23rd Apr 2007 07:01
Lok'n Store Group PLC23 April 2007 23 April 2007 LOK'NSTORE GROUP PLC ("Lok'nStore" or "the Group") Interim Results for the six months to 31 January 2007 Lok'nStore Group Plc, a leading company in the fast-growing self-storage marketwith over 1 million sq. ft of lettable space, announces record interim resultsfor the six months ended 31 January 2007. Highlights • Turnover up 23.8% to £5.30 million (£4.28 million: six months to 31.1.06) • Store EBITDA up 43.7% to £2.18 million (£1.52 million: six months to 31.01.06) • Store EBITDA margin up to 41.3% from 35.6% (six months to 31.01.06) • Group EBITDA * up 73.8% to £1.44 million (£0.83 million: six months to 31.01.06) • Operating profit * up 108.5% to £899,357 (£431,367: six months to 31.01.06) • Profit before tax * up 504% to £447,061 (Profit £73,916: six months to 31.01.06) • New banking facility of £40 million • Commencement of dividend at full year * including a profit and loss charge for the application of FRS 20 ( share-basedpayments) Andrew Jacobs, Chief Executive, commented: "These record results show that Lok'nStore is taking full advantage of thisexciting market. We are particularly encouraged by the progress of our new unitsat Farnborough and Crayford which have created a compelling model for futuregrowth, and since the period end we have broken through the 1 million squarefeet mark with the acquisition of the new Harlow store. We are investing in new larger purpose built stores and enlarging the averagesize of our existing units to improve margins. To underline our confidence inthe business the Board expects to pay a maiden dividend in respect of the fullyear." Lok'nStore Group plcAndrew Jacobs, Chief Executive Today: 020 7831 3113Ray Davies, Finance Director Thereafter: 01252 521010 Financial Dynamics Tel: 020 7831 3113Billy CleggJonathan Brill CHAIRMAN'S STATEMENT Overview I am delighted to report on this record first half for the Group, during which turnover, cash flow and profits all increased significantly. A 23.8% increase in turnover resulted in geared profit growth at all levels. Ourkey performance measure for each store is earnings before interest, tax,depreciation and amortisation (Store EBITDA) which rose by 43.7%. This resultedin a five-fold increase in Group profit before tax. We are encouraged by the operating success at our new stores in Farnborough andCrayford and we plan to accelerate our growth rate of larger new build stores.To help fund growth a new £40 million bank facility has been put in place whichwill provide all the external funding currently required. This facility replacesthe previous £20 million facility. Interest payable on the loan is on similarterms as previously at between 1.25% and 1.35% over LIBOR. Your Board is committed to finding high quality self-storage sites similar tothe new stores at Farnborough and Crayford, while at the same time enhancing thevalue of the existing portfolio. In regard to the latter we announced after theperiod end the sale of our Kingston store for £10 million in cash, a price atthe upper end of our expectations. This price is significantly in excess of whatcould be achieved for self-storage use and the proceeds will be reinvested in anumber of new stores. The sale of the Kingston store is in line with our core strategy of activelymanaging our existing portfolio in order to maximise the growth of asset valuesfor our shareholders. This includes increasing the size of our stores, and wherepossible buying in the freeholds of our leasehold stores and occasionallyselling stores if appropriate. This is in addition to our continuing efforts todrive storage revenues up by strengthening our branding, filling space andincreasing our pricing. Our priorities continue to be: • improving the operating performance of existing stores• maximising the value of existing stores• increasing the number of stores Improving the operating performance of existing stores Turnover Growth Turnover for the six months to 31 January 2007 increased by 23.8% to £5.3million with stores in all age brackets contributing to this growth (£4.28million: six months to 31.01.2006). Stores over 250 weeks grew by 13%demonstrating continued robust performance from the established portfolio. Therecent efforts to strengthen the brand are bearing fruit and this will continuewith projects such as the development at our Fareham store in the currentperiod. The Group achieved an operating profit of £899,357 up 108.5% compared to£431,367 for the corresponding 2006 period. Average prices for self-storage increased to £16.70 at January 31 2007 from£16.40 per sq ft in July 2006. The Group made a pre-tax profit for the period of £447,061 up 504% from the£73,916 profit for the corresponding period in 2006. Basic earnings per sharewas 1.92p per share (0.30p per share: six months to 31.01.2006). The cash flow of the operating business has continued to grow. Store EBITDA wasup 43.7% to £2.181 million for the period (£1.517 million: six months to31.01.2006), with overall store margins expanding from 35.6% to 41.3%. Packing materials, insurance and other sales kept pace with the increase instorage income at 7.8% of turnover, (7.4%: 31.01.2006) an increase of 32.8% overthe corresponding 2006 period. The total area let increased by 15.9% to 604,712 sq. ft (521,739 sq. ft:31.01.2006) and the amount of fitted space occupied increased by 18.4% to527,504 (445,228 sq. ft: 31.01.2006). Maximising the value of existing stores During the period we commenced two exciting projects to increase the value ofexisting stores. A new lease has been signed at the Company's Fareham store which will double thesize of the store to around 60,000 sq ft. The store fronts the busy M27motorway, and will carry the distinctive orange livery and neon lighting whichis proving an effective generator of business at our other stores. The expansionof the store adds significantly to the potential profit margins as no furtheroperating costs are required. During the period the Company also purchased a new freehold site for theexisting store in Portsmouth which currently occupies a leasehold premises.This new freehold increases the space available to the Portsmouth business to64,000 sq ft, an increase of 63%. It is adjacent to the busy M275 motorwayaccess to Portsmouth city centre and will also carry Lok'nStore's strengthenedbranding. We continue to explore options such as these to create extra value at both ourfreehold and leasehold operations. Following the Company's comprehensive external valuation at 31 July 2006, thefreehold and leasehold properties have not been revalued during this six monthperiod. The Board has determined in the future to value all properties annually. Increasing the number of stores We have 21 stores of which 11 are freehold accounting for 60% of total space,and 10 are leasehold. After the period end we announced the acquisition of a new 69,000 sq ft store inHarlow. This store will be purpose built with opening targeted for spring 2008,and is prominently located opposite a busy retail park. This takes Lok'nStorethrough the 1 million square feet mark which is a notable milestone in thedevelopment of the Company. Our objective is to increase the number of Lok'nStore centres within the currentgeographical coverage of South-East England and we are continuously reviewingopportunities to buy, to build, and to lease new stores. We have recentlyappointed Rapleys, the roadside specialist surveyors to assist the propertyacquisition team. Financial strength and balance sheet efficiency Capital expenditure during the period totalled £3.6 million, of which £2.2million is accounted for by the acquisition of the new Portsmouth site and thisis reflected in the increase in tangible assets from £24,405,504 to £28,501,660. At 31 January 2007, the Group had cash balances of £1.35 million (31 January2006: £0.63 million) and £16.7 million of borrowings representing gearing of128% on net debt of £15.4m million (31 July 2006: 122%). Gearing is 29% whencalculated taking account of the uplift in market values of properties arisingfrom the July 2006 valuations. Following the sale of the Kingston store afterthe period end gearing reduces to 10% on a revalued basis. The Board expects to pay a maiden dividend at the full year reflecting its viewof the continuing progress and development of the business. Non Executive Directors I am delighted to announce that Edward Luker and Charles Peal have joined theBoard as Non- Executive Directors. Edward Luker (57) is a well known figure in the UK property industry, havingworked for CB Richard Ellis for 33 years, where Edward has been a Director andPartner for 20 years. In 1997-8 Edward was Chairman of the Investment PropertyForum, the industry body, and has acted for a number of pension funds in thecreation of property investment funds. Edward is a Fellow of the RoyalInstitute of Chartered Surveyors and is currently the discretionary portfoliomanager of one of the UK's largest public sector pension funds investing inproperty. Charles Peal (52) started his career in 1977 at 3i Group, the leading UK quotedventure capital company. He was the Chief Executive of Legal and GeneralVentures from 1988 to 2000 and was a director of various quoted private equityinvestment trusts and management buyouts. He is currently a director ofWarnborough Asset Management, an independent fund management business, and otherprivate equity investments. Edward and Charles bring a raft of valuable experience in property and financeto our Board. With Lok'nStore's strong operational model this will be a powerfulcombination. Edward's depth of property experience and contacts will greatlycontribute to our site acquisition programme and portfolio management. Charles'financial skills will complement this, and further help us to get full valuefrom Lok'nStore's proven ability to grow assets and cash-flow. Our people At 31 January 2007, we had 107 employees and I would like to thank them all fortheir contribution during the period. Outlook These results show Lok'nStore is taking full advantage of the exciting UKself-storage market. We are encouraged by the progress of our new units atFarnborough and Crayford which has created a compelling model for future growth,and since the period end we have broken through the 1 million square feet markwith the acquisition of the new Harlow store. The doubling in size of the Fareham store and the move of the Portsmouth storeto a new freehold location demonstrate that plenty of extra value can be createdfrom the established portfolio, beyond the geared effect of the turnover growthon profitability. We are investing in new stores and enlarging the average size of our existingunits to improve margins. To underline our confidence in the business the Boardexpects to pay a maiden dividend in respect of the full year Simon ThomasChairman CONSOLIDATED PROFIT AND LOSS ACCOUNTFor the six months ended 31 January 2007 Notes Unaudited Audited Six months Six months Year 31 January 31 January 31 July 2007 2006 2006 £ £ £ As restated As restatedTURNOVERContinuing operations 2 5,298,485 4,281,574 8,946,083 Operating expenses (4,399,128) (3,850,207) (8,260,052) OPERATING PROFIT 899,357 431,367 686,031 Loss on disposal of fixed assets - (980) -Interest receivable 29,976 14,859 36,936Interest payable (482,272) (371,330) (763,986) PROFIT/(LOSS) ON ORDINARY ACTIVITIES BEFORETAXATION 447,061 73,916 (41,019) Taxation 3 36,913 - (36,913) PROFIT/(LOSS) ON ORDINARY ACTIVITIES AFTERTAXATION 483,974 73,916 (77,932) EARNINGS/(LOSS) PER SHARE Basic 5 1.92p 0.30 p (0.30) pFully diluted 5 1.79p 0.29 p (0.30) p STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSESFor the six months ended 31 January 2007 Notes Unaudited Audited Six months Six months Year 31 January 31 January 31 July 2007 2006 2006 £ £ £ As restated As restated Profit/(loss) for financial period 483,974 73,916 (77,932)Prior period adjustments 1 c) (148,331) Total recognised gains & losses 335,643 CONSOLIDATED BALANCE SHEET31 January 2007 Unaudited Audited 31 January 31 January 31 July 2007 2006 2006 £ £ £ Notes As restated As restatedFIXED ASSETSIntangible assets 322,686 346,941 334,813Tangible assets 6 28,501,660 24,405,504 25,430,037 28,824,346 24,752,445 25,764,850 CURRENT ASSETSStocks 78,776 102,221 77,668Debtors 7 1,773,785 1,535,076 2,022,769Cash at bank and in hand 1,353,284 631,004 921,928 3,205,845 2,268,301 3,022,365 CREDITORS: Amounts falling due within one year 8 (3,274,557) 2,876,955) (3,877,489) NET CURRENT LIABILITIES (68,712) (608,654) (855,124) TOTAL ASSETS LESS CURRENT LIABILITIES 28,755,634 24,143,791 24,909,726 CREDITORS: Amounts falling due after more than 9 (16,724,392) (13,279,244) (14,066,802)one year PROVISION FOR LIABILITIES AND CHARGES 3 - - (36,913) 12,031,242 10,864,547 10,806,011 CAPITAL AND RESERVESCalled up share capital 4 267,177 250,711 250,911Share premium 13 657,924 59,376 66,776Capital redemption reserve 13 34,205 34,205 34,205Merger reserve 13 6,295,295 6,295,295 6,295,295Other distributable reserve 13 5,903,002 5,903,002 5,903,002Profit and loss account 10 (962,519) (1,294,645) (1,446,493)Share-based payment reserve 11 345,744 126,189 211,901ESOP shares (509,586) (509,586) (509,586) SHAREHOLDERS' FUNDS 12,031,242 10,864,547 10,806,011 CONSOLIDATED CASH FLOW STATEMENTFor the six months ended 31 January 2007 Notes Unaudited Audited Six months Six months Year 31 January 31 January 31 July 2007 2006 2006 £ £ £ Cash flow from operating activities 14a 1,151,015 118,270 1,603,118 Returns on investments and servicing of finance (379,614) (290,284) (771,211) Taxation - - (50,500) Capital expenditure and financial investment (3,597,709) (4,758,364) (6,273,461) CASH OUTFLOW BEFORE FINANCING (2,826,308) (4,930,378) (5,492,054) Financing 3,257,664 5,136,644 5,989,244 INCREASE IN CASH IN THE PERIOD 431,356 206,266 497,190 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT) 31 January 31 January 31 July 2007 2006 2006 Notes £ £ £ Increase in cash in the period 431,356 206,266 497,190 Change in net debt resulting from cash flows (2,650,250) (5,129,244) (5,974,244) MOVEMENT IN NET DEBT IN PERIOD (2,218,894) (4,922,978) (5,477,054) NET DEBT BROUGHT FORWARD (13,202,316) (7,725,262) (7,725,262) NET DEBT CARRIED FORWARD 14b (15,421,210) (12,648,240) (13,202,316) NOTES TO THE INTERIM RESULTS 1. ACCOUNTING POLICIES (a) Basis of preparation The interim results for the half year ended 31 January 2007 have been preparedon the basis of the accounting policies as set out in the statutory financialstatements for the year ended 31 July 2006 as modified by the application ofFinancial Reporting Standard 20 ('FRS 20') - Share based payments. This is thesame basis as will be applied at the year-end. The interim results, which wereapproved by the Directors on 20 April 2007 are unaudited but have been reviewedin accordance with Auditing Practices Board bulletin "Review of InterimFinancial Information" by the auditors. The interim results do not constitutestatutory financial statements within the meaning of section 240 of theCompanies Act 1985. The directors, having been notified of the cessation of thepartnership known as Baker Tilly, resolved that Baker Tilly UK Audit LLP beappointed as successor auditor with effect from 1 April 2007, in accordance withthe provisions of the Companies Act 1989, s26(5). Comparative figures for the year ended 31 July 2006 are an abridged version ofthe Group's full accounts, which carry an unqualified audit report, do notcontain a statement under section 237(2) or (3) of the Companies Act and havebeen delivered to the Registrar of Companies. (b) Share-based payments The cost of providing share based payments to employees is charged to the profitand loss account over the vesting period of the related share options. The costis based on the fair value of the options determined using the Monte Carlopricing model, which is appropriate given the vesting and other conditionsattaching to the options. The value of the charge may be adjusted to reflectexpected and actual levels of vesting. Advantage has been taken of the exemption available in FRS20 - Share basedpayments to exclude share options granted before November 2002. (c) Prior period adjustment The 'first-time' adoption of FRS20 in these interim financial statements hasnecessitated a prior period adjustment to be made, creating a 'Share-basedpayments reserve' at the beginning of the period as detailed in note 11. Thereis also a corresponding effect on the deferred tax liability as at the beginningof the period. This adjustment related to all share options granted under thecompany's EMI scheme and under unapproved arrangements after November 2002. 2. TURNOVER AND SEGMENTAL INFORMATION Revenue represents amounts derived from the provision of self storageaccommodation and related services which fall within the Group's ordinaryactivities after deduction of trade discounts and value added tax. The Group'snet assets, revenue and profit before tax are attributable to one activity, theprovision of self-storage accommodation and related services. These all arisein the United Kingdom. Total revenue for the period was £5.3 million (31.01.2006: £4.28 million).Revenue from self storage accommodation was £4.86 million in the period(31.01.2006: £3.94 million), £0.41 million came from other storage relatedincome such as sales of packaging materials and insurance (31.01.2006: £0.32million) and £0.028 million came from non-storage related income (31.01.2006:£0.022 million). 3. TAXATION Unaudited six Unaudited six Audited months months Year 31 31 Jan 2007 31 Jan 2006 July 2006 £ £ £ Current tax charge for the period - - - As restatedDeferred Tax 36,913 - (36,913) Origination & reversal of timingdifferencesTotal deferred tax credit (charge) for 36,913 - (36,913)the periodTotal tax credit/(charge) on profit on 36,913 - (36,913)ordinary activities. The Group has revenue tax losses of approximately £5.8 million available tocarry forward against future taxable profits of the same trade. Of this amount,£4.6 million has been provided against fixed asset timing differences. No valueis ascribed to these losses, due to the uncertainty as to the utilisation of thelosses in the foreseeable future. The 2006 year tax charge related to a movement in deferred tax arising onaccelerated capital allowances in excess of depreciation after taking account ofall revenue losses. This charge has reversed in this period due to the effect ofthe tax deduction arising on the exercise of the 'Founder options' referred toin note 13. This effect is specific to this period and arises since the taxdeduction on the share option exercises has not been matched with acorresponding accounting charge. This is because the Group is taking advantageof the exemption available under FRS 20 to not account for the cost of shareoptions granted prior to November 2002 through the profit and loss account. Future tax charges may be affected by the degree to which deferred tax assetsare recognised in the future. It is not the intention of the directors to make any significant disposals ofoperational self-storage centres in the foreseeable future. If however, theproperties were sold at their market values as operating self-storage centres,or in the case of the Kingston and Reading stores with their residentialdevelopment value, an estimate of the tax payable on the gain arising at 31January 2007 would be approximately £10.6 million. This tax payable figure doesnot take into account any claims to rollover relief that the Company might make. At present, it is not envisaged that any tax will become payable in theforeseeable future. The group intends to make a rollover relief claim in respect of the capital gainarising on the sale of the Kingston store. 4. SHARE CAPITAL Unaudited Unaudited Audited 31 Jan 2007 31 Jan 2006 31 July 2006 £ £ £ Authorised: 350,000 350,000 350,00035,000,000 ordinary shares of 1p each Allotted, issued and fully paid: 267,177 250,711 250,91126,717,700 ordinary shares of 1p each Authority to make market purchases of its shares Following approval by shareholders of a special resolution at the AGM on 7December 2006, the company has authority to make market purchases of up to5,845,299 shares. The authority expires at the conclusion of the next AGM, butis expected to be renewed at the next AGM. 5. EARNINGS / (LOSS) PER ORDINARY SHARE The calculation of earnings per ordinary share is based on the following profit/(loss) and on the following weighted average number of shares in issue. Unaudited Unaudited Audited 31 Jan 2007 31 Jan 2006 31 July 2006 £ £ £ As restated As restated Profit/(loss) for the financial period 483,974 73,916 (77,932) No of Shares No of Shares No of SharesWeighted average number of sharesFor basic earnings per share 25,250,423 24,443,644 24,453,288Dilutive effect of share options 1,733,817 1,471,665 1,526,446 26,984,240 25,915,309 25,979,734 Earnings / Loss per share Basic 1.92p 0.30p (0.30)pDiluted 1.79p 0.29p (0.30)p 6 TANGIBLE FIXED ASSETS Short leasehold Furniture, Freehold Improvements fixtures & MotorGroup Properties fittings Vehicles Total £ £ £ £ £Cost1 August 2006 18,527,701 1,595,577 9,557,776 60,406 29,741,460Additions 2,415,735 139,432 1,042,542 - 3,597,709 31 January 2007 20,943,436 1,735,009 10,600,318 60,406 33,339,169 Depreciation1 August 2006 540,078 633,055 3,098,618 39,672 4,311,423Charged in year 73,388 71,214 379,023 2,461 526,08631 January 2006 613,466 704,269 3,477,641 42,133 4,837,509 Net book value31 July 2006 17,987,623 962,552 6,459,158 20,734 25,430,03731 January 2007 20,329,970 1,030,740 7,122,677 18,273 28,501,660 The additions to freehold properties include the acquisition of the freeholdsite at Rudmore Square, Portsmouth totalling £2.2 million. The additions tofixtures and fittings includes fit-outs at Farnborough, Horsham, Crayford,Eastbourne and Milton Keynes stores. Market valuation of freehold and leasehold land and buildings Following the Company's comprehensive external valuation at 31 July 2006, thefreehold and leasehold properties have not been valued during this six monthperiod, although it is the intention to do so at the next year-end at 31 July2007. The valuation report at 31 July 2006 indicated a total for properties valued of£66.6 million (NBV £25.2 million). These valuations have not been included inthe Balance Sheet. The valuations also do not account for any further investmentor divestment in existing centres since July 2006. 7 DEBTORS Unaudited Audited 31 Jan 2007 31 Jan 2006 31 July 2006 £ £ £Due within one year:Trade debtors 802,077 687,447 807,347Other debtors 308,145 183,505 83,190Prepayments & accrued income 663,563 664,124 1,132,232 1,773,785 1,535,076 2,022,769 8 CREDITORS Unaudited Audited 31 Jan 2007 31 Jan 2006 31 July 2006 £ £ £ Trade creditors 582,662 521,805 1,039,688Taxation & social security costs 101,066 80,831 281,622Corporation tax - 45,700 -Other creditors 959,166 758,019 911,432Accruals & deferred income 1,631,663 1,470,600 1,644,747 3,274,557 2,876,955 3,877,489 9 CREDITORS: AMOUNTS FALLING DUE AFTER MORE THAN ONE YEAR Unaudited Audited 31 Jan 2007 31 Jan 2006 31 July 2006 £ £ £Bank loans repayable in more than 2years but not more than 5 yearsGross 16,774,494 13,279,244 14,124,244Deferred financing costs (50,102) - (57,442) ________ ________ ________Bank loans repayable in more than 2years but not more than 5 years 16,724,392 13,279,244 14,066,802 10 PROFIT AND LOSS ACCOUNT Unaudited Audited 31 January 2007 31 January 2006 31 July 2006 £ £ £ Opening balance as originally (1,298,162) (1,321,980) (1,321,980)statedPrior period adjustment:Share-based payments (211,901) (46,581) (46,581)Deferred tax 63,570 - - Opening balance as restated (1,446,493) (1,368,561) (1,368,561)Profit /(loss) for the period 483,974 73,916 (77,932) Closing balance (962,519) (1,294,645) (1,446,493) 11 SHARE BASED PAYMENT RESERVE Unaudited Audited 31 January 2007 31 January 2006 31 July 2006 £ £ £ Opening balance as originally - - -statedPrior period adjustment 211,901 46,581 46,581 Charge for period 133,843 79,608 165,320 Closing balance 345,744 126,819 211,901 12 SHARE BASED PAYMENT PLANS The group operates an Enterprise Management Initiative ('EMI') approved and anunapproved share option scheme, the rules of which are similar in all materialrespects. Awards granted under the Approved Share Option Plan do not fall underthe scope of FRS20. The grant of options to executive directors and seniormanagement is recommended by the Remuneration Committee on the basis of theircontribution to the Group's success. The options vest after three years. The exercise price of the options is equal to the closing mid-market price ofthe shares on the trading day previous to the date of the grant. The exerciseof options awarded has been subject to the meeting of performance criteriageared primarily to sales growth with the key non market performance conditionbeing the achievement of £10 million annual turnover. Exercise of an option issubject to continued employment. The life of each option granted is sevenyears. There are no cash settlement alternatives. The expected volatility is based on a historical review of share price movementsover a period of time, prior to the date of grant, commensurate with theexpected term of each award. The expected term is assumed to be six years whichis part way between vesting (3 years after grant) and lapse (10 years aftergrant). The risk free rate of return is the UK gilt rate at date of grantcommensurate with the expected term (i.e. six years). The total charge for the period relating to employer share-based payment schemeswas £133,843. (Prior period adjusted 31.01.2006: £79,608), all of which relatesto equity-settled share-based payment transactions. The 'first-time' adoption ofFRS20 to these interim financial statements has necessitated a prior periodadjustment to be made, and in total a 'Share-based payments reserve' at 31January 2007 of £345,744 results. This adjustment related to all share optionsgranted under the company's EMI scheme and under unapproved arrangements sinceNovember 2002 on 1,589,500 shares. 13 OTHER RESERVES Other Capital distributable redemption Share premium Merger reserve reserve reserve £ £ £ £ 1 August 2006 66,776 6,295,295 5,903,002 34,205Exercise of share options 591,148 - - - 31 January 2007 657,924 6,295,295 5,903,002 34,205 On 3 November 2006, Simon Thomas, Andrew Jacobs and Colin Jacobs exercised theirfounder options ('Founder Options'). These Founder Options were granted underarrangements pertaining to the Company's original move onto the OFEX market in1997 and were due to expire in April 2007. Their resultant holding in theCompany's ordinary shares of 1 pence each (the 'Ordinary Shares') followingdisposal of the Ordinary Shares issued pursuant to the exercise of the FounderOptions is as follows: Director No of founder Exercise Exercise Ordinary Disposal Date of Resultant Resultant % options price per date shares price per disposal holding holding exercised share disposed share Simon Thomas 496,489 37p 3.11.06 496,489 181p 3.11.06 2,187,500 8.2% Andrew Jacobs 992,978 37p 3.11.06 992,978 181p 3.11.06 5,314,000 19.9% Colin Jacobs 130,000 37p 3.11.06 130,000 181p 3.11.06 nil 0% No Founder Options remain following this exercise. The directors continue toretain share options granted subsequent to 1997. The resultant beneficial holdings of the directors following the abovetransactions remain unchanged. In aggregate the Directors referred to above hold8,041,925 ordinary shares in the Company (including their indirect holdings ofLok'nStore shares through two pension schemes (540,425 shares)) representing30.11% of the Company's share capital as enlarged by the issue of OrdinaryShares to satisfy the exercise of the Founder Options. Following this transaction and at 31 January 2007 the Company has 26,717,744Ordinary Shares in issue. 14. CASH FLOWS Unaudited Audited Six months Six months Year 31 January 31 January 31 July 2007 2006 2006 £ £ £ As restated As restated(a) Reconciliation of operating profit to net cash flow from operating activities Operating profit 899,357 431,367 686,031 Depreciation 526,086 384,638 875,203 Loss on disposal of fixed assets - - 980 Amortisation 12,127 12,127 24,255 Share -based employee remuneration 133,843 79,608 165,320 (Increase) / Decrease in stocks (1,108) (13,573) 10,980 Decrease/(Increase) in debtors 256,325 149,717 (330,187) (Decrease)/Increase in creditors (675,615) (925,614) 170,536 Net cash flow from operating activities 1,151,015 118,270 1,603,118 At Other non- At 31 July 2006 Cash flow cash changes 31 Jan 2007 £ £ £ £ (b) Analysis of net debt Cash at bank and in hand 921,928 431,356 - 1,353,284 Debt due after one year (14,124,244) (2,650,250) - (16,774,494) TOTAL (13,202,316) (2,218,894) - (15,421,210) 15 POST BALANCE SHEET EVENTS a) Sale of Kingston Store On 23 March 2007, contracts were exchanged on the sale of Lok'nStore's Kingstonstore for £10 million: £6 million is payable on completion in June and theremaining £4 million plus accrued interest is payable on 28 December 2007. The property was bought for £976,000 in 1996, and stands in the books at£1,331,149. The site was valued in July 2005 by Cushman Wakefield Healey andBaker as an operational self storage site at £2.75 million and as a residentialdevelopment site at £9.15 million in July 2006. As referred to in note 3, theGroup intends to make a rollover relief claim in respect of the capital gainarising on the sale of the Kingston site. b) Acquisition of new store in Harlow On 30 March 2007, Lok'nStore, acquired the freehold of a new build site onEdinburgh Way, in Harlow. The site has all the necessary planning consents andwill cost approximately £5 million once fully constructed and fitted out. It isexpected to open in spring 2008. This takes the Company's total lettable square footage to 1,023,000, breakingthe 1 million square feet barrier for the first time. 62% of this space is heldfreehold and 38% leasehold. The store will carry Lok'nStore's distinctive orange branding and provide 69,000square feet of self-storage space. The store is prominently located opposite abusy retail park. The decision to acquire more new build sites follows the success of Lok'nStore'sfirst new build store at Farnborough overlooking the M3, which is trading welland provides a model for Lok'nStore's future development. INDEPENDENT REVIEW REPORT TO LOK'N STORE GROUP PLC Introduction We have been instructed by the company to review the financial information setout on pages 5 to 15 and we have read the other information in the interimstatement and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financial information. This report, including the conclusion, has been prepared for and only for thecompany for the purpose of their interim statement and for no other purpose. Wedo not, therefore, in producing this report, accept or assume responsibility forany other purpose or to any other person to whom this report is shown or intowhose hands it may come save where expressly agreed by our prior consent inwriting. Directors' responsibilities The interim statement, including the financial information contained therein, isthe responsibility of, and has been approved by the directors. The directors areresponsible for preparing the Interim Statement in accordance with theAlternative Investment Market Rules which require that the accounting policiesand presentation applied to the interim figures must be consistent with thosethat will be adopted in the company's annual accounts. Review work performed We conducted our review in accordance with guidance contained in Bulletin 1999/4issued by the Auditing Practices Board as if that Bulletin applied. A reviewconsists principally of making enquiries of group management and applyinganalytical procedures to the financial information and underlying financial dataand based thereon assessing whether the accounting policies and presentationhave been consistently applied unless otherwise disclosed. A review excludesaudit procedures such as tests of controls and verification of assets,liabilities and transactions. It is substantially less in scope than an auditperformed in accordance with Auditing Standards and therefore provides a lowerlevel of assurance than an audit. Accordingly we do not express an audit opinionon the financial information. Review conclusion On the basis of our review we are not aware of any material modifications thatshould be made to the financial information as presented for the six monthsended 31 January 2007. BAKER TILLY UK AUDIT LLPChartered Accountants2 Bloomsbury StreetLondon WC1B 3ST 23 April 2007 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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