Revenue up, adjusted earnings down for Lok'nStore

Self-storage operator Lok'nStore Group reported a 4.3% increase in revenue in its interim results on Monday, to £14.17m, with headline self-storage revenue rising 4.9% to £13.33m.

The AIM-traded firm said group adjusted EBITDA, however, saw a slight decline of 3.6% to £7.65m year-on-year for the six months ended 31 January.

Its same store analysis revealed positive trends, with same store group revenue increasing 2.6% to £13.93m and same store self-storage revenue rising 3.1% to £13.09m.

However, same store group adjusted EBITDA experienced a marginal decrease of 0.9%.

Operational metrics indicated a 4% increase in pricing to £27.37 per square foot, although occupied unit space decreased 2.9% to 862,554 square feet.

Same store EBITDA margins stood at 58.9%, slightly lower than the prior period.

In terms of banking and liquidity, Lok'nStore disclosed fixed debt of £10m out of a total debt of £43.7m, with £15m cash at period-end.

Net debt, excluding lease liabilities and deferred finance costs, increased to £28.8m, impacting the loan-to-value ratio.

The company's adjusted net asset value per share increased marginally to £9.87 per share.

Lok'nStore also highlighted its new store pipeline, including recent openings and planned developments in 2024.

The company also noted the recommended cash offer by Shurgard Self Storage at 1,110p per share, with unanimous intent from the board to recommend it.

Considering that, the board said it was not recommending a dividend at the interim stage, pending the offer's completion and any associated adjustments.

“Lok'nStore's revenue has moved ahead, with group revenue up 4.3% and headline self-storage revenue up by 4.9%,” said chair Andrew Jacobs.

“With this muted growth and some cost increases, group adjusted EBITDA of £7.65m was down 3.6%.

“Customer demand remains above levels seen pre-pandemic, although it has been lower compared to the same period 12 months ago.”

Jacobs said the firm had made progress on its new store pipeline, with its new landmark store in Basildon opened in December and Kettering in early February.

“We are on site at two locations in Staines and Bromborough, both of which will open in 2024.”

At 1414 BST, shares in Lok’nStore Group were flat at 1,110p.

Reporting by Josh White for Sharecast.com.