Restore plc Raises FY26 Outlook After Strong Trading Update and Strategic Moves

Synertec: framework access for NHS Notify

Synertec continues to trade in line with expectations and has been included on a new four-year NHS Notify framework. That should add volumes from the first half of 2026, supporting growth in outbound communications.

Datashred: steady prices, higher visits and bolt-ons feed growth

Datashred saw strong revenue growth driven by increased visit numbers, largely stable paper prices and four acquisitions completed in 2025. The stability has been underpinned by hedging around half of volumes – essentially pre-arranging pricing to smooth volatility.

Integration work is mostly done for Shred-on-Site and three smaller bolt-ons. Management expects synergies to further improve profitability in 2026. That reads well for margin progression next year.

Technology: leaner, focused, and rebuilding margins

The Technology division is now leaner and refocused on larger customers with more uniform, higher-quality IT assets. Demand is firming as hardware refresh cycles normalise and more clients outsource their IT requirements, including via value-added resellers.

Divisional profitability is improving and moving towards the medium-term 15% adjusted operating margin target. Not there yet, but the direction of travel is positive.

Harrow Green disposal: cleaner portfolio, modest upfront cash

Restore has sold Harrow Green to Pickfords for £5.5 million cash, of which £2.0 million is contingent on FY26 performance. The disposal simplifies the group and removes a non-core business ahead of the next phase of growth. Note that consensus had included £2.2 million of adjusted PBT from Harrow Green in FY26, which will now be absent – yet management still expects to beat FY26 consensus at group level.

Financing: new £150m RCF boosts flexibility at better pricing

Restore has refinanced with a new five-year revolving credit facility (RCF) of £150 million, plus a £50 million accordion. An RCF is a flexible credit line the company can draw down and repay as needed. The facility, provided by a five-bank syndicate, replaces the previous RCF that was due to expire in April 2027 and comes at improved pricing, increasing balance sheet flexibility for organic and M&A opportunities.

Guidance, consensus and cash: the numbers that matter

Adjusted PBT is a non-GAAP measure that strips out certain items to give a clearer view of underlying performance. Restore’s guidance and the company-compiled consensus imply further upside:

Metric	Figure / Guidance
FY25 adjusted PBT (company-compiled consensus)	£41.2 million (range £39.3m-£43.6m)
FY25 adjusted PBT on a continuing basis (ex-Harrow Green)	£39.6 million consensus; company expects to be ahead
FY26 adjusted PBT (company-compiled consensus)	£46.5 million (range £43.1m-£49.0m); company expects to be ahead
Medium-term adjusted operating margin target	20%; expected to be exceeded in FY25 and sustained above in FY26
Technology medium-term margin target	15% adjusted operating margin
Cash conversion in the Period	In excess of 80%
Business rates increase from April 2026	~10% increase, c.£1.0 million annualised
Harrow Green sale proceeds	£5.5 million cash, of which £2.0 million contingent on FY26 performance
New RCF	£150 million, five-year term, £50 million accordion

Year-end net debt is expected to be in line with market expectations when adjusted for H2 M&A activity, although the precise figure is not disclosed.

My take: momentum is broad-based, with sensible de-risking

This is one of Restore’s cleaner updates in recent years. The group is getting simpler, integration is ahead of plan, and the balance sheet has been future-proofed with a larger, cheaper facility. Exceeding a 20% operating margin in FY25 – on a continuing basis – is a big statement and underpins the FY26 confidence.

Information Management is doing the heavy lifting: pricing is indexed, capacity is being rationalised, and scanning is landing high-quality NHS and council workloads. Datashred looks set for another leg up in 2026 as synergies land, and Technology is improving as customers resume refresh cycles. The sale of Harrow Green shows discipline; losing the FY26 profit contribution is acknowledged, but still covered by core growth.

Balanced view: what could go right – and what could bite

• Positives: higher-margin mix in Information Management, better-than-expected £5.0 million-plus annualised savings, NHS Notify framework access for Synertec, paper price hedging in Datashred, and >80% cash conversion.
• Negatives: April 2026 business rates increase (~£1.0 million) partially offsets property savings; integration risk after seven acquisitions in the year; continued reliance on public-sector volumes in scanning; and the Technology margin rebuild is still in progress.

What to watch next

• FY25 results confirmation: adjusted PBT “ahead” of the £39.6 million continuing basis consensus and operating margin above 20%.
• Box moves to Rainham and Stroud in early 2026 and any quantified property cost benefits.
• Synertec volumes under the NHS Notify framework from H1 2026.
• Datashred synergies flowing through in 2026 following integrations.
• Technology margin progression towards the 15% target.
• Year-end net debt and leverage metrics – not disclosed today.

Overall, this is an upbeat update: Restore is guiding to beat in FY25 and to be ahead again in FY26 even after allowing for the rates rise and the Harrow Green disposal. Execution remains key, but the mix, momentum and margin profile are moving in the right direction.