------- ----------- ----------- ------------- ----------- ----------------- Profit before taxation 2,547 2,099 Income tax expense (621) (229) Consolidated profit for the financial period 1,926 1,870 ----------------------------- ------------- ----------- ----------- ------------- ----------- ----------------- Serviced 2017 - Audited archive & Self-storage records management Total year year year ended ended ended 31 July 31 July 31 July 2017 2017 2017 GBP'000 GBP'000 GBP'000 ----------------------------- ------------- -------------------- ---------- Revenue from external customers 14,327 2,327 16,654 ----------------------------- ------------- -------------------- ---------- Segment adjusted EBITDA 5,933 560 6,493 Management charges 25 (25) - ----------------------------- ------------- -------------------- ---------- Segment adjusted EBITDA 5,958 535 6,493 Depreciation (1,760) (96) (1,856) Amortisation of intangible assets - (165) (165) Equity settled share based payments (97) - (97) Store relocation costs (29) - (29) Property disposal costs - (15) (15) Director retirement costs (69) - (69) Segment profit 4,003 259 4,262 ----------------------------- ------------- -------------------- ---------- Central costs not allocated to segments: Finance income 309 Finance costs (606) ----------------------------- ------------- -------------------- ---------- Profit before taxation 3,965
Income tax expense (904) Consolidated profit for the financial year 3,061 ----------------------------- ------------- -------------------- ---------- 2018 Serviced Unaudited Serviced archive archive & records & records Self-storage management Total Self-storage management Total 31 January 31 January 31 January 31 January 31 January 31 January 2018 2018 2018 2017 2017 2017 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 --------------------- ------------- ----------------- ------------ ------------- ------------ ------------ Segment assets 134,660 5,917 140,577 122,935 6,100 129,035 --------------------- ------------- ----------------- ------------ ------------- ------------ ------------ Segment liabilities (21,512) (606) (22,118) (19,067) (498) (19,565) Borrowings (28,684) (28,737) --------------------- ------------- ----------------- ------------ ------------- ------------ ------------ Total liabilities (50,802) (48,302) Capital expenditure 10,863 16 10,879 2,768 2 2,770 --------------------- ------------- ----------------- ------------ ------------- ------------ ------------ 2017 Serviced archive Audited Self-storage & records Total 31 July management 31 July 2017 31 July 2017 2017 GBP'000 GBP'000 GBP'000 --------------------- ------------- ----------------- --------- Segment assets 133,457 6,190 139,647 --------------------- ------------- ----------------- --------- Segment liabilities (21,189) (669) (21,858) Borrowings (28,670) --------------------- ------------- ----------------- --------- Total liabilities (50,528) --------------------- ------------- ----------------- --------- Capital expenditure 6,459 169 6,628 --------------------- ------------- ----------------- --------- 2a Property, staff, distribution, Six months Six months Year general costs and retail cost of ended ended ended sales 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ----------------------------------- ------------------------ -------------- --------- Property and premises costs 1,974 2,087 4,179 Staff costs 2,194 2,156 4,389 General overheads 552 542 1,098 Distribution costs 81 83 171 ----------------------------------- ------------------------ -------------- --------- Subtotal - operating costs 4,801 4,868 9,837 ----------------------------------- ------------------------ -------------- --------- Retail products cost of sales 166 162 324 ----------------------------------- ------------------------ -------------- --------- 4,967 5,030 10,161 ----------------------------------- ------------------------ -------------- --------- 2b Cost of sales of retail products
Cost of sales represents the direct costs associated with the sale of retail products such as boxes and packaging and, the ancillary sales of insurance cover for customer goods, all of which fall within the Group's ordinary activities.
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ---------------------------------- ------------ ------------ --------- Retail 56 67 128 Insurance 20 20 37 Other 5 2 2 ---------------------------------- ------------ ------------ --------- 81 89 167 Serviced archive consumables and direct costs 85 73 157 ---------------------------------- ------------ ------------ --------- 166 162 324 ---------------------------------- ------------ ------------ --------- 2c Other Income and costs Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 --------------------------- ------------- ------------ --------- Property disposal costs - 14 15 Director retirement costs - - 69 Store relocation costs - 21 29 --------------------------- ------------- ------------ --------- - 35 113 ----------------------------------------- ------------ --------- 3 Finance income Six months Six months ended ended Year ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ---------------- ------------ ------------ ----------- Bank interest 5 18 25 Other interest 66 156 284 ---------------- ------------ ------------ ----------- 71 174 309 ---------------- ------------ ------------ ----------- 4 Finance costs Six months Six months ended ended 31 Year ended 31 January January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 --------------------------------------- ------------ ----------- ----------- Bank interest 269 283 520 Non-utilisation fees and amortisation of bank loan arrangement fees 45 42 86 314 325 606 --------------------------------------- ------------ ----------- -----------
Most interest payable arises on bank loans classified as financial liabilities measured at amortised cost.
5 Profit before taxation Six months ended Six months Year ended 31 January ended 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP '000 --------------------------------------------- ----------------- ------------------ ----------- Profit before taxation is stated after charging: Depreciation of plant, property and equipment - owned assets 962 897 1,856 Amortisation of intangible assets 83 83 165 Operating lease rentals - land and buildings 719 764 1,488 --------------------------------------------- ----------------- ------------------ -----------
6 Taxation Six months ended Six months Year 31 January ended 31 January ended 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Current tax: UK corporation tax 486 424 792 ---------------------------------------- ----------------- ------------------ --------------- Deferred tax: Origination and reversal of temporary differences 135 71 204 Adjustments in respect of prior periods - - 173 Impact of change in tax rate on closing balance - (266) (265) ---------------------------------------- ----------------- ------------------ --------------- Total deferred tax charge 135 (195) 112 ---------------------------------------- ----------------- ------------------ --------------- Income tax expense for the period/year 621 229 904 ---------------------------------------- ----------------- ------------------ ---------------
The charge for the period can be reconciled to the profit for the period as follows:
Year Six months ended Six months ended 31 31 January ended 31 January July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 Profit before tax 2,547 2,099 3,695 Tax on ordinary activities at the standard effective rate of corporation tax in the UK of 20% (31.1.2017: 20.0%) 509 420 793 Expenses not deductible for tax purposes 2 2 2 Depreciation of non-qualifying assets 144 50 104 Share based payment charges in excess of corresponding tax deduction 3 10 19 Adjustments in respect of prior periods - deferred tax - - 173 Impact of change in tax rate on closing DT balance - (266) (265) Share option scheme - 12 5 Other timing differences (37) - 71 ---------------------------------------- ----------------- ------------------ ------------- Income tax expense for the period/year 621 229 904 ---------------------------------------- ----------------- ------------------ ---------- Effective tax rate 24.4% 10.9% 23% ---------------------------------------- ----------------- ------------------ ----------
In addition to the amount charged to profit or loss for the period, deferred tax relating to the revaluation of the Group's properties of GBP118,872 (31.1.2017: GBP498,983) has been recognised directly in other comprehensive income (see note 16 on deferred tax).
7 Dividends Six months Six months ended ended 31 Year ended 31 January January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ----------------------------------------------- ------------ ----------- ------------- Amounts recognised as distributions to equity holders in the year: ----------------------------------------------- ------------ ----------- ------------- Final dividend for the year ended 31 July 2016 (6.33 pence per share) - 1,778 1,778 Interim dividend for the six months to 31 January 2017 (3 pence per share) - - 859 Final dividend for the year ended 31 July 2,016 - - 2017 (7 pence per share) 2,016 1,778 2,637 ----------------------------------------------- ------------ ----------- -------------
In respect of the current period the Directors propose that an interim dividend of 3.33 pence per share will be paid to the shareholders. The total estimated dividend to be paid is GBP983,956 based on the number of shares currently in issue as adjusted for shares held in the Employee Benefits Trust. This interim dividend is an on-account payment of a final annual dividend and is ultimately subject to approval by shareholders at the 2018 Annual General Meeting and has not been included as a liability in these financial statements. The ex-dividend date will be 3 May 2018; the record date 4 May 2018; with an intended payment date of 15 June 2018. The final deadline for Dividend Reinvestment Election is 21 May 2018.
8 Earnings per share
The calculations of earnings per share are based on the following profits and numbers of shares.
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ----------------------------------- ---------------- ------------ ----------- Profit for the financial period 1,926 1,870 3,061 ----------------------------------- ---------------- ------------ ----------- No. of No. of No. of shares shares shares ----------------------------------- ---------------- ------------ ----------- Weighted average number of shares For basic earnings per share 28,746,236 27,071,818 27,780,676 Dilutive effect of share options 526,509 651,347 999,657 ----------------------------------- ---------------- ------------ ----------- For diluted earnings per share 29,272,745 27,723,165 28,780,333 ----------------------------------- ---------------- ------------ -----------
623,212 shares (31.01.2017: 623,212) are held in the Employee Benefit Trust and nil (31.01.2017: 491,869) shares are held in Treasury. Both are excluded from the above calculation.
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited -------------------- ------------ ------------ --------- Earnings per share Basic 6.70p 6.91p 11.02p -------------------- ------------ ------------ --------- Diluted 6.58p 6.74p 10.64p -------------------- ------------ ------------ --------- 9 Property, plant and equipment Fixtures, Development Long leasehold Short fittings property Land and land and leasehold and Motor assets buildings buildings improvements equipment vehicles at cost at valuation at valuation at cost at cost at cost Total Group GBP'000 GBP '000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- Net book value at 31 July 2016 - Audited 458 80,953 9,263 782 12,902 5 104,363 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- Net book value at 31 January 2017 - Unaudited 2,792 80,865 9,314 769 12,884 4 106,628 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- Net book value at 31 July 2017 - Audited 5,124 87,548 10,293 719 13,213 4 116,901
-------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- Cost or valuation 1 August 2017 5,124 87,548 10,293 2,599 23,984 17 129,565 Additions 10,756 105 - 18 - - 10,879 Revaluations - 145 49 - - - 194 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- 31 January 2018 Unaudited 15,880 87,798 10,342 2,617 23,984 17 140,638 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- Depreciation 1 August 2017 - - - 1,880 10,771 13 12,664 Depreciation - 372 63 49 478 - 962 Revaluations (372) (63) - - - (435) -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- 31 January 2018 Unaudited - - - 1,929 11,249 13 13,191 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ---------- Net book value at 31 January 2018 - Unaudited 15,880 87,798 10,342 688 12,735 4 127,447 -------------- ------------ -------------- --------------- ------------- ----------- ------------- ----------
Capital expenditure during the period totalled GBP10.9 million (31.1.2017: GBP2.8 million). This was primarily the purchase and subsequent construction works at our development sites in Gillingham and Wellingborough as well as completing fitting-out works at our Bristol store.
Property, plant and equipment (non-current assets) with a carrying value of GBP127.4 million (31.1.2017: GBP106.6 million) are pledged as security for bank loans (see note 15a).
Market Valuation of Freehold and Operating Leasehold Land and Buildings
Following the comprehensive external valuation at 31 July 2017 by JLL, the freehold and leasehold properties have not been externally valued at 31 January 2018, although in accordance with the Group's established policy it is the intention to do so at the next year end at 31 July 2018.
Although the Board did not commission an external valuation at this interim period-end it is mindful of the need to accord with the measurement principles of International Financial Reporting Standards as adopted by the European Union. Accordingly after consulting with our external valuers, whilst there has been continued market activity in the self storage sector since July 2017, the Directors considered that there had not been such a material movement in market yields that warranted a modification to the position as at 31 January 2018 in respect of our properties externally valued at 31 July 2017. The Directors therefore consider that it is appropriate to maintain the portfolio's external valuation without modification pending a comprehensive external valuation at our 31 July 2018 year-end.
10 Development loan capital
In May 2015 Lok'nStore opened a new store in Aldershot, Hampshire on behalf of outside investors, to which it provided development loan capital. The store is managed under the Lok'nStore brand. The Group has managed the building and subsequent operation of the store and has generated a return on GBP2.5 million of the total development capital committed to the project, as well as management fees for the construction, operation and branding of the store. On 31 October 2017 the entire development loan was repaid to Lok'nStore together with all accrued interest. Lok'nStore continues to manage the operation of the store.
31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 -------------------------- ------------ ----------- --------- Development loan capital - 3,319 3,463 -------------------------- ------------ ----------- --------- 11 Inventories 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ---------------------------------- ----------- ----------- --------- Consumables and goods for resale 236 168 203 ---------------------------------- ----------- ----------- ---------
The amount of inventories recognised as an expense during the period was GBP77,039 (31.1.2017: GBP81,005).
12 Trade and other receivables 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 -------------------------------- ----------- ----------- --------- Trade receivables 2,098 1,414 1,693 Other receivables 1,473 857 1,822 Prepayments and accrued income 621 1,000 751 4,192 3,271 4,266 -------------------------------- ----------- ----------- ---------
The Directors consider that the carrying amount of trade and other receivables and accrued income approximates their fair value.
13 Trade and other payables 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ------------------------------------ ----------- ----------- --------- Trade payables 960 593 818 Taxation and social security costs 496 666 288 Other payables 1,221 1,156 1,692 Accruals and deferred income 2,235 2,107 2,234 ------------------------------------ ----------- ----------- --------- 4,912 4,522 5,032 ------------------------------------ ----------- ----------- ---------
The Directors consider that the carrying amount of trade and other payables and accruals approximates fair value.
14 Capital management and gearing
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance.
The gearing ratio at the period-end is as follows:
31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 --------------------------- ----------- ----------- --------- Gross debt (28,816) (28,816) (28,816) Cash and cash equivalents 5,359 12,140 11,386 --------------------------- ----------- ----------- --------- Net debt (23,457) (16,676) (17,430) Total equity 89,775 80,733 89,119 Net debt to equity ratio 26.1% 20.7% 19.6% --------------------------- ----------- ----------- --------- 15a Borrowings 31 January 31 January 31 July 2018 Unaudited 2017 Unaudited 2017 GBP'000 GBP'000 Audited GBP'000 --------------------------------------- ---------------- ---------------- --------- Non-current Bank loans repayable in more than two years but not more than five years Gross 28,816 28,816 28,816 Deferred financing costs (132) (79) (146) --------------------------------------- ---------------- ---------------- --------- Net bank borrowings 28,684 28,737 28,670 --------------------------------------- ---------------- ---------------- ---------
The GBP40 million five year revolving credit facility which was executed in January 2016 with Royal Bank of Scotland plc. included a two year extension option which means it will now run until January 2023.
The GBP40 million five year revolving credit facility set the interest rate margin at the London Inter-Bank Offer Rate (LIBOR) plus 1.40%-1.65% based on a loan to value covenant test. This rate is 1.40% currently and the all in debt cost on GBP28.8 million drawn averaged 1.7% in the last five months.
The revolving credit facility is secured by legal charges and debentures over the freehold and leasehold properties and other assets of the business with a net book value of GBP127.4 million together with cross-company guarantees from Group companies. The Group is not obliged to make any repayments prior to expiration.
(Post Balance Sheet) In February 2018, after the period-end, the Group executed its GBP10 million accordion increasing its existing GBP40 million Banking Facility to GBP50 million. The increased facility will provide funding for site acquisitions and working capital to support the Group's ambitious growth plans for more landmark site acquisitions and working capital.
16 Deferred tax 31 January 31 January 31 July 2017 2018 2017 Audited Unaudited Unaudited GBP'000 Deferred tax liability GBP'000 GBP'000 -------------------------------------- ----------- ----------- ------------- Liability at start of period/year 16,363 15,361 15,361 Charge to income for the period/year 135 (195) 112 Tax charged directly to other comprehensive income 119 (499) 932 Credit to share based payment reserve 16 (221) (42) Liability at end of period/year 16,633 14,446 16,363 -------------------------------------- ----------- ----------- -------------
The following are the major deferred tax liabilities and assets recognised by the Group and the movements during the year:
Rolled over Accelerated Other Revaluation gain Capital Tax Intangible temporary of on Share Allowances losses assets differences properties disposal Options Total GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ At 31 July 2016 - Audited 1,855 - 447 24 10,961 2,323 (249) 15,361 Charge/ (credit) to income for the period (34) - (39) (8) - (141) 27 (195) Charge to other comprehensive income - - - - (511) 12 - (499) ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ Charge to share based payment reserve - - - - - - (221) (221) ---------------- ------------ -------- ----------- ------------ ------------ --------- At 31 January 2017 - Unaudited 1,821 - 408 16 10,450 2,194 (443) 14,446 ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ Charge/ (credit) to income for the period 375 - (14) 1 - (48) (7) 307 Charge to other comprehensive income - - - - 1,431 - - 1,431 ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ Charge to share based payment reserve - - - - - - 179 179 ---------------- ------------ -------- ----------- ------------ ------------ --------- At 31 July 2017 - Audited 2,196 - 394 17 11,881 2,146 (271) 16,363 ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ Charge/ (credit) to income for the period 161 - (14) - - (12) - 135 Charge to other comprehensive income - - - - 107 12 - 119 ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ Charge to share based payment reserve - - - - - - 16 16 ---------------- ------------ -------- ----------- ------------ ------------ --------- At 31 January 2018 - Unaudited 2,357 - 380 17 11,988 2,146 (255) 16,633 ---------------- ---------------- -------- ----------- ------------ ------------ --------- -------- ------------ 17 Share capital 31 January 31 January 2017 31 July 2017 2018 Unaudited Audited Unaudited GBP'000 GBP'000 GBP'000 -------------------------------------- ------------- ---------------- ------------- Authorised: 35,000,000 ordinary shares of 1 pence each 350 350 350 -------------------------------------- ------------- ---------------- ------------- Called up, Called up, Called up, allotted and allotted and allotted and fully paid fully paid fully paid Number Number Number -------------------------------------- ------------- ---------------- ------------- Number of shares at start of period/year 29,302,923 29,109,322 29,109,322 -------------------------------------- ------------- ---------------- ------------- Options exercised during period/year 127,000 89,908 193,601 -------------------------------------- ------------- ---------------- ------------- Balance at end of period/year 29,429,923 29,199,230 29,302,923 -------------------------------------- ------------- ---------------- ------------- Allotted, issued and fully paid GBP GBP GBP ordinary shares -------------------------------------- ------------- ---------------- ------------- Balance at start of period/year 293,029 291,093 291,093 Options exercised during period/year 1,270 899 1,936 -------------------------------------- ------------- ---------------- ------------- Balance at end of period/year 294,299 291,992 293,029 -------------------------------------- ------------- ---------------- -------------
The Company has one class of ordinary shares which carry no right to fixed income.
18 Other reserves Share-based Cash flow Other Capital hedge Merger reserve redemption payment reserve reserve reserve reserve Total Group GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------- ------------ -------- -------- ----------- ------------ -------- 1 August 2016 - Audited (37) 6,295 1,294 34 846 8,432 ------------------------------- ------------ -------- -------- ----------- ------------ -------- Equity share based payments - - - - 48 48 Transfer to retained earnings in relation to share based payments - - - - (66) (66) Cash flow hedge reserve net of tax 37 - - - - 37 Tax credit relating to share options - - - - 221 221 ------------------------------- ------------ -------- -------- ----------- ------------ -------- 31 January 2017 - Unaudited - 6,295 1,294 34 1,049 8,672 ------------------------------- ------------ -------- -------- ----------- ------------ -------- Equity share based payments - - - - 49 49 Transfer to retained earnings in relation to share based payments - - - - (73) (73) Tax credit relating to share options (179) (179) ------------------------------- ------------ -------- -------- ----------- ------------ --------
31 July 2017 - Audited - 6,295 1,294 34 846 8,469 ------------------------------- ------------ -------- -------- ----------- ------------ -------- Equity share based payments - - - - 17 17 Transfer to retained earnings in relation to share based payments - - - - (80) (80) Tax credit relating to share options - - - - (16) (16) ------------------------------- ------------ -------- -------- ----------- ------------ -------- 31 January 2018 - Unaudited - 6,295 1,294 34 767 8,390 ------------------------------- ------------ -------- -------- ----------- ------------ --------
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. The other distributable reserve and the capital redemption reserve arose in the year ended 31 July 2004 from the purchase of the Company's own shares and a cancellation of share premium.
Share based payment reserve
Under IFRS2 there is the option to make transfers from the share based payment reserve to retained earnings in respect of accumulated share option charges where the options have either been exercised or have lapsed post-vesting. The total amounts calculated and accordingly transferred to retained earnings in the period amounted to GBP79,666 (31.1.2017: GBP65,570).
19 Retained earnings Retained earnings Retained before deduction Own shares earnings of own shares (note 20) Total Group GBP'000 GBP'000 GBP'000 ----------------------------------- ----------- ----------- ----------- 1 August 2016 - Audited 17,824 (4,241) 13,583 ------------------------------------- ----------- ----------- ----------- Profit for the financial period 1,870 - 1,870 Transfer from revaluation reserve 115 - 115 Transfer from share based payment reserve (Note 18) 66 - 66 Dividend paid (1,778) - (1,778) Sale of treasury shares - 3,117 3,117 ------------------------------------- ----------- ----------- ----------- 31 January 2017 - Unaudited 18,097 (1,124) 16,973 ------------------------------------- ----------- ----------- ----------- Profit for the financial period 1,191 - 1,191 Transfer from revaluation reserve 162 - 162 Transfer from share based payment reserve (Note 18) 73 - 73 Sale of treasury shares - 624 624 Dividend paid (859) - (859) Transfer realised gain on asset - - - disposal ----------------------------------- ----------- ----------- ----------- 31 July 2017 - Audited 18,664 (500) 18,164 ------------------------------------- ----------- ----------- ----------- Profit for the financial period 1,926 - 1,926 Transfer from revaluation reserve 148 - 148 Transfer from share based payment reserve (Note 18) 80 - 80 Dividend paid (2,016) - (2,016) 31 January 2018 - Unaudited 18,802 (500) 18,302 ------------------------------------- ----------- ----------- -----------
The transfer from revaluation reserve represents the additional depreciation charged on revalued assets net of deferred tax.
The Own Shares Reserve represents the cost of shares in Lok'nStore Group plc purchased in the market and held in the Employee Benefit Trust to satisfy awards made under the Group's share incentive plan.
20 Own shares ESOP ESOP Treasury Treasury Own shares shares shares shares shares total Number GBP Number GBP GBP ------------------- -------- -------- ---------- ---------- ----------- 1 August 2016- Audited 623,212 499,910 2,466,869 3,741,036 4,240,946 31 January 2017 - Unaudited 623,212 499,910 491,869 624,247 1,124,157 31 July 2017- Audited 623,212 499,910 - - 499,910 ------------------- -------- -------- ---------- ---------- ----------- 31 January 2018 - Unaudited 623,212 499,910 - - 499,910 ------------------- -------- -------- ---------- ---------- -----------
Following the disposal on 26 April 2017 in the previous period of the remaining shares held in Treasury, and with no purchases made during the current period, Lok'nStore Limited no longer holds any shares in Treasury at the period-end (31.1.2017: 491,869).
The Group operates an Employee Benefit Trust (EBT) under a settlement dated 8 July 1999 between Lok'nStore Limited and Lok'nStore Trustee Limited, constituting an employees' share scheme. Funds are placed in the trust by way of deduction from employees' salaries on a monthly basis as they so instruct for purchase of shares in the Company. Shares are allocated to employees at the prevailing market price when the salary deductions are made. As at 31 January 2018, the Trust held 623,212 (31.01.2017: 623,212) ordinary shares of 1 pence each with a market value of GBP2,461,687 (31.01.2017: GBP2,835,615). No shares were transferred out of the scheme during the period (2017: nil).. No options have been granted under the EBT.
21 Cash flows
(a) Reconciliation of profit before tax to cash generated from operations
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 ------------------------------------ ------------ ------------ --------- Profit before tax 2,547 2,099 3,965 Depreciation 962 897 1,856 Amortisation of intangible assets 83 83 165 Equity settled share based payments 17 48 97 Store relocation costs and site disposal costs - 35 44 Interest receivable (71) (174) (309) Interest payable 314 325 606 (Increase) in inventories (33) (3) (38) Decrease/(increase) in receivables 74 736 (284) (Decrease) in payables (137) (1,149) (648) -------------------------------------- ------------ ------------ --------- Cash generated from operations 3,756 2,897 5,523 -------------------------------------- ------------ ------------ ---------
(b) Reconciliation of net cash flow to movement in net debt
Net debt is defined as non-current and current borrowings, as detailed in note 15a less cash and cash equivalents.
Six months Six months Year ended ended ended 31 January 31 January 31 July 2018 2017 2017 Unaudited Unaudited Audited GBP'000 GBP'000 GBP'000 (Decrease) / Increase in cash in the period/year (6,027) 6,805 6,051 Change in net debt resulting - - - from cash flows --------------------------------- ------------ ------------ --------- Movement in net debt in period (6,027) 6,805 6,051 Net debt brought forward (17,430) (23,481) (23,481) ----------------------------------- ------------ ------------ --------- Net debt carried forward (23,457) (16,676) (17,430) ----------------------------------- ------------ ------------ --------- 22 Events after the Reporting Date i) Lok'nStore increases its existing GBP40 million Banking Facility to GBP50 million
In February 2018, after the period-end the Group executed its GBP10 million accordion. The increased facility will provide funding for site acquisitions and working capital to support the Group's ambitious growth plans for more landmark site acquisitions and working capital.
ii) Wellingborough Store
The store opened on 23 March 2018.
iii) Gloucester
On 2 March 2018 the Gloucester site was secured as a Managed Store.
iv) Leicester
Acquisition on 14 February 2018 of a freehold site for a new landmark store (subject to planning).
The 1 acre site is in a highly prominent location opposite a major food retailer in the heart of Leicester's busy retail district. The total investment of circa GBP8.5 million will be funded from cash flow and existing banking facilities. When developed, this store will add around 60,000 sq. ft. of trading space.
v) Fareham Store (Leasehold)
On 22 February 2018, the Group completed the Deed of Variation, Reversionary Lease and Rent Review Memorandum extending the lease term by ten years to 2036.
Our Stores/Sites
Head office
Lok'nStore plc
112 Hawley Lane
Farnborough
Hampshire GU14 8JE
Tel 01252 521010
www.loknstore.co.uk
Owned Trading Stores
Basingstoke, Hampshire Horsham, West Sussex Poole, Dorset Bristol, Gloucestershire Crockford Lane Blatchford Road 50 Willis Way Longwell Green Chineham Redkiln Estate Fleetsbridge Trade Park Basingstoke Horsham Poole Aldermoor Way Hampshire RG24 West Sussex RH13 Dorset BH15 3SY Bristol 8NA 5QR Tel 01202 666160 BS30 7ET Tel 01256 474700 Tel 01403 272001 poole@loknstore.co.uk Tel 0117 967 basingstoke@loknstore.co.uk horsham@loknstore.co.uk 7055 bristol@loknstore.co.uk Crayford, Kent Luton, Bedfordshire Portsmouth, Hampshire Gillingham, Kent Block B 27 Brunswick Street Rudmore Square Courtney Road Optima Park Luton Portsmouth PO2 Gillingham Thames Road Bedfordshire LU2 8RT Kent ME8 0RT Crayford 0HG Tel 02392 876783 Tel 01634 366044 Kent DA1 4QX Tel 01582 721177 portsmouth@loknstore.co.uk gillingham@loknstore.co.uk Tel 01322 525292 luton@loknstore.co.uk crayford@loknstore.co.uk ---------------------------- ---------------------------- ---------------------------- Eastbourne, East Maidenhead, Berkshire Reading, Berkshire Tonbridge, Kent Sussex Stafferton Way 251 A33 Relief Unit 6 Deacon Unit 4, Hawthorn Maidenhead Road Trading Estate Road Berkshire Reading Vale Road Eastbourne SL6 1AY RG2 0RR Tonbridge East Sussex BN23 Tel 01628 878870 Tel 01189 588999 Kent TN9 1SW 6QA maidenhead@loknstore.co.uk reading@loknstore.co.uk Tel 01732 771007 Tel 01323 749222 tonbridge@loknstore.co.uk eastbourne@loknstore.co.uk ---------------------------- ---------------------------- ---------------------------- Fareham, Hampshire Milton Keynes, Southampton, Hampshire Harlow, Essex 26 + 27 Standard Buckinghamshire Manor House Avenue Edinburgh Way Way Etheridge Avenue Millbrook Temple Fields Fareham Industrial Brinklow Southampton Harlow Park Milton Keynes Hampshire SO15 Essex CM20 2GF Fareham Buckinghamshire 0LF Tel 01279 882366 Hampshire PO16 MK10 0BB Tel 02380 783388 harlow@loknstore.co.uk 8XJ Tel 01908 281900 southampton@loknstore.co.uk Tel 01329 283300 miltonkeynes@loknstore.co.u fareham@loknstore.co.uk k ---------------------------- ---------------------------- ---------------------------- Farnborough, Hampshire Northampton Central Northampton Riverside Sunbury, Middlesex 112 Hawley Lane 16 Quorn Way Units 1-4 Unit C Farnborough Grafton Street Carousel Way The Sunbury Centre Hampshire GU14 Industrial Estate Northampton Hanworth Road 8JE Northampton NN1 Northamptonshire Sunbury on Thames Tel 01252 511112 2PN NN3 9HG Middlesex TW16 farnborough@loknstore.co.uk Tel 01604 629928 Tel 01604 785522 5DA nncentral@loknstore.co.uk northampton@loknstore.co.uk sunbury@loknstore.co.uk ---------------------------- ---------------------------- ---------------------------- Southampton, Hampshire ParknCruise Third Avenue Manor House Avenue Southampton Millbrook, Southampton Hampshire SO15 Hampshire SO15 0JX 0LF Tel 02380 783388 Tel 02380 789966 southampton@loknstore.co.uk southampton@parkncruise.co. uk ---------------------------- ---------------------------- ----------------------------
Development locations - LNS Owned Stores
Wellingborough, Bedford Bournemouth Leicester 19/21 Whitworth 69 Cardington Land at Wessex Part of land forming Way Road, Bedford. Field, Deansleigh part of Freemens Wellingborough NK42 0BQ Road, Bournemouth Common Road, Leicester NN8 2EF BH7 7DU LE2 7SL
Managed stores - Trading
Aldershot, Hampshire Chichester, West Woking Broadstairs 251, Ash Road Sussex Marlborough Road Unit 2, Pyramid Aldershot 17, Terminus Woking Business Park, GU12 4DD Road GU21 5JG Poorhole Lane, Tel 0845 4856415 Chichester Tel 01483 378323 Broadstairs, aldershot@loknstore.co.uk West Sussex woking@loknstore.co.uk Kent CT10 2PT PO19 8TX chichester@loknstore.co.uk Ashford, Kent Crawley, West Swindon Kembrey Hemel Hempstead Wotton Road Sussex Park Fortius Point, Ashford Sussex Manor Kembrey Street 47, Maylands Avenue, Kent TN23 6LL Business Park Elgin Industrial Hemel Hempstead, Tel 01233 645500 Gatwick Road Estate Hertfordshire HP2 Fax 01233 646000 Crawley Swindon 7DE ashford@loknstore.co.uk RH10 9NH Wiltshire SN2 Tel 01293 738530 8UY crawley@loknstore.co.uk Tel 01793 421234 swindoneast@loknstore.co.uk
Managed stores - Under Development
Dover, Kent Exeter Ipswich, Honeywood Parkway, Land on the West Part of Site 7, Whitfield, Side of Matford Futura Park, Ipswich Dover, CT16 3FJ Park Road, Marsh IP3 9QH Barton, Exeter Devon
This information is provided by RNS
The company news service from the London Stock Exchange
END
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(END) Dow Jones Newswires
April 23, 2018 02:00 ET (06:00 GMT)
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