Canaccord Genuity reiterates 'buy' rating on Restore

Canaccord Genuity noted that Restore had confirmed that its full-year 2022 trading performance was in line with expectations, with balance sheet leverage matching estimates of 1.7x EBITDA and "good" organic momentum delivered in its records management unit.

The Canadian bank also highlighted that Restore's Datashred division also returned to growth, while technology recorded sales growth in excess of 25% year-on-year and saw customer demand and operational efficiency improve during Q4.

"Looking forward, the focus in H1 2023E will be on executing price rises, capturing identified cost savings and driving cash generation through new contract wins," said Canaccord. "Our forecasts, which are unchanged, call for a 10% rise in adj. PBT in FY23E to £45.0m."

Canaccord also stated that M&A could continue to provide upside risk to estimates with the pipeline strong and asset pricing expected to moderate.

Reporting by Iain Gilbert at Sharecast.com