Interim Results

Lok'n Store Group PLC
23 March 2004



LOK'NSTORE GROUP PLC
('Lok'nStore' or 'the Group')

Interim Results for the six months to 31 January 2004


Lok'nStore Group Plc, one of the leading companies in the fast-growing
self-storage market, which operates 18 units in the South East, announces
interim results for the six months ended 31 January 2004.


Highlights

•    Turnover increased by 11.4% to £3.13 million (£2.81m: six months to 
     31.1.03)

•    Operating profit breakeven*

•    Loss before tax* of £ 41,830    (profit - £24,179: six months to 31.1.03)

•    8 Freehold stores valued at £20.1m  (NBV £9.9m)

•    Eastbourne acquired in August 2003 and opened within an 8 week turn
     around programme in October 2003

•    Number of stores is now 18

•    Applications for high density residential schemes at Kingston and
     Reading sites


* Before exceptional items


Andrew Jacobs, Chairman, commented,

'Our strong balance sheet and accelerated turnover growth means that we remain
well positioned to take advantage of this under-developed market. We continue to
adhere to strict investment appraisal and operational criteria and the Group
continues to see profitable opportunities. The revaluation of our freehold sites
and the development potential at both Kingston & Reading provides financial
flexibility for us. The Board is therefore confident in the future and in the
Group's  ability to deliver substantial growth in shareholder value.'

                                                                   23 March 2004

Enquiries:

Lok'nStore Group plc
    Andrew Jacobs, Chairman                  020 7457 2020 (today)
    Ray Davies, Finance Director             020 8247 1861 (thereafter)

College Hill
    Crawford Burden                          020 7457 2020


CHAIRMAN'S STATEMENT


I am pleased to report another period of progress for the Group with an
accelerating trend of turnover growth in response to continued attention to our
sales and marketing functions.

We remain committed to finding high quality self-storage sites whilst examining
profitable opportunities to enhance the value of the existing stores. We
continue to believe that the South and South East of England presents the
greatest opportunity for the Group, and our site acquisition strategy remains
driven by prospective internal rate of return, site location and visibility. Our
tactical as well as strategic approach to acquisition continues to offer
opportunities.

We indicated in February 2004, that the Board had decided to obtain a
professional valuation of all of its freehold sites, including Kingston and
Reading, in order to provide guidance to shareholders in placing a value on the
underlying assets as operational self- storage businesses.

Cushman & Wakefield, Healey & Baker, have valued the 8 freehold stores
(including  Reading) at £20.1 million. This valuation has not been reflected in
the Group's interim results and compares to the depreciated historic cost of
£9.9 million.

The Board rejected an approach at the end of 2003 believing the 115 pence per
share offer did not fully reflect the current value of the group or its
potential value going forward.

Our priorities remain:

  • improving the operating performance of existing stores
  • increasing the number of stores
  • maximising the potential value of existing stores
  • optimising the group's capital structure


Results


Turnover for the six months to 31 January 2004 increased by 11.4% to £3.13
million  (£2.81 million), as existing stores have continued to fill. Our new
store at Eastbourne opened in October 2003 and we have increased the performance
gearing of our sales bonus system. This is showing a positive effect on sales.

Before exceptionals, the Group achieved operating profit breakeven after taking
account of the development and launch of our new Eastbourne store, which
incurred a loss of £143,238 in the four months during the period that it was
open.  Eastbourne is trading comfortably ahead of expectations.

Loss before tax and exceptional items for the period was £41,831 (profit -
£24,180).

Exceptional costs of  £127,406 arose from termination payments to the former
finance director and senior managers, and all associated fees, as well as costs
relating to the approach.

As at 31 January 2004, the Group held £0.6 million in cash and had no debt


Property Valuations


Our 8 freehold stores, have been valued at £20.1 million against a net book
value of £9.9 million. This will enhance the Group's ability to borrow as and
when debt is required in the future. Additionally, it also makes the value
created within our stores more transparent to shareholders. These valuations
take no account of any further uplift in values which would result from the
successful outcome of the planning applications for high density housing schemes
at the Kingston and Reading sites.


Share buyback


The company has an ongoing authority to make market purchases of its ordinary
shares. This authority lasts  for eighteen months from  the date of the special
resolution passed on 27 November 2003. The Group will use this authority as
appropriate in the best interests of shareholders.


Appointments


During the period, we welcomed Ray Davies as Finance Director who brings a
wealth of relevant experience from the quoted health club sector, and Robert
Jackson as non- executive director. We have appointed Investec as sole broker
and nominated advisor.


 Outlook


Our strong balance sheet and accelerating turnover growth, means that Lok'nStore
remains well positioned to take advantage of this under-developed market. We
continue to adhere to strict investment appraisal and operational criteria and
the Group continues to see opportunities. The revaluation of our freehold sites
and the development potential at both Kingston & Reading provides financial
flexibility for us. The Board is therefore confident in the future and in the
Group's ability to deliver substantial growth in shareholder value.


                                                                   ANDREW JACOBS
                                                                        Chairman

                                                                   22 March 2004



CONSOLIDATED PROFIT AND LOSS ACCOUNT
For the six months ended 31 January 2004

                                                Notes            Unaudited                     Audited

                                                            Six months     Six months             Year
                                                            31 January     31 January          31 July
                                                                  2004           2003             2003
                                                                     £              £                £

TURNOVER
Continuing operations                                        3,135,997     2,811,873         5,612,978

Operating expenses                                         (3,140,418)   (2,773,015)       (5,535,788)
Exceptional items                                   3        (127,406)             -          (64,287)


OPERATING (LOSS)/PROFIT                                      (131,827)        38,858            12,903
                                                                           
Exceptional item                                    3                -     (400,901)          (400,901
Loss on disposal fixed assets                                        -             -           (3,177)
Interest receivable                                             13,562        35,372            61,748
Interest payable                                              (50,972)      (50,051)         (101,057)


(LOSS) ON ORDINARY ACTIVITIES BEFORE
TAXATION                                                     (169,237)     (376,722)         (430,484)

Taxation                                            4               -              -                 -


(LOSS) ON ORDINARY ACTIVITIES AFTER
TAXATION                                                     (169,237)     (376,722)         (430,484)


EARNINGS PER SHARE

Basic                                               6          (0.59)p       (1.32)p           (1.51)p
Fully diluted                                       6          (0.59)p       (1.32)p           (1.51)p

There are no other recognised gains or losses.


CONSOLIDATED BALANCE SHEET
For the six months ended 31 January 2004

                                                                  Unaudited                    Audited

                                                            31 January      31 January         31 July
                                                                  2004            2003            2003
                                                                     £               £               £
FIXED ASSETS
Intangible assets                                              395,450        419,705          407,578
Tangible assets                                             13,684,285     13,119,758       13,398,636
Investments                                                  1,023,886        172,917        1,023,886

                                                            15,103,621     13,712,380       14,830,100

CURRENT ASSETS
Stock                                                           89,604         98,982          101,783
Debtors                                                      1,203,851      1,017,526        1,527,779
Cash at bank and in hand                                       642,693      2,298,408        1,101,809

                                                             1,936,148      3,414,916        2,731,371

CREDITORS: Amounts falling due within one year             (1,966,778)     (1,847,620)     (2,336,243)

NET CURRENT (LIABILITIES)/ASSETS                              (30,630)      1,567,296          395,128

TOTAL ASSETS LESS CURRENT LIABILITIES                       15,072,991     15,279,676       15,225,228

CREDITORS: Amounts falling due after more than
one year                                                             -           (685)               -

                                                            15,072,991     15,278,991       15,225,228

CAPITAL AND RESERVES
Called up share capital                                        284,687        284,687          284,687
Share premium                                        5          21,496      9,912,448        9,912,447
Merger reserve                                               6,295,295      6,295,295        6,295,295
Other distributable reserve                          5       9,907,951              -                -
Profit and loss account                                    (1,436,438)    (1,213,439)      (1,267,201)

SHAREHOLDERS' FUNDS                                         15,072,991     15,278,991       15,225,228


CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 31 January 2004
                                                         Notes          Unaudited                  Audited
                                                                   Six months   Six months            Year
                                                                   31 January   31 January         31 July
                                                                         2004         2003            2003
                                                                            £            £               £

Cash flow from operating activities                        7a         178,432      15,521         292,975

Returns on investments and servicing of finance                      (37,410)     (14,678)        (39,309)

Taxation                                                                   -            -               -

Capital expenditure and financial investment                        (614,827)    (695,621)     (2,139,262)


CASH OUTFLOW BEFORE FINANCING                                       (473,806)    (694,778)     (1,885,596)

Financing                                                              14,690 (7,134,154)      (7,139,935)


(DECREASE) IN CASH IN THE PERIOD                                    (459,116)  (7,828,932)     (9,025,531)


RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS/(DEBT)
                                                                          31 January   31 January        31 July
                                                                                2004         2003           2003
                                                                                  £            £              £

Decrease in cash in the period                                             (459,116)  (7,828,932)    (9,025,531)

Change in net funds/(debt) resulting from cash flows                           2,310    7,138,651      7,144,431


MOVEMENT IN NET FUNDS IN PERIOD                                            (456,806)    (690,281)    (1,881,100)

NET FUNDS BROUGHT FORWARD                                                  1,098,814    2,979,914      2,979,914

NET FUNDS CARRIED FORWARD                                          7b        642,008    2,289,633      1,098,814


NOTES TO THE INTERIM RESULTS

1.       BASIS OF PREPARATION

The interim results have been prepared on the basis of the accounting policies
as set out in the statutory financial statements for the year ended 31 July
2003. The interim results, which were approved by the Directors on 22 March
2004, are unaudited but have been reviewed in accordance with Auditing Practices
Board bulletin 'Review of Interim Financial Information' by the auditors. The
interim results do not constitute statutory financial statements within the
meaning of section 240 of the Companies Act 1985.

Comparative figures for the year ended 31 July 2003 are an abridged version of
the Group's full accounts, which carry an unqualified audit report and have been
delivered to the Registrar of Companies.


2.       MARKET VALUATION OF FREEHOLD LAND AND BUILDINGS

Professional valuations were prepared by Cushman & Wakefield Healey & Baker, in
respect of all freehold land and properties held by the Group as operational
self-storage businesses and also included a consideration of the value of a part
of the Reading site, which is currently held as a property investment. This
report indicated a total value of £20.1 million  and is £10.2 million in excess
of the net book value of freehold property and land as disclosed in the
financial statements.


3.      EXCEPTIONAL ITEMS

Exceptional costs of  £127,406 arose from termination payments to the former
finance director and senior managers, and all associated fees, as well ascosts
relating to the approach.

The 2003 exceptional cost of £400,901 related to the loss on the sale of a
freehold site in Swindon.


4.       TAXATION

There is no charge to corporation tax for the group due to the availability of
brought forward trading losses.


5.       CANCELLATION OF SHARE PREMIUM ACCOUNT AND AUTHORITY TO MAKE MARKET
         PURCHASES OF ITS SHARES

At the Company's EGM on 5 September 2003, shareholders gave approval for a
buy-back of shares, the cancellation of the share premium account and its
corresponding conversion into a distributable reserve. High Court approval for
cancellation of the share premium account was received on 24 September 2003.
Following approval by shareholders of a special resolution at the AGM on 27
November 2003, the company has an ongoing authority to make market purchases of
its ordinary shares. This authority expires eighteen months after the date on
which the resolution was passed unless renewed, varied or revoked by the Company
in General Meeting.


6.       EARNINGS PER ORDINARY SHARE

The calculation of earnings per ordinary share is based on the loss for the
period of £169,237 (year to 31 July 2003 - loss of £430,484, period to 31
January 2003 - loss of £376,722) and on the weighted average number of shares in
issue during the period of 28,468,693 shares (31 July 2003- 28,468,693  shares;
31 January 2003 - 28,468,693).

Fully diluted earnings per share includes shares held under the directors'
option scheme and is based on a loss for the period of £169,237 (year to 31 July
2003 - loss of £430,484, period to 31 January 2003 - loss of £376,722) and on a
weighted average number of shares during the period of 30,346,523 shares (31
July 2003 - 30,253,160  shares; 31 January 2003 - 30,320,140  shares).


7.        CASH FLOWS                                       Unaudited                          Audited

                                                            31 January       31 January       31 July
                                                                  2004             2003          2003
                                                                    £                £             £
    a     Reconciliation of operating profit to net
          cash flow from operating activities

          Operating profit/(loss)                            (131,827)           38,858        12,903
          Depreciation                                         329,179          308,039       621,835
          Amortisation                                          12,127           12,127        24,254
          Loss/(Profit) on disposal of fixed assets                  -            3,178             -
          Decrease/(Increase) in stocks                         12,179         (36,015)      (38,816)
          Decrease/(Increase) in debtors                       323,929          238,576     (271,677)
          (Decrease)/Increase in creditors                   (367,155)        (542,428)      (48,710)
          Exceptional item                                                      (6,814)       (6,814)
                                                                                
          Net cash flow from operating activities              178,432          15,521       292,975


                                               At                        Other non-                 At
                                     31 July 2003        Cash flow     cash changes        31 Jan 2004
                                                £               £                £                  £
  b    Analysis of net funds/(debt)

       Cash at bank and in hand         1,101,809        (459,116)                -            642,693
       Debt due within one year                 -                -                -
       Debt due after one year                  -                                 -                  -
       Finance leases                     (2,995)            2,310                -              (685)

       TOTAL                            1,098,814        (456,806)                -            642,008



INDEPENDENT REVIEW REPORT TO LOK'N STORE GROUP PLC


Introduction

We have been instructed by the company to review the financial information set
out on pages 4 to 8 and we have read the other information contained in the
interim report and considered whether it contains any apparent misstatements or
material inconsistencies with the financial information.

This report, including the conclusion, has been prepared for and only for the
company for the purpose of their interim report and for no other purpose.  We do
not, therefore in producing this report, accept or assume responsibility for any
other purpose or to any other person to whom this report is shown or into whose
hands it may come save where expressly agreed by our prior consent in writing.


Directors' Responsibilities

The interim report, including the financial information contained therein, is
the responsibility of, and has been approved by the directors. It is best
practice that the accounting policies and presentation applied to the interim
figures should be consistent with those applied in preparing the preceding
annual accounts except where any changes, and the reasons for them, are
disclosed.


Review Work Performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board as if that Bulletin applied. A review
consists principally of making enquiries of group management and applying
analytical procedures to the financial information and underlying financial data
and based thereon, assessing whether the accounting policies and presentation
have been consistently applied unless otherwise disclosed. A review excludes
audit procedures such as tests of controls and verification of assets,
liabilities and transactions.  It is substantially less in scope than an audit
performed in accordance with Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information.


Review Conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 31 January 2004.


BAKER TILLY
Chartered Accountants
2 Bloomsbury Street
London WC1B 3ST

22 March 2004


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