Self-storage company Lok’nStore (LOK:AIM) saw occupancy rates rise 4.6% in the first half of its financial year to 31 January. Revenue increased 3.9% year-on-year in Lok’nStore’s core self-storage business, implying decent demand, although square footage prices remain flat.
The company seems to be tapping into to a new seam of demand, where its serviced document storage division looks after various documents and tapes. This part of the business saw sales increase 8.8%.
Lok’n Store currently has 26 self-storage centres in the UK and plans to open four new stores in the second half of 2017.
'We are now on site in all four of our pipeline stores in Broadstairs, Gillingham, Hemel Hempstead and Wellingborough,' says CEO Andrew Jacobs. 'All four should be open by the end of our 2017 financial year and will provide added impetus to sales and earnings growth,' he claims.
Guy Hewitt, analyst at broker FinnCap, is confident the company can finance the development of its new stores, which will add 14% to available space and support further growth. The evidence is Lok’nStore’s new £40m bank facility that runs through to January 2023.
Once the new stores open, Hewitt expects a significant uplift to net asset value (NAV) towards his 417p target some time during the new financial year, to January 2018. The company's adjusted NAV stood at 386p as of 31 July 2016
The shares nudged 2.7% higher to 472.5p, implying a 13% premium to FinnCap's NAV target.
