Restore (LON:RST) Capital market day, held 6/11 for institutions and analysts. ..... .New CEO and new team presentation.

Restore hosted a CMD show casing the new CEO’s future vision ( 9 months in) with presentation from four divisional heads and the even newer FD ( ex Mulberry,Dyson Canada), he having done just 5 weeks. The buss word was margins. The event was the new CEO’s big picture corporate stragegy review since Charles Skinner, the founder retired. Restore is an AIM stock with a market cap of £500m with a wide investor base of which 70% of the audience are customers we were told. A seamless transition to new management has happened and a new phase of growth planned for shareholders and the 2200 staffers. Continuing profitable growth and cash generation was highlighted along with multiple market opportunities to grow organically, increase margins and acquisitions in the fragmented markets they operate in. There is ‘enormous room to grow’ and the market size £1.8bn with Restore having an 11% market share. Charles Bligh, the CEO has so far visited 45 out of the 75 sites. The recent 1H numbers were built upon and the PLC yesterday issued a 9 month update with further growth hinted at.

Organic growth is between 1-4% a year, with the top end highlighted. A push for more cross selling (the lorry drivers get rewarded for introductions) is key to advancing margins, along with better use of the asset base. The number of property is being reviewed, the cost base as well and better use of data analytics introduced all to advance margins which at 1H were up 60bp to 21% for the group, though revenues were up 15% to £106m. The PLC is very cash generative giving acquisition fire power for upto £20m deals, having done three small deals in the 1H. Debt is £95m and leverage down form 2.3x to 1.8x with further falls more than likely. 40 acquisitions have ben made since 2012.

Restore has a unique breadth of capabilities for a commercial customer who is moving from the moving of office kit, boxes going into storage and the asset management of redundant office equipment such as safely stripped down computers. It is not a regulated industry but certification is important. Many of the divisions have an entry point for other divisions as well as direct approaches. Not a tech savvy…

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