Restore warns of higher finance costs after strong first half

Restore reported a 32% improvement in revenue in its first half on Thursday, to £140.3m, driven by “strong” organic momentum of 14%, and the integration of acquisitions driving growth of 13%, though it did warn of higher finance costs for the full year.

The AIM-traded firm said its adjusted profit before tax was 36% higher year-on-year for the six months ended 30 June, at £21.2m, while its statutory profit before tax jumped 58% to £14.1m.

Adjusted EBITDA came in 21% firmer at £40.3m, while net debt expanded 13% over the same time last year to stand at £103.5m at period end.

The company reported adjusted earnings per share of 12.6p, up 29%, while statutory earnings per share rocketed 400% to 7.5p.

Its board hiked the interim dividend by 4%, to 2.6p per share.

Looking at its divisions, Restore said digital and information management achieved revenue growth of 41% as a result of strategic contract wins in the last 18 months, as well as “excellent” operational delivery in the first half.

Secure lifecycle services grew revenue by 20%, with technology growing “strongly” at 40%, and Datashred also performing well at 33%.

The group said it also successfully managed inflationary cost pressures during the first-half through “proportionate” price rises, while driving cost reductions across the group.

Looking ahead, Restore said that with “strong” organic momentum, three further acquisitions completed in the first half, and “substantial” financial capacity to make further acquisitions, it was growing its capability and scale.

Its board said it was confident of delivering its stated objective to reach annual revenues of £450m, and to double EBITDA to £150m in the medium term.

The company did, however, warn that rising interest rates were leading to higher finance charges, with interest costs now expected to be £1m to £2m greater than planned for the year.

“I am delighted with the growth achieved in the first half which demonstrates that our strategy and execution is on track,” said chief executive officer Charles Bligh.

“Across the group we are seeing increasing sales activity and significant customer contract wins.

“In addition to our confidence in future organic growth, we have a well developed pipeline of acquisition opportunities and, with our strong balance sheet, we are looking forward to completing further investments in the second half and continuing to deliver great results for our shareholders and customers.”

At 1406 BST, shares in Restore were up 0.79% at 448.5p.

Reporting by Josh White at Sharecast.com.