Lok'n Store Group PLC (LON:LOK), the self-storage company, has got shot of its document storage business.
The business has been sold for £7.64mln in cash to Iron Mountain UK, which represents a nice premium to the net book value (as at the end of last July) of £5.4mln,
The disposed of business contributed £2.38mln of Lok’n’Store’s revenue in the year to the end of July 2018 and £660,000 to annual underlying earnings (EBITDA).
In the short term, the disposal proceeds will be used to reduce overall group borrowing and will improve all of the group’s key banking ratios.
READ Lok'n 'Store unlocks share price growth as annual profit soars
In the medium term, the disposal proceeds will be used to fund the ongoing investment of new self-storage centres, fulfilling the company's objective of growing asset value by recycling capital from lower growth assets into high growth landmark stores.
"Executing this strategic disposal and making these further acquisitions continues our strategy of increasing the number of fast-growing landmark self-storage centres. We are reallocating capital to enhance the efficiency and quality of our portfolio and expand our asset value whilst further strengthening our balance sheet,” said Andrew Jacobs, the chief executive officer of Lok’n Store.
“We take a tactical approach to the management of both property and financial assets creating value without significantly increasing risk whilst maintaining the predictable growth in dividends for investors,” he added.
This is nice. Loknstore Harlow will donate £25 to Grove Cottage Bishop's Stortford Mencap if you mention them when booking storage... ????#SupportLocal #BigUpHarlow #Charity https://t.co/Orth9AQQiE
— Lorraine Perry (@CM17Mag) January 31, 2019
Shares in Lok’n Store were up 2.5p at 405p in early deals.