Lok'nStore sees first-half revenues jump, warns of softer trading ahead

Group revenues from continued operations rose 5.3% in the six months to 31 January, to £8.97m, while earnings before interest, tax, depreciation and amortisation improved 6.4% to £4.72m. Pre-tax profits fell, however, to £2.3m from £2.6m, after property, staff and other operating costs edged ahead to £4.2m.

Updating on current trading, the Aim-listed self-storage specialist said all its stores remained open and that trading to date had been “resilient”. Some new business customers had moved in; however, that had been “modestly” outweighed by others moving out.

Looking forward, Lok’nStore continued: “We do expect trading to soften as move-ins have tailed off, but this will only impact our numbers in the fourth quarter.

“Given the levels of distress in the economy, and the uncertainty surrounding what is a fast-moving situation, it is too early to make judgements about future trading until we have more visibility.”

Despite that Lok’nStore said it would still pay an interim dividend – of 4p per share, a 9% increase – insisting that its “robust capital structure and cash flow” would help protect the business going forward.

Andrew Jacobs, chief executive, said: “Despite the current deeply unsettled circumstances, Lok’nStore has a resilient business model and a flexible and conservative debt structure. Our results for the first half of the year are robust.

“With a strong balance sheet and low gearing helped by capital recycling, we will adjust to the current turbulence caused by the pandemic, and when the economy stabilises, we will continue to build more landmark stores in an under-supplied market.”

Tom Musson, analyst at Liberum, said: “The effect of Covid-19 on Lok’nStore’s business is in line with what has been reported by peers: all stores remain open while social distancing measures are in place.

“While Lok’nStore, Safestore and Big Yellow are not immune to slower economic growth in the medium term, their business models are proving relatively resilient in the current environment.”