REG - Lok'nStore Group - Interim Results <Origin Href="QuoteRef">LOK.L</Origin> - Part 3
24/04/2017 07:06
- Part 3: For the preceding part double click ID:nRSX0435Db
1,456 1,456
Interim dividend for the six months to 31 January 2016 (2.67 pence per share) - - 691
Final dividend for the year ended 31 July 2016 (6.33 pence per share) 1,778 - -
1,778 1,456 2,147
In respect of the current period the Directors propose that an interim dividend of 3.00 pence per share will be paid to the
shareholders. The total estimated dividend to be paid is £842,524 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 2017 Annual
General Meeting and has not been included as a liability in these financial statements. The ex-dividend date will be 11 May
2017; the record date 12 May 2017; with an intended payment date of 9 June 2017.
8 Earnings per share
The calculations of earnings per share are based on the following profits and numbers of shares.
Six months ended31 January2017Unaudited£'000 Six months ended31 January2016Unaudited£'000 Year ended31 July 2016Audited£'000
Profit for the financial period 1,870 2,972 4,282
No. of shares No. of shares No. of shares
Weighted average number of shares
For basic earnings per share 27,071,818 25,775,767 25,791,821
Dilutive effect of share options 651,347 626,082 577,822
For diluted earnings per share 27,723,165 26,401,849 26,369,643
623,212 (31.01.2016: 623,212) shares are held in the Employee Benefit Trust and 491,869 (31.01.2016: 2,466,869) shares are
held in Treasury. Both are excluded from the above calculation.
Six months ended31 January2017Unaudited Six months ended31 January2016Unaudited Year ended31 July 2016Audited
Earnings per share
Basic 6.91p 11.53p 16.60p
Diluted 6.74p 11.26p 16.24p
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 2015 - Audited 8,888 61,035 6,425 873 10,572 19 87,802
Net book value at 31 January 2016 - Unaudited 13,150 57,935 6,478 827 10,096 8 88,494
Net book value at 31 July 2016 - Audited 458 80,953 90,263 782 12,902 5 104,363
Cost or valuation
1 August 2016 458 80,953 9,263 2,563 22,758 17 116,012
Additions 2,334 (43) - 36 443 - 2,770
Disposals - - - - - - -
Reclassification - - - - - - -
Revaluations - (45) 51 - - - 6
31 January 2016 - Unaudited 2,792 80,865 9,314 2,599 23,201 17 118,788
Depreciation
1 August 2016 - - - 1,781 9,856 12 11,649
Depreciation - 323 63 49 461 1 897
Disposals - - - - - -
Revaluations (323) (63) - - - (386)
31 January 2017 Unaudited - - - 1,830 10,317 13 12,160
Net book value at 31 January 2017 - Unaudited 2,792 80,865 9,314 769 12,884 4 106,628
Capital expenditure during the period totalled £2.8million (31.1.2016: £4.6 million). This was primarily the purchase and
subsequent construction works at our development sites in Gillingham and Wellingborough as well as completing fitting-out
works at our Bristol store.
Property, plant and equipment (non-current assets) with a carrying value of £106.6 million (31.1.2016: £88.5 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 2016 by JLL, the freehold and leasehold properties have not been
externally valued at 31 January 2017, although in accordance with the Group's established policy it is the intention to do
so at the next year end at 31 July 2017.
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, whilst there has been continued market activity in the self storage
sector since July 2017, including the sale of the Big Box portfolio in October 2016 to US investors Storage Mart for in
excess of £100m, as well as some sales of individual self storage assets, the Directors considered that there had not been
such a material movement in market yields that warranted a modification to the position as at 31 January 2017 in respect of
our properties externally valued at 31 July 2016. 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 2017
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 January2017 Unaudited£'000 31 January2016 Unaudited£'000 31 July2016Audited£'000
Development loan capital 3,319 2,905 3,159
11 Inventories
31 January2017 Unaudited£'000 31 January2016 Unaudited£'000 31 July2016Audited£'000
Consumables and goods for resale 168 139 165
The amount of inventories recognised as an expense during the period was £81,005 (31.1.2016: £74,320).
12 Trade and other receivables
31 January2017 Unaudited£'000 31 January2016 Unaudited 31 July2016 Audited
£'000 £'000
Trade receivables 1,414 1,344 2,027
Other receivables 857 1,511 1,910
Prepayments and accrued income 1,000 822 1,015
3,271 3,677 4,952
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 January2017 Unaudited£'000 31 January2016 Unaudited 31 July2016 Audited
£'000 £'000
Trade payables 593 864 887
Taxation and social security costs 666 884 1,369
Other payables 1,156 1,095 1,197
Accruals and deferred income 2,107 1,996 2,341
4,522 4,839 5,794
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 January2017 Unaudited 31 January2016 Unaudited 31 July2016 Audited
£'000 £'000 £'000
Gross debt (28,816) (28,816) (28,816)
Cash and cash equivalents 12,140 3,010 5,335
Net debt (16,676) (25,806) (23,481)
Total equity 80,733 56,409 71,475
Net debt to equity ratio 20.7% 45.7% 32.8%
15a Borrowings
31 January2017 Unaudited£'000 31 January2016 Unaudited£'000 31 July2016 Audited
£'000
Non-current
Bank loans repayable in more than two years
but not more than five years
Gross 28,816 28,816 28,816
Deferred financing costs (79) (192) (89)
Net bank borrowings 28,737 28,624 28,727
The Group has agreed a two year extension on its existing banking facility with Royal Bank of Scotland plc. The £40 million
five year revolving credit facility which was executed last year included an extension option which has now been
implemented. The facility which was due to expire in January 2021, will now run until January 2023 providing funding for
more landmark site acquisitions and working capital.
The £40 million five year revolving credit facility set the interest rate margin at the London Inter-Bank Offer Rate
(LIBOR) plus 1.40%-1.65% based on a loan to value covenant test. This rate is 1.40% currently and the all in debt cost on
£28.8 million drawn averaged 1.7% in the last five months. Bank covenants and margin are unaffected by this extension of
term.
The £40 million revolving credit facility is secured by legal charges and debentures over the freehold and leasehold
properties and other assets of the business with a net book value of £125.5 million together with cross-company guarantees
from Group companies. The Group is not obliged to make any repayments prior to expiration.
15b Derivative financial instruments
Of the £28.8 million of gross debt currently drawn against the revolving credit facility, £20 million was at a fixed
interest rate with £10 million fixed rate swap at a fixed 1 month sterling LIBOR rate of 1.2% and £10 million swap at a
fixed 1 month sterling LIBOR rate of 1.15%.
The £20 million fixed rate was treated as an effective cash flow hedge and its fair value on a mark-to-market basis has
fluctuated historically. Under current facility arrangements the Group is not committed to enter into hedging instruments
going forwards but rather to keep such matters under periodic review. The fixed interest swaps expired on 20 October 2016
and the Groups entire £28.8 million of gross debt reverted to variable rate and results in an overall weighted average rate
over the financial period of 1.74%. At the balance sheet date the effective cost of debt is 1.65 %
Fair Value
Currency Principal£ Maturity date 31 Jan2017 Unaudited£'000 31 Jan2016 Unaudited£'000 31 July2016 Audited
£'000
3032816LS Interest rate swap GBP 10,000,000 20/10/2016 - (51) (19)
3047549LS Interest rate swap GBP 10,000,000 20/10/2016 - (48) (18)
20,000,000 - (99) (37)
The movement in fair value of the interest rate swaps of £37,850 (31.1.2016: £20,529) has been recognised in other
comprehensive income in the period.
16 Deferred tax
Deferred tax liability 31 January 2017Unaudited£'000 31 January 2016Unaudited£'000 31 July 2016Audited£'000
Liability at start of period/year 15,361 12,252 12,252
Charge to income for the period/year (195) 89 605
Tax charged directly to other comprehensive income (499) (707) 2,408
Credit to share based payment reserve (221) - 96
Liability at end of period/year 14,446 11,634 15,361
The following are the major deferred tax liabilities and assets recognised by the Group and the movements during the year:
AcceleratedCapitalAllowances£'000 Taxlosses£'000 Intangibleassets£'000 Othertemporarydifferences£'000 Revaluation ofproperties£'000 Rolledover gainon disposal£'000 ShareOptions£'000 Total£'000
At 31 July 2015 - Audited 1,708 - 530 (8) 8,586 1,787 (351) 12,252
Charge/ (credit) to income for the period (62) - (68) 34 - 162 23 89
Charge to other comprehensive income - - - 10 (734) 11 6 (707)
At 31 January 2016 - Unaudited 1,646 - 462 36 7,852 1,960 (322) 11,634
Charge/ (credit) to income for the period 209 - (15) (23) - 362 (17) 516
Charge to other comprehensive income - - - 11 3,109 1 (6) 3,115
Charge to share based payment reserve - - - - - - 96 96
At 31 July 2016 - Audited 1,855 - 447 24 10,961 2,323 (249) 15,361
Charge/ (credit) to income for the period (34) - (39) (8) - (141) 27 (195)
Charge to other comprehensive income - - - - (511) 12 - (499)
Charge to share based payment reserve - - - - - - (221) (221)
At 31 January 2017 - Unaudited 1,821 - 408 16 10,450 2,194 (443) 14,446
17 Share capital
31 January 2017 Unaudited£'000 31 January 2016Unaudited£'000 31 July 2016Audited£'000
Authorised: :35,000,000 ordinary shares of 1 pence each 350 350 350
Called up, Called up, Called up,
allotted and allotted and allotted and
fully paid fully paid fully paid
Number Number Number
Number of shares at start of period/year 29,109,322 28,446,749 28,446,749
Options exercised during period/year 89,908 517,328 662,573
Balance at end of period/year 29,199,230 28,964,077 29,109,322
Allotted, issued and fully paid ordinary shares £ £ £
Balance at start of period/year 291,093 284,467 284,467
Options exercised during period/year 899 5,175 6,626
Balance at end of period/year 291,992 289,640 291,093
The Company has one class of ordinary shares which carry no right to fixed income.
18 Other reserves
Cash flow Other Capital Share-based
hedge Merger reserve redemption payment
reserve reserve reserve reserve Total
Group £'000 £'000 £'000 £'000 £'000 £'000
1 August 2015 - Audited (99) 6,295 1,294 34 1,161 8,685
Equity share based payments - - - - 93 93
Transfer to retained earnings in relation to share based payments - - - - (303) (303)
Cash flow hedge reserve net of tax 11 - - - - 11
Tax credit relating to share options (6) (6)
31 January 2016 - Unaudited (88) 6,295 1,294 34 945 8,480
Equity share based payments - - - - 89 89
Transfer to retained earnings in relation to share based payments - - - - (98) (98)
Cash flow hedge reserve net of tax 51 - - - - 51
Tax credit relating to share options (90) (90)
31 July 2016 - Audited (37) 6,295 1,294 34 846 8,432
Equity share based payments - - - - 48 48
Transfer to retained earnings in relation to share based payments - - - - (66) (66)
Cash flow hedge reserve net of tax 37 - - - - 37
Tax credit relating to share options - - - - 221 221
31 January 2017 - Unaudited - 6,295 1,294 34 1,049 8,672
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 in the period amounted to £65,570 (31.1.2016:
£302,804).
19 Retained earnings Retained earnings before Retained
deduction of Own shares earnings
own shares (note 21) Total
Group £'000 £'000 £'000
1 August 2015 - Audited 13,387 (4,241) 9,146
Profit for the financial period 2,972 - 2,972
Transfer from revaluation reserve 128 - 128
Transfer from share based payment reserve (Note 18) 303 - 303
Dividend paid (1,456) - (1,456)
Transfer realised gain on asset disposal 1,668 - 1,668
31 January 2016 - Unaudited 17,002 (4,241) 12,761
Profit for the financial period 1,310 - 1,310
Transfer from revaluation reserve 134 - 134
Transfer from share based payment reserve (Note 18) 98 - 98
Dividend paid (691) - (691)
Transfer realised gain on asset disposal (29) - (29)
31 July 2016 - Audited 17,824 (4,241) 13,583
Profit for the financial period 1,870 - 1,870
Transfer from revaluation reserve 115 - 115
Transfer from share based payment reserve (Note 18) 66 - 66
Dividend paid (1,778) - (1,778)
Sale of Treasury shares - 3,117 3,117
31 January 2017 - Unaudited 18,097 (1,124) 16,973
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 have not been cancelled and were purchased at an average
price considerably lower than the Group's adjusted net asset value. These shares may in due course be 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 as and when required.
20 Own shares
ESOP ESOP Treasury Treasury Own shares
shares shares shares shares total
Number £ Number £ £
1 August 2015 - Audited 623,212 499,910 2,466,869 3,741,036 4,240,946
31 January 2016 - Unaudited 623,212 499,910 2,466,869 3,741,036 4,240,946
31 July 2016 - Audited 623,212 499,910 2,466,869 3,741,036 4,240,946
31 January 2017 - Unaudited 623,212 499,910 491,869 624,247 1,124,157
On 1 November 2016 the Group sold 1,975,000 ordinary shares of 1 pence each ("Ordinary Shares") held in treasury. This sale
was undertaken to satisfy demand for the Company's shares, and to improve liquidity going forward. The Ordinary Shares were
sold to a range of institutional investors at a price of 400 pence per share.
Lok'nStore Limited now holds a total of 491,869 (31.1.2016: 2,466,869) of Lok'nStore Group plc ordinary shares of 1p each
for treasury with an aggregate nominal value of £4,919 purchased for an aggregate cost of £618,413 at an average price of
£1.26 per share. These shares represent 1.68% of the Parent Company's called-up share capital. The maximum number of shares
held by Lok'nStore Limited in the period was 2,466,869.
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 January 2017, the Trust held
623,212 (31.01.2016: 623,212) ordinary shares of 1 pence each with a market value of £2,835,615 (31.01.2016: £2,003,627).
No shares were transferred out of the scheme during the period (2016: nil). No dividends were waived during the year. No
options have been granted under the EBT.
21 Cash flows
(a) Reconciliation of profit before tax to cash generated from operations
Six months ended31 January2017Unaudited£'000 Six months ended31 January2016Unaudited£'000 Year ended31 July2016 Audited£'000
Profit before tax 2,099 1,849 5,493
Depreciation 897 735 1,535
Amortisation of intangible assets 83 83 165
Equity settled share based payments 49 93 182
Store relocation costs and site disposal costs 35 - -
Net settlement proceeds - Reading site - - (1,940)
Disposal costs - - 123
Interest receivable (174) (150) (313)
Interest payable 325 564 1,048
(Increase)/decrease in inventories (3) 2 (24)
Decrease/(increase) in receivables 736 (221) (2,471)
Decrease in payables (1,150) (1,129) (24)
Cash generated from operations 2,897 1,826 (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 15a less cash and cash equivalents.
Six monthsended31 January2017Unaudited£'000 Six monthsended31 January 2016Unaudited£'000 Year ended31 July2016Audited£'000
Increase in cash in the period/year 6,805 575 2,900
Change in net debt resulting from cash flows - (1,115) (1,115)
Movement in net debt in period 6,805 (540) 1,785
Net debt brought forward (23,481) (25,266) (25,266)
Net debt carried forward (16,676) (25,806) (23,481)
22 Events after the reporting date
There were no reportable events after the reporting date.
23 Capital commitments and guarantees
The Group has capital expenditure contracted but not provided for in the financial statements of £5.4 million (31.01.2016:
£2.2 million). These relate to the build and fit-outs of the Gillingham and Wellingborough Stores and the refurbishment of
the Old Southampton store for cruise parking.
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
Fax 01256 477377
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
Fax 01322 521333
crayford@loknstore.co.uk
Eastbourne, East Sussex
Unit 4, Hawthorn Road
Eastbourne
East Sussex BN23 6QA
Tel 01323 749222
Fax 01323 648555
eastbourne@loknstore.co.uk
Fareham, Hampshire
26 + 27 Standard Way
Fareham Industrial Park
Fareham
Hampshire PO16 8XJ
Tel 01329 283300
Fax 01329 284400
fareham@loknstore.co.uk
Farnborough, Hampshire
112 Hawley Lane
Farnborough
Hampshire GU14 8JE
Tel 01252 511112
Fax 01252 744475
farnborough@loknstore.co.uk
Harlow, Essex
Unit 1 Dukes Park
Edinburgh Way
Harlow
Essex CM20 2GF
Tel 01279 454238
Fax 01279 443750
harlow@loknstore.co.uk
Horsham, West Sussex
Blatchford Road
Redkiln Estate
Horsham
West Sussex RH13 5QR
Tel 01403 272001
Fax 01403 274001
horsham@loknstore.co.uk
Luton, Bedfordshire
27 Brunswick Street
Luton
Bedfordshire LU2 0HG
Tel 01582 721177
Fax 01582 721188
luton@loknstore.co.uk
Maidenhead, Berkshire
Stafferton Way
Maidenhead
Berkshire
SL6 1AY
Tel 01628 878870
Fax 01628 620136
maidenhead@loknstore.co.uk
Milton Keynes, Buckinghamshire
Etheridge Avenue
Brinklow
Milton Keynes
Buckinghamshire MK10 0BB
Tel 01908 281900
Fax 01908 281700
miltonkeynes@loknstore.co.uk
Northampton Central
16 Quorn Way
Grafton Street Industrial Estate
Northampton NN1 2PN
Tel 01604 629928
Fax 01604 627531
nncentral@loknstore.co.uk
Northampton Riverside
Units 1-4
Carousel Way
Northampton
Northamptonshire NN3 9HG
Tel 01604 785522
Fax 01604 785511
northampton@loknstore.co.uk
Poole, Dorset
50 Willis Way
Fleetsbridge
Poole
Dorset BH15 3SY
Tel 01202 666160
Fax 01202 666806
poole@loknstore.co.uk
Portsmouth, Hampshire
Rudmore Square
Portsmouth PO2 8RT
Tel 02392 876783
Fax 02392 821941
portsmouth@loknstore.co.uk
Reading, Berkshire
251 A33 Relief Road
Reading
RG2 0RR
reading@loknstore.co.uk
Southampton, Hampshire
Third Avenue
Southampton
Hampshire SO15 0JX
Tel 02380 783388
Fax 02380 783383
southampton@loknstore.co.uk
Staines, Middlesex
The Causeway
Staines
Middlesex TW18 3AY
Tel 01784 464611
Fax 01784 464608
staines@loknstore.co.uk
Sunbury on Thames, Middlesex
Unit C, The Sunbury Centre
Hanworth Road
Sunbury
Middlesex TW16 5DA
Tel 01932 761100
Fax 01932 781188
sunbury@loknstore.co.uk
Tonbridge, Kent
Unit 6 Deacon Trading Estate
Vale Road
Tonbridge
Kent TN9 1SW
Tel 01732 771007
Fax 01732 773350
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
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
Fax 01233 646000
ashford@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 Kembrey Park, Wiltshire
Kembrey Street
Elgin Industrial Estate
Swindon
Wiltshire SN2 8UY
Tel 01793 421234
Fax 01793 422888
swindoneast@loknstore.co.uk
Woking
Marlborough Road
Woking
GU21 5JG
Tel 01483 378323
Fax 01483 722444
woking@loknstore.co.uk
Under Development (Managed Stores)
Hemel Hempstead
Broadstairs
This information is provided by RNS
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