Preliminary Results
Lok'n Store Group PLC
31 October 2005
31st October 2005
LOK'nSTORE GROUP PLC ('Lok'nStore' or 'the Company')
Preliminary Results for the year ended 31 July 2005
Lok'nStore Group plc, one of the leading players in the fast growing
self-storage market, announces Preliminary Results for the year ended 31 July
2005.
Financial Highlights
• Turnover £7.77 million - up 17.6%
• EBITDA £1.36 million - up 68%
• Operating cash flow £1.98 million - up 112%
• Storage centres EBITDA £2.48 million - up 41%
• Operating Profit £607,000 up from an operating loss
• New £20 million banking facility
• Properties valued at £33.6 million at 31.01.05 (NBV £18.4 million)
Operational Highlights
• Increased occupancy by 83,417 sq ft. - up 17.7%
• Number of customers 6,715 up 20.6%
• Good sales growth in established and new storage centres
• Opened Tonbridge centre
• Building Farnborough centre
• Acquired Crayford centre
• Increased capacity to 920,000 sq ft.
• Planning permission achieved for high density residential at
Kingston site
• 11 Freeholds:10 Leaseholds
Andrew Jacobs, Chief Executive Officer commented:
'Lok'nStore has again made excellent progress.
'Operating performance has continued to improve, we have enhanced the value of
our existing centres and we have acquired new sites. Our new £20 million bank
facility combined with the increased value of our properties provide the Company
with financial firepower and flexibility.
'The acquisition and build-out of sites in Farnborough and in Crayford, and the
continued investment in our existing centres, reflect our positive view of the
market, and we are looking forward to opening these two highly visible new
centres around the turn of the year.
'The UK self-storage market continues to offer an unrivalled combination of
predictable profits and potential for growth. Lok'nStore's proven ability to
expand steadily within this market gives us confidence in the future performance
of the Company.
'Lok'nStore's market position, leading brand, and active management team are
producing robust and growing cashflows and improving asset values. This will
continue to deliver substantial growth in shareholder value.'
Press Enquiries:
Andrew Jacobs, CEO, Lok'nStore Tel: 020 8547 2288
Ray Davies, Finance Director, Lok'nStore Tel: 020 8547 2288
Jonathon Brill/ Billy Clegg Financial Dynamic Tel: 020 7831 3113
CHAIRMAN'S STATEMENT
OVERVIEW
I am pleased to report that Lok'nStore has again made good progress against its
stated objectives. The operating performance of our existing centres has
continued to improve. We have increased the value of our existing centres and
we have acquired new sites. During the year we have revalued all of our
properties and signed a new £20 million bank facility.
Lok'nStore's focus on growth has again underpinned satisfactory results.
Enquiries, turnover, profits and operating cash in flows have all increased.
The acquisition and build-out of sites in Farnborough and in Crayford, and the
continued investment in our existing centres, reflect our positive view of the
market. We are looking forward to opening these two highly visible new centres
around the turn of the year.
We believe that the UK self-storage market offers great potential for
Lok'nStore.
SALES AND EARNINGS GROWTH
Turnover for the year was £7.77 million (2004: £6.61 million), an increase of
17.6%, with annualised revenues now reaching £8.48 million demonstrating the
continued growth of the business. The Group made an operating profit for the
year of £606,961 compared with a loss of £5,733 in 2004. The Group made a
pre-tax profit for the year of £114,325 compared with a loss of £169,104 in
2004.
Demonstrating the growing cash-flow of the operating business, EBITDA from the
storage centres was £2.48 million and cash flow from operating activities grew
from £0.93 million to £1.98 million.
At 31 July 2005, the number of customers had risen to 6,715 from 5,566 at 31
July 2004, an increase of 20.6% over the year.
Our established centres have continued to grow alongside the more rapid sales
increases at our newest centres. Centres trading for more than 250 weeks grew
(snapshot) revenue by 9.7 %, centres with 100 to 250 weeks' trading grew 22.2%,
while newer centres trading for less than 100 weeks grew at 113%.
Lok'nStore's 11 most established centres (over 250 weeks old) made EBITDA
margins of 48%, demonstrating the strong underlying profitability of the
business.
DIVIDEND
The directors do not recommend the payment of a dividend, however the Board will
keep this matter under periodic review.
NEW CENTRES
During the year we opened a new centre in Tonbridge, obtained planning
permission and started construction on our new centre in Farnborough, and
acquired a new centre in Crayford. They are all located in attractive markets
with high visibility and provide 167,000 net sq. ft. This will take the total
number of our centres to 21 with 920,000 sq. ft. of net storage space when fully
completed.
Following the exercise of an option to purchase the freehold of our Poole
centre, we have now fitted out a further 12,000 net sq. ft. providing the centre
with total capacity of 64,000 sq. ft.
Our objective continues to be to increase our number of centres within the
current geographical coverage of South-East England.
PROPERTY ASSETS
Our trading freehold and leasehold centres were valued at 31 January 2005.
This report valued our trading properties at £31.84 million. Including the
Farnborough site, the total valuation is £33.6 million compared to a net book
value of £18.4 million. These valuations do not include any uplift for
alternative use with planning permission obtained at Kingston, nor do they
include the value of the Crayford site, other investment in established centres
since January 2005, or the build-out costs at Farnborough.
During the year we were pleased to obtain planning permission for a high-density
residential development at our existing Kingston site. The permission is for 124
flats and a new 7,000 square feet GP's surgery. This potentially creates much
greater value than can be obtained as a self-storage site. The management are
making progress towards realising this value.
NEW BANK FACILITY
Lok'nStore Group plc has agreed a new £20 million revolving credit facility at a
reduced interest margin. The new facility replaces the previous £10 million
facility and provides sufficient additional liquidity for the Group's immediate
expansion plans. Interest payable on the loan is on improved terms, paying
between 1.25% and 1.35% over LIBOR.
The facility is secured on the existing self-storage portfolio, excluding the
Kingston and Reading properties. Following the signing of this new facility, the
management is confident that the Group has full flexibility to maximise the
value of any potential exit or realisation of these two redevelopment
opportunities and that the Group is in a position to continue to grow its
self-storage business.
SELF-STORAGE IN THE UK
The UK self-storage market continues to grow rapidly and offers a great
opportunity, particularly to the major operators with specialist skills.
The more mature US market, grew from 2.9 sq. ft. per member of the population in
1994 to 5 sq. ft. in 2004. Despite this increase in capacity, the average weekly
price for a 100 sq ft. unit has increased by 45% between 2000 and 2004*. (*
Source: Pramerica Real Estate Investors) The population density of the US is
only 32 per square kilometre against 246 in the UK. This creates far more
pressure to use property resources efficiently in the UK, which is a driver of
demand for self-storage.
Lok'nStore is now one of only two quoted storage operators in the UK, ranked
fourth in size in the UK and sixth in Europe.
LOK'NSTORE PEOPLE
Andrew Jacobs, as Chief Executive Officer, is supported by an experienced
executive team. Our storage centre personnel are committed and motivated and
help maintain the levels of friendly service that Lok'nStore gives its
customers, which, we believe, is exemplary.
I would therefore like to thank all of the people who work both in our head
office and in our centres for their commitment to our business and for their
hard work. Their continued efforts will provide us with the necessary platform
for our ongoing success.
OUTLOOK
The self-storage market continues to offer an unrivalled combination of
predictable profits and potential for growth. Lok'nStore's proven ability to
expand steadily within this market gives us confidence in the future performance
of the Group. Growing turnover from existing centres and growth in the number of
centres are combining to produce attractive growth and profits.
Our priorities are to further improve the operating performance of existing
centres; to enhance the value of existing centres; to grow the number of
centres; and to optimise the Group's capital structure.
I believe that Lok'nStore's market position, leading brand, and active
management team will continue to deliver substantial growth in shareholder
value.
Simon Thomas
Chairman
OPERATING REVIEW
SALES PERFORMANCE
We have continued to raise operational standards and to focus centre personnel
on taking responsibility for increasing turnover. This work has continued to
improve the consistency of performance across the centres. Our central sales
team are now running more frequent and improved sales training courses. In
addition, we regularly review the bonus scheme to link performance and reward
more directly to turnover growth and consistently high quality customer service.
As a result our conversion ratio of enquiries into customers remains very high.
During the year we increased occupied space by 83,417 sq. ft. (17.7%), with
total occupied space at 31 July 2005 of 555,445 sq. ft. (2004: 472,028 sq ft).
We have included a table summarising the trading performance of all our centres
over the year, analysed between centres open less than 100 weeks, between 100
and 250 weeks, and more than 250 weeks at the end of the period.
Both first generation, converted buildings and modern, well-located centres
continue to show good growth. The lower cost base associated with the older
converted buildings ensures that they generate returns equal to the more highly
specified, but higher cost base new centres. Also, encouragingly, revenue
occupancy of these 11 older centres (over 250 weeks) increased 9.7% on the year.
We believe there is room for further increases with new space still to be fitted
out in some of these centres in addition to improving income from existing
space.
Lok'nStore's established centres (over 250 weeks old) achieved EBITDA margins of
48%.
During the year we opened our new Tonbridge centre, bringing the number of
centres trading to 19. Total capacity is currently 792,000 sq. ft. With the new
centres at Crayford and Farnborough coming on stream in Winter 2005/06 the
number of centres trading will be 21 and will increase total capacity to 920,000
sq. ft.
14 of the centres are now trading profitably at the pre-tax level (2004: 12) and
17 have positive operating cash flow (2004: 14).
Packing materials, insurance and other sales increased 11% over the year
accounting for 7.7% of turnover.
MARKETING
The Company spent approximately 6.4% of turnover on advertising and marketing
(including postage, printing and stationery) (2004: 7.7%). Our marketing costs
should remain at these levels over the coming years. Marketing resources and
efforts have been upgraded, and this contributed to Lok'nStore achieving another
excellent increase in occupancy over the year of 83,417 sq. ft, up 17.7% on the
previous year, whilst reducing pro-rata costs.
We are still reviewing new and better opportunities in the media and through
local marketing efforts and each of these shows progress. New centres will
benefit from the marketing and promotion effort already applied to our existing
centres.
Work on centre visibility is also improving response to our marketing. Our new
Farnborough centre with its prominent design and position adjacent to the M3
motorway will help to raise the profile of thewhole Lok'nStore brand. We are
conspicuous in our directory advertising, which is targeted in all of the areas
in which our stores operate, and produces a significant proportion of our
enquiries.
We apply coordinated sales and marketing messages and our storage centre
personnel are as involved as our head office, which ensures our expenditure
remains effective.
SYSTEMS
During the year we have increased the penetration of direct debit facilities,
which reduces the administrative burden and use of paper and postage at the
centres, as well as being a positive service to our customers and reducing the
time committed to credit management.
The current focuses are on greater systems centralisation, greater audit
capability and a continued focus on efficient and timely data.
The new centre audit system has been effective in terms of improved security,
credit control and centre presentation.
SECURITY ISSUES
The safety and security of our customers and centres remains a high priority.
With today's heightened terrorist concerns this is of particular importance. We
already invest in CCTV systems, intruder and fire alarm systems and the remote
monitoring of our centres out of hours and we have rigorous security procedures
in relation to customers.
Furthermore, we are currently reviewing our security resources and we are
upgrading our security in line with up-to-date equipment, for example, colour
CCTV monitors of greater capability and detail.
The importance of security and the need for vigilance is communicated to all
personnel and reinforced through our various training procedures.
OUR PEOPLE
At 31 July 2005, we had 94 employees.
Attracting, retaining and encouraging the right people is key to the success of
Lok'nStore. We are committed to providing a positive attitude in the business
and an enjoyable working environment. Lok'nStore encourages all personnel to
build their skills through appropriate training and regular performance
monitoring. Regular training courses support these objectives.
All employees are eligible to participate in share ownership plans after 3
months of employment and 38% of our employees have EBT shares or options. 45% of
the personnel are members of the contributory pension scheme.
I would like to thank all of our people for their contribution to a successful
year. The continuing progress of the Group is being achieved as a result of
their efforts and hard work.
PROPERTY AND CONSTRUCTION
The total portfolio of centres and sites is now 21, of which 11 are held
freehold. We prefer to acquire freeholds if possible, and where opportunities
arise we will seek to acquire the freehold of our leasehold centres. Indeed, we
achieved the early exercise of our option to purchase the freehold interest in
our Poole centre during the year, and this also allowed an expansion of the
space available by12,000 sq. ft. to a total of 64,000 sq. ft.
However, our overriding objective is to increase the number of storage centres
we operate and we are comfortable to take leases on appropriate terms.
Our new Farnborough Centre is a freehold and will be our first purpose-built
centre. It will open in January 2006. Our new freehold centre in Crayford is
currently being fitted out and is expected to open in December 2005. These
centres are located within our existing geographical coverage and will be
managed by our existing sales team.
The Company continues to focus on the efficiency of our fitting out programme in
order to bring forward the revenue stream and maximise our rate of return. We
optimise the available space in new centres by fitting mezzanine floors and
storage units as customer demand dictates. This allows revenue to be generated
by utilising open storage space, and thereby keeping tighter control on capital
expenditure until it is required. Over the year under review we fitted out a
further 67,000 sq. ft. of self-storage units.
Subject to market conditions, it is our current aim to acquire between 2 and 4
centres per annum. Our current average centre size is around 40,000 net sq. ft.
and this may increase for new centres up to 60,000 net sq. ft. The exact timing
of centre openings will largely depend on market availability, and we will
retain our disciplined and flexible approach to site acquisition.
CENTRE ANALYSIS
MATURITY ANALYSIS Jul-05
Weeks Old over 250 100 to 250 under 100 To be opened Total
in 2005/06
Sales (£'000) 4,813 2,398 437 7,648
Stores EBITDA (£'000) 2,307 349 -179 2,477
EBITDA MARGIN (%) 47.9 14.6 -41.0 32.4
Maximum Net Area 423 289 80 128 920
('000 sq ft)
Freehold 7 2 0 2 11
Leasehold 4 4 2 0 10
Total Centres 11 6 2 2 21
CUSTOMER ANALYSIS
At the end of July 42.6% of our turnover was from business customers (28.6% by
number) and 57.4% was from household customers (71.4% by number).
Andrew Jacobs
Chief Executive Officer
FINANCIAL REVIEW
TRADING
During the financial year Lok'nStore has shown 17.6% growth in turnover to £7.77
million (2004: £6.61m). The continuing growth during the year and since the
year-end is shown by the increase in annualised turnover to £8.48 million.
Demonstrating the cash generative nature of the business, EBITDA was up 68% to
£1.36 million (2004: £0.81 million before exceptional items). Operating profit
increased to £606,961 (2004: Loss: £5,733).
There were no exceptional costs this year (2004; £127,407).
Credit control remains tight with £36,000 of bad debts written off during the
year representing less than 0.5% of turnover.
The net interest charge increased from £162,501 to £492,636. This increase is a
consequence of the Group utilising its bank facilities to acquire the freehold
sites at Farnborough and Crayford, the continuing fit-out programme at our
existing stores, and the full year effect of the share buy back implemented in
March 2004. Year-end borrowings of £8.15 million together with outstanding
expenditure on the Farnborough and Crayford build-outs mean that the interest
charge will rise significantly next year on a full-year charge.
The Group made a profit on ordinary activities before tax of £114,325 (2004:
£169,104 Loss)
No charge to corporation tax arises as a result of the Group's tax loss in the
year. Tax losses available to carry forward for offset against future profits
amount to some £3 million. In addition the business had capital losses available
to carry forward of £362,636.
Basic earnings per share was 0.47 pence per share (2004: loss of 0.16 pence per
share before exceptional items: loss of 0.64 pence per share after exceptional
items).
BORROWINGS AND CASH FLOW
Cash flows from the Group remain encouraging, with increasing cash flows as
turnover increases continuing to demonstrate the cash generative nature of the
business. The Group had cash balances at the year-end of £0.42 million (2004:
£0.65 million).
Cash Inflow from operating activities before interest and capital expenditure
was £1.98 million, compared to £0.93 million for 2004. Capital expenditure
totalling some £2.6 million reflects the Group's commitment to growing its
business through a combination of site acquisition and related works (£1.1
million) and investing in our existing stores (£1.5million). At 31 July 2005,
the Group had £8.15 million of borrowings representing gearing on a NBV basis of
72% on net debt of £7.73 million. Gearing, when adjusted on the basis of the
Group's revalued stores, drops to 22%.
BUYBACK AUTHORITY
At the Company's AGM on 16 December 2004, shareholders gave approval to replace
the existing share buy-back authority. This authority will be sought annually
at the Company's annual general meeting each year. The authority is restricted
to a maximum of 5,845,299 Ordinary Shares, which is equivalent to 23.3% of the
Company's issued share capital and is equal to the number of shares available
for purchase under the previous authority. The buy-back authority will only be
exercised in circumstances where the Directors regard such purchases to be in
the best interests of Shareholders as a whole and is subject to the waiver of
Rule 9 by the Panel of Takeovers and Mergers being approved by the Shareholders.
The total number of shares in issue is 25,071,144 Ordinary Shares.
BALANCE SHEET
Net assets at the year-end increased to £10.7 million (2004: £10.6 million).
The Employee Benefit Trust owns 627,500 (2004: 627,500) shares, the costs of
which are shown as a deduction from shareholders' funds in accordance with
Urgent Issues Task Force Abstract 38.
On 31 January 2005, professional valuations were prepared by external valuers,
Cushman & Wakefield Healey & Baker, ('CWHB') in respect of all trading freehold
and leasehold properties as operational self-storage businesses. The freehold
land at Farnborough, acquired on 30 July 2004, was not valued on this occasion,
as building works had not commenced.
This Report was prepared on the basis of Market Value/Existing Use Value, having
regard to its trading potential as appropriate, in accordance with RICS
Appraisal and Valuation Standards, but on the special assumption that any
potential for residential development was excluded. (See note 11 in the notes to
the accounts for a more detailed description of valuation methodology).
The Report indicates a total for properties valued of £31.84 million. Including
Farnborough, (NBV £1.76 million), this gives a total value of properties held of
£33.6 million (NBV £18.4 million). These valuations have not been included in
the Balance Sheet. These valuations do not account for any further uplift in
values, which would result from the planning permission achieved for residential
at the Kingston site, nor any successful outcome of the planning application for
residential at the Reading site. These valuations also do not account for any
further uplift arising from the acquisition of the Crayford site or further
investment in existing centres since January 2005 and in particular the further
build-out works to the Farnborough centre, which is under development. While the
Company does not envisage routinely revaluing its properties it will do so when
appropriate.
PROPERTY ASSETS £ million
Valuation NBV
Properties valued 31.01.2005 by 'CWHB' 31.84 16.69
Farnborough - at cost 1.76 1.76
Total £33.6 £18.45
Uplift 31 Jan 05 31 Jan 04
% £m £m
Valuation (8 freehold Centres) 13.6 22.84 20.10
Over the years Lok'nStore has acquired the freehold interest in previously
leased centres at Horsham, Reading and Poole. This tactical approach combines
the early cash flow advantages of leasehold centres with the long-term income
security and investment potential of freeholds. 8 of our 10 leaseholds are
within the terms of the 1954 landlord and tenant act giving a degree of security
of tenure. The average length of the leases was 11.1 years at the date of the
2005 Valuation. (Source: 'CWHB')
FINANCING & LIQUIDITY
The Company has signed a new £20 million revolving credit facility at a reduced
interest margin for the Group. The new facility replaces the previous £10
million facility and provides sufficient additional liquidity for the Group's
immediate expansion plans. Interest payable on the loan is on improved terms,
paying between 1.25% and 1.35% over LIBOR. Non-utilisation charges have also
been reduced to 0.25% on the value of the undrawn facility. Undrawn committed
facilities at the year-end amounted to £11,850,000.
The facility is secured on the existing self-storage portfolio, excluding the
Kingston and Reading properties. This ensures that the Group has full
flexibility to maximise the value of any potential exit or realisation of these
two redevelopment opportunities, as well as using the proceeds in the best
interests of Shareholders.
The £20 million revolving credit facility agreed with The Royal Bank of Scotland
Plc is a five-year committed facility and during the year the Company complied
with all corresponding debt covenants.
TREASURY
All cash deposits are placed with Royal Bank of Scotland Plc on treasury deposit
utilising either one-day or two-day money funds. The Group's cash position is
reviewed daily and cash is transferred daily between these accounts and the
company's operational current accounts as required. During the year the company
obtained improved terms on its treasury deposit rates.
Ray Davies
Finance Director
CONSOLIDATED PROFIT AND LOSS ACCOUNT
for the year ended 31 July 2005
Notes 2005 2004
£ £
TURNOVER 7,774,541 6,611,911
Operating expenses (7,167,580) (6,617,644)
OPERATING PROFIT/(LOSS) 606,961 (5,733)
Loss on disposal of fixed assets - (870)
Interest receivable 35,898 36,950
PROFIT ON ORDINARY ACTIVITIES 642,859 30,347
BEFORE INTEREST PAYABLE
Interest payable (528,534) (199,451)
PROFIT / (LOSS) ON ORDINARY 114,325 (169,104)
ACTIVITIES BEFORE TAXATION
Taxation 3 - -
PROFIT /(LOSS) FOR THE YEAR 8 114,325 (169,104)
EARNINGS PER SHARE
Basic 4 0.47p (0.64p)
Diluted 4 0.44p (0.64p)
BALANCE SHEETS - 31 July 2005
Group Group Company Company
Notes 2005 2004 2005 2004
£ £ £ £
FIXED ASSETS
Intangible assets 5 359,068 383,323 - -
Tangible assets 20,032,760 18,162,957 - -
Investments 6 - - 214,563 214,563
20,391,828 18,546,280 214,563 214,563
CURRENT ASSETS
Stocks 88,648 103,880 - -
Debtors 1,684,793 1,948,711 6,025,331 5,994,621
Cash at bank and in hand 424,738 654,361 - -
2,198,179 2,706,952 6,025,331 5,994,621
CREDITORS: Amounts falling (3,736,384) (3,094,644) - -
due within one year
NET CURRENT (1,538,205) (387,692) 6,025,331 5,994,621
(LIABILITIES)/ASSETS
TOTAL ASSETS LESS 18,853,623 18,158,588 6,239,894 6,209,184
CURRENT LIABILITIES
CREDITORS: Amounts falling (8,150,000) (7,600,000) - -
due after more than one year
10,703,623 10,558,588 6,239,894 6,209,184
CAPITAL AND RESERVES
Called up share capital 7 250,711 250,481 250,711 250,481
Share premium account 8 51,976 21,496 51,976 21,496
Capital redemption reserve 8 34,205 34,205 34,205 34,205
Merger reserve 8 6,295,295 6,295,295 - -
Other distributable reserve 8 5,903,002 5,903,002 5,903,002 5,903,002
Profit and loss account 8 (1,321,980) (1,436,305) - -
ESOP shares 9 (509,586) (509,586)
- -
SHAREHOLDERS' FUNDS 10,703,623 10,558,588 6,239,894 6,209,184
CONSOLIDATED CASH FLOW STATEMENT
31 July 2005
Notes 2005 2004
£ £
Cash flow from operating activities 10a 1,983,832 934,854
Returns on investments and servicing of finance 10b (500,901) (122,163)
Taxation - -
Capital expenditure and financial investment 10b (2,293,945) (5,429,344)
CASH OUTFLOW BEFORE FINANCING (811,014) (4,616,653)
Financing 10b 581,392 4,169,204
DECREASE IN CASH IN THE PERIOD (229,622) (447,449)
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)
Notes 2005 2004
£ £
Decrease in cash in the period (229,622) (447,449)
Cash inflow from increase in debt and lease financing (549,852) (7,597,153)
MOVEMENT IN NET (DEBT)/FUNDS IN PERIOD (779,474) (8,044,602)
NET (DEBT) / FUNDS AT 1 AUGUST (6,945,788) 1,098,814
NET DEBT AT 31 JULY 10c (7,725,262) (6,945,788)
NOTES TO THE FINANCIAL STATEMENTS
1 ACCOUNTING POLICIES
The above results for the year ended 31 July 2005 are an abridged version of the
Company'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 2004.
2 EXCEPTIONAL ITEMS
2005 2004
£ £
Termination payments - 20,246
Professional fees re bid approach - 38,600
Director's compensation for loss of office - 68,561
- 127,407
3 TAXATION
There is no Corporation Tax or deferred tax charge due to the availability of
accumulated losses.
The tax assessed is lower than the standard rate of corporation tax in the UK
(30%). The differences are explained below:
2005 2004
£ £
Profit / (Loss) on ordinary activities before tax 114,325 (169,104)
Profit / (Loss) on ordinary activities multiplied by the standard 34,298 (50,731)
rate of corporation tax in the UK of 30% (2004 - 30%)
Expenses not deductible for tax purposes 15,295 7,492
Capital allowances for period in excess of depreciation (82,429) (52,506)
Accounting loss on disposal of capital assets - -
Tax losses not utilised 60,552 95,745
General provision (203) -
Deduction for employee share options (23,277) -
Depreciation on revenue items (4,236 -
Current tax charge for the period - -
The Group has revenue tax losses of approximately £3 million available to carry
forward against future taxable profits of the same trade. No value is ascribed
to these losses, due to the uncertainty as to the utilisation of the losses in
the foreseeable future.
Future tax charges may be affected by the degree to which deferred tax assets
are subject to recognition in the future.
It is not the intention of the directors to dispose of any of the properties as
operational self-storage centres in the foreseeable future. If, however, the
properties were sold at their market values as operational self-storage centres
as disclosed in note 11, an estimate of the tax payable on the gain arising
would be approximately £3m. This tax payable figure does not take into account
any claims to rollover relief that the company might make. At present, it is
not envisaged that any tax will become payable in the foreseeable future.
4 EARNINGS PER ORDINARY SHARE
The calculations of earnings per share are based on the following profits and
numbers of shares.
2005 2004
£ £
Profit / (Loss) for the financial year before exceptional 114,325 (41,697)
items
Profit / (Loss) for the financial year 114,325 (169,104)
2005 2004
No. of shares No. of shares
Weighted average number of shares or basic earnings 24,432,491 26,300,997
per share
Exercise of share options 1,414,688 1,135,584
For diluted earnings per share 25,847,179 27,436,581
5 INTANGIBLE FIXED ASSETS
Purchased
Goodwill Total
GROUP £
Cost
1 August 2004 485,093
Additions -
31 July 2005 485,093
Amortisation 101,770
1 August 2004
Charged in year 24,255
31 July 2005 126,025
Net book value
31 July 2005 359,068
31 July 2004 383,323
6 INVESTMENTS
COMPANY Shares in subsidiary
undertakings
£
Cost: At 1 August 2004 and 31 July 2005
Lok'nStore Limited 214,563
The Company holds more than 20% of the share capital of the following companies,
all of which are incorporated in England and Wales:
Subsidiary undertakings Class of % of shares held
shareholding Directly Indirectly Nature of business
Lok'nStore Limited Ordinary 100 - Self-storage
Lok'nStore Trustee Limited Ordinary - 100 Trustee Company
7 SHARE CAPITAL
2005 2004
£ £
Authorised:
35,000,000 ordinary shares of 1p each (2004: 35,000,000) 350,000 350,000
Allotted, issued and fully paid ordinary shares:
Number of shares £
At 31 July 2004 25,048,144 250,481
Options exercised 23,000 230
At 31 July 2005 25,071,144 250,711
During the year, options were exercised on 23,000 ordinary shares at 37 pence per share and that number of shares were
issued for a consideration of £8,510.
At the Company's AGM on 16 December 2004, shareholders gave approval to replace the existing share buy-back authority
and this authority will be subsequently renewed annually at the Company's annual general meeting each year thereafter.
The authority is restricted to a maximum of 5,845,299 Ordinary Shares, which is equivalent to 23.3% of the Company's
issued share capital and is equal to the number of shares available for purchase under the previous authority. The buy-
back authority will only be exercised in circumstances where the Directors regard such purchases to be in the best
interests of Shareholders as a whole and is subject to the waiver of Rule 9 by the Panel of Takeovers and Mergers being
approved by the Shareholders.
8 RESERVES
Other Capital
Share Merger Distributable Redemption Profit and
premium reserve reservee reserve loss account Total
£ £ £ £ £ £
1 August 2004 21,496 6,295,295 5,903,002 34,205 (1,436,305) 10,817,693
Exercise of Share Options 30,480 - - - - 30,480
Profit for the year - - - 114,325 114,325
31 July 2005 51,976 6,295,295 5,903,002 34,205 (1,321,980) 10,962,498
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.
9 ESOP SHARES
Group Group Group Group
2005 2004 2005 2004
Number Number £ £
1 August 2004 627,500 1,127,500 509,586 1,023,886
Purchased in the year - - - -
Sold in the year - (500,000) - (514,300)
31 July 2005 627,500 627,500 509,586 509,586
The ESOP shares are held by the employee benefit trust. The disposals in 2004
arose from the Group's buyback of shares.
10 CASH FLOWS
A 2005 2004
£ £
Reconciliation of operating profit to net cash inflow from
operating activities
Operating profit / (loss) 606,961 (5,733)
Depreciation 728,522 664,153
Amortisation 24,255 24,255
Decrease / (increase) in stocks 15,232 (2,097)
Decrease / (increase) in debtors 263,089 (420,932)
Increase in creditors 345,773 675,208
Net cash flow from operating activities 1,983,832 934,854
2005 2004
B £ £
Analysis of cash flows for headings netted in the
cash flow
Returns on investments and servicing of
finance
Interest received 35,898 36,950
Interest paid (536,757) (158,319)
Interest element of finance lease rental payments (42) (794)
Net cash outflow for returns on (500,901) (122,163)
nvestments and servicing of finance
Capital expenditure and financial
investment
Purchase of tangible fixed assets (2,293,945) (5,429,644)
Proceeds from sale of tangible fixed assets - 300
Net cash outflow for capital expenditure (2,293,945) (5,429,344)
and financial investment
Financing
Bank loans 550,000 7,600,000
Capital element of finance lease rental payments (148) (2,847)
Exercise of share options 31,540 17,000
Purchase of own shares (incl. costs) - (3,444,949)
Net cash inflow from financing 581,392 4,169,204
C Analysis of net debt
At Other non At
31 July 2004 Cash flow cash changes 31 July 2005
£ £ £ £
Cash at bank and in hand 654,360 (229,622) - 424,738
Debt due after 1 year (7,600,000) (550,000) - (8,150,000)
Finance leases (148) 148 -
-
Total (6,945,788) (779,474) - (7,725,262)
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