Restore to reinstate dividend as strong momentum continues

Data and document management company Restore confirmed it would reinstate its progressive dividend and pay an interim dividend for the 2021 financial year on Monday, given its strong trading through the first half.

The AIM-traded firm said trading had continued to strengthen through the period, with second quarter performance ahead of its previous expectations.

With the benefit of the increasing activity levels, the accretion from acquisitions made in 2021 and further new business wins, the group said its positive first quarter momentum continued into the second quarter.

The positive trend was said to be evident across all of its business units, with each showing strong revenue growth in the second quarter, both sequentially and over the prior year.

As a result of the progress, the group said its run rate revenue for the eight week period since its acquisition of EDM was more than £250m per annum, up from £182.7m in the 2020 financial year and £215.6m in 2019.

Underlying cash generation in the first half was “strong”, with net debt set to be in line with expectations at the half year.

Restore said it made “significant” strategic progress during the period, with the board saying a “solid platform” was in place for continued development in the second half, with further growth potential from increasing activity levels in the economy, sales expansion and further acquisitions expected to be completed during the third and fourth quarters.

The directors said the combination of activity recovery, market share gains and focussed acquisitions meant the group was already emerging from the pandemic as a larger business, with enhanced positions in its key target structural growth markets.

In addition, it said management's focus on operational effectiveness and financial discipline had also created a “stronger organisation”, capable of generating “sustainably higher” returns.

“I am delighted to report that the group is emerging from the pandemic not only larger but better and with strong momentum,” said chief executive officer Charles Bligh.

“This is borne out by current trading which is ahead of the board's expectations with the prospect of increasing activity in the second half.”

Bligh said the company’s recent acquisitions, including EDM, had made “impressive” starts within the group.

“What is particularly pleasing is the positive response and motivational impact to these developments from both existing and new staff members.

“We have over 2,500 staff in the group, and continue to hire with the expected growth.”

At 0839 BST, shares in Restore were up 4.08% at 406.95p.