Completion of Reading site disposal

RNS Number : 7493X

Lok'nStore Group PLC

24 November 2014

 



24^th November 2014

Lok'nStore Group plc

("Lok'nStore" or the "Company")

Completion of Reading site disposal - £2.9m cash payment received

Conditional sale of Portsmouth north harbour site for £3m

The Board of Lok'nStore Group, the fast growing self-storage company, is pleased to announce the completion of the disposal of the Company's former storage site in Reading to a residential developer. The Company has received a cash payment of £2.9m for the site and further payments may be received depending on the value of residential sales achieved on the site. The existing customers have now been transferred into the adjacent new store which provides 48,000 square feet of space in a highly prominent location on the main A33 relief road.

In addition, the Company is pleased to announce the sale of the Company's undeveloped site at Portsmouth north harbour for £3m, the same level as the July 31^st 2014 valuation. The disposal is conditional on the buyer achieving appropriate planning permission which could take up to 18 months.

Andrew Jacobs CEO of Lok'nStore said:

"We are delighted to have completed the Reading disposal which largely funds the development of the new store there. We have transferred our customers to our adjacent purpose built storage facility which almost the doubles the space available to the store. We are positive about the potential for this new store.  

"The conditional sale of the Portsmouth site will also help to fund the new stores in Southampton and Bristol which will open next year."  

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Press Enquiries Andrew Jacobs, CEO	Lok'nStore Group plc	Tel: [phone]
Ray Davies, CFO	Lok'nStore Group plc
Billy Clegg/ Tom Huddart	Camarco	Tel: [phone]
Julian Blunt/Christopher Raggett, Corporate Finance Victoria Bates, Corporate Broking	finnCap Ltd	Tel: [phone]

Notes to editors

Lok'nStore is one of the leading companies in the fast growing UK self-storage market, currently operating 24 highly visible, distinctive orange livery self-storage centres in prominent locations in South-East England and two serviced document storage sites.  Lok'nStore has started a programme of opening five new stores in Maidenhead, Reading, Aldershot (managed store), Southampton and Bristol.

Lok'nStore employs 143 people; 12 of the centres are freehold accounting for 84% of the valuation; and in the self-storage business 33% of revenue is from business customers and 67% is from household customers. Total self-storage trading space (owned stores) will be 1.1 million square feet once these projects are complete.

The self-storage market in the UK is set to grow with to 0.5 square feet per person, compared to 7.3 square feet per person in the USA (Self-Storage Association 2014 UK Annual Survey). There are high barriers to entry in the UK in terms of competition for suitable sites and the difficulties in securing appropriate planning consents which helps reinforce the stability of returns available. 

The Company's strategy to continue to increase profits over the coming years focusses on:

Ø Filling existing stores and improving pricing

Ø Developing new stores on a self-funded basis 

Ø Opportunistic site acquisitions 

Ø Increasing the number of stores managed for third parties

Ø Developing document storage offering through organic growth

The strong performance of the business since 2008 despite a generally poor economy is testament to its underlying resilience. In the year to 31 July 2014, Lok'nStore reported record results with revenue of £13.91 million up 7.2%, adjusted EBITDA of £4.62million up 11.6% and an annual dividend of 7 pence per share up 16.7%.

Lok'nStore has robust asset backing with an adjusted Net Asset Value per share of £2.71 and net debt of just £25.5 million as at 31^st July 2014, with a loan to value ratio of 28.2%.

 

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