AIM:RST

Stock Analysis Report

Executive Summary

Restore plc, together with its subsidiaries, operates as a support services company primarily in the United Kingdom.

Rewards

Trading at 84.1% below its fair value

Earnings are forecast to grow 19.54% per year

Earnings grew by 39.7% over the past year

Risk Analysis

Has a high level of debt

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Proven track record with mediocre balance sheet.

Share Price & News

How has Restore's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RST has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.3%

RST

-0.2%

GB Commercial Services

-0.8%

GB Market


1 Year Return

14.6%

RST

25.9%

GB Commercial Services

8.5%

GB Market

Return vs Industry: RST underperformed the UK Commercial Services industry which returned 25.9% over the past year.

Return vs Market: RST exceeded the UK Market which returned 8.5% over the past year.


Shareholder returns

RSTIndustryMarket
7 Day-4.3%-0.2%-0.8%
30 Day7.7%3.5%-0.6%
90 Day7.8%4.0%1.5%
1 Year16.5%14.6%29.7%25.9%14.1%8.5%
3 Year22.9%18.6%27.9%17.0%19.2%4.0%
5 Year88.0%77.7%40.5%17.7%41.8%9.5%

Price Volatility Vs. Market

How volatile is Restore's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Restore undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: RST (£4.47) is trading below our estimate of fair value (£28.04)

Significantly Below Fair Value: RST is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: RST is poor value based on its PE Ratio (26.3x) compared to the Commercial Services industry average (18.8x).

PE vs Market: RST is poor value based on its PE Ratio (26.3x) compared to the UK market (17.3x).


Price to Earnings Growth Ratio

PEG Ratio: RST is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: RST is overvalued based on its PB Ratio (2.6x) compared to the GB Commercial Services industry average (2.3x).


Next Steps

Future Growth

How is Restore forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

19.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RST's forecast earnings growth (19.5% per year) is above the savings rate (0.5%).

Earnings vs Market: RST's earnings (19.5% per year) are forecast to grow faster than the UK market (12.4% per year).

High Growth Earnings: RST's earnings are forecast to grow, but not significantly.

Revenue vs Market: RST's revenue (2.7% per year) is forecast to grow slower than the UK market (3.6% per year).

High Growth Revenue: RST's revenue (2.7% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: Insufficient data to determine if RST's Return on Equity is forecast to be high in 3 years time


Next Steps

Past Performance

How has Restore performed over the past 5 years?

31.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RST has a large one-off loss of £6.2M impacting its June 30 2019 financial results.

Growing Profit Margin: RST's current net profit margins (10.1%) are higher than last year (8.5%).


Past Earnings Growth Analysis

Earnings Trend: RST's earnings have grown significantly by 31.3% per year over the past 5 years.

Accelerating Growth: RST's earnings growth over the past year (39.7%) exceeds its 5-year average (31.3% per year).

Earnings vs Industry: RST earnings growth over the past year (39.7%) exceeded the Commercial Services industry 16.1%.


Return on Equity

High ROE: RST's Return on Equity (10%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Restore's financial position?


Financial Position Analysis

Short Term Liabilities: RST's short term assets (£72.5M) exceed its short term liabilities (£65.8M).

Long Term Liabilities: RST's short term assets (£72.5M) do not cover its long term liabilities (£248.5M).


Debt to Equity History and Analysis

Debt Level: RST's debt to equity ratio (54.5%) is considered high.

Reducing Debt: RST's debt to equity ratio has increased from 53.2% to 54.5% over the past 5 years.

Debt Coverage: RST's debt is well covered by operating cash flow (41.7%).

Interest Coverage: RST's interest payments on its debt are well covered by EBIT (5.3x coverage).


Balance Sheet

Inventory Level: RST has a high level of physical assets or inventory.

Debt Coverage by Assets: RST's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Restore's current dividend yield, its reliability and sustainability?

1.34%

Current Dividend Yield


Dividend Yield vs Market

company1.3%marketbottom25%2.0%markettop25%5.3%industryaverage2.8%forecastin3Years1.8%

Current dividend yield vs market & industry

Notable Dividend: RST's dividend (1.34%) isn’t notable compared to the bottom 25% of dividend payers in the UK market (1.96%).

High Dividend: RST's dividend (1.34%) is low compared to the top 25% of dividend payers in the UK market (5.25%).


Stability and Growth of Payments

Stable Dividend: RST has been paying a dividend for less than 10 years and during this time payments have been volatile.

Growing Dividend: RST's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (37.6%), RST's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: RST's dividends in 3 years are forecast to be well covered by earnings (26.1% payout ratio).


Next Steps

Management

What is the CEO of Restore's salary, the management and board of directors tenure and is there insider trading?

1.0yrs

Average board tenure


CEO

Charles Bligh (51yo)

0.7yrs

Tenure

0

Mr. Charles Edward Bligh is Chief Executive Officer at Restore plc since April 1, 2019. Mr. Bligh had been the Chief Operating Officer at TalkTalk Telecom Group PLC since May 2017 until June 30, 2018. Mr.  ...


Board Age and Tenure

1.0yrs

Average Tenure

51yo

Average Age

Experienced Board: RST's board of directors are not considered experienced ( 1 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUK£5,06119 Mar 19
Sharon Baylay
EntityIndividual
Role
Lead Director
Senior Independent Director
Shares1,750
Max PriceUK£2.89
BuyUK£39,99904 Feb 19
Nigel Dews
EntityIndividual
Shares14,084
Max PriceUK£2.84
BuyUK£49,81321 Jan 19
Anthony Pearlgood
EntityIndividual
Shares16,660
Max PriceUK£2.99
BuyUK£183,74515 Jan 19
Charles Anthony Skinner
EntityIndividual
Shares54,500
Max PriceUK£3.38

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.1%.


Management Team

  • Sarah Waudby

    Company Secretary

    • Tenure: 0yrs
  • Charles Bligh (51yo)

    CEO & Director

    • Tenure: 0.7yrs
  • Neil Ritchie (48yo)

    Executive Director

    • Tenure: 0.2yrs

Board Members

  • Martin Towers (66yo)

    Independent Chairman

    • Tenure: 1.9yrs
    • Compensation: UK£90.00k
  • James Christie Wilde (65yo)

    Independent Non-Executive Director

    • Tenure: 5.5yrs
    • Compensation: UK£45.00k
  • Sharon Baylay (51yo)

    Senior Independent Director

    • Tenure: 1yrs
    • Compensation: UK£51.00k
  • Susan Davy (49yo)

    Non-Executive Director

    • Tenure: 0.9yrs
  • Charles Bligh (51yo)

    CEO & Director

    • Tenure: 0.7yrs
  • Neil Ritchie (48yo)

    Executive Director

    • Tenure: 0.2yrs

Company Information

Restore plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Restore plc
  • Ticker: RST
  • Exchange: AIM
  • Founded: 2004
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: UK£544.716m
  • Shares outstanding: 124.36m
  • Website: https://www.restoreplc.com

Number of Employees


Location

  • Restore plc
  • 15/19 Cavendish Place
  • London
  • Greater London
  • W1G 0QE
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
RSTAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJul 2005

Biography

Restore plc, together with its subsidiaries, operates as a support services company primarily in the United Kingdom. The company operates through two segments, Document Management and Relocation. The Docum ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/06 21:01
End of Day Share Price2019/12/06 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.