Restore (AIM: RST), the UK's leading provider of digital and information management and secure lifecycle services, provides the following trading update for the four months ended 30th April 2023 (the "Period"), ahead of its Annual General Meeting to be held Tuesday 16th May 2023.
Revenue for the first four months at £92.8m, has continued to increase, up c.4% on the prior year.
· In Digital and Information Management, substantial price increases were successfully implemented at the start of the year and, combined with increased activity from new customers and ongoing cost saving measures, are offsetting the large non-repeating public sector contract that benefitted the Digital business during H1 last year. In Records Management, the BBC contract, the largest in Restore's history, has started well and during April the transfer of artefacts to our facilities commenced as planned. Expected net box growth for FY23 continues to be strong and within the guided range of 1% to 2%.
· In Secure Lifecycle Services activity levels in Datashred and Harrow Green are in line with management expectations for the Period, together with good cost control. Technology is seeing strong demand for ultra secure IT Destruction and IT Relocation projects (together representing a combined c.20% of Technology revenue). However there continues to be a slower than anticipated recovery in hardware recycling volumes, consistent with recent IT sector reports that indicate new PC/Laptop sales were down 25-30% in Q1 2023 following elevated pandemic demand.
· The business is adapting capacity and continues to execute its planned structural cost reductions of c.£3m across the Group, which is progressing in line with management expectations, with actions across supplier rationalisation, cost of sales and operating overheads.
The Board anticipates that the Group will deliver revenue and adjusted EBITDA growth in excess of 5% over FY22 through the implemented price changes, increased organic activity and strong cost control. Despite this positive organic momentum, due to the ongoing reduced levels of volumes in the IT hardware market, management now expect the Group's adjusted PBT to be below their previous expectation and in the range of £41-43 million for the year.
The Group's half year results will be announced on Wednesday 26th July 2023.
Charles Bligh, CEO, commented:
"We are successfully achieving our plans to implement price increases, execute cost reduction and provide consistent service delivery. In a challenging environment, we are continuing to see increased activity across the majority of our businesses, especially in our Digital and Information Management Division. Whilst the unprecedented reduction in IT hardware sales is having an impact on Technology in the short term, overall the Group is on track to deliver growth in revenue and operating profits for the year and achieve a further reduction in debt."