Headline figures mask the true picture for document storage specialist Restore (RST) and, after stripping out exceptional items including acquisition and integration costs, underlying pre-tax profits grew by 42 per cent at the interim stage to £7.1m.
The document management division remained the key growth driver, with turnover up by almost three-quarters and adjusted operating profit ahead by 40 per cent at £7.4m. However, costs were ramped up as a result of significant technical problems relating to Cintas, the records management specialist acquired last year. Cost overruns here led to a first-half performance well below budgeted levels. The integration is now largely complete, with the finishing touches expected to be completed in the second half.
With customers rarely switching their records management supplier, Restore continued to increase its market share through further acquisitions. These included records management business Ancora Solutions, and after the half-year end a further three businesses were acquired. Empty printer cartridge collector ITP Group was bought in July, while Data Imaging and Archiving and scanning specialist Crimson were bought in August.
Analysts at Panmure Gordon forecast full-year adjusted pre-tax profits of £16.9m and EPS of 15.7p (from £12.1m and 11.5p in 2014).
| RESTORE (RST) | ||||
|---|---|---|---|---|
| ORD PRICE: | 262.5p | MARKET VALUE: | £217m | |
| TOUCH: | 260-265p | 12-MONTH HIGH: | 285p | LOW: 213p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 45 | |
| NET ASSET VALUE: | 82p* | NET DEBT: | 45% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 30.6 | 3.3 | 3.5 | 0.8 |
| 2015 | 43.9 | 2.9 | 2.9 | 1 |
| % change | +43 | -12 | -17 | +25 |
Ex-div: 15 Oct Payment: 13 Nov *Includes intangible assets of £71m, or 86p a share | ||||
