REG - Lok'nStore Group - Preliminary results for the year ended 31 July 17 <Origin Href="QuoteRef">LOK.L</Origin> - Part 4

Lok'n StoreAnnouncement

30/10/2017 07:05

- Part 4: For the preceding part double click  ID:nRSd8962Uc 

             -                  (3,500)                      13,661                 
 N Newman-Shepherd total         203,937                20,645           (13,500)                  (10,000)           (3,500)                      211,082                
 C Jacobs - Unapproved           123,997                -                (23,997)                  (23,997)           -                            100,000                
 C Jacobs - CSOP                 18,926                 -                (18,926)                  -                  (18,926)                                            
 C Jacobs total *                142,923                -                (42,923)                  (23,997)           (18,926)                     100,000                
 Non-Executive Directors                                                                                                                                                  
 ETD Luker - Unapproved          15,000                 -                -                         -                  -                            15,000                 
 All Directors total             939,634                28,387           (145,916)                 (108,997)          (36,919)                     822,105                
                                                                                                                                                                            
 
 
*  C Jacobs retired 4 July 2017. 
 
The grant of options to Executive Directors and senior management is recommended by the Remuneration Committee on the basis
of their contribution to the Group's success. The options vest after two and a half or three years. 
 
The exercise price of the options is equal to the closing mid-market price of the shares on the trading day previous to the
date of the grant. Exercise of an option is subject to continued employment or in the case of unapproved options at the
discretion of the Board. The life of each option granted is six and a half to seven years. There are no cash settlement
alternatives. 
 
The expected volatility is based on a historical review of share price movements over a period of time, prior to the date
of grant, commensurate with the expected term of each award. The expected term is assumed to be six years which is part way
between vesting (two and a half to three years after grant) and lapse (10 years after grant). The risk free rate of return
is the UK gilt rate at date of grant commensurate with the expected term (i.e. six years). 
 
The total charge for the year relating to employer share-based payment schemes was £96,985 (2016: £182,124), all of which
relates to equity-settled share-based payment transactions. 
 
21a         Other reserves 
 
                                                 Cash flow                    Capital     Share-based         
                                                 hedge      Merger   Other    redemption  payment             
                                                 reserve    reserve  reserve  reserve     reserve      Total  
 Group                                           £'000      £'000    £'000    £'000       £'000        £'000  
 1 August 2015                                   (99)       6,295    1,294    34          1,161        8,685  
 Share based remuneration (options)              -          -        -        -           182          182    
 IFRS 2 - transfer to retained earnings          -          -        -        -           (401)        (401)  
 Cash flow hedge reserve net of tax              62         -        -        -           -            62     
 Tax charge relating to share options            -          -        -        -           (96)         (96)   
 31 July 2016                                    (37)       6,295    1,294    34          846          8,432  
 Share based remuneration (options)              -          -        -        -           97           97     
 IFRS 2 - transfer (to)/ from retained earnings  -          -        -        -           (139)        (139)  
 Cash flow hedge reserve net of tax              37         -        -        -           -            37     
 Tax charge relating to share options            -          -        -        -           42           42     
 31 July 2017                                    -          6,295    1,294    34          846          8,469  
 
 
The merger reserve represents the excess of the nominal value of the shares issued by Lok'nStore Group plc over the nominal
value of the share capital and share premium of Lok'nStore Limited as at 31 July 2001. 
 
The other distributable reserve and the capital redemption reserve arose in the year ended 31 July 2004 from the purchase
of the Company's own shares and a cancellation of share premium. 
 
Share based payment reserve 
 
Under IFRS2 there is the option to make transfers from the share based payment reserve to retained earnings in respect of
accumulated share option charges where the options have either been exercised or have lapsed post-vesting. The total
amounts calculated and accordingly transferred to retained earnings amounted to £138,755 (2016: £400,957). 
 
21b         Other reserves 
 
                                              Other    Share-based         
                                              reserve  payment             
                                                       reserve      Total  
 Company                                      £'000    £'000        £'000  
 1 August 2015                                1,114    1,066        2,180  
 Share based remuneration (options)           -        182          182    
 IFRS 2 - transfer to retained earnings       -        (401)        (401)  
 31 July 2016                                 1,114    847          1,961  
 Share based remuneration (options)           -        97           97     
 IFRS 2 - transfer to/from retained earnings  -        (139)        (139)  
 31 July 2017                                 1,114    805          1,919  
 
 
22           Retained earnings 
 
                                                                                Retained earnings              Retained  
                                                                                before deduction   Own shares  earnings  
                                                                                of own shares      (note 23)   Total     
 Group                                                                          £'000              £'000       £'000     
 1 August 2015                                                                  13,387             (4,241)     9,146     
 Profit attributable to owners ofParent for the financial year                  4,282              -           4,282     
 Transfer from revaluation reserve(Additional depreciation on revaluation)      262                -           262       
 Transfer from share based payment  reserve (Note 24a)                          401                -           401       
 Transfer realised gain on asset disposal                                       1,639              -           1,639     
 Dividend paid                                                                  (2,147)            -           (2,147)   
 31 July 2016                                                                   17,824             (4,241)     13,583    
 
 
 Profit attributable to owners ofParent for the financial year                  3,061    -      3,061    
 Transfer from revaluation reserve(Additional depreciation on revaluation)      277      -      277      
 Transfer from share based payment  reserve (Note 24a)                          139      -      139      
 Sale of shares from treasury                                                   -        3,741  3,741    
 Dividend paid                                                                  (2,637)  -      (2,637)  
 31 July 2017                                                                   18,664   (500)  18,164   
 
 
The transfer from revaluation reserve represents the additional depreciation charged on revalued assets net of deferred
tax. 
 
The Own Shares Reserve represents the cost of shares in Lok'nStore Group plc purchased in the market and held in the
Employee Benefit Trust to satisfy awards made under the Group's share incentive plan and shares purchased separately by
Lok'nStore Limited for Treasury Account. These treasury shares were not cancelled and have been released back into the
market to assist liquidity of the Company's stock and to provide availability of a reasonable line of stock to satisfy
investor demand. 
 
23           Own shares 
 
                                EBT      EBT      Treasury  Treasury  Own shares  
                                shares   shares   shares    shares    total       
                                Number   £        Number    £         £           
 31 July 2016 and 31 July 2017  623,212  499,910  -         -         499,910     
 
 
Sale of treasury shares:   At the start of the financial year Lok'nStore Limited held a total of 2,466,869 of Lok'nStore
Group plc ordinary shares of 1p each for treasury with an aggregate nominal value of £24,669 purchased for an aggregate
cost of £3,741,036 at an average price of £1.503 per share (excluding broker's commission and stamp duty costs). These
shares represented 8.4% of the Parent Company's called-up share capital. The maximum number of shares held by Lok'nStore
Limited in the year was 2,466,869. 
 
In November 2016, Lok'nStore sold 1,975,000 ordinary shares of these treasury shares. The shares were sold to a range of
institutional investors at a price of 400 pence per share. 
 
On 26 April 2017 it sold the remaining 491,869 ordinary treasury shares to a range of institutional and individual
investors at a price of 425 pence per Ordinary Share. The sale of these shares realised a total surplus over and above the
cost price of £6,150,000. In accordance with the Companies Act 2006 this surplus has been shown as in increase in share
premium in the year in both the consolidated and parent company financial statements. These shares had been bought
previously by Lok'nstore Limited on behalf of the parent company and in prior year accounts should therefore have been
shown as treasury shares in the parent company's equity at an amount of £3,741,000 and as a reduction in the inter-company
receivable of the amount. 
 
The directors have considered whether a prior year adjustment should be made to reflect this reclassification in the parent
company's comparative balance sheet but are mindful of the fact that this is all intercompany and the situation has been
resolved in the current year through the sale of these shares. As a result, the directors do not believe that this
adjustment would cause the reader of the financial statements to form a different view of the statement of financial
position of the parent company at 31 July 2016 and therefore do not believe it is material in the context of the financial
statements as a whole. 
 
Employee Benefit Trust (EBT): The Group operates an Employee Benefit Trust (EBT) under a settlement dated 8 July 1999
between Lok'nStore Limited and Lok'nStore Trustee Limited, constituting an employees' share scheme. 
 
Funds are placed in the trust by way of deduction from employees' salaries on a monthly basis as they so instruct for
purchase of shares in the Company. Shares are allocated to employees at the prevailing market price when the salary
deductions are made. 
 
As at 31 July 2017, the Trust held 623,212 (2016: 623,212) ordinary shares of 1 pence each with a market value of
£2,414,947 (2016: £2,025,439). No shares were transferred out of the scheme during the year (2016: nil). 
 
No dividends were waived during the year. No options have been granted under the EBT. 
 
24           Cash flows 
 
(a) Reconciliation of profit before tax to cash generated from operations 
 
                                               Group2017  Group2016  
                                               £'000      £'000      
 Profit before tax                             3,965      5,493      
 Depreciation                                  1,856      1,535      
 Amortisation of intangible assets             165        165        
 Equity settled share based payments           97         182        
 Net settlement proceeds - Reading site        -          (1,940)    
 Property disposal costs                       15         123        
 Store relocation costs                        29         -          
 Director retirement costs                     69         -          
 Interest receivable                           (309)      (313)      
 Interest payable                              606        1,048      
 Increase in inventories                       (38)       (24)       
 (Increase) / decrease in receivables          (284)      (2,471)    
 (Decrease) / increase in payables             (648)      (24)       
 Cash generated from operations                5,523      3,774      
 
 
(b) Reconciliation of net cash flow to movement in net debt 
 
Net debt is defined as non-current and current borrowings, as detailed in note 17a less cash and cash equivalents. 
 
                                                     Group2017  Group2016  
                                                     £'000      £'000      
 Increase in cash in the year                        6,051      2,900      
 Change in net debt resulting from cash flows        -          (1,115)    
 Movement in net debt in year                        6,051      1,785      
 Net debt brought forward                            (23,481)   (25,266)   
 Net debt carried forward                            (17,430)   (23,481)   
 
 
25           Commitments under operating leases 
 
At 31 July 2017 the total future minimum lease payments as a lessee under non-cancellable operating leases were as
follows: 
 
                                     Group   Group   
                                     2017    2016    
                                     £'000   £'000   
 Land and buildings                                  
 Amounts due:                                        
 Within one year                     1,469   1,535   
 Between two and five years          5,868   5,847   
 After five years                    6,600   7,468   
                                     13,937  14,850  
 
 
Operating lease payments represent rentals payable by the Group for certain of its properties.  Typically leases are
negotiated for a term of 20 years and rentals are fixed for an average of five years. 
 
26           Related party transactions 
 
The Company provides share options for the employees of Lok'nStore Limited. The capital contributions arising from these
share-based payments are separately disclosed under investments in note 11. 
 
The aggregate remuneration of the Directors, who are the key management personnel of the Group, is set out below.  Further
information on the remuneration of individual Directors is found in note 6. 
 
                                                     Group2017  Group2016  
                                                     £'000      £'000      
 Short term employee benefits          1,000  1,648  
 Post-employment benefits              31     31     
 Share-based payments                                97         182        
 Total                                               1,128      1,861      
                                                                             
 
 
The Group uses Trucost Plc, an environmental research company, to provide information and undertake performance assessment
of the environmental effect of its business activities. The total fees payable to Trucost Plc in respect of its
environmental assessment and reporting for the year was £6,000 (2016: £6,000). The balance outstanding to Trucost Plc at
year-end was £nil (2016: £nil). 
 
Group Director shareholdings - dividends received 
 
In respect of the total dividends paid during the year of £2,637,353, the Group directors received the amounts set out in
the table below.:- 
 
 Director's Dividend Income  Holding    Final 2016  Interim 2017  
                                        £0.0633     £0.0300       
                                        £           £             
 Executive:                                                       
 A Jacobs                    5,205,600  329,514     156,168       
 RA Davies                   61,780     2,935       1,409         
 Neil Newman                 3,300      -           -             
 CM Jacobs1                  7,500      475         225           
 Non-Executive:                                                   
 SG Thomas                   1,800,000  113,940     54,000        
 RJ Holmes                   273,674    17,207      8,155         
 ETD Luker                   13,800     874         414           
 CP Peal                     513,561    54,755      15,301        
                             7,879,215  519,700     235,672       
 
 
Managed Stores - Group Director shareholdings. 
 
Although the director holdings in Managed Stores falls outside of the definition of related party transactions they are
disclosed here for transparency and are set out in the table below:- 
 
 Director                   Chichester    Broadstairs   Exeter        
                            No of shares  No of shares  No of shares  
 Andrew Jacobs              36,800        38,160        240,000       
 Charles Peal               -             -             500,000       
 Simon Thomas               -             -             160,000       
 Total shareholding         36,800        38,160        900,000       
 Issued Share Capital       189,341       189,690       3,970,000     
 % of Issued Share Capital  19.4%         20.1%         22.7%         
 
 
27a         Capital commitments and guarantees 
 
The Group has capital expenditure contracted but not provided for in the financial statements of £2.60 million (2016: £1.10
million) relating to building contracts on its Gillingham and Wellingborough development sites as well as building
retentions outstanding on the completed Bristol, Southampton and Reading stores. 
 
27b         Bank borrowings 
 
The Company has guaranteed the bank borrowings of Lok'nStore Limited, a subsidiary company. As at the year-end, that
company had gross bank borrowings of £28.8 million (2016: £28.8 million). 
 
28           Events after the reporting date 
 
a)      Contracts exchanged on the purchase of the Bedford site 
 
On 3 August 2017 contracts were exchanged on the purchase of a site in Bedford for £1.1 million. Lok'nStore will develop
this site as a purpose built landmark store. 
 
b)    Surrender of Lease on Unit 4, Leatherhead Industrial Estate and the execution of a new lease on the adjacent Unit 6. 
 
On 10 August 2017 the Group completed the execution of a new lease on Unit 6, Leatherhead Industrial Estate, together with
the surrender of the lease on Unit 4. 
 
This is part of a continuing strategy within the document storage business of optimising the utilisation of trading space
which has now been consolidated into two trading units. 
 
i)      Surrender of Unit 4 
 
The Group has obtained releases from all obligations whether past, present or future and received all of the rent deposits
held by the Landlord. There were no outstanding dilapidations obligations. 
 
ii)     New lease on Unit 6 
 
The lease is in substantially the same form as the existing lease but is for fifteen years and inside the 1954 Landlord &
Tenant Act. The landlord has a right to break at the end of the tenth year on redevelopment grounds on six months' notice.
There is an upward only rent review at the end of the fifth year of the term. 
 
c)      Planning permission obtained on the Dover site 
 
On 9 September 2017, planning permission was granted for the construction of a detached storage building with associated
vehicular access, parking and landscaping works. 
 
Our Stores 
 
Head office 
 
Lok'nStore plc 
 
112 Hawley Lane 
 
Farnborough 
 
Hampshire 
 
GU14 8JE 
 
Tel   01252 521010 
 
www.loknstore.co.uk 
 
www.loknstore.com 
 
Central Enquiries 
 
0800 587 3322 
 
info@loknstore.co.uk 
 
www.loknstore.co.uk 
 
Basingstoke, Hampshire 
 
Crockford Lane 
 
Chineham 
 
Basingstoke 
 
Hampshire 
 
RG24 8NA 
 
Tel   01256 474700 
 
basingstoke@loknstore.co.uk 
 
Bristol, Gloucestershire 
 
Longwell Green Trade Park 
 
Aldermoor Way 
 
Bristol 
 
BS30 7ET 
 
Tel 0117 967 7055 
 
Bristol@loknstore.co.uk 
 
Crayford, Kent 
 
Block B 
 
Optima Park 
 
Thames Road 
 
Crayford 
 
Kent 
 
DA1 4QX 
 
Tel   01322 525292 
 
crayford@loknstore.co.uk 
 
Eastbourne, East Sussex 
 
Unit 4, Hawthorn Road 
 
Eastbourne 
 
East Sussex 
 
BN23 6QA 
 
Tel   01323 749222 
 
eastbourne@loknstore.co.uk 
 
Fareham, Hampshire 
 
26 + 27 Standard Way 
 
Fareham Industrial Park 
 
Fareham 
 
Hampshire 
 
PO16 8XJ 
 
Tel   01329 283300 
 
fareham@loknstore.co.uk 
 
Farnborough, Hampshire 
 
112 Hawley Lane 
 
Farnborough 
 
Hampshire 
 
GU14 8JE 
 
Tel   01252 511112 
 
farnborough@loknstore.co.uk 
 
Harlow, Essex 
 
Unit 1 Dukes Park 
 
Edinburgh Way 
 
Harlow 
 
Essex 
 
CM20 2GF 
 
Tel   01279 454238 
 
harlow@loknstore.co.uk 
 
Horsham, West Sussex 
 
Blatchford Road 
 
Redkiln Estate 
 
Horsham 
 
West Sussex 
 
RH13 5QR 
 
Tel   01403 272001 
 
horsham@loknstore.co.uk 
 
Luton, Bedfordshire 
 
27 Brunswick Street 
 
Luton 
 
Bedfordshire 
 
LU2 0HG 
 
Tel   01582 721177 
 
luton@loknstore.co.uk 
 
Maidenhead, Berkshire 
 
Stafferton Way 
 
Maidenhead 
 
Berkshire 
 
SL6 1AY 
 
Tel   01628 878870 
 
maidenhead@loknstore.co.uk 
 
Milton Keynes, Buckinghamshire 
 
Etheridge Avenue 
 
Brinklow 
 
Milton Keynes 
 
Buckinghamshire 
 
MK10 0BB 
 
Tel   01908 281900 
 
miltonkeynes@loknstore.co.uk 
 
Northampton Central 
 
16 Quorn Way 
 
Grafton Street Industrial Estate 
 
Northampton 
 
NN1 2PN 
 
Tel   01604 629928 
 
nncentral@loknstore.co.uk 
 
Northampton Riverside 
 
Units 1-4 
 
Carousel Way 
 
Northampton 
 
Northamptonshire 
 
NN3 9HG 
 
Tel   01604 785522 
 
northampton@loknstore.co.uk 
 
Poole, Dorset 
 
50 Willis Way 
 
Fleetsbridge 
 
Poole 
 
Dorset 
 
BH15 3SY 
 
Tel   01202 666160 
 
poole@loknstore.co.uk 
 
Portsmouth, Hampshire 
 
Rudmore Square 
 
Portsmouth 
 
PO2 8RT 
 
Tel   02392 876783 
 
portsmouth@loknstore.co.uk 
 
Reading, Berkshire 
 
251 A33 Relief Road 
 
Reading 
 
RG2 0RR 
 
Tel   01189 588999 
 
reading@loknstore.co.uk 
 
Southampton, Hampshire 
 
Third Avenue 
 
Southampton 
 
Hampshire 
 
SO15 0JX 
 
Tel   02380 783388 
 
southampton@loknstore.co.uk 
 
Sunbury on Thames, Middlesex 
 
Unit C, The Sunbury Centre 
 
Hanworth Road 
 
Sunbury 
 
Middlesex 
 
TW16 5DA 
 
Tel   01932 761100 
 
sunbury@loknstore.co.uk 
 
Tonbridge, Kent 
 
Unit 6 Deacon Trading Estate 
 
Vale Road 
 
Tonbridge 
 
Kent 
 
TN9 1SW 
 
Tel   01732 771007 
 
tonbridge@loknstore.co.uk 
 
Development locations (Owned Stores) 
 
Wellingborough, Northamptonshire 
 
19/21 Whitworth Way 
 
Wellingborough 
 
NN8 2EF 
 
Gillingham, Kent 
 
Courtney Road 
 
Gillingham 
 
Kent 
 
ME8 0RT 
 
Bedford, Bedfordshire 
 
69 Cardington Road 
 
Bedford 
 
MK42 0BQ 
 
Managed stores 
 
Aldershot, Hampshire 
 
251, Ash Road 
 
Aldershot 
 
GU12 4DD 
 
Tel  0845 4856415 
 
aldershot@loknstore.co.uk 
 
Ashford, Kent 
 
Wotton Road 
 
Ashford 
 
Kent 
 
TN23 6LL 
 
Tel   01233 645500 
 
ashford@loknstore.co.uk 
 
Broadstairs, Kent 
 
2, Pyramid Business Park 
 
Poorhole Lane 
 
Broadstairs 
 
CT10 2PT 
 
Tel 01843 863253 
 
Broadstairs@loknstore.co.uk 
 
Chichester, West Sussex 
 
17, Terminus Road 
 
Chichester 
 
PO19 8TX 
 
Tel 01243 771840 
 
Chichester@loknstore.co.uk 
 
Crawley, West Sussex 
 
Sussex Manor Business Park 
 
Gatwick Road 
 
Crawley 
 
RH10 9NH 
 
Tel  01293 738530 
 
crawley@loknstore.co.uk 
 
Swindon, Wiltshire 
 
Kembrey Street 
 
Elgin Industrial Estate 
 
Swindon 
 
Wiltshire 
 
SN2 8UY 
 
Tel   01793 421234 
 
swindoneast@loknstore.co.uk 
 
Woking, Surrey 
 
Marlborough Road 
 
Woking 
 
GU21 5JG 
 
Tel   01483 378323 
 
woking@loknstore.co.uk 
 
Under Development  (Managed Stores) 
 
Hemel Hempstead, Herts 
 
Fortius Point 
 
47 Maylands Avenue 
 
Hemel Hempstead 
 
Hertfordshire 
 
HP2 7DE 
 
Exeter, Devon 
 
The former Auction Centre 
 
Matford Park Road 
 
Exeter 
 
EX2 8FD 
 
Ipswich, Suffolk 
 
Plot 7A, Crane Boulevard 
 
Futura Park 
 
Ipswich 
 
IP3 9QH 
 
Dover, Kent 
 
Honeywood Parkway 
 
White Cliffs Business Park 
 
Whitfield 
 
Dover 
 
CT16 3FJ 
 
This information is provided by RNS
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