TIDMRST
RNS Number : 1337T
Restore PLC
16 March 2023
16 March 2023
Restore plc
("Restore" or the "Group" or "Company")
Full Year 2022 Audited Results
Achieving continued growth and demonstrating strength
Restore plc (AIM: RST), the UK's leading provider of digital and
information management and secure lifecycle services, is pleased to
provide its audited results for the year ended 31 December
2022.
Restore achieved another year of revenue and profit growth, with
revenue up 19.1% to GBP279.0 million, adjusted EBITDA up 9.8% to
GBP81.5 million, adjusted profit before tax increasing 7.6% to
GBP41.0 million and statutory profit before tax increasing 1.3% to
GBP23.3 million.
SUMMARY OF RESULTS
Continuing operations 2022 2021 Change
-------------------------------------- --------- --------- ------
Revenue GBP279.0m GBP234.3m +19.1%
Statutory profit before tax GBP23.3m GBP23.0m +1.3%
Adjusted profit before tax(1) GBP41.0m GBP38.1m +7.6%
Adjusted EBITDA(2) GBP81.5m GBP74.2m +9.8%
Net debt(3) GBP103.5m GBP100.8m +2.7%
Adjusted basic earnings per share(4) 24.3p 23.2p +4.7%
Statutory basic earnings per share 12.3p 8.7p +41.4%
Dividend per share 7.4p 7.2p +2.8%
-------------------------------------- --------- --------- ------
BUSINESS AND STRATEGIC HIGHLIGHTS
-- Strong organic and acquisitive growth despite challenging
macroeconomic conditions, demonstrating resilient nature of the
business and excellent service delivery.
- Records Management net box growth of 1.6% (2021: 1.3%) in line
with long term growth strategy increasing boxes under management to
22.4 million boxes with utilisation increasing from c.89% to c.97%
at the end of 2022
- Strong sales performance including significant storage and
service contract wins with BBC Heritage (c.GBP22 million over 10
years) and Department for Work and Pensions (c.GBP1 million per
year)
- Digital achieved exceptional performance through a number of
large government contracts and expansion of revenues in long term
business process outsourcing and cloud storage
- Technology grew strongly albeit behind plan due to short term
market conditions and with positive operational cost management
- Datashred and Harrow Green performing in line with plan, with
growing service visits in Datashred, and Harrow Green progressing
in Life Science sector and commercial storage markets in line with
strategy
-- Price increases were implemented across all business units
during 2022, however cost increased at a slightly faster rate due
to inflation. With the cost actions in Q4 2022 and the pricing
changes in early 2023, we expect this impact to be broadly neutral
in 2023
-- Five acquisitions successfully completed for total
consideration of GBP12.3 million net of cash during 2022 delivering
c.GBP10 million of additional annualised revenues.
FINANCIAL HIGHLIGHTS
-- Revenue increased 19.1% to GBP279.0 million (2021: GBP234.3
million), with organic growth (+11%) and acquisitions (+8%) with
resulting adjusted EBITDA growing to GBP81.5 million (2021: GBP74.2
million)
-- Adjusted profit before tax increased 7.6% to GBP41.0 million
(2021: GBP38.1 million) as a result of strong performances in
Records Management and Digital offset by increased interest rate
impact of GBP2.4 million for the year
-- Statutory profit before tax of GBP23.3 million (2021: GBP23.0
million) showed a small increase and reflective of higher
amortisation on prior year acquisitions, interest rate increases,
property exit charges and strategic IT programme costs
-- Adjusted basic earnings per share increased 4.7% to 24.3
pence (2021: 23.2 pence) with statutory earnings per share up 41.4%
to 12.3 pence (2021: 8.7 pence)
-- Good cash conversion(5) of 82% (2021: 104%), with resulting
net debt(3) at period end of GBP103.5 million and leverage(6) ratio
of 1.7x (2021: 1.8x), despite five acquisitions, well within the
Group's target range of 1.5-2.0x. The Group retains substantial
headroom across its borrowing facilities
-- Proposed increased final dividend of 4.8 pence taking total
dividend for the year to 31 December 2022 to 7.4 pence (2021: 7.2
pence).
OUTLOOK
The Group has started 2023 with good momentum following
contracts wins, cost reduction actions and pricing changes
implemented in H2 2022 and early 2023.
-- Box Growth: Records Management anticipate that net box
numbers will continue to grow strongly and within the guided range
of 1% to 2% for FY23
-- Pricing: Annual price rises for a significant proportion of
the Group's revenues were successfully implemented from 1 January
2023, with further pricing to be introduced during H1 for the
remainder. We expect that pricing and cost actions will at least
offset the inflationary cost pressures
-- Cost: As previously announced, the Group is making good progress on cost reductions
-- Acquisition: Whilst the acquisition pipeline for FY23 remains
strong, the focus in H1 will be on executing price rises, cost
management and organic contract wins
Whilst the macro-economic environment and inflationary
environment continues to be uncertain, the Group has plans in place
to more than overcome these challenges and trading since the start
of the year has been in line with the Board's expectations.
CHARLES BLIGH, CEO, commented:
"Restore achieved another year of strong revenue growth and
finished the year in a strong position in each of our markets. In a
challenging environment, our performance demonstrates the
underlying resilience of our markets and the essential nature of
the services we deliver to organisations.
Going forward, whilst the macro-economic outlook remains
uncertain, our markets remain attractive, and our essential
services are needed more than ever to help customers reduce their
costs while delivering improvements in security and data
management. Our focus in H1 is on the basics in the business from
price increases, cost reduction plans and consistent service
delivery. We have significant acquisition opportunities which we
expect will be back end loaded this year going into 2024. Overall,
we are confident that FY23 will be another year of good
progress."
1) Calculated as statutory profit before tax and adjusting items
(reconciled below Consolidated statement of comprehensive
income)
2) Calculated as earnings before interest, taxation,
depreciation, amortisation and adjusting items (reconciled below
Consolidated statement of comprehensive income)
3) Calculated as external borrowings less cash, excluding the
effects of lease obligations under IFRS16 (reconciled in note
10)
4) Calculated as adjusted profit before tax with a standard tax
charge applied, divided by the weighted average number of shares in
issue (reconciled in note 5)
5) Calculated as free cashflow divided by net operating profit.
Note for 2021, free cashflows have been normalised for the impact
of VAT deferrals (GBP7.3m). Free cashflow calculated as cash
generated from operations less income taxes paid, capital
expenditure and lease payments, but before adjusting items
(excluding amortisation).
6) Calculated as pre-IFRS16 Adjusted EBITDA before share-based
payments divided by net debt, including a pro-forma adjustment to
EBITDA for acquisitions in line with financial debt covenants.
For further information please contact:
Restore plc www.restoreplc.com
Charles Bligh, CEO +44 (0) 207 409 2420
Neil Ritchie, CFO
Investec (Nominated Adviser and Joint Broker) www.investec.com
Carlton Nelson +44 (0) 207 597 5970
James Rudd
Canaccord Genuity (Joint Broker, Corporate Advisor) www.canaccordgenuity.com
Max Hartley +44 (0) 207 523 8000
Chris Robinson
Citi (Joint Broker) www.citigroup.com
Stuart Field +44 (0) 207 986 4074
Laura White
Buchanan Communications (PR Enquiries) www.buchanan.uk.com
Charles Ryland +44 (0) 207 466 5000
Jack Devoy
Chair's Introduction
I am pleased to report a further year of strategic progress in
the development and expansion of Restore.
The business has once again shown its resilient characteristics
during a difficult economic period and despite the challenges of
2022, the Group has posted a strong financial result for the year
to 31 December 2022 and enters 2023 with excellent momentum and
strong plans for further growth.
The Board was pleased to welcome Lisa Fretwell as Non-Executive
Director to the team in April. Lisa brings extensive experience of
overseeing data-based businesses together with deep understanding
of risk management and ESG and chairs both the Risk Committee and
recently established ESG Committee.
As the Board and I look ahead, we remain confident that despite
the macro uncertainty, the business has clear plans and will
continue to deliver on its strategy for growth through organic
expansion, acquisition for capability and margin enhancement
through efficiency and scale.
Finally, I would like to thank the whole team for the successes
achieved throughout the past financial year and their steadfast
determination in addressing the challenges that arose and their
commitment towards continuing to build our business in 2023.
2022 Performance
Restore has delivered strong revenue and profit growth in 2022
with a 19.1% increase in revenues to GBP279.0 million and a 7.6%
increase in adjusted profit before tax to GBP41.0 million. On a
statutory basis, profit before tax was a healthy GBP23.3 million, a
small increase on 2021.
Strong, recurring organic revenue expansion was a key feature of
the Group's performance in 2022 with five acquisitions completed in
the year, for consideration of GBP12.3 million net of cash,
providing increased capability in Restore Technology and further
scale to Restore Records Management and Restore Harrow Green.
Inflationary cost pressures were significant and whilst we
anticipated interest rate increases, the pace of rate increase was
faster than we expected. As such, whilst we are pleased with the
solid profit growth in 2022, this has been affected by these
pressures and looking ahead to 2023, management have a number of
plans to continue to mitigate these challenges and to drive further
profitability gains.
As a result of the improved profits of the Group, adjusted
earnings per share increased to 24.3 pence for the year, an
increase of 4.7% compared to the 23.2 pence achieved for 2021.
The Group continues to demonstrate its highly cash generative
nature and the closing leverage of 1.7x provides plenty of capacity
to continue to invest in 2023.
Strategic progress
Restore continues to make good progress in its strategy to
significantly grow the revenues and profits of the business through
organic expansion, strategic acquisition and margin improvement
through further efficiency investments and increased scale.
Organic progress was especially strong in 2022 with another year
of reliable increase in the Group's boxes under management to over
22 million boxes, a number of substantial contract wins across the
different businesses and the benefits from expanding the Group's
product capability, especially in Restore Digital and Restore
Technology.
I am especially pleased with the BBC heritage storage and
services contract win (Restore Records Management and Restore
Harrow Green), evolution of contracts with the Department for Work
and Pensions (Restore Records Management) and HMRC (Restore
Digital) and the cross-Group BT technology decommissioning
solution. These wins are illustrative of the increasing capability
of the Group and the growing demand for the critical solutions and
services we provide.
The Board and I chose to reduce the level of acquisition
investment in the year compared with 2021, as the Group explored a
number of strategic options and assessed the economic situation.
That said, we are delighted with the five acquisitions made during
the year and especially the purchase of 'Ultratec', a hard drive
business that adds significant and class leading capability in hard
drive erasure and restoration.
Margin expansion was more challenging in 2022 due to cost
inflation, although Restore Datashred and Restore Digital both made
significant progress as a result of scale benefits and as
operational improvement plans took effect. Pricing is a key focus
area as we look ahead to ensure hard won efficiency benefits and
the benefits of scale are not lost.
Health and Safety
Health and Safety remains the first item for Board discussion,
always, and I am pleased with the sustained focus across the
business on ensuring Restore remains a safe place to work.
With the Group's operational management processes now well
evolved, the Health and Safety Committee has started to focus on a
number of strategic objectives including culture, communications,
systems and training enhancement and during 2022, a number of
awareness campaigns were run and a major initiative to enhance
virtual training resources was also completed.
Management's relentless approach to continuous improvement is
commended and I extend my gratitude to the health and safety and
management team for their diligence and evolution of focus as the
business continues to expand.
Finally, during the year, the Board and I visited several sites
across Restore Technology, Restore Digital and Restore Records
Management where we were pleased to see the business operating
effectively and safely.
Dividends
Your Board is recommending a final dividend of 4.8 pence,
payable on 7 July 2023. This brings the total dividend for the year
to 7.4 pence (2021: 7.2 pence).
Chief Executive Officer's Statement
I am pleased to report a further year of revenue growth, up
19.1% leading to another year of record profit delivery. Business
activity increased during the year and despite the economic and
political challenges, the business has shown excellent organic
revenue growth of 11% with acquisition related growth of 8%.
After ending 2021 strongly and even with COVID-19 restrictions
in Q1 2022, the business continued to see expansion with activity
levels rising across the Group. With the activity in the economy
improving, the leadership team had to adapt very quickly to the
rising inflation and economic changes brought about by the war in
Ukraine and the political/economic volatility that ensued in H2. I
have said many times during the last few years that Restore's
business model has both highly resilient and growth qualities. We
saw this demonstrated in 2020 and 2021 as we emerged from the
pandemic even stronger than before, and we showed the growth
qualities of the markets we are in as we won small and large
contracts to drive organic growth.
Health and Safety
Health and Safety is the first priority across the Group, and I
am pleased with the year-on-year improvement in our operational
safety. During the year we continued substantial investment in our
people, facilities, and technologies to enable improved operational
safety at the sites and in operating the fleet, as well as
improving our reporting and monitoring systems.
We have continued to conduct our programme of internal and
external audits across all of our operations and continually make
improvements in policies and procedures. In addition, we carry out
regular risk assessments to stand-back, learn and plan for more
improvement in 2023. As the Board and I look ahead, our focus is
continued expansion of technology enabled improvement and on
enhancing further the culture of preventative safety across the
Group, both of which are built upon the strong foundation that has
been put in place.
Results
Our financial performance was strong in 2022 with adjusted
EBITDA increasing +9.8% to GBP81.5 million, and despite the
headwind of rapidly increasing interest costs in the year we
delivered a record adjusted profit before tax of GBP41.0 million,
up +7.6% on 2021, and delivered a statutory profit before tax of
GBP23.3 million, up +1.3% on 2021. Factoring in the prior year
equity raise and the impact of this on the weighted average number
of shares in issue in 2022 compared to 2021, we achieved good
adjusted basic EPS growth of +4.7% to 24.3 pence per year, with
statutory basic EPS increasing +41.4% to 12.3 pence per share.
I did highlight throughout the year that as we enter high
inflation periods the cost base of the company increases at a
slightly faster rate than our ability to take further actions to
reduce cost and also increase pricing. Therefore this result,
strong as it was, reflects the time lag between fast rising
inflation and pricing.
On a positive note, a function of the highly contracted nature
of the revenues is that they have the facility to apply in-contract
price changes with a high proportion using backward looking CPI/RPI
mechanisms. As such, as inflation abates we will see cost and price
effects first neutralise and then move to a tailwind as cost
pressure falls but price amendment remains at the higher rate due
the lag effect of backward-looking price mechanisms.
Going into 2023, the net effect of pricing and inflation is
anticipated to be neutral to positive on profit, assuming inflation
reduces as expected.
Cash management in our growing company is a core discipline and
the team executed strongly on all aspects of cash management. We
finished the year with net debt at year end of GBP103.5 million
delivering an improved leverage ratio of 1.7x. With the substantial
cash generation capability of the Group combined with future
profitable growth and the bank facilities we have, there is
significant capacity to pursue highly accretive and strategic
acquisitions when they arise.
For the first time in early 2021 we published our 'Growth with
Quality' strategic growth targets which show the medium-term
balanced goals including profit growth, Return On Invested Capital
(ROIC), Cash Conversion and Carbon Emissions and I am delighted we
continue to deliver against these targets. Investors can be
re-assured we are focused on driving significant growth in our
fragmented markets but also growth with higher quality contracted
and largely recurring profits which fundamentally generates cash to
re-invest back into the business to drive above average returns for
shareholders.
Customers
As previously highlighted, of the 19.1% revenue growth, organic
growth was 11% and acquisition related growth was 8%. The organic
revenue growth was largely driven by winning new contracts from
customers and taking market share versus inflation related top line
growth. I am very pleased with the improving quality of sales
experience and execution across the whole sales team and at the
same time I know there is more we can do to drive more pipeline and
improve our win rates.
We had some notable large wins in the year, specifically in
Records Management with the BBC Heritage contract worth c.GBP22
million over ten years, which is the largest contract win in the
Group's history, and the DWP contract which will deliver over GBP1
million per year. Across the Group there were over 3,400 new
customers in the year which is an increase of 18% (vs prior year
new customer increases) which shows we can win market share with
our excellent reputation for delivery and competitive pricing. In
addition to attracting new customers to the Group we are driving a
cross-selling programme which I sponsor with the Managing Directors
and Sales Directors in each business unit. The activity associated
with cross-selling is gaining more momentum in the business which
all contributes to the organic growth in the business. There are
many activities which drive cross-selling from the large to small
customers, but one activity is referrals. Any employee can refer
any opportunity which can deliver an incentive to them and in 2022
there were 1,000 referrals.
Acquisitions
We completed five acquisitions in the year with three smaller
bolt-on acquisitions in Restore Records Management, one acquisition
in Restore Technology with Ultratec, and one acquisition in Restore
Harrow Green. The total consideration of the acquisitions net of
cash was GBP12.3 million.
People
With another year of record revenues driving higher activity
levels, we end the year with an increasing number of employees
across our 91 UK sites and we are immensely proud to be a strong
regional employer across the length and breadth of the UK.
The number of permanent employees at the end of 2022 was 2,881,
which is an increase of 4.4% compared to 2,760 at the end of 2021,
and our average agency workforce was 324 FTE for the year. We
invested in training and development across the business from
operations to sales and we have started for the first time in the
company history, training of our management and leadership talent
with the new 'Leading at Restore' programme. After significant
changes in the top c.60 leaders in the business over the last 2
years, we have recruited into the business another 6 senior hires
in sales, marketing and operations, with further leaders being
awarded promotions during the year as we grow and build the team to
deliver on the significant growth plans.
I am also delighted that in 2022 we committed to and signed the
Armed Forces Charter to support our veterans and reservists and our
target is to become a Gold member over the coming years.
Investing for Growth
We continued to invest in our facilities in 2022 to support
growth. In Restore Records Management we commissioned a new
warehouse in Heywood which will have a 1 million box capacity, and
we are well advanced on discussions to add further capacity with
further warehouses. In Restore Datashred we upgraded our Welsh
shredding centre in Bedwas.
We delivered in the year improvements to the digital
infrastructure of the Group and also made progress on operating
systems which will be implemented in 2023. Notably two business
units (Restore Datashred and Restore Technology) will be replacing
their ERP systems during 2023 on the back of development and
testing in 2022 to drive significant benefits for customers and
efficiencies in the business. The finance function is also
undertaking a major transformation with consolidation to one
technology platform. We have invested in further IT tools and
security measures to improve our Cyber Defences and I am delighted
we have renewed our CyberEssentials Plus certification.
We have improved our physical assets security in 2022 with the
commissioning of a new Physical Security Operations Centre to
consolidate the 24/7 monitoring of our sites which will also
include our mobile assets in the future (vans/trucks). We have
plans over the next 2 years to invest even further to improve our
security posture which will ensure we lead in our markets.
Delivering Significant Growth
Our strategy is to deliver significant growth, over and above
market growth levels, through organic market share gains, accretive
and cash generative acquisitions and delivering margin growth using
our scale advantage. The medium-term goal is to scale towards
GBP450-500 million in revenues and therefore increase Group
adjusted EBITDA to c.GBP150 million. 2022 adjusted EBITDA was
GBP81.5 million and 2019 adjusted EBITDA was GBP70.0 million,
meaning the business has experienced 16.4% growth in adjusted
EBITDA over that 3-year period.
With these and prior results we have demonstrated that we can
grow above the market when the wider economy is growing and also
when there is uncertainty as shown during the pandemic periods. We
also know that in the coming years, with perhaps slower economic
growth, we can still continue to grow, because in simple terms, we
deliver essential services which saves money for medium to large
private/public sector organisations. We also deliver services that
customers cannot do themselves at the same scale, service level and
cost. During low to negative economic growth periods, organisations
are looking to save money and they can outsource more to us and
reduce their costs. Therefore, we are confident in our ability to
continue to grow with strong sales and delivery execution. We do
not take this for granted which is why we invest in service
innovation and customer experience to have the best customer
satisfaction, trust, and certainty of delivery for our customers
leading to repeat business and cross-selling opportunities.
Looking at the wider market trends in the UK and around the
world the forces which drive growth in our markets are:
1) Digitisation
2) Security of Data
3) Flexible working, and
4) Sustainable working in a low carbon economy.
These are forces which have been persistent for the last 20-40
years and we see these forces only growing in intensity and size in
the future, which underpins our confidence in the growth of our
markets. The services we provide favour providers with scale which
drives down unit costs and therefore being either a number one or
number two provider in the markets we operate in is key to our
success going forward.
ESG
We announced our new ESG Strategy in Q4 2021 called 'Restoring
our World' and I have been pleased with the enthusiasm and focus of
the whole Restore team to drive the changes we need. We have
actions and targets for the areas that matter for our business to
make an impact, in particular in the area of carbon emissions. We
have bold targets of Net Zero by 2035 for Scope 1 & 2 emissions
and 50% reduction in our Scope 3 emissions by 2030. As a result of
rising activity levels in the business, in 2022 we did increase our
overall Scope 1, 2 & 3 emissions by 3.5%. However, over the
same period revenue increased 19.1%. Therefore, as a result, our
carbon emissions per GBP1m of revenue decreased by 12.5% which is
positive, with emissions per employee similarly decreasing by
12.5%, also showing we are making a difference in the business. We
have plans to drive the transition to electric vehicle which is a
large part of our current emissions, and we are also looking to do
much more with our supplier base to reduce emissions into the
business.
Digital and Information Management
Our Digital and Information Management division comprises
Restore Records Management and Restore Digital. For 2022 revenue
was GBP168.2 million, up 21.6% on 2021 with adjusted operating
profit of GBP47.4 million, up GBP11.5% on 2021.
Restore Records Management
Restore Records Management delivered strong growth of 12.1% in
revenue during 2022 with total revenue of GBP113.7 million, which
includes organic revenue growth of 8.9%. Total net box growth was
1.6% including good organic growth at 1.2% (vs 1.3% in 2021 vs 0.9%
in 2020).
It was a record year of customer wins which underpinned the 1.6%
net box growth in 2022 and indeed underpins the growth we expect in
2023. As I previously mentioned, we won the largest contract in the
Group's history with the BBC for c.GBP22 million and also a large
contract with the Department for Work and Pensions of c.GBP1
million per year in revenues. Both wins will result in the transfer
of documents/items from facilities managed by the BBC/DWP which
demonstrates there is still a substantial amount of opportunity for
unvended storage to grow the market. In addition to these larger
wins, we experienced a record number of new customers with 286 new
customer wins in 2022 which is a 36% increase on 2021. Going into
2023 we have a strong pipeline of potential new customers to power
the organic growth going forward. We have over 60% of our 2023 new
box target already confirmed.
Storage revenues grew by 8% during the year and service revenue
grew by 21% to GBP32 million because of an increase in project
revenues primarily in the public sector. We believe customer
activity levels have normalised after COVID-19 and we are seeing an
increase in discussions in activity around projects to manage their
inventories which were postponed during 2020/2021 because of
COVID-19.
We implemented price changes throughout the year with CPI or RPI
increases (backward facing) as applicable depending on the
contractual terms. Given the rapid inflation increase from May to
December, the price increases did not fully cover cost increases
causing tailwinds in the business, but in 2023 we expect much
higher increases with the full impact of the high inflation kicking
in to offset the cost increases. We are also seeing our competition
implementing significant price increases in the market.
We made three bolt-on acquisitions in Restore Records Management
during the year with a total value of GBP0.7 million with all the
boxes transferred to existing facilities.
We have an 8-10 year strategy to rationalise sub scale or high
cost sites as and when leases expire and in 2022, we closed four
sites with a total box count of 270k and have other sites in the
process of being consolidated.
As a result of the new net wins, acquisitions, and
rationalisation of sites we ended the year with an occupancy rate
(utilisation of the available capacity) of 97% which is a very
substantial increase from the start of the year which was 89%. This
occupancy rate is higher than we would like, as it drives extra
costs and can constrain growth. It has resulted from the fast pace
of client wins and as such we are actively looking to accelerate
further expansion plans and our search for new sites to cater for
the growth we see in the immediate term but also over the next 10
years. We expect over the next 10 years boxes under management to
grow from c.22 million to over 25 million based on organic growth
and in addition further expansion will be needed for
acquisitions.
We continue to deliver for customers and our reputation on
Trustpilot with over 405 reviews shows 4.5 stars and an 'Excellent'
rating which also complements our internal customer satisfactions
surveys and account reviews. Having said this, to make the
experience even better, we are investing in our portals and
technology for our warehouse and drivers. These should not only
improve the customer experience but deliver improvements in
productivity in our facilities. We are taking the learnings in our
Restore Datashred business and using these to improve the planning
for service deliveries to drive route density efficiency as we
scale the business.
The short and long term customer trends in the market are
positive which underpins our confidence in organic growth. The
market is still fragmented which means there is significant
acquisition opportunity to further improve the scale of the
business. Combining this growth and the productivity improvements
we know exists and cost reductions as we rationalise various sites
across the UK, means we are confident in the ability to
significantly grow revenue and deliver significant profit growth
over the short to medium term.
Restore Digital
Restore Digital revenues continued to increase substantially
with revenues up 47.7% to GBP54.5 million, driven by excellent
organic revenue growth of 25.0% with acquisition related growth of
22.7%.
Over the last 3 years the business has transformed from a
c.GBP20 million revenue business with a focus on large scale
scanning to be a multi service business with over GBP50 million in
revenues. The revenues are much higher quality, longer term
contracted in nature, and more in the high growth areas of cloud,
consulting and business process outsourcing. We are leading the
markets we operate in but with overall 16% market share in growing
markets we have substantial room to grow.
With strong execution and improved market leadership we are
seeing good win rates with customers and we are now bidding and
winning contracts we would not be considered for in the past,
therefore opening up further growth potential. Although we enjoy
winning large scale 3-12 month projects, the market dynamics mean
our teams are increasingly focused on customer engagement, which
have longer term (multi year) annuity services, which involve our
cloud and software offerings combined into a Business Process
Outsourcing service.
Restore Digital won a significant contract with HMRC to digitise
a large archive of records held on microfilm and microfiche. The
records date back to the 1960's and are accessed daily by HMRC for
historic employment queries by the public. Requiring a complex IT
setup due to the volume of data, Restore Digital are scanning
c.6.5M images per day using industry leading microfilm / fiche
scanners which will be used for over 12 months until late summer
2023.
Restore Digital has also partnered with Softcat to support
Digital Transformation, addressing the complex, customer-specific
requirements within the wider NHS. The first contract win was with
a Northern England NHS where Restore Digital was chosen as a
preferred partner of Softcat to provide digitisation and data
hosting services to the Trust (contract value of c. GBP900k). These
services will help the Trust meet the technical challenge of
linking complex systems together, putting in the right
infrastructure, standards, and security measures with the emergence
of new digital systems and services, such as; Cloud, Robotic
Process Automation and Artificial Intelligence.
With increased scale, the team also delivered strong
productivity improvements in the year and combined with the larger
mix of higher profit services, the business improved margins year
over year. We did experience higher staff costs, as expected with
the higher inflation in the year, but this was also partly offset
with a relentless focus on costs and driving efficiency with
technology investments to drive long term productivity
improvements. We have not been constrained by availability of
people to support growth and the regional nature of our operation
spreads this load across the UK.
The long term trends for Restore Digital are very positive as we
have described in the last few years. Over the last 10 years
customers are seeing increasing ways to monetise the data (of which
a substantial amount is in paper records) they have in their
organisation, and we see this trend continuing for the next 20+
years. Customers are looking to drive new revenue streams with the
creation of new products or services or looking for insight to
drive operational efficiency with new IT investments. Ensuring you
have customer data from the past (largely in physical form) and the
future is important and customers are looking to their physical and
digital records suppliers to help them unlock these benefits. Our
focus is to help customers in a physical document environment to a
hybrid of physical/digital records and workflow processes to a pure
digital workflow. We are uniquely placed with both a physical
records business and a scale digital business to help customers
navigate this often complex and long term issue which can drive
significant profits for our customers.
Changes in the workplace are favourable with services like
Digital Mailroom which remove the need for customers to have onsite
mailroom employees and this also enhances their ability to change
their property portfolios. Hybrid working increases the need to be
more digital and we offer a complete physical to digital service,
and with our consulting, cloud and software assets we help
customers in this journey. The services we provide come with
attractive financial profiles for Restore Digital comprising a
mixture of project and multi year contracted revenues.
The medium term strategy is to grow to more than GBP80 million
in revenues through an organic growth plan. Acquisitions provide
further opportunity to accelerate this plan and build a business of
even greater scale and service offering. Over the last 3 years we
have moved the business from a business with c.80% of the revenues
from large scale scanning and this is now reduced to represent only
around half of the business. The other half of the revenues are
Cloud, Consulting, SaaS and Business Process Outsourcing which are
higher margin in nature, often with long term contracts. Our
intention is to focus on these higher margin services while
maintaining our leadership position as the "go to" provider for
large scale and complex scanning services.
Secure Lifecycle Services
Our Secure Lifecycle Services Division comprises Restore
Technology, Restore Datashred and Restore Harrow Green. For 2022
revenue was GBP110.8 million, up 15.4% on 2021 with adjusted
operating profit of GBP11.8 million, up 0.9% on 2021.
Restore Technology
Restore Technology continued to grow significantly based on
organic growth and acquisition activity, both in-year and from the
effect of prior year acquisitions. The business delivered revenue
of GBP35.8 million (2021: GBP28.1 million) an increase of 27.4%,
which we believe gives us a market share of approximately 6%
showing the enormous opportunity to grow organically and with
acquisitions to consolidate a fragmented market.
The medium term focus of the business is to increase our scale
in end of life processing of IT equipment and to build out our
ability to process Intel PC/Laptops, Apple Laptops, Servers,
Networking equipment and all types of hard disk technologies. We
made very good progress in 2022 which saw us increase our
processing of assets by 14% to 1.6m (2021: 1.4m) across the 7 core
operating sites and invest further in skills to process the
different technologies described above.
In addition to recycling end of life assets, a significant
number of customers in the private and public sector have the most
stringent security and require us to completely destroy old IT
assets. We are the most trusted and leading provider in the UK with
the highest levels of certification. As a result we saw IT
destruction revenues increase by 18.5% during the year which was
largely driven by organic growth, and we expect this to continue
going forward.
We also deliver important services in the pre and mid life of an
IT asset to help customers configure and deploy IT equipment and
update/change equipment during its life. Our pre and mid-life
services grew by 34.6% during the year.
We did experience a slower increase in assets collected during
the year than predicted as a result of the wider slow down in IT
investment, after the significant increase in 2021. We had to
quickly adjust our cost base, but the overall change was profit
impacting during the year. However we exited the year with the
right cost structure for the volume and we continue to invest in
sales and marketing to drive market share gains to further increase
volume in 2023.
Across all our services we derive our revenues from both direct
customers and through the partner channel (IT Vendors, IT
Resellers, Network vendors, Network Resellers, leasing companies
etc). Three years ago, the revenues of the business were largely
derived from direct customers which accounted for over c.90% of the
revenues. Moving forward, we want to grow our direct customer base,
but we want to significantly grow our partner channel, which will
ensure we access more of the available market to underpin our
growth. We have a dedicated Partner Sales team who are delivering
excellent growth in the key channel partners in the UK market. We
expect over the medium term to generate roughly the same revenues
from direct and partner customers.
Our acquisition strategy continued with the acquisition of
Ultratec in May of 2022. Ultratec brings on board over c.GBP7m of
annualised revenue across three business streams. Its core business
is the trading and handling of recovered hard drives. Ultratec has
the largest stock holding of historic hard drives and customers
from across the world use the business for upgrades and
replacements into their current and legacy platforms. Ultratec has
a large customer base in the UK, which fully compliments the
Technology partner business.
Ultratec developed and patented a platform called Genesis that
can recover hard drives that have failed during industry standard
software wiping of data (i.e. Blancco, Youwipe). This offers a
unique opportunity for Restore Technology as approximately 30% of
hard drives fail when being wiped. Historically, these are then
destroyed (to make safe the data they are storing) with minimal
value but using the Ultratec Genesis platform, there is the
opportunity to further recover over 80% of these failed drives,
wipe them and then resell at the relevant market price. Ultratec
also provides this Genesis platform on a rental model (SaaS model)
to a number of international partners, and we see this highly
contracted service offering as providing further growth
opportunities for the business.
The Technology team continue to integrate the three companies
acquired in 2021 (CDL, PRM Green and the Bookyard) into the
existing national footprint. The Bookyard has been successfully
relocated into a purpose-built Apple facility in the Runcorn
location from which we see enormous opportunity to grow with Apple
IT assets. This will form the hub for the majority of Apple assets
processed across the wider business.
Restore Technology remains focused on driving both organic and
acquisitive growth in an extremely fragmented market. The business
offers our partners scale in IT Recycling services and the
immediate ability to complement their own services and offer a full
lifecycle into their customer base. In return Restore Technology
gains quick traction into the in-situ customer bases at a reduced
cost to on-board.
The long-term trends of using more IT assets in organisations
coupled with the risk associated with security of data and
environmental concerns for end-of-life assets means that building a
large IT Recycling/Lifecycle business using scale to drive down
costs presents a significant opportunity to grow shareholder value.
We believe there is substantial opportunity to improve the margins
of the business as we scale and drive productivity improvements.
Given we are a leader in the market with only 6% market share, and
with full national coverage with expertise across all technology
types from Intel, Apple, and various hard drives, we see ample
opportunity to grow.
Restore Datashred
Restore Datashred, a market leading secure shredding and paper
recycling business had a strong year with revenue up 23.8% to
GBP37.4 million (2021: GBP30.2 million) which was driven by a 19%
increase in service visits for the year, recycled paper tonnage
collected was up 11% and we also experienced strong paper prices
throughout the year.
After the last COVID-19 restrictions were lifted in late Q1 22
we saw a steady increase in customer visits throughout the year.
This demonstrates the continual re-activation of customers for the
service driven by the post pandemic increase in workers in the
various offices (large and small) and wider public sector
organisations across the UK. We are now operating at c.8% below
pandemic volumes which we believe has now stabilised and expect
growth to come from growing the number of customers taking our
service.
The market for recovered paper continued to improve from the
paper mills across the UK and Europe. Their focus is improved
quality of paper, and this favours our business given we have the
highest quality recycled white paper. The average paper price
throughout the year was GBP238 per tonne which was a 29% increase
on 2021.
We are winning in the market with our consistently high levels
of responsiveness and customer service backed by the national
network giving customers a one stop shop. We increased the number
of customers taking our service in 2022 by 10% versus pre pandemic
levels. There were several key wins across the year with a sizeable
new national telecommunications customer, where Restore Datashred,
Restore Harrow Green and Restore Technology are providing an office
closure program initially for 900 offices. This opportunity will
continue into 2023. Additionally, as part of the push in digital
marketing Restore Datashred onboarded over 2,812 customers that are
new to the Group.
Operational efficiency is a relentless focus of the team, and we
delivered further increases in productivity during the year based
on better on the day execution and also using analytics and data to
drive changes in operations. The team continued to focus on
optimising our fleet with a mix of different vehicles from vans to
small and large trucks to fit the profile of the work we do (onsite
shredding vs offsite). We also moved and converted our destruction
facility in Rugby to a collection facility in a shared location
with Records Management, Coventry. All these changes have resulted
in further productivity in the year, with the number of visits per
driver, per day, increasing and the number of miles per visit down
by c.15% (versus 2021). Combined, this delivers savings on fuel,
maintenance and delivers overall cost reductions.
Customer satisfaction was again, excellent throughout the year
with an increase in our Trustpilot score to 4.7/5, and we improved
our market leading NPS score to 76 (2021: 72.5). Our digital
transformation drive continues, with a focus on automation to
streamline our processes, enhancing our customer experience. We
launched additional Homeshred services which means we offer the
most comprehensive, fully compliant, home worker solution in the
market. We will be upgrading the core IT system (ERP) of the
business in H1 2023 and from this we expect to improve the 'ease of
use' for customers to service online and allow us to deliver
further operational improvements on a growing customer base.
As a paper recycler, the environmental priority is a core part
of what we do, but customers are asking for more, specifically Net
Zero carbon solutions. It is relatively easy to provide a shredding
service badged as Net Neutral using carbon offsets, but customers
are challenging how we can deliver with Net Zero.
Onsite shredding has been a popular service in the last 20
years, but it does produce significant carbon with the engine
constantly powering the shredder in the truck at a customer site.
Contrast this with offsite shredding where we pickup 'bins' or
'sacks' of whole paper in normal box trucks, securely transport to
our facilities where we are using renewable power in the shredding
centre. We are leading in both services, but we are seeing growing
requests from customers to deliver Net Zero vs Net Neutral, and
this favours our business model with national scale offsite
shredding facilities. To be fully Net Zero we need a wider variety
of electric vehicles, and we are trialling Electric Vehicle and
expect over the next 3-5 years this to be more popular than onsite
diesel service.
In addition to the environmental concern the highest priority of
our customers is the security of data with their shredding service,
and we see both the security of data and environmental concerns to
only grow in priority around the board table of our customers.
Our strategy is to grow the business both organically and
through acquisitions which increases our scale and over time to
deliver a Net Zero service. I am delighted with the progress made
by the team over the last few years and our focus is to continue to
grow the customer base through organic expansion and driving down
our costs with further scale effects. The wider market is very
fragmented, and we believe there will be consolidation going
forward and we are ideally situated to acquire businesses and
incorporate them into the existing footprint of the business
delivering strong synergies.
Restore Harrow Green
Restore Harrow Green delivered a solid year with stable revenues
of GBP37.6 million (2021: GBP37.7 million). As previously announced
the Ministry of Defence (DAS) contract ended in Q1 of 2022 and
adjusting for this contract the business achieved underlying growth
of 8% on prior year. The year was characterised by a lot of smaller
to medium projects as customers reconfigured their office space to
work in a post COVID-19 environment. We see this favourable trend
continuing in 2023 and beyond. We did expect to see the larger
projects which were postponed in 2020 and 2021 start to deliver in
2022 but with construction delays across the wider commercial
market we have only now started the preparatory work and expect
these larger projects to deliver in 2023 and 2024.
A strategic focus is to build our storage revenues and we
delivered GBP4.4 million of storage revenues in 2022, up 7.3%
(2021: GBP4.1 million) on prior year. We are now at 96% utilisation
across our 9 sites, and we are in active discussions to add more
capacity given the long run growth trend as customers seek more
flexible working space and then store furniture/equipment to call
on as needed.
We are delighted with the success in the Life
Sciences/Pharmaceutical market. Revenues in this segment are GBP3.8
million which is a 450% increase on prior year. Our Cambridge
facility opened in 2021 and is operating ahead of expectation with
storage utilisation of over 90%.
As always, the team showed strong cost control and with our
flexible labour model we could flex our resources to meet the
demands of our customers. Increased utilisation of our assets
helped drive further efficiencies and reduced our variable
costs.
Although some larger projects moved into 2023/24, we did deliver
some major projects such as the University of Manchester MECD
relocation (the biggest undertaking of its type in the UK),
University of Glasgow Arc Institute, Preston Museum Harris project,
Salford University Science and Engineering relocation, HMRC
clearance projects and supported the Commonwealth Games.
The uncertainty surrounding hybrid working deliberation, delays
on construction projects and a lack of high grade ESG compliant
properties also impacted on potential project works, however, as
the year progressed, we saw an increase in major quoting
opportunities across our core businesses. We also continued to
maintain our high win rate when bidding for work. Examples include
Apple, Credit Agricole, T Rowe Price, BT, EDF Energy, Skadden,
Hogan Lovells, BPP, Burberry and Ted Baker. In addition, we
successfully secured national agreements with HSBC, Emcor and BT
which will generate a major revenue stream for Restore Harrow Green
throughout 2023 and beyond. We were also successful in retaining
key clients such as Anglia Ruskin University, Southwark Council and
Kirklees Council.
Although our competitors have bid aggressively during the last
few years, we continued to maintain high win rates demonstrating
that our track record on delivering complex projects and the trust
in our brand to stick to quoted pricing resulted in us securing
several large opportunities, showing that clients still value
excellent service and robust, accurate budgeting. The outlook for
large projects is looking positive with a number of long-term
projects in the pipeline which we estimate will have significant
values (circa GBP800K+), and these are spread across both office
relocation and specialist Pharma and heritage sectors. Most notably
the BBC Archives relocation starting in Q2 2023 in conjunction with
Restore Records Management.
Our acquisition focus in Restore Harrow Green is to look for
bolt on opportunities which provide additional scope of services
aligned to the business strategy. We are delighted in Q4 2022 to
acquire CAMA Workspace for consideration net of cash of GBP2.6
million. CAMA Workspace was a family-run company providing premium
corporate moves and services for more than 100 years, uniquely over
40% of the business was in long term storage with a total revenue
of c.GBP2 million. In addition, a majority of the customers are not
active customers across the wider business.
Over the next 12-24 months we expect increasing activity from
larger projects deferred over the last three years, along with the
constant growth of companies looking to downsize, upsize or
regionalise their businesses across the UK to drive down costs and
access the needed skills and staff.
Restore Harrow Green's strategy is to grow organically and
expand into new customer segments that value certainty of delivery
as demonstrated with our Life Sciences investment in Cambridge.
Although the strategy is focused on organic growth, we will look at
acquisition opportunities that may present themselves to strengthen
our service proposition and target key customer segments. Restore
Harrow Green has a pre-eminent customer list across all industries
and public sector organisations which also supports additional
cross-selling opportunities from the wider Group.
Outlook
Looking ahead we see strong demand for our essential services
which saves our customers money. This is the major focus of our
customers given the weak economic backdrop in the UK in the short
term.
The trends in our market have been positive for the last 20 - 40
years. With market growth expected to continue and together with
our high win rates, I have confidence in our ability to continue to
drive strong organic growth in the future.
We are increasing prices as appropriate at CPI/RPI in most
cases, and driving investments to improve our productivity, with a
relentless focus on cost as we scale.
Although we do not envisage acquisitions in H1 2023 the pipeline
for buying cash generative and EPS accretive businesses with strong
returns based on synergies, is substantial. With pricing of assets
becoming more balanced we see opportunity to grow with acquisitions
later in 2023 and consistently over the medium term as outlined in
our profit growth plans.
Over the medium term, the high growth strategy based on above
market organic growth, accretive acquisitions, and margin growth as
we scale gives us confidence in the goal to grow revenues from
c.GBP280 million to between GBP450-500 million, and substantially
increasing adjusted EBITDA to c.GBP150 million.
Trading since the start of the year has been in line with the
Board's expectations.
Chief Financial Officer's Statement
I am pleased to report that Restore has delivered a further year
of growth for the year ended 31 December 2022 with a 19.1% increase
in revenues to GBP279.0 million, a 7.6% increase in adjusted profit
before tax to GBP41.0 million and a small increase in statutory
profit before tax to GBP23.3 million.
The strong revenue expansion is driven by organic growth of 11%
with acquisition effects providing a further 8% growth. As a
result, adjusted EBITDA, after the effects of IFRS16, increased
9.8% to GBP81.5 million with adjusted EBITDA before the effects of
IFRS16, as used for covenant calculations, growing by 10.7% to
GBP59.9 million.
The growth in profits is especially pleasing given the
challenging economic conditions and this robust performance
illustrates the resilient nature of Restore and its ability to
adapt to changing conditions.
Five acquisitions were made during the year with Restore
Technology acquiring Ultratec (Holdings) Limited, a hard drive
recovery business for GBP9.0 million net of cash in May, three bolt
on acquisitions in Restore Records Management for GBP0.7 million
and a small acquisition of a commercial storage and logistics
business, CAMA Workspace Ltd, by Restore Harrow Green for GBP2.6
million net of cash in October.
Good cash generation continues to be a key characteristic of the
business with cash conversion of 82% for 2022 (2021: 104%) and
leverage reduced to 1.7x at 31 December 2022 (2021: 1.8x).
The business exits 2022 in good condition and as we look ahead
to 2023, we are focussed on pricing, cost and cash in the near term
whilst continuing to develop our strategy for growth through
organic expansion and strategic acquisitions for capability and
scale.
Income statement and profit performance
The business increased in scale during 2022 and has delivered
underlying organic growth whilst successfully integrating the
acquisitions made in 2021 and 2022.
Restore Records Management achieved a further year of strong box
growth of 1.6% with major contract wins for the Department of Work
and Pensions and BBC Heritage providing the business with a solid
platform for growth in 2023 and overall revenue growth of 12% for
2022.
Restore Digital had an outstanding year with revenue growth of
48%, benefitting from the successful integration of EDM, acquired
in 2021, incremental contract wins and expansion with existing
customers through deepening the level of service provision.
Restore Technology provided good revenue growth at 27% but this
was lower than the high bar we set for the business with the asset
supply side proving less of a tailwind than expected, largely due
to production issues in new assets coming to market. That said, the
downstream demand for refurbished assets remained very strong.
Restore Datashred visits increased in the year and with strong
paper pricing, the business has enjoyed a good performance with
revenue growth of 24%.
Restore Harrow Green has transitioned in 2022, filling the gap
created through the loss of its sub-contracted work for Ministry of
Defence relocations, into expansion in the regions and storage
incomes with overall revenues flat year on year.
Adjusted operating margins remained strong at 18.6% (2021:
19.7%) with the benefit of increased scale but slight dilution due
to an increased proportion of Restore Digital within the mix and a
time lag between price increases and cost inflation.
The Group's adjusted profit before tax increased to GBP41.0
million for the year (2021: GBP38.1 million), an increase of 7.6%.
The statutory profit before tax also increased to GBP23.3 million
(2021: GBP23.0 million).
The increased profits reflect the strong organic and acquisition
related revenue growth, offset by the significant year on year
increase in interest cost from bank borrowings of GBP2.4 million
that resulted from the rapid increase in interest rates.
Acquisition
2022 2021 YoY YoY
Organic
Revenue: (GBP'm) (GBP'm) YoY (GBP'm) (GBP'm) (GBP'm)
Restore Records Management 113.7 101.4 9.1 3.2 12.3
Restore Digital 54.5 36.9 9.2 8.4 17.6
---------------------------- ---------- ---------- ------------- ------------- ----------
Digital and Information
Management 168.2 138.3 18.3 11.6 29.9
---------------------------- ---------- ---------- ------------- ------------- ----------
Restore Technology 35.8 28.1 1.4 6.3 7.7
Restore Datashred 37.4 30.2 6.5 0.7 7.2
Restore Harrow Green 37.6 37.7 (0.4) 0.3 (0.1)
---------------------------- ---------- ---------- ------------- ------------- ----------
Secure Lifecycle Services 110.8 96.0 7.5 7.3 14.8
---------------------------- ---------- ---------- ------------- ------------- ----------
Total 279.0 234.3 25.8 18.9 44.7
---------------------------- ---------- ---------- ------------- ------------- ----------
Adjusting items
Due to the nature of certain income or costs, the Directors
believe that an alternative measure of profit before tax and
earnings per share provides readers of the annual report with a
useful representation of the Group's performance that should be
considered together with statutory profit and earnings per
share.
The adjusting items in arriving at adjusted profit before tax
are as follows:
2022 2021
GBP'm GBP'm
------------------------------ ------ ------
Amortisation 12.1 10.7
Acquisition transaction costs 1.4 1.2
Restructuring and redundancy 2.6 2.4
Property related costs 0.9 -
Strategic IT reorganisation 0.7 -
Other adjusting items - 0.8
Total adjusting items 17.7 15.1
------------------------------- ------ ------
The GBP2.6 million increase in adjusting items is largely due to
an increase in amortisation of GBP1.4 million principally arising
on acquisitions, acquisition and restructuring costs incurred in
the year, the settlement of an unusually high charge on the exit
from a property and investment to deliver strategic IT programmes
that due to the nature of cloud-based accounting are expensed as
incurred. Investment of c.GBP4 million is planned across Finance,
HR and other systems over 3 years with the in-year cost of these
programmes GBP0.7 million in 2022.
Earnings Per Share (EPS)
Adjusted basic earnings per share are calculated by reference to
the adjusted profit for the year, less a standard tax charge, to
the weighted average number of shares in issue during the year.
Adjusted fully diluted earnings per share are calculated by
reference of the adjusted profit for the year, less a standard tax
charge, to the weighted average number of shares in issue and
options granted over the shares of the Group.
2022 2021
------------------------------------------- ----------- -----------
Weighted average number of shares in issue 136,761,738 132,932,784
-------------------------------------------- ----------- -----------
Weighted average fully diluted number of
shares in issue 138,025,803 137,669,498
-------------------------------------------- ----------- -----------
Adjusted profit before tax (GBP'm) 41.0 38.1
Tax at 19.0% (GBP'm) (7.8) (7.2)
============================================ =========== ===========
Adjusted profit after tax (GBP'm) 33.2 30.9
============================================ =========== ===========
Adjusted basic earnings per share 24.3p 23.2p
============================================ =========== ===========
Adjusted fully diluted earnings per share 24.1p 22.4p
-------------------------------------------- ----------- -----------
The 4.7% increase in adjusted basic earnings per share to 24.3
pence (2021: 23.2 pence) results from a 7.6% increase in adjusted
profit after tax and a 2.9% increase in the weighted average number
of shares.
Statutory basic EPS grew by 41.4% to 12.3 pence as a result of
profit growth in the year and a non-cash deferred tax cost
adjustment impacting the prior year as a result of the increase to
UK corporation tax rate.
Financing and interest expense
Net debt closed the year at GBP103.5 million (2021: GBP100.8
million) with leverage reducing from 1.8x to 1.7x as a result of
the increased adjusted EBITDA.
31 December 31 December 31 December 31 December
2019 2020 2021 2022
------------------ ------------ ------------ ------------ ------------
Net debt (GBP'm) 88.5 66.1 100.8 103.5
------------------ ------------ ------------ ------------ ------------
Leverage 1.6x 1.8x 1.8x 1.7x
------------------ ------------ ------------ ------------ ------------
Interest expense relating to bank borrowings increased to GBP5.0
million due an increase in the average debt balance for the year as
a whole and the increase in interest rates from 0.25% to 3.5%
during the year. Non-cash interest arising on application of IFRS16
relating to leased assets, primarily property, reduced by GBP0.2m
as a result of the lease liability reducing from GBP117.0 million
at 31 December 2021 to GBP109.5 million at 31 December 2022.
2022 2021
GBP'm GBP'm
--------------------------------------- ------ ------
Interest on bank loans and overdrafts 5.0 2.6
Interest on finance lease liabilities 5.0 5.2
Amortisation of deferred finance costs 0.9 0.3
---------------------------------------- ------ ------
Total finance costs 10.9 8.1
---------------------------------------- ------ ------
In order to improve investment capacity, Restore refinanced its
rolling credit facility ("RCF") in early 2022, increasing borrowing
capacity to GBP200 million and introducing new banks to the lending
syndicate. Terms were substantially improved and documentation
raised to investment grade quality. Subsequent to the year end, the
new facility was extended by a further year to 30 April 2026.
During the tear, the Group developed relationships with
financing providers to introduce a variety of fixed interest rate
instruments to create greater certainty over the cost of debt. This
includes the potential for hedging mechanisms and access to the
fixed rate loan markets.
Taxation
The tax charge for the period is GBP6.5 million (2021: GBP11.5
million). In the prior year, the tax charge included a non-cash tax
charge of GBP6.2 million in relation to re-assessment of the
deferred tax position of the Group following the announced increase
to the UK corporate tax rate to 25%.
Cashflow
Cash generation continues to be a key characteristic of Restore
and in 2022 the Group generated free cashflow before financing
costs of GBP34.6 million (2021: GBP31.5 million).
Operating cash inflows increased by GBP5.3 million, whilst
working capital requirements increased by GBP0.5 million to support
revenue expansion with capex increased by GBP2.2 million. The
resulting cash conversion was within target range at 82% (2021:
104%)
Statement of Financial Position
The Group's balance sheet continues to be in good health with
key working capital ratios in line with previous years and further
expansion of the net assets of the business due to the profitable
nature of the Group's activities whilst balancing with returns to
shareholders.
Working capital management remains a strength of the business
with debt ageing consistent at 52 days and the current asset to
current liability ratio consistent at 1.4x. Total equity has
increased to GBP273.2 million (2021: GBP265.2 million).
The provision for estate dilapidations increased by GBP8.3
million, principally as a result of a review conducted at 31
December 2022 to reflect inflation in construction costs and
reassessment of potential liability on sites where a lease exit is
considered likely. The total provision following this reassessment
is GBP17.1 million and is depreciated over the remaining term of
the lease in accordance with the application of IFRS16.
The strength of the Statement of Financial Position is
indicative of the overall good health of the business and provides
substantial capacity to support future growth and investment
requirements.
Consolidated statement of comprehensive income
For the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021*
Note GBP'm GBP'm
------------------------------------- ---- ------------ ------------
Revenue - continuing operations 2 279.0 234.3
Cost of sales (155.4) (127.1)
===================================== ==== ============ ============
Gross profit 123.6 107.2
Administrative expenses (89.2) (76.2)
Movement in trade receivables loss
allowance (0.2) 0.1
Operating profit 34.2 31.1
------------------------------------- ---- ------------ ------------
Finance costs (10.9) (8.1)
Profit before tax 23.3 23.0
===================================== ==== ============ ============
Taxation 4 (6.5) (11.5)
===================================== ==== ============ ============
Profit after tax 16.8 11.5
===================================== ==== ============ ============
Other comprehensive income - -
===================================== ==== ============ ============
Total comprehensive income for
the year from continuing operations
and profit attributable to owners
of the parent 16.8 11.5
===================================== ==== ============ ============
Earnings per share attributable
to owners
of the parent (pence)
===================================== ==== ============ ============
Total - basic 5 12.3p 8.7p
Total - diluted 5 12.2p 8.4p
------------------------------------- ---- ------------ ------------
*Prior year amounts have been re-presented in a format
consistent with current year adjusting items.
The reconciliation between the statutory results shown above and
the non-GAAP adjusted measures are shown below:
Year ended Year ended
31 December 31 December
2022 2021
Note GBP'm GBP'm
--------------------------------------- ---- ------------ ------------
Operating profit 34.2 31.1
Adjusting items - administrative
expenses 3 5.6 4.4
Adjusting items - amortisation of
intangible assets 3 12.1 10.7
--------------------------------------- ---- ------------ ------------
Adjusted operating profit 51.9 46.2
Depreciation of property, plant
and equipment and right of use assets 29.6 28.0
======================================= ==== ============ ============
Adjusted EBITDA 81.5 74.2
======================================= ==== ============ ============
Adjusted operating profit 51.9 46.2
Tax at 19.0% (9.9) (8.8)
======================================= ==== ============ ============
NOPAT ('Net operating profit after
tax') 42.0 37.4
======================================= ==== ============ ============
Profit before tax 23.3 23.0
Adjusting items - administrative
expenses 3 5.6 4.4
Adjusting items - amortisation of
intangible assets 3 12.1 10.7
Adjusted profit before tax 41.0 38.1
======================================= ==== ============ ============
Consolidated statement of financial position
At 31 December 2022
Company registered no. 05169780
31 December 31 December
2022 2021
Note GBP'm GBP'm
============================== ==== =========== ===========
ASSETS
Non-current assets
Intangible assets 8 331.9 327.2
Property, plant and equipment 79.7 78.8
Right of use assets 101.4 102.5
Deferred tax asset - 5.9
============================== ==== =========== ===========
513.0 514.4
============================== ==== =========== ===========
Current assets
Inventories 2.0 1.4
Trade and other receivables 70.0 56.9
Cash and cash equivalents 10 30.2 32.9
============================== ==== =========== ===========
102.2 91.2
============================== ==== =========== ===========
Total assets 615.2 605.6
============================== ==== =========== ===========
LIABILITIES
Current liabilities
Trade and other payables (49.2) (45.5)
Financial liabilities - lease
liabilities (19.2) (18.2)
Current tax liabilities (1.6) (1.5)
Provisions (1.7) (0.9)
============================== ==== =========== ===========
(71.7) (66.1)
============================== ==== =========== ===========
Non-current liabilities
Financial liabilities - borrowings 10 (133.7) (133.7)
Financial liabilities - lease liabilities (90.3) (98.8)
Deferred tax liability (30.9) (33.9)
Provisions (15.4) (7.9)
=========================================== ======= =======
(270.3) (274.3)
========================================== ======= =======
Total liabilities (342.0) (340.4)
=========================================== ======= =======
Net assets 273.2 265.2
=========================================== ======= =======
EQUITY
Share capital 6.8 6.8
Share premium account 187.9 187.9
Other reserves 6.9 7.0
Retained earnings 71.6 63.5
=========================================== ======= =======
Total equity attributable to the
owners of the parent 273.2 265.2
=========================================== ======= =======
Consolidated statement of changes in equity
For the year ended 31 December 2022
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
2021 6.3 150.3 6.0 56.0 218.6
Profit for the year 11.5 11.5
----------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income
for the year - - - 11.5 11.5
----------------------------- --------- --------- ---------- ---------- --------
Transactions with owners
Issue of shares during
the year 0.5 39.5 - - 40.0
Issue costs - (1.9) - - (1.9)
Dividends - - - (3.4) (3.4)
Share-based payments
charge - - 2.2 - 2.2
Current tax on share-based
payments - - 0.2 - 0.2
Deferred tax on share-based
payments - - 0.6 - 0.6
Transfer* - - (0.2) 0.2 -
Purchase of treasury
shares - - (2.6) - (2.6)
Disposal of treasury
shares - - 0.8 (0.8) -
Balance at 31 December
2021 6.8 187.9 7.0 63.5 265.2
----------------------------- --------- --------- ---------- ---------- --------
Balance at 1 January
2022 6.8 187.9 7.0 63.5 265.2
Profit for the year - - - 16.8 16.8
----------------------------- --------- --------- ---------- ---------- --------
Total comprehensive income
for the year - - - 16.8 16.8
----------------------------- --------- --------- ---------- ---------- --------
Transactions with owners
Dividends - - - (9.9) (9.9)
Share-based payments
charge - - 1.7 - 1.7
Deferred tax on share-based
payments - - (0.7) - (0.7)
Transfer* - - (2.1) 2.1 -
Purchase of treasury
shares - - (1.1) - (1.1)
Disposal of treasury
shares - - 2.1 (0.9) 1.2
Balance at 31 December
2022 6.8 187.9 6.9 71.6 273.2
----------------------------- --------- --------- ---------- ---------- --------
* In 2022 a net amount of GBP2.1 million (2021: GBP0.2 million)
was reclassified from share-based payments reserve to retained
earnings in respect of lapsed and exercised options.
Consolidated statement of cash flows
For the year ended 31 December 2022
Year ended Year ended
31 December 31 December
2022 2021
Note GBP'm GBP'm
------------------------------------------ ---- ------------ ------------
Cash generated from operating activities 9 65.2 59.9
Net finance costs (11.4) (7.0)
Income taxes paid (6.0) (5.2)
========================================== ==== ============ ============
Net cash generated from operating
activities 47.8 47.7
Cash flows from investing activities
Purchase of property, plant and equipment
and applications software (11.0) (8.8)
Purchase of subsidiary undertakings,
net of cash acquired (10.8) (85.8)
Purchase of trade and assets (0.7) (0.9)
Cash flows used in investing activities (22.5) (95.5)
Cash flows from financing activities
Net proceeds from share issue - 38.1
Dividends paid (9.9) (3.4)
Purchase of treasury shares (1.1) (2.6)
Proceeds from disposal of treasury
shares 1.2 -
Repayment of revolving credit facility (145.8) (65.0)
Drawdown of revolving credit facility 146.8 106.0
Lease principal repayments (19.2) (18.8)
========================================== ==== ============ ============
Net cash (used in)/generated financing
activities (28.0) 54.3
========================================== ==== ============ ============
Net (decrease)/increase in cash and
cash equivalents (2.7) 6.5
========================================== ==== ============ ============
Cash and cash equivalents at start
of year 32.9 26.4
========================================== ==== ============ ============
Cash and cash equivalents at end
of year 30.2 32.9
------------------------------------------ ---- ------------ ------------
A reconciliation between the statutory results above and the
non-GAAP free cashflows measure is shown below:
Year ended Year ended
31 December 31 December
2022 2021
GBP'm GBP'm
------------------------------------------- ------------ ------------
Cash generated from operating activities 65.2 59.9
Income taxes paid (6.0) (5.2)
Purchase of property, plant and
equipment and applications software (11.0) (8.8)
Lease principal repayments (19.2) (18.8)
Add back: Adjusting items - administrative
expenses 5.6 4.4
--------------------------------------------- ------------ ------------
Free cashflow 34.6 31.5
--------------------------------------------- ------------ ------------
Notes to the preliminary financial information
For the year ended 31 December 2022
1. Basis of Preparation
The financial information in this preliminary announcement has
been extracted from the audited consolidated financial statements
for the year ended 31 December 2022 and does not constitute the
statutory accounts for the Group. The audit opinion in respect of
the audited consolidated financial statements for the year ended 31
December 2022 is unqualified.
The consolidated financial statements of Restore plc have been
prepared in accordance with UK-adopted International Accounting
Standards in conformity with the requirements of the Companies Act
2006 as applicable to companies reporting under those standards.
The consolidation financial statements have been prepared on a
historical cost basis, except for certain financial assets and
liabilities which are held at fair value. The accounting policies
have been consistently applied, other than where new accounting
standards have been adopted. The preparation of financial
statements in conformity with IFRS requires the use of certain
accounting estimates. It also requires management to exercise its
judgement in the process of applying the Group's accounting
policies. The consolidated financial statements are presented in
pounds sterling and, unless stated otherwise, shown in pounds
million to one decimal place.
2. Segmental Analysis
The vast majority of trading of the Group is undertaken within
the United Kingdom. Segment assets include intangibles, property,
plant and equipment, right of use assets, 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.
Revenue
The revenue from external customers was derived from the Group's
principal activities primarily in the UK (where the Company is
domiciled) as follows:
2022 2021
Revenue - Continuing operations GBP'm GBP'm
--------------------------------- ------ -------
Restore Records Management 113.7 101.4
Restore Digital 54.5 36.9
Digital & Information Management 168.2 138.3
================================== ====== =======
Restore Technology 35.8 28.1
Restore Datashred 37.4 30.2
Restore Harrow Green 37.6 37.7
================================== ====== =======
Secure Lifecycle Services 110.8 96.0
================================== ====== =======
Total Revenue 279.0 234.3
---------------------------------- ------ -------
For the year ended 31 December 2022 no customers individually
accounted for more than 3% (2021: 3%) of the Group's total
revenue.
Segmental information:
2021 2021*
Profit before tax GBP'm GBP'm
-------------------------------------------- ------ -------
Digital & Information Management 44.8 41.9
Secure Lifecycle Services 11.0 9.5
Central (7.6) (6.8)
Adjusting items -Amortisation of intangible
assets (12.1) (10.7)
Share-based payments charge (including
related NI) (1.9) (2.8)
--------------------------------------------- ------ -------
Operating profit 34.2 31.1
Finance costs (10.9) (8.1)
--------------------------------------------- ------ -------
Profit before tax 23.3 23.0
--------------------------------------------- ------ -------
The reconciliation between the statutory results shown above and
the non-GAAP adjusted measures are shown below:
2022 2021
Digital & Information Management GBP'm GBP'm
--------------------------------- ------ -------
Operating profit 44.8 41.9
Adjusting items 2.6 0.6
---------------------------------- ------ -------
Adjusted operating profit 47.4 42.5
---------------------------------- ------ -------
2022 2021
Secure Lifecycle Solutions GBP'm GBP'm
--------------------------------- ------ -------
Operating profit 11.0 9.5
Adjusting items 0.8 2.2
---------------------------------- ------ -------
Adjusted operating profit 11.8 11.7
---------------------------------- ------ -------
*Prior year amounts have been re-presented in a format
consistent with current year adjusting items
Digital & 31 December
Information Secure Lifecycle 2022
Management Services Central Total
GBP'm GBP'm GBP'm GBP'm
------------------------------ ----------------------- ------------------ ------- -----------
Segment assets 446.3 158.3 10.6 615.2
Segment liabilities 115.4 63.7 162.9 342.0
Capital expenditure 8.4 2.2 0.4 11.0
Depreciation and amortisation 29.2 11.9 0.6 41.7
------------------------------ ----------------------- ------------------ ------- -----------
31 December
Digital & Information Secure Lifecycle 2021
Management Services Central Total
GBP'm GBP'm GBP'm GBP'm
------------------------------ ----------------------- ------------------ ------- -----------
Segment assets 341.2 255.5 8.9 605.6
Segment liabilities 154.1 57.3 129.0 340.4
Capital expenditure 5.7 2.7 0.4 8.8
Depreciation and amortisation 26.2 12.1 0.4 38.7
------------------------------ ----------------------- ------------------ ------- -----------
3. Adjusting items / Alternative Performance measures
Restore's strategy is to grow through organic expansion,
strategic acquisitions and margin enhancement through efficiency
and scale. To assess progress in delivery of this strategy,
management believe it is useful to provide readers of the accounts
with alternative performance measures ('APMs') that describe the
performance of the Group before the effects of significant costs or
income that are considered to be distorting due to their nature,
and non-cash amortisation primarily arising from acquired
intangible assets.
Adjustments made from statutory measures to adjusted measures
are referred to as adjusting items within the financial statements
and include amortisation, expenses associated with acquisitions and
subsequent integration costs, costs associated with major
restructuring programmes, and other significant costs that are
considered to be distorting due to their nature when assessing the
performance of the business.
The Group's adjusting items are set out below:
2022 2021
GBP'm GBP'm
----------------------------------------- ------ ------
Amortisation 12.1 10.7
Acquisition related transaction/advisory
costs 1.4 1.2
Restructuring and redundancy 2.6 2.4
Property related costs 0.9 -
Strategic IT reorganisation 0.7 -
Other adjusting items - 0.8
------------------------------------------- ------ ------
Total 17.7 15.1
------------------------------------------- ------ ------
4. Taxation
2022 2021
GBP'm GBP'm
------------------------------------------ ------ ------
Current tax:
UK corporation tax on profit for the year 6.0 6.8
Adjustment in respect of previous periods 0.1 -
=========================================== ====== ======
Total current tax 6.1 6.8
------------------------------------------- ------ ------
Deferred tax:
Current year 0.3 4.7
Adjustment in respect of previous periods 0.1 -
=========================================== ====== ======
Total deferred tax 0.4 4.7
------------------------------------------- ------ ------
Total tax charge 6.5 11.5
------------------------------------------- ------ ------
The charge for the year can be reconciled to the profit in the
Consolidated statement of comprehensive income as follows:
2022 2021
GBP'm GBP'm
------------------------------------------- ------ ------
Profit before tax 23.3 23.0
Profit before tax multiplied by the rate
of corporation tax of 19.0% (2021:19.0%) 4.4 4.4
Effects of:
Expenses not deductible 1.3 0.9
Adjustment in respect of corporation tax
for previous periods 0.1 -
Adjustment in respect of deferred tax for
previous periods 0.1 -
Share-based payments 0.3 -
Effect of change in rate used for deferred
tax 0.3 6.2
============================================ ====== ======
Tax charge 6.5 11.5
-------------------------------------------- ------ ------
The tax charge for the year is higher than the profit before tax
multiplied by the rate of corporation tax (2021: higher).
5. Earnings Per Ordinary Share
Basic earnings per share have been calculated on the profit for
the year after taxation and the weighted average number of ordinary
shares in issue during the year.
2022 2021
---------------------------------------- ----------- -----------
Weighted average number of shares in
issue 136,761,738 132,932,784
========================================= =========== ===========
Total profit for the year GBP16.8m GBP11.5m
======================================== =========== ===========
Total basic earnings per ordinary share 12.3p 8.7p
========================================= =========== ===========
Weighted average number of shares in
issue 136,761,738 132,932,784
----------------------------------------- ----------- -----------
Share options 1,264,065 4,736,714
========================================= =========== ===========
Weighted average fully diluted number
of shares in issue 138,025,803 137,669,498
========================================= =========== ===========
Total fully diluted earnings per share 12.2p 8.4p
========================================= =========== ===========
Adjusted earnings per share
The Directors believe that the adjusted earnings per share
provide a comparable view of earnings derived from the Group's
alternative performance measures. The adjusting items are shown in
the table below:
2022 2021
GBP'm GBP'm
--------------------------------------------- ------ ------
Profit before tax 23.3 23.0
---------------------------------------------- ------ ------
Adjusting items - administrative expenses 5.6 4.4
Adjusting items - amortisation of intangible
assets 12.1 10.7
---------------------------------------------- ------ ------
Adjusted profit before tax 41.0 38.1
---------------------------------------------- ------ ------
The adjusted earnings per share and adjusted fully diluted
earnings per share, based on the weighted average number of shares
in issue during the year of 136.8 million (2021:132.9 million) and
weighted average fully diluted number of shares in issue during the
year of 138.0 million (2021: 137.7 million) respectively, are
calculated below using a standard tax charge:
2022 2021
GBP'm GBP'm
------------------------------------------ ------ ------
Adjusted profit before tax (GBP'm) 41.0 38.1
Tax at 19.0% (GBP'm) (7.8) (7.2)
=========================================== ====== ======
Adjusted profit after tax (GBP'm) 33.2 30.9
=========================================== ====== ======
Adjusted basic earnings per share 24.3p 23.2p
=========================================== ====== ======
Adjusted fully diluted earnings per share 24.1p 22.4p
------------------------------------------- ------ ------
6. Dividends
The directors recommend a final dividend of 4.8p per share for
the year ended 31 December 2022 (2021: 4.7p per share) to give a
full year dividend of 7.4p per share (2021: 7.2p). An interim
dividend of 2.6p was paid during the year (2021: 2.5p).
7. Business Combinations
The Group's strategy seeks to target the substantial acquisition
opportunities that exist in all of the markets in which it
operates, whilst applying strict investment discipline. The Group
has completed five acquisitions during the year.
On 3 May 2022, the Group acquired 100% of the share capital of
Ultratec (Holdings) Limited, together with its subsidiaries
("Ultratec"). Ultratec is a Technology business that provides
secure data erasure and physical data destruction services, bespoke
technology recycling solutions, hard drive parts supply and data
centre focussed hardware maintenance services.
On 31 October 2022, the Group acquired 100% of the share capital
of CAMA Group Limited, together with its subsidiaries ("CAMA").
CAMA is a commercial relocation and storage business which also
provides an asset management portal. The portal provides on-line
tracking and retrieval for all assets held on behalf of
customers.
On 4 May 2022, 20 May 2022 and 31 October 2022, the Company
acquired the trade and assets of Secure Records & Data
Management Limited ("SRDM"), UK Archive Limited and Millbank
Document Storage Limited ("Millbank") respectively, which are all
Records Management businesses.
As the Group is still in the process of establishing the fair
value of the assets and liabilities acquired, the fair values
presented below are provisional.
UK Archive
Ultratec CAMA SRDM GBP'm Millbank Total
GBPm GBP'm GBP'm GBP'm GBP'm
---------------------------- ---------- ------- ------- ------------ ---------- -------
Intangibles - customer
relationships 6.7 1.7 0.5 0.1 0.1 9.1
Intangibles - software 0.2 - - - - 0.2
Property, plant, and
equipment 0.4 - - - - 0.4
Right-of-use Assets 0.9 - - - - 0.9
Inventories 0.3 - - - - 0.3
Trade and other receivables 0.8 0.4 - - - 1.2
Cash and cash equivalents 2.3 0.1 - - - 2.4
Trade and other payables (1.0) (0.3) - - - (1.3)
Financial Liabilities
- lease liabilities (0.9) - - - - (0.9)
Provisions (0.2) - - - - (0.2)
Deferred taxation (1.7) (0.4) (0.2) - - (2.3)
------- ------------ ---------- -------
Net assets acquired 7.8 1.5 0.3 0.1 0.1 9.8
---------------------------- ---------- ------- ------- ------------ ---------- -------
Goodwill 3.5 1.2 0.2 - - 4.9
---------------------------- ---------- ------- ------- ------------ ---------- -------
Consideration 11.3 2.7 0.5 0.1 0.1 14.7
---------------------------- ---------- ------- ------- ------------ ---------- -------
Satisfied by:
Cash to Vendors 11.2 1.5 0.5 0.1 0.1 13.4
Deferred / contingent
consideration 0.1 1.2 - - - 1.3
---------------------------- ---------- ------- ------- ------------ ---------- -------
Total consideration 11.3 2.7 0.5 0.1 0.1 14.7
---------------------------- ---------- ------- ------- ------------ ---------- -------
The fair value of acquired receivables is GBP1.2 million, which
is equivalent to the gross contractual amount of acquired
receivables due. The loss allowance recognised on acquisition is
not considered to be material.
Acquired intangibles are valued based on future cash flows
equivalent to the expected useful life of the asset. The present
value is most sensitive to the expected useful life. A halving of
expected useful life decreases the value of customer relationships
acquired by GBP2.7 million.
The Goodwill arising across the acquisitions primarily
represents the potential synergies and cross-selling to the Group's
existing operations; an extension of the Group's national coverage,
increasing the Group's market share; access to new markets; and the
skilled workforce and knowledge acquired.
A significant portion of contingent consideration is payable
based on revenue milestones. The potential amount payable is
between GBPnil and GBP1.0 million. The fair value of the contingent
consideration of GBP1.0 million recognised was based on the maximum
expected future cash flow payable. The amount is undiscounted and
payable with 6 months of completion. The remaining deferred
consideration is payable based on completion dates.
During the year, deferred consideration of GBP0.5 million was
paid, in relation to prior year acquisitions of Euro-Recycling
Limited and The Document Warehouse Limited (2021: GBP1.3
million).
Post-acquisition results
The table below gives the revenue and profit for the
acquisitions completed in the year and included in the consolidated
results.
2022 2021
GBP'm GBP'm
---------------------------------------------------- ------ ------
Revenue 5.5 30.0
==================================================== ====== ======
Profit before tax since acquisition included in
the Consolidated statement of comprehensive income 0.5 6.3
---------------------------------------------------- ------ ------
If the acquisitions had been completed on the first day of the
financial year, Group revenue would have been GBP283.3 million and
Group continuing profit before tax would have been GBP23.9 million.
The acquisitions made during the year were to further extend
national coverage, increase customers and sites and increase the
Group's market share in its Records Management, Technology and
Harrow Green businesses.
8. Intangible Assets
Goodwill Customer Trade Applications Total
GBP'm relationships names software GBP'm
GBP'm GBP'm GBP'm
-------------------------- -------- -------------- ------ ------------ ------
Cost
1 January 2021 165.8 128.1 4.3 7.2 305.4
Arising on acquisition of
subsidiaries 46.7 39.9 - 1.1 87.7
Arising on acquisition of
trade and assets - 0. 8 - - 0. 8
Additions - external - - - 2.0 2.0
31 December 2021 212.5 168.8 4.3 10.3 395.9
-------------------------- -------- -------------- ------ ------------ ------
Arising on acquisition of
subsidiaries 4.7 8.4 - 0.2 13.3
Arising on acquisition of
trade and assets 0.2 0.7 - - 0.9
Fair Value Adjustment 1.7 - - - 1.7
Additions - external - - - 0.9 0.9
Disposals - - - (0.7) (0.7)
31 December 2022 219.1 177.9 4.3 10.7 412.0
========================== ======== ============== ====== ============ ======
Accumulation amortisation
and impairment
1 January 2021 17.6 33.5 2.5 4.4 58.0
Charge for the year - 9.1 0.3 1.3 10.7
31 December 2021 17.6 42.6 2.8 5.7 68.7
-------------------------- -------- -------------- ------ ------------ ------
Charge for the year - 10.4 0.2 1.5 12.1
Disposals - - - (0.7) (0.7)
31 December 2022 17.6 53.0 3.0 6.5 80.1
========================== ======== ============== ====== ============ ======
Carrying amount
31 December 2022 201.5 124.9 1.3 4.2 331.9
-------------------------- -------- -------------- ------ ------------ ------
31 December 2021 194.9 126.2 1.5 4.6 327.2
-------------------------- -------- -------------- ------ ------------ ------
Amortisation is charged to profit or loss as an administrative
expense. Of the GBP1.7 million fair value adjustment, GBP1.3
million relates to provisions and GBP0.4 million relates to
accruals.
9. Cash generated from operating activities
2022 2021
Continuing operations GBP'm GBP'm
---------------------------------------------- ------ ------
Profit before tax 23.3 23.0
Depreciation of property, plant and equipment
and right-of-use assets 29.6 28.0
Amortisation of intangible assets 12.1 10.7
Net finance costs 10.9 8.1
Share-based payments charge 1.9 2.2
Increase in inventories (0.3) (0.3)
Increase in trade and other receivables (11.9) (7.8)
Decrease in trade and other payables (0.4) (4.0)
----------------------------------------------- ------ ------
Net cash generated from operating activities 65.2 59.9
----------------------------------------------- ------ ------
10. Financial Liabilities - Borrowings
2022 2021
GBP'm GBP'm
------------------------- ------ ------
Non-current
Bank loans - secured 135.0 134.0
Deferred financing costs (1.3) (0.3)
========================== ====== ======
133.7 133.7
------------------------- ------ ------
On 18 January 2022, the Group extinguished its financing
arrangement in place at 31 December 2021, and replaced it with a
new GBP200 million revolving credit facility.
At 31 December 2022, the bank debt was due to Barclays Bank plc,
National Westminster Bank plc, Clydesdale Bank plc, The Governor
and Company of the Bank or Ireland, Bank of China Limited and
Citibank.
Under the bank facility the Group was required to meet quarterly
covenant tests in respect of interest cover and leverage. All
covenant tests were met during the year.
2022 2021
Analysis of net debt GBP'm GBP'm
------------------------------- ------- -------
Cash at bank and in hand 30.2 32.9
Bank loans due within one year - -
Bank loans due after one year (133.7) (133.7)
================================ ======= =======
Net debt (103.5) (100.8)
-------------------------------- ------- -------
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
FR SFWFAIEDSEFD
(END) Dow Jones Newswires
March 16, 2023 03:00 ET (07:00 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