REG - Lok'nStore Group - Interim results for the 6 months to 31 January 16 <Origin Href="QuoteRef">LOK.L</Origin> - Part 2
26/04/2016 17:06
- Part 2: For the preceding part double click ID:nRSY1296Wa
Total comprehensive income - - 11 1,102 2,972 4,085 - 4,085
Transactions with owners:
Dividend paid - - - - (1,456) (1,456) - (1,456)
IFRS2 transfer share options to which the equity relates have either been exercised or lapsed - - (303) - 303 - - -
Equity share based payments - - 93 - - 93 - 93
Deferred tax credit relating to share options - - (6) - - (6) (6)
Exercise of share options 5 719 - - - 724 - 724
Total transactions with owners
Transfer realised gain on asset disposal - - - (1,668) 1,668 - - -
Transfer additional dep'n on revaluation net of deferred tax - - - (128) 128 - - -
31 January 2016 - Unaudited 290 3,333 8,480 31,545 12,761 56,409 - 56,409
Consolidated Statement of Financial Position
31 January 2016
Notes 31 January 2016Unaudited£'000 31 January 2015Unaudited£'000 31 July 2015Audited £'000
Assets
Non-current assets
Intangible assets 3,674 3,840 3,758
Property, plant and equipment 9 88,494 78,721 87,802
Development loan capital 10 2,905 - 2,779
Derivative financial instruments 15b - 188 -
95,073 82,749 94,339
Current assets
Inventories 11 139 127 141
Trade and other receivables 12 3,677 3,408 2,479
Cash and cash equivalents 3,010 3,397 2,435
Total current assets 6,826 6,932 5,055
Total assets 101,899 89,681 99,394
Liabilities
Current liabilities
Trade and other payables 13 (4,839) (4,883) (5,971)
Taxation (294) (624) (535)
Derivative financial instruments 15b (99) - -
(5,232) (5,507) (6,506)
Non-current liabilities
BorrowingsDerivative financial instrumentsDeferred tax 15a15b16 (28,624)-(11,634) (27,497)-(10,966) (27,548)(119) (12,252)
(40,258) (38,463) (39,919)
Total liabilities (45,490) (43,970) (46,425)
Net assets 56,409 45,711 52,969
Equity
Equity attributable to owners of the parent
Called up share capital 17 290 282 285
Share premium 3,333 2,342 2,614
Other reserves 18 8,480 7,347 8,685
Retained earnings 19 12,761 9,471 9,146
Revaluation reserve 31 ,545 26,269 32,239
Total equity 56,409 45,711 52,969
Approved by the Board of Directors and authorised for issue on 22 April 2016 and signed on its behalf by:
Andrew Jacobs Ray Davies
Chief Executive Officer Finance Director
Consolidated Statement of Cash Flows
For the six months ended 31 January 2016
Notes Six months ended31 January 2016Unaudited£'000 Six monthsended31 January 2015Unaudited£'000 Year ended 31 July 2015Audited £'000
Operating activities
Cash generated from operations 21a 1,826 1,388 5,984
Income tax paid (961) - (338)
Net cash from operating activities 865 1,388 5,646
Investing activities
Development loan capital (126) - (2,650)
Purchase of property, plant and equipment 9 (4,589) (1,865) (3,583)
Net proceeds from disposal of property, plant and equipment 5,398 2,907 2,901
Interest received 135 26 12
Net cash from/(used in) investing activities 818 (1,068) (3,320)
Financing activities
Repayment of borrowings (27,701) - -
Proceeds from new borrowings 28,816 - -
Loans granted to projects under management contracts (978) - -
Finance costs paid (513) (524) (1,041)
Equity dividends paid (1,456) (1,258) (1,847)
Proceeds from issuance of ordinary shares (net) 724 545 819
Net cash used in financing activities (1,108) (1,237) (2,069)
Net increase in cash and cash equivalents in the period 575 1,219 257
Cash and cash equivalents at beginning of the period 2,435 2,178 2,178
Cash and cash equivalents at end of the period 3,010 3,397 2,435
Accounting Policies
General Information
Lok'nStore Group plc is an AIM listed company incorporated and domiciled in England and Wales. The address of the
registered office is One London Wall, London EC2Y 5AB, UK. Copies of this Interim Report and Accounts may be obtained from
the Company's head office at 112 Hawley Lane, Farnborough, Hants, GU14 8JE, or from the investor section of the Company's
website at http://www.loknstore.co.uk.
Basis of preparation
The interim results for the six months ended 31 January 2016 have been prepared on the basis of the accounting policies
expected to be used in the 2016 Lok'nStore Group Plc Annual Report and Accounts and in accordance with the recognition and
measurement principles of International Financial Reporting Standards as adopted by the European Union ('EU') ('IFRS').
The same accounting policies, presentation and methods of computation are followed in these interim condensed set of
financial statements as have been applied in the Group's latest annual audited financial statements.
The interim results, which were approved by the Directors on 22 April 2016, are unaudited. The interim results do not
constitute statutory financial statements within the meaning of section 435 of the Companies Act 2006.
Comparative figures for the year ended 31 July 2015 have been extracted from the statutory accounts for the Group for that
period, which carried an unqualified audit report, did not include a reference to any matters to which the auditor drew
attention by way of emphasis of matter, did not contain a statement under section 498(2) or (3) of the Companies Act 2006
and have been delivered to the Registrar of Companies.
Going concern
The Directors can report that, based on the Group's budgets and financial projections, they have satisfied themselves that
the business is a going concern. The Board has a reasonable expectation that the Company and the Group have adequate
resources and facilities to continue in operational existence for the foreseeable future based on Group cash balances and
cash equivalents of £3.0 million (31.01.2015: £3.4 million), undrawn committed bank facilities at 31 January 2016 of £11.4
million (31.01.2015: £12.3 million), and cash generated from operations in the period to 31 January 2016 of £3.8 million
(31.01.2015: £1.4 million). The Group operates a new banking facility on improved terms with Royal Bank of Scotland plc.
The new £40 million five year revolving credit facility has replaced the existing facility which was due to expire in
October 2016, and will provide funding for site acquisitions and working capital. The Group is fully compliant with all
bank covenants and undertakings and is not obliged to make any repayments prior to expiration. The financial statements are
therefore prepared on a going concern basis.
Adjusted EBITDA
Earnings before interest, tax, depreciation and amortisation (EBITDA) is defined as profits from operations before all
depreciation and amortisation charges, share-based payments and other non-recurring costs, finance income, finance costs
and taxation.
Store adjusted EBITDA
Store adjusted EBITDA is defined as adjusted EBITDA (see above) but before central and head office costs.
Notes to the Financial Statements
For the six months ended 31 January 2016
1 Revenue
Analysis of the Group's revenue is shown below:
Six months ended31 January2016Unaudited Six months ended31 January2015Unaudited Yearended31 July2015Audited
Stores trading £'000 £'000 £'000
Self-storage revenue 6,004 5,921 11,851
Other storage related revenue 738 713 1,434
Ancillary store rental revenue 4 4 4
Management fees 190 68 176
Sub-total 6,936 6,706 13,465
Stores under development
Non-storage income (8) - 3
Sub-total 6,928 6,706 13,468
Serviced archive and records management revenue 1,058 923 1,956
Total revenue per statement of comprehensive income 7,986 7,629 15,424
The segment information for the period ended 31 January 2016 is as follows:
2015/2016 - Unaudited Self-storagesix months ended31 January2016£'000 Serviced archiveand records managementsix months ended31 January2016£'000 Totalsix months ended31 January 2016£'000 Self-storagesix months ended31 January2015£'000 Serviced archiveand records managementsix months ended31 January2015£'000 Totalsix months ended31 January 2015£'000
Revenue from external customers 6,928 1,058 7,986 6,706 923 7,629
Segment adjusted EBITDA 3,045 252 3,297 2,808 108 2,916
DepreciationAmortisation of intangible assets (685) - (50) (84) (735)(84) (633) - (48) (83) (689)(83)
Equity settled share based payments (93) - (93) (112) - (112)
Net settlement proceeds - Reading site 1,940 - 1,940
Costs of disposal - Swindon Store (122) - (122)
Segment profit/(loss) 4,085 118 4,203 2,063 (31) 2,032
Central costs not allocated to segments:
Finance income 150 26
Finance costs (564) (575)
Profit before taxation 3,789 1,483
Income tax expense (841) (387)
Consolidated profit for the financial period 2,948 1,096
2014/2015 - Audited Self-storageyearended31 July2015£'000 Serviced archive & records managementyearended31 July2015£'000 Totalyearended31 July2015£'000
Revenue from external customers 13,468 1,956 15,424
Segment adjusted EBITDAManagement charges 5,42025 262(25) 5,682-
DepreciationAmortisation of intangible assets (1,340)- (100) (165) (1,440)(165)
Equity settled share based payments (211) - (211)
Irrecoverable property costs (209) - (209)
Segment profit/(loss) 3,685 (28) 3,657
Central costs not allocated to segments:
Finance income 141
Finance costs (1,141)
Profit before taxation 2,654
Income tax expense (686)
Consolidated profit for the financial year 1,968
2016Unaudited Self-storage 31 January 2016£'000 Serviced archive & records management 31 January 2016£'000 Total 31 January 2016£'000 Self-storage 31 January 2015£'000 Serviced archive & records management 31 January 2015£'000 Total 31 January 2015£'000
Segment assets 95,913 5,986 101,899 83,806 5,875 89,681
Segment liabilities (17,246) (445) (17,691) (15,975) (498) (16,473)
Borrowings (28,624) (27,497)
Total liabilities (46,315) (43,970)
Capital expenditure 4,449 140 4,589 1,423 442 1,865
1 Capital expenditure includes fixed asset additions (note 9).
2015Audited Self-storage 31 July 2015£'000 Serviced archive & records management 31 July 2015£'000 Total 31 July 2015£'000
Segment assets 93,296 6,098 99,394
Segment liabilities (18,341) (536) (18,877)
Borrowings (27,548)
Total liabilities (46,425)
Capital expenditure 3,126 457 3,583
2a Property, staff, distribution and general costs
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Property and premises costs 1,889 1,960 4,010
Staff costs 2,074 2,005 4,188
General overheads 481 491 1,049
Distribution costs 78 95 190
Retail products cost of sales 167 162 305
4,689 4,713 9,742
2b Cost of sales of retail products
Cost of sales represents the direct costs associated with the sale of retail products such as boxes and packaging and, the
ancillary sales of insurance cover for customer goods, all of which fall within the Group's ordinary activities.
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Retail 55 69 130
Insurance 33 17 33
Van hire 1 - 2
Other 1 1 -
90 87 165
Serviced archive consumables and direct costs 77 75 140
167 162 305
2c Other Income
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Net settlement proceeds 1,940 - -
The Group has received an additional £2 million from the purchaser of the original Reading store site in return for the
relinquishment of all remaining rights over the site. This sum is in addition to the £2.9 million received from the
purchaser on 31 October 2014, taking the total consideration to £4.9m.
3 Finance income
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Bank interest 150 26 141
4 Finance costs
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Bank interest 456 465 925
Non-utilisation fees and amortisation of bank loan arrangement fees 108 110 219
Hire purchase and other interest - - 1
564 575 1,144
Most interest payable arises on bank loans classified as financial liabilities measured at amortised cost.
5 Profit before taxation
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£ '000
Profit before taxation is stated after charging:
Depreciation and amounts written off property, plant and equipment:
- owned assets Amortisation of intangible assetsOperating lease rentals - land and buildings 735 84762 681 83773 1,440 1651,562
6 Taxation
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Current tax:
UK corporation tax 728 293 535
Deferred tax:
Origination and reversal of temporary differences 468 94 100
Adjustments in respect of prior periods (379) - 51
Total deferred tax charge 89 94 151
Income tax expense for the period/year 817 387 686
The charge for the period can be reconciled to the profit for the period as follows:
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Profit before tax 3,789 1,483 2,654
Tax on ordinary activities at the standard effective rate of corporation tax in the UK of 20% (31.1.2015: 20.67%) 758 306 549
Expenses not deductible for tax purposes 1 4 2
Depreciation of non-qualifying assets 38 58 85
Share based payment charges in excess of corresponding tax deduction 19 23 -
Adjustments in respect of prior periods - deferred tax - - 51
Adjustments in respect of prior periods - corporation tax 3 - -
Impact of change in tax rate on closing DT balance (379) - -
Impact of change in tax rate on timing differences - (4) -
Share option scheme (12) - -
Deferred tax on rolled over gain 388 - -
Other timing differences 1 - (1)
Income tax expense for the period/year 817 387 686
Effective tax rate 22.2% 26% 26%
The UK's main rate of corporation tax reduced to 20% from 1 April 2015. The effective rate for this period is 22.2%.
(31.01.2015: 26%).
In addition to the amount charged to profit or loss for the period, deferred tax relating to the revaluation of the Group's
properties of £75,900 (31.1.2015: £25,612) and the fair value of cash flow hedges of £11,616 (31.1.2014: £28,320) has been
recognised directly in other comprehensive income (see note 16 on deferred tax).
7 Dividends
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Amounts recognised as distributions to equity holders in the year:
Final dividend for the year ended 31 July 2014 (5.00 pence per share) - 1,258 1,258
Interim dividend for the six months to 31 January 2015 (2.33 pence per share) - - 589
Final dividend for the year ended 31 July 2015 (5.67 pence per share) 1,456 - -
1,456 1,258 1,847
In respect of the current period the Directors propose that an interim dividend of 2.67 pence per share will be paid to the
shareholders. The total estimated dividend to be paid is £691,236 based on the number of shares currently in issue as
adjusted for shares held in the Employee Benefits Trust and for shares held on treasury. This interim dividend is an
on-account payment of a final annual dividend and is ultimately subject to approval by shareholders at the 2016 Annual
General Meeting and has not been included as a liability in these financial statements. The ex-dividend date will be 5 May
2016; the record date 6 May 2016; with an intended payment date of 10 June 2016.
8 Earnings per share
The calculations of earnings per share are based on the following profits and numbers of shares.
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£'000 Year ended31 July 2015Audited£'000
Profit for the financial period 2,972 1,096 1,968
No. of shares No. of shares No. of shares
Weighted average number of shares
For basic earnings per share 25,775,767 24,950,434 25,102,032
Dilutive effect of share options 626,082 614,261 654,598
For diluted earnings per share 26,401,849 25,564,695 24,981,571
623,212 (31.01.2015: 623,212) shares are held in the Employee Benefit Trust and 2,466,869 (31.01.2015:2,466,869) shares are
held in Treasury. Both are excluded from the above calculation.
Six months ended31 January2016Unaudited£'000 Six months ended31 January2015Unaudited£ Year ended31 July 2015Audited£
Earnings per share
Basic 11.53p 4.39p 7.84p
Diluted 11.26p 4.29p 7.64p
9 Property, plant and equipment
Group Developmentproperty assetsat cost£'000 Land and buildings at valuation£ '000 Long leasehold land and buildings at valuation£'000 Short leasehold improvementsat cost£'000 Fixtures, fittings and equipmentat cost£'000 Motorvehiclesat cost £'000 Total£'000
Net book value at 31 July 2014 Audited 11,409 51,412 5,121 961 8,764 12 77,679
Net book value at 31 Jan 2015 Audited 7,874 54,265 5,029 918 10,624 11 78,721
Net book value at 31 July 2015 Audited 8,888 61,035 6,425 873 10,572 19 87,802
Cost or valuation
1 August 2015 10,492 61,035 6,425 2,563 20,571 30 101,116
Additions 2,831 134 1 - 1,623 - 4,589
Disposals - (3,228) - - (701) - (3,929)
Reclassification 1,431 - - - (1,431) - -
Revaluations - (6) 52 - - - 46
31 January 2016 - Unaudited 14,754 57,935 6,478 2,563 20,062 30 101,822
Depreciation
1 August 2015 1,604 - - 1,690 9,999 21 13,314
Depreciation - 295 37 46 356 1 735
Disposals - - - - (389) - (389)
Revaluations (295) (37) - - - (332)
31 January 2016 - Unaudited 1,604 - - 1,736 9,966 22 13,328
Net book value at January 2016 Unaudited 13,150 57,935 6,478 827 10,096 8 88,494
If all property, plant and equipment were stated at historic cost the carrying value would be £50.0 million (31.01.2015:
£46.4 million).
Capital expenditure during the period totalled £4.6million (31.1.2015: £1.9 million). This was primarily the construction
and fitting out works at our developments sites in Southampton and Bristol as well as completing works at our Reading Store
and expanding capacity at our Luton store. The Group also invested a further £0.14 million in additional racking at the
Saracen Olney warehouse to increase box capacity.
Property, plant and equipment (non-current assets) with a carrying value of £88.5 million (31.1.2015: £78.7 million) are
pledged as security for bank loans (see note 15a).
Market Valuation of Freehold and Operating Leasehold Land and Buildings
Following the comprehensive external valuation at 31 July 2015 by Cushman and Wakefield (C&W), the freehold and leasehold
properties have not been externally valued at 31 January 2016, although in accordance with the Group's established policy
it is the intention to do so at the next year end at 31 July 2016.
Although the Board did not commission an external valuation at this interim period-end it is mindful of the need to accord
with the measurement principles of International Financial Reporting Standards as adopted by the European Union.
Accordingly after
consulting with our external valuers, the Directors considered that although there was evidence of a more buoyant real
estate market, there had not been such a material movement in market yields that warranted a modification to the position
as at 31 January 2016 in respect of our properties externally valued at 31 July 2015. The Directors therefore consider that
it is appropriate to maintain the portfolio's external valuation without modification pending a comprehensive external
valuation at our 31 July 2016 year-end.
10 Development loan capital
In May 2015 Lok'nStore opened a new store in Aldershot, Hampshire to which it provided development loan capital. The store
is managed for outside investors under the Lok'nStore brand. Lok'nStore has managed the building and subsequent operation
of the store and will generate a return on £2.5 million of the total development capital committed to the project, and a
management fee for the construction, operation and branding of the store.
31 January2016 Unaudited£'000 31 January2015 Unaudited£'000 31 July2015Audited£'000
Development loan capital 2,905 - 2,779
11 Inventories
31 January2016 Unaudited£'000 31 January2015 Unaudited£'000 31 July2015Audited£'000
Consumables and goods for resale 139 127 141
The amount of inventories recognised as an expense during the period was £74,320 (31.1.2015: £98,634).
12 Trade and other receivables
31 January2016 Unaudited£'000 31 January2015 Unaudited £'000 31 July2015 Audited £'000
Trade receivables 1,344 1,183 1,302
Other receivables 1,511 1.596 640
Prepayments and accrued income 822 629 537
3,677 3,408 2,479
The Directors consider that the carrying amount of trade and other receivables and accrued income approximates their fair
value.
13 Trade and other payables
31 January2016 Unaudited£'000 31 January2015 Unaudited £'000 31 July2015 Audited £'000
Trade payables 864 952 1,901
Taxation and social security costs 884 598 464
Other payables 1,095 1,112 1,173
Accruals and deferred income 1,996 2,221 2,433
4,839 4,883 5,971
The Directors consider that the carrying amount of trade and other payables and accruals approximates fair value.
14 Capital management and gearing
The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while
maximising the return to stakeholders through the optimisation of the debt and equity balance.
The gearing ratio at the period-end is as follows:
Capital Management 31 January2016 Unaudited £'000 31 January2015 Unaudited £'000 31 July2015 Audited £'000
Gross debt (28,816) (27,701) (27,701)
Cash and cash equivalents 3,010 3,397 2,435
Net debt (25,806) (24,304) (25,266)
Total equity 56,409 45,711 52,968
Net debt to equity ratio 45.7% 53.2% 47.7%
15a Borrowings
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