Restore confident after strong full-year performance

Digital and information management provider Restore reported a 19.1% increase in revenue to £279m in its full-year results on Thursday, driven by organic growth of 11% and a contribution from acquisitions of 8%.

The AIM-traded firm said that resulted in adjusted EBITDA of £81.5m, up from £74.2m in 2021.

Adjusted profit before tax also increased, by 7.6% to £41m, and adjusted basic earnings per share rose 4.7% to 24.3p.

Statutory profit before tax increased slightly to £23.3m, which the board said reflected higher amortisation on prior-year acquisitions, interest rate increases, property exit charges, and strategic IT program costs.

The company's cash conversion remained “good” at 82%, and net debt at the end of 2022 totalled £103.5m.

Despite five acquisitions, Restore's leverage ratio was 1.7x, which was well within its target range of 1.5x to 2.0x.

The firm proposed an increased final dividend of 4.8p, taking the total distribution for the year ended 31 December to 7.4p.

Looking ahead, Restore said it was optimistic about its prospects, saying it had started 2023 with good momentum following contract wins, cost reduction actions, and pricing changes implemented in the second half of 2022 and early in 2023.

The directors said they expected net box numbers would continue to grow strongly within the guided range of 1% to 2% for the full year.

Annual price rises for a significant proportion of the group's revenues were successfully implemented from 1 January, with further pricing to be introduced during the first half for the remainder.

Restore said it anticipated that pricing and cost actions would at least offset the inflationary cost pressures.

“Restore achieved another year of strong revenue growth and finished the year in a strong position in each of our markets,” said chief executive officer Charles Bligh.

“In a challenging environment, our performance demonstrates the underlying resilience of our markets and the essential nature of the services we deliver to organisations.

“Going forward, whilst the macroeconomic outlook remains uncertain, our markets remain attractive, and our essential services are needed more than ever to help customers reduce their costs while delivering improvements in security and data management.”

Bligh said Restore’s focus in the first half was on the basics in the business from price increases, cost reduction plans and consistent service delivery.

“We have significant acquisition opportunities which we expect will be back end loaded this year going into 2024.

“Overall, we are confident that 2023 will be another year of good progress.”

At 1452 GMT, shares in Restore were up 2.72% at 319.45p.

Reporting by Josh White for Sharecast.com.