Lok'n Store Group (LSE:LOK) ROC % : 1.86% (As of Jan. 2024)

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What is Lok'n Store Group ROC %?

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. Lok'n Store Group's annualized return on capital (ROC %) for the quarter that ended in Jan. 2024 was 1.86%.

As of today (2024-06-07), Lok'n Store Group's WACC % is 12.02%. Lok'n Store Group's ROC % is 1.60% (calculated using TTM income statement data). Lok'n Store Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Lok'n Store Group ROC % Historical Data

The historical data trend for Lok'n Store Group's ROC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

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Lok'n Store Group ROC % Chart

Lok'n Store Group Annual Data

Trend

Jul14

Jul15

Jul16

Jul17

Jul18

Jul19

Jul20

Jul21

Jul22

Jul23

ROC %

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2.06

1.89

1.64

3.00

1.94

Lok'n Store Group Semi-Annual Data
	Jul14	Jan15	Jul15	Jan16	Jul16	Jan17	Jul17	Jan18	Jul18	Jan19	Jul19	Jan20	Jul20	Jan21	Jul21	Jan22	Jul22	Jan23	Jul23	Jan24
ROC %	Get a 7-Day Free Trial															3.32	2.78	2.71	1.19	1.86

Lok'n Store Group ROC % Calculation

Lok'n Store Group's annualized Return on Capital (ROC %) for the fiscal year that ended in Jul. 2023 is calculated as:

	ROC % (A: Jul. 2023 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (A: Jul. 2022 )	+	Invested Capital (A: Jul. 2023 ))	/ count )
=	8.916 * ( 1 - 29.98% )	/	( (308.662	+	333.46)	/ 2 )
=	6.2429832	/	321.061
=	1.94 %

where

	Invested Capital		(A: Jul. 2022 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	353.868	-	4.44	-	( 46.465	-	max(0, 9.83	-	50.596	+	46.465	))
=	308.662

	Invested Capital		(A: Jul. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	372.644	-	2.328	-	( 42.132	-	max(0, 8.006	-	44.862	+	42.132	))
=	333.46

Lok'n Store Group's annualized Return on Capital (ROC %) for the quarter that ended in Jan. 2024 is calculated as:

	ROC % (Q: Jan. 2024 )
=	NOPAT	/	Average Invested Capital
=	Operating Income * ( 1 - Tax Rate % )	/	( (Invested Capital (Q: Jul. 2023 )	+	Invested Capital (Q: Jan. 2024 ))	/ count )
=	9.234 * ( 1 - 31.27% )	/	( (333.46	+	349.813)	/ 2 )
=	6.3465282	/	341.6365
=	1.86 %

where

	Invested Capital		(Q: Jul. 2023 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	372.644	-	2.328	-	( 42.132	-	max(0, 8.006	-	44.862	+	42.132	))
=	333.46

	Invested Capital		(Q: Jan. 2024 )
=	Total Assets	-	Accounts Payable & Accrued Expense	-	Excess Cash
=	Total Assets	-	Accounts Payable & Accrued Expense	-	( Cash, Cash Equivalents, Marketable Securities	-	max(0, Total Current Liabilities	-	Total Current Assets	+	Cash, Cash Equivalents, Marketable Securities	))
=	363.855	-	4.118	-	( 14.975	-	max(0, 8.699	-	18.623	+	14.975	))
=	349.813

Note: The Operating Income data used here is two times the semi-annual (Jan. 2024) data.

Lok'n Store Group (LSE:LOK) ROC % Explanation

ROC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROIC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, Lok'n Store Group's WACC % is 12.02%. Lok'n Store Group's ROC % is 1.60% (calculated using TTM income statement data). Lok'n Store Group earns returns that do not match up to its cost of capital. It will destroy value as it grows.

Be Aware

Like ROE % and ROA %, ROC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.

Lok'n Store Group ROC % Related Terms

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Lok'n Store Group (LSE:LOK) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Real Estate » Real Estate » Lok'n Store Group PLC (LSE:LOK) » Definitions » ROC %

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Address

112 Hawley Lane, Farnborough, Hampshire, GBR, GU14 8JE

Website

https://www.loknstore.co.uk

Lok'n Store Group PLC operates in the real estate industry based in the United Kingdom. Its business involves buying or leasing warehouses or industrial buildings and letting them out as self-storage units to its customers. Operating through the Self-Storage segments, the company caters to both households and business customers. Its self-storage segment accounts for the bulk of its operations with the provision of storage rooms, student storage, pallet storage, warehouse space, self-storage archiving, flexible office space, and multi-site business storage accounts.

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