Storage barn operator Lok'n'Store has rebased its dividend and for once, the term refers to a substantial increase in pay-outs, not a poorly-disguised dividend cut.
"The board has decided to significantly increase the dividend to 5p for the full year, and it is intended that the company's future dividend payments will reflect the growth in the underlying cash generated by the business," revealed Andrew Jacobs, Chief Executive Officer of Lok'n'Store.
The 5p dividend represents a two-thirds improvement on the previous year's 3p payment.
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"We have a secure financial base, an excellent development pipeline and robust trading which gives the board the confidence to propose this step change in the dividend," Jacobs said.
In the year to July 31st the group saw profit before tax retreat to £926m from £938m the year before, largely as a result of finance costs virtually doubling to £1.03m and a result of the firm refinancing its £40m bank facility during the year.
Though the group's business is off-site storage, many investors regard it as a glorified property company and so the net asset value (NAV) per share is closely watched. At the end of July 2012 adjusted NAV per share had barely changed at 228p from 229p the year before.
Net debt increased from £24.4m at the end of July 2011 to £25.7m at the end of July 2012.
"At an operating level we have continued to demonstrate an innovative approach to asset management, enabling the group to increase its operational footprint while maintaining a strong balance sheet. With further valuable planning permissions obtained and renewed and the opening of the Aldershot and Maidenhead stores scheduled for 2013, we are poised to move ahead strongly over the next couple of years," Jacobs said.
The new document storage business, acquired at the end of June 2011, has moved into profit under its new ownership, with earnings before interest, tax, depreciation and amortisation of £0.47m, versus a loss of £0.04m the year before.
JH
