Restore confident in outlook after second half recovery

Information and document management company Restore reported a 15% fall in revenue from continuing operations in its full-year results on Thursday, to £182.7m, which it said reflected the impact of the Covid-19 pandemic, primarily in the second quarter.

The AIM-traded firm said it saw a “sustained” recovery pattern through the second half of 2020, with strategic progress made on acquisitions and cost reductions.

Its adjusted profit before tax was 35% weaker year-on-year at £23.2m, while adjusted earnings per share totalled 15p, falling from 23.3p in 2019.

The company was paying no dividend for 2020, given the impact of the coronavirus crisis, having distributed 2.4p per share in the prior year.

Restore said its activity approached 90% of pre-Covid-19n levels by the fourth quarter, adding that the actions it had taken in the year delivered structural cost benefits of £2m per year, as well as “enhanced” flexibility through the consolidation of sites and a reduced headcount.

It described cash generation as “strong”, with a substantial further reduction in net debt of £22.4m to £66.1m as at 31 December.

A non-cash impairment of £8.6m on intangible assets and historic investment was recorded.

"With a further year of debt reduction, the business is well positioned to bounce back very strongly and is now actively investing for future growth,” said chief executive officer Charles Bligh.

“The recent acquisitions in Restore Technology will double revenues to £30m a year in this business, and in Records Management, we are planning to invest in new sites during 2021 to absorb our accelerating net box growth momentum from 2020 and to meet future growth requirements.

“We have substantial quality and quantity in our acquisition pipeline with realistic pricing across all the key business units, which we are actively pursuing.”

At 1037 GMT, shares in Restore were up 4.29% at 365p.