Final Results

Lok'n'Store Group PLC 19 November 2000 LOK'nSTORE GROUP PLC Maiden Preliminary Results for the year ended 31 July 2000 Highlights * Turnover for the year increased by 54% to £2.9 million (1999: £1.88 million) * Profit before tax and exceptional items for the period substantially increased to £413,528 (1999: £3,555) * Earning per share increased to 1.11p or 2.1p before exceptionals (1999: 0.02p) * Successful admission to AIM in June * Acquisition of new stores at Poole, Fareham, Swindon, Ashford * Post year end, three new stores acquired, taking total number of stores to fifteen * New acquisitions team established Andrew Jacobs, chief executive of Lok'nStore Group, commented, 'I am delighted to report excellent progress in our maiden preliminary results. Lok'nStore's centre opening schedule has been increased dramatically with four new stores opened or acquired during the financial year. Since then we have acquired three new stores. Lok'nStore is one of the largest self-storage operators in the UK and we see ourselves at the forefront of this growing market. We are actively pursuing a path of profitable growth and see considerable opportunities to expand the business. I look forward with confidence to reporting further progress at the half year stage.' Press enquiries: Simon Thomas, Chairman Lok'nStore Group plc Tel: 020 8547 2288 Andrew Jacobs, Chief Executive Lok'nStore Group plc Tel: 020 8547 2288 Katie Tzouliadis Biddick Associates Tel: 020 7448 1000 CHAIRMAN & CHIEF EXECUTIVE'S STATEMENT We are delighted to report on another successful year at Lok'nStore continuing the Group's fifth year of uninterrupted growth. In addition to our excellent performance and as part of our strategy to accelerate the growth of the Company, we successfully transferred Lok'nStore's shares from the OFEX Market to the Alternative Investment Market in June. Results For the year to 31 July 2000, turnover increased by 54% from £1.88 million to £2.9 million and is currently running at in excess of £3.5 million on an annualised basis. Profit before tax and exceptional items relating to conversion to plc status and our AIM listing rose from £3,555 to £413,528 giving earnings per share of 2.1p (1999:0.02p). Expansion Lok'nStore's centre opening schedule has been increased dramatically with four new stores opened or acquired during the financial year to 31 July 2000. As a result Lok'nStore had twelve stores at the financial year end. Since then, we have acquired three new stores which we expect to open in the New Year. The stores, at Swindon, Northampton and Milton Keynes are all situated in prime locations, offering excellent visibility and access. When fully developed, these new centres will provide an additional 140,000 ft of lettable space. New stores in Portsmouth and Southampton, which opened just before the period under consideration, have performed ahead of expectations. The team at Portsmouth in particular deserves congratulations for returning a profit in its first full year of operation. Corporate Development In November 1999, we were pleased to complete the sale of five million Ordinary shares for £3.75 million to Access Storage Holdings Sarl. ('Access'). At the same time, Access purchased 1.2 million existing shares making them a 29% shareholder in Lok'nStore. The agreement and injection of funds strengthened Lok'nStore's balance sheet and significantly improved our covenant to institutional property owners. Management Structure As part of our expansion programme, we have established a dedicated acquisitions team. Their job is to find, assess and negotiate new stores. In addition to acquiring the stores mentioned above they have successfully appealed against the rateable values on three existing stores. The team has also exercised the option to acquire the freehold at Swindon Self Storage Ltd and has successfully purchased the freehold and one of the long leaseholds at our Reading store. The team is negotiating on further sites. We have continued to structure the management team to ensure that it can effectively manage the store-opening programme. Of particular note is the introduction of regional managers. This has allowed many of the day-to-day operational issues to be resolved nearer store level. Head office time has been saved to concentrate on opening new stores quickly after completion, with trained staff and most importantly customers from the first day. The structure has also provided more opportunities for promotion of our staff - the first of our regional managers was previously a centre manager and now looks after three stores. It is our intention, wherever possible, to recruit regional managers from our existing store managers. Board Appointment We were very pleased to welcome Martin O'Grady, Chief Financial Officer of Access as Non-executive Director. He replaced Marc Jason who stepped down from the board following his resignation from Access. Outlook The self-storage industry as a whole has experienced an exciting year. The media and financial interest in the sector has continued to increase leading to a number of fund-raisings and acquisitions. We firmly believe that the emergence of what are being termed Space Management Companies incorporating managed workspace, serviced offices and self-storage will lead to significant changes within the UK property market. Inflexible, long leases are less and less attractive to businesses and households in today's fast changing economy. Lok'nStore is the fourth largest self-storage operator in the United Kingdom. We see ourselves at the forefront of this growing market and have an ambitious expansion strategy in place, together with the appropriate management structure to support our growth. We will continue to capitalise on the predictable cashflow that self-storage provides using the expertise we have gained over the last five years. The Board is therefore confident and optimistic for the future. Simon Thomas, Chairman Andrew Jacobs, Chief Executive CONSOLIDATED PROFIT & LOSS ACCOUNT for the year ended 31 July 2000 Notes 2000 1999 £ £ Turnover Continuing operations 2,879,192 1,888,881 Acquisitions 26,517 - 2,905,709 Operating expenses (2,418,952) (1,719,597) Operating profit/(loss) Continuing operations 549,311 Acquisitions (62,554) 486,757 169,284 Exceptional item (relating to AIM admission) 2 (194,453) - Interest receivable 36,914 51,094 Profit on ordinary activities before 329,218 220,378 interest Interest payable (110,143) (216,823) Profit on ordinary activities before 219,075 3,555 taxation Taxation - - Profit for the year 219,075 3,555 Earnings per share Basic 3 1.11p 0.02p Diluted 3 1.04p 0.02p No separate statement of Total Recognised Gains and Losses has been presented as all such gains and losses have been dealt with in the profit and loss account. GROUP BALANCE SHEET As at 31 July 2000 Notes 2000 1999 £ £ Fixed Assets Intangible assets 4 474,278 - Tangible assets 7,196,663 5,192,826 Investments 5 172,917 - 7,843,648 5,192,826 Current Assets Stocks 21,764 17,198 Debtors 757,160 484,847 Cash in bank and in hand 2,367,653 521,025 3,146,577 1,023,070 Creditors: Amounts falling due within one year (1,702,926) (1,454,957) Net current assets (liabilities) 1,443,651 (431,887) Total assets less current liabilities 9,287,299 4,760,939 Creditors: Amounts falling due after more than one year (3,243,907) (2,747,636) 6,043,392 2,013,303 Capital and reserves Called up share capital 6 214,563 163,472 Merger reserve 7 6,295,295 2,535,372 Profit and loss account 7 (466,466) (685,541) Shareholders' funds 6,043,392 2,013,303 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2000 Notes 2000 1999 £ £ Cash flow from operating activities 8 455,554 622,472 Returns on investments and servicing of finance 8 (73,229) (165,729) Taxation - - Capital expenditure and financial investment 8 (2,289,852) (1,673,380) Acquisitions and disposals 8 (537,985) - Cash outflow before financing (2,445,512) (1,216,637) Financing 8 4,292,140 1,085,013 Increase/(decrease) in cash in the period 1,846,628 (131,624) NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 JULY 2000 1. Accounting policies The above results for the year ended 31 July 2000 are an abridged version of the Group's statutory financial statements. The profit and loss account and balance sheet do not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. These accounts have been prepared on the basis of the same accounting policies as set out in the statutory accounts for the year ended 31 July 1999. 2. Exceptional item 2000 1999 £ £ Costs of a fundamental reorganisation 194,453 - The above costs relate to legal and professional fees incurred in relation to the reorganisation of the Group structure and the admission to AIM. 3. Earnings per Ordinary Share The calculations of earnings per share are based on the following profits and numbers of shares. Basic Basic Diluted Diluted 2000 1999 2000 1999 £ £ £ £ Profit for the 219,075 3,555 219,075 3,555 financial year 2000 1999 No. of shares No. of shares Weighted average number of shares For basic earnings per share 19,800,018 16,347,212 Exercise of share options 1,252,276 814,629 For diluted earnings per share 21,052,294 17,161,841 4. Intangible fixed assets £ Group Cost Goodwill on consolidation 485,093 31 July 2000 485,093 Amortisation Charged in the year 10,815 31 July 2000 10,815 Net book value 31 July 2000 474,278 On 12 May 2000 the Group acquired 100% of the issued share capital of Swindon Self Storage Limited, whose assets and liabilities at acquisition were: £ Book value and fair value Tangible fixed assets 144,230 Debtors 44,151 Bank overdraft (12,246) Creditors (15,489) Net assets required (160,646) Goodwill 485,093 Consideration 645,739 Shares 120,000 Cash 470,000 Cost of acquisition 55,739 645,739 The loss after taxation of the acquired entity for the period from the beginning of the acquired entity's financial year to the date of acquisition and the previous financial year are as follows: Loss after tax for period to: Date of acquisition For previous year £ £ Swindon Self Storage Limited (94,173) (47,828) 5. Investments Own shares £ Group Cost Additions 172,917 31 July 2000 172,917 This represents the shares owned by Lok'nStore Trustee Limited as part of the Group's employees share scheme. 6. Share Capital 2000 1999 £ Restated £ Group and Company Authorised: 30,000,000 Ordinary Shares of 1p each 300,000 100,000 Allotted, issued and fully paid: 21,456,303 (1999: 16,347,212) Ordinary 214,563 163,472 shares of 1p each The Company was incorporated on 30 May 2000 with an authorised share capital of £300,000 of which 2 shares were issued and fully paid. At the year end there were 21,456,303 Ordinary shares in issue. On 28 June 2000 the Company issued 20,793,605 1p Ordinary shares with a further 662,696 1p Ordinary shares being issued between 2-11 August 2000 and combined with 2 subscriber shares in order to acquire 21,456,303 0.01p Ordinary shares in Lok'nStore Limited, representing 100% of the issued share capital. The restated 1999 comparatives reflected an adjusted share capital calculated by reference to the restructured share capital. Prior to the reconstruction, Lok'nStore Limited issued 109,091 0.01p Ordinary shares (equivalent to 109,091 1p Ordinary shares) at £1.10 per share as part payment to acquire 2 £1 Ordinary shares in Swindon Self Storage Limited, representing 100% of the issued share capital. On 23 November 1999, Lok'nStore Limited issued 5,000,000 0.01p Ordinary shares (equivalent to 5,000,000 1p Ordinary shares) at 75p per share, raising £ 3,691,014 after issue costs. 7. Reserves Share Merger reserve Profit and loss Total premium account £ £ £ £ 1 August 2,697,209 - (685,541) 2,011,668 1999 Transfer of (2,697,209) 2,697,209 - - share premium Adjustment to reflect the reconstruction - (161,837) - (161,837) of the Group share capital 1 August - 2,535,372 (685,541) 1,849,831 1999 as restated Issue of shares by Lok'nStore Limited pre- - 3,759,923 - 3,759,923 reconstruction Profit for the - 219,075 219,075 year - 6,295,295 (466,466) 5,828,829 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 capital of Lok'nStore Limited. 8. Cash flows 2000 1999 £ £ a Reconciliation of operating profit to net cash inflow from operating activities Operating profit 486,757 169,284 Depreciation 257,538 201,944 Amortisation 10,815 10,000 Increase in stocks (4,566) (14) Decrease/(increase) in debtors (228,162) (197,047) (Decrease)/increase in creditors 127,625 438,305 Exceptional item (194,453) - Net cash inflow from operating activities 455,554 622,472 b Analysis of cash flows for headings netted in the cash flow Returns on investments and servicing of finance Interest received 36,914 51,094 Interest paid (99,868) (192,587) Interest element of finance lease rental payments (10,275) (24,236) Net cash outflow for returns on investment and (73,229) (165,729) servicing of finance Capital expenditure and financial investment Purchase of tangible fixed assets (2,125,794) (1,677,596) Sale of tangible fixed assets 8,859 4,216 Purchase of investments (172,917) - Net cash outflow for capital expenditure and (2,289,852) (1,673,380) financial investment Acquisitions and disposals Purchase of subsidiary undertaking (525,739) - Net overdrafts acquired with subsidiary (12,246) - Net cash outflow for acquisitions (537,985) - Financing Bank loans 657,786 1,158,172 Capital element of finance lease rental payments (56,660) (72,646) Net proceeds from issue of shares by subsidiary 3,691,014 (513) Net cash inflow from financing 4,292,140 1,085,013 c Analysis of net debt At 31 July 1999 Other non At 31 July cash 2000 Cash flow changes £ £ £ £ Cash at bank 521,025 1,846,628 2,367,653 and in hand Debt due (338,657) (142,009) (480,666) within 1 year Debt due after (2,696,426) (515,777) (3,212,203) 1 year Finance leases (129,315) 66,935 (10,285) (72,665) Total (2,643,373) 1,255,777 (10,285) (1,397,881) D Purchase of subsidiary undertaking £ Net assets acquired: Tangible fixed assets 144,230 Debtors 44,151 Creditors (15,489) Bank overdrafts (12,246) 160,646 Goodwill 485,093 Total consideration 645,739 Satisfied by: Shares allotted 120,000 Cash 470,000 Cost of acquisition 55,739 645,739 The subsidiary undertaking acquired during the year contributed (£ 11,633) to the Group's net operating cashflows, paid £nil in respect of net returns on investments and servicing of finance, paid £nil in respect of taxation and utilised £9,737 for capital expenditure.

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