Interim Results

Lok'n Store Group PLC 25 April 2003 LOK'NSTORE GROUP PLC ('Lok'nStore' or 'the Group') Interim Results for the six months to 31 January 2003 Lok'nStore Group Plc, one of the leading companies in the fast-growing self-storage market, which operates 17 units in the South East, announces interim results for the six months ended 31 January 2003. Highlights • Turnover increased by 19% to £2.81 million (£2.37 million) • Operating profit of £38,858 (loss £253,608) • Profit before tax* of £24,179 (loss £445,079) • Luton acquired in August 2002 and opened within 8 week turn around programme in October 2002 • Number of stores is now 17 * Before exceptional items Andrew Jacobs, Chairman, commented, 'The Group's strong balance sheet and the lowest breakeven occupancy in the market, means that Lok'nStore remains well positioned to take advantage of the status of the current market in order to advance its market share. Lok'nStore continues to adhere to strict investment appraisal and operational criteria & the Group continues to see growth opportunities. The Board is therefore confident in the future and in its ability to deliver substantial shareholder value.' 25 April 2003 Enquiries: Lok'nStore Group plc Steven Hourston, Managing Director Today: 020 7457 2020 Christopher Stevens, Finance Director Thereafter: 020 8547 2288 College Hill Tel: 020 7457 2020 Justine Warren Crawford Burden LOK'NSTORE GROUP PLC CHAIRMAN'S STATEMENT I am pleased to report another period of progress for the Group against a climate of continued challenging market conditions. With regard to our acquisition programme, we continue to find high quality potential self-storage sites. However, we remain prudent about the commercial property market and expect prices to decline further. This has led to protracted negotiations with vendors and our roll out programme has therefore been slower than planned. We continue to apply, and will not compromise, our strict investment criteria and will continue to invest only within these parameters. The slower rate of site acquisition has resulted in a higher group operating profit, as we have not incurred the early losses associated with new sites. We maintain that the South and South East of England presents the greatest opportunity for the Group due to the ever-increasing population and continued pressure on the utilisation of space. Our site acquisition strategy remains driven by prospective internal rate of return, site location and visibility. We are delighted to be so ideally positioned to exploit opportunities when they arise. Results Turnover for the six months to 31 January 2003 increased by 19% to £2.81 million (£2.37 million). Overall, sales have increased due to volume improvements, price increases and an improved product offering. Expenditure in the business remains tightly controlled to ensure that any variable costs remain sensitive to fluctuations in the market place. Lok'nStore continues to seek to maximise growth whilst maintaining operational profitability. The Group made an operating profit of £38,858 compared to an operating loss of £253,608 during the same period last year, an improvement of £292,466 year on year. Profit before tax and exceptional items for the period was £24,180 (loss: £445,079) representing an improvement of £469,259, reflecting a greater proportion of the Group's operations moving towards maturity and a reduced interest charge. Following the acquisition of Swindon Self-Storage Ltd during year ended 31st July 2000, which consisted of single site at Swindon West, we were able to take on a new site in a far more prominent and visible location at the front of the Swindon West plot. This enabled the Group to sell the original Swindon Self-Storage freehold, generating cash of £1.1million and an exceptional loss of £0.4million. Overall, during the last few years there has been an underlying significant uplift in the value of our freehold properties. This will both enhance the Group's ability to borrow as and when debt is required in the future and gives the Group the opportunity to release value to shareholders. Following the Group's successful placing and open offer in June 2002 and the signing of a new £10 million revolving credit facility with our existing bankers, The Royal Bank of Scotland, we were able to pay down all the debt that existed at the end of the last financial year. As at 31 January 2003, the Group held £2.3 million in cash and no debt. We have seen considerable improvements in retailing and operational techniques with more advanced and sophisticated management information, investment appraisal and IT systems being implemented to ensure that the key drivers of the business are being targeted. The Board maintains that investing in new sites will strengthen the balance sheet and create the most value for our shareholders. The Directors do not recommend the payment of an interim dividend. Expansion The opening of the new site at Luton in October 2002 adds an additional 33,000 sq ft of net lettable space to the Group and complements its existing portfolio of sites north of London that includes Milton Keynes and Northampton. The phased fit out programme at all our new and semi-mature sites has progressed well during the six month period, with further phases being completed at Sunbury, Poole, Ashford, Fareham, Northampton, Southampton and Swindon West. The phased approach continues to ensure that we take a 'just in time' investment approach to capital expenditure and ensures that the mix of unit sizes available to customers can be tailored to local demand. Prospects The Group's strong balance sheet and the lowest breakeven occupancy in the market, means that Lok'nStore remains well positioned to take advantage of the status of the current market in order to advance its market share. Lok'nStore continues to adhere to strict investment appraisal and operational criteria & the Group continues to see growth opportunities. The Board is therefore confident in the future and in its ability to deliver substantial shareholder value. Andrew Jacobs Chairman 24 April 2003 CONSOLIDATED PROFIT AND LOSS ACCOUNT For the six months ended 31 January 2003 Notes Unaudited Audited Six months Six months Year 31 January 31 January 31 July 2003 2002 2002 £ £ £ TURNOVER Continuing operations 2,811,873 2,369,605 5,000,488 Operating expenses (2,773,015) (2,623,213) (4,997,589) OPERATING PROFIT/(LOSS) 38,858 (253,608) 2,899 Exceptional item 2 (400,901) - - Interest receivable 35,372 40,162 53,958 Interest payable (50,051) (231,633) (455,730) (LOSS)/PROFIT ON ORDINARY ACTIVITIES BEFORE TAXATION (376,722) (445,079) (398,873) Taxation 3 - - - (LOSS)/PROFIT ON ORDINARY ACTIVITIES AFTER TAXATION (376,722) (445,079) (398,873) EARNINGS PER SHARE Basic 4 (1.32)p (0.59)p (1.81)p Fully diluted 4 (1.32)p (0.59)p (1.81)p There are no other recognised gains or losses. CONSOLIDATED BALANCE SHEET 31 January 2003 Unaudited Audited 31 January 31 January 31 July 2003 2002 2002 £ £ £ FIXED ASSETS Intangible assets 419,705 443,960 431,832 Tangible assets 13,119,758 12,937,303 13,129,442 Investments 172,917 172,917 172,917 13,712,380 13,554,180 13,734,191 CURRENT ASSETS Stock 98,982 40,934 62,967 Debtors 1,017,526 807,287 1,256,102 Cash at bank and in hand 2,298,408 483,123 10,127,340 3,414,916 1,331,344 11,446,409 CREDITORS: Amounts falling due within one year (1,847,620) (2,671,457) (2,395,389) NET CURRENT ASSETS / (LIABILITIES) 1,567,296 (1,340,113) 9,051,020 TOTAL ASSETS LESS CURRENT LIABILITIES 15,279,676 12,214,067 22,785,211 CREDITORS: Amounts falling due after more than one year (685) (6,587,132) (7,133,995) 15,278,991 5,626,935 15,651,216 CAPITAL AND RESERVES Called up share capital 284,687 214,563 284,687 Share premium 9,912,448 - 9,907,951 Merger reserve 6,295,295 6,295,295 6,295,295 Profit and loss account (1,213,439) (882,923) (836,717) SHAREHOLDERS' FUNDS 15,278,991 5,626,935 15,651,216 CONSOLIDATED CASH FLOW STATEMENT For the six months ended 31 January 2003 Notes Unaudited Audited Six months Six months Year 31 January 31 January 31 July 2003 2002 2002 £ £ £ Cash flow from operating activities 5a 15,521 (36,441) 806,994 Returns on investments and servicing of finance (14,678) (191,470) (401,772) Taxation - - - Capital expenditure and financial investment (695,621) (2,488,159) (2,951,402) CASH OUTFLOW BEFORE FINANCING (694,778) (2,716,070) (2,546,180) Financing (7,134,154) 2,204,054 11,678,381 (DECREASE)/INCREASE IN CASH IN THE PERIOD (7,828,932) (512,016) 9,132,201 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT) 31 January 31 January 31 July 2003 2002 2002 £ £ £ Decrease in cash in the period (7,828,932) (512,016) 9,132,201 Change in net funds/(debt) resulting from cash flows 7,138,651 (2,217,433) (1,700,518) New finance leases - 13,379 - MOVEMENT IN NET FUNDS IN PERIOD (690,281) (2,716,070) 7,431,683 NET FUNDS BROUGHT FORWARD 2,979,914 (4,451,769) (4,451,769) NET FUNDS CARRIED FORWARD 5b 2,289,633 (7,167,839) 2,979,914 NOTES TO THE INTERIM RESULTS 1. BASIS OF PREPARATION The interim results have been prepared on the basis of the accounting policies as set out in the statutory financial statements for the year ended 31 July 2002. The interim results, which were approved by the Directors on 24 April 2003, are unaudited but have been reviewed in accordance with Auditing Practices Board bulletin 'Review of Interim Financial Information' by the auditors. The interim results do not constitute statutory financial statements within the meaning of section 240 of the Companies Act 1985. Comparative figures for the year ended 31 July 2002 are an abridged version of the Group's full accounts which carry an unqualified audit report and have been delivered to the Registrar of Companies. 2. EXCEPTIONAL ITEM An exceptional loss of £400,901 (2002: nil) arose on the sale of a freehold site in Swindon. The sale generated £1.1m of cash. 3. TAXATION There is no charge to corporation tax for the group due to the availability of brought forward trading losses. 4. EARNINGS PER ORDINARY SHARE The calculation of earnings per ordinary share is based on the loss for the period of £376,722 (year to 31 July 2002 - loss of £398,373, period to 31 January 2002 - loss of £445,079) and on the weighted average number of shares in issue during the period of 28,468,693 shares (31 July 2001- 22,081,169 shares; 31 January 2002 - 21,456,303). Fully diluted earnings per share includes shares held under the directors' option scheme and is based on a loss for the period of £376,722 (year to 31 July 2002 - loss of £398,373, period to 31 January 2002 - loss of £445,079) and on a weighted average number of shares during the period of 30,320,140 shares (31 July 2002 - 23,434,294 shares; 31 January 2002 - 23,268,373 shares). 5. CASH FLOWS Unaudited Audited 31 January 31 January 31 July 2003 2002 2002 £ £ £ a Reconciliation of operating profit to net cash flow from operating activities Operating profit/(loss) 38,858 (253,608) 2,899 Depreciation 308,039 210,494 481,598 Amortisation 12,127 12,127 24,255 Loss/(Profit) on disposal of fixed assets 3,178 (115) (115) Decrease/(Increase) in stocks (36,015) 314 (21,719) Decrease/(Increase) in debtors 238,576 196,182 (252,633) (Decrease)/Increase in creditors (542,428) (201,835) 572,709 Exceptional item (6,814) - - Net cash flow from operating activities 15,521 (36,441) 806,994 At Other non- At 31 July 2002 Cash flow cash changes 31 Jan 2003 £ £ £ £ b Analysis of net funds/(debt) Cash at bank and in hand 10,127,340 (7,828,932) - 2,298,408 Debt due within one year - - - Debt due after one year (7,130,998) 7,130,998 - - Finance leases (16,428) 7,653 - (8,775) TOTAL 2,979,914 (690,281) - 2,289,633 INDEPENDENT REVIEW REPORT TO LOK'N STORE GROUP PLC Introduction We have been instructed by the company to review the financial information set out on pages 4 to 8 and we have read the other information contained in the interim report and considered whether it contains any apparent misstatements or material inconsistencies with the financial information. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by the directors. The Listing Rules of the Financial Services Authority require that the accounting policies and presentation applied to the interim figures should be consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4 issued by the Auditing Practices Board. A review consists principally of making enquiries of group management and applying analytical procedures to the financial information and underlying financial data and based thereon, assessing whether the accounting policies and presentation have been consistently applied unless otherwise disclosed. A review excludes audit procedures such as tests of controls and verification of assets, liabilities and transactions. It is substantially less in scope than au audit performed in accordance with Auditing Standards and therefore provides a lower level of assurance than an audit. Accordingly we do not express an audit opinion on the financial information. Review conclusion On the basis of our review we are not aware of any material modifications that should be made to the financial information as presented for the six months ended 31 January 2003. BAKER TILLY Chartered Accountants 2 Bloomsbury Street London WC1B 3ST 24 April 2003 This information is provided by RNS The company news service from the London Stock Exchange

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