Lok'nStore reports robust same-store performance

Self-storage operator Lok’nStore reported a robust performance in its preliminary results on Monday, as same-store self-storage revenue increased 12.1% to £25.3m.

The AIM-traded firm said same-store self-storage adjusted EBITDA was 4% firmer year-on-year for the 12 months ended 31 July at £14.5m.

Overall revenue reached £27.1m, up 0.9% over the prior year, while group adjusted EBITDA declined 7.9% to £15.1m.

The board reported a 6.8% increase in pricing to £27.37 per square foot, a closing occupancy rate of 80.6% in stores over three years old - down from 82.9% in 2022 - a 4.9% year-on-year increase in move-ins, and managed store recurring revenue of £1.5m, up 11.9% on the year.

Same Store EBITDA margins, while slightly lower, remained robust at 57.2% compared to 61.3% in the prior year.

Lok’nStore continued its track record of dividend increases, making its 12th consecutive hike with a 10.1% uplift in the annual dividend to 19p per share.

The net asset value per share increased 1.4% to £9.86.

Lok’nStore said its approach to capital allocation resulted in a strong balance sheet and reduced net debt, noting that an equity raise of £20.5m in July, combined with a year-end cash balance of £42.1m - down from £46.5m in 2022 - brought net debt excluding lease liabilities and deferred finance costs down to £12.3m, with a loan-to-value ratio net of cash of 3.7%, compared to 6.6% a year earlier.

Looking ahead, Lok’nStore said its pipeline of new ‘landmark’ stores, which added 108,890 square feet of owned space and three more stores set to add over 162,000 square feet of trading space, positioned it for further growth.

The firm’s trading momentum remained strong, with store revenue up 6.3% in August and September compared to the same period a year earlier.

“Lok’nStore’s business has once again moved ahead with same store self storage revenue up 12.1%,” said chair Andrew Jacobs.

“Demand for UK self-storage assets remains strong, and this, coupled with our new store openings, has driven our net asset value up by 1.4% to £9.86 per share.

“We are proposing a 10.1% increase in the annual dividend - the 12th year of increased dividends in a row.”

Jacobs noted that net debt was low, and loan-to-value was 3.7%.

“Trading since the year-end continues to be in line with expectations.

“We have opened two new landmark stores and are on-site at three more, which will open within the next 12 months which can be completed using cash.

“These new stores will add further momentum to sales, earnings and net asset growth.”

Reporting by Josh White for Sharecast.com.