Lok'nStore Group PLC Acquisition of trading store and sale of land (4449N)
February 01 2021 - 01:00AM
UK Regulatory
TIDMLOK
RNS Number : 4449N
Lok'nStore Group PLC
01 February 2021
Lok'nStore Group plc
("Lok'nStore", the "Company", or the "Group")
Acquisition of trading store and sale of land
Lok'nStore, the fast-growing AIM listed self-storage company, is
pleased to announce that it has acquired the Lok'nStore managed
store in Chichester ("the Chichester Store") and sold its freehold
land site at Pantheon Park, Wolverhampton.
The five-year old Chichester Store will be acquired for GBP4.025
million (as independently valued by Jones Lang LaSalle Limited).
The Company will pay in aggregate, approximately GBP4.16 million in
cash with associated costs and stamp duty. The acquisition will be
funded from the Group's existing bank facilities.
The current owner of the Chichester Store is Gypsy Moth Storage
Limited ("GMS") which in the year to 31 March 2020 made EBITDA of
GBP0.255 million; as at 31 March 2020 the book value of the
Chichester Store was GBP2.3 million.
At the same Lok'nStore has sold its freehold land at Pantheon
Park, Wolverhampton to GMS, with the full benefit of the planning
permission and all accumulated planning and design work for a new
storage services facility ("Wolverhampton Site") for a total cash
consideration of GBP1.523 million, (excluding VAT) reflecting the
purchase price of the site plus planning and other costs and fees
incurred by the Group to date. Sales proceeds will be used to
offset the cost of the acquisition of the Chichester Store, as
above.
Following this sale Lok'nStore will enter into a new Management
Services Agreement ("MSA") and Development and Advisory Agreement
("DAA") with GMS in respect of the Wolverhampton Site pursuant to
which the Group will provide property and construction advice
during the building of the Wolverhampton Store as well as ongoing
operational management services of the facility once built. The MSA
and DAA are each in substantially the same form and commercial
terms as other agreements to which the Group is party in respect of
its other managed facilities.
Once developed the Wolverhampton facility will comprise a 52,600
ft purpose built landmark store featuring Lok'nStore's distinctive
branding and is located in an excellent location adjacent to a busy
retail park. The store is expected to open by Q1 2022.
Today's developments demonstrate the Group's ongoing desire to
build a balanced portfolio of owned and managed stores. The sale to
GMS is consistent with this strategy and enables the site to be
developed in a capital-efficient manner. The acquisition of the
Chichester store provides the Group with a mature cash generative
asset which will be a welcome addition to the Group's portfolio of
owned stores which are driving Group Cash Available for
Distribution (CAD) and dividends. The reduction in ongoing
management fees from the Chichester Store will be replaced by fees
earned under the new DAA and MSA management and development
agreements referred to above.
GMS is a private company which was incorporated in 2014 to
develop and own the Chichester storage services operation, under
the management of the Group. Andrew Jacobs, Executive Chairman of
Lok'nStore Group holds 17.6% of the share capital of Lok'nStore and
also holds 19.4% of the share capital of GMS*. GMS has one
director, Ray Davies appointed on 20 September 2019, who is also
Group Finance Director of Lok'nStore. Accordingly, GMS is deemed to
be a related party of Lok'nStore within the meaning of the AIM
Rules and the above transactions constitute related party
transactions within the meaning of the AIM Rules. The Independent
Directors of Lok'nStore, being the Board excluding Andrew Jacobs
and Ray Davies consider, having consulted with finnCap (as the
Company's nominated adviser) that the terms of the Proposals are
fair and reasonable insofar as the Company's Shareholders are
concerned.
The Board look forward to updating the market on first half
trading on Monday 8(th) February
Neil Newman, Managing Director of Lok'nStore said:
"We are pleased to push forward our store management business
with this new development in Wolverhampton. It provides continued
momentum to our new store opening program with four stores
currently under development. We have managed the Chichester store
since its opening and it will provide a solid income over the
coming years for Lok'nStore group."
*This interest does not amount to a related party holding for
IFRS accounting purposes. Nevertheless, holdings of this type are
disclosed in the annual report each year under related party
transactions for full transparency. Source Lok'nStore Group Annual
Report 2020.
-Ends-
Enquiries:
Lok'nStore
Neil Newman, Group Managing Director
Andrew Jacobs, Executive Chairman 01252 521 010
Ray Davies, Group Finance Director
finnCap Julian Blunt, Giles Rolls, Corporate Finance
Alice Lane, Corporate Broking 020 7220 0500
Camarco, Billy Clegg / Tom Huddart 0203 757 4983
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END
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