TIDMRST
RNS Number : 5249G
Restore PLC
27 July 2021
27 July 2021
Restore plc
("Restore" or the "Group" or "Company")
Half Year Results 2021
A larger, stronger business with accelerating growth
momentum
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
announce its unaudited results for the six months ended 30 June
2021 ("H1" or "the period").
OVERVIEW
The Group achieved a strong performance in H1 ahead of the
Board's expectation, with adjusted profit before tax up 56%,
sustained momentum in trading across the entire business and
significant progress made on Restore's strategy to grow through
organic expansion, strategic acquisition and margin enhancement
through synergy and efficiency.
Activity levels increased steadily throughout the period and a
number of major contract wins reaffirmed Restore's leading position
and ability to grow market share still further. Four acquisitions
were successfully completed during the period including the
substantial acquisition of EDM, a Digital and Document Management
business for GBP62.4 million which resulted in the significant
expansion of Restore Digital and Restore Records Management, a
bolt-on acquisition in Records Management and two acquisitions in
Restore Technology, with all contributing to the successful H1
performance. The strong profit achievement was further supported by
the realisation of cost and efficiency improvement initiatives,
particularly in property and employee costs.
The combination of recovering activity in the wider economy,
market share gains and focused acquisitions means that the Group is
already emerging from the pandemic as a larger and stronger
business, with enhanced positions in its key target growth markets.
In addition, management's focus on operational effectiveness and
financial discipline has also created a more efficient business
that is well positioned for future expansion. As a result of this
strategic progress, the financial scale of the business has
increased with annualised run rate revenues expanding to c.GBP250
million based on performance in May and June 2021, some 16% higher
than 2019 (taken as the pre COVID-19 benchmark) and profits showing
an improving trend from Q1 into Q2.
BUSINESS HIGHLIGHTS
-- Continued improvement in economic activity across Restore's
key markets, with the majority of the business at, or above, pre
COVID-19 activity levels
-- Significant new market opportunities continue to open up for
the Group supporting customers on their secure data and
digitalisation transitions, together with an increasing focus on
creating secure, flexible workspaces that have a lower impact on
the environment
-- Records Management revenue growth of 9% for H1 through sales
wins, 'refuse to lose' approach to customer retention and two
acquisitions delivering an overall 9.2% increase in net box assets
under management by the end of the period
-- Restore Digital performed well with strong organic growth and
revenues doubling following the acquisition of EDM in April
-- Restore Technology achieved significant strategic progress
through capability and scale acquisitions, driving a substantial
increase in Relocation division operating margin to 17.4% in H1
2021 from 4.9% in H1 2020.
-- Further strengthening of Executive team with key appointments
of Restore Technology Managing Director and Group Property
Director
-- GBP80.9 million in acquisitions during H1 (GBP71.1 million
net of cash acquired) with healthy pipeline and over 25 ongoing
discussions with several deals anticipated to be completed during
H2.
FINANCIAL HIGHLIGHTS
-- H1 Revenue of GBP106.1 million, up 19% on prior year and ahead of management expectations
-- H1 Adjusted PBT of GBP15.6 million, up 56% on prior year with
strong sequential momentum, being 18% higher than H2 2020
-- Scale of business substantially increased with annualised run
rate revenues in excess of GBP250 million (FY20 GBP182.7 million)
based on performance in May and June 2021
-- EBITDA increased from GBP13.8 million in Q1 to GBP19.4
million in Q2 and totalled GBP33.2 million for the half compared
with GBP27.4 million for H1 2020
-- Profitability improved strongly through the period, with an
operating margin of 14.9% in Q1 improving to 21.3% for Q2 making
18.5% as a whole for H1 2021 which compares to 16.2% in H1 2020 and
21.5% in H1 2019
-- Continued successful progress on efficiency with further site
consolidation in Restore Technology and Records Management, staff
cost ratios improved and new Group fuel contract implemented
-- Leverage in line with expectation at 1.9x following
successful equity raise of GBP40m to support acquisition of EDM and
continued strong cash generation despite anticipated working
capital investment to support growth
-- Progressive dividend policy reinstated with interim dividend of 2.5 pence per share.
FINANCIAL SUMMARY H1 2021 H1 2020 Change
---------------------------------- ---------- ---------- -------
Revenue GBP106.1m GBP89.5m +19%
Adjusted Profit Before Tax* GBP15.6m GBP10.0m +56%
Statutory Profit / (Loss) Before
Tax** GBP8.9m GBP(3.1)m +387%
Adjusted EBITDA* GBP33.2m GBP27.4m +21%
Net Debt GBP91.6m GBP73.9m +24%
Adjusted Earnings Per Share
(FD) 9.4p 6.2p +52%
----------------------------------- ---------- ---------- -------
* Stated before amortisation of intangible assets, exceptional items and asset impairments
** H1 2020 stated after non-cash impairment of GBP8.6m relating
to intangible assets and investments
OUTLOOK
The Board was delighted with the H1 performance which was ahead
of expectations and with the increasing economic activity across
the UK we have seen demand significantly grow for our mission
critical services and the Board is confident in Restore's future
prospects, and the ability to deliver excellent shareholder
value.
The business has seen economic activity across the UK increase
progressively since the peak of the pandemic in Q2 2020 and
assuming this trend continues with the successful vaccination and
reopening of the UK, the Board would expect that underlying demand
will continue to grow for our mission critical services in the
second half of 2021.
We delivered significant growth and momentum in revenue and
profitability between Q1 and Q2 and performance will further
benefit from a full 6-month contribution from recent acquisitions,
as well as additional income from new contract wins in H1,
particularly a new Department for Work and Pensions ("DWP")
contract which commenced in May. In Records Management, the Board's
expectation is that organic growth of net boxes in storage will
accelerate in H2 and grow between 1-2% for the year (2020: 0.9%)
and that Digital and Technology revenues will continue to run at
twice pre COVID-19 levels in H2.
The increase in the Group's scale is clearly visible with
current annualised run rate revenues of GBP250 million, based on
the performance in May and June 2021, and the trend of growth in
quarterly EBITDA performance from Q1 to Q2. Looking ahead, the
Group has a number of substantial opportunities for further growth
including continued organic growth, strategic acquisitions and
margin enhancement through synergy and efficiency.
As a result of this growth momentum and due to the cash
generative nature of the Group, the balance sheet has substantial
capacity to support further acquisition investment. Management are
in active discussions with a large number of potential target
companies representing aggregate revenues in excess of GBP75m. A
number of these accretive opportunities are expected to be executed
in H2 and although this is dependent on a number of factors,
acquisition investment could be between GBP20 million and GBP30
million.
CHARLES BLIGH, CEO, commented:
"During H1 our top priority has been the safety and welfare of
our customers and staff. These strong results demonstrate the
commitment of our people to deliver the increasing demands from
customers safely and as a result we have emerged larger, stronger
and in a lot of ways, a much better business from before the
pandemic.
The drive towards more flexible and sustainable ways of working
in the public and private sectors are a significant positive for
Restore and combining this with the ongoing focus on
digitalisation, security of data and certainty of delivery means
the demand for our mission critical services is growing.
Our current run rate revenue has expanded to GBP250 million,
which is 16% more than pre COVID-19 and is set to continue to
increase as a result of our clear growth strategy of strong organic
expansion, strategic acquisitions and margin enhancement through
synergy and efficiency. The strategic opportunity for Restore is
compelling and the management team is committed to delivering a
fast growing business that exceeds our customer's expectations and
results in further excellent shareholder value creation."
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
Ed Allsopp
Buchanan Communications www.buchanan.uk.com
Charles Ryland 020 7466 5000
Vicky Hayns
Stephanie Watson
STRATEGIC UPDATE
Restore's strategy is to grow substantially through continuing
to be UK's leading provider of integrated information and data
management services, secure technology recycling, and commercial
relocation solutions .
Operating nationally, in five distinct markets with a total size
of c.GBP1.9 billion, Restore is the UK's most trusted partner in
document storage and recycling, digital asset management, secure IT
destruction and commercial asset relocation. Our business model is
based on high levels of customers' satisfaction which is delivered
alongside our considerable scale advantage, which drives down cost.
In addition to this high level of customer satisfaction, Restore
has high customer retention rates and this also provides the
foundation to upsell further services from the wider Group.
The services provided to these markets are mission critical and
during the recent pandemic, Restore was classified as an 'essential
service' and was able to provide assurance to customers on
continuity of their service, enabling their operations to continue
to function effectively even through the periods of the most
elevated disruption.
From a number 1 or number 2 position in each of its markets,
Restore has grown its market share significantly from 11% to 13%
over the past 12 months and has potential to expand further
substantially, through organic growth and acquisition
strategies.
Demand for the Group's services are being shaped and accelerated
by customers' needs to provide secure, flexible and environmentally
less impactful working environments. This necessitates a range of
services from the secure management and storage of data, the
digitalisation of historic records, the adaptation of office
environments and the collection of a growing range of commercial
waste streams. Restore is unique in being able to offer customers
this full range of capability and the highest standards of customer
service, responsiveness, and security.
To capitalise on this opportunity, Restore has a clear strategy
to grow via organic expansion, strategic acquisition and margin
enhancement through synergy and efficiency. During the first half
of the year, significant progress has been made in each of these
areas:
-- Organic Growth - although difficult to separate revenue
increases between underlying sales growth and rebound following the
pandemic, it is clear all businesses are achieving increased
momentum and 4 of the 5 business are already at pre COVID-19 levels
of activity exiting the period. In Restore Digital, organic growth
is strong at 19% in H1, excluding exam scanning and should benefit
further from the expanded capability following the recent
acquisition of EDM. The Technology market is very active, and the
growing importance of data security and responsible disposal are
very positive organic drivers.
-- Acquisitions - the Board is delighted with four successful
acquisitions in H1, with GBP80.9 million of capital deployed during
H1 (GBP71.1 million net of cash acquired) . In Technology, the
integration of CDL and The Bookyard has added scale, geographic
coverage and new product lines, including Apple capability. In
Records Management we were pleased to complete the acquisition of
1BDM, a small bolt on acquisition that naturally fits into our
scale and operational capability. With EDM acquired in April for
GBP62.4 million (26% of the revenue in Records Management and 74%
of the revenue in Digital), the Digital business has substantially
increased its product capability and has greater scale from which
to leverage efficiency. We reassert our previously communicated
expectation that the acquisition of EDM will result in annual
synergies of at least GBP2.0 million.
-- Margin Expansion - during COVID-19 the business accelerated
plans to restructure towards more digital processes and higher
levels of productivity through process and measurement
improvements. As a result of these changes the ratio of staff cost
to revenue reduced from 44% in Q1 to 39% in Q2 and compares to a
ratio of 41% for FY19, a pre COVID-19 benchmark. The Groups
property strategy was further progressed with the consolidation of
a site in Technology and agreement reached to enter a new lease for
a high density 1m box facility at Heywood in Q4 (with the option to
expand to 2.2m boxes).
Stronger platform for growth
In order to create a platform capable of sustaining above-market
growth, whilst maintaining high and predictable returns,
significant investment has been undertaken in the business over the
last two years. The resulting infrastructure of the Group is
significantly stronger than was the case three years ago, with
notable evolutions in:
-- Strategy - we have clearly defined a high growth strategy
which balances organic growth, acquisitions in our fragmented
markets and margin expansion through disciplined cost
management.
-- Health & Safety - our H&S posture is significantly
improved with a new role created Head of Risk & Quality which
reports into the Executive Committee. H&S is the first focus
item in all Business Unit meetings and at the plc Board meeting to
ensure this is the number one measure of performance in the
business.
-- Financials - the clarity and quality of our earnings and cash
flows has improved with a significantly reduced level of
exceptional charges. Executive share scheme costs are now included
within the reported profit measure, rather than being classified as
an exceptional item. Not all acquisitions carry exceptional cost
but where synergies and restructuring play an important part of the
deal value our estimate is exceptional items would on average be no
more than 3-5% of the deal.
-- Customer Satisfaction - with relentless and increasing focus,
our customer satisfaction has improved from previously strong
levels. Continuity of service throughout the pandemic strengthened
trust and supports growing Restore's market share.
-- People - significant improvement in the leadership of the
business with 9 of 11 Executive Committee members and 69% of the
top 62 leaders new into the Group or new in their roles.
Compelling investment case
The investment case for Restore is compelling and we have a
clear strategy to continue to deliver and accelerate strong returns
to shareholders.
We operate in attractive markets which are highly fragmented.
These markets are all growing and although we have leading
positions, we have only c.13% overall share and therefore have
significant room to grow.
At the heart of the company is a dedication to customer
satisfaction. This delivers significant benefits in terms of high
levels of customer retention, recurring revenues and predicable
cash generation. The premium quality of the customer base and a
strong financial foundation provides a solid base from which
management are building a high quality business with a sustainable
growth plan.
The investment position is clear:
-- Strong ESG credentials
-- Leading positions in growth markets
-- Long standing customer relationships with high levels of customer satisfaction/retention
-- Business model based on high levels of long term contracted and recuring revenues
-- Attractive operating margins and strong cashflows
-- Fragmented markets with significant acquisition opportunities
-- Track record in closing and integrating acquisitions with strong ROIC
-- Competitive advantage through Restore's scale leading to cost advantages
-- Significant barriers to entry
-- Strong management team with demonstrated delivery of results.
BUSINESS PERFORMANCE
The Group achieved a strong performance in H1, with revenue up
19% vs the same period in 2020 and importantly showing sequential
improvement with an increase of 20% in Q2 vs Q1. This reflects the
increasing activity levels in the economy and the fact that our
customers have adapted to COVID-19 restrictions and are demanding
more services from us. Given our operational gearing, this increase
in revenue each quarter has a significant beneficial impact on the
profitability of the Group.
Document Management
Our Document Management division comprises Restore Records
Management, Restore Datashred and Restore Digital.
For the period the division achieved an adjusted operating
profit of GBP18.2m (H1 2020: GBP15.2m) on turnover of GBP75.7m (H1
2020: GBP67m).
Restore Records Management - Revenue GBP47.7m up 9% yoy (H1
2020: GBP43.7m)
With increasing activity levels and the contribution from
acquisitions, revenue was up 9% on H1 2020 and 9% on H2 2020.
Storage revenue increased 1% and Service revenue increased 31%
compared with H2 2020, with increasing activity at our customers'
operations despite many social restrictions remaining in place for
all of H1 2021. Annualised run rate revenue for Records Management
is now at GBP109 million which is 14% above pre COVID-19 levels
based upon performance in May and June 2021.
Total box growth was 9.2% in H1, with a total capacity at the
end of H1 of c.22.8m boxes. We maintained capacity utilisation at
94.7% and we have committed to a new site in Heywood with 1m box
capacity with an option for a further 1.2m in 12 months' time to
create a new site of c.2.2m boxes. This will allow room to grow
organically and with acquisitions and provide capacity to enable
the rationalisation of other sites to lower per box costs. We also
accelerated the exit of the Paddock Wood site in H1.
We experienced strong and encouraging sales results in H1. We
won, signed and started work with the Department for Work and
Pensions (DWP) for a contract worth GBP9.5m over 20 months to
manage the DWP Heywood site.
We contracted 98 new customers with a total of 95k boxes during
H1. Within this result, 83 new customers with 29k boxes were
previously unvendored, i.e. the records were stored on the
customers' premises. These 83 customers were mostly in the private
sector showing that downsizing and the move to flexible working and
smaller offices will have a positive impact in Records Management.
This is a trend we have seen increase over the last few years,
where flexible working / office downsizing is driving more boxes
into the market.
H2 has started strongly for the business, with four major wins
from competitors, totalling 200k new boxes, including a new
customer signing with 120k boxes.
Restore Digital - Revenue GBP14.2m up 60% yoy (H1 2020:
GBP8.9m)
The Restore Digital business has been transformed in scale and
capability through the combination of Restore Digital and the
digital business of EDM (74% of EDM revenues). The combined
business now has annualised run rate revenues of GBP46.3m based on
performance in May and June 2021 and is the market leader in size
and breadth of offering for customers. It will be a strong platform
to grow further with organic growth and further acquisitions as
outlined in the Capital Markets Day in November 2020.
The EDM business with two months of trading under Restore
ownership has performed well and in line with our expectations. We
have announced the merger of the two businesses and are in
consultation with staff at this time but we reassert our
expectation that the previously announced synergies of at least
GBP2 million per year will be achieved.
Restore Digital revenues achieved strong growth in H1. The
business had 2 months contribution from EDM, however on an organic
basis the business increased by 19% vs H1 2020 and 19% vs H1 2019
(normalising for the Exam RM work).
The business unit won 226 customer contracts in the period, an
increase of c.85% on H1 2020 and the contract value was a c.55%
increase vs H1 2020. The pipeline of qualified deals is 50% greater
compared with this time last year, showing the strength of the
Restore Digital brand and improving market conditions. We continue
to focus on highly regulated industry and wider industries that
value the offline/online data they hold. We have six active bids
into the NHS for the digitisation of patient records and with the
combined relationships in EDM we are focusing on a further 30 NHS
trusts over the next 18 months who have announced digitisation
initiatives.
A focus of the enlarged business is winning Digital Mailroom
contracts which are higher margins and long term contracted
revenues. We have won 4 customers in H1 2021 with a focus on
insurance, legal, financial services and utilities. A 2021 win has
been with Monzo bank, one of the first online-only challenger banks
in the UK. We have successfully rolled out a digital inbound and
outbound omnichannel mailroom, and together we are looking to
develop this further, including cheque processing.
Restore Datashred - Revenue GBP13.8m down 4% yoy (H1 2020:
GBP14.4m)
As expected, Restore Datashred's revenue was lower year-on-year
in H1 with the comparative period last year having almost 3 months
of performance unaffected by COVID-19. A more relevant measure is
the sequential quarterly improvement in trading with revenue
increasing c.9% in Q2 vs Q1 and the number of customer visits
increasing by c.5%. Paper volumes also increased c.3% from Q1 to
Q2, demonstrating that companies are starting to reactivate office
services with the reduction in restrictions.
Paper pricing continues to be stable with the exit rate of Q2 at
roughly the same levels seen in H2 2020. There are a number of
factors that change the supply/demand which drives the pricing, and
we believe that overall, this will be stable throughout 2021 with
some encouraging signs this may improve as we exit the year.
A highlight of the business last year and into H1 2021 have been
the operational and sales improvements we delivered and we are
starting to see benefits from these as activity increases.
In operations we have made a number of changes which add up to
material productivity improvements which will be structural in
nature as volume grows. Our route density which is a key measure of
operational performance has improved c.19% vs pre COVID-19 levels
with customer satisfaction improving during this period.
After restructuring the sales team in 2020 we have seen a 50%
increase in revenue per head. We have also made substantial changes
to the website and search rankings and coupled with improved social
business marketing, our inbound queries have improved
substantially. In H1 we added c.1,200 new customers. Order intake
is at pre COVID-19 levels overall but slightly lower with the
larger Facilities Management companies. London activity levels look
particularly encouraging.
Overall, the Q2 revenues of Datashred are c.70% of pre COVID-19
levels and with the excellent cost and sales improvements in the
team we have reduced overall costs in the business. This will
provide a strong platform for the likely consolidation of the
shredding market over the coming months and years which will
generate strong profits for the Group.
Relocation & IT Recycling
Our Relocation division comprises Restore Harrow Green, the UK
market leader in office relocation, and Restore Technology which is
now the market leader in IT Lifecycle Services. IT Lifecycle
Services is comprised of three specialist areas: 1) Recycling of IT
equipment safely and securely; 2) Early life implementation of IT
hardware and 3) IT Relocation - specialising in server and data
centre relocation, as well as IT moves, equipment installation and
deployment.
For the period the division achieved an operating profit of
GBP5.3m (H1 2020: GBP1.1m) on turnover of GBP30.4m (H1 2020:
GBP22.5m).
Restore Harrow Green - Revenue GBP18.1m up 21% yoy (H1 2020:
GBP15.0m)
Restore Harrow Green performed well in H1 with increasing
activity levels across the whole business with revenue up 21% vs H1
2020 and 8% vs H1 2019 (excluding pass through revenues) showing
the bounce back of the business.
The whole business is performing above 2019 levels and
sequentially we achieved a 12% increase in Q2 vs Q1 showing the
significant levels of office relocation and organisational change
occurring in the economy.
Our strategy is to expand our Life Sciences business
significantly and in Q1 we opened our new storage and customer
facility in Cambridge (first new branch opening in 7 years) which
is showing very positive results and well on track to exceed the
expectation for the year.
Sales activity, specifically, quoting for new work, is back to
pre COVID-19 levels and rising. We have seen a c.20% increase in
crate hire and recycling and a c.30% increase in Storage revenue in
H1 2021 vs H1 2019. Our win rates continue to be strong and we were
delighted to be awarded a significant project with The University
of Exeter for c.GBP700k which will be delivered in H2 2021.
Restore Technology - Revenue GBP12.3m up 64% yoy (H1 2020:
GBP7.5m)
Revenue is up 64% vs H1 2020 and grew very strongly as a result
of three acquisitions made in the last 9 months and continued high
levels of demand in the market with assets collected in H1 2021
increased by c.170% vs H1 2020 showing the strong recovery in the
market.
Increasing our e-commerce revenue is a strategic priority and we
are delivering against this plan. Annualised run rate e-commerce
sales based on performance in May and June 2021 (including e-Bay)
is GBP2.8 million which is 201% higher than FY 2020 and 416% more
than FY 2019. This will have two significant beneficial impacts;
The first is it drives up awareness of the Restore Technology brand
and therefore improves demand with clients to increase collections
and secondly, as we grow our own branded online website we will
reduce our e-Bay reseller fees that absorb 12-15% of revenue
through this channel.
Operational productivity continues to strengthen. Processing
activity grew by 55% in H1 2021 compared with H1 2020. In 2021 we
closed a small site and absorbed the work into a larger
facility.
We are delighted with the two acquisitions in H1 2021 with
Computer Disposals Ltd in January and The Bookyard in March 2021,
which together are transformational for the business with the
addition of scale and also Apple refurbishment capability. The
integration of both businesses is progressing on plan.
We are seeing increasing demand for IT recycling with companies
making significant investment in IT. Gartner predicts IT spending
to increase 8.4% in 2021 (source Press Release 7 April 2021) This
increase in IT spending has a direct correlation with the demand
for IT recycling with companies looking to securely and
environmentally recycle old equipment as the new equipment is
installed.
A new Managing Director, Athena Ainsworth, was announced in H1
2021 and has already started in the business. We are delighted to
welcome Athena to Restore as the new MD for Technology. Athena
previously worked at IBM and joins us from Vodafone to lead and
deliver on the planned and exciting growth prospects for this
business.
Our sustained growth in the Technology business will continue to
be a product of strong organic demand in the market and targeted
acquisitions building our scale and scope of services. We have a
number of active acquisition discussions with companies which will
be accretive to earnings.
FINANCIAL PERFORMANCE
Financial overview
Restore delivered a strong financial performance for the 6
months to 30 June 2021, with a return to normal levels of activity
across most of the business units during Q2 and the benefit of
accretive acquisitions leading to an increase in the scale of the
business. Revenues showed a sequential expansion from GBP48.3
million in Q1 growing to GBP57.8 million for Q2, with revenue
performance in May and June annualising to a run rate of more than
GBP250 million.
Restore Datashred performance lags the more general recovery
across the Group whilst Records Management, Restore Technology and
Restore Digital have all grown, particularly in Q2, and enter H2
2021 materially larger businesses. Restore Harrow Green has also
performed satisfactorily with a high compare in the prior year
revenue including pass through revenues relating to furniture and
minimal cost plus.
Revenue H1 2021 H1 2020 H1 2019 H1 2021 H1 2021
GBPm GBPm GBPm % of % of
H1 2020 H1 2019
---------------------------- -------- -------- -------- --------- ---------
Restore Records Management 47.7 43.7 47.8 109% 100%
Restore Datashred 13.8 14.4 21.0 96% 66%
Restore Digital 14.2 8.9 11.6 160% 122%
Restore Harrow Green 18.1 15.0 19.7 121% 92%*
Restore Technology 12.3 7.5 6.1 164% 202%
---------------------------- -------- -------- -------- --------- ---------
106.1 89.5 106.2 119% 100%
---------------------------- -------- -------- -------- --------- ---------
*Note: Restore Harrow Green excluding pass through revenues
delivered growth of 8% (ie 108%) in H1 2021 vs H1 2019
The Group made a number of acquisitions in the first half
including CDL, an IT asset disposal and recycling company for
GBP15.8 million in January and EDM, a records and digital
information management business in April for GBP62.4 million.
Associated with the acquisition of EDM, the Group completed a
successful equity placing of GBP40 million, before costs which was
completed on 30 April 2021. As a result of the equity raise and
together with continued strong operating cashflow, the Group's net
debt of GBP91.6 million at the period end is in line with
expectations and well within banking covenants.
Income Statement
Revenue for the first half was GBP106.1 million, +19% compared
to the prior year and approximately in line with 2019. The Group's
revenues have recovered from the pandemic with 2021 acquisitions
contributing c.GBP9.3 million of additional revenue in H1 and
offsetting the slower recovery in Restore Datashred and the
cancellation of the summer exam scanning sessions.
Revenue by quarter 2021
2021 2020 2019 % of
2021
% of
GBPm GBPm GBPm 2020 2019
-------------------- ------ ------ ------ ------ ------
Q1 48.3 51.4 50.7 94% 95%
Q2 57.8 38.1 55.5 152% 104%
-------------------- ------ ------ ------ ------ ------
H1 106.1 89.5 106.2 119% 100%
------------------------------------------------------------------
The Group's adjusted profit before tax of GBP15.6 million for
the period represents a solid recovery after the disruption of
COVID-19 and is without any form of Government support.
Profitability improved through the period , with operating margin
of 14.9% in Q1 improving to 21.3% for Q2 making 18.5% for H1 2021
as a whole and compares to 16.2% achieved for H1 20 20 and 21.5%
achieved for H1 20 19. Improvement to the margins in Restore
Technology during the first half are particularly satisfying and
follow the significant increase in scale of that Business Unit in
the last six months following strategic acquisitions.
EBITDA (post IFRS16) has improved as a result of sales expansion
and grew sequentially from GBP13.8 million in Q1 to GBP19.4 million
in Q2 and totalled GBP33.2 million for the half compared with
GBP27.4 for H1 2020.
The statutory profit before tax of GBP8.9 million showed strong
growth over the prior year loss of GBP3.1 million as a result of
the year on year growth in revenue and the prior year having been
being impacted by non-cash investment and asset impairments of
GBP8.6 million. The resulting statutory basic fully diluted
earnings per share for H1 2021 was 1.5 pence and compares to a
fully diluted basic loss of 3.8 pence per share for the same period
in 2020. The statutory earnings per share are impacted by a
non-cash deferred tax adjustment in the year which results from the
planned increase in corporation tax from 2023.
Fully diluted adjusted earnings per share for the first half
were 9.4 pence, an increase of 51.6% compared with 6.2 pence in H1
2020. The EPS reflects the improved profitability in 2021 and the
increase in weighted average number of shares in the year.
Cost
Cost control across the business continues to be excellent with
action across a number of strategic opportunities progressing
well.
The exit of a further Restore Technology site in Portsmouth and
its activity consolidation into our Bristol location has commenced
and will deliver incremental operational improvements from H2.
In other cost areas, Restore has implemented a preferred supply
arrangement for fuel with Shell which in addition to cost savings,
provides telematics and carbon offset credits and represents a
significant enhancement in the management of this key cost
line.
On staff cost, headcount has increased during H1 in line with
trading activity. However, as a result of efficiency and
restructuring measures, the people cost to revenue ratio improved
and was 39% for Q2 compared 41% for FY 2019, taken as a pre
COVID-19 benchmark.
Financing
Underlying cashflow in the business continues to be strong and
in the absence of acquisitions, the equity raise and exceptional
costs, the Group's net debt would have reduced from GBP66.1 million
at 31 December 2020 to GBP56.7 million at 30 June 2021.
Net operating cashflows were lower in H1 2021 compared to H1
2020 as expected with higher operating profits offset by the
significant increase in working capital as a result of increasing
sales. Despite this effect, the business has generated very
positive operating cashflows of GBP19.6 million and continues to
demonstrate its strongly cash generative nature.
In order to support the acquisition of EDM, an equity raise was
successfully completed on 30 April 2021 and a total of 10,958,904
new ordinary shares of 5 pence each in the Company, representing
approximately 8.7 percent of the existing issued share capital of
the Company, were placed by Peel Hunt LLP at a price of 365 pence
per Placing Share, raising gross proceeds of approximately GBP40
million. The placing price of 365 pence per Placing Share
represented a discount of 5.2 % to the closing price of 385 pence
on 29 April 2021.
The Group invested GBP80.9 million in acquisitions during H1
(GBP71.1 million net of cash acquired) and after the successful
equity raise and other cashflows, net debt was GBP91.6 million at
the period end.
The proforma rolling 12 month EBITDA for bank leverage purposes,
which excludes the effect of IFRS16, was GBP49.3 million. As such,
the corresponding leverage at 30 June 2021 was 1.9x (31 December
2020: 1.7x), well within the bank covenant operating parameters and
headroom of the existing GBP160 million rolling credit
facility.
Adjusted profit items
Due to the one-off nature of exceptional costs and the non-cash
nature of certain charges, the Directors believe that an adjusted
measure of profit before tax and earnings per share provides
shareholders with a useful representation of underlying earnings
from the Group's business.
The adjusting items in arriving at the underlying adjusted
profit before tax are as follows:
H1 2021 H1 2020 Change
GBPm GBPm
----------------------------------- -------- -------- -------
Exceptional items 1.7 0.4 +325%
Amortisation of intangible assets
and software 5.0 4.1 +22%
Impairment of intangible assets - 7.0 n/a
Write down in investment value - 1.6 n/a
----------------------------------- -------- -------- -------
Total adjusting items 6.7 13.1 49%
----------------------------------- -------- -------- -------
Exceptional items incurred in H1 2021 are primarily acquisition
related restructuring costs (GBP0.5 million), acquisition related
transaction costs (GBP0.9 million) and charges in relation to a
legacy legal matter (GBP0.3 million).
Dividend
In recognition of the Group's continued strong trading momentum
and its confidence in the H2 2021 and future outlook, the Board has
re-instated its previous progressive dividend policy.
The Board has declared an interim dividend of 2.5p per share for
FY2021 (2020: 0.0p). The dividend will be paid on 15 October to
shareholders on the register at 17 September 2021.
FINANCIAL STATEMENTS
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 30 June 2021
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
Note 2021 2020 2020
GBP'm GBP'm GBP'm
---------------------------------------- ------- ------------ ------------ --------------
Revenue - continuing operations 2 106.1 89.5 182.7
Cost of sales (58.3) (53.3) (105.9)
Gross profit 47.8 36.2 76.8
Administrative expenses (28.2) (21.7) (45.1)
Amortisation of intangible assets (5.0) (4.1) (8.3)
Impairment of intangible assets - (7.0) (7.0)
Impairment of investment - (1.6) (1.6)
Exceptional items 3 (1.7) (0.4) (2.3)
Operating profit 12.9 1.4 12.5
---------------------------------------- ------- ------------ ------------ --------------
Finance costs (4.0) (4.5) (8.5)
Profit/(loss) before tax 8.9 (3.1) 4.0
---------------------------------------- ------- ------------ ------------ --------------
Taxation 4 (6.9) (1.8) (3.8)
---------------------------------------- ------- ------------ ------------ --------------
Profit/(loss) after tax 2.0 (4.9) 0.2
Other comprehensive income - - -
---------------------------------------- ------- ------------ ------------ --------------
Profit/(loss) and total comprehensive
income/(loss) for the period
attributable to owners of the
parent 2.0 (4.9) 0.2
---------------------------------------- ------- ------------ ------------ --------------
Earnings/(loss) per share attributable
to owner of the parent (pence)
Total
- Basic 5 1.5p (3.9p) 0.2p
- Diluted 5 1.5p (3.8p) 0.2p
Continuing Operations
- Basic 5 1.5p (3.9p) 0.2p
- Diluted 5 1.5p (3.8p) 0.2p
---------------------------------------- ------- ------------ ------------ --------------
The reconciliation between the statutory results shown above and
the non-GAAP adjusted measures are shown below:
Operating profit - continuing
operations 12.9 1.4 12.5
------------------------------------------ ------ ------ ------
Adjustments for:
Amortisation of intangible assets 5 5.0 4.1 8.3
Impairment of intangible assets 5 - 7.0 7.0
Impairment of investment 5 - 1.6 1.6
Exceptional items 5 1.7 0.4 2.3
Adjustments 6.7 13.1 19.2
------------------------------------------ ------ ------ ------
Adjusted operating profit 19.6 14.5 31.7
------------------------------------------ ------ ------ ------
Depreciation of property, plant
and equipment and right-of-use
assets 13.6 12.9 25.7
------------------------------------------ ------ ------ ------
Earnings before interest, taxation,
depreciation, amortisation, impairment
and exceptional items (EBITDA) 33.2 27.4 57.4
------------------------------------------ ------ ------ ------
Profit/(loss) before tax 8.9 (3.1) 4.0
------------------------------------------ ------ ------ ------
Adjustments (as stated above) 6.7 13.1 19.2
------------------------------------------ ------ ------ ------
Adjusted profit before tax 15.6 10.0 23.2
------------------------------------------ ------ ------ ------
Condensed Consolidated Statement of Financial Position
As at 30 June 2021
Unaudited Audited
30 June Unaudited 31 December
2021 30 June 2020 2020
Note GBP'm GBP'm GBP'm
--------- ------------- ------------
ASSETS
Non-current assets
Intangible assets 320.6 246.8 247.4
Property, plant and equipment 74.0 71.0 70.6
Right-of-use assets 105.1 111.1 107.1
Deferred tax asset 4.5 3.5 3.4
-------------------------------------------- ------ --------- ------------- ------------
504.2 432.4 428.5
-------------------------------------------- ------ --------- ------------- ------------
Current assets
Inventories 1.2 1.1 0.9
Trade and other receivables 55.0 40.3 41.2
Corporation tax receivable 0.1 - 0.3
Cash and cash equivalents 22.0 28.4 26.4
78.3 69.8 68.8
Total assets 582.5 502.2 497.3
-------------------------------------------- ------ --------- ------------- ------------
LIABILITIES
Current liabilities
Trade and other payables (48.8) (35.9) (38.8)
Financial liabilities - lease liabilities (17.7) (16.9) (16.7)
Other financial liabilities - (0.1) -
Current tax liabilities - (0.4) -
Provisions (1.1) (0.4) (0.4)
-------------------------------------------- ------ --------- ------------- ------------
(67.6) (53.7) (55.9)
-------------------------------------------- ------ --------- ------------- ------------
Non-current liabilities
Financial liabilities - borrowings 9 (113.6) (102.3) (92.5)
Financial liabilities - lease liabilities (100.6) (107.2) (104.0)
Deferred tax liabilities (34.4) (18.4) (19.8)
Provisions (7.1) (6.5) (6.5)
(255.7) (234.4) (222.8)
-------------------------------------------- ------ --------- ------------- ------------
Total liabilities (323.3) (288.1) (278.7)
-------------------------------------------- ------ --------- ------------- ------------
Net assets 259.2 214.1 218.6
-------------------------------------------- ------ --------- ------------- ------------
EQUITY
Share capital 6.8 6.2 6.3
Share premium account 187.9 150.3 150.3
Other reserves 7.3 6.4 6.0
Retained earnings 57.2 51.2 56.0
-------------------------------------------- ------ --------- ------------- ------------
Equity attributable to owners of
parent 259.2 214.1 218.6
-------------------------------------------- ------ --------- ------------- ------------
Condensed Consolidated Statement of Changes in Equity
For the six months ended 30 June 2021
Attributable to owners of the parent
------------------------------------------------------
Share Share Other Retained Total
capital premium reserves earnings equity
GBP'm GBP'm GBP'm GBP'm GBP'm
----------------------------- --------- --------- ---------- ---------- --------
Balance at 1 January
2020 6.2 150.3 6.1 55.9 218.5
Loss for the period - - - (4.9) (4.9)
----------------------------- --------- --------- ---------- ---------- --------
Total comprehensive
loss for the period - - - (4.9) (4.9)
----------------------------- --------- --------- ---------- ---------- --------
Transactions with
owners
Transfers - - (0.2) 0.2 -
Share-based payments
charge - - 0.9 - 0.9
Deferred tax on share-based
payments - - (0.4) - (0.4)
----------------------------- --------- --------- ---------- ---------- --------
Balance at 30 June
2020 (unaudited) 6.2 150.3 6.4 51.2 214.1
----------------------------- --------- --------- ---------- ---------- --------
Balance at 1 July
2020 6.2 150.3 6.4 51.2 214.1
Profit for the period - - - 5.1 5.1
----------------------------- --------- --------- ---------- ---------- --------
Total comprehensive
income for the period - - - 5.1 5.1
----------------------------- --------- --------- ---------- ---------- --------
Transactions with
owners
Issue of shares 0.1 - - (0.1) -
Transfers - - 0.2 (0.2) -
Share-based payments
charge - - 0.3 - 0.3
Deferred tax on share-
based payments - - (0.9) - (0.9)
----------------------------- --------- --------- ---------- ---------- --------
Current tax on share-based
payments - - 0.8 - 0.8
----------------------------- --------- --------- ---------- ---------- --------
Treasury share transactions - - (0.8) - (0.8)
----------------------------- --------- --------- ---------- ---------- --------
Balance at 31 December
2020 (audited) 6.3 150.3 6.0 56.0 218.6
----------------------------- --------- --------- ---------- ---------- --------
Balance at 1 January
2021 6.3 150.3 6.0 56.0 218.6
Profit for the period - - - 2.0 2.0
----------------------------- --------- --------- ---------- ---------- --------
Total comprehensive
income for the period - - - 2.0 2.0
----------------------------- --------- --------- ---------- ---------- --------
Transactions with
owners
Issue of shares 0.5 39.5 - - 40.0
Issue costs - (1.9) - - (1.9)
Share-based payments
charge - - 0.9 - 0.9
Deferred tax on share-based
payments - - (0.3) - (0.3)
Purchase of treasury
shares - - (0.1) - (0.1)
Transfers* - - 0.8 (0.8) -
----------------------------- --------- --------- ---------- ---------- --------
Balance at 30 June
2021 (unaudited) 6.8 187.9 7.3 57.2 259.2
----------------------------- --------- --------- ---------- ---------- --------
* An amount of GBP0.8m was reclassified from the treasury
reserve to retained earnings in respect of exercised options
settled out of the Group's Employee Benefit Trust.
Condensed Consolidated Statement of Cash Flows
For the six months ended 30 June 2021
Unaudited
six months Unaudited Audited
ended six months year ended
30 June ended 31 December
2021 30 June 2020 2020
Note GBP'm GBP'm GBP'm
------------ -------------- -------------
Net cash generated from operations 7 25.8 36.4 66.9
Net finance costs (3.8) (4.4) (8.0)
Income taxes paid (2.4) (5.3) (7.2)
-------------------------------------- ----- ------------ -------------- -------------
Net cash generated from operating
activities 19.6 26.7 51.7
Cash flows from investing activities
Purchase of property, plant
and equipment and applications
software 2 (2.8) (3.6) (7.3)
Purchase of subsidiary, net
of cash acquired (71.1) - (3.4)
Purchase of trade and assets - - (0.3)
Cash flows used in investing
activities (73.9) (3.6) (11.0)
Cash flows from financing activities
Dividends paid - - -
Net proceeds from share issue 38.1 - -
Purchase of treasury shares (0.1) - (0.8)
Repayment of revolving credit
facility (45.0) (3.0) (13.0)
Drawdown of revolving credit 66.0 - -
facility
Principal element of lease
repayments (9.1) (8.3) (17.1)
-------------------------------------- ----- ------------ -------------- -------------
Net cash used in financing
activities 49.9 (11.3) (30.9)
-------------------------------------- ----- ------------ -------------- -------------
Net (decrease) / increase in
cash and cash equivalents (4.4) 11.8 9.8
Cash and cash equivalents at
start of period 26.4 16.6 16.6
-------------------------------------- ----- ------------ -------------- -------------
Cash and cash equivalents at
the end of period 9 22.0 28.4 26.4
-------------------------------------- ----- ------------ -------------- -------------
Cash and cash equivalents shown
above comprise:
Cash at bank 22.0 28.4 26.4
Bank overdraft - - -
9 22.0 28.4 26.4
-------------------------------------- ----- ------------ -------------- -------------
Notes to the Consolidated Interim report
For the six months ended 30 June 2021
1 Basis of Preparation
The half year report has been prepared in accordance with IAS
34, Interim Financial Reporting, adopting accounting policies that
are consistent with those of the previous financial year and
corresponding half year reporting period,
2 Segmental Analysis
The Group is organised into two main operating segments,
Document Management and Relocation and incurs central costs.
Services per segment operate as described in the business review.
The vast majority of trading of the Group is undertaken within the
United Kingdom. Segment assets include intangibles, property, plant
and equipment, inventories, receivables and operating cash. Central
assets include deferred tax and head office assets. Segment
liabilities comprise operating liabilities. Central liabilities
include income tax and deferred tax, corporate borrowings and head
office liabilities. Capital expenditure comprises additions to
computer software, property, plant and equipment and includes
additions resulting from acquisitions through business
combinations. Segment assets and liabilities are allocated between
segments on an actual basis.
Audited
Unaudited Unaudited 31 December
30 June 2021 30 June 2020 2020
Revenue - Continuing operations GBP'm GBP'm GBP'm
================================ ============== ============= ============
Restore Records Management 47.7 43.7 87.6
Restore Datashred 13.8 14.4 28.0
Restore Digital 14.2 8.9 18.5
================================ ============== ============= ============
Document Management division 75.7 67.0 134.1
================================ ============== ============= ============
Restore Harrow Green 18.1 15.0 33.3
Restore Technology 12.3 7.5 15.3
================================ ============== ============= ============
Relocation division 30.4 22.5 48.6
================================ ============== ============= ============
Total revenue 106.1 89.5 182.7
================================ ============== ============= ============
The revenue from external customers was derived from the Group's
principal activities primarily in the UK (where the Company is
domiciled).
Unaudited Audited
30 June Unaudited 31 December
2021 30 June 2020 2020
Profit before tax GBP'm GBP'm GBP'm
====================================== ========= ============== ============
Document Management division 18.2 15.2 33.2
Relocation division 5.3 1.1 4.0
Central costs (2.7) (2.0) (4.5)
Amortisation of intangible assets (5.0) (4.1) (8.3)
Impairment of intangible assets - (7.0) (7.0)
Impairment of investment - (1.6) (1.6)
Share based payment charge (including
related NI) (1.2) 0.2 (1.0)
Exceptional items (1.7) (0.4) (2.3)
Operating profit 12.9 1.4 12.5
Finance costs (4.0) (4.5) (8.5)
-------------------------------------- --------- -------------- ------------
Profit/(loss) before tax 8.9 (3.1) 4.0
====================================== ========= ============== ============
Segmental information
Unaudited
30 June 2021
Document Management Relocation Central costs Total
GBP'm GBP'm GBP'm GBP'm
============================== =================== ========== ============= =============
Segment assets 484.4 85.5 12.6 582.5
Segment liabilities 100.9 13.7 208.7 323.3
Capital expenditure 2.2 0.4 0.2 2.8
Depreciation and amortisation 15.9 2.7 - 18.6
============================== =================== ========== ============= =============
Unaudited
30 June 2020
============================== =================== ========== ============= =============
Segment assets 417.5 69.5 15.2 502.2
Segment liabilities 159.1 31.2 97.8 288.1
Capital expenditure 3.3 0.3 - 3.6
Depreciation and amortisation 15.0 2.0 - 17.0
============================== =================== ========== ============= =============
Audited
31 December
2020
============================== =================== ========== ============= =============
Segment assets 427.4 56.3 13.6 497.3
Segment liabilities 160.0 31.6 87.1 278.7
Capital expenditure 6.6 0.5 0.2 7.3
Depreciation and amortisation 29.6 4.3 0.1 34.0
============================== =================== ========== ============= =============
3 Exceptional items
For the six months ended 30 June 2021, exceptional costs were
GBP1.7m, including GBP0.9m of acquisition related transaction
costs, GBP0.5m of acquisition related restructuring costs and
GBP0.3m in respect of a legacy legal liability (2020: exceptional
costs GBP0.4m, including restructuring costs of GBP0.1m and GBP0.3m
relating to the employer's national insurance on the exercise of
legacy share options).
The legal liability charge in the period is the final adjustment
to the penalty relating to an incident at the Crayford shredding
site in 2018 with the final HSE fine of GBP0.6 million. The current
management have since made a number of changes to H&S across
the business.
In the year ended 31 December 2020, GBP2.3m of exceptional costs
were incurred, comprising acquisition related costs (GBP0.2m),
redundancy and site consolidation costs (GBP1.3m), employer's
national insurance on the exercise of legacy share options
(GBP0.3m), legacy legal liability costs (GBP0.3m), and corporate
restructure costs (GBP0.2m).
4 Taxation
The current tax charge for the period to 30 June 2021 is
anticipated to be GBP2.7m. Following the announcement on 3 March
2021 of a change in the UK corporation tax rate to 25% in 2023,
which has now been substantively enacted, we have re-assessed the
deferred tax position of the Group which has resulted in an
additional charge of GBP4.2m being recognised in the income
statement.
5 Earnings per ordinary share
Basic earnings per share have been calculated on the profit for
the period after taxation and the weighted average number of
ordinary shares in issue during the period.
Unaudited Unaudited
six months six months Audited
ended ended year ended
30 June 30 June 31 December
2021 2020 2020
----------------------------------------- ----------- ----------- ------------
Weighted average number of shares in
issue 129,129,492 124,872,300 125,214,737
----------------------------------------- ----------- ----------- ------------
Total profit/(loss) for the period GBP2.0m (GBP4.9m) GBP0.2m
----------------------------------------- ----------- ----------- ------------
Total basic earnings/(loss) per ordinary
share 1.5p (3.9p) 0.2p
----------------------------------------- ----------- ----------- ------------
Weighted average number of shares in
issue 129,129,492 124,872,300 125,214,737
Share options 4,725,584 4,957,992 3,543,950
Weighted average fully diluted number
of shares in issue 133,855,076 129,830,292 128,758,687
----------------------------------------- ----------- ----------- ------------
Total fully diluted earnings/(loss)
per share 1.5p (3.8p) 0.2p
----------------------------------------- ----------- ----------- ------------
Continuing profit/(loss) for the period GBP2.0m (GBP4.9m) GBP0.2m
----------------------------------------- ----------- ----------- ------------
Continuing basic earnings/(loss) per
share 1.5p (3.9p) 0.2p
----------------------------------------- ----------- ----------- ------------
Continuing fully diluted earnings/(loss)
per share 1.5p (3.8p) 0.2p
----------------------------------------- ----------- ----------- ------------
Adjusted earnings per share
The Directors believe that adjusted earnings per share provide a
more appropriate representation of the underlying earnings derived
from the Group's business. The adjusting items are shown in the
table below:
Unaudited Unaudited Audited
six months six months year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'm GBP'm GBP'm
------------------------------------ ----------- ----------- ------------
Continuing profit/(loss) before tax 8.9 (3.1) 4.0
Adjustments:
Amortisation of intangible assets 5.0 4.1 8.3
Impairment of intangible assets - 7.0 7.0
Impairment of investment - 1.6 1.6
Exceptional items 1.7 0.4 2.3
Adjusted continuing profit for the
period 15.6 10.0 23.2
------------------------------------ ----------- ----------- ------------
The adjusted earnings per share, based on weighted average
number of shares in issue during the period, 129.1m (2020: 124.9m)
is calculated below:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
------------------------------------ ----------- ----------- ------------
Adjusted profit before tax (GBP'm) 15.6 10.0 23.2
Tax at 19.0% (GBP'm) (3.0) (1.9) (4.4)
------------------------------------ ----------- ----------- ------------
Adjusted profit after tax (GBP'm) 12.6 8.1 18.8
------------------------------------ ----------- ----------- ------------
Adjusted basic earnings per share 9.8p 6.5p 15.0p
------------------------------------ ----------- ----------- ------------
Adjusted fully diluted earnings per
share 9.4p 6.2p 14.6p
------------------------------------ ----------- ----------- ------------
6 Dividends
In respect of the current period, the Directors propose an
interim dividend of 2.5p per share (2020: GBPnil). The estimated
dividend to be paid is GBP3.4m (2020: GBPnil).
7 Cash inflow from operations
Unaudited Unaudited
six months six months Audited year
ended ended ended
30 June 30 June 31 December
2021 2020 2020
GBP'm GBP'm GBP'm
--------------------------------------------- ----------- ----------- ------------
Continuing operations
Profit/(loss) before tax 8.9 (3.1) 4.0
Depreciation of property, plant and
equipment and right-of-use assets 13.6 12.9 25.7
Amortisation of intangible assets 5.0 4.1 8.3
Impairment of intangible assets - 7.0 7.0
Impairment of investment - 1.6 1.6
Net finance costs 4.0 4.5 8.5
Share-based payments charge/(credit) 0.9 (0.2) 1.2
Gain on disposal of property, plant
and equipment and right-of-use assets - - (0.1)
(Increase)/decrease in inventories (0.1) 0.3 0.5
(Increase)/decrease in trade and other
receivables (5.9) 7.8 7.8
(Decrease)/increase in trade and other
payables (0.6) 1.5 2.4
--------------------------------------------- ----------- ----------- ------------
Net cash generated from operating activities 25.8 36.4 66.9
--------------------------------------------- ----------- ----------- ------------
8 Business combinations
On 8 January 2021, the Group acquired 100% of the share capital
of Computer Disposals Ltd ("CDL"), a Technology business, which
provides leading IT recycling and asset disposition (ITAD)
services.
On 1 March 2021, the Group acquired 100% of the share capital of
The Bookyard Ltd ("The Bookyard"), a Technology business, which
provides leading Apple recycling and spare parts services.
On 15 April 2021, the Group acquired 100% of the share capital
of Big Data Management Ltd ("1 Big Data"), a leading high-quality
Records Management business.
On 30 April 2021, the Group acquired 100% of Rainbow HoldCo
Limited, which trades as EDM Group Limited ("EDM"). This
acquisition is additive to the Group's core Records Management
business and transformational for its growing Digital business.
As the Group is still in the process of establishing the fair
value of the assets and liabilities acquired in respect of these
acquisitions, the fair values presented below are provisional.
CDL The Bookyard 1 Big Data EDM
GBP'm GBP'm GBP'm GBP'm
--------------------------------- ------ ------------ ---------- ------
Intangibles - goodwill, customer
relationships and other 12.3 0.6 2.3 62.2
Right of use assets 0.4 - - 5.7
Property, plant and equipment
and right-of-use assets 1.3 - - 4.4
Deferred tax assets - - - 0.3
Stock - 0.2 - -
Trade and other receivables 0.5 - 0.1 6.0
Cash 4.7 0.1 - 4.8
Trade and other payables (1.7) (0.1) (0.1) (7.8)
Corporation tax (0.2) - - 0.3
Deferred tax liabilities (1.1) - (0.4) (7.9)
Provisions - - - (0.7)
Lease liabilities (0.4) - - (4.9)
--------------------------------- ------ ------------ ---------- ------
Net assets acquired 15.8 0.8 1.9 62.4
--------------------------------- ------ ------------ ---------- ------
Consideration 15.8 0.8 1.9 62.4
--------------------------------- ------ ------------ ---------- ------
Satisfied by:
Cash to vendors 15.3 0.8 1.8 62.4
Deferred consideration 0.5 - 0.1 -
Total consideration 15.8 0.8 1.9 62.4
--------------------------------- ------ ------------ ---------- ------
9 Financial liabilities - borrowings
Unaudited Unaudited Audited
30 June 30 June 31 December
2021 2020 2020
GBP'm GBP'm GBP'm
-------------------------- --------- --------- ------------
Current
Bank loans and overdrafts - - -
Deferred financing costs - - -
-------------------------- --------- --------- ------------
- - -
-------------------------- --------- --------- ------------
Non-current
Bank loans - secured 114.0 103.0 93.0
Deferred financing costs (0.4) (0.7) (0.5)
-------------------------- --------- --------- ------------
113.6 102.3 92.5
-------------------------- --------- --------- ------------
Analysis of net debt
Cash at bank and in hand 22.0 28.4 26.4
Bank loans due within one year - - -
Bank loans due after one year (113.6) (102.3) (92.5)
------------------------------- ------- ------- ------
(91.6) (73.9) (66.1)
------------------------------- ------- ------- ------
10 Post balance sheet events
On 22 July 2021, Marlowe plc (Marlowe) announced a possible
non-binding offer for the Group. Prior to this, the Group had
received two unsolicited, highly conditional, non-binding proposals
from Marlowe, both of which were unanimously rejected by the Board
given that it significantly undervalued the Group considering its
current and future prospects. In addition, it was concluded that
the structure of the proposals was not in the best interest of the
Group's shareholders, given the low cash element. The Board remains
highly confident in Restore's standalone prospects through its
clearly articulated strategy to generate significant shareholder
value through sustained organic growth, material margin improvement
through scale, synergy and operational efficiency and the
substantial acquisition opportunities that exist in the markets in
which it operates. Marlowe now has until 19th August to put forward
a firm offer for Restore or walk away/confirm it has no intention
to make a firm offer. There can be no certainty either that an
offer will be made nor as to the terms of any offer, if made. For
further details, refer to the Group's Statement re possible offer,
which is publicly available on the Group's website.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR SEIFUMEFSEEW
(END) Dow Jones Newswires
July 27, 2021 02:00 ET (06:00 GMT)
Restore (LSE:RST)
Historical Stock Chart
From Jun 2024 to Jul 2024
Restore (LSE:RST)
Historical Stock Chart
From Jul 2023 to Jul 2024