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Restore recovery gains momentum

Revenue levels are nearing pre-pandemic levels for the record management specialist
Restore recovery gains momentum
  • Revenues at around 90 per cent of pre-pandemic levels
  • Strong cash generation helps cut net debt by a fifth

Restore’s (RST) rapid recovery from pandemic disruption continued into the fourth quarter, when revenue reached 90 per cent of pre-coronavirus levels. Management is targeting net box growth of between 1 and 2 per cent for the core records management business this year, up from 0.9 per cent in 2020.

Business relocation specialist Harrow Green and Restore Digital are also expected to return to at least 2019 revenue levels. A recovery in cash generation helped reduce net debt - excluding lease liabilities - by a quarter to £66m. That was equivalent to 1.8 times adjusted cash profits, but would reduce to a multiple of 1.2 if profits recover to 2019 levels as anticipated.  

Margins should also benefit from cost saving measures that include reducing headcount and consolidating sites, aimed at wiping £2m a year from the expenses bill. Analysts at house broker Peel Hunt forecast adjusted pre-tax profits of £32.9m and EPS of 20.6p this year, nearing pre-pandemic levels in 2019, before rising 13 per cent in 2022. Buy.

Last IC view: Buy, 346p, 1 Oct 2020

RESTORE (RST)    
ORD PRICE:353pMARKET VALUE:£ 444m
TOUCH:340-365p12-MONTH HIGH:430pLOW: 280p
DIVIDEND YIELD:NILPE RATIO:1765
NET ASSET VALUE:174p*NET CASH:85%
Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
20161297.5017.84.0
20171729.907.105.0
201819621.015.36.0
201921624.813.62.4
20201834.000.20nil
% change-15-84-99-
Ex-div:na   
Payment:na   
*Includes intangible assets of £247m, or 197p a share