Shredding documents, relocating offices and storing cardboard boxes full of paper has proved to be a successful niche for support services business Restore (RST), which has been expanding quickly. The acquisition of Harrow Green in a £6.2m deal a year ago was the main reason for the big rise in reported revenues. Management seem set on continuing its expansion into related areas and a £7m placing was announced alongside these results to fund its latest takeover of File and Data Storage Limited.
Restore's core document management division reported a 34 per cent rise in revenues to £21m and adjusted operating profits up from £5.4m to £7.5m, mainly driven by integration of Harrow Green's record management business. Harrow Green had a big impact on Restore's fledging office relocation business, too, where turnover jumped from £3.2m to £22.3m and operating profits quadrupled to £1.2m. The pace of integration led to higher one-off costs of £3.4m but, on an underlying basis, pre-tax profits and EPS both rose by over two-thirds to £6.2m and 7.4p, respectively. Broker Cenkos expects further progress this year, pencilling in adjusted pre-tax profits of £9.8m and EPS of 10.2p.
Chief executive Charles Skinner said that Restore would continue to "broaden out" its business with acquisitions in specific areas. "The key to this kind of contracted work is that clients don't often want to change where they store their documents so, once we've won the initial business, we can see recurring revenue for many years."
RESTORE (RST) | ||||
|---|---|---|---|---|
| ORD PRICE: | 119p | MARKET VALUE: | £81.2m | |
| TOUCH: | 116-121p | 12-MONTH HIGH: | 124p | LOW: 80p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 48 | |
| NET ASSET VALUE: | 53p* | NET DEBT: | 49% | |
| Year to 31 Dec | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 31.5 | -3.85 | -0.84 | nil |
| 2009 | 27.0 | -7.79 | -1.64 | nil |
| 2010 | 27.7 | 0.60 | 3.50 | nil |
| 2011 | 18.8 | 1.20 | 2.60 | 1.0 |
| 2012 | 43.3 | 1.50 | 2.50 | 1.5 |
| % change | +130 | +25 | -4 | +50 |
Ex-div: 12 Jun Payment: 9 Jul *Includes intangible assets of £32.7m, or 48p a share | ||||
