Lok'nStore first-half profit jumps 156%

AIM-listed self-storage company Lok’nStore Group reported a 155.5% jump in first-half profit as revenue grew and costs declined.

In the six months to the end of January, pre-tax profit rose to £3.79m from £1.48m in the same period last year, on revenue of £7.99m, up 4.7%.

The group attributed the increase in revenue to occupancy and price growth, and said that with with operating and finance costs reduced in the period profit margins rose both at the store and group level.

As a result, adjusted earnings before interest, taxes, depreciation and amortisation were up 13.1% to £3.3m.

Funds from operations grew to £3.1m from £2.5m and the company declared an interim dividend of 2.67p per share, up 14.6% from the year before.

Chief executive officer Andrew Jacobs said: “With revenue up and costs down Lok'nStore's profits have continued to grow robustly. We are investing in the future growth of the business with more new landmark stores. Our low level of debt means that this rapid development programme can be financed from cash flow and existing bank facilities, while progressively increasing the dividend.

"Our new store development programme continues to change the balance of our store portfolio with new and purpose built stores accounting for 59% of our portfolio. New stores in Chichester, Southampton and Bristol will add impetus to sales and earnings growth, and our pipeline of 4 new stores will reinforce this further."

In January, Lok’nStore secured a new banking facility with Royal Bank of Scotland on significantly improved terms. The new £40m five-year revolving credit facility replaces the existing facility which was due to expire in October and will provide funding for site acquisitions and working capital.

The interest margin, non-utilisation fee and arrangement fee have all been significantly reduced leading to a large cash saving over the life of the facility.