Shares in document management and office relocation group, Restore (RST), rose 7 per cent on the back of these solid half-year figures - adjusted pre-tax profit nearly doubled to £4.1m. That was driven by continued solid trading in document management and a reduced cost base in office relocation, as last year’s acquisition of Harrow Green bedded down.
The records management business, which involves Restore looking after boxes of its clients’ paperwork, provides reliable earnings and cash flow with good margins and mid-single digit organic growth. As chief executive Charles Skinner points out, once a client has shipped off its boxes to one of Restore’s warehouses, it is unlikely to move them somewhere else. Building on its relationships here, Restore has branched off into areas such as shredding, scanning and IT asset disposal.
The office relocation business, meanwhile, is more cyclical with work closely linked to the London office market. The business turned a £0.4m profit in the first half against a £0.1m loss last year as cost-cutting paid off. Mr Skinner believes there's more profit recovery to come with the London office building boom a good omen: "once they have built the office, everyone has to move the desks in."
Broker Cenkos expects full-year pre-tax profit of £10m, giving EPS of 10.5p (from £7.4m/6.2p in 2012), rising to 12.2p in 2014.
RESTORE (RST) | ||||
|---|---|---|---|---|
| ORD PRICE: | 138p | MARKET VALUE: | £103m | |
| TOUCH: | 135p-140p | 12-MONTH HIGH: | 142p | LOW:91p |
| DIVIDEND YIELD: | 1.2% | PE RATIO: | 29 | |
| NET ASSET VALUE: | 59p* | NET DEBT: | 40% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 18.2 | -0.4 | -0.30 | 0.40 |
| 2013 | 24.6 | 1.8 | 2.00 | 0.60 |
| % change | +35 | - | - | +50 |
Ex-div: 23 Oct Payment: 28 Nov *Includes intangible assets of £41.7m, or 56p a share | ||||
