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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