Lok'nStore extends bank facility, adds Leicester to pipeline

Self-storage company Lok'nStore announced an increase in its banking facility to £50m on Tuesday, following the execution of a £10m accordion.

The AIM-traded firm said the increased facility would provide funding for site acquisitions and working capital to support its ambitious growth plans.

It said the facility was originally agreed with the Royal Bank of Scotland in January 2016, and the term extended by two years in January last year.

The larger facility now runs until January 2023.

Lok’nStore said the interest rate was set at LIBOR plus a 1.40%-1.65% margin, based on a loan-to-value covenant test, with the margin currently set at 1.40%.

Bank covenants and margin were unaffected by the increase in the size of the facility, the board confirmed.

As at 31 July last year net debt was £17.4m, with a loan-to-value ratio of 14%.

Lok'nStore also announced the acquisition of a freehold site for a new landmark store in Leicester, subject to planning.

The company said the one acre site is in a “highly prominent” location opposite a major food retailer.

It said the total investment of £8.5m would be funded from cash flow and the extended bank facility, and when open, the store would add around 60,000 square feet of trading space.

The site would bring Lok’nStore’s total secured pipeline of new stores to seven, adding to its existing 28 trading stores.

Further sites were said to be under consideration as the company pursued its growth strategy.

Its new landmark store in Wellingborough will open in March, and the board said it was in the early build stages at Dover and Exeter.

Bedford, Ipswich, Bournemouth and Leicester were all in the design and planning stage, with all set to open by the end of 2019.

“The £10m increase in our existing banking facility with its extremely competitive terms and flexible structure enables Lok'nStore to continue with its ambitious plans for growth funded from operating cash flow, existing cash and bank lending, whilst the balance sheet remains conservatively geared,” said CEO Andrew Jacobs.

“This new Leicester site increases our secured pipeline of landmark stores to seven.

“All are in prominent locations with large catchment areas and little established competition and demonstrate the company's ability to source high quality sites adding to future sales and earnings growth.”

Jacobs said trading at the company’s new stores had been “excellent”.

“These eye-catching buildings, with their distinctive orange Lok'nStore branded livery and prominent signage, create highly visible landmarks, which continues to be a big contributor of new customers.”