REG - Restore PLC - Trading Update

RestoreAnnouncement

01/02/2023 07:00

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RNS Number : 4760O  Restore PLC  01 February 2023

1 February 2023

Restore plc

("Restore" or the "Group" or "Company")

 

Trading Update

 

FY22 performance in line with expectations

 

 

Restore plc (AIM: RST), the UK's leading provider of digital and information
management and secure lifecycle services, is pleased to provide a trading
update for the year ended 31 December 2022 ("FY22"), ahead of the publication
of the Group's full year results on 16 March 2023.

 

FULL YEAR TRADING UPDATE

 

The Board is pleased to report that Restore has performed in line with
expectations for the year ended 31 December 2022, achieving strong revenue and
profit growth, demonstrating the Group's underlying resilience during a
challenging economic period.

·      Records Management net box growth of c1.5% for the year (FY21:
1.3%) driven by higher general activity levels and service contract wins
during the year.

·      Records Management achieved strong sales during the year
including major storage and service contract wins with BBC Heritage (c.£22
million over 10 years) and Department for Work and Pensions (c.£1 million per
year) leading to an increase in utilisation during the year from 92% to c.97%
by the end of 2022.

·      As a result of this growth, the property estate has been
reconfigured to best utilise the space available, resulting in some non
recurring property costs in H2 together with further property costs on
acceleration of consolidation of the estate to more efficient premises.

·      Restore Digital performed very strongly driven by new contracts
wins and Datashred also delivered growth.

·      Restore Technology customer demand and operational efficiency
improved in Q4 as expected.

·      Five acquisitions completed during 2022 across Restore
Technology, Restore Records Management and Restore Harrow Green for c.£12.4m.

·      Leverage at 31 December 2022 was 1.7x EBITDA, well within the
Group's target range of 1.5- 2.0x EBITDA, and the Group retains substantial
headroom across its borrowing facilities.

 

OUTLOOK

 

The Group enters 2023 with positive momentum and continues to see substantial
growth potential across its organic and acquisition strategies, with
opportunities to improve margins further through pricing and cost synergies.

Whilst the macro-economic conditions and inflationary environment continue to
be uncertain, the Group has plans in place to meet the challenges:

·      Pricing:  Annual price rises for a significant proportion of the
Group's revenues were introduced from 1 January 2023, with prices rising more
than in previous years reflecting the higher input costs. Other contract price
increases are planned to be implemented throughout the year according to
renewal dates, typically based on CPI for the past 12 months.

 

·      Cost: As previously announced, the Group is making good progress
on cost reductions of at least £3 million for 2023 across cost of sales and
operating overheads as well as supplier rationalisation with over £1m of
these savings having already been actioned.

·      Acquisitions: The Group will remain disciplined and focused on
delivering strong returns from its acquisition programme. Whilst the
acquisition pipeline for FY23 remains strong, the focus in H1 will be on
executing price rises, cost management and organic contract wins. We expect
pricing for assets will also moderate.

·      Cash Generation and Balance Sheet: We expect the Group to remain
strongly cash generative in FY23 and debt levels to reduce during the year, in
the absence of acquisitions.

·      Box Growth: Records Management anticipate that net boxes will
continue to grow strongly and within the guided range of 1% to 2% for FY23 as
a result of reported new wins and organic growth from existing customers.

 

CHARLES BLIGH, CEO, commented:

 

"Restore delivered another year of revenue and profit growth and I am pleased
how the whole team navigated the uncertainties of 2022 to finish in a strong
position with major contract wins and excellent operational execution for
customers, together with a robust financial position.

 

Whilst the macro-economic outlook is uncertain, our markets remain attractive
as our essential services are needed more than ever to help customers reduce
their costs while delivering improvements in security and data management and
we have plans in place across both pricing and the cost base to address these
macro challenges. Accordingly, we are confident that FY23 will be another year
of good progress."

 

 

 

 

*Note: Analyst consensus forecast FY22 Adjusted PBT of £41.1m, with a range
of £40.0m - £42.0m

 

For further information please contact:

 

Restore
plc
www.restoreplc.com (http://www.restoreplc.com)

Charles Bligh,
CEO
+44 (0) 207 409 2420

Neil Ritchie,
CFO

 

Investec (Nominated Adviser and Joint
Broker)                        www.investec.com
(http://www.investec.com)

Carlton
Nelson
            +44 (0) 207 597 5970

James Rudd

 

Canaccord Genuity (Joint Broker, Corporate Advisor)  www.canaccordgenuity.com
(http://www.canaccordgenuity.com)

Max
Hartley
+44 (0) 207 523 8000

Chris Robinson

 

Citi (Joint
Broker)
www.citigroup.com (http://www.citigroup.com)

Stuart
Field
+44 (0) 207 986 4074

Laura White

 

Buchanan Communications (PR Enquiries)
            www.buchanan.uk.com (http://www.buchanan.uk.com)

Charles
Ryland
            +44 (0) 207 466 5000

Jack Devoy

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