RE­STORE (RST:AIM) 510p

Gain to date:0.6% Orig­i­nal en­try point: Buy at 507p, 29 Mar 2018

Shares - - GREAT IDEAS UPDATES -

THE GAINS FROM our ‘buy’ stance on doc­u­ment man­age­ment group Re­store (RST:AIM) have been more or less erased af­ter a mixed up­date on 21 May.

The com­pany noted that trad­ing had started ‘sat­is­fac­to­rily’ in 2018 and that its ex­pec­ta­tions for the full year re­mained un­changed, de­spite pres­sure on its shred­ding unit. How­ever, the mar­ket clearly felt there was a risk the prob­lems in this part of the busi­ness could see it miss es­ti­mates.

Re­store Datashred, the shred­ding busi­ness, de­liv­ered lower op­er­at­ing mar­gins than bud­geted in the first quar­ter and steps have been taken to im­prove mar­gins in the sec­ond quar­ter.

More pos­i­tively, and ahead of this an­nounce­ment, Liberum ini­ti­ated on the stock with a 600p price tar­get.

An­a­lysts Rahim Karim and Joe Brent reckon there is still scope for sig­nif­i­cant up­side at the firm. They ar­gue: ‘A com­bi­na­tion of or­ganic growth and ac­qui­si­tions has built the lead­ing provider of out­sourced of­fice ser­vices in the UK.

‘How­ever, with a mar­ket share of just 11.5%, we be­lieve the ex­ist­ing strat­egy still has the po­ten­tial to drive sig­nif­i­cant growth.

‘This top-line dy­namic, com­bined with sig­nif­i­cant mar­gin up­side, means the po­ten­tial to once again trans­form the scale of the busi­ness re­mains.’

SHARES SAYS:

Keep buy­ing. (TS) BRO­KER SAYS: 5 0 0

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