Amid a Covid-19 squeeze in April and May, document management specialist Restore (RST) saw its adjusted pre-tax profit plunge by more than two-fifths in the six months to 30 June, to £10m. The Datashred business was particularly hard hit as lockdown restrictions meant fewer tonnes of paper could be collected and margins were squeezed.
On a statutory basis the group swung to a pre-tax loss following a £7m impairment of intangible assets and a £1.6m write-down of a legacy investment.
The records management business accounts for almost 50 per cent of total sales and generates revenue via two channels – the storage of boxes and files, and services such as retrieval, refiling and destruction. Storage revenues were largely unaffected by the pandemic – growing by 1.5 per cent across the first half – but this was more than offset by the decline in service-based revenues. Overall records management sales dipped by 8.5 per cent to £43.7m.
Excluding £131m in lease liabilities, net debt has been reduced by 16 per cent from the December year-end, to £73.9m, equivalent to 1.7 times cash profits (Ebitda). There’s no interim dividend, although the group hopes to resume the payout from 2021.
Berenberg expects adjusted pre-tax to drop by 31 per cent in 2020, to £25m, before recovering to £35m next year – just shy of the pre-pandemic total achieved in 2019.
| RESTORE (RST) | ||||
| ORD PRICE: | 375p | MARKET VALUE: | £467bn | |
| TOUCH: | 360-390p | 12-MONTH HIGH: | 560p | LOW: 340p |
| DIVIDEND YIELD: | NIL | PE RATIO: | 179 | |
| NET ASSET VALUE: | 172p* | NET DEBT: | 96% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 106 | 12.0 | 7.6 | 2.40 |
| 2020 | 89.5 | -3.1 | -3.9 | nil |
| % change | -16 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes £247m in intangible assets, or 198p a share | ||||
