Restore confident despite tougher trading conditions

16th Nov 2023 14:11

(Sharecast News) - Digital and information management specialist Restore described resilient trading in an update on Thursday, with growth in various segments of its operations.

The AIM-traded firm said that in the records management division, it achieved robust revenue and profit levels in the first ten months of the year, driven by sustained growth and effective cost management efforts within the organisational structure and property estate.

That focus on efficiency contributed to a more streamlined operating model.

While the digital segment experienced lower non-recurring contracts, particularly in bulk scanning, Restore said it showcased strong cost management and secured significant contract wins with HMRC and the Land Registry.

Those successes had bolstered the division's momentum, the board said.

In the technology sector, Restore said it had faced challenges due to subdued volumes of quality IT assets for resale, which were attributed to economic uncertainty and a low point in the IT refreshment cycle.

However, the company had pivoted towards higher-margin activities and leveraged its core capabilities in this competitive market.

Meanwhile, the Datashred division performed as anticipated, reflecting lower recycled paper prices, and the company said it was actively addressing cost challenges in the area.

Harrow Green continued to operate in line with management expectations.

Despite the additional cash expenditure associated with restructuring and change processes during the period, Restore said it maintained healthy cash generation.

The company expected the year-end net debt position to be broadly consistent with the previous year-end.

Moreover, Restore said it remained on track to meet market expectations for its full-year performance.

Regarding contract awards, Restore Digital secured a significant contract from the Land Registry with a minimum total contract value of £4.5m.

Under the three-year contract, which started in September, Restore said it would operate and manage a central mail room, providing services such as document scanning and data extraction for the Land Registry.

At 1330 GMT, shares in Restore were up 0.99% at 204p.

Reporting by Josh White for Sharecast.com.