Refocused strategy underpins rerating potential
Restore (AIM: RST) is the UK’s leading provider of records management, digitisation and secure recycling services.The last twelve months have seen a management overhaul with the return of former CEO Charles Skinner, bringing a refreshed strategic focus to address a disappointing trading performance in 2023.
Restore is a high-quality business operating in markets characterised by high barriers to entry, recurring revenues, attractive margins and sticky customer relationships. Under a proven, driven and experienced management team, we see scope for consistent earnings growth over the medium term, which in-turn should see a rerating of the shares.
It is clear to us that the share price does not yet reflect confidence in earnings forecasts, or the upside potential of management’s medium-term targets.
We initiate coverage with a 400p Fair Value estimate which represents an FY25 P/E rating of 20x, in line with Restore’s historic average rating and peer group multiples.
Restore is engaged in Document Management and Business Relocations services. Co. provides services in document storage, document shredding, scanning, commercial and workplace relocation, and IT equipment and consumables reuse and recycling. Co. has two divisions: Document Management, which comprises of Restore Records Management, Restore Datashred, and Restore Digital; and Relocation, which comprises of Restore Harrow Green and Restore Technology.
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