Restore half-year results: revenue rises 21% as profit and dividend grow

Restore's first-half numbers at a glance

Restore PLC has reported a strong set of half-year results, combining double-digit growth, a slightly improved group margin and healthy cash generation.

Revenue for the six months ended 30 June 2026 increased by 21% to £175.4 million. Adjusted profit before tax rose 23% to £22.3 million, while adjusted basic earnings per share increased by 24% to 12.4p.

Importantly, Restore said organic growth and acquisitions contributed to the revenue increase in broadly equal proportions. This means the performance was not simply the result of buying additional businesses.

Continuing operations	H1 2026	H1 2025	Change
Revenue	£175.4 million	£144.4 million	21%
Adjusted operating profit	£29.9 million	£25.2 million	19%
Adjusted operating margin	20.1%	19.6%	50 basis points
Adjusted profit before tax	£22.3 million	£18.1 million	23%
Statutory profit before tax	£7.4 million	£5.8 million	28%
Adjusted basic EPS	12.4p	10.0p	24%
Interim dividend per share	2.6p	2.2p	18%

A basis point is one-hundredth of a percentage point, so the 50-basis-point margin improvement is equivalent to 0.5 percentage points.

Why these results matter for investors

Restore's investment case rests heavily on recurring revenue, operating margins and cash generation. The latest results provide evidence of progress on all three.

Adjusted operating profit grew by 19% to £29.9 million, slightly behind revenue growth of 21%. However, the reported adjusted operating margin still improved from 19.6% to 20.1% because Restore excludes Synertec's regulated postage costs when calculating this measure.

The company has now achieved its medium-term target of a 20% adjusted operating margin. Its next goal is to grow revenue while maintaining a margin of at least 20%.

That is a sensible target, but it also raises the bar. Investors will want to see growth continue without acquisitions, integration costs or a changing sales mix pushing profitability backwards.

Information Management drives the expansion

Information Management remains Restore's largest division. Revenue increased by 26% to £133.9 million, while adjusted operating profit rose from £25.5 million to £28.2 million.

Physical document storage remained stable in volume terms, with storage revenue rising in line with inflation. Project revenue also benefited from a new scanning contract for the Ministry of Defence.

Restore's warehouse consolidation programme is nearing completion and is expected to finish in the first half of 2027. By then, the group expects to have moved more than 4 million boxes, exited 20 warehouses and moved into five new locations.

Management said the programme has kept the cost of storing a box flat despite rising rents and business rates. That is significant because storage costs are an important driver of the division's margins.

Digital Services also benefited from restructuring undertaken over the previous two years. Restore reported progress in digital mailrooms, scanning projects and online hosting, while its Department for Work & Pensions digital mailroom continued to run smoothly.

Outbound Communications, formerly Synertec, performed in line with Restore's expectations. Revenue was supported by NHS Notify work covering screening and vaccination appointment communications.

The main caveat is that Information Management's adjusted operating margin fell from 28.1% to 26.2%. Restore attributed this to a greater contribution from the lower-margin Outbound Communications and Digital Services activities.

Technology's recovery gathers pace

Technology produced the clearest operational improvement.

Revenue increased by 17% to £20.7 million, while adjusted operating profit doubled from £1.2 million to £2.4 million. Its adjusted operating margin rose from 6.8% to 11.6%.

The division had recorded operating losses in 2023, so the latest figures suggest its recovery is becoming more established. Restore credited management's focus on higher-value areas of IT recycling, improved internal systems and more disciplined pricing.

A strong global market for IT hardware sales also helped. That external support is worth remembering, but the scale of the margin improvement indicates that internal actions played an important role too.

Weak paper prices remain a drag on Datashred

Datashred's revenue increased by 3% to £20.8 million, while adjusted operating profit was broadly flat at £2.2 million. Its margin edged up from 10.4% to 10.6%.

The division faced a substantially lower UK paper price, which averaged £145 per tonne compared with £186 per tonne in H1 2025. Restore hedged approximately 70% of its output, although at a lower rate than in the previous year.

Contributions from seven acquisitions completed during 2025 and 2026 offset the paper-price pressure. Restore believes difficult market conditions could create further consolidation opportunities, but investors should recognise that this division remains exposed to recycled paper values.

Cash flow, debt and shareholder returns

Free cash flow increased from £20.6 million to £21.3 million. Cash conversion was 95%, down from 109%, but still represented a high proportion of adjusted operating profit after tax.

Net debt was £122.5 million, compared with £120.1 million a year earlier and £123.8 million at the end of 2025. Leverage fell year-on-year from 1.9 times to 1.7 times, within Restore's target range of 1.5 to 2.0 times.

This was achieved despite four bolt-on acquisitions for aggregate consideration of £6.0 million and £4.6 million spent through the group's £20 million share buyback programme during the first half.

The interim dividend increased by 18% to 2.6p per share. It is due to be paid on 21 October 2026 to shareholders on the register on 25 September 2026.

The adjusted and statutory profit gap deserves attention

Restore's adjusted profit before tax was £22.3 million, but statutory profit before tax was considerably lower at £7.4 million.

The difference reflected £14.9 million of adjusting items, including £8.5 million of intangible asset amortisation, £3.8 million of acquisition-related costs and £2.6 million of property-related costs.

Some of these items are non-cash accounting charges. However, acquisition and integration expenses are relevant when assessing a company that regularly buys businesses.

Restore also recognised a £2.3 million loss within discontinued operations after writing off contingent consideration associated with the 2025 disposal of Harrow Green. The former division is not expected to meet the performance threshold required for the additional payment.

Full-year expectations and what to watch next

The board expects full-year adjusted profit before tax to be at least in line with market expectations. Company-compiled consensus is £47.2 million, within a range of £44.9 million to £48.2 million.

That wording represents confidence rather than a formal upgrade. Investors will be watching whether Technology maintains its recovery, Digital Services continues improving and Datashred can withstand weak paper prices.

Further acquisitions are likely to remain part of the strategy. Four bolt-on deals were completed during 2026 for £6.0 million in aggregate, and Restore described its acquisition pipeline as healthy.

There is also a planned leadership transition. Charles Skinner will become non-executive chair and current CFO Dan Baker will become chief executive from January 2027.

Overall, the half-year performance shows revenue growth coming from several parts of the group, supported by cash generation and declining leverage. The challenge now is to maintain margins above 20%, manage acquisition-related costs and convert the improved operational momentum into statutory earnings.

The full figures and accompanying notes are available in the original company announcement.