Final Results

Lok'n Store Group PLC 30 September 2002 LOK'nSTORE GROUP PLC Preliminary Results for the year ended 31 July 2002 Lok'nStore Group Plc, one of the leading players in the fast-growing self-storage market, which operates 17 units in the South East, announces preliminary results for the year ended 31 July 2002. Highlights • Turnover for the year up by 26.3% to £5.00 million (2001: £3.96 million) • Steady operating profit for the period • Successful placing of Access' 29% stake across a number of prominent institutional investors • Successful fundraising of £10m equity via a Placing and Open Offer in June 2002 • New £10m revolving bank facility in place, on improved terms, to fund expansion Andrew Jacobs, Chairman of Lok'nStore Group, commented, 'With the cash raised from the Placing and Open Offer, the new bank facility in place, an increase in available new sites and a proven disciplined management approach, Lok'nStore has established a robust platform for growth in the years ahead. We will continue to apply the same stringent criteria to our expansion plans and management of existing operations, and maintain the Group's objective of maximising growth whilst maintaining operational profitability.' 30 September 2002 enquiries Lok'nStore Group plc Tel: 020 8547 2288 Simon Thomas, Chief Executive Chris Stevens, Finance Director College Hill Tel: 020 7457 2020 Justine Warren James Henderson AN ANALSYT PRESENTATION WILL BE HELD AT COLLEGE HILL, 78 CANNON STREET, LONDON EC4 @ 10.00AM CHAIRMAN & CHIEF EXECUTIVE'S STATEMENT PLATFORM FOR GROWTH Overview The last year was another exciting and progressive year for Lok'nStore in which the Group demonstrated continued growth. We are particularly delighted with these results in view of the general economic slowdown, and feel that this is testament to the defensive qualities of the Group's business. Our corporate brokers placed a large (29%), single shareholder's stake with a number of institutions last November, which significantly spread the shareholder base. This formed a platform from which, despite extremely difficult markets, we were able to raise £10m in June 2002 for our future growth. We have also continued to invest in our portfolio with the acquisition of new sites and further phased investment in our existing stores. The growth in turnover for the year reflects the continued success of the existing portfolio and strong growth in the newer stores. Even in geographical locations where competitive pressures exist, we have been able to maintain prices and profitability. More recently there has been a noticeable upturn in the number of new site opportunities that meet our rigorous investment criteria. Group Results We are pleased to announce that trading results for the year to 31 July 2002 are in line with our expectations. Turnover for the year was £5.00m (2001: £3.96m) a rise of 26.3%, with revenues on an annualised basis currently running at £5.62m. A reflection of our disciplined management approach was our ability to achieve an operating profit of £2,899 for the year (2001: £317,658) while maximising our reinvestment in the growth of the business. The stores that were opened in the latter part of the last financial year, namely, Northampton, Milton Keynes, Sunbury and Swindon, in addition to current year openings, have performed well. The Group continues to achieve physical occupancy levels at its mature sites of 87%, at the same time as factoring in price increases to maximise financial occupancy. In spite of significant price increases in insurance premiums widely reported in the storage sector we are pleased to have limited our premium increase to 10%. This is a consequence of our low claims history combined with strong bargaining power from our 180% year on year increase in the sale of insurance policies to our customers. This tight control of an important cost area epitomises the Lok'nStore management approach. Institutional Shareholders In November 1999, Access Storage Holdings Sarl became a significant shareholder in Lok'nStore investing £4.8m for a 29% stake in the Group. Following a change in strategy at Access' parent, Security Capital, this holding was placed across a broad range of institutional investors in November 2001. On completion of this transaction, WestLB Panmure were appointed as corporate broker and nominated adviser to the Group. In June 2002, we were delighted to raise £10m of new equity (net of expenses), despite the extremely difficult global market conditions. The ability of the Group to raise funds in such a difficult economic environment clearly demonstrates the strength of Lok'nStore's business. We were very pleased with the continued support of our existing shareholders and welcome a number of new institutional investors who participated in the placing. Last year we stated that it was our objective to widen the institutional shareholder base of the Group. Following the placing of the stake held by Access and the Placing and Open Offer, we are pleased to report that the level of institutional shareholding in the Company has risen from less than 1% to 46%. Strong Cash Generation The continued strong organic cash generation during the year has enabled the Company to invest in the existing portfolio. We have continued to pursue our policy of investing in new phases of development at our stores only when there will be an immediate and tangible return. Gross interest payments increased slightly during the period to £455,730 (2001: £411,724). Cash at the year end was £10.1m (2001: 1.0m) with total gross debt of £7.1m (2001: £5.4m). Despite the increase in debt during the year, the interest charge increases were kept to a minimum and the Group benefited from the drop in the bank base rate to 4% during the year. The proceeds from the Placing and Open Offer were received at the end of the financial year and therefore had minimal impact in reducing the interest charge. We have agreed a new three year £10m revolving credit bank facility with our existing bank, The Royal Bank of Scotland plc. The increase in the Group's banking facility and the restructuring provides a strong foundation upon which to expand the business over the months ahead. This restructuring will allow further borrowings of £2.9m, an additional £2.2m saving over the next three years resulting from deferred capital repayments and an interest charge saving of 0.5% pa. This new facility is a strong vote of confidence from our bank. New Investment Tangible fixed assets rose to £13.1m (2001: £10.7m) an increase of £2.4m. We have purchased the freehold premises at Reading where we previously operated under an occupational lease. This transaction is a good example of the positive results that may be achieved by maintaining a flexible approach to freeholds and leaseholds. Having been occupied by an existing tenant when we acquired the site, our Ashford store was opened in December 2001. With this prominent site we have extended our coverage in the South East and raised the brand profile. Since the year end we have acquired a new site in Luton, Bedfordshire. This adds a further 33,000 sq ft of net lettable space to the Group and takes the total number of stores to 17. The Luton store is due to open in mid-October 2002 and links up with our successful Northampton and Milton Keynes operations. Outlook With the cash raised from the Placing and Open Offer, the new bank facility in place, an increase in available new sites and a proven disciplined management approach, Lok'nStore has established a robust platform for growth in the years ahead. We will continue to apply the same stringent criteria to our expansion plans and management of existing operations, and maintain the Group's objective of maximising growth whilst maintaining operational profitability. Finally, we would like to thank the staff of Lok'nStore for their exceptional contribution during the last year and look forward to working with them in the coming year. Andrew Jacobs, Chairman Simon Thomas, Chief Executive 26 September 2002 CONSOLIDATED PROFIT & LOSS ACCOUNT for the year ended 31 July 2002 Notes 2002 2001 £ £ Turnover 5,000,488 3,958,573 Operating expenses (4,997,589) (3,640,915) Operating profit 2,899 317,658 Interest receivable 53,958 122,688 Profit on ordinary activities before interest 56,857 440,346 Interest payable (455,730) (411,724) (Loss)/profit on ordinary activities before (398,873) 28,622 taxation Taxation - - (Loss)/profit for the year (398,873) 28,622 Earnings per share Basic 2 (1.81)p 0.13p Diluted 2 (1.81)p 0.12p The operating (loss) / profit for the year arises from the group's continuing operations. 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 2002 Notes 2002 2001 £ £ Fixed Assets Intangible assets 3 431,832 456,087 Tangible assets 13,129,442 10,659,523 Investments 4 172,917 172,917 13,734,191 11,288,527 Current Assets Stocks 62,967 41,248 Debtors 1,256,102 1,003,469 Cash in bank and in hand 10,127,340 995,139 11,446,409 2,039,856 Creditors: Amounts falling due within one year (2,395,389) (2,740,802) Net current assets (liabilities) 9,051,020 (700,946) Total assets less current liabilities 22,785,211 10,587,581 Creditors: Amounts falling due after more than one year (7,133,995) (4,515,567) 15,651,216 6,072,014 Capital and reserves Called up share capital 5 284,687 214,563 Share Premium 6 9,907,951 - Merger reserve 6 6,295,295 6,295,295 Profit and loss account 6 (836,717) (437,844) Shareholders' funds 15,651,216 6,072,014 CONSOLIDATED CASH FLOW STATEMENT for the year ended 31 July 2002 Notes 2002 2001 £ £ Cash flow from operating activities 7 806,994 1,060,468 Returns on investments and servicing of finance 7 (401,772) (289,036) Taxation - - Capital expenditure and financial investment 7 (2,951,402) (3,825,542) Cash outflow before financing (2,546,180) (3,054,110) Financing 7 11,678,381 1,681,596 Increase/(decrease) in cash in the period 9,132,201 (1,372,514) NOTES TO THE FINANCIAL STATEMENTS for the year ended 31 July 2002 1. Accounting policies The above results for the year ended 31 July 2002 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 2001. 2. Earnings per Ordinary Share The calculations of earnings per share are based on the following profits and numbers of shares. Basic Basic Diluted Diluted 2002 2001 2002 2001 £ £ £ £ (Loss)/profit for the financial (398,873) 28,622 (398,873) 28,622 year 2002 2001 No. of shares No. of shares Weighted average number of shares For basic earnings per share 22,081,169 21,456,303 Exercise of share options 1,353,125 1,823,474 For diluted earnings per share 23,434,294 23,279,777 The exercise of share options would give rise to a reduction in the loss per share. This is not considered to be dilutive. 3. Intangible fixed assets £ Group Cost 1 August 2001 and 31 July 2002 Goodwill on consolidation 485,093 Amortisation At 1 August 2001 29,006 Charged in the year 24,255 31 July 2002 53,261 Net book value 31 July 2002 431,832 31 July 2001 456,087 4. Investments Own shares £ Group Cost At 1 August 2001 and 31 July 2002 172,917 This represents the shares owned by Lok'nStore Trustee Limited as part of the Group's employees share scheme. 5. Share Capital 2002 2001 £ £ Group and Company Authorised: 35,000,000 (2001: 30,000,000) Ordinary Shares of 1p each 350,000 300,000 Allotted, issued and fully paid: 28,468,693 (2001: 21,456,303) Ordinary shares of 1p each 284,687 214,563 6. Reserves Share Premium Merger reserve Profit and loss Total account £ £ £ £ 1 August 2001 - 6,295,295 (437,844) 5,857,451 Share Issues 10,557,000 - - 10,557,000 Expenses of Equity Share Issues (649,049) - (649,049) Loss for the year - - (398,873) (398,873) 9,907,951 6,295,295 (836,717) 15,366,529 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. 7. Cash flows 2002 2001 £ £ a Reconciliation of operating profit to net cash inflow from operating activities Operating profit 2,899 317,658 Depreciation 481,598 362,472 Amortisation 24,255 18,191 Profit on disposal of fixed assets (115) - Increase in stocks (21,719) (19,484) Increase in debtors (252,633) (246,309) Increase in creditors 572,709 627,940 Net cash inflow from operating activities 806,994 1,060,468 b Analysis of cash flows for headings netted in the cash flow 2002 2001 Returns on investments and servicing of finance Interest received 53,958 122,688 Interest paid (446,451) (403,349) Interest element of finance lease rental payments (9,279) (8,375) Net cash outflow for returns on investment and servicing of finance (401,772) (289,036) Capital expenditure and financial investment Purchase of tangible fixed assets (2,953,677) (3,825,542) Sale of tangible fixed assets 2,275 - Net cash outflow for capital expenditure and financial investment (2,951,402) (3,825,542) Financing Bank loans 1,717,336 1,720,793 Capital element of finance lease rental payments (17,030) (39,197) New share issue (net of issue costs) 9,978,075 - Net cash inflow from financing 11,678,381 1,681,596 c Analysis of net debt Other non At 31 July 2001 Cash flow cash changes At 31 July 2002 £ £ £ £ Cash at bank and in hand 995,139 9,132,201 - 10,127,340 Debt due within 1 year (904,687) 904,687 - - Debt due after 1 year (4,508,753) (2,622,245) - (7,130,998) Finance leases (33,468) 17,040 - (16,428) Total (4,451,769) 7,431,683 - 2,979,914 This information is provided by RNS The company news service from the London Stock Exchange FR LRMRTMMITBBT

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