Research on Restore PLC (RST:LON) from Equity Development
FY25 was a year of significant strategic progress for Restore. M&A activity stepped up a gear with the acquisition of Synertec and the disposal of Harrow Green; the integration of Records Management and Digital is now complete; and all three divisions reported strong profit growth. As a result, Restore has hit its 20% medium-term operating margin target ahead of schedule, whilst strong cash generation will underpin a newly announced £20m share buyback programme. Restore’s shares have rarely traded, as they currently do, below 10x forward P/E, and in our view, this wholly overlooks the progress that has been made and the quality of this business. The average rating over the past 10+ years is 16x. We reiterate our 400p/ share Fair Value estimate, which represents an FY26 P/E rating of 16x, falling to 14x in FY28.