MIDAS SHARE TIPS UPDATE: Self-storage firm Lok'nStore is reaping the benefits of our changing lives
Lok'nStore is another company reaping the benefits of changing consumer and business norms. Founded by chief executive Andrew Jacobs in 1995, Lok'nStore owns and operates self-storage units, with 29 stores up and running and a further 13 in the pipeline.
Midas recommended the shares at 307.5p in 2015. Today, they are 415.5p and City analysts think they are worth more than 600p.
In America, there are 9.3 square feet of self-storage space per person. Here, there is less than 0.7 square foot. US trends often wend their way to Britain and this is likely to be no exception.
People increasingly use self-storage because they have too much stuff and need somewhere to put it while they save for bigger homes. Companies use self-storage as a flexible way of keeping goods. Some use the sites to run small online businesses as well.
Whatever the reason, self-storage is a growing sector and Lok'nStore is doing well. Annual results posted last week showed a 34 per cent increase in profits to £5.3 million for the year to July 31, and a 10 per cent rise in the dividend to 11p.
The numbers should continue to rise, particularly given that Jacobs plans to open so many new stores over the next few years – each site carefully chosen to accommodate local demand. The units have changed as well as the firm has focused on modern, attractive, purpose-built properties.
MIDAS VERDICT: Jacobs founded Lok'nStore more than 20 years ago, he remains deeply committed to the business and still owns 18 per cent of the shares. The company has upped its game in recent times but it is valued less highly on the stock market than its larger peers. That should change over the next couple of years, taking the stock price higher. This was a good investment in 2015. It is even better now.
Traded on: Aim Ticker: LOK Contact: loknstore.co.uk or 01252 521010
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