Acquisitions fuel strong first half at Restore

Data management and recycling specialist Restore has given investors some cheer after reinstating its dividend and indicating that its first half has been strong.

The firm issued a trading update covering its second quarter, ahead of full half-year results later this month, that revealed it would pay an interim dividend for FY21.

Restore hit the headlines earlier this year with a couple of acquisitions, picking up Liverpool-based Apple recycling and spare parts specialist The Bookyard and Runcorn-based Computer Disposals. Those deals have already started to add to the bottom line, making a contribution to the business in the second quarter, and the firm has seen increased activity across the business.

Most recently, in April, the firm added EDM into the mix with a £61m deal for the information management specialist. That acquisition doubled the size of Restore’s digital business and the firm revealed in the trading statement that it had already contributed financially, with the group’s run rate revenue for the eight-week period since the acquisition of EDM hitting more than £250m pa (FY20: £182.7m, FY19: £215.6m). The integration of EDM is also progressing, with the firm expected to exploit “synergies” of at least £2m.

The trading statement indicated that Restore’s acquisition spree is not over, with plans to add more deals in Q3 and Q4. The firm said it has a significant pipeline of potential deals, taking part in active discussions with more than 25 potential targets. It is confident it can close some of those in its second half.

“I am delighted to report that the group is emerging from the pandemic not only larger, but better and with strong momentum,” said Charles Bligh, CEO of Restore. “This is borne out by current trading, which is ahead of the board’s expectations with the prospect of increasing activity in H2.

“Our recent acquisitions, including EDM, have made impressive starts within the Restore 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.”

Restore’s trading update comes at a time when the economy is starting to recover from the pandemic, but also against the backdrop of increased focus on sustainability.

Speaking recently about the  environmental, social and governance (ESG) initiatives in its products, David Wolstencroft, senior vice-president of alliances for Europe, the Middle East and Africa (EMEA) at Coupa, said customers were keen to measure their green credentials.

“Companies these days are not just being measured by the amount of profit and revenue,” he said. “A lot of companies now have published policies on environmental sustainability that they’re measured by, so it’s on people’s agendas.

“A lot of key companies and FTSE 100 companies in the UK are grabbing hold of this with both hands and trying to get ahead. Now is the time companies are really turning to ESG to make an impact.”