Lok'nStore Group Interim Results for Six Months to 31st January 2021

Highlights:    

Strong trading

· Group revenue £10.21 million up 13.9% (31.1.2020: £8.97 million)

· Group adjusted EBITDA¹ profit £5.5 million up 17.3% (31.1.2020: £4.7 million)

 

  Cash flow growth drives interim dividend increase

 

· Cash available for Distribution (CAD)³  £3.49 million up 19.7% (31.1.2020: £ 2.92 million)

· Interim dividend 4.33 pence per share up 8.25% (31.1.2020: 4 pence per share)

 

 Increasing net asset value

· Adjusted Net Asset Value (NAV) per share⁵ up 6.8% to £5.68 (31.1.2020: £5.32)  

(31.7.2020: £5.56)

 

Secure balance sheet  

· £11.3 million cash at period-end (31.7.2020: £13.1 million)

· Net debt (excluding lease liabilities) £42.6 million (31.7.2020: £38.3 million)

· Loan to value ratio⁶ 20.4% (31.7.2020: 19.3%)

· Average cost of debt 1.55 % (31.7. 2020: 1.69%)

 

Unprecedented occupancy growth

· Occupied space up 24.7% since January 2020

· Occupancy up from 67.1% to 81.6% of available space

· Store EBITDA Margins increased from 55.8% to 58.5%

· Store management fees £0.74 million up 87.5 % (31.1.2020: £0.39 million)

 

Active pipeline of new landmark stores ⁷

· Store pipeline of 13 sites will add 38% of new space over coming years

· 2 new stores opened (including Salford post-balance sheet)

· 2 new stores acquired (plus Basildon post-balance sheet)

· Building 4 new stores

· Chichester Managed Store acquired.

 

Commenting on the Group's results, Andrew Jacobs Chairman of Lok'nStore Group said,  

 

“We continue to build our pipeline of prominent Landmark storage centres tapping in to deep latent demand for storage in the U.K and our store team members have worked tirelessly to provide great service to our customers. As a result, we have achieved an unprecedented growth in occupied space of 24.7% in the period and this has driven strong growth of revenue and profits” .  

 

“We have added to our new store pipeline which increases operating space by 38% to over 2.5 million sq. ft. over the coming years. We opened our new Leicester store in August and our new Salford store after the period end.  Construction is underway at our sites in Warrington, Stevenage and Wolverhampton . Continuing this exciting period of growth, our objective is to build more Landmark stores in an under-supplied market while remaining conservatively geared delivering sustainable growth and consistently increasing dividends. We are raising the interim dividend by 8.25% to 4.33 pence per share.”

 

The Performance of our Stores 

 

· Self-storage revenue £9.5 million up 11.0% (31.1.2020: £8.5 million)

· Adjusted Store EBITDA £5.5 million up 17.3% (31.1.2020: £4.8 million)

· Unit occupied space increased 24.7% year on year

· Occupied units pricing decreased 2.6%

 

With operating costs under control, revenue growth translates 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 17.3% to £5.5 million (31.01.2020: £4.8 million).

 

Over the course of the year unit occupied space rose by a substantial 24.7%, with occupancy rising from 67.1% to 81.6%.

 

In supporting our customers, we chose not to implement price increases to our existing customers throughout this period and unit pricing was down 2.6%. However, the strong occupancy gains realised in the first half gives us significant embedded pricing leverage and margin opportunity going forward.

 

The overall adjusted EBITDA margin across all stores increased to 58.5% from 55.8%.

 

As we build the Current Pipeline we will be operating from 53.2% freehold space, leasehold space will decline to 17.0% of space and managed stores will increase to 29.8% of total space operated. This shifting tenure structure will also have the effect of increasing overall margins.

 

Portfolio Analysis and Performance Breakdown 

 

					When Fully Developed
Portfolio Analysis and Performance Breakdown	Number of stores	% of Property Valuation	% of Adjusted Store EBITDA	Adjusted Store EBITDA Margin (%)	% lettable space	Number of stores	Total % lettable space
As at 31 January 2021
Freehold Stores	16	77.7	77.4	64.4	48.8	23	53.2
Leaseholds Stores	9	8.6	22.6	44.6	22.4	9	17.0
Managed Stores	11			100.0	28.8	15	29.8
Total stores trading	36					47
Pipeline Stores (secured)
Owned	7	13.7
Managed	4
Total Stores	47	100	100	58.5	100	–	100

 

 

In the Operating Performance table below, we show how the performance breaks down across the stores, based on the age of store. Older stores have had more time to fill-up and produce higher EBITDA returns.

 

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 adjusted store EBITDA margin.  The impact of this will be to continue to increase the average store 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 make a larger than average contribution to Group profits as they become established trading units.

 

 

 

Operating Performance at a glance (Lok'nStore freehold and leasehold stores only) *

 

Weeks Old	Secured Pipeline	Under 100	100 to 250	over 250	Total
Six months ended 31 January 2021
Sales £000		224	1,391	7,900	9,515
Stores Adjusted EBITDA £'000		(10)	909	4,668	5,567
Adjusted EBITDA Margin (%)		(4.4%)	65.3%	59.1%	58.5%
Stores Adjusted EBITDAR £'000		(10)	909	5,435	6,334
Adjusted EBITDAR Margin (%)		(4.4)%	65.3%	68.8%	66.6%
As at 31 January 2021 (sq. ft.)
Maximum Net Area	392,700	97,724	225,980	970,926	1,687,330
Freehold ('000 sq. ft.)	392,700	97,724	225,980	536,315	1,252,719
Short Leasehold (sq. ft.)	–	–	–	434,611	434,611
Number Stores
Freehold	7	2	4	10	23
Short Leasehold	–	–	–	9	9
Total Stores	7	2	4	19	32

*Table excludes Managed Stores.

 

In respect of the Farnborough Store (over 250 weeks) the total store revenue includes a £50,000 contribution receivable from Group Head Office.