15 September 2021
("Restore" or the "Group" or "Company")
Positive Trading Momentum Continues
Restore plc (AIM: RST), the UK's leading provider of integrated information and data management services, secure technology recycling, and commercial relocation solutions, is pleased to provide the following trading update for the eight months to 31 August 2021.
Following the strong first half performance reported on 27 July 2021, the Group has achieved further positive trading momentum in the third quarter and continues to make excellent progress on its strategy to expand through organic growth, strategic acquisitions and margin improvement:
· Trading in July and August has continued the positive momentum achieved throughout the year, supporting confidence in a strong second half performance in line with the Board's expectation
· Current run rate level of revenue now at £254 million, with run rate EBITDA of £74 million (c.18% growth above pre-COVID-19 revenue levels)
· Customer demand continues to increase across all business units with particularly strong demand growth experienced in Technology, Datashred and Harrow Green in August
· Restore continues to deliver positive net box growth in its Records Management business and restates previous guidance of between 1-2% box growth for 2021
· EDM performance in line with expectations, with operational integration expected to complete on 1 October 2021. Customer experience during integration has been excellent. Synergies expected to be at c.£2.6 million pa which is at the higher end of the range communicated at the time of the acquisition
· PRM Green, acquired on 10 August 2021 with average yearly revenue of £3 million and EBITDA of £0.9m, further progressing Restore Technology's leading position in the IT Asset Disposal and Recycling market. Overall Restore Technology has doubled in size in the last 18 months with run rate revenues in excess of £30 million pa
· In H1 the Group completed acquisitions to the value of £80.9 million and in H2 is expecting to complete acquisitions to the value of £20-30 million, including the PRM Green acquisition already completed. This is in line with Restore's stated strategy, and there is a very good pipeline of deals for H2 at advanced stages across all business units. Our pipeline for acquisitions for 2022 is also building strongly
· Underlying cashflow dynamics continue to be very positive, albeit with increasing working capital investment in the second half to capitalise on the strong bounce back in revenue
· Group leadership talent has significantly improved in the last 18 months and with selective recruitment and talent from new acquisitions, the platform for growth is strong. In addition, with rising demand Restore is aggressively expanding the scale of operations; specifically the Group's digital capability with a significant recruitment plan in place for H2 across all business units
CONTINUED DELIVERY OF GROWTH STRATEGY
The Group has a clear strategy to become the UK's leading provider of integrated information and data management services, secure technology recycling, and commercial relocation solutions. Delivery of this will enable sustainable and significant profit growth, well ahead of our underlying markets, enhanced further by disciplined and effective investment of our cash flows into both organic and inorganic opportunities.
Restore has made significant progress in this strategy in the last two years, with the Group considerably enhanced in size (c.18% larger), capability and market position. Despite the challenges posed by the pandemic, Restore has grown its overall market share significantly from 11% to 13% over the past 12 months. In addition, strategic acquisitions in the last 12 months have transformed the scale and growth opportunity of our Digital, Records Management and Technology businesses. Datashred and Harrow Green have notably improved their operating platforms to enhance customer experience and increase margins and with organic demand and acquisitions expect a very strong contribution to profit growth.
Our investment case is compelling with our growth strategy to double profits in the medium term.
Charles Bligh, CEO, commented:
"Restore continues to perform very well and I am particularly pleased with the sales activity levels across all the business units which shows real demand for our mission critical services. The summer period saw first half positive momentum continued and consequently the Board remains very confident in delivering its full year expectations and in line with our objective of significant growth.
Importantly, the pandemic has not impacted our strategic ambition or progress, with current run rate revenue of £254 million pa well above pre COVID-19 levels. We expect to deliver further growth in H2 and are hiring talent aggressively as a result."
Restore will hold a Capital Markets Day on 9 November 2021.
Restore plc www.restoreplc.com
Charles Bligh, CEO 020 7409 2420
Neil Ritchie, CFO
Peel Hunt LLP www.peelhunt.com
Mike Bell 020 7418 8900
Buchanan Communications www.buchanan.uk.com
Charles Ryland 020 7466 5000