Lok’nStore Group Plc, the AIM quoted self-storage Company announces interim results for the six months to 31 January 2023
Highlights:
Reminder – We sold four stores on 31 January 2022 adding circa £37 million to cash, reinforcing our strong financial footing. Our Same Store analysis strips out the effect of this and of new stores opened
Excellent growth of same store revenue
15% in crease in interim dividend
New store opening schedule driving future growth
Strong balance sheet with low net debt and LTV
Growth strategy flexible and adaptive
Strong revenue growth
Same Store
· Same Store Group Revenue £13.22 million up 11.2 % (31.1.2022: £11.89 million)
· Same Store Group Adjusted EBITDA1 £ 7.79 million up 8.9 % (31.1.2022: £ 7.16 million)
· Same Store Group Operating Profit before non-underlying2 items £ 5.33 million up 7.6 % (31.1.2022: £ 4.95 million)
Headline
· Group Revenue £13.58 million up 1.5% (31.1.2022: £13.38 million)
· Group Adjusted EBITDA1 £7.93 million down 2.3% (31.1.2022: £8.12 million)
· Group Operating Profit before non-underlying2 items £5.24 million down 9.3% (31.1.2022: £5.78 million)
Driven by solid operating metrics
· Move-ins up 13.5% on corresponding period last year
· Same-Store occupied space up 2.6%
· Achieved rate on occupied space up 9.2% to £ 26.45 per sq. ft (31.1.2022: £24.22 per sq. ft)
· Managed store revenue £0.82 million up 21.8% (31.1.2022: £0.67 million)
· Trading momentum continues post year end with same-store revenue up 11.4 % for February and March 2023 compared to the same period last year
Management of Costs
· External cost increases experienced in period, specifically in energy, local rates, and interest
· EBITDA margins remain robust at 60.3% despite these cost increases
Cash flow (CAD) supports interim dividend increase
· Cash available for Distribution 17.70 pence per share down 6.8% (31.1.2022: 19.00 pence)
· Interim dividend 5.75 pence per share up 15% (31.1.2022: 5.0 pence per share) – Twelfth consecutive year of interim dividend increase
Operational resilience reflected in net asset value
· Adjusted Net Asset Value (NAV) per share up 8.6% year on year to £9.15 (31.1.2022: £8.43)
and down 5.9% from 31 July 2022 (£9.72)
· Four new owned stores on site accretive to NAV when they open
Sale of four stores last year leads to strong balance sheet and low net debt
· £40.3 million cash at period-end (31.7.2022: £44.4 million)
· Net debt (excluding lease liabilities and deferred financing costs) £26.5 million (31.7.2022: £20.3 million)
· Loan to value ratio6 8.9% (31.7.2022: 6.6%)
· £18.2 million capex required to complete store development on site covered by cash
· Bank facility runs until April 2026
New Landmark stores will deliver further growth
· Bedford store opened February 2023 – very early trading has been excellent
· Peterborough store opening in 2nd half
· A further three store openings in FY24
Commenting on the Group’s results, Andrew Jacobs, Chair of Lok’nStore Group said,
“Lok’nStore is reporting excellent results with same-store sales rising 11.2%, operating margins remaining resilient at 60.3% and same-store EBITDA growth of 8.9%. This is against the background of a more challenging business environment with increased costs of energy, local rates and interest.
“After the sale-and-manage back of 4 stores on 31 January 2022 for £37.9 million we are focused on same store growth. This transaction puts the Company in a strong financial position with only 8.9% net loan to value ratio. We are committed to continuing our disciplined approach to capital allocation.
“We have updated the valuation of our assets resulting in net asset value per share of £9.15, down 5.9% since July 2022 and 8.6% up from January 2022. This valuation reflects increased interest rates and our buoyant sales and robust margins.
“We will open 5 new Landmark stores in the coming year. These will all be accretive to asset value, revenue and profits as they fill up. Trading since the period end has remained solid. Our flexible and adaptive business model gives us confidence about the future, and we are increasing the interim dividend by 15% to 5.75 pence per share, the twelfth consecutive increase of the interim dividend.”