U.K. self-storage company Lok'nStore Group PLC has released the financial report for its 2014 fiscal year, which ended July 31. The company reported a 7.2 percent increase in revenue from 2013 to £13.9 million, but pre-tax profit fell 75 percent from £1.43 million to £367,000. The drop was attributed to a £1.6 million one-off impairment charge at the company’s Portsmouth North Harbour, England, development site.
The future of the Portsmouth project is apparently up in the air. “The group has no immediate plans to progress works at our site at Portsmouth North Harbour and may not ultimately develop the site as a purpose-built self-storage center,” Lok’nStore officials said in a strategic report accompanying the financial results. “Accordingly, the carrying cost of the site has been written down by £1.6 million to a level which reflects its alternative-use value.”
The loss in profit was otherwise tempered by a 17.5 percent increase in funds from operations (FFO), which finished at £3.97 million for the year. FFO per share was 16.1 pence, up from 14.1 pence in 2013.
Unit occupancy was up 12.4 percent for the year, reaching 69.5 percent across the company’s portfolio. Rental rates increased 5.8 percent in 2014, and ancillary sales increased 15.5 percent. Revenue from document storage was flat year over year, reaching £1.84 million.
Despite the impairment issued on the Portsmouth property, Lok’nStore still has U.K. development projects in Aldershot, Bristol, Reading and Southampton. All four self-storage facilities are expected to open in the next 18 months. The Reading property is scheduled to be completed this month, company officials said.
"Trading has been strong and accelerated through the second half of our financial year. Our new store pipeline is changing the balance of our portfolio, with new and purpose-built stores increasing from 39.6 percent of the portfolio to 58 percent of our lettable space,” said Andrew Jacobs, CEO. “The new flagship store in Maidenhead opened in December and is trading well, and the new stores in Reading, Aldershot, Southampton and Bristol opening over the coming 18 months will add further impetus to sales and earnings growth. These will all be purpose-built stores with our eye-catching modern design in highly prominent positions.”
The company declared an annual dividend of 7 pence per share, up 16.7 percent from 6 pence per share in 2013.
Lok’nStore builds, buys or leases large warehouses or industrial buildings and rents storage units to customers on a weekly basis. Around 60 percent of the company's 7,000 customers are residential and 40 percent are commercial. Lok’nStore has more than 920,000 square feet of net rentable space, which is evenly split between freehold and leasehold.