Restore’s AGM Update confirms the Board remains confident of delivering against full year expectations. It remains focused on leveraging a higher operating margin (now above 20%) through organic growth and a disciplined M&A strategy in what remains a fragmented market. Today’s update confirms it is delivering on both counts, with high single digit organic growth in Scanning, outbound communications and IT recycling, as well as three further bolt-on acquisitions in Datashred (£3.5m consideration). The outlook remains compelling, with forecast PBT growth of 18%, 14% and 9% p.a. Despite this, the shares still trade on a P/E rating of only 10.3x, falling to 8.8x. We believe this materially undervalues the quality and predictability of Restore’s earnings and fails to reflect its enviable track record. The £20m share buyback is ongoing. We retain our Buy recommendation and 393p target price (15x PER, 49% upside).
