Lok'nStore revenues rise amid 'robust' sales growth

Self-storage company Lok'nStore reported a rise in first-half revenue on Monday amid "robust" sales growth.

In an update for the first half to 31 January 2019, the company said trading was "strong", with revenue up 7.7% year-on-year and revenue in the core self-storage business up 9.2%.

At the end of January, self-storage unit occupancy was up 8% and price per let square foot was 1.4% higher than the same date a year ago.

The company said proceeds from the disposal of its document storage business, Saracen Datastore, will be used to fund the ongoing investment into its "highly accretive" development pipeline of new landmark self-storage centres, fulfilling its objective of growing asset value by recycling capital from lower growth assets into high growth landmark stores.

During the period, it bought two new sites in Stevenage and Wolverhampton which will be developed into landmark stores adding around 100,000 sq. ft. to the trading portfolio next year.

In addition, an existing single store self-storage operation of 42,000 sq. ft. in Hedge End, Southampton has been purchased and is in the process of being rebranded. Following the rebrand and the implementation of Lok'nStore's management processes, the store's revenue and EBITDA profit are expected to improve from pro forma levels of £570,000 and £100,000 respectively.

Chief executive officer Andrew Jacobs said: "Recently opened landmark stores are trading well and contributing to revenue growth. As most costs of trading additional self-storage centres are fixed, this revenue growth will have an increasing impact on EBITDA in the coming years. This underpins our confidence that our strong pipeline will add further momentum to our highly quality income stream.

"We look forward to opening more new landmark stores and adding further momentum to sales and earnings growth."

At 1250 GMT, the shares were up 5.7% to 444p.