LOCATIONS
Head Office
T: 020 7409 2420
E: info@restoreplc.com
W: www.restoreplc.com
66 Grosvenor Street, London W1K 3JL
Restore Records Management
T: 01293 446 270
E: admin@restore.co.uk
W: www.restore.co.uk
The Databank, Unit 5 Redhill Distribution
Centre, Salbrook Road, Redhill, Surrey RH1 5DY
Restore Datashred
T: 0800 376 4422
E: customerhub@restore.co.uk
W: www.shredding.info
Unit Q1, Queen Elizabeth Distribution Centre,
Purfleet, Essex RM19 1NA
Restore Scan
T: 0333 043 5643
E: enquiries@restorescan.co.uk
W: www.restore.co.uk/scan
Unit 4 Tally Way, Agecroft Commerce Park,
Salford M27 8WJ
Harrow Green
T: 0345 603 8774
E: info@harrowgreen.com
W: www.harrowgreen.com
2 Oriental Road, Silvertown
London E16 2BZ
Relocom
T: 0345 313 1491
E: contactus@relocom.co.uk
W: www.relocom.co.uk
IT Efficient
T: 01462 813 132
E: ite@itefficient.com
W: www.restore.co.uk/it-disposal
Unit 4B-4F Shefford Industrial Park,
St Francis Way, Shefford, Bedfordshire SG17 5DZ
ITP Group
T: 0118 943 8001
E: info@itp-group.com
W: www.itp-group.com
Unit 1 Stadium Way, Tilehurst,
Reading, Berkshire RG30 6BX
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IT EQUIPMENT
RECYCLING
TECHNOLOGY
RELOCATION
CARTRIDGE RECYCLING
STORE
WORKPLACE RELOCATION
Report &
Financial
Statements
For the year ended
31 December 2016
SHRED
SCAN
Restore plc is an AIM-listed
support services company
focused on providing services
to offices and workplaces in the
private and public sectors.
WORKPLACE
RELOCATION
STORE
TECHNOLOGY
RELOCATION
IT EQUIPMENT
RECYCLING
SHRED
SCAN
CARTRIDGE
RECYCLING
Contents
Overview
Highlights
At a glance
Strategic report
Investor proposition
Our markets
Our business model and strategy
Performance
Corporate Responsibility
Chairman’s statement
Chief Executive’s statement
Group Finance Director’s statement
Principal risks and uncertainties
01
02
06
08
10
12
14
18
20
22
25
Governance
Board of Directors
Directors’ report
Corporate governance statement
Directors’ remuneration report
Statement of Directors' responsibilities
Independent auditor’s report
Financial statements
Consolidated statement
of comprehensive income
Consolidated statement
of changes in equity
Consolidated statement
of financial position
42
Consolidated statement of cash flows
Notes to the Group financial statements 43
Company statement of changes in equity 71
Company statement of financial position 72
73
Company statement of cash flows
74
Company accounting policies
Notes to the Company
financial statements
75
Other information
Notice of Annual General Meeting
Officers and advisers
Trading record
Financial calendar
87
93
93
93
28
30
32
34
37
38
39
40
41
01
Revenue
(£'m)
41%
Adjusted Profit Before Tax*
(£'m)
41%
Dividend Per Share
(p)
25%
Adjusted Earnings Per Share*
(p)
15%
m
9
.
1
m
4
.
9
2
9
1
£
£
m
m
3
.
6
0
.
3
1
2
£
£
p
p
2
.
3
0
.
4
p
6
.
5
p
9
.
7
1
1
Highlights
FINANCIAL
OPERATIONAL
• Group revenue up 41% to £129.4m
• Group adjusted profit before tax up 41% to £23.0m
• Adjusted basic earnings per share up 15% to 17.9p
• Document Management revenue up 65%; adjusted
operating profit up 46%
• Relocation revenue up 6%; adjusted operating
profit up 17%
• Capacity utilisation in Records Management at c90%
• Document shredding activities transformed by
PHS Data Solutions acquisition
• Performance of Restore Scan significantly improved
and capabilities enhanced
• Further operating margin increases in Relocation
• Wincanton Records Management integration
• Total dividend up 25% to 4.0p per share
completed
• Integration of PHS Data Solutions on track
2016
2015
Change
Adjusted Results –
continuing operations
Revenue
EBITDA*
Operating profit*
Profit before tax*
Earnings per share**
£129.4m
£29.3m
£25.0m
£23.0m
17.9p
£91.9m
£20.4m
£17.6m
£16.3m
15.6p
Dividend per share
4.0p
3.2p
Net debt
£72.3m
£60.6m
41%
44%
42%
41%
15%
25%
Statutory Results –
continuing operations
Revenue
Operating profit
Profit before tax
Earnings per share
2016
2015
£129.4m
£91.9m
£9.5m
£7.5m
10.3p
£7.7m
£6.1m
7.0p
*
Before discontinued operations, exceptional items (including exceptional finance costs), amortisation of intangible assets and share-based payments charge.
**
Calculated based on the weighted average shares in issue and a standard tax charge.
AWARD WINNING
For more information please see our fact sheet at www.restoreplc.com/about/about_restore_plc.aspx
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
02
The areas in which we operate are coherent: Records Management,
Shred and Scan are all elements of Document Management.
Together with Relocation, they share a similar customer base
within which all of our services are generally procured by the
same team or individual.
At a glance
DOCUMENT
MANAGEMENT
1,302
Total
employees
72
Total
sites
24%
Operating
Margin
65% 46%
m
m
7
.
4
1
.
0
5
9
£
£
m
1
.
5
m
0
.
2
1
2
£
£
Revenue (£'m)
Adjusted Operating
Profit* (£'m)
RELOCATION
449
Total
employees
12
Total
sites
12%
Operating
Margin
6%
17%
m
2
.
7
m
3
.
9
3
3
£
£
m
1
.
4
m
8
.
4
£
£
Revenue (£'m)
Adjusted Operating
Profit* (£'m)
RECORDS
MANAGEMENT
SHRED
The majority of Restore
Records Management’s
sales are from the storage
and retrieval of hard copy
documents, typically stored in
cardboard boxes. The business
generates additional service
income from the reorganisation
of customer documents,
document restoration, file-
tracking services and electronic
data back-up.
Restore Datashred’s secure
shredding and recycling
services are provided
both on-site, using mobile
shredding units, and off-site
at our 14 sites. Volumes
have increased significantly
in 2016 principally through
the acquisition of PHS
Datashred, and cross-selling
to other Group business
customers.
WORKPLACE
RELOCATION
TECHNOLOGY
RELOCATION
Harrow Green serves a
diverse range of customers
in both the private and public
sectors. With the bulk of its
business in London, it services
many of the largest offices
that have frequent demand
requiring staff to work
permanently on customer
sites. International moving
services are also provided,
typically for senior managers
of global companies.
Relocom specialises in server
and data centre relocation,
desktop IT and trading desk
relocation, and IT asset audit
and management. Helping
blue-chip organisations
during a relocation,
reorganisation or period
of change, Relocom also
works with Harrow Green to
provide a complete relocation
package.
*
Before discontinued operations, exceptional items (including exceptional finance costs), amortisation of intangible assets and share-based payments charge.
RESTORE PLC > Annual Report and Accounts 03
Head Office
Document Management
Records Management
Shred
Scan
Relocation services
Workplace Relocation
Technology Relocation
IT equipment Recycling
Cartridge Recycling
We have nationwide coverage and all of our
businesses operate on the same Customer
Relationship Management system, which further binds
our businesses together and enables cross-selling
whose effectiveness can be constantly monitored.
SCAN
One of the country’s leading
document conversion and
digitisation specialists,
enlarged by the recent
acquisition of PHS Capital
Capture, Restore Scan
transforms document
related processes to
improve customers access to
information and their overall
efficiency and effectiveness. A
significant part of its revenues
derive from long term or
repeat customer contracts.
IT EQUIPMENT
RECYCLING
CARTRIDGE
RECYCLING
IT Efficient provides secure
data destruction and
hardware disposal services
for computer equipment
and mobile phones across
mainland Britain.
ITP Group collects cartridges
from thousands of premises
across the UK in a wide range
of sectors, and bulk purchases
cartridges from waste
operators, to sell on
for remanufacture.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 04
Acquisition
ACQUISITION OF PHS DATA SOLUTIONS
PHS Data Solutions, comprising PHS Datashred, PHS Records Management and PHS Capital Capture, was acquired
in August 2016 for £83.1 million. PHS Data Solutions, at time of acquisition, was the second largest provider of
document shredding services in the UK, with a significant records management business and presence in document
scanning with combined revenues of £46.8 million.
The acquisition has:
• significantly expanded Restore’s presence in the document shredding market
to become the second largest operator in the UK, under the re-branded name
Restore Datashred;
• provided a strong platform for further expansion in document shredding;
• extended Restore’s position as the second largest records management
operator in the UK;
• broadened Restore Scan’s service offering;
• materially increased the scale and customer base of the enlarged Group.
The acquisition is expected to be earnings enhancing in its first full year of ownership.
RESTORE PLC > Annual Report and Accounts 05
STRATEGIC REPORT
Strategic report
Investor proposition
Our markets
Our business model and strategy
Performance
Corporate Social Responsibility
Chairman’s statement
Chief Executive’s statement
Group Finance Director’s statement
Principal risks and uncertainties
06
08
10
12
14
18
20
22
25
PHS DATA
SOLUTIONS
SITES ACQUIRED
SHRED
STORE
SCAN
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 06
STRONG GROWTH
GOOD OPERATING MARGINS
HIGH VISIBILITY OF EARNINGS
through acquisition, integration
and improvement, UK focus and
cross-selling opportunities
through complex and mission-critical
services where switching suppliers
carries significant risk for customers
strong predictable recurring revenues
and high customer retention
Investor Proposition
GROWTH THROUGH
ACQUISITION
AND MARKET
CONSOLIDATION
INTEGRATION AND
IMPROVEMENT OF
ACQUISITIONS
COMPETITIVE
ADVANTAGE
THROUGH UK FOCUS
AND MARKET
KNOWLEDGE
ACQUISITION OF PHS DATA
SOLUTIONS
Restore acquired PHS Data
Solutions in August 2016. The
acquisition:
• is expected to be earnings
enhancing in 2017
• provided opportunities for
significant synergies across the
division
• materially increased the scale
of the Document Management
division with revenues of £46.8m,
a customer base of 7,500 and
storage capacity for 2.5 million
boxes (at 90% utilisation)
• elevated Restore to the second
largest shredding operator in the
UK market
• further extended Restore’s
position as the second largest
records management operator in
the UK
• significantly enhanced Restore
Scan's capabilities to provide
Consultancy, Outsourcing and
Large Scale Scanning services
INTEGRATION OF WINCANTON
RECORDS MANAGEMENT
In December 2015, Restore
acquired Wincanton Records
Management (WRM), with sites in
mainland Britain and the Republic
of Ireland.
In March 2016, in accordance
with Restore’s geographical
strategy, The Republic of Ireland
interest, renamed Restore
Document Management Ireland
Limited (RDMI), was sold. The net
acquisition cost, after the sale of
RDMI which resulted in £9.2m pre-
tax profit on acquisition value, was
£29.9m on UK revenues of £14.8m.
Since the acquisition, occupancy
rates have increased from 69%
to 80% and will increase further.
There have also been considerable
operating synergies which are
driving margins up sharply.
CASE STUDY – THE FRANCIS CRICK
INSTITUTE
The Francis Crick Institute is a joint
project between six major research
organisations. The Institute is
Europe’s largest biomedical
research laboratory under one
roof and discoveries made there
will speed up the development of
treatments for major diseases such
as cancer, heart disease and stroke.
Their requirement was to
consolidate suppliers, rationalise
movement of documents,
equipment and materials, improve
security, automate end-to-end
inventory and embed these
processes. This ongoing project
was undertaken by Restore
Records Management, before and
during the Institute’s migration
from a number of legacy sites into
one premises in London - a building
with no on-site storage and severe
restrictions on delivery traffic
and noise.
RESTORE PLC > Annual Report and Accounts 07
2016 v 2015 performance
377.5p
SHARE PRICE AT
30 DECEMBER
+26%
17.9p
ADJUSTED EARNINGS
PER SHARE
+15%
4.0p
TOTAL DIVIDEND
PER SHARE
+25%
GROUP-WIDE
CROSS-SELLING
OPPORTUNITIES
COMPLEX AND
MISSION-CRITICAL
OPERATIONAL
SERVICES
STRONG, PREDICTABLE
RECURRING REVENUES
AND HIGH CUSTOMER
RETENTION
CASE STUDY – GROUP SERVICES
TO RPC LLP
RPC LLP, the multi-award winning
law firm with offices in the UK and
the Far East, has been a customer
of Restore since 2001.
CASE STUDY – TRAVERS SMITH
HEAD OFFICE RESTACK AND
CONSOLIDATION
The brief: restack two London
based offices and consolidate a
third premises.
To meet their requirements for
swift, secure deliveries of archived
material and safe handling of
end-of-life data, Restore provides
records management, scanning and
shredding services.
In 2016, Harrow Green and
Relocom worked together to
project manage and implement
RPC’s London office consolidation
and reconfiguration. The project,
affecting 550 staff, was in two
phases – furniture moves, IT
equipment decommission/
recommission and cabling changes,
and subsequent redistribution of
furniture to their Bristol office and
unwanted furniture for recycling.
Requiring over 1,000 moves
across 10 phases, Harrow Green
and Relocom worked together,
providing relocation and IT
equipment move services, to
manage and deliver the complex
project. 500 staff were moved
twice, to interim space while their
offices were being refurbished and
back again, without disruption to
their day to day working.
Travers Smith is a commercial and
financial law firm, founded over
200 years ago. It is widely regarded
as a member of the ‘Silver Circle’ of
leading law firms in the UK, having
twice been voted UK Law Firm of
the Year.
CASE STUDY – MAYER BROWN LLP
ARCHIVE SERVICES
Mayer Brown LLP, a global legal
services provider with offices in
London, formed from the merger of
an American and a British firm in the
late 1990s. Merging their document
management service functions,
Restore was chosen to be the sole
UK provider of archive services.
Requiring twice-daily deliveries, in
addition to providing emergency
deliveries, Restore have continued
to store tens of thousands of
archive boxes for them since
2000.
When Mayer Brown undertook
a tender review process in 2013
they determined that “the level of
customer service Restore provides is
unequalled elsewhere” and, having
introduced FileTrak software to
enable online file ordering/tracking
to interface with Mayer Brown’s
own data sharing system, Restore
successfully retained the contract.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 08
Document Management UK Market Positions In 2016:
#2
#2
SHREDDING
SCANNING
#2
RECORDS
MANAGEMENT
Our markets
RECORDS
MANAGEMENT
Worth an estimated £500–600
million per year, the UK market
of this global industry has been
established for over 30 years and
continues to grow at an estimated
4 per cent per year, whilst market
consolidation continues.
Although Cloud storage is sometimes
perceived as a threat to hard-copy
records management, data as a whole
has increased exponentially and
cloud services, which suffer repeated
security concerns, have not affected
overall physical storage volumes.
High barriers to entry restrict new
participants of scale, largely due to
the investment required to meet
increasingly higher regulatory
standards and difficulty in acquiring
new customers who often commit
to long term contracts with single
operators who can provide extended
geographical coverage, efficiency,
space and cost savings.
We offer national coverage from
45 sites and one of our core
differentiators is understanding
the specific requirements of UK
customers. We continue to build
scale, achieve cost control and
increase revenues through market
consolidation and cross-selling.
SHREDDING
SCANNING
The UK security shredding and
recycling market is estimated at
£250 million per year.
A young, fragmented and fast-
growing industry, still at the early
stages of consolidation, sales are
generated from two sources:
• the collection and destruction
of documents
• sales of baled, shredded material
for recycling, into products such
as tissues.
A time consuming process, volume
shredding is often outsourced
and recycled paper consumption
continues to grow. Demand for
destruction also continues to
grow, to meet data protection
and environmental disposal
requirements.
Through the acquisition of
PHS Data Solutions, Restore
is now ranked as second in
the UK shredding market. The
scale of the business has now
increased eight-fold with
14 sites nationwide on-site and
off-site services. The business
is highly complementary to our
other business streams and
often plays a role in cross-selling
opportunities.
Though difficult to assess the
size of the UK scanning market,
because of the wide range and
scale of businesses providing
these services, an estimate of the
entire market is £600-700 million
per annum.
Providers operating in this market
often specialise in particular
functions, which mainly fall into the
following categories:
• reprographics and print
providers
• scanning bureaux
• software houses
• mailroom providers
• Business Process Outsourcing
(BPO) providers
• other document management
service providers
As the second largest scanning
and related services provider in
the UK we offer coverage from
13 sites across mainland Britain,
with a focus on recurring revenues
from major contracts. The recent
acquisition of PHS Capital Capture
has expanded the sophistication
and range of services that we offer
to nationwide customers.
RESTORE PLC > Annual Report and Accounts 09
Relocation UK Market Positions In 2016:
#1
WORKPLACE
RELOCATION
Top 10
TECHNOLOGY
RELOCATION
Top 10
IT ASSETS REUSE
AND RECYCLING
#1
PRINTER
CARTRIDGE
RECYCLING
WORKPLACE
RELOCATION
TECHNOLOGY
RELOCATION
IT EQUIPMENT
RECYCLING
CARTRIDGE
RECYCLING
The IT relocation market has
remained relatively active,
after an initial period of
uncertainty surrounding the
EU referendum.
The data centre sector of the
market, however, continues
to change to reflect the move
from legacy server systems
to central cloud services,
particularly in the SME market.
This is less so in large financial
services institutions, which
forms a substantial part of the
market’s customer base.
Relocom specialises in
server and data centre
relocation, and a wide
range of innovative and
complementary IT services
including IT equipment asset
audit, asset management,
moves and changes, and new
equipment installation and
deployment. Working with
Harrow Green, Restore is
able to deliver a complete
relocation package, and
provide opportunities to IT
Efficient for asset recycling.
Demand for high-level
corporate and specialist
workplace relocations in the UK
continues to remain steady.
IT EQUIPMENT
RECYCLING
It is a demanding market as
success is based on sophisticated
logistics and complex project
management to meet
customers' mission-critical
requirements. Relationships are
often long term, particularly
when regular reconfigurations
are required which necessitates
our staff to be located
permanently on-site.
Following the EU referendum in
June 2016, activity has remained
buoyant in the corporate
market and re-configurations,
consolidations and relocations
have continued. This trend
is expected to continue
throughout 2017.
As the number 1 provider of
workplace relocation services
in the UK, Harrow Green
offers national coverage
and is well established, with
a blue chip customer base
for whom skills in complex
project management are
essential. It is also an
excellent lead generators for
other Restore businesses.
TECHNOLOGY
RELOCATION
Of the approximately 460
million printer cartridges sold
annually worldwide, up to
30% are remanufactured by
re-filling empty cartridges.
These cartridges are collected
in local markets and sold on
in bulk to refillers and OEMs
around the world.
ITP Group is the UK's leading
collector of empty toner
cartridges, increasingly
providing this recycling service
to the Group's customer base.
It also makes bulk purchases to
make up appropriate batches
for global re-sale.
The IT asset and mobile
phone recycling market
benefits strongly from
regulations under the
WEEE directive requiring
safe and secure disposal
STORE
of equipment.
Increasing focus within the
industry on responsible
handling, secure destruction
and consolidation to cloud
services provides significant
growth in the market.
IT Efficient has a strong
market presence, particularly
in the insurance and financial
sectors, providing services
to five of the world's leading
investment banks. Our
presence in this market
has increased further by
the acquisition of The ITAD
Works in February 2017.
WORKPLACE RELOCATION
+400k
staff relocated
CARTRIDGE RECYCLING
SHRED
SCAN
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
10
Our business model and strategy
OPERATE IN
ATTRACTIVE
SECTORS
WITH GOOD
MARGINS
INVEST IN
ORGANIC GROWTH
TO INCREASE
MARKET SHARE AND
OPERATIONAL
EFFICIENCY
“ We provide inter-related office support services to customers
throughout the UK, using our proven acquisition-based
model, resources and expertise to create value that is shared
with our investors and used to fund continued growth.”
WHAT WE DO AND
WHERE WE WORK
Our sectors
We operate in targeted and inter-
related sectors of the office support
services market:
Document Management
• Records management through
Restore Records Management
• Shredding through Restore Datashred
• Scanning through Restore Scan
Relocation and recycling
• Workplace Relocations & Storage
•
•
through Harrow Green
IT & Server Relocations through
Relocom
IT Asset Reuse & Recycling through
IT Efficient
• Printer Cartridge Recycling through
ITP Group
OUR KEY RESOURCES
AND CAPABILITIES
Our selection criteria
Our sectors are selected on the basis
of specific criteria:
• Competitive advantage through
our scale, tight cost control, UK
focus and market knowledge
• Longstanding customer
relationships
• Nationwide coverage
• Motivated, capable people
• Efficient processing assets
across the UK
• Track record in integrating and
improving acquisitions
• Responsible leadership
Read about our investment
proposition on page 6.
• Recurring revenues
• Operational complexity
• Similar route to market
• Strong rationale for customers to
remain with existing suppliers
• Scope to cross-sell
• Consistency of demand through
the economic cycle and advances
in technology
Our markets
We work nationwide from 84 sites
across the UK. Our customer base
covers a broad range of industries
spanning public sector, retail and
commercial organisations of
diverse sizes.
We operate a decentralised
model, with autonomous divisions
supported by a small head office.
RESTORE PLC > Annual Report and Accounts 11
GROW BUSINESS
THROUGH
ACQUISITIONS AND
LEVERAGE GROUP
CUSTOMER
BASE
CREATE VALUE
THROUGH SCALE
AND SYNERGIES,
ENTER RELATED
MARKETS
SHARE VALUE WITH
STAKEHOLDERS AND
REINVEST TO FUND
CONTINUED
GROWTH
HOW WE GROW THE
GROUP
HOW WE
CREATE VALUE
We invest to build scale and
operational efficiency in our chosen
sectors. That enables us to enhance
customer service and generate
the funding capability for on-going
investment in organic growth
and targeted acquisitions of
related businesses.
We look for complementary
markets that our customers have
expressed demand for – services
not currently offered.
We identify opportunities to acquire
businesses operating in the same
market where we will increase our
market share, geographical coverage
and operational efficiency.
We also look to acquire businesses
in closely related activities where we
believe we can build a strong market
position. We have proven experience
in the successful integration of such
acquisitions.
In addition to conventional sales
methods, we also leverage the Group’s
customer base by seeking cross-
selling opportunities through our
comprehensive Customer Relationship
Management system.
While our rapid growth has been fuelled
primarily by acquisitions, we are highly
focused on organic growth through both
increasing sales to existing customers
and developing new accounts.
HOW WE SHARE VALUE
WITH STAKEHOLDERS
Customers
Efficient solutions that reduce
complexity in a cost-effective
manner.
Shareholders
Shareholder value and returns from
profitable, cash-generative growth
with a high proportion of recurring
revenue and progressive dividends.
Read the Chairman’s
statement on page 18.
Employees
Interesting and rewarding careers
with power and responsibility to
perform to their best ability.
Read about our people
on page 14.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 12
We are pleased to report another strong
performance in 2016 and further strategic
progress in expanding the scale of the
Group’s activities.
Performance
Share price
Jan 2010
Dec 2010
Dec 2011
Dec 2012
Dec 2013
Dec 2014
Dec 2015
350
300
250
200
p
150
100
50
0
Dec 2016
Share placings
21-Oct-10: £4.0m at 26p
02-Mar-12: £8.5m at 75p
09-Apr-13: £7.0m at 111p
08-Dec-15: £34.0m at 260p
02-Aug-11: £4.6m at 65p
03-Oct-12: £3.0m at 93p
07-Oct-14: £14.9m at 210p
26-Aug-16: £35.2m at 290p
Revenue (£'m)
Adjusted Profit Before Tax (£'m)
£'m
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
129.4
91.9
67.5
53.6
43.3
18.8
2011
2012
2013
2014
2015
2016
£'m
26
24
22
20
18
16
14
12
10
8
6
4
2
0
23.0
16.3
12.0
10.0
6.2
3.7
2011
2012
2013
2014
2015
2016
Adjusted Earnings Per Share (p)
Dividend Per Share (p)
p
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
7.4
4.3
17.9
15.6
12.3
10.5
p
5.0
4.0
3.0
2.0
1.0
0.0
4.0
3.2
2.4
1.9
1.5
1.0
2011
2012
2013
2014
2015
2016
2011
2012
2013
2014
2015
2016
RESTORE PLC > Annual Report and Accounts
13
Current trading and outlook
The Group has historically relied heavily on its records
management activities to drive growth and profitability.
While Restore Records Management continues to perform
strongly and to have attractive prospects for the future,
we are also excited about the prospects for the rest of the
business. Restore Datashred is in a very strong position
to achieve significant growth at attractive margins both
organically and through acquisition. The prospects for
Restore Scan both in the short and longer term have never
looked brighter with it holding an increasingly strong
position in what we expect to be a growth market.
In the Relocation division, the core Harrow Green business
has been very effective in driving operating margins up and
there is appreciable scope for profitable growth in all of
the division’s activities.
We believe that the basic nature of Restore’s businesses
are generally acyclical, which, combined with our scale
and operating agility, provides considerable insulation
to the Group from fluctuations in the overall economic
environment.
The current year has started well and we look forward
to delivering another year of strong growth in 2017.
Corporate activity
The key transaction of the year was the acquisition of PHS
DS in August for a total consideration of £83.1 million. This
was funded by a combination of debt and equity.
The other corporate transaction during the year was
the sale of the Irish operations of Wincanton Records
Management for £27.7 million in March, part of the
business acquired in December 2015.
Customer statistics March 2016 to March 2017
Our customer base covers a broad range of sectors such
as government departments and local government, public
sector, health services, retail, manufacturing, construction,
education, utilities, financial services, media, legal, IT,
banking and FTSE 100 companies. Our customers include:
90%
(previous year: 72%)
of top 100 UK legal practices
78%
(previous year: 66%) of top 50
UK accountancy companies
74%
(previous year: 60%)
of FTSE 100 companies
54%
(previous year: 41%) of local
authorities in England,
Wales and Scotland
73%
(previous year: 41%)
of UK National Health Trusts
Post year-end events
Since the year-end, three acquisitions have been made:
•
In January, we acquired the trade and assets of
Reisswolf Wales, a secure shredding business based
in Welshpool, Wales
• Also in January, we acquired ID Secured Limited, trading
as Reisswolf London, a Bedfordshire-based secure
shredding business
•
In February, we acquired The ITAD Works Limited, a
Surrey-based IT recycling company, increasing our share
of this highly regulated market
IT EQUIPMENT
RECYCLING
STORE
+250k
IT assets
recycled
TECHNOLOGY
RELOCATION
WORKPLACE RELOCATION
CARTRIDGE RECYCLING
SHRED
SCAN
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 14
In improving our CSR practices within our
operations we try to help our communities too...
IMPROVING THE
ENVIRONMENT
SUPPORTING
CHARITIES
RECYCLING AND
REDUCING CARBON
FOOTPRINTS
HELPING OUR
COMMUNITIES
Corporate Responsibility
Group approach to employee welfare and diversity
We are committed to recruiting and retaining the best available
employees. We believe that encouraging diversity amongst our
workforce helps us to achieve this and will ensure we deliver
the best service to our customers.
Our key principle is that power and responsibility go hand in hand
and this approach is promoted to our entire workforce. They know
what is expected of them and have the power to make their
own decisions to meet those expectations.
Our aim is that our workforce will be representative of all
sections of society and each employee feels respected and able
to give their best.
We are committed to providing equality and fairness for all
in our employment and not discriminating on the grounds
of gender, gender reassignment, marital status, race, ethnic
origin, colour, nationality, national origin, disability, sexual
orientation, religion or age.
As our Group increases in scale, we are able to offer greater
stability and career opportunities for all our people. We are
also in a position to provide the support and development that
is appropriate to a larger company without losing the flexibility
to treat people as individuals.
Operational employee diversity as at 31 December 2016
BOARD OF
DIRECTORS
HEAD
OFFICE
SENIOR
MANAGEMENT TEAM
SENIOR
EXECUTIVES
TOTAL
EMPLOYEES
83.3%
16.7%
37.5%
62.5%
100%
0%
77.8%
22.2%
74.5%
25.5%
Health & Safety
The Group continually aims to improve its health and safety
performance and has well established training, accident
reporting procedures, and processes in place to mitigate
such risks. These are overseen by the Risks Committee and
Group Board.
Whilst we are proud of our low record of incidents per
employee, we strive to learn from them and improve our
training and processes to ensure that our employees’ welfare
is at the heart of our business.
Health & Safety incidents
Employee man months
Employee man hours*
RIDDOR events
Near misses
RIDDOR events per man month
RIDDOR events per man hour
* Measured in hours due to the nature of the Relocation business.
RIDDOR – Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 2013.
Document Management
Relocation
2016
9,290
2
18
2015
8,309
5
7
2016
2015
1,128,173
963,438
7
2
9
3
0.02%
0.06%
0.0006%
0.0009%
RESTORE PLC > Annual Report and Accounts 15
Recycling statistics
900k
+1m RECYCLED
CARTRIDGES FOR
REMANUFACTURING
250k
IT ASSETS
79k
PAPER
BRIQUETTES
PRODUCED
32k
TONNES
PAPER
2.5k
TONNES NO
LONGER NEEDED
ASSETS
CSR at Restore
Our aim is to minimise our carbon footprint,
support local communities and contribute towards
charitable efforts.
The nature of the business streams in which we
operate allow us to incorporate a significant
element of corporate social responsibility within
our day-to-day operations, whether that’s
recycling or in the processes we employ to reduce
our impact on the environment.
We have specific targets for those businesses that
operate in areas of secure disposal of 0% landfill,
whether that’s in shredding, IT asset recycling or
collection of empty printer cartridges.
In 2016, we produced 32,000 tonnes of shredding
materials for recycling by paper mills in addition to
79,000 paper briquettes from our shredding dust
extraction process which is also recycled. These
are turned into a range of products.
In IT asset recycling we processed 250,000 items
of equipment – from PCs to mobile phones – and
either refurbished them for resale or stripped
them down to component level so that elements
(such as precious metals) could be removed and
recycled. In the printer cartridge collection area,
we not only collected and sent for remanufacture
900,000 proprietary printer cartridges but also
sent over 1,000,000 for recycling to ensure that no
landfill was generated. And when our customers
want storage boxes destroyed, we send them off
to be shredded and recycled.
1.5m
new boxes
stored
BRIQUETTE
PROCESS
Restore Datashred has
now implemented a dust
extraction process into
its operation.
Dust generated during
the shredding process
is extracted from the
atmosphere, through
a series of extraction
pipes throughout the
area, and the waste
product is collected
and compressed
into briquettes or logs.
c79,000 were generated
and put through the
recycling process along
with shredded bales.
Not only does this
increase our levels of
recycling but improves
the working environment
for our employees.
IT EQUIPMENT
RECYCLING
STORE
WORKPLACE RELOCATION
TECHNOLOGY
RELOCATION
CARTRIDGE RECYCLING
SHRED
SCAN
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 16
...and encourage our
employees to do their part.
Corporate Responsibility continued
Business initiatives
Within our operations, the issues of energy conservation,
waste management and the prevention of pollution are key
considerations. We continue to work hard to ensure we:
• Energy management and recycling – we continue to follow
the plan produced for us by the Carbon Trust to reduce
our environmental impacts through recycling and reducing
energy consumption
• reduce consumption of materials and promote re-use
and recycling – our aim is to achieve 0% landfill wherever
possible, including furniture unsuitable for redistribution
• achieve continual improvement in environmental
performance and minimise the impact of our operations on
the environment through a range of activities
• minimise the impact of our buildings, structures and
operational plant by reducing visibility and noise levels.
Our customers benefit by helping them to:
• make more efficient use of office space and public service
facilities, by storing documents in remote premises
•
improve access to important documents – our Restore Scan
service creates efficient processes for public services
• reduce their carbon footprint and increase recycling
through Restore Datashred, ITP Group, IT Efficient and
Harrow Green.
We also take day-to-day steps to minimise our use of natural
resources:
• Archive boxes – we use millions of easily assembled,
double-walled construction boxes that are made from
material that is 70% recycled, along with responsibly
sourced FSC-certified raw material.
• Fuel and fleet management – we run a modern fleet of
vehicles optimised for fuel efficiency, planning deliveries
and collections to reduce fuel use and using tracking to
enhance fleet utilisation.
283m
documents
scanned
• Lighting – we continue to migrate our storage facilities
to a mix of ultra-low wattage LED lighting, very slim T5
fluorescent tubes and PIR sensors.
We use a local bio-energy scheme in Suffolk to provide our
electricity needs at nearby sites.
Harrow Green continues its work with Planet First which
partners with the Eden Project and has achieved a 15.9%
reduction in its carbon footprint since 2015.
Harrow Green, IT Efficient and ITP Group provide ways for
our customers to contribute to charitable causes through
donations of furniture, IT equipment and payments in lieu of
cash-back programmes.
Investing in people
The more we grow, the more jobs we are able to create and
provide the appropriate support and development for our people.
We continue our involvement with the Growing Talent project
run by PricewaterhouseCoopers, helping unemployed
participants into work.
Community initiatives
Restore Scan was successful in their bid to oversee the records
management and storage of documents in the newly created
Nuclear and Caithness Archives, located in Wick, Scotland. As
part of the socioeconomic commitment to the area, Restore
employed local people, local contractors and engaged at all
times with the local community on the project.
Harrow Green provided over 2,500 tonnes of No Longer
Needed assets, under its Re-Fresh programme, to charities,
schools, community and voluntary groups and start-up
businesses in its area of operation.
When Crisis for Christmas asked for our help again, the Group
worked together to donate clothing, toiletries, food and other
items for their guests and Harrow Green provided transport to
help set up their facilities (see page 26).
Harrow Green also continued to provide its services free
of charge for small charities and community groups, when
possible. For example, Harrow Green provided moving crates
to the Nomad Cinema, whose distributable profits go to
charity, when it called for help.
IT EQUIPMENT
RECYCLING
STORE
WORKPLACE RELOCATION
TECHNOLOGY
RELOCATION
CARTRIDGE RECYCLING
SHRED
SCAN
RESTORE PLC > Annual Report and Accounts 17
Restore Records Management continues its
support of the Surrey Care Trust, which provides
learning, training, volunteering opportunities
and support for people who have been held back
through disadvantage and hardship, and the Willow
Foundation, which helps people aged 16 to 40 who
have been diagnosed with a life-threatening illness.
Restore Datashred continues to support the Woodland
Trust in its programme of planting tens of thousands of
trees, in addition to supporting tree conservation and
wildlife protection. Restore Datashred also supports a
number of regional hospices.
Employee initiatives
We believe in caring for our employees, the
communities in which we work and for everyone that
comes into contact with the organisation.
We encourage them to help in their communities
or support favourite charities and sponsor them
to take part in fund-raising and by giving them
time away from work to participate in events for
approved charities.
Our employees take part in a wide variety of
charitable and community initiatives, including
marathon runs. They also continue to raise funds for
a variety of causes including:
• Jeans for Genes
• NSPCC
• British Legion
• Pear Tree Specialist School
• Demelza, providing hospice care for children
• MacMillan Cancer Trust
• St Clare Hospice
• Smartworks
• Wear It Pink
• Help For Heroes
Where does all
the paper go?
We take boxes and sacks
of paper and then we
shred the contents.
What size it's shredded
to depends on the
customers' specification
for destruction.
We extract the dust
created, turn it into
paper briquettes and
add that to the shredded
materials.
We send it to paper
mills in the UK to be
recycled into all kinds
of paper goods.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 18
“We have a strong channel to market in the office
support services sector, supplying highly valued
services, often in areas where customers do not wish
to change suppliers. This provides good earnings
visibility, high barriers to entry, attractive margins
and significant scope to cross-sell all of the Group’s
services to existing customers.”
Chairman’s statement
Results
I am pleased to report another strong performance by your
Company. For the year to 31 December 2016, profit before tax,
exceptional items, amortisation, discontinued operations and
share-based payment charges was £23.0 million, a year-on-year
increase of 41% (2015: £16.3 million). Turnover was £129.4 million
(2015: £91.9 million), with a large part of the year-on-year increase
reflecting acquisitions made in both 2015 and 2016. Earnings
per share on an adjusted basis were up 15% at 17.9 pence (2015:
15.6 pence). The recommended final dividend is up 21% at 2.67p,
making a total dividend for the year of 4.0p, up 25%.
Profit before tax on discontinued operations, which is not
included above, was £9.3 million (2015: £0.2 million), primarily
reflecting the disposal of the Irish operations of Wincanton
Records Management.
Strategy
The areas in which we operate are coherent: Records
Management (RM), Shred and Scan are all elements of
Document Management. Together with Relocation, they share
a similar customer base within which all of our services are
generally procured by the same team or individual. We have
nationwide coverage and all of our businesses operate on
the same Customer Relationship Management system, which
further binds our businesses together and enables cross-selling
whose effectiveness can be constantly monitored. None of the
main competitors in each of our individual business streams
offer these other closely-related activities in a meaningful way,
giving us a unique proposition to our customers. Furthermore,
our focus on the UK market gives us the understanding of
our customers’ specific needs and the flexibility to adapt our
services to these needs.
During 2016, Restore became one of two UK market leaders in
key activities where we did not previously hold this position.
This was achieved in large part through the acquisition of PHS
Data Solutions (PHS DS) in August, which further consolidated
our position as one of the two main providers of RM services
in the UK but importantly added both scale and capability to
our shredding and scanning activities. In particular, it moved
Restore Shred from being sub-scale in the UK shredding market
to one of the two major operators. This is especially critical in
a business where profitability is closely linked to route density
such that scale, where operated soundly, becomes the key factor
in success.
The PHS DS acquisition was the largest of three major
acquisitions made in a two-year period, alongside Cintas UK
(acquired in October 2014, and comprising primarily of RM
and scanning) and Wincanton Records Management (acquired
in December 2015, and comprising primarily of RM).
These transactions, combined with several complementary
smaller acquisitions, have not only driven revenue, profit and
earnings per share, but have established your Company as a
leading operator in UK office services, where we are either the
market leader or number two in each of our main activities: RM,
Shred, Scan and Relocation.
We have a strong channel to market in the office support
services sector, supplying highly valued services, often in areas
where customers do not wish to change suppliers. This provides
good earnings visibility, high barriers to entry, attractive margins
and significant scope to cross-sell all of the Group’s services to
existing customers and it is an excellent platform for further
growth, both organically and by acquisition.
Trading
Our Document Management division performed well. Its
turnover was £90.1 million (2015: £54.7 million) and adjusted
operating profit was £22.0 million (2015: £15.1 million). The
core RM business continued to demonstrate the strength of
its financial model. Shred’s performance was transformed
following the integration in September of Restore Shred
into the PHS DS Datashred business, now known as Restore
Datashred. The combined business immediately moved to the
levels of profitability previously achieved by Datashred. Scan’s
performance improved significantly over the course of the year
as its new management team improved many of its operating
practices, such that it made a meaningful operating profit during
the period. We are pleased to have now fulfilled our strategic
objective of having substantial and highly attractive shredding
and scanning operations after several years of operating subscale
enterprises in these areas.
Our Relocation division traded satisfactorily overall. Turnover
was £39.3 million (2015: £37.2 million) and adjusted operating
profit was £4.8 million (2015: £4.1 million). Strong performances
in Harrow Green, the core office relocation business, and IT
Efficient, our IT recycling business, were offset by losses incurred
at ITP Group, our toner cartridge recycling business.
Overall operating margins across the Group remained steady at 19%
for the year (2015: 19%).
Corporate Transactions
As mentioned above the key transaction of the year was the
acquisition of PHS DS in August for a total consideration of
£83.1 million. This was funded by a combination of debt and equity.
The other corporate transaction during the year was the sale
for £27.7 million in March of the Irish assets of Wincanton
Records Management, part of the business we had acquired in
December 2015.
RESTORE PLC > Annual Report and Accounts 19
Revenue
(£'m)
41%
Adjusted Profit Before Tax*
(£'m)
41%
Dividend Per Share
(p)
25%
Adjusted Earnings Per Share*
(p)
15%
m
9
.
1
m
4
.
9
2
9
1
£
£
m
m
3
.
6
0
.
3
1
2
£
£
p
p
2
.
3
0
.
4
p
6
.
5
p
9
.
7
1
1
*
Before discontinued operations, exceptional items (including exceptional finance costs), amortisation of intangible assets and share-based payments charge.
There were no other acquisitions made during the year. Since the
year-end, we have made three acquisitions:
•
In January, we acquired the trade and assets of Reisswolf
Wales, a secure shredding business based in Welshpool, Wales
• Also in January, we acquired ID Secured Limited, trading as
Reisswolf London, a Bedfordshire-based secure shredding
business
•
In February, we acquired The ITAD Works Ltd, a Surrey-
based IT recycling company.
Funding
Net debt at the year-end was £72.3 million (2015: £60.6
million). The increase in net debt reflects the use of borrowings
to part-finance the acquisition of PHS DS, although the
quantum required was reduced by the funds received earlier
in the year from the Irish disposal. As part of the PHS DS
transaction, we increased our overall borrowing capacity to
£97.5 million from £80 million. We now have in place £67.5
million of Term Loans maturing in December 2020 and a 5-year
Revolving Credit Facility of £30 million.
The acquisition of PHS DS was also funded by the placing of
12.1 million shares at 290.0 pence per share. I believe that our
ability to raise such funding during the extreme uncertainty
immediately following the Brexit vote reflects the support that
the Company has generated amongst its financial stakeholders.
The prestigious AIM Company of the Year Award which we won
in October 2016 bears further testimony to this.
Dividends
Your Board is recommending a final dividend of 2.67p, payable
on 7 July 2017 to shareholders on the register on 9 June 2017.
The total dividend for the year is 4.0p, a 25% year-on-year
increase. It also represents a quadrupling of the dividend over
the last five years and reflects the Board’s firm intention to
follow a progressive dividend policy.
People
Our business has continued to grow significantly in recent years
and that is reflected in the size of our workforce. We now have
1,800 permanent employees, some of whom are part-time,
often to fit their personal circumstances, as well as temporary
staff for peak demand.
Restore wins Company
of the Year at the AIM
Awards 2016
The award was presented to
Charles Skinner by David Snell,
Partner and AIM Leader, PwC
and Chris Fielding, Head of
Corporate Finance,
W H Ireland.
For more information
please refer to our website
at www.restoreplc.com/
AIM_awards_2016
our customers. As part of this, we continue to operate on an
operationally and managerially decentralised basis so that our
people at all levels can continue to have a real impact on the
performance of their area of the business.
I have noted in previous years that as our Group increases
in scale, we are able to offer greater stability and career
opportunities for all our people. We are also in a position to
provide the support and development that is appropriate to
a larger company without losing the flexibility to treat people
as individuals. We look forward to developing this further in
2017 in key areas such as talent-spotting and management
succession planning at all levels of the business so that our
people can fulfil their potential within the Restore Group.
I thank all our people for their commitment over the last year
and look forward to them continuing to share in the success
of the Group. I also welcome the people who have joined us
through acquisitions made over the last year.
Outlook
The growth prospects in our RM business remain attractive.
We expect to continue to gain market share from our expanded
base in shredding and scanning, both organically and through
acquisition. In Relocation, we are focused on delivering further
growth in revenue and operating margins.
The current year has started well and we look forward to
delivering another year of strong progress in 2017.
As the business grows, it is important we remain committed
to the principle of locking power and responsibility together
at all levels within the business and letting our people get on
with their job with minimal interference. I believe this lies at
the heart of our current success as we are wholly dependent
on the abilities of our people and their commitment to serving
Sir William Wells
Chairman
22 March 2017
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 20
“ Through the acquisition of PHS Data Solutions, we
have transformed our previously sub-scale document
shredding business and significantly enhanced our
capability in scanning. Taken together with our existing
positions in records management and relocation,
Restore is now established as one of the two UK market
leaders in each of our main activities.”
Chief Executive’s statement
Document Management Division
Document Management increased revenue by £35.4 million
to £90.1 million. Adjusted operating profits increased by
£6.9 million to £22.0 million. The majority of the increase in
revenue derived from the acquisition of Wincanton Records
Management in December 2015 and the acquisition of PHS Data
Solutions (PHS DS) in August 2016. The decline in operating
margin reflects the higher percentage of revenues deriving from
activities other than records management.
Our Records Management business still comprises the bulk
of these results and it continued to perform robustly. Cost
savings in recently acquired businesses have been in line
with expectations at the time of acquisition. Net box growth,
excluding acquired boxes, was positive, although as expected
slower than in previous years. This primarily reflects the ongoing
exit of a major customer of the former Wincanton Records
Management of which we were aware at the time we acquired
the business. Overall, organic growth in revenue was 5 per cent.
The acquisition of Wincanton Records Management, where
occupancy rates at the time of acquisition were 69 per cent,
immediately lowered our overall capacity utilisation but provided
attractive new space especially in Rainham, Essex. We continue
to rationalise our estate, exiting less suitable premises when the
opportunity arises, such as our site in Charlton, south London,
where the relocation of more than 500,000 boxes is nearly
complete, and expanding existing sites where the cost of storage
is lower. As part of this, the newly-developed additional space
in our underground freehold site in Wiltshire is now coming on
stream. Capacity utilisation levels across our RM estate, which
currently comprises 45 sites, are now running at around 90 per
cent and further rationalisation of the estate will increase capacity
utilisation to what we consider to be optimal levels.
The integration of the RM business of PHS DS has been
substantially completed. Occupancy rates at PHS DS were
around 82 per cent at the time of acquisition, providing some
scope to improve margins through increased occupancy. Cost
savings are also being delivered in line with expectations such
that we are confident that margins in the acquired operations
will move towards those typically achieved in our RM operations.
Our RM business has grown substantially over the last two and a
half years with the acquisitions of Cintas UK, Wincanton Records
Management and PHS DS. While there are limited opportunities
for further acquisitions on this scale in RM, we expect to
continue to make further bolt-on acquisitions in due course.
Restore Shred, now rebranded as Restore Datashred, our
secure shredding and recycling business, has been transformed
by the acquisition of PHS DS. We have operated in this area for
over five years but had struggled to achieve appropriate levels of
profitability, primarily as we lacked the critical mass in a route-
based business. PHS DS’s largest business, PHS Datashred, was
one of the two market leaders in the UK shredding market and
its addition has increased our shredding revenues by more than
eight-fold, meaning that we are now significantly larger than the
third-largest operator in the UK market.
The former Restore Shred business had shown good year-on-
year growth in the eight months prior to the acquisition of PHS
Datashred but had not operated profitably over that period.
Since the acquisition, Restore Shred has been integrated into the
acquired business with significant cost savings. The profitability
of the combined business since integration has been in line with
that previously achieved by Datashred and we are confident that
we can deliver further improvements in operating margins from
these levels.
Restore Datashred now operates from 14 sites across the UK.
Beneath the two major operators, the UK shredding market
remains highly fragmented with a large number of smaller
independent operators. Given the advantages of scale in this
business, we view this as representing a significant opportunity
for the Group to consolidate this market through acquisition.
The two acquisitions made so far this year are indicative of our
ambition to further consolidate this market.
Restore Scan, our document scanning business, has been
transformed during the last two and a half years following
the acquisitions of the Cintas scanning business as part of the
Cintas UK transaction, Crimson, Data Imaging and Archiving
in August 2015 and, most recently, Capital Capture as part of
the PHS DS acquisition. We have been active in scanning for
10 years but, prior to these acquisitions, Restore Scan had
largely been operating as a one-site scanning bureau. Basic
document scanning has been a difficult and commoditised
market in recent years but there is significant demand for more
sophisticated forms of digitisation and other related services,
including managing customers’ digitisation programmes on-site,
data hosting and broader electronic document management.
This requires significant IT capability and resource such that a
successful, modern scanning operation requires an appreciable
overhead. We now have the scale and customer base to support
and develop such a resource.
The new management team at Restore Scan has achieved
much over the year. Its financial performance has improved
with 8 per cent organic growth and an increase in gross margin
(as expressed by direct costs as a percentage of revenue). Our
major seasonal contract for scanning exam papers was executed
successfully. Our large contract for the Nuclear Decommissioning
Authority is progressing well, including the recent opening of the
RESTORE PLC > Annual Report and Accounts 21
Key Performance Figures
Revenue
2016
Revenue
2015
Operating Profit
2016
Operating Profit
2015
Adjusted*
Adjusted*
Document
Management
Relocation
Head Office costs
£90.1m
£39.3m
–
£54.7m
£37.2m
–
Total
£129.4m
£91.9m
£22.0m
£4.8m
(£1.8m)
£25.0m
£15.1m
£4.1m
(£1.6m)
£17.6m
These are the key results from the ongoing
businesses which are included in the fuller
statement set out under ‘Profit Before Tax’
below.
* Before discontinued operations, exceptional items
(including exceptional finance costs), amortisation of
intangible assets and share-based payments charge.
Nucleus archiving centre in Wick, Scotland. We are managing
major scanning contracts for NHS Trusts, an area expected
to benefit from significant demand over the next few years.
Our business process outsourcing activities, which generally
comprise regular scanning for a broad range of customers, are
now making good progress. We have also invested significantly
in the business, including a revamped facility at Scan’s head
office in Manchester. We are now operating one of the two
largest scanning businesses in the UK which we are confident
provides an attractive platform for further growth.
Relocation
The Relocation division recorded adjusted operating profit
for the year of £4.8 million (2015: £4.1 million) on revenue of
£39.3 million (2015: £37.2 million). As noted in the Chairman’s
Statement, the overall good progress of the division, particularly
at Harrow Green and IT Efficient, was held back by the
underperformance of ITP Group.
Revenues in the core Harrow Green office relocation business
showed year-on-year growth. This was an encouraging
performance given an appreciable slowdown in relocation
activity in the two months preceding the Brexit vote at the end
of June and that our large contract providing services to the
Ministry of Defence was less active than in 2015. Operating
margins continued to improve, helped by small but effective
adjustments to our operating model in London, our single
largest market. General activity levels with our larger customers
remained steady overall. Major one-off projects undertaken
during the year included an office move for UBS as well as
Raytheon and Natixis, and the University of Birmingham library
move. Our most recent branch addition, in Croydon, traded
well in its first year of operation. GMS, our international moves
business, again showed a strong year-on-year improvement in
both revenues and contribution.
Relocom, our IT relocation business, had a satisfactory year. We
have acquired the outstanding minority stake in Relocom and
this should further strengthen its close working relationship with
Harrow Green.
IT Efficient, our IT recycling business, performed strongly with
both increased revenues and a significant improvement in
operating margins. We have been active in IT recycling for four
years and believe that it provides a good opportunity for growth.
In February 2017 we significantly expanded our presence in this
market with the acquisition of The ITAD Works, a Surrey-based
provider of IT asset recovery and recycling services.
IT EQUIPMENT
RECYCLING
STORE
weak during 2016 but we also failed to maintain and develop
relationships with key buyers. We have now appointed a new
management team and are focused on ensuring that the product
which we collect is attractive to the global remanufacturing
industry. We remain confident that toner cartridge recycling is
an activity that fits well with the rest of the Group’s offering and
that we can achieve an acceptable return on our investment.
Customers
As our business has grown, our customer base now
includes a high proportion of larger offices in the UK. This
can be seen from our current penetration of customers in
various groupings:
Sector
March 2017 March 2016
Top 100 UK legal practices
Top 50 UK accountancy companies
FTSE-100 companies
UK National Health Trusts
Local authorities in England,
Wales and Scotland
90%
78%
74%
73%
54%
72%
66%
60%
41%
41%
We seek to utilise this extensive customer base by maintaining
and developing our Group Customer Relationship Management
system which has been in place for many years. While our
operations are decentralised, it is a central tenet of our
Group that all of our business streams have access to all of
our Group’s customers through this system whose use is
mandatory across all of our sales teams. As the database
has grown, the reciprocal benefits of using the system have
become evident, helping to ensure compliance. This facilitates
cross-selling as most of our customers have a demand for most
of our services and the procurement person or team is often
the same.
Having a strong channel to market is critical to successful
growth in most commercial activity. It is particularly important
in business-to-business services where relationships and trust
take time to build. The strength of our customer relationships
also means we can recognise these customers’ evolving needs
and adapt our services to these needs. The depth and breadth
of our customer relationships represents an excellent base for
our Group’s long-term success.
ITP Group, our toner cartridge recycling business acquired in
July 2015, traded poorly in the year and recorded a loss on
lower revenues. Global demand for empty toner cartridges was
Charles Skinner
Chief Executive
WORKPLACE RELOCATION
TECHNOLOGY
RELOCATION
CARTRIDGE RECYCLING
SHRED
SCAN
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 22
“The net cash inflow from continuing operations
increased 64%, from £11.0 million to £18.0 million.
The improvement from the prior year has largely
been driven by increased levels of EBITDA and a
reduction in working capital requirements.”
Group Finance Director’s statement
Profit before tax
Profit before tax from continuing operations for the year
ended 31 December 2016 was £7.5 million (2015: £6.1 million).
The increase in profitability compared to the prior year is a
reflection of the following;
• The contribution from acquired businesses, most notably
Wincanton Records Management and PHS DS.
• A much improved performance in Restore Scan following a
challenging year in 2015.
These have been partially offset by higher levels of
exceptional costs and a weaker performance in ITP Group,
our toner recycling business.
Exceptional costs of £10.3 million (2015: £6.4 million)
include £6.2 million (2015: £5.1 million) of restructuring and
redundancy costs. During the year, most of the costs relating
to the rationalisation of Wincanton Records Management and
PHS DS were incurred. This primarily consisted of redundancy
payments, double-running costs of roles which were scheduled
for redundancy and double-running costs of properties prior to
rationalisation. The majority of these costs are incurred in the
12 months following an acquisition. Typically the restructuring
and redundancy costs incurred equate to approximately the
anticipated annualised cost saving. The second largest element
to exceptional costs was National Insurance payable on the
exercise of share options of £1.7 million, which was more
than offset in cash terms by the reduction in corporation tax
payments from the resulting tax deduction.
Amortisation of intangible assets for the year was £4.4 million
(2015: £2.6 million) with the increase attributable to the higher
carrying value of intangible assets.
Profit before tax from discontinued operations for the year
ended 31 December 2016 was £9.3 million (2015: £0.2 million).
This primarily reflects the gain on disposal of the Irish operations
of Wincanton Records Management in March 2016. The net
effect of this disposal was to rationalise the Wincanton Records
Management acquisition down to the UK operations where
the benefits of integration with Restore would be significantly
greater, whilst materially reducing the overall financial outlay.
Due to the one-off nature of exceptional costs and the non-
cash element of certain charges, the Directors believe that an
adjusted measure of profit before tax and earnings per share
provides shareholders with a more appropriate representation
of the underlying earnings derived from the Group’s business.
The items adjusted for in arriving at that underlying adjusted
profit before tax are as follows:
Continuing operations
Profit before tax
Share-based payments charge
Exceptional items
Amortisation of intangible assets
Exceptional finance costs
Adjusted profit before tax –
continuing operations
2016
£'m
7.5
0.8
10.3
4.4
–
23.0
2015
£'m
6.1
0.9
6.4
2.6
0.3
16.3
Reconciliation of Reported Operating Profit to
Adjusted Operating Profit and Adjusted EBITDA
Continuing operations
Operating profit
Share-based payments charge
Exceptional items
Amortisation of intangible assets
Adjusted operating profit
Depreciation
Adjusted EBITDA
Earnings Per Share (EPS)
Basic adjusted earnings per share
from continuing operations
Total basic earnings per share
Basic earnings per share from
continuing operations
2016
£'m
9.5
0.8
10.3
4.4
25.0
4.3
29.3
2015
£'m
7.7
0.9
6.4
2.6
17.6
2.8
20.4
2016
2015
17.9p
17.8p
15.6p
7.2p
10.3p
7.0p
Basic adjusted earnings per share are calculated as adjusted
profit for the year less standard tax charge divided by the
weighted average number of shares in issue in the year.
RESTORE PLC > Annual Report and Accounts 23
Key Performance Indicator
Revenue
Adjusted operating profit
Operating cash flow before
financing costs and tax
2016
£'m
129.4
25.0
18.2
2015
£'m Analysis
91.9
17.6
Year-on-year change in revenues analysed by segment (see note 4)
Year-on-year change in adjusted operating profit analysed by segment (see note 4)
11.0 Operating cash flow generated in 2016 increased due to higher levels of
profitability, lower working capital requirements and increased non cash
charges to the income statement.
Bank interest cost
1.8
1.2
Year-on-year change in cost of Group finance. Finance costs in the year
remained increased as a result of higher levels of net debt.
Net debt
72.3
60.6
Year-on-year change in bank debt, which increased to fund the acquisitions of PHS DS
Basic earnings per share reflect the actual tax charge. Basic
earnings per share from continuing operations exclude the gain
on disposal of Wincanton Ireland noted above.
Exceptional Costs
Acquisition – transaction costs
Acquisition – box relocation and
transport costs
Restructuring and redundancy costs
Other exceptional
Total
2016
£'m
1.2
0.4
6.2
2.5
10.3
2015
£'m
0.4
0.1
5.1
0.8
6.4
As mentioned above, the integration of acquisitions remains
the key component of exceptional costs. In the year, the Group
undertook the bulk of the restructuring on both the Wincanton
Records Management and PHS DS acquisitions, the two largest
acquisitions Restore has made. The Wincanton Records
Management integration is now largely complete and the PHS
DS integration is proceeding to plan.
Transaction costs include stamp duty costs and transitional
service arrangement fees, in addition to the cost of legal and
professional fees incurred as part of the acquisitions.
Box relocation and transport costs include the cost of uplifting
boxes to existing facilities and the movement of boxes from
facilities which closed as result of acquisitions. In the period
the majority of the cost in this area was a result of the transfer
of boxes from the Cintas Charlton site to existing Restore sites
ahead of the lease end in June 2017.
Restructuring and redundancy costs have increased to
£6.2 million in 2016. As noted above these primarily relate to
the Wincanton Records Management and PHS DS acquisitions
and include:
• The cost of duplicated staff roles during the integration and
restructuring period.
SCAN
• The redundancy cost of implementing the post completion
staff structures.
•
IT costs associated with the wind down of duplicated IT
systems and the transfer across to the destination systems.
• Property costs associated with sites which are identified
at the point of acquisition as being superfluous to ongoing
requirements and where a credible exit strategy is clear to
management.
Other exceptional costs include £1.7 million of National
Insurance costs on the exercise of options. The second
element of other exceptional costs is a fixed asset write down
of £0.8 million resulting from the integration of Restore Shred
into PHS DS which has given rise to the closure of a number
of the Restore Shred depots and the replacement of the
operational IT system.
STORE
Interest
Net finance costs amounted to £2.0 million (2015: £1.3 million)
which reflects the increased average levels of debt as a result
of acquisitions.
Taxation
UK Corporation Tax is calculated at 20% (2015: 20.25%) of
the estimated assessable profit/(loss) for the year. The UK
Corporation Tax rate remained at 20% throughout the year.
The rate will reduce to 19% on 1 April 2017 falling further to
17% on 1 April 2020; accordingly, these rate reductions have
been reflected in the deferred tax balance which forms part of
the statement of financial position.
WORKPLACE RELOCATION
IT EQUIPMENT
RECYCLING
TECHNOLOGY
RELOCATION
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8bn
pages
shredded
CARTRIDGE RECYCLING
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 24
Operational KPIs, managed at executive level,
vary according to business stream and can include:
• Customer satisfaction
• Sales volumes
• Zero waste to landfill
• Customer retention
• Stock volumes
• Staff turnover
• Cross-sell volumes
• CO2 emissions
• CO2 footprint
Group Finance Director’s statement continued
Statement of Financial Position
Net assets increased to £152.1 million (2015: £104.7 million)
primarily due to the acquisition of PHS DS and the placing of
shares. Goodwill and intangibles at 31 December 2016 were
£190.3 million (2015: £118.6 million).
Net proceeds from the sale of the Irish operations of
Wincanton Records Management were £27.4 million. The cash
received was used to provide headroom on the existing bank
facilities which were subsequently deployed as part of the
acquisition of PHS DS.
Property, plant and equipment totalled £47.6 million (2015:
£37.4 million), comprising the freehold underground storage
facilities in Wiltshire, storage racking, operational equipment,
vehicles and computer systems. The development of additional
storage space in the underground facility has continued in
2016 following the completion of the chamber that was being
developed throughout 2015. The viability of the final chamber
has been confirmed and development is underway with sections
coming on stream during 2017.
Cash Flow
The net cash inflow from continuing operations increased 64%
to £18.0 million (2015: £11.0 million). The improvement from
the prior year has been largely driven by increased levels of
profitability and an increase of £4.0 million in non-cash charges
in the income statement.
Net working capital usage in the year was £1.8 million which
includes:
• Working capital required for the Wincanton Records
Management and PHS DS acquisitions. The structure of both
these transactions was such that the consideration paid
was reduced by the estimated amount of working capital
required post completion.
• Payments against property provisions of £2.0 million.
This includes rent and rates on the Cintas Charlton site of
£1.1 million. The lease on the Cintas Charlton property
comes to an end in June 2017 at which point the original
£2.5 million provision against the property, funded by a
payment from Cintas at the point of acquisition, will have
been fully utilised.
• These outflows have been largely offset by a strong
performance by the core business in managing the
working capital cycle. This is most notable in debtors,
where the both accrued income and other receivables have
been reduced.
Capital expenditure totalled £5.2 million (2015: £4.0 million)
following the continued development of additional space in the
underground storage facility and our other storage facilities.
We have also continued to invest in our scanning business with
a new head office in Manchester.
Net Debt
Net debt at the end of the year was £72.3 million (2015: £60.6
million) reflecting the additional debt taken on to fund the
acquisition of PHS DS which was partially funded through
a placing of shares raising £34.2 million. As part of the
acquisition of PHS DS the Group drew down on an optional
£20.0 million additional term loan that was built into the
existing loan agreement. Facilities at the end of the period
totalled £97.5 million comprising a £67.5 million of term
loans and a £30.0 million revolving credit facility. Scheduled
repayments total £32.5 million against the term loans before a
final settlement payment of £35 million in 2020. The Group has
sufficient headroom on its facilities at the end of the period to
continue to fund smaller acquisitions as part of its strategy.
Principal Risks and uncertainties
Please refer to the table on page 25.
Key Performance Indicators (‘KPIs’)
The Group uses many different KPIs at an operational level
which are specific to the business and provide information to
management. At an executive level, a selection of operational
KPIs, which allow a relevant and robust review of operational
performance, are considered with operational management
on a monthly basis. The board also relies on KPIs that focus on
the financial performance of the Group. The table on page 23
shows the main KPIs used to manage the Group’s performance
during the year.
The non-financial indicators that are regularly monitored are
customer satisfaction and retention as well as staff turnover
ratios. Customer attrition rates are very low, as the business has
strong and long-term relationships and a high level of customer
satisfaction. The Group has a strong team of experienced and
dedicated staff and staff turnover rates are low.
Adam Councell
Group Finance Director
RESTORE PLC > Annual Report and Accounts 25
All business streams maintain Health & Safety KPIs
(see page 14 for more information).
Principal Risks and Uncertainties
The management of the business and the execution of the Group’s strategies are subject to a number of key risks. The financial
risks the Group faces have been considered and policies have been implemented to best deal with each risk. The Risk Committee,
created by the Group Board to consider the range of risks to the Group, includes senior management from all the business
streams in addition to Executive and Non-Executive Directors.
The three most significant risks to the Group are considered to be liquidity risk, finance cost risk and customer relationship risk.
The Group is primarily based in and operates within the United Kingdom and, therefore, the direct exposure to exchange risk is
considered to be small.
Risk
Exposure
Mitigation
Movement
Liquidity
Finance
cost
The year end debt was £72.3m (2015: £60.6m)
net of cash. Overall debt included £86.0m
of interest bearing loans and borrowings
plus £0.5m of overdrafts (see note 18)
(2015: £68.5m of interest bearing loans and
borrowings plus £1.4m of overdrafts).
The Group pays finance costs on its bank
facilities. The bank facilities finance cost is a
variable cost linked to LIBOR plus a margin.
The average finance cost on bank facilities for
the Group in 2016 was 2.5% (2015: 2.7%).
Net debt is monitored on a daily basis and
banking facilities are reviewed against future
expected cash flow movements to ensure
that adequate facilities are in place.
The potential exposure to LIBOR movements
is deemed acceptable given the current and
anticipated future levels of debt.
Customer
relationship
The Group has commercial relationships with
in excess of 20,000 business customers. The
largest customer accounts for less than 3%
of Group revenue, with the majority of large
customers tied into longer term contracts.
Attrition rates are low and relationships are
strong. Due to the relatively low revenue
concentration of our largest customers
the perceived customer relationship risk is
deemed to be low.
Key
personnel
It is likely that changes to members of the
senior management team might impact
on the Group’s ability to perform to the
expectations within its strategy.
The Board ensures that the management
team is appropriately rewarded for its efforts
and that succession plans are currently being
implemented across key positions in each of
the businesses.
Health &
Safety
As many of the Group’s operations involve
physical labour, use of machinery and
transport, there is potentially a high exposure
to accidents, including RIDDOR incidents.
The Group has well established training,
accident reporting procedures, and processes in
place to mitigate such risks. These are overseen
by the Risk Committee and Group Board.
Legislative
The Group is exposed to changes in
government legislation.
The Group has systems and procedures
in place to ensure compliance with, and
to manage the impact of changes in,
Government legislation such as agency worker
regulations, vehicle operating procedures and
environmental requirements.
The Strategic report on pages 5 to 25 was approved by the Board of Directors on 22 March 2017 and signed on its behalf by:
Charles Skinner
Chief Executive
Adam Councell
Group Finance Director
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 26
Community
CRISIS AT CHRISTMAS
Image credit: Sam Mellish
Once again, Sharon Sales at Harrow Green coordinated our Group’s efforts in supporting the Crisis at Christmas
campaign to help homeless people throughout the country. We provided transport and staff to help set up facilities
as well as holding a Group-wide collection for clothing, linens, toiletries and food to be distributed to their guests.
Suzie Dudley, Crisis Transport Services Coordinator, said
“... Your donations were incredible and helped provide some gifts to our guests. Much needed clothing and toiletries
meant they could leave Crisis at Christmas with a little goodie bag.
Your help with providing drivers and trucks was invaluable too. For set up, it meant we were able to efficiently setup
our 10 centres and ensure we were ready to welcome guests on time and ready for the Christmas celebrations. For
close down, it made a huge difference having Harrow Green there, we packed up and moved everything back to our
warehouse in record time this year, earlier than any previous year!
Words really cannot express how grateful we are for all the hard work and effort by Harrow Green employees for
collecting items and driving for us. Also to you for your excellent coordination getting everything to us and arranging
vehicles and drivers to support us with our huge operation that is setting up and closing down 10 centres across
London, that welcome nearly 4000 guests during Christmas week.
Thank you, thank you, thank you!”
For further information on Crisis and its work go to www.crisis.org.uk
RESTORE PLC > Annual Report and Accounts 27
GOVERNANCE &
FINANCIAL STATEMENTS
Governance
28
Board of Directors
30
Directors’ report
32
Corporate governance statement
34
Directors’ remuneration report
Statement of Directors’ responsibilities 37
38
Independent auditor’s report
Financial statements
Consolidated statement
of comprehensive income
Consolidated statement
of changes in equity
Consolidated statement
of financial position
Consolidated statement of cash flows
Notes to the Group financial statements
Company statement of changes in equity
Company statement of financial position
Company statement of cash flows
Company accounting policies
Notes to the Company
financial statements
Other information
Notice of Annual General Meeting
Officers and advisers
Trading record
Financial calendar
39
40
41
42
43
71
72
73
74
75
87
93
93
93
ARMED FORCES COVENANT
In 2016 Harrow Green signed the Armed Forces Covenant, a
pledge that we acknowledge and understand that those who
serve or who have served in the armed forces, and their families,
should be treated with fairness and respect in the communities,
economy and society they serve with their lives.
The Group as a whole consider that it is appropriate to
demonstrate our support of the Covenant and promote
awareness within the Group, encourage support among our
employees, and to work with agencies to identify suitable
recruitment opportunities within the Group.
For further information on the Armed Forces
Covenant go to www.armedforcescovenant.gov.uk
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 28
Board of Directors
Sir William Wells
Aged 77, Non-Executive Chairman
Charles Skinner
Aged 56, Chief Executive
IT EQUIPMENT
RECYCLING
Adam Councell
Aged 38, Group Finance Director
STORE
Charles Skinner was appointed Chief
Executive of the Group on 8 June 2009.
Charles was previously Chief Executive
of Johnson Service Group plc and
Brandon Hire plc, prior to which he
was at SG Warburg, 3i plc and Editor
of Management Today. Charles has 20
years’ experience as Chief Executive of
quoted companies, all operating in the
business to business service sector.
Adam Councell was appointed Group
Finance Director on 18 June 2012.
Previously, he worked at Whitbread plc
before moving to Milward Brown Precis,
a subsidiary of WPP plc. Subsequently
joining Rentokil Initial plc, Adam was
Commercial Director of the Business
and Industry division, Finance Director
of Catering and Hospitals division and
latterly UK Business Services division.
Sir William Wells was appointed
Chairman of the Board on 8 June 2009.
His career encompasses senior positions
in public health, commercial property,
insurance and business services,
including Chairman of Chesterton
Chartered Surveyors for 34 years,
overseeing their transition to a listed
company. His experience includes Non-
Executive Director roles with AMP (UK),
Henderson Group plc and Exel plc. He
is Chairman of ADL plc, CMG plc, Pure
Sports Medicine and The Practice Group.
He was the Chairman of the Department
of Health’s Commercial Advisory Board
and NHS Appointments Commission.
WORKPLACE RELOCATION
TECHNOLOGY
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CARTRIDGE RECYCLING
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RESTORE PLC > Annual Report and Accounts 29
IT EQUIPMENT
RECYCLING
STORE
Stephen Davidson
Aged 61, Non-Executive Director
James Wilde
Aged 63, Non-Executive Director
Sharon Baylay
Aged 48, Non-Executive Director
Stephen Davidson joined the Board on
8 January 2014. He is Non-Executive
Chairman of Datatec Limited, PRS
for Music and Actual Experience
plc. Stephen is also Non-Executive
Director of Informa plc and Jaywing plc.
Formerly, Stephen was Chief Financial
Officer then Chief Executive officer
of Telewest Communications plc and
Vice Chairman of investment banking
at WestLB Panmure. Stephen is also
Chairperson of the Group’s
Audit Committee.
James Wilde joined the Board on
1 June 2014. He has previously been
Non-Executive Chairman of several
support services and manufacturing
businesses, including NSL Services
Group, Deb Group Limited, Zenith
Vehicle Contracts Group Limited, ATPI
Limited and Allied Glass Group Limited.
He was on the Board of the Navy Army
and Air Force Institutes for six years
and spent much of his executive career
at Securiguard Group plc and Rentokil
Initial plc, where he was Chief Executive.
Sharon Baylay joined the Board on
10 September 2014. She is a Non-
Executive Director of ITE Group plc and
Market Tech Holdings Ltd and Chairman
of Exclaimer Ltd. She was Marketing
Director and main Board Director of
the BBC, responsible for Marketing
Communications and Audiences, and
spent much of her career at Microsoft,
as Board Director of Microsoft UK and
Regional General Manager of MSN
International. Sharon is also Chairperson
of the Group’s Risk Committee.
WORKPLACE RELOCATION
TECHNOLOGY
RELOCATION
CARTRIDGE RECYCLING
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OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 30
Directors’ report
The Directors submit their report and the financial statements
of Restore plc for the year ended 31 December 2016.
Restore plc is a public limited company quoted on AIM,
incorporated and domiciled primarily in the United Kingdom
where the vast majority of trading occurs.
Results
The profit before tax for the year ended 31 December 2016 for
continuing operations was £7.5 million (2015: £6.1 million).
Dividends
The Directors recommend a final dividend for the year of 2.67
pence per share payable on 7 July 2017 (2015: 2.2 pence per
share). An interim dividend of 1.33 pence was paid during the
year (2015: 1.0 pence). The estimated final dividend to be paid
is £3.0 million (2015: £2.1 million).
Principal Activities
The principal activities of the Group during the year were that
of Document Management and Relocation.
Business Review and Future Developments
This is dealt with in the Strategic report on pages 5 to 25.
Directors
The following Directors have held office during the year:
Sir William Wells (Chairman)
Charles Skinner (Chief Executive)
Adam Councell (Group Finance Director)
Stephen Davidson (Non-Executive Director)
James Wilde (Non-Executive Director)
Sharon Baylay (Non-Executive Director)
Directors’ remuneration, share options, long-term executive
plans, pension contributions and benefits are set out in the
Directors' remuneration report on pages 34 to 36.
The Company maintains liability insurance for its Directors
and Officers.
Share Capital
Full details of the authorised and issued share capital of the
Company are set out in note 23 to the financial statements.
Substantial Shareholdings
At 17 March 2017 the Company had been notified of the
following interests amounting to 3% or more of the Company’s
issued share capital:
Hargreave Hale
Octopus Investments
BlackRock Investment
Management (UK)
Old Mutual Global Investors
Slater Investments
Franklin Templeton
Investment Management (UK)
Charles Stanley
& Co Limited
Number of 5p
ordinary shares
13,197,778
10,879,907
9,799,787
7,119,942
6,697,181
4,554,600
3,788,538
Percentage of
issued share
capital
11.8%
9.7%
8.7%
6.4%
6.0%
4.0%
3.4%
Property Values
The Directors are aware that a significant difference may exist
between market and book values, as shown in the Consolidated
statement of financial position at 31 December 2016, for the
Group’s freehold properties, all of which have a market value in
excess of the book value recorded. The Directors believe that
this excess is in the region of £7.4 million.
Employees
The Group’s people are its most important asset. Our policy
is to employ the best people irrespective of race, gender,
nationality, disability or sexual orientation. Consultation with
employees or their representatives occurs at all levels, with
the aim of ensuring their views are taken into account when
decisions are made that are likely to affect their interests.
Disabled Employees
Applications for employment by disabled persons are given full
and fair consideration for all vacancies, having regard to their
particular aptitudes and abilities. In the event of an employee
becoming disabled, every effort is made to retain them in order
that their employment with the Group may continue. It is the
policy of the Group that training, career development and
promotion opportunities should be available to all employees.
RESTORE PLC > Annual Report and Accounts 31
Environmental Policy
Maintaining and improving the quality of the environment in
which we live is an important concern for the Group, our staff,
customers, suppliers, sub-contractors and communities. We
have adopted high standards of environmental practices and
aim to minimise our impact on the environment wherever this
is practical. In particular, we comply with, and endeavour to
exceed the requirements of all laws and regulations relating to
the environment.
Health and Safety
The Group recognises the importance of maintaining high
standards of health and safety for everyone working within
our business and also for anyone who may be affected by
our business. Health and safety is a particular concern to our
customers. Consequently, both of our operating segments have
appointed Health and Safety Officers.
The Group’s operations report to the Board on a monthly basis
includes a section on all health and safety matters.
Financial Risk Management
Information in respect of the financial risk management
objectives and policies of the Group, is contained in note 3, and
detailed in the Group Finance Director’s statement.
Political and Charitable Donations
Donations of £10,000 were made by the Group for charitable
purposes during the year (2015: £22,000). The Group does not
make political donations.
Statement, as to Disclosure of Information to Auditors
The Directors in office on 22 March 2017 have confirmed that,
as far as they are aware, there is no relevant audit information
of which the auditor is unaware. Each of the Directors have
confirmed that they have taken all steps that they ought to
have taken as Directors in order to make themselves aware of
any relevant audit information and to establish that it has been
communicated to the auditor.
Annual General Meeting
The notice of the Annual General Meeting to be held on 22 May
2017 is set out on pages 87 to 90.
Post Balance Sheet Events
Details of post balance sheet events are given in note 35 of the
financial statements.
Sarah Waudby
Company Secretary
22 March 2017
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
32
Corporate governance statement
The policy of the Board is to manage the affairs of the Company having regard to Quoted Company Alliance. The Directors support
the principles underlying these requirements insofar as is appropriate for a group of the size of Restore plc.
The Board of Directors
The Group is led and controlled by the Board comprising two Executive Directors and four Non-Executive Directors.
Board meetings are held on a regular basis and no significant decision is made other than by the Directors.
All Directors participate in the key areas of decision-making, including the appointment of new directors. There is no separate
Nomination Committee due to the current size of the Board. The Board receives timely information on all material aspects of the
Group to enable it to discharge its duties.
All Directors submit themselves for re-election at the Annual General Meeting at regular intervals. The following were Directors
during the year:
Number of Board meetings
attended during the year
ended 31 December 2016
Total 10
Number of Audit Committee meetings
attended during the year
ended 31 December 2016
Total 2
Number of Remuneration Committee
meetings attended during the year
ended 31 December 2016
Total 1
Executive Directors
Charles Skinner
Adam Councell
Non-Executive Directors
Sir William Wells
Stephen Davidson
James Wilde
Sharon Baylay
10
10
10
10
10
10
2
2
2
2
2
2
–
–
1
1
1
1
The Executive Directors are not members of the Audit Committee or Remuneration Committee but may attend the meetings as a
guest of the Chair of the committee.
Directors’ Remuneration
The Company has an established Remuneration Committee.
Details of the remuneration of each Director are set out in the Remuneration report on pages 34 to 36.
Accountability and Audit
The Company has established an Audit Committee comprising the Chairman and Non-Executive Directors who are responsible for
reviewing the scope and results of the audit, its cost effectiveness and the independence and objectivity of the auditor.
Relations with Shareholders
The Chief Executive and the Group Finance Director are the Company’s principal contact for investors, fund managers, the
press and other interested parties. At the Annual General Meeting, investors are given the opportunity to question the
entire Board.
RESTORE PLC > Annual Report and Accounts 33
Internal Control
The Board acknowledges its responsibility for establishing and monitoring the Group’s systems of internal control. Although no
system of internal control can provide absolute assurance against material mis-statement or loss, the Group’s systems are designed
to provide the Directors with reasonable assurance that problems are identified on a timely basis and dealt with appropriately.
The key procedures that have been established and which are designed to provide effective control are as follows:
Management structure – the Board meets regularly to discuss all issues affecting the Group.
Investment appraisal – the Group has a clearly defined framework for investment appraisal and approval is required by the Board
where appropriate.
The Board regularly reviews the effectiveness of the systems of internal control and considers the major business risks and the
control environment. No significant control deficiencies have come to light during the year and no weakness in internal financial
control has resulted in any material losses, contingencies or uncertainties which would require disclosure as recommended by the
Turnbull guidance for Directors on reporting on internal financial control.
The Board considers that, in light of the control environment described above, there is no current requirement for a separate
internal audit function. The Board will continue to review the need to put in place an internal audit function.
Going Concern
As more fully explained in note 2, having made appropriate enquiries and having examined the major areas which could affect the Group’s
financial position, the Directors are satisfied that the Group has adequate resources to continue in operation for the foreseeable future.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 34
Directors’ remuneration report
Remuneration Committee
The Company has an established remuneration committee consisting of the Chairman and the Non-Executive Directors. The
Chairman and Non-Executive Directors are responsible for the consideration and approval of the terms of service, remuneration,
bonuses, share-based incentives and other benefits of the Executive Directors. All decisions made are after giving due consideration
to the size and nature of the business and the importance of retaining and motivating management. The committee meets at least
once a year and at other times as appropriate.
Directors’ Contracts and Letters of Appointment
The Company’s policy on Executive Directors’ service contracts is that, in line with the best practice provisions of the UK Corporate
Governance code, they are to be terminable by the Company on 12 or 6 months notice.
Executive Directors
Charles Skinner
Adam Councell
Date of contract
Notice period
8 June 2009
1 May 2012
12 months
6 months
The Non-Executive Directors do not have service contracts but have letters of appointment.
Non-Executive Directors
Sir William Wells
Stephen Davidson
James Wilde
Sharon Baylay
Date of Letter
Notice period
8 June 2009
8 January 2014
28 March 2014
12 August 2014
3 months
3 months
3 months
3 months
Directors’ Emoluments
The aggregate emoluments of the Directors of the Company were:
£’000
Executive Directors
Charles Skinner
Adam Councell
Non-Executive
Directors
Sir William Wells
Stephen Davidson
James Wilde
Sharon Baylay
Salary &
Fees
Benefits
Pension
costs
Subtotal
2016
Long-term
incentives
vesting
Total
2016
Salary &
Fees
Benefits
Pension
Costs
Total
2015
475
227
70
45
40
42
899
4
1
–
–
–
–
5
–
25
–
–
–
–
479
253
6,706
888
7,185
1,141
70
45
40
42
2,610
2,680
–
–
–
45
40
42
432
181
65
40
35
35
25
929
10,204
11,133
788
4
1
–
–
–
–
5
–
21
–
–
–
–
436
203
65
40
35
35
21
814
RESTORE PLC > Annual Report and Accounts 35
Directors’ Interests in Shares and Options
The beneficial interests of the Directors who were in office at 31 December 2016 in the shares of the Company (including family
interests) were as follows:
Charles Skinner
Adam Councell
Sir William Wells
Stephen Davidson
James Wilde
Sharon Baylay
Number of ordinary shares of
5p each 31 December 2016
Number of ordinary shares of
5p each 31 December 2015
1,098,792
145,623
352,553
–
–
–
541,415
–
352,553
–
–
–
As at 17 March 2017 there has been no change in any of the above holdings.
The Directors believe that the success of the Group will depend to a high degree on the future performance of the management
team. The Company has established share-based incentive arrangements which will reward the Directors when shareholder value is
created, thereby aligning the interests of the management directly with those of the shareholders.
Restore Share-based Incentives
Employee Share Options
The following options have been granted to employees within the Group during the year:
Date of Grant
16 June 2016
8 September 2016
10 October 2016
Granted
250,000
300,000
150,000
Number of ordinary
shares of 5p each
Exercise price
Date from which
exercisable
Expiry date
250,000
300,000
150,000
311.0p
347.0p
337.0p
16 June 2019
16 June 2026
8 September 2019
8 September 2026
10 October 2019
10 October 2026
The share options granted have no performance conditions. See note 29 for details of the grant.
The closing price for Restore plc shares at 31 December 2016 was 377.5 pence. During the year the market price of the Company’s
ordinary shares ranged between 254.0 pence and 381.5 pence.
The Directors’ interests in the employee share option scheme are as follows:
Charles Skinner
Adam Councell
Sir William Wells
Number of ordinary shares of
5p each 31 December 2016
Number of ordinary shares of
5p each 31 December 2015
–
–
–
2,699,611
400,000
1,053,389
On 11 May 2016 the Directors exercised all of the share options granted to them in 2012 and prior years. The options were
net-settled via a placing at 305.0 pence per share which resulted in 3,916,015 ordinary shares of 5.0 pence being issued (2015: nil).
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 36
Directors’ remuneration report continued
Restore Executive Incentive Plan
The Company has an Executive Incentive Plan (EIP), details of which are given in note 29. The Directors’ interests in the EIP are as
follows:
Charles Skinner
Adam Councell
Number of performance units
31 December 2016
Number of performance units
31 December 2015
–
–
66,667
16,667
On 26 November 2016 the performance conditions under the EIP were met and the performance units held by the Directors were
converted into nil-cost options which were granted on 5 December 2016 as set out in the table below. All of these options were
held at 31 December 2016.
Number of nil-cost options
Date from which exercisable
Expiry Date
1,759,073
879,536
879,536
586,358
293,179
293,178
5 December 2016
26 November 2017
26 November 2018
5 December 2016
26 November 2017
26 November 2018
26 November 2023
26 November 2023
26 November 2023
26 November 2023
26 November 2023
26 November 2023
Charles Skinner
Charles Skinner
Charles Skinner
Adam Councell
Adam Councell
Adam Councell
By order of the Board
Stephen Davidson
Chairman of the Remuneration Committee
22 March 2017
RESTORE PLC > Annual Report and Accounts 37
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Strategic report and the Directors’ report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and Company financial statements for each financial year. The Directors are
required by the AIM Rules of the London Stock Exchange to prepare Group financial statements in accordance with International
Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and have elected under company law to prepare the
Company financial statements also in accordance with IFRS.
The Group financial statements are required by law and IFRS adopted by the EU to present fairly the financial position and
performance of the Group; the Companies Act 2006 provides in relation to such financial statements that references in the relevant
part of that Act to financial statements giving a true and fair view are references to their achieving a fair presentation.
Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and the Company and of the profit or loss of the Group for that period.
In preparing each of the Group and Company financial statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• for the Group and Company financial statements, state whether they have been prepared in accordance with IFRS adopted by
the EU; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and the
Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s and the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and the Company
and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the Group and the Company and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Restore
plc website (www.restoreplc.com).
Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation
in other jurisdictions.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 38
Independent auditor’s report to the
Members of Restore plc
We have audited the Group and parent Company financial statements (“the financial statements”) on pages 39 to 86. The financial
reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union and, as regards the parent Company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
In our opinion
• the financial statements give a true and fair view of the state of the Group’s and the parent’s affairs as at 31 December 2016 and
of the group’s profit for the year then ended;
• the Group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;
• the parent financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as
applied in accordance with the Companies Act 2006; and
• the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on the Financial Reporting Council’s website at
http://www.frc.org.uk/auditscopeukprivate
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Strategic report and the Directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements and, based on the work undertaken in the course of our audit,
the Strategic report and the Directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have
not identified any material misstatements in the Strategic report or the Directors’ report.
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if,
in our opinion:
• adequate accounting records have not been kept by the parent Company, or returns adequate for our audit have not been
received from branches not visited by us; or
• the parent Company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of Directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Respective responsibilities of Directors and auditor
As more fully explained in the Directors’ Responsibilities Statement set out on page 37, the Directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and
express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and
Ireland). Those standards require us to comply with the Auditing Practices Board’s (APB’s) Ethical Standards for Auditors.
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for
the opinions we have formed.
MARK HARWOOD (Senior Statutory Auditor)
For and on behalf of RSM UK Audit LLP, Statutory Auditor
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
22 March 2017
RESTORE PLC > Annual Report and Accounts
39
Consolidated statement of comprehensive income
For the year ended 31 December 2016
Year Ended 31 December 2016
Year Ended 31 December 2015
Before
exceptional
items
£’m
Exceptional
items
(note 5)
£’m
After
exceptional
items
£’m
Before
exceptional
items
£’m
Exceptional
items
£’m
After
exceptional
items
£’m
Note
Revenue
Cost of sales
Gross profit
Administrative expenses
Amortisation of intangible assets
Operating profit
Finance costs
Profit before tax
Income tax credit/(charge)
Profit and total comprehensive income
for the year from continuing operations
Profit from discontinued operations
Attributable to owners of the parent
Earnings per share attributable
to owners of the parent (pence)
4
6
6
13
6
7
8
4
9
129.4
(81.6)
47.8
(23.6)
(4.4)
19.8
(2.0)
17.8
1.2
19.0
7.7
26.7
–
–
–
(10.3)
–
(10.3)
–
(10.3)
1.9
(8.4)
–
(8.4)
Total
– Basic
– Diluted
Continuing operations
– Basic
– Diluted
Discontinued operations
– Basic
– Diluted
129.4
(81.6)
47.8
(33.9)
(4.4)
9.5
(2.0)
7.5
3.1
10.6
7.7
18.3
17.8p
16.9p
10.3p
9.8p
7.5p
7.1p
91.9
(59.0)
32.9
(16.2)
(2.6)
14.1
(1.3)
12.8
(1.6)
11.2
0.2
11.4
–
–
–
(6.4)
–
(6.4)
(0.3)
(6.7)
1.3
(5.4)
–
(5.4)
91.9
(59.0)
32.9
(22.6)
(2.6)
7.7
(1.6)
6.1
(0.3)
5.8
0.2
6.0
7.2p
6.8p
7.0p
6.6p
0.2p
0.2p
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 40
Consolidated statement of changes in equity
For the year ended 31 December 2016
Balance at 1 January 2015
Profit for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares during the year
Issue costs
Dividends
Transfers (note 26)
Share-based payments charge
Deferred tax on share-based payments
Balance at 31 December 2015
Balance at 1 January 2016
Profit for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares during the year
Issue costs
Dividends
Transfers (note 26)
Share-based payments charge
Deferred tax on share-based payments
Balance at 31 December 2016
Attributable to owners of the parent
Share
capital
£’m
Share
premium
£’m
4.1
–
–
0.7
–
–
–
–
–
0.7
4.8
4.8
–
–
0.8
–
–
–
–
–
0.8
5.6
35.3
–
–
33.2
(1.0)
–
–
–
–
32.2
67.5
67.5
–
–
34.6
(1.2)
–
–
–
–
33.4
100.9
Other
reserves
£’m
3.8
–
–
–
–
–
(0.1)
0.9
0.1
0.9
4.7
4.7
–
–
–
–
–
(0.9)
0.8
(2.2)
(2.3)
2.4
Retained
earnings
£’m
Total
Equity
£’m
23.8
6.0
6.0
–
–
(2.2)
0.1
–
–
(2.1)
27.7
27.7
18.3
18.3
–
–
(3.7)
0.9
–
–
(2.8)
43.2
67.0
6.0
6.0
33.9
(1.0)
(2.2)
–
0.9
0.1
31.7
104.7
104.7
18.3
18.3
35.4
(1.2)
(3.7)
–
0.8
(2.2)
29.1
152.1
RESTORE PLC > Annual Report and Accounts Consolidated statement of financial position
41
As at 31 December 2016
Company registered no. 05169780
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets held directly for sale
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liabilities – borrowings
Other financial liabilities
Current tax liabilities
Provisions
Liabilities associated with assets held for sale
Non-current liabilities
Financial liabilities – borrowings
Other long term liabilities
Other financial liabilities
Deferred tax liability
Provisions
Total liabilities
Net assets
EQUITY
Share capital
Share premium account
Other reserves
Retained earnings
Equity attributable to the owners of the parent
Note
2016
£’m
2015
£’m
13
14
21
15
16
20
12
17
18
19
22
12
18
11
19
21
22
23
24
25
26
190.3
47.6
2.8
240.7
1.9
38.4
13.4
53.7
–
118.6
37.4
4.3
160.3
1.7
28.8
8.5
39.0
24.2
294.4
223.5
(34.3)
(22.4)
(7.3)
(0.1)
(1.5)
(1.0)
(44.2)
–
(44.2)
(78.4)
(0.2)
(0.3)
(13.2)
(6.0)
(98.1)
(142.3)
152.1
5.6
100.9
2.4
43.2
152.1
(3.7)
(0.1)
(2.2)
(0.8)
(29.2)
(4.6)
(33.8)
(65.4)
(0.5)
(0.2)
(12.0)
(6.9)
(85.0)
(118.8)
104.7
4.8
67.5
4.7
27.7
104.7
These financial statements were approved by the Board of Directors and authorised for issue on 22 March 2017 and were signed on
its behalf by:
Charles Skinner
Chief Executive
Adam Councell
Group Finance Director
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS
42
Consolidated statement of cash flows
For the year ended 31 December 2016
Net cash generated from operations
Net finance costs
Income taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment and applications software
Purchase of subsidiary undertakings,
net of cash acquired
Purchase of trade and assets
Proceeds from sale of available for sale assets
Cash flows used in investing activities
Cash flows from financing activities
Net proceeds from share issues
Dividends paid
Repayment of bank borrowings
(Repayment)/drawdown of revolving credit facility
New bank loans raised
(Decrease)/increase in bank overdrafts
Finance lease repayments
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Cash and cash equivalents shown above comprise:
Cash at bank
Note
27
11
12
20
Year ended
31 December
2016
£’m
Year ended
31 December
2015
£’m
18.2
(2.0)
(0.4)
15.8
(5.2)
(82.6)
–
29.9
(57.9)
34.2
(3.7)
–
(2.5)
20.0
(0.9)
(0.1)
47.0
4.9
8.5
13.4
13.4
11.0
(1.1)
(0.8)
9.1
(4.0)
(63.9)
(2.0)
–
(69.9)
32.9
(2.2)
(47.0)
28.5
50.0
0.2
–
62.4
1.6
6.9
8.5
8.5
RESTORE PLC > Annual Report and Accounts 43
Notes to the Group financial statements
For the year ended 31 December 2016
1. GENERAL INFORMATION
Restore plc and its subsidiaries specifically focus on Document Management and Relocation. The Group primarily operates in the
UK. The Company is a public limited company incorporated and domiciled in the United Kingdom. The address of its registered
office is The Databank, Unit 5, Redhill Distribution Centre, Salbrook Road, Redhill, Surrey, RH1 5DY.
The Company is listed on the AIM market.
These Group consolidated financial statements were authorised for issue by the Board of Directors on 22 March 2017.
2. SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The consolidated financial statements of Restore plc have been prepared in accordance with EU endorsed International Financial
Reporting Standards (IFRS), IFRIC interpretations and the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared on a historical cost basis although derivatives are reflected at their fair value. The
preparation of financial statements in conformity with IFRS requires the use of certain accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial
statements are disclosed later in this note.
The consolidated financial statements are presented in pounds sterling and, unless stated otherwise, shown in pounds million to
one decimal place.
Going Concern
The Group’s business activities, together with the factors likely to affect its future development, performance, financial position,
its cash flows, liquidity position, principal risks and uncertainties affecting the business are set out in the Strategic report on
pages 5 to 25.
The Group meets its day-to-day working capital requirements through its financing facilities which are due to expire in November
2020. Details of the Group’s borrowing facilities are given in note 20 of the financial statements.
The Group’s budgets for 2017 and forecasts for 2018, taking account of reasonably possible changes in trading performance, show
that the Group should be able to operate within the level of its current facility.
The Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the
foreseeable future. Thus they continue to adopt the going concern basis of accounting in preparing the annual financial statements.
Basis of Consolidation
The Consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company
(its subsidiaries) made up to 31 December each year. Control is achieved where the Company has the power to govern the financial
and operating policies of an investee entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the Consolidated statement of comprehensive
income from the effective date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line
with those used by the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
The acquisition method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition
is measured as the fair value of the assets given, equity instruments issued, contingent consideration and liabilities incurred
or assumed at the date of exchange. Costs directly attributable to the acquisition are expensed as incurred. Identifiable assets
acquired and liabilities and contingent liabilities assumed in a business combination are initially measured at fair value at the
acquisition date. Provisional fair values are adjusted against goodwill if additional information is obtained within one year of
the acquisition date about facts or circumstances existing at the acquisition date. Other changes in provisional fair values are
recognised through profit or loss.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 44
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Contingent Consideration
Contingent consideration is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent
consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change
to other comprehensive income unless the contingent consideration is classified as equity. In such circumstances, changes are
recognised within equity.
Changes in contingent consideration arising from additional information, obtained within one year of the acquisition date, about
facts or circumstances that existed at the acquisition date are recognised as an adjustment to goodwill.
Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
In the opinion of the Directors, the chief operating decision maker is the Board of Restore plc and there are two segments,
Document Management and Relocation, whose reports are reviewed by the Board in order to allocate resources and assess
performance. Segment revenue comprises sales to external customers most of whom are located in the UK. Services are provided
primarily from the UK.
Revenue Recognition
Revenue is measured as the fair value of the consideration received or receivable and represents amounts receivable for goods and
services provided in the normal course of business, net of discounts, VAT, returns, rebates and after eliminating intra-group sales.
The Group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits
will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below.
Sale of services – Document Management
Revenue from Records Management represents amounts billed or due for the storage and retrieval of customers’ files and boxes.
Revenue is recognised on retrieval of documents or time-apportioned for the period for which the documents are stored.
The Group provides all round secure document destruction and recycling processes, including the rental and servicing of office
recycling units as well as larger secure waste containers providing a confidential waste destruction process. Revenue is recognised
on a time-apportioned basis in respect of rental and when destruction is complete. For the sale of paper products, revenue is
currently recognised when the goods are delivered to the customers' premises, which is taken to be the point in time at which the
customer accepts the goods and the related risks and rewards of ownership transfer.
The Group sells scanning and IT services which are provided on a time basis or as a fixed price contract with contract terms ranging
up to three years, in which case revenue is recognised based upon the value of work completed, or revenue may be received on a
contractual basis, either as a fixed proportion of managed costs or other fee mechanism, in which case revenue is recognised once
those contractual conditions have been satisfied, either based on managed costs incurred, on a time basis, or other appropriate
contractual measurement.
Sale of services – Relocation
Revenue represents amounts in respect of relocation, furniture storage, asset disposal and recycling. Revenue is recognised based
upon the value of the work completed for removals, storage revenue is recognised on a per day basis for the furniture stored on
behalf of its customers and when a disposal is complete.
Interest income
Interest income is accrued on a time basis by reference to the principal outstanding and at the effective interest rate applicable,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s
net carrying amount.
Dividend income
Dividend income is recognised when the right to receive payment is established.
Exceptional Items
Exceptional items are those significant items which are separately disclosed by virtue of their size or incidence to enable a full
understanding of the Group’s financial performance. Transactions which may give rise to exceptional items are principally gains or
losses on disposal of investments and subsidiaries, redundancy, integration and other restructuring costs, provisions made in respect
of onerous leases, acquisition costs relating to business combinations and national insurance costs on the exercise of share options.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 45
Profit Measures
Due to the one-off nature of exceptional items and the non-cash element of certain charges, the Directors believe that an adjusted
measure of operating profit, EBITDA, profit before tax and earnings per share provide shareholders with a more appropriate
representation of the underlying earnings of the Group. The items adjusted for in arriving at these are share-based payments
charge, exceptional items (including exceptional finance costs) and amortisation of intangible assets and a standard tax charge.
Intangible Assets
Goodwill arising on consolidation represents the excess of the cost of acquisition over the Group’s interest in the fair value of
identifiable assets and liabilities of a subsidiary, at the date of acquisition. Goodwill is initially recognised as an asset at cost and is
subsequently measured at cost less any accumulated impairment losses. Goodwill which is recognised as an asset is reviewed for
impairment at least annually. Any impairment is recognised immediately in profit or loss and is not subsequently reversed.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from
the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating
unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill
allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit.
On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Other intangible assets
Other intangible assets are recognised when they are controlled through contractual or other legal rights, or are separable from
the rest of the business, and their fair value can be reliably measured.
Customer relationships
Acquired customer relationships are identified as a separate intangible asset as they are separable and can be reliably measured
by valuation of future cash flows. This valuation also assesses the life of the particular relationship. The life of the relationship is
assessed annually and management believes that a 5% customer attrition rate on average is appropriate giving the life of customer
relationships as twenty years. All customer relationships are being written off on a straight-line basis and have a remaining life of
five to twenty years. The customer lists are considered annually to ensure that this classification is still appropriate.
Trade names
Acquired trade names are identified as a separate intangible asset. Trade names are being written off on a straight-line basis over
ten years. The life of the trade name is assessed annually.
Application software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific
software. These costs are amortised on a straight-line basis over their estimated useful lives (three to five years).
Costs associated with developing or maintaining computer software programmes are recognised as an expense as incurred.
Costs that are directly associated with the development of identifiable and unique software products controlled by the Group,
and that will probably generate economic benefits exceeding costs beyond one year, are recognised as intangible assets.
Computer software development costs recognised as assets are amortised on a straight-line basis over their estimated useful lives
(expected to be up to five years). Residual values and useful lives are reviewed each year.
Property, Plant and Equipment
Property, plant and equipment is stated at historical cost, less accumulated depreciation and accumulated impairment losses.
Depreciation is provided on a straight-line basis on all property, plant and equipment, except freehold land.
Freehold and long leasehold buildings
Long leasehold land
Leasehold improvements
Plant and machinery
Racking
Office equipment, fixtures and fittings
Motor vehicles
Basis
2 – 5% per annum
over the remaining life of the lease
over the life of the lease
5 – 50% per annum
5% per annum
10 – 40% per annum
20 – 25% per annum
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 46
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Leased Assets
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating
leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a
straight-line basis over the period of the lease.
Where property lease contracts contain guaranteed minimum incremental rental payments, the total committed cost is
determined and is amortised on a straight-line basis over the life of the lease. Leases of property, plant and equipment which
transfer substantially all the risks and rewards of ownership to the Group are classified as finance leases. Finance leases are
classified as a financial liability and measured at amortised cost. Finance leases are capitalised at the inception of the lease at the
lower of the fair value of the leased property, plant and equipment and the present value of the minimum lease payments and
depreciated over the period of the lease. The resulting lease obligations are included in liabilities. Lease payments are apportioned
between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance
of the liability.
Investments
Loans and receivables are measured at amortised cost. Impairment losses are recognised in profit or loss when there is evidence of
impairment. Available for sale investments are non-derivative assets and are initially recognised at fair value net of any transaction
costs and are subsequently carried at fair value. Fair value gains and losses are recognised in other comprehensive income and are
recycled to profit or loss on disposal of the investment. If a fair value for an investment cannot be reliably measured, due to the
variability in the range of reasonable fair value estimates being significant, or the probabilities of the various estimates within the
range not being able to be reasonably assessed, that investment will be carried at cost. An impairment test is performed annually
on the carrying value of the investment. An impairment loss is recognised for the amount by which the asset’s carrying value
exceeds its recoverable amount, when there is objective evidence for impairment including significant or prolonged decline in fair
value below cost.
Investments which are held for the long term and over which management do not exercise significant control are carried at cost.
An impairment review is carried out annually.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on a first in first out basis. Net realisable
value is the price at which inventories can be sold in the normal course of business. Provision is made where necessary for
obsolete, slow moving and defective inventories.
Trade and Other Receivables
Trade receivables, classified as loans and receivables in accordance with IAS 39 ‘Financial Instruments: Recognition and
Measurement’, are recorded initially at fair value and subsequently measured at amortised cost. A provision for impairment
of trade receivables is established when there is evidence that the Group will not be able to collect all amounts due according
to the original terms. The amount of the provision is the difference between the assets’ carrying amount and the present value
of future cash flows discounted at the effective interest rate. The movement in the provision is recognised in profit or loss.
Any other receivables are recognised at their initial fair value less an allowance for any doubtful amounts. An allowance is made
when collection of the full amount is no longer considered probable.
Customer Incentives
Incentives provided to new customers are in the form of either costs borne on behalf of new customers or the provision of services
free of charge. Such incentives are recognised as an asset at amortised cost at the point when the contract is signed and the costs
are incurred, or when the service is provided and are amortised in the income statement over the period of the contract.
Cash and Cash Equivalents
Cash and cash equivalents as defined for the Consolidated statement of cash flows comprise cash in hand, cash held at bank with
immediate access, other short-term investments and bank deposits with maturities of three months or less from the date
of inception.
Assets Held for Sale
Assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale
transaction rather than continuing use. This condition is regarded as met only when a sale is highly probable and the asset (or
disposal group) is available for immediate sale in its present condition. Management must be committed to the sale which should
be expected to qualify for recognition as a completed sale within one year from the date of classification. If this condition is no
longer met and the assets and disposal groups are held for continuing use they are transferred out of assets held for sale in the
current year. Disposal groups are groups of assets, and liabilities directly associated with those assets, that are to be disposed of
together as a group in a single transaction.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 47
Non-current assets and disposal groups classified as held for sale are initially measured at the lower of carrying value and fair value
less costs to sell. At subsequent reporting dates non-current assets (and disposal groups) are measured to the latest estimate of fair
value less costs to sell. As a result of this measurement any impairment is recognised by charging to profit or loss.
Trade Payables
Trade payables, classified as other liabilities in accordance with IAS 39, are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method. Other payables are stated at amortised cost.
Borrowings
Borrowings are classified as other liabilities in accordance with IAS 39 and are recorded at the fair value of the consideration
received, net of direct transaction costs. Finance charges are accounted for in profit or loss over the term of the instrument using
the effective interest rate method.
Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from accounting profit as reported in the
Consolidated statement of comprehensive income because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated
using tax rates that have been enacted or substantively enacted at the reporting date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities
in the financial statements and the corresponding tax bases used in the computation of taxable profit and accounted for using
the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and
deferred tax assets are recognised to the extent it is probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profits nor the accounting profit.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised
based upon tax rates that have been enacted or substantively enacted at the reporting date. Deferred tax is charged or credited in
profit or loss, except when it relates to items charged or credited directly to other comprehensive income and equity, in which case
the deferred tax is also dealt with in other comprehensive income and equity.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable
that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be made. If the
effect is material, provisions are determined by discounting the expected future cash flows at an appropriate pre-tax discount rate.
Equity Instruments
Equity instruments issued by the Company are recorded at fair value net of transaction costs.
Share-Based Payments
The Group has applied the requirements of IFRS 2 Share-based Payment.
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments are measured
at fair value at the date of grant. The fair value determined at the grant date of equity-settled share-based payments is expensed
on a straight-line basis over the vesting period, based on the Group’s estimate of shares that will eventually vest. Fair value is
measured by use of a stochastic pricing model. Where employees’ contracts are terminated the options are treated as having been
forfeited and accordingly previous charges are credited back to profit or loss if the option has not yet vested or retained earnings if
the option has vested.
The Group has the ability to net-settle share options such that only shares equating to the gain over the option price are issued
directly to the option holder. This has the benefit of reducing the number of shares that must be issued in connection with an
option exercise thereby reducing shareholder dilution.
Pensions
The Group operates a number of defined contribution pension schemes. Contributions are charged to profit or loss as incurred.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 48
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Financial Instruments
Financial assets and financial liabilities are recognised on the Group’s statement of financial position when the Group has
become party to the contractual provisions of the instrument. The Group uses derivative financial instruments when considered
appropriate such as interest rate caps to hedge its risks associated with interest rates. Such derivative financial instruments are
initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair
value. Derivatives are carried as assets when the fair value is positive and as liabilities when the fair value is negative.
Any gains or losses arising from changes in fair value on derivatives during the year that do not qualify for hedge accounting are
taken directly to profit or loss.
Critical Accounting Estimates and Judgements
The preparation of the Group’s financial statements requires management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the
reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a
material adjustment to the carrying amount of the asset or liability affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those
involving estimates, which have the most significant effect on the amounts recognised in the financial statements.
Acquisitions
The Group has made a significant acquisition in the year, being the acquisition of PHS DS (note 11) and in 2015 the acquisition of
Wincanton UK and Ireland. The assessment of the fair values of the assets and liabilities at acquisition is inherently judgemental
and where these are still being assessed until further information is received, the amounts included in these financial statements
are included as provisional. The key assumptions that have been made are in respect of the valuation of customer relationships,
and the allocation of the consideration between cash-generating units.
Valuation of separable intangibles on acquisition
When valuing the intangibles acquired in a business combination, management estimate the expected future cash flows from the
asset and select a suitable discount rate in order to calculate the present value of those cash flows. Separable intangibles valued on
acquisitions made in the year were £19.5m (2015: £48.2m) as detailed further in note 11.
Consideration
In the acquisition of PHS DS, the consideration has been allocated to the cash-generating units based on historic earnings as the
Directors believe this to be the most appropriate measure. In the acquisition of Wincanton in 2015, the Directors concluded that
turnover was the most appropriate basis for allocating the consideration to each cash-generating unit. The key reason behind
this was that the results of each business incurred a proportion of shared overhead cost and allocation of these costs would have
introduced additional estimation and judgement.
Fixed assets
On the acquisition of Wincanton, fixed assets have been fair valued in line with the value that a market participant would attribute
to those assets. Furthermore an adjustment of £1.1m was made in 2015 to write down a site where an exit was planned.
Exceptional items
Included within exceptional items, and as disclosed in note 5, are amounts included in respect of restructuring and reorganisation
and the related duplication of costs. The period taken to complete restructuring varies for each acquisition and management
judgement is applied in determining the level of duplication of costs incurred, particularly in relation to personnel costs where it
can take some time for the optimal levels of staffing to be achieved.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Impairment of non-financial assets
The Group assesses whether there are any indicators of impairment for all non-financial assets at each reporting date. Goodwill is
tested for impairment annually and at other times when such indicators exist. Other non-financial assets are tested for impairment
when there are indicators that the carrying amounts may not be recoverable.
When value in use calculations are undertaken, management must estimate the expected future cash flows from the asset or
cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows. Further details
are given in note 13.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 49
Provisions
Included within provisions is an onerous lease provision which relates to the amount by which future lease rental commitments,
arising as a result of acquisitions, exceed the fair market rentals. In calculating this provision the key estimates are those relating to
the fair values of the rentals on the properties concerned, the impact of future rent reviews and the discount rate applicable.
Adoption of New and Revised Standards
New standards, amendments and interpretations issued and effective during the financial year commencing 1 January 2016
Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations
The amendments specify how to account for the acquisition of an interest in a joint operation that constitutes a business.
Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation
The IASB has clarified that the use of revenue-based methods to calculate the depreciation of property, plant or equipment is not
appropriate because revenue generated by an activity that includes the use of an asset generally reflects factors other than the
consumption of the economic benefits embodied in the asset.
The IASB also clarified that amortisation methods based on revenue are presumed to be an inappropriate for an intangible asset
as revenue typically reflects factors that are not directly linked to the consumption of the economic benefits embodied in the
intangible asset. This presumption can be rebutted in certain limited circumstances.
The amendment to IAS 38 also refers to the contract that sets out the entity’s rights over its use of an intangible asset as a starting
point for the identification of the appropriate basis of amortisation, for example if the entity’s use of the intangible asset is over
time or as a number of units are produced.
Both amendments clarify that expected future reductions in the selling price of an item produced using an asset could indicate
expected technical or commercial obsolescence of that asset, which in turn might reflect a reduction of the future economic
benefits embodied in the asset.
Annual Improvements to IFRSs 2012-2014 Cycle
In September 2014, the IASB published 'Annual Improvements to IFRSs – 2012-2014 Cycle' as part of its annual improvements
project. A summary of the amendments is set out below:
IFRS 5 Non-current Assets Held for Sale and Discontinued Operations
When an asset (or disposal group) is reclassified directly from ‘held for sale’ to ‘held for distribution to owners’, or directly from
‘held for distribution to owners’ to ‘held for sale’, the change in classification is considered to be a continuation of the original plan
of disposal. Therefore, the asset (or disposal group) is measured at the lower of its carrying amount before it was classified as ‘held
for sale’ or as ‘held for distribution to owners’ (adjusted for depreciation, amortisation or revaluations) and its fair value less costs
to sell or its fair value less costs to distribute, as applicable. The requirement for the sale or distribution to complete within a year
of the initial classification as ‘held for sale’ or ‘held for distribution to owners’ is not extended by reclassifications between ‘held for
sale’ and ‘held for distribution to owners’ except in circumstances already permitted by IFRS 5.
The amendment also applies the accounting in IFRS 5 when an asset (or disposal group) ceases to be classified as ‘held for sale’, to
assets (or disposal groups) that cease to be classified as ‘held for distribution to owners’.
IAS 19 Employee Benefits
The amendment clarifies that, for currencies in which there is no deep market in high quality corporate bonds, the market yields on
government bonds denominated in that currency shall be used.
IAS 34 Interim Financial Reporting
Where disclosures required in the interim financial statements are cross referenced to some other statement (such as management
commentary or a risk report), that other statement should be made available to the users of the financial statements at the same
time and on the same terms as the interim financial statements. If access is not provided at the same time and on the same terms,
the interim financial statements are incomplete.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 50
2. SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Amendments to IAS 27 Equity Method in Separate Financial Statements
The amendments allow entities to use the equity method (as described in IAS 28 Investments in Associates and Joint Ventures) to
account for investments in subsidiaries, joint ventures and associates in their separate financial statements. Alternatively, those
investments may still be accounted for at cost, or in accordance with IFRS 9 Financial Instruments. The entity shall apply the same
accounting for each category of investments.
There are consequential amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards and IAS 28
Investments in Associates and Joint Ventures.
Amendments to IAS 1: Disclosure initiative
The amendments are in response to views that guidance on materiality in IFRS was not clear and that this led to difficulties in
applying the concept of materiality in practice. As a consequence, financial statements contained too much irrelevant information
and not enough relevant information. Various amendments were made to clarify that the concept of materiality.
IFRS 14 Regulatory Deferral Accounts*
The aim of this interim Standard is to enhance the comparability of financial reporting by entities that are engaged in rate-regulated
activities. It is relevant to first time IFRS adopters who provide goods or services that are subject to rate regulation.
Amendments to IAS 12: Recognition of Deferred Tax Assets for Unrealised Losses*
The amendments introduce illustrative examples together with new explanatory paragraphs.
Amendments to IAS 7: Disclosure initiative*
The amendment requires the changes in liabilities arising from financing activities to be disclosed
IFRS 15 Revenue from Contracts with Customers
The core principle of the new standard is for entities to recognise revenue to depict the transfer of goods or services to customers
in amounts that reflect the consideration to which the entity expects to be entitled in exchange for those goods or services.
Clarifications to IFRS 15 Revenue from Contracts with Customers*
The amendments target areas of IFRS 15 as well as some transition relief.
IFRS 9 Financial Instruments*
The Amendments include a logical model for classification and measurement, a single, forward-looking ‘expected loss’ impairment
model and a substantially- reformed approach to hedge accounting.
Amendments to IFRS 2: Classification and Measurement of Share-based Payment Transactions*
The amendments made eliminate diversity in practice in three main areas vesting conditions when measuring cash-settled share-
based payment transactions, classification of share-based payment transactions with net settlement features for withholding tax
obligations, change of classification from cash-settled to equity-settled.
IFRS 16 Leases*
The new standard recognises a leased asset and a lease liability for almost all leases and requires them to be accounted for in a
consistent manner. This introduces a single lessee accounting model and eliminates the previous distinction between an operating
lease and a finance lease.
* Not yet endorsed by the EU
The Directors are still considering the impact that the adoption of these Standards and Interpretations in future periods will have
but do not expect a material impact on the financial statements of the Group when the relevant standards and interpretations
come into effect.
3. FINANCIAL RISK MANAGEMENT
The Group’s activities expose it to a variety of financial risks: market risk, credit risk, liquidity risk and capital risk. The Group’s
overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse
effects on the Group’s financial performance.
The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out centrally under policies approved by the Board of Directors. The Group evaluates and hedges
financial risks. The Board provides written principles for overall risk management.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 51
Market risk
Foreign exchange risk
The Group operates primarily in the UK and has limited exposure to foreign exchange risk.
Cash flow and fair value interest rate risk
The Group’s interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow
interest rate risk. During 2016 and 2015, the Group’s borrowings at variable rates were denominated in pounds sterling. The Group
analyses its interest rate exposure using financial modelling. Based on the various scenarios, the Group manages its cash flow
interest rate risk by using interest rate swaps when considered appropriate. Such interest rate swaps have the economic effect of
converting borrowings from floating rates to fixed rates at a certain level. Interest rate swaps are an agreement with other parties
at quarterly intervals, to exchange the difference between fixed and floating rate calculated by reference to the notional principal
amount as shown in note 20.
Credit risk
Credit risk is managed on a Group basis, except for credit risk relating to accounts receivable balances. Each local entity is
responsible for managing and analysing the credit risk for each of their new customers before standard payment, delivery terms
and conditions are offered. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with
banks and financial institutions, as well as credit exposures to retail customers, including outstanding receivables and committed
transactions. The maximum exposure is the carrying amount as disclosed in note 16.
With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash equivalents, the Group’s
exposure to credit risk arises from default of the counterparty, with a maximum exposure equal to the carrying amount of these
instruments as also shown in note 16.
Liquidity risk
The Group monitors its risk to a shortage of funds using a forecasting model. This model considers the maturity of both its financial
assets and financial liabilities and projected cash flows from operations. The Group’s objective is to maintain a balance between
continuity of funding and flexibility through the use of bank overdrafts, bank loans and finance in order to ensure that there is
sufficient cash or working capital facilities to meet the requirements of the Group for its current business plan. A detailed analysis
of the Group’s debt facilities is given in note 20.
Capital risk
The Group’s main objective when managing capital is to protect returns to shareholders by ensuring the Group will trade profitably in
the foreseeable future. The Group also aims to maximise its capital structure of debt and equity so as to minimise its cost of capital.
The Group manages its capital with regard to the risks inherent in the business and the sector within which it operates by
monitoring its gearing ratio on a regular basis. The Group considers its capital to include share capital, share premium, other
reserves, retained earnings and net debt as noted below. Net debt includes short and long-term borrowings (including overdrafts)
net of cash and cash equivalents.
No changes were made in the objectives, policies or processes during the years ending 31 December 2016 and 31 December 2015.
The Group’s strategy is to strengthen its capital base in order to sustain the future development of the business.
Debt to Capital Ratio
Total debt
Less: cash and cash equivalents (note 20)
Net debt
Total equity
Debt to capital ratio
2016
£’m
85.7
(13.4)
72.3
152.1
0.5
2015
£’m
69.1
(8.5)
60.6
104.7
0.6
The gearing during 2016 decreased as a result of the additional debt to acquire the PHS DS in the year (note 11) being less than the
equity raised (note 23). The Group does not have any externally imposed capital requirements.
Fair value estimation
The fair value of financial instruments is market value.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 52
4. SEGMENTAL ANALYSIS
The Group is organised into two main operating segments, Document Management and Relocation and incurs Head Office costs.
Services per segment operate as described in the Strategic report. The main segmental profit measure is adjusted operating profit
and is shown before exceptional items, share-based charge and amortisation of intangible assets. The vast majority of trading
of the Group is undertaken within the United Kingdom. Segment assets include intangibles, property, plant and equipment,
inventories, receivables and operating cash. Central assets include deferred tax and head office assets. Segment liabilities comprise
operating liabilities. Central liabilities include income tax and deferred tax, corporate borrowings and head office liabilities. Capital
expenditure comprises additions to computer software, property, plant and equipment and includes additions resulting from
acquisitions through business combinations. Segment assets and liabilities are allocated between segments on an actual basis.
Revenue
The revenue from external customers was derived from the Group’s principal activities primarily in the UK (where the Company is
domiciled) as follows:
Continuing operations
Revenue
Segment adjusted operating profit/(loss)
Exceptional items
Share-based payments charge
Amortisation of intangible assets
Operating profit
Finance costs
Profit before tax
Tax credit
Profit after tax
Segment assets
Segment liabilities
Capital expenditure
Depreciation and amortisation
Continuing operations
Revenue
Segment adjusted operating profit/(loss)
Exceptional items
Share-based payments charge
Amortisation of intangible assets
Operating profit
Finance costs
Exceptional finance costs
Profit before tax
Tax charge
Profit after tax
Segment assets
Segment liabilities
Capital expenditure
Depreciation and amortisation
Document
Management
£’m
90.1
22.0
Relocation
£’m
39.3
4.8
Head
Office
£’m
–
(1.8)
249.8
43.1
5.0
8.0
Document
Management
£’m
54.7
15.1
40.5
10.9
0.2
0.7
Relocation
£’m
37.2
4.1
4.1
88.3
–
–
Head
Office
£’m
–
(1.6)
183.5
41.0
3.8
4.6
39.7
7.8
0.2
0.8
0.3
70.0
–
–
2016
Total
£’m
129.4
25.0
(10.3)
(0.8)
(4.4)
9.5
(2.0)
7.5
3.1
10.6
294.4
142.3
5.2
8.7
2015
Total
£’m
91.9
17.6
(6.4)
(0.9)
(2.6)
7.7
(1.3)
(0.3)
6.1
(0.3)
5.8
223.5
118.8
4.0
5.4
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts Discontinued operations
Revenue
Operating profit
Profit before tax
Tax charge
Profit after tax of discontinued operations
Pre-tax gain recognised as the re-measurement of assets of disposal group
Tax charge
After tax gain recognised on the re-measurement of assets of disposal group
Profit after tax for the year from discontinued operations
53
2016
£’m
1.7
0.1
0.1
–
0.1
9.2
(1.6)
7.6
7.7
2015
£’m
0.6
0.2
0.2
–
0.2
–
–
–
0.2
The operating cashflow for the period was £0.2m (2015: £nil). On 10 March 2016, the Group disposed of Restore Document
Management Ireland Limited for €36.0m (note 12).
Major Customers
For the year ended 31 December 2016 no customers individually accounted for more than 3% (2015: 4%) of the Group’s total revenue.
5. EXCEPTIONAL ITEMS
Acquisition – transaction costs
Acquisition – box relocation and transport costs
Restructuring and redundancy costs
Other exceptional
Total
2016
£’m
1.2
0.4
6.2
2.5
10.3
2015
£’m
0.4
0.1
5.1
0.8
6.4
The integration of acquisitions remains the key driver of exceptional costs. In the year the Group undertook the bulk of the
restructuring on both the Wincanton Records Management and PHS DS acquisitions, the two largest acquisitions Restore has made.
The Wincanton Records Management integration is now largely complete and the PHS DS integration is ahead of schedule.
Transaction costs include stamp duty costs and transitional service arrangement fees, in addition to the cost of legal and
professional fees incurred as part of the acquisitions.
Box relocation and transport costs include the cost of uplifting boxes to existing facilities and the movement of boxes from facilities
which closed as result of acquisitions. In the period the majority of the cost in this area has been a result of the transfer of boxes
from the Cintas Charlton site to existing Restore sites ahead of the lease end in June 2017. This process is ahead of schedule.
Restructuring and redundancy costs have increased to £6.2m in 2016. As noted above these primarily relate to the Wincanton
Records Management and PHS DS acquisitions and include:
• The cost of duplicated staff roles during the integration and restructuring period
• The cost of implementing the post completion staff structures
•
IT costs associated with the wind down of duplicated IT systems and the transfer across to the destination systems
• Property costs associated with sites which are identified at the point of acquisition as being superfluous to ongoing
requirements and where a credible exit strategy is clear to management.
Other exceptional costs include £1.7m of national insurance costs on the exercise of share options. The second element of other
exceptional costs is a fixed asset write down of £0.8m resulting from the integration of Restore Shred into PHS DS which has given
rise to the closure of a number of the Restore Shred depots and the replacement of the operational IT system.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 54
6. OPERATING PROFIT
The following items have been included in arriving at operating profit:
Amortisation of intangible assets
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment (note 5)
Share-based payments charge
Operating leases – plant and machinery
Operating leases – land and buildings
Auditors’ remuneration:
– Parent and consolidated financial statements
– Audit of Company’s subsidiaries pursuant to legislation
– Corporate finance services
– Tax compliance services
Expenses by function:
Staff costs (note 30)
Depreciation
Premises costs
Materials costs
Subcontractor costs
Selling and distribution expenses
Transport costs
Computer costs
Audit and tax services
Legal and professional costs
Telecommunication costs
Exceptional items
Other expenses
Total cost of sales and administrative expenses
Amortisation of intangible assets
Total operating costs
7. FINANCE COSTS
Interest on bank loans and overdrafts
Amortisation of deferred finance costs
Unwind of discount
Interest rate swap
Exceptional finance costs
Total
Exceptional finance costs in 2015 related to the write off of bank arrangement fees.
2016
£’m
2015
£’m
4.4
4.3
0.8
0.8
2.5
11.2
0.1
0.1
–
0.1
41.4
4.3
18.3
6.7
14.9
2.3
4.1
2.1
0.3
0.4
0.8
10.3
9.6
115.5
4.4
119.9
2016
£’m
1.8
0.2
–
–
2.0
–
2.0
2.6
2.8
–
0.9
1.4
6.5
0.1
0.1
0.1
0.1
28.3
2.8
13.2
3.8
13.6
0.4
4.2
1.3
0.4
0.4
0.6
6.4
6.2
81.6
2.6
84.2
2015
£’m
1.2
0.1
0.1
(0.1)
1.3
0.3
1.6
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 8. TAXATION
Current tax:
UK corporation tax on profit for the year
Adjustment in respect of previous periods
Total current tax
Deferred tax: (note 21)
Current year
Adjustment in respect of previous periods
Total deferred tax
Total tax (credit)/charge
55
2016
£’m
0.3
(0.6)
(0.3)
(1.9)
(0.9)
(2.8)
(3.1)
2015
£’m
1.0
(0.1)
0.9
(0.2)
(0.4)
(0.6)
0.3
The (credit)/charge for the year can be reconciled to the profit in the Consolidated statement of comprehensive income as follows:
Profit before tax
Profit before tax multiplied by the rate of corporation tax of 20.0% (2015: 20.25%)
Effects of:
Expenses not deductible for tax purposes
Tax losses not previously recognised
Share-based payments deduction
Effect of change in rate used for deferred tax
Adjustment in respect of corporation tax for previous periods
Adjustment in respect of deferred tax for previous periods
Tax (credit)/charge
2016
£’m
7.5
1.5
0.8
(0.8)
(2.6)
(0.5)
(0.6)
(0.9)
(3.1)
2015
£’m
6.1
1.2
0.2
(0.6)
–
–
(0.1)
(0.4)
0.3
9. EARNINGS PER ORDINARY SHARE
Basic earnings per share have been calculated on the profit for the year after taxation and the weighted average number of ordinary
shares in issue during the year.
Weighted average number of shares in issue
Total profit for the year
Total basic earnings per ordinary share (pence)
Weighted average number of shares in issue
Share options
Executive incentive plan
2016
2015
102,712,773
83,442,266
£18.3m
17.8p
£6.0m
7.2p
102,712,773
83,442,266
5,454,143
–
4,430,077
373,579
Weighted average fully diluted number of shares in issue
108,166,916
88,245,922
Total fully diluted earnings per share (pence)
Continuing profit for the year
Continuing basic earnings per share (pence)
Continuing fully diluted earnings per share (pence)
Discontinued profit for the year
Discontinued basic earnings per share (pence)
Discontinued fully diluted earnings per share (pence)
16.9p
£10.6m
10.3p
9.8p
£7.7m
7.5p
7.1p
6.8p
£5.8m
7.0p
6.6p
£0.2m
0.2p
0.2p
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 56
9. EARNINGS PER ORDINARY SHARE CONTINUED
Adjusted earnings per share
The Directors believe that the adjusted earnings per share provide a more appropriate representation of the underlying earnings
derived from the Group’s business. The adjusting items are shown in the table below:
Continuing profit before tax
Adjustments:
Amortisation of intangible assets
Exceptional items
Share-based payments charge
Exceptional finance costs
Adjusted continuing profit for the year
2016
£’m
7.5
4.4
10.3
0.8
–
23.0
2015
£’m
6.1
2.6
6.4
0.9
0.3
16.3
The adjusted earnings per share, based on the weighted average number of shares in issue during the year, £102.7m (2015: £83.4m)
is calculated below:
Adjusted profit before tax (£’m)
Tax at 20%/20.25% (£’m)
Adjusted profit after tax (£’m)
Adjusted basic earnings per share (pence)
Adjusted fully diluted earnings per share (pence)
2016
23.0
(4.6)
18.4
17.9p
17.0p
2015
16.3
(3.3)
13.0
15.6p
14.7p
10. DIVIDENDS
In respect of the current year, the Directors propose a final dividend of 2.67p per share (2015: 2.2p) will be paid to ordinary
shareholders on 7 July 2017. This dividend is subject to approval by shareholders at the Annual General Meeting and has not been
included as a liability in these financial statements. An interim dividend of 1.33p per share (2015: 1.0p) was paid during the year.
The proposed final dividend for 2016 is payable to all shareholders on the Register of Members on 9 June 2017. The final estimated
dividend to be paid is £3.0m (2015: £2.1m).
11. BUSINESS COMBINATIONS
On 26 August 2016, the Company acquired 100% of PHS DS, the second largest provider of document shredding services in the
UK as well as having a significant records management business and a presence in document scanning. The total consideration
of £83.1m was paid in cash. As the Group is still in the process of establishing the fair value of the assets and liabilities acquired
the fair values presented below are provisional:
Intangible assets – customer relationships
Intangible assets – trade name
Property, plant and equipment
Inventories
Trade receivables
Cash
Trade and other payables
Deferred tax liabilities
Other financial liabilities
Net assets acquired
Goodwill
Consideration
Satisfied by:
Cash to vendors
Provisional
fair value at
acquisition
£’m
17.2
2.3
10.5
0.4
5.3
0.9
(7.0)
(3.3)
(0.2)
26.1
57.0
83.1
83.1
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 57
Deferred tax at 17.0% has been provided on the value of intangible assets. Acquisition costs of £255k were incurred and have been
charged to profit or loss within exceptional items.
On 4 January 2016, deferred consideration of £0.4m was paid in respect of ITP. During the year the Directors reviewed the
performance of ITP and concluded that the final payment of earn-out consideration of £0.4m would not be made. As this
assessment was made within 12 months of the acquisition, this has been adjusted in goodwill (note 13).
In 2015, the fair value of assets acquired as part of the Wincanton UK acquisition were shown as provisional. During the year a
re-assessment of these was undertaken and resulted in no adjustments being made. A fair value adjustment of £0.4m was made
in 2016 in respect of the Diamond Relocations freehold site which was sold in the year (note 12).
Other financial liabilities include £0.4m (2015: £0.5m) in respect of the contingent consideration in respect of Crimson UK Limited,
of which £0.3m is due after more than one year (2015: £0.5m).
Post acquisition results
Revenue
Profit before tax since acquisition included in the Consolidated statement of comprehensive income
PHS DS
£’m
17.7
1.8
If the acquisitions had been completed on the first day of the financial year, Group revenue would have been £160.1m and Group
continuing profit before tax would have been £12.7m. As explained in note 5, following the acquisition a number of restructuring
costs are incurred, and after this post acquisition restructuring the acquisitions have a positive impact on Group profit before tax.
The acquisition of PHS DS was made to acquire a market leading brand, Datashred (now trading as Restore Datashred), to extend
national coverage and increase the Group’s market share.
The goodwill on this acquisition is higher than on other recent acquisitions. The Directors believe this represents:
• the network of routes and depots built up by the company over many years which provide the backbone of profitable operations
in shredding
• the skilled workforce and knowledge acquired by the company in building a number 2 position in the market
• the potential for cost synergies in the Group’s existing shredding operation through consolidation of routes and depots with
PHS DS
• a platform for future bolt on acquisitions.
12. ASSETS CLASSIFIED AS HELD FOR SALE
At 31 December 2015 the assets and liabilities of Restore Document Management Ireland Limited (previously Wincanton
Ireland) were presented as held for sale and were subsequently disposed of on 10 March 2016 for €36.0m (£27.7m) the net cash
consideration being £27.4m.
In addition, a freehold site acquired as part of the acquisition of Diamond Relocations Limited was also classified as held for sale at
31 December 2015 and was sold on 5 May 2016 for £2.5m.
Assets classified as held for sale
Intangible assets
Property, plant and equipment
Other current assets
Liabilities classified as held for sale
Trade and other payables
Deferred taxation
2016
£’m
–
–
–
–
–
–
–
2015
£’m
17.8
5.6
0.8
24.2
2.2
2.4
4.6
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 58
13. INTANGIBLE ASSETS
Cost
1 January 2015
Additions – external
Disposals
Arising on acquisition of subsidiaries
Transferred to assets held for sale
31 December 2015
1 January 2016
Additions – external
Disposals
Arising on acquisition of subsidiaries
31 December 2016
Accumulated amortisation and impairment
1 January 2015
Charge for the year
Disposals
Transferred to assets held for sale
31 December 2015
1 January 2016
Charge for the year
31 December 2016
Carrying amount
31 December 2016
31 December 2015
1 January 2015
Goodwill
£’m
Customer
relationships
£’m
Trade
names
£’m
Applications
software
£’m
58.5
–
–
21.6
(4.8)
75.3
75.3
–
–
56.2
131.5
10.6
–
–
–
10.6
10.6
–
10.6
120.9
64.7
47.9
22.1
–
–
48.2
(13.0)
57.3
57.3
–
–
17.2
74.5
3.9
1.9
–
(0.1)
5.7
5.7
3.6
9.3
65.2
51.6
18.2
2.0
–
–
–
–
2.0
2.0
–
–
2.3
4.3
0.9
0.2
–
–
1.1
1.1
0.2
1.3
3.0
0.9
1.1
3.8
0.5
(1.6)
–
–
2.7
2.7
0.5
(0.1)
–
3.1
2.1
0.5
(1.3)
–
1.3
1.3
0.6
1.9
1.2
1.4
1.7
Total
£’m
86.4
0.5
(1.6)
69.8
(17.8)
137.3
137.3
0.5
(0.1)
75.7
213.4
17.5
2.6
(1.3)
(0.1)
18.7
18.7
4.4
23.1
190.3
118.6
68.9
The customer relationships have a remaining life of 5 – 20 years.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts The changes to goodwill during the year were as follows:
Cost
1 January 2015
Acquired – ITP
Acquired – DIAC
Acquired – Crimson
Acquired – Wincanton
Acquired – Diamond
Adjusted – Cintas UK
Transferred to assets held for sale
31 December 2015
Adjusted – Diamond
Acquired – PHS DS
Adjusted – ITP
31 December 2016
Accumulated impairment
1 January 2015 and 31 December 2015
31 December 2016
Carrying amount at 31 December 2016
Carrying amount at 31 December 2015
Carrying amount 1 January 2015
59
£’m
58.5
1.7
0.3
0.7
19.3
0.4
(0.8)
(4.8)
75.3
(0.4)
57.0
(0.4)
131.5
10.6
10.6
120.9
64.7
47.9
Allocation to cash-generating units
Goodwill has been allocated for impairment testing purposes to the following cash-generating units. The carrying value is as follows:
Document Management
Relocation
2016
£’m
114.2
6.7
120.9
2015
£’m
57.2
7.5
64.7
Annual test for impairment
For the purpose of impairment testing, goodwill and other intangibles are allocated to business segments which represent the lowest
level that those assets are monitored for internal management purposes. The recoverable amount of each cash-generating unit is
determined from value-in-use calculations. The calculations use pre-tax cash flow projections based on financial budgets approved by
the Directors for year one and cash flow projections for years two and three using growth rates that are considered to be in line with
the general trends in which each cash-generating unit operates. Terminal cash flows are based on these 3 year projections, assumed
to grow perpetually at 1%. In accordance with IAS 36, the growth rates for beyond the forecasted three years do not exceed the
long-term average growth rate for the industry. The key assumptions forming inputs to the cash flows are in revenues and margins.
Revenues for 2017 have been assessed by reference to existing contracts and market volumes. Margins have been assumed to be
consistent with those currently achieved in the Document Management and Relocation divisions. The forecasts have been discounted
at a pre-tax rate of 10.3% (2015: 12.3%). This discount rate was calculated using a pre-tax rate based on the weighted average cost of
capital for the Group. This has changed during the year as a result of changes in both the cost of equity and cost of debt for the Group.
The key assumptions used for the value in use calculations are as follows:
Revenue growth – average over 3 years
Revenue growth – remainder
Cost growth – employee/overheads, average over 3 years
Document
Management
%
Relocation
%
4
1
4
2
1
1
Sensitivity
The Group has not identified any reasonable potential changes to key assumptions that would cause the carrying value of the
remaining goodwill or intangibles to exceed its recoverable amount.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 60
14. PROPERTY, PLANT AND EQUIPMENT
Freehold and
long leasehold
land & buildings
£’m
Leasehold
improvements
£’m
Racking
plant &
machinery
£’m
Office
equipment
fixtures
& fittings
£’m
Motor
vehicles
£’m
Cost
1 January 2015
Additions
Disposals
Acquisitions
Transfer to assets
held for sale
31 December 2015
1 January 2016
Exchange differences
Additions
Disposals
Acquisitions
Reclassification*
31 December 2016
Accumulated Depreciation
1 January 2015
Charge for the year
Disposals
31 December 2015
1 January 2016
Charge for the year
Disposals
31 December 2016
Net book value
31 December 2016
31 December 2015
1 January 2015
11.5
0.4
–
2.2
(2.2)
11.9
11.9
–
0.5
–
–
–
12.4
0.8
0.1
–
0.9
0.9
0.1
–
1.0
11.4
11.0
10.7
7.0
0.8
(1.0)
–
–
6.8
6.8
–
1.1
(0.2)
1.3
–
9.0
1.2
0.5
(1.0)
0.7
0.7
0.7
(0.1)
1.3
7.7
6.1
5.8
16.3
1.7
(1.9)
0.1
–
16.2
16.2
–
1.9
(0.6)
6.0
6.0
29.5
4.8
1.3
(1.9)
4.2
4.2
2.3
(0.3)
6.2
23.3
12.0
11.5
3.9
0.5
(2.5)
9.7
(3.4)
8.2
8.2
0.1
1.0
(0.3)
0.4
(6.0)
3.4
2.3
0.7
(2.5)
0.5
0.5
0.7
(0.1)
1.1
2.3
7.7
1.6
1.0
0.1
(0.4)
0.1
–
0.8
0.8
–
0.1
(0.3)
2.8
–
3.4
0.4
0.2
(0.4)
0.2
0.2
0.5
(0.2)
0.5
2.9
0.6
0.6
Total
£’m
39.7
3.5
(5.8)
12.1
(5.6)
43.9
43.9
0.1
4.6
(1.4)
10.5
–
57.7
9.5
2.8
(5.8)
6.5
6.5
4.3
(0.7)
10.1
47.6
37.4
30.2
* During the year an amount of £6.0m previously recognised on 2015 acquisitions as office equipment fixtures & fitting was reclassified to racking plant & machinery
on the 2016 hive-up of these assets.
Capital expenditure contracted for but not provided in the financial statements is shown in note 32.
Depreciation is charged to profit or loss as an administrative expense. Assets with a net book value of £0.4m (2015: £nil) were held
under finance leases.
15. INVENTORIES
Finished goods and goods for resale
2016
£’m
1.9
2015
£’m
1.7
£1.1m (2015: £1.0m) of inventories were recognised as an expense in cost of sales in the year.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 16. TRADE AND OTHER RECEIVABLES
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables – net
Other receivables
Prepayments and accrued income
61
2016
£’m
26.8
(0.4)
26.4
2.4
9.6
38.4
2015
£’m
17.3
(0.1)
17.2
2.7
8.9
28.8
The average credit period is 63 days (2015: 57 days). No interest is charged on the trade receivables for the first 30 days from
the date of the invoice. Thereafter, interest may be charged at 2% per annum on the outstanding balance. Trade receivables are
provided for based on estimated irrecoverable amounts, determined by reference to past payment history and the current financial
status of the customers.
Movement in the allowance for impairment
1 January
Increase in amount recognised in profit or loss
31 December
2016
£’m
0.1
0.3
0.4
2015
£’m
0.1
–
0.1
In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date. See note 20 for an analysis of trade receivables that
were past due but not impaired.
17. TRADE AND OTHER PAYABLES
Trade payables
Other taxation and social security
Other payables
Accruals and deferred income
2016
£’m
11.4
5.4
0.6
16.9
34.3
2015
£’m
9.0
2.6
1.3
9.5
22.4
The Group has financial risk management policies in place to ensure that all payables are paid within the credit time frame. Trade
and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit period for
trade purchases is 65 days (2015: 70 days).
18. FINANCIAL LIABILITIES – BORROWINGS
Current
Bank loans and overdrafts due within one year
Overdrafts on demand
Bank loans – secured
Deferred financing costs
Non-current
Bank loans – secured
Deferred financing costs
2016
£’m
0.5
7.0
(0.2)
7.3
79.0
(0.6)
78.4
2015
£’m
1.4
2.5
(0.2)
3.7
66.0
(0.6)
65.4
The bank debt is due to The Royal Bank of Scotland plc and Barclays Bank plc and is secured by a fixed and floating charge over the
assets of the Group. The interest rate profile and an analysis of borrowings is given in note 20. Under the bank facility the Group is
required to meet quarterly covenant tests in respect of cashflow cover, interest cover and leverage. All tests were met during the
year and the Directors expect to continue to meet these tests.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 62
18. FINANCIAL LIABILITIES – BORROWINGS CONTINUED
Analysis of net debt
Cash at bank and in hand
Bank loans and overdrafts due within one year
Bank loans due after one year
19. OTHER FINANCIAL LIABILITIES
Obligations under finance leases – present value of finance lease liabilities
Repayable by instalments:
In less than one year
In two to five years
Over five years
2016
£’m
13.4
(7.3)
(78.4)
(72.3)
2016
£’m
0.4
0.1
0.2
0.1
0.4
20. FINANCIAL INSTRUMENTS
The Group’s financial instruments comprise cash, bank and various other receivable and payable balances that arise from its
operations. The main purpose of these financial instruments is to finance the Group’s operations.
Cash and cash equivalents
Cash at bank and in hand
2016
£’m
13.4
2015
£’m
8.5
(3.7)
(65.4)
(60.6)
2015
£’m
0.3
0.1
0.2
–
0.3
2015
£’m
8.5
As at 31 December 2016, trade receivables of £5.4m (2015: £3.3m) were past due but not impaired. These relate to a number of
independent customers with no recent history of default. The ageing analysis of these trade receivables is as follows:
60–90 days
Greater than 90 days
2016
£’m
4.8
0.6
2015
£’m
1.5
1.8
The main financial risks arising from the Group’s financial instruments are interest rate risk and liquidity risk. The Directors review
and agree policies for managing each of these risks. Interest rates are regularly reviewed to ensure competitive rates are paid.
Detailed cash flow forecasts are produced on a regular basis to minimise liquidity risks.
Carrying value of financial assets and (liabilities) excluding cash and borrowings
Loans and receivables
Financial liabilities measured at amortised cost
2016
£’m
27.3
(29.2)
2015
£’m
18.5
(19.5)
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 63
Currency and interest rate risk profile of financial liabilities
All bank borrowings are subject to floating interest rates, at LIBOR plus a margin of between 1.35% and 2.35%, depending on the
leverage covenant.
The interest rate risk profile of the Group’s gross borrowings for the year was:
Currency
Sterling at 31 December 2016
Sterling at 31 December 2015
Floating rate
financial
liabilities
£’m
Subject to
interest rate
collar
£’m
Weighted
average
interest rates
%
85.7
65.6
–
3.5
2.5
2.7
Total
£’m
85.7
69.1
The exposure of Group borrowings to interest rate changes and contractual pricing dates at the end of the year are as follows:
6 months or less
2016
£’m
85.7
2015
£’m
69.1
Interest rate sensitivity
At 31 December 2016, if interest rates had been 50 basis points higher and all other variables were held constant, it is estimated
that the Group’s profit before tax would be approximately £0.4m (2015: £0.2m) lower. This is mainly attributable to the Group’s
exposure to interest rates on its variable rate borrowings and is based on the change taking place at the beginning of the financial
year and held constant throughout the year.
The Group’s sensitivity to future interest rates changes has increased during the current year due to the increased debt.
Financial assets recognised in the statement of financial position and interest rate profile
All financial assets are short-term receivables and cash at bank. The cash at bank earns interest based on the variable bank base
rate and is held with Barclays Bank plc.
Maturity of financial liabilities
The maturity profile of the carrying amount of the Group’s financial liabilities (including interest payment) other than short-term
trade payables and accruals which are due within one year was as follows:
Within one year, or on demand
Between one and two years
Between two and five years
More than five years
Bank
debt
£’m
7.3
7.0
71.4
–
85.7
Other
financial
liabilities*
£’m
0.2
0.3
0.2
0.1
0.8
2016
Total
£’m
7.5
7.3
71.6
0.1
86.5
Bank
debt
£’m
3.7
6.0
59.5
–
69.2
Other
financial
liabilities*
£’m
1.6
0.2
–
–
1.8
2015
Total
£’m
5.3
6.2
59.5
–
71.0
* Other financial liabilities include interest accruals, amounts owing under finance leases and contingent and deferred consideration.
Borrowing facilities
The Group has a finance facility with The Royal Bank of Scotland plc and Barclays Bank plc which expires on 4 November 2020. This
facility at 31 December 2016 comprises term loans of £67.5m and a revolving credit facility (RCF) of £30.0m, which is partly reduced
by an on demand net overdraft facility of £1.5m (2015: term loan £50.0m, RCF £30.0m and overdraft £1.5m). An offset facility is in
place and on a gross basis, £13.9m of the overdraft facility was unutilised at 31 December 2016 (2015: £8.6m). Details of security
are given in note 18. Committed but undrawn borrowing facilities as at 31 December 2016 amounted to £12.0m (2015: £8.6m).
All of the Group’s borrowings are in sterling.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 64
20. FINANCIAL INSTRUMENTS CONTINUED
Fair values of financial assets and financial liabilities
The Group’s financial assets and liabilities bear floating interest rates and are relatively short-term in nature. In the opinion of the
Directors the book values of the assets and liabilities equate to their fair value.
Interest rate management
The Group does not currently hold any interest rate swaps to mitigate the risk of changing interest rates on the issued variable rate
debt held, as the swaps held at 31 December 2015 expired during the year. The fair value was as follows:
Average contracted
fixed interest rate
Notional
principal amount
2016
%
–
2015
%
2.8
2016
£’m
–
2015
£’m
3.5
Fair value
2016
£’m
–
Less than one year
21. DEFERRED TAX
Summary of balances
Deferred tax liabilities
Deferred tax asset
Net position at 31 December
The movement in the year in the Group’s net deferred tax position is as follows:
1 January
Credit to profit for the year
Tax (charged)/credited directly to equity
Acquisitions
Transferred to liabilities held for sale
31 December
2015
£’m
–
2015
£’m
(12.0)
4.3
(7.7)
2015
£’m
(2.0)
0.6
0.1
(8.8)
2.4
(7.7)
2016
£’m
(13.2)
2.8
(10.4)
2016
£’m
(7.7)
2.8
(2.2)
(3.3)
–
(10.4)
The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon during the year:
Deferred tax liabilities
1 January 2015
Credit to income for the year
Acquisitions
Transferred to liabilities held for sale
31 December 2015
Credit to income for the year
Acquisitions
31 December 2016
Accelerated
capital
allowances
£’m
Intangible
assets
£’m
Properties
£’m
(1.3)
0.1
(0.1)
–
(1.3)
0.6
–
(0.7)
(3.9)
0.7
(8.9)
2.4
(9.7)
1.4
(3.3)
(11.6)
(1.0)
0.1
(0.1)
–
(1.0)
0.1
–
(0.9)
Total
£’m
(6.2)
0.9
(9.1)
2.4
(12.0)
2.1
(3.3)
(13.2)
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 65
Deferred tax assets
1 January 2015
(Charge)/credit to income for the year
Acquisitions
Transactions with owners
31 December 2015
Credit/(charge) to income for the year
Transactions with owners
31 December 2016
Share-based
payments
£’m
2.6
(0.1)
–
0.1
2.6
0.1
(2.2)
0.5
Depreciation in
excess of capital
allowances
£’m
Provisions
£’m
0.1
0.2
–
–
0.3
0.1
–
0.4
1.3
(0.2)
0.3
–
1.4
(0.2)
–
1.2
Losses
£’m
0.2
(0.2)
–
–
–
0.7
–
0.7
Total
£’m
4.2
(0.3)
0.3
0.1
4.3
0.7
(2.2)
2.8
A deferred tax asset has been recognised on the share-based payments charge. An amount of £2.2m (2015: £0.1m) has been taken
directly to equity.
A deferred tax asset of £0.7m (2015: £nil) has been recognised on brought forward tax losses due to greater certainty over
recoverability of the asset. A potential deferred tax asset amounting to £nil (2015: £0.9m) on tax losses of £nil (2015: £4.6m) has not
been recognised due to uncertainty over the recoverability of the asset.
22. PROVISIONS
Onerous lease provision
1 January
Used during the year
Increase in provision arising on the acquisition of Cintas UK
31 December
2016
£’m
7.7
(0.7)
–
7.0
2015
£’m
7.2
(1.1)
1.6
7.7
The onerous lease provision relates to future payments at above market rents on onerous leases on a number of sites expiring
before March 2030. £1.0m of costs are expected to be incurred within one year and the balance over the next 7 years. This
provision has been discounted at 6%, being the market commercial property yield rates (2015: 6%).
Provisions are analysed as follows:
Current
Non-current
Total
2016
£’m
1.0
6.0
7.0
2015
£’m
0.8
6.9
7.7
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 66
23. CALLED UP SHARE CAPITAL
Authorised:
199,000,000 ordinary shares of 5p each
Allotted, issued and fully paid:
112,067,479 (2015: 95,954,760) ordinary shares of 5p each
The issued ordinary share capital is as follows:
Date
1 January 2015
23 April 2015 – exercise of share options
10 June 2015 – exercise of share options
16 November 2015 – exercise of share options
8 December 2015 – equity raised to acquire Wincanton
31 December 2015
11 May 2016 – exercise of share options
9 June 2016 – exercise of share options
26 August 2016 – equity raised to acquire PHS DS
13 December 2016 – exercise of share options
31 December 2016
2016
£’m
10.0
5.6
2015
£’m
10.0
4.8
Number of
ordinary shares
82,213,540
Issue price
372,541
256,016
35,739
13,076,924
95,954,760
3,916,015
38,051
12,143,632
15,021
112,067,479
5.0p
5.0p
5.0p
260.0p
5.0p
5.0p
290.0p
5.0p
The 3,969,087 (2015: 664,296) ordinary shares shown as issued above as a result of the exercise of share options were net-settled
at market price on the day of exercise (note 29).
24. SHARE PREMIUM ACCOUNT
1 January
Premium on shares issued during the year
Share issue costs
31 December
2016
£’m
67.5
34.6
(1.2)
100.9
2015
£’m
35.3
33.2
(1.0)
67.5
The Company may use the reserve to reduce a deficit in the retained earnings of the Company from time to time subject to
shareholders and court approval and the Company may release the reserve upon transferring to a blocked trust bank account a
sum equal to the remaining amount outstanding to non-consenting creditors that existed at the date of the capital reduction.
25. OTHER RESERVES
Share-based payments reserve
1 January
Charge for the year
Deferred tax on share-based payments charge
Transfers*
31 December
2016
£’m
4.7
0.8
(2.2)
(0.9)
2.4
2015
£’m
3.8
0.9
0.1
(0.1)
4.7
* A net amount of £0.9m has been reclassified from share-based payments reserve to retained earnings in respect of lapsed and exercised options (2015: £0.1m).
The share-based payments reserve comprises charges made to the income statement in respect of share-based payments under
the Group’s equity compensation schemes.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 26. RETAINED EARNINGS
1 January
Profit for the year
Dividends
Transfers*
31 December
67
2016
£’m
27.7
18.3
(3.7)
0.9
43.2
2015
£’m
23.8
6.0
(2.2)
0.1
27.7
* A net amount of £0.9m has been reclassified from share-based payments reserve to retained earnings in respect of lapsed and exercised options (2015: £0.1m).
Retained earnings are the balance of income retained by the Group. Retained earnings may be distributed to shareholders by a
dividend payment.
27. CASH INFLOW FROM OPERATIONS
Continuing operations
Profit before tax
Depreciation of property, plant and equipment
Amortisation of intangible assets
Net finance costs
Share-based payments charge
Loss on disposal of plant, property and equipment
Decrease/(increase) in inventories
Increase in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash generated from continuing operations
Discontinued operations
Profit before tax
Depreciation of property, plant and equipment
Profit on disposal of available for sale assets
Net cash generated from discontinued operations
Net cash generated from operations
2016
£’m
7.5
4.3
4.4
2.0
0.8
0.8
0.2
(5.1)
3.1
18.0
7.7
0.1
(7.6)
0.2
18.2
2015
£’m
6.1
2.8
2.6
1.6
0.9
–
(0.5)
(1.5)
(1.0)
11.0
–
–
–
–
11.0
28. PENSIONS
The Group operates a number of defined contribution schemes for all qualifying employees. The assets of the schemes are
held separately from those of the Group in funds under the control of trustees. The total cost charged to profit or loss of £0.9m
(2015: £0.6m) represents contributions payable to these schemes by the Group at rates specified in the rules of the plan.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 68
29. SHARE-BASED PAYMENTS
Share options scheme
The Restore share option scheme was introduced in May 2005. Under the scheme the Remuneration Committee can grant options
over shares in the Company to Directors and employees of the Group. Options are granted at a fixed price equal to the market
price of the shares under option at the date of grant. The contractual life of the option is 10 years. Awards under the scheme are
generally reserved for employees at senior management level and above.
Between 2010 and 2016 the Company made grants of options to senior management and Directors, on which there are no
performance conditions and which are exercisable within 0 – 10 years.
Options were valued using a stochastic model. The fair value per option and the assumptions used in the calculation for the options
issued in 2015 and 2016 are as follows:
Grant date
Share price at grant date
Exercise price
Number of employees
Share options granted
Vesting period (years)
Expected volatility
Option life (years)
Expected life (years)
Risk free rate
Expected dividends expressed as a dividend yield
Fair value per option
10 October
2016
8 September
2016
337.0p
337.0p
2
347.0p
347.0p
1
16 June
2016
311.0p
311.0p
1
15 June
2015
271.0p
271.0p
1
150,000
300,000
250,000
100,000
3
30%
10
6
1.5%
0%
94.3p
3
30%
10
6
1.5%
0%
97.1p
3
30%
10
6
1.5%
0%
87.1p
3
30%
10
6
4.0%
0%
100.3p
The total fair value of options issued in the year was £0.7m (2015: £0.1m). The volatility is measured by calculating the standard
deviation of the natural logarithm of share price movements.
A reconciliation of share option movements over the two years to 31 December 2016 is:
Grant date
Outstanding at 1 January
Granted
Exercised
Converted from EIP
Outstanding at 31 December
Exercisable at 31 December
2016
Weighted
average
exercise price
79.0p
344.4p
62.4p
0p
63.8p
34.3p
Number
6,316,588
700,000
(4,975,588)
4,690,860
6,731,860
3,386,430
2015
Weighted
average
exercise price
73.1p
271.0p
51.5p
–
79.0p
60.9p
Number
7,036,588
100,000
(820,000)
–
6,316,588
5,366,588
The 4,975,588 options exercised as shown in the table above were net-settled at the market price on the day of exercise and
resulted in 3,969,087 ordinary shares being issued (note 23), (2015: 820,000 options exercised, 664,296 ordinary shares issued).
The exercisable options outstanding at 31 December 2016 had an exercise price of between 0p and 149.5p and a weighted average
remaining contractual life of 7.7 years (2015: 5.9 years). The weighted average share price at exercise date for options exercised in the
year was 320.0p.
Executive Incentive Plan (EIP)
The Director’s interests in the performance units of the EIP is as follows:
Charles Skinner
Adam Councell
2016
–
–
2015
66,667
16,667
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts 69
No payment was made for the grant of these awards. Performance units converted into nil-cost options on 26 November 2016,
being the end of the three year performance period, as the value created for shareholders was in excess of the threshold hurdle
calculated by reference to 10% annualised growth in the market capitalisation of the Company plus dividend payments minus net
shareholder investments, from the start of the performance period being 26 November 2013. The participants were entitled to
receive in aggregate 10% of the value created for shareholders above the hurdle, 50% of the entitlement will vest at the end of the
performance period with 25% at the end of each of the following two years.
On 26 November 2016 the performance conditions under the EIP were met and the performance units held by the Directors were
converted into nil-cost options as set out in the table below. All of these options were held at 31 December 2016.
Charles Skinner
Charles Skinner
Charles Skinner
Adam Councell
Adam Councell
Adam Councell
Number of nil-cost options
Date from which exercisable
1,759,073
879,536
879,536
586,358
293,179
293,178
5 December 2016
26 November 2017
26 November 2018
5 December 2016
26 November 2017
26 November 2018
30. DIRECTORS AND EMPLOYEES
Staff costs during the year
Wages and salaries
Social security costs
Post employment benefits
Share-based payments charge
Expiry Date
26 November 2023
26 November 2023
26 November 2023
26 November 2023
26 November 2023
26 November 2023
2016
£’m
36.2
3.5
0.9
0.8
41.4
2015
£’m
24.4
2.4
0.6
0.9
28.3
Average monthly number of employees during the year
Number
Number
Directors
Management
Administration
Operatives
Total amounts for Directors’ remuneration and other benefits
Emoluments for Directors’ services
Directors’ remuneration shown above included the following amounts in respect of the highest paid Director:
Salary and benefits
Directors exercised share options during the year as shown on page 35.
Key management compensation
Short-term employment benefits
Social security costs
Post employment benefits
Other benefits
Share-based payments charge
Long-term incentives vesting
The key management of the Group are management attending divisional board meetings.
2
300
101
1,395
1,798
2016
£’m
11.1
2
169
82
886
1,139
2015
£’m
0.8
7.2
0.4
2016
£’m
2.4
2.0
0.2
0.1
0.8
11.9
17.4
2015
£’m
1.9
0.3
0.1
–
1.0
–
3.3
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 70
31. LEASING COMMITMENTS
The Group leases various premises and assets under non-cancellable operating lease agreements of varying terms. The majority of
the lease agreements are renewable at the end of the lease period at market rate.
Land and buildings
Plant and machinery
Future aggregate minimum lease payments under
non-cancellable operating leases
– Within one year
– Within two to five years
– Over five years
2016
£’m
12.1
42.8
44.6
99.5
2015
£’m
9.4
28.8
48.9
87.1
The operating leases represent rentals payable by the Group for certain properties, vehicles and equipment.
32. CAPITAL COMMITMENTS
Capital expenditure
Contracted for but not provided in the financial statements
2016
£’m
1.8
5.6
0.7
8.1
2016
£’m
0.3
2015
£’m
1.1
2.0
0.2
3.3
2015
£’m
–
33. CONTINGENT LIABILITIES
The Company has entered into a bank cross guarantee with its subsidiaries. The guarantee amounts to £72.3m at 31 December
2016 (2015: £60.6m). The assets of the Company and its subsidiaries are pledged as security for the bank borrowings, by way of a
fixed and floating charge.
34. RELATED PARTY TRANSACTIONS AND CONTROLLING PARTY
The remuneration of key management personnel and details of the Directors’ emoluments are shown in note 30. Dividends
of £38,787, £12,445, £5,140, (2015: £14,077, £13,846, £nil) were paid to Charles Skinner, Sir William Wells and Adam Councell
respectively.
The Directors exercised share options in the period, as disclosed within the Directors’ remuneration report (page 35).
The Directors do not consider there to be a controlling party.
35. POST BALANCE SHEET EVENTS
On 9 January 2017 the Group completed the acquisition of the trade and assets of Reisswolf Wales, a secured shredding business
based in Welshpool Wales for £0.8m. On 23 January 2017, this was complemented by the acquisition of Bedfordshire based ID
Secured Limited, trading as Reisswolf London for £0.4m.
On 20 February 2017 the Company acquired The ITAD Works Limited for £1.9m, a Surrey based IT recycling company.
On 7 March 2017 the Group acquired the remaining 17% share in Relocom Limited for £0.4m.
The Group is still in the process of establishing the fair value of the assets and liabilities acquired in all of these acquisitions.
Notes to the Group financial statements continuedFor the year ended 31 December 2016RESTORE PLC > Annual Report and Accounts Company statement of changes in equity
For the year ended 31 December 2016
71
Balance at 1 January 2015
Loss for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares during the year
Issue costs
Dividends
Transfers*
Acquisition**
Share-based payments charge
Deferred tax on share-based payments
Balance at 31 December 2015
Balance at 1 January 2016
Profit for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares during the year
Issue costs
Dividends
Transfers*
Acquisition**
Share-based payments charge
Deferred tax on share-based payments
Balance at 31 December 2016
Attributable to owners of the parent
Share
capital
£’m
Share
premium
£’m
4.1
–
–
0.7
–
–
–
–
–
–
0.7
4.8
4.8
–
–
0.8
–
–
–
–
–
–
0.8
5.6
35.3
–
–
33.2
(1.0)
–
–
–
–
–
32.2
67.5
67.5
–
–
34.6
(1.2)
–
–
–
–
–
33.4
100.9
Other
reserves
£’m
3.7
–
–
–
–
–
(0.1)
–
0.9
0.1
0.9
4.6
4.6
–
–
–
–
–
(0.9)
–
0.8
(2.2)
(2.3)
2.3
Retained
earnings
£’m
Total
Equity
£’m
10.6
(3.1)
(3.1)
–
–
(2.2)
0.1
7.2
–
–
5.1
12.6
12.6
16.1
16.1
–
–
(3.7)
0.9
1.0
–
–
(1.8)
26.9
53.7
(3.1)
(3.1)
33.9
(1.0)
(2.2)
–
7.2
0.9
0.1
38.9
89.5
89.5
16.1
16.1
35.4
(1.2)
(3.7)
–
1.0
0.8
(2.2)
30.1
135.7
* A net amount of £0.9m has been reclassified from share-based payments reserve to retained earnings in respect of lapsed and exercised options (2015: £0.1m).
** As a result of hive-ups shown in note 36, retained earnings of £1.0m were transferred to the Company (2015: £7.2m).
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 72
Company statement of financial position
As at 31 December 2016
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets held directly for sale
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liabilities – borrowings
Current tax liabilities
Non-current liabilities
Financial liabilities – borrowings
Other long term liabilities
Deferred tax liability
Provisions
Total liabilities
Net assets
EQUITY
Share capital
Share premium account
Other reserves
Retained earnings
Equity attributable to the owners of the parent
Note
2016
£’m
2015
£’m
36
37
38
46
40
41
45
39
42
43
43
44
46
47
48
114.4
31.5
95.5
0.2
241.6
0.3
21.2
6.0
27.5
–
43.8
22.3
80.6
2.3
149.0
0.2
19.9
3.9
24.0
17.2
269.1
190.2
(16.1)
(6.8)
(0.2)
(23.1)
(78.4)
(23.9)
(8.0)
–
(110.3)
(133.4)
135.7
5.6
100.9
2.3
26.9
135.7
(12.5)
(2.3)
(2.1)
(16.9)
(65.4)
(15.2)
(3.1)
(0.1)
(83.8)
(100.7)
89.5
4.8
67.5
4.6
12.6
89.5
These financial statements were approved by the Board of Directors and authorised for issue on 22 March 2017 and were signed on
its behalf by:
Charles Skinner
Chief Executive
Adam Councell
Group Finance Director
RESTORE PLC > Annual Report and Accounts
Company statement of cash flows
For the year ended 31 December 2016
Net cash generated from operations
Net finance costs
Income taxes paid
Net cash generated from operating activities
Cash flows from investing activities
Purchase of property, plant and equipment and applications software
Purchase of subsidiary undertakings
Purchase of trade and assets
Sale of subsidiary
Cash flows used in investing activities
Cash flows from financing activities
Net proceeds from share issues
Dividends paid
Repayment of bank borrowings
Drawdown of revolving credit facility
New bank loans raised
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at start of year
Cash and cash equivalents at end of year
Cash and cash equivalents shown above comprise:
Cash at bank
73
Note
49
12
45
Year ended
31 December
2016
£’m
Year ended
31 December
2015
£’m
14.4
(1.7)
(0.3)
12.4
(2.9)
(83.1)
–
27.7
(58.3)
34.2
(3.7)
(2.5)
–
20.0
48.0
2.1
3.9
6.0
6.0
11.8
(1.1)
(0.8)
9.9
(2.3)
(66.6)
(2.0)
–
(70.9)
32.9
(2.2)
(47.0)
28.5
50.0
62.2
1.2
2.7
3.9
3.9
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 74
Company accounting policies
These financial statements for the Company have been prepared under the historical cost convention and in accordance with
the Companies Act 2006 and EU endorsed International Financial Reporting Standards (IFRS). The Directors consider that the
accounting policies as shown on pages 43 to 50 are suitable, are supported by reasonable judgements and estimates and have
been consistently applied except where stated below. A summary of the more important accounting policies is set out below.
GOING CONCERN
The going concern basis has been applied in these accounts on the basis that funds will be made available from other
group companies.
The going concern position is discussed further in the consolidated financial statements of the Group on page 43 and applies
to the Company.
COMPANY PROFIT AND LOSS ACCOUNT
In accordance with section 408 of the Companies Act 2006 the Company is exempt from the requirement to present its own profit
and loss account. The results for the financial year of the Company are given on page 71 of the financial statements.
HIVE-UPS
The Company holds investments in trading subsidiaries, but has a policy of hiving-up the trade and assets of acquired subsidiaries
within records management. During the year, the trade and assets of the records management business of Wincanton UK and PHS
DS was hived-up to Restore plc. On hive-up, separable intangible assets recognised on the original acquisition are recognised within
the Company statement of financial position together with other assets and liabilities. The previously recognised investment in the
subsidiary is de-recognised and any balance is taken to goodwill.
RESTORE PLC > Annual Report and Accounts
Notes to the Company financial statements
For the year ended 31 December 2016
36. INTANGIBLE ASSETS
Cost
1 January 2015
Additions – external
Transfer from subsidiaries
Disposals
Arising on acquisition
31 December 2015
1 January 2016
Additions – external
Arising on acquisition
31 December 2016
Accumulated amortisation and impairment
1 January 2015
Charge for the year
Disposals
31 December 2015
1 January 2016
Charge for the year
31 December 2016
Carrying amount
31 December 2016
31 December 2015
1 January 2015
Goodwill
£’m
Customer
relationships
£’m
Applications
software
£’m
22.9
–
–
–
10.5
33.4
33.4
–
32.1
65.5
3.8
–
–
3.8
3.8
–
3.8
61.7
29.6
19.1
1.8
–
–
–
12.1
13.9
13.9
–
40.8
54.7
0.1
0.5
–
0.6
0.6
2.2
2.8
51.9
13.3
1.7
1.7
0.3
0.2
(0.5)
–
1.7
1.7
0.3
–
2.0
0.8
0.3
(0.3)
0.8
0.8
0.4
1.2
0.8
0.9
0.9
Customer relationships have a life of 5-20 years. Amortisation is charged to profit or loss as an administrative expense.
75
Total
£’m
26.4
0.3
0.2
(0.5)
22.6
49.0
49.0
0.3
72.9
122.2
4.7
0.8
(0.3)
5.2
5.2
2.6
7.8
114.4
43.8
21.7
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 76
Notes to the Company financial statements continued
For the year ended 31 December 2016
36. INTANGIBLE ASSETS CONTINUED
The changes to goodwill during the year were as follows:
Cost
1 January 2015
Acquired – Wansdyke Security
Acquired – Filebase
Acquired – Cintas UK
Acquired – DIAC
31 December 2015
Acquired – Wincanton UK
Acquired – PHS DS
31 December 2016
Accumulated impairment
1 January 2015
31 December 2015
31 December 2016
Carrying amount at 31 December 2016
Carrying amount at 31 December 2015
Carrying amount 1 January 2015
£’m
22.9
6.0
0.2
4.5
(0.2)
33.4
13.0
19.1
65.5
3.8
3.8
3.8
61.7
29.6
19.1
During the year the trade and assets of the storage business of Wincanton UK and PHS DS was hived-up into the Company.
Annual test for impairment
The recoverable amount of the Company is determined from value-in-use calculations. The calculations use pre-tax cash flow
projections based on financial budgets approved by the Directors for year one and cash flow projections for years two and three
using growth rates that are considered to be in line with the general trends in which the Company operates. Terminal cash flows are
based on these 3 year projections, assumed to grow perpetually at 1%. In accordance with IAS 36, the growth rates for beyond the
forecasted three years do not exceed the long-term average growth rate for the industry. The key assumptions forming inputs to
the cash flows are in revenues and margins. Revenues for 2017 have been assessed by reference to existing contracts and market
volumes. Margins have been assumed to be consistent with those currently achieved in the Document Management division. The
forecasts have been discounted at a pre-tax rate of 10.3% (2015: 12.3%). This discount rate was calculated using a pre-tax rate
based on the weighted average cost of capital for the Company. This has changed during the year as a result of changes in both the
cost of equity and cost of debt for the Company.
The key assumptions used for the value in use calculations are as follows:
Revenue growth – average over 3 years
Revenue growth – remainder
Cost growth – employee/overheads, average over 3 years
Document
Management
%
4
1
4
Sensitivity
The Company has not identified any reasonable potential changes to key assumptions that would cause the carrying value of the
remaining goodwill or intangibles to exceed its recoverable amount.
RESTORE PLC > Annual Report and Accounts 37. PROPERTY, PLANT AND EQUIPMENT
Freehold and
long leasehold
land & buildings
£’m
Leasehold
improvements
£’m
Racking
plant &
machinery
£’m
Office
equipment
fixtures
& fittings
£’m
Motor
vehicles
£’m
Cost
1 January 2015
Additions
Disposals
Acquisitions
31 December 2015
1 January 2016
Additions
Acquisitions
31 December 2016
Accumulated depreciation
1 January 2015
Charge for the year
Disposals
31 December 2015
1 January 2016
Charge for the year
31 December 2016
Net book value
31 December 2016
31 December 2015
1 January 2015
5.3
0.4
–
–
5.7
5.7
0.5
–
6.2
0.1
0.1
–
0.2
0.2
0.1
0.3
5.9
5.5
5.2
1.7
0.5
–
3.8
6.0
6.0
0.5
0.8
7.3
0.3
0.5
–
0.8
0.8
0.6
1.4
5.9
5.2
1.4
7.0
0.9
–
5.0
12.9
12.9
1.3
8.3
22.5
0.9
1.0
–
1.9
1.9
1.7
3.6
18.9
11.0
6.1
0.5
0.2
(0.1)
0.2
0.8
0.8
0.3
0.1
1.2
0.2
0.2
(0.1)
0.3
0.3
0.2
0.5
0.7
0.5
0.3
0.1
–
(0.1)
0.1
0.1
0.1
–
–
0.1
–
0.1
(0.1)
–
–
–
–
0.1
0.1
0.1
77
Total
£’m
14.6
2.0
(0.2)
9.1
25.5
25.5
2.6
9.2
37.3
1.5
1.9
(0.2)
3.2
3.2
2.6
5.8
31.5
22.3
13.1
Capital expenditure contracted for but not provided in the financial statements is shown in note 53.
Depreciation is charged to profit or loss as an administrative expense. Assets with a net book value of £nil (2015: £nil) were held
under finance leases.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 78
Notes to the Company financial statements continued
For the year ended 31 December 2016
38. INVESTMENTS
Shares in subsidiary undertakings
Cost
1 January 2015
Adjusted – Shred
Acquired – ITP
Acquired – DIAC
Acquired – Wincanton
Acquired – Diamond
Capital contribution – subsidiary share-based payment
Transfer to intangible assets (less deferred tax)
Transferred to assets held for sale (note 39)
31 December 2015
1 January 2016
Adjusted – Diamond
Adjusted – ITP
Acquired – PHS DS
Capital contribution – subsidiary share-based payment
Transfer to intangible assets (less deferred tax)
31 December 2016
Provision for impairment
1 January 2015
Charge for the year
31 December 2015 and 31 December 2016
Net book value
31 December 2016
31 December 2015
1 January 2015
£’m
82.4
0.3
7.7
0.7
57.3
2.5
0.1
(19.4)
(17.2)
114.4
114.4
(1.4)
(0.4)
83.1
0.2
(66.6)
129.3
28.8
5.0
33.8
95.5
80.6
53.6
RESTORE PLC > Annual Report and Accounts 79
At 31 December 2016 the Company held directly and indirectly equity and voting rights of the following undertakings:
Company
Class of
holding
% held
Country of
incorporation
Nature of
business
Document Management Division
All companies within this division are registered at The Databank, Unit 5 Redhill Distribution Centre, Salbrook Road, Redhill, Surrey RH1 5DY.
*Restore (Spur) Limited**
*Restore Shred Limited**
*Data Solutions 2016 Limited**
*Restore Scan Limited**
*Stapledon Holdings Limited**
*Wansdyke Security Limited
Document Control Services Limited
Crimson UK Limited
AARMS Limited
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
England and Wales
Records Management
England and Wales
Shredding Services
England and Wales
Shredding Services
England and Wales
Document Scanning
England and Wales
Holding Company
England and Wales
England and Wales
England and Wales
England and Wales
Dormant
Dormant
Dormant
Dormant
Relocation Division
All UK companies within this division are registered at 2 Oriental Road, Silvertown, London E16 2BZ.
*Harrow Green Limited
Relocom Limited**
*Diamond Relocations Limited**
*IT Efficient Limited**
*ITP Group Holdings Limited**
International Technology Products (UK)
Limited**
International Technology Products GmbH***
Office Green Limited**
Takeback Limited**
*Sargents Trading Limited
* Held directly
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
83%
100%
100%
100%
100%
100%
100%
100%
100%
England and Wales
England and Wales
England and Wales
Relocations
Relocations
Relocations
England and Wales
IT Asset Disposal
England and Wales
Holding Company
England and Wales
Printer Cartridge Recycling
Germany
Printer Cartridge Recycling
England and Wales
Printer Cartridge Recycling
England and Wales
Printer Cartridge Recycling
England and Wales
Dormant
** The Company has taken the exemption from audit under section 479A of the Companies Act 2006
*** The registered address of International Technology Products GmbH is Röntgenstraße 4, Hainburg, D-63512, Germany
Dormant companies are exempt from filing accounts under section 394 of the Companies Act 2006.
39. ASSETS CLASSIFIED AS HELD FOR SALE
In 2015 the assets of Restore Document Management Ireland Limited (previously Wincanton Ireland) were presented as held for
sale and subsequently disposed of on 10 March 2016.
Assets classified as held for sale
Investments
40. INVENTORIES
Finished goods and goods for resale
£0.1m (2015: £0.1m) of inventories were recognised as an expense in cost of sales in the year.
2016
£’m
–
2016
£’m
0.3
2015
£’m
17.2
2015
£’m
0.2
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 80
Notes to the Company financial statements continued
For the year ended 31 December 2016
41. TRADE AND OTHER RECEIVABLES
Due in less than one year
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables – net
Amounts due from group undertakings
Other receivables
Prepayments and accrued income
Due after more than one year
Amounts due from group undertakings
2016
£’m
11.3
(0.2)
11.1
0.5
0.1
4.6
16.3
4.9
21.2
2015
£’m
8.4
(0.1)
8.3
2.5
0.1
4.9
15.8
4.1
19.9
The average credit period is 57 days (2015: 62 days). No interest is charged on the trade receivables for the first 30 days from the
date of the invoice. Thereafter, interest may be charged at 2% per annum on the outstanding balance.
Trade receivables are provided for based on estimated irrecoverable amounts, determined by reference to past payment history
and the current financial status of the customers.
Movement in the allowance for impairment
1 January
Increase in amount recognised in profit or loss
31 December
2016
£’m
0.1
0.1
0.2
2015
£’m
0.1
–
0.1
In determining the recoverability of the trade receivables, the Company considers any change in the credit quality of the trade
receivable from the date credit was initially granted up to the reporting date. See note 45 for an analysis of trade receivables that
were past due but not impaired.
42. TRADE AND OTHER PAYABLES
Trade payables
Amount due to group undertakings
Other taxation and social security
Other payables
Accruals and deferred income
2016
£’m
4.9
0.5
2.1
–
8.6
16.1
2015
£’m
4.9
1.4
1.3
1.0
3.9
12.5
The Company has financial risk management policies in place to ensure that all payables are paid within the credit time frame.
Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average credit
period for trade purchases is 62 days (2015: 70 days).
43. FINANCIAL LIABILITIES – BORROWINGS
Current
Bank loans and overdrafts due within one year
Bank loans – secured
Deferred financing costs
Non-current
Bank loans – secured
Deferred financing costs
2016
£’m
7.0
(0.2)
6.8
79.0
(0.6)
78.4
2015
£’m
2.5
(0.2)
2.3
66.0
(0.6)
65.4
RESTORE PLC > Annual Report and Accounts 81
The bank debt is due to The Royal Bank of Scotland plc and Barclays Bank plc and is secured by a fixed and floating charge over the
assets of the Group. The interest rate profile and an analysis of borrowings is given in note 45. Under the bank facility the Group is
required to meet quarterly covenant tests in respect of cashflow cover, interest cover and leverage. All tests were met during the
year and the Directors expect to continue to meet these tests.
Analysis of net debt
Cash at bank and in hand
Bank loans and overdrafts due within one year
Bank loans due after one year
44. OTHER FINANCIAL LIABILITIES
Amounts due to group undertakings
Other long term liabilities
2016
£’m
6.0
(6.8)
(78.4)
(79.2)
2016
£’m
23.9
–
23.9
2015
£’m
3.9
(2.3)
(65.4)
(63.8)
2015
£’m
14.8
0.4
15.2
45. FINANCIAL INSTRUMENTS
The Company’s financial instruments comprise cash, bank and various other receivable and payable balances that arise from its
operations. The main purpose of these financial instruments is to finance the Company operations.
Cash and cash equivalents
Cash at bank and in hand
2016
£’m
6.0
2015
£’m
3.9
As at 31 December 2016 trade receivables of £1.5m (2015: £1.3m) were past due but not impaired. These relate to a number of
independent customers with no recent history of default. The ageing analysis of these trade receivables is as follows:
60–90 days
Greater than 90 days
2016
£’m
1.1
0.4
2015
£’m
0.5
0.8
The main financial risks arising from the Company’s financial instruments are interest rate risk and liquidity risk. The Directors
review and agree policies for managing each of these risks. Interest rates are regularly reviewed to ensure competitive rates are
paid. Detailed cash flows are produced on a regular basis to minimise liquidity risks.
Carrying value of financial assets and (liabilities) excluding cash and borrowings
Loans and receivables
Financial liabilities measured at amortised cost
2016
£’m
11.6
(13.8)
2015
£’m
10.7
(11.2)
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 82
Notes to the Company financial statements continued
For the year ended 31 December 2016
45. FINANCIAL INSTRUMENTS CONTINUED
Currency and interest rate risk profile of financial liabilities
All bank borrowings are subject to floating interest rates, at LIBOR plus a margin of between 1.35% and 2.35%, depending on the
leverage covenant.
The interest rate risk profile of the Company’s gross borrowings for the year was:
Currency
Sterling at 31 December 2016
Sterling at 31 December 2015
Floating rate
financial
liabilities
£’m
Subject
to interest rate
collar
£’m
Weighted
average interest
rates
%
85.2
64.2
–
3.5
2.4
2.7
Total
£’m
85.2
67.7
The exposure of Company’s borrowings to interest rate changes and contractual pricing dates at the end of the year are as follows:
6 months or less
2016
£’m
85.2
2015
£’m
67.7
Interest rate sensitivity
At 31 December 2016, if interest rates had been 50 basis points higher and all other variables were held constant, it is estimated
that the Company’s profit before tax would be approximately £0.3m lower (2015: loss £0.2m higher). This is mainly attributable to
the Company’s exposure to interest rates on its variable rate borrowings and is based on the change taking place at the beginning
of the financial year and held constant throughout the year.
The Company’s sensitivity to future interest rates changes has increased during the current year due to the increased debt.
Financial assets recognised in the statement of financial position and interest rate profile
All financial assets are short-term receivables and cash at bank. The cash at bank earns interest based on the variable bank base
rate and is held with Barclays Bank plc.
Maturity of financial liabilities
The maturity profile of the carrying amount of the Company’s financial liabilities (including interest payments), other than short-
term trade payables and accruals which are due within one year was as follows:
Within one year, or on demand
Between one and two years
Between two and five years
Bank
debt
£’m
6.8
6.0
72.4
85.2
Other
financial
liabilities*
£’m
–
–
23.9
23.9
2016
Total
£’m
6.8
6.0
96.3
109.1
Bank
debt
£’m
2.3
6.0
59.4
67.7
Other
financial
liabilities*
£’m
1.1
0.4
14.8
16.3
2015
Total
£’m
3.4
6.4
74.2
84.0
* Other financial liabilities include interest accruals, amounts owing under finance leases and contingent and deferred consideration.
Borrowing facilities
The Company has a finance facility with The Royal Bank of Scotland plc and Barclays Bank plc which expires on 4 November 2020.
This facility in 2016 comprises term loans of £67.5m and a revolving credit facility (RCF) of £30.0m, which is partly reduced by an on
demand net overdraft facility of £1.5m (2015: term loan £50.0m, RCF £30.0m and overdraft £1.5m). An offset facility is in place and on
a gross basis, £7.5m of the overdraft facility was unutilised at 31 December 2016 (2015: £5.4m). Details of security are given in note 43.
Committed but undrawn borrowing facilities as at 31 December 2016 amounted to £12.5m (2015: £10.0m).
All of the Company’s borrowings are in sterling.
Fair values of financial assets and financial liabilities
The Company’s financial assets and liabilities bear floating interest rates and are relatively short term in nature. In the opinion of
the Directors the book values of the assets and liabilities equate to their fair value.
Interest rate management (see page 64)
RESTORE PLC > Annual Report and Accounts 46. DEFERRED TAX
Summary of balances
Deferred tax liabilities
Deferred tax asset
Net position at 31 December
The movement in the year in the Company’s net deferred tax position is as follows:
1 January
Credit to profit or loss for the year
Tax (charged)/credited directly to equity
Acquisitions
31 December
83
2016
£’m
(8.0)
0.2
(7.8)
2016
£’m
(0.8)
1.6
(2.2)
(6.4)
(7.8)
2015
£’m
(3.1)
2.3
(0.8)
2015
£’m
1.0
0.2
0.1
(2.1)
(0.8)
The following are the major deferred tax liabilities and assets recognised by the Company and the movements thereon during the year:
Deferred tax liabilities
1 January 2015
Credit to income for the year
Acquisitions
31 December 2015
Credit to income for the year
Acquisitions
31 December 2016
Deferred tax assets
1 January 2015
Transactions with owners
31 December 2015
Credit to income for the year
Transactions with owners
31 December 2016
Accelerated
capital
allowances
£’m
Intangible
assets
£’m
(0.9)
–
(0.2)
(1.1)
0.4
–
(0.7)
(0.3)
0.2
(1.9)
(2.0)
1.1
(6.4)
(7.3)
Total
£’m
(1.2)
0.2
(2.1)
(3.1)
1.5
(6.4)
(8.0)
Share-based
payments
£’m
2.2
0.1
2.3
0.1
(2.2)
0.2
A deferred tax asset has been recognised on the share-based payments charge. An amount of £2.2m (2015: £0.1m) has been taken
directly to equity.
47. PROVISIONS
Onerous lease provision
1 January
Used during the year
31 December
2016
£’m
0.1
(0.1)
–
2015
£’m
0.1
–
0.1
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 84
Notes to the Company financial statements continued
For the year ended 31 December 2016
47. PROVISIONS CONTINUED
Provisions are analysed as follows:
Non–current
Total
48. SHARE CAPITAL
Authorised:
199,000,000 ordinary shares of 5p each
Allotted, issued and fully paid:
112,067,479 (2015: 95,954,760) ordinary shares of 5p each
The issued ordinary share capital is as follows:
Date
1 January 2015
23 April 2015 – exercise of share options
10 June 2015 – exercise of share options
16 November 2015 – exercise of share options
8 December 2015 – equity raised to acquire Wincanton
31 December 2015
11 May 2016 – exercise of share options
9 June 2016 – exercise of share options
26 August 2016 – equity raised to acquire PHS DS
13 December 2016 – exercise of share options
31 December 2016
2016
£’m
–
–
2016
£’m
10.0
5.6
2015
£’m
0.1
0.1
2015
£’m
10.0
4.8
Number of
ordinary shares
82,213,540
Issue price
372,541
256,016
35,739
13,076,924
95,954,760
3,916,015
38,051
12,143,632
15,021
112,067,479
5.0p
5.0p
5.0p
260.0p
5.0p
5.0p
290.0p
5.0p
The 3,969,087 (2015: 664,296) ordinary shares shown as issued above as a result of the exercise of share options were net-settled
at market price on the day of exercise (note 29).
49. CASH INFLOW FROM OPERATIONS
Continuing operations
Profit/(loss) before tax
Depreciation of property, plant and equipment
Amortisation of intangible assets
Net finance costs
Share-based payments charge
Increase in inventories
Decrease in trade and other receivables
(Decrease)/increase in trade and other payables
Net cash generated from continuing operations
Discontinued operations
Profit before tax
Profit on disposal of available for sale assets
Net cash generated from discontinued operations
Net cash generated from operations
2016
£’m
5.1
2.6
2.6
1.7
0.6
–
4.9
(3.1)
14.4
7.9
(7.9)
–
14.4
2015
£’m
(3.0)
1.9
5.8
1.6
0.9
(0.1)
2.9
1.8
11.8
–
–
–
11.8
RESTORE PLC > Annual Report and Accounts 50. SHARE-BASED PAYMENTS
Details of the share-based payments can be found in note 29.
51. DIRECTORS AND EMPLOYEES
Staff costs during the year
Wages and salaries
Social security costs
Post employment benefits
Share-based payments charge
85
2016
£’m
12.6
1.2
0.3
0.6
14.7
2015
£’m
9.6
0.9
0.2
0.8
11.5
Average monthly number of employees during the year
Number
Number
Directors
Management
Administration
Operatives
Total amounts for Directors’ remuneration and other benefits
Emoluments for Directors’ services
Directors’ remuneration shown above included the following amounts in respect of the highest paid Director:
Salary and benefits
Directors exercised share options during the year as shown on page 35.
Key management compensation
Short-term employment benefits
Social security costs
Post employment benefits
Share-based payments charge
Long-term incentives vesting
2
64
53
447
566
2016
£’m
11.1
2
46
53
380
481
2015
£’m
0.8
7.2
0.4
2016
£’m
1.3
1.4
0.1
0.6
11.4
14.8
2015
£’m
1.2
0.2
0.1
0.8
–
2.3
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 86
Notes to the Company financial statements continued
For the year ended 31 December 2016
52. LEASING COMMITMENTS
The Company leases various premises and assets under non-cancellable operating lease agreements of varying terms. The majority
of the lease agreements are renewable at the end of the lease period at market rate.
Future aggregate minimum lease payments
under non-cancellable operating leases
– Within one year
– Within two to five years
– Over five years
Land and buildings
Plant and machinery
2016
£’m
10.8
39.2
37.3
87.3
2015
£’m
7.9
25.5
28.1
61.5
2016
£’m
0.7
1.0
–
1.7
The operating leases represent rentals payable by the Company for certain properties, vehicles and equipment.
53. CAPITAL COMMITMENTS
Capital expenditure
Contracted for but not provided in the financial statements
2016
£’m
0.2
2015
£’m
0.4
0.4
–
0.8
2015
£’m
–
54. CONTINGENT LIABILITIES
The Company has entered into a bank cross guarantee. The guarantee amounts to £72.3m at 31 December 2016 (2015: £60.6m).
The assets of the Company are pledged as security for the bank borrowings, by way of a fixed and floating charge.
55. RELATED PARTY TRANSACTIONS AND CONTROLLING PARTY
Details of related party transactions can be found in note 34.
56. POST BALANCE SHEET EVENTS
On 23 January 2017 the Company acquired ID Secured Limited, a Bedfordshire based secure shredding company trading as
Reisswolf London for £0.4m.
On 20 February 2017 the Company acquired The ITAD Works Limited for £1.9m, a Surrey based IT recycling company.
RESTORE PLC > Annual Report and Accounts 87
Notice of Annual General Meeting
RESTORE PLC
Notice is hereby given that the Annual General Meeting of Restore plc ('the Company') will be held in Rooms 1 and 2 at the offices
of Cenkos Securities plc, 6.7.8 Tokenhouse Yard, London EC2R 7AS on 22 May 2017 at 2.00pm for the following purposes:
ORDINARY BUSINESS
1. To receive the Company’s annual accounts for the financial year ended 31 December 2016, together with the Directors’ report
and the Auditor's report on those accounts.
2. To re-appoint RSM UK Audit LLP as auditors to the Company to hold office from the conclusion of the meeting until the
conclusion of the next Annual General Meeting at which accounts are laid.
3. To authorise the Directors to set the auditors’ remuneration.
4. To re-appoint Stephen James Davidson, who retires by rotation pursuant to the Company’s Articles of Association, as a Director
of the Company.
5. To declare a final dividend of 2.67 pence per ordinary share in respect of the year ended 31 December 2016. This dividend will
be paid on 7 July 2017 to the holders of ordinary shares at 6pm on 9 June 2017 (the ex dividend date being 8 June 2017).
SPECIAL BUSINESS
As special business, to consider and, if thought fit, to pass the following resolutions which will be proposed as to resolution 6 as an
ordinary resolution and as to resolutions 7 and 8 as special resolutions:
6. That the Directors be and they are hereby generally and unconditionally authorised in substitution for all existing authorities
(but without prejudice to any allotment of shares or grant of rights already made, offered or agreed to be made pursuant
to such authorities) to exercise all the powers of the Company to allot equity securities (as defined in section 560 of the
Companies Act 2006 (the 'Act')) up to an aggregate nominal amount of £1,868,794.45 (being 37,375,889 ordinary shares of
5.0 pence each) provided that this authority shall, unless renewed, expire at the conclusion of the next Annual General Meeting
of the Company after the passing of this resolution or if earlier on the date which is 15 months after the date of this Annual
General Meeting, except that the Company may before such expiry make offers or agreements which would or might require
equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offers
agreements as if the authority conferred by this resolution had not expired.
7. That, subject to the passing of resolution number 6 above, the Directors be and they are hereby empowered, pursuant to
section 570 of the Act, to allot equity securities (as defined in section 560 of the Act) for cash pursuant to the authority
conferred by resolution number 6 or by way of a sale of treasury shares as if section 561 of the Act did not apply to any such
allotment, provided that this power shall be limited to:
7.1 the allotment of equity securities in connection with a rights issue or other pro-rata offer in favour of holders of equity
securities where the equity securities respectively attributable to the interests of all those persons at such record dates as
the Directors may determine are proportionate (as nearly as may be) to the respective numbers of equity securities held by
them subject to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with
treasury shares, fractional entitlements, record dates, practical or legal difficulties under the laws of any territory or the
requirements of any regulatory body or stock exchange or by virtue of equity securities being represented by depositary
receipts or any other matter whatsoever; and
7.2 the allotment (otherwise than pursuant to paragraph 7.1 above) of equity securities up to an aggregate nominal amount
of £560,638.33,
and shall expire upon the expiry of the general authority conferred by resolution 6 above, except that the Company may before
such expiry make offers or agreements which would or might require equity securities to be allotted and/or shares held by
the Company in treasury to be sold or transferred after such expiry and the directors may allot equity securities and/or sell or
transfer shares held by the Company in treasury in pursuance of such offers or agreements as if the power conferred by this
resolution had not expired.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 88
Notice of Annual General Meeting continued
SPECIAL BUSINESS CONTINUED
8. That the Company be and is hereby generally and unconditionally authorised, in accordance with section 701 of the Act,
to make market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of 5.0 pence each in the capital
of the Company (ordinary shares) on such terms and in such manner as the directors may from time to time determine provided
that:
8.1 the maximum number of ordinary shares authorised to be purchased is 11,212,766;
8.2 the minimum price which may be paid for each Ordinary Share is 5.0 pence (exclusive of expenses payable by the Company);
and
8.3 the maximum price which may be paid for each Ordinary Share (exclusive of expenses payable by the Company) cannot
be more than 105 per cent of the average market value of an Ordinary Share for the five business days prior to the day on
which the Ordinary Share is contracted to be purchased.
The authority conferred shall expire at the conclusion of the next annual general meeting of the Company or if earlier on the date
which is 15 months after the date of this annual general meeting except that the Company may before such expiry make a contract
to purchase its own shares which will or may be completed or executed wholly or partly after such expiry.
By order of the Board
Sarah Waudby
Company Secretary
22 March 2017
Registered Office
The Databank
Unit 5
Redhill Distribution Centre
Salbrook Road
Redhill
Surrey RH1 5DY
RESTORE PLC > Annual Report and Accounts 89
NOTES: THESE NOTES ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION.
1. A Shareholder entitled to attend and vote at the Annual General Meeting is entitled to appoint another person of his/her choice
as that Shareholder’s proxy to exercise all or any of that Shareholder’s rights to attend and to speak and vote at the meeting
on his/her behalf. A Shareholder may appoint more than one proxy in relation to the meeting, provided that each proxy is
appointed to exercise the rights attached to a different share or shares held by that Shareholder. A proxy does not need to be a
shareholder of the Company.
2. A Form of Proxy for use in connection with the meeting is enclosed with the document of which this notice forms part. Completion
and return of a Form of Proxy will not prevent a Shareholder from attending and voting in person at the meeting. Addresses (including
electronic addresses) in this document are included strictly for the purposes specified and not for any other purpose.
3. To appoint a proxy or proxies Shareholders must complete a Form of Proxy, sign it and return it, together with the power of
attorney or, any other authority under which it is signed, or a notarially certified copy of such authority, to the Company’s
registrars, Capita Asset Services, PXS1, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF so that it is received no
later than 2.00pm on 18 May 2017.
4. Only those members entered on the Register of Members of the Company at close of business on 18 May 2017 or, in the event
that this meeting is adjourned, in the Register of Members as at close of business on the day two days before the date of any
adjourned meeting, shall be entitled to attend and vote at the meeting in respect of the number of ordinary shares registered in
their names at that time. Changes to the entries on the register of members by the close of business on 18 May 2017 or, in the
event that this meeting is adjourned, in the register of members before the close of business on the day two days before the
date of the adjourned meeting, shall be disregarded in determining the rights of any person to attend or vote at the meeting.
5. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do so
for the Annual General Meeting to be held at 2.00pm on 22 May 2017 and any adjournment(s) thereof by using the procedures
described in the CREST Manual. CREST personal members or other CREST sponsored members, and those CREST members who
have appointed a voting service provider should refer to their CREST sponsors or voting service provider(s), who will be able to
take the appropriate action on their behalf.
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a “CREST
Proxy Instruction”) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s specifications and must
contain the information required for such instructions, as described in the CREST Manual. The message must be transmitted
so as to be received by the Company’s agent, Capita Registrars Limited (CREST Participant ID: RA10), no later than 48 hours
before the time appointed for the meeting. For this purpose, the time of receipt will be taken to be the time (as determined by
the time stamp applied to the message by the CREST Application Host) from which the Company’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST.
CREST members and, where applicable, their CREST sponsor or voting service provider should note that Euroclear UK & Ireland
Limited does not make available special procedures in CREST for any particular messages. Normal system timings and limitations
will therefore apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST member concerned
to take (or, if the CREST member is a CREST personal member or sponsored member or has appointed a voting service provider,
to procure that his CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any particular time. In this connection, CREST members and, where applicable, their
CREST sponsor or voting service provider are referred in particular to those sections of the CREST Manual concerning practical
limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
6. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares.
In the event of a conflict between a blank proxy form and a proxy form which states the number of shares to which it applies,
the specific proxy form shall be counted first, regardless of whether it was sent or received before or after the blank proxy
form, and any remaining shares in respect of which you are the registered holder will be apportioned to the blank proxy form.
You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy,
you should contact Capita Asset Services, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4TU.
7. Any corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all of its
powers as a member provided that they do not do so in relation to the same shares.
8. Copies of the following documents will be available for inspection at the Company’s registered office during normal working
hours on any week day (Saturdays, Sundays and public holidays excepted) from the date of this notice until the date of the
Annual General Meeting and at the place of the Annual General Meeting for 15 minutes prior to and during the meeting:
a. copies of all service agreements or letters of appointment under which the directors of the Company are employed by
the Company.
9. Biographical details of each director who is being proposed for re-appointment or re-election by shareholders can be found by
visiting the Company’s website www.restoreplc.com.
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 90
Notice of Annual General Meeting continued
EXPLANATION OF RESOLUTIONS
Resolution 6 – authority to allot shares
At the last General Meeting of the Company held on 22 August 2016, the Directors were given authority to allot ordinary shares in
the capital of the Company up to a maximum nominal amount of £547,331.25.
The Directors consider it appropriate that a further authority be granted to allot ordinary shares in the capital of the Company up
to a maximum nominal amount of £1,868,794.45 representing approximately one third of the Company’s issued ordinary share
capital as at 17 March 2017 (the latest practicable date before publication of this document) during the shorter of the period up to
the conclusion of the next Annual General Meeting in 2017 or 15 months.
As at the date of this notice the Company does not hold any ordinary shares in the capital of the Company in treasury.
Resolution 7 – disapplication of statutory pre-emption rights
Resolution 7 will empower the directors to allot ordinary shares in the capital of the Company for cash on a non-pre-emptive basis:
•
in connection with a rights issue or other pro-rata offer to existing Shareholders; and
• (other than in connection with a rights issue or other pro-rata offer to existing Shareholders) up to a maximum nominal value of
£560,638.33, representing approximately 10 per cent of the issued ordinary share capital of the Company as at 17 March 2017
(the latest practicable date before publication of this document).
Resolution 8 – authority to make market purchases of own shares
Resolution 8 gives the Company authority to buy back its own ordinary shares in the market as permitted by the Companies Act
2006. The authority limits the number of shares that could be purchased to a maximum of 11,212,766 (representing approximately
10 per cent. of the Company’s issued ordinary share capital as at 17 March 2017 (the latest practicable date before publication of
this document)), and sets minimum and maximum prices. This authority will expire at the conclusion of the next Annual General
Meeting or, if earlier, 15 months after the resolution is passed.
The Directors have no present intention of exercising the authority to purchase the Company’s ordinary shares but will keep
the matter under review, taking into account the financial resources of the Company, the Company’s share price and future
funding opportunities. The authority will be exercised only if the directors believe that to do so would be in the best interest of
Shareholders generally.
Companies purchasing their own shares are allowed to hold them in treasury as an alternative to cancelling them. No dividends are
paid on shares whilst held in treasury and no voting rights attach to treasury shares.
RESTORE PLC > Annual Report and Accounts 91
RESTORE PLC
(the 'Company')
(registered in England – No. 5169780)
FORM OF PROXY FOR USE AT THE ANNUAL GENERAL MEETING
TO BE HELD ON 22 MAY 2017 AT 2.00PM.
I/We
(Name in full in block capitals please)
of
being [a] member[s] of Restore plc appoint the Chairman of the meeting or
as my/our proxy to vote for me/us on my/our behalf at the annual general meeting of the Company to be held on 22 May 2017 at
2.00pm and at any adjournment of the meeting, on the resolutions listed below, as indicated by an ‘X’ in the appropriate box and,
on any other resolutions, as he thinks fit.
Please tick here if this proxy appointment is one of multiple appointments being made
For
Against
Vote
Withheld
Resolution
Business
Ordinary Resolutions
1.
2.
3.
4.
5.
6.
To receive the Company’s annual accounts for the financial year ended
31 December 2016 together with the Directors’ report and the Auditor’s report
on those accounts.
To re-appoint RSM UK Audit LLP as Auditors.
To authorise the Directors to set the Auditors’ remuneration.
To re-appoint Stephen James Davidson as a Director of the Company.
To declare a dividend of 2.67 pence per ordinary share
To authorise the Directors to allot shares pursuant to section
551 Companies Act 2006.
Special Resolutions
7.
8.
To disapply section 561 Companies Act 2006.
To authorise the Company to make market purchases of its own shares.
Signature:
Date:
2017
To return your completed Proxy form
please use the reply paid envelope provided
"
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS 92
Notice of Annual General Meeting continued
NOTES
1. A member who is entitled to attend and vote at the meeting is entitled to appoint one or more proxies to attend, speak and to
vote instead of him/her provided each proxy is appointed to exercise rights in respect of different shares. To appoint more than
one proxy (an) additional proxy form(s) may be obtained by contacting Capita Asset Services, PXS1, The Registry, 34 Beckenham
Road, Beckenham, Kent, BR3 4ZF, or you may photocopy this page indicating on each copy the name of the proxy you wish to
appoint and the number of shares in respect of which the proxy is appointed. All forms must be signed and should be returned
to Capita Asset Services in the same envelope.
2. A proxy need not be a member of the Company but must attend the meeting to represent you. To appoint as your proxy a
person other than the Chairman of the meeting, insert their full name in the space provided. If you sign and return this proxy
form with no name inserted as such, the Chairman of the meeting will be deemed to be your proxy. Where you appoint as your
proxy someone other than the Chairman, you are responsible for ensuring that they attend the meeting and are aware of your
voting intentions.
3.
4.
If someone else signed the form on your behalf, you or that person must send the power of attorney or other written authority
under which it is signed to the address detailed in Note 6 below.
In the case of joint holders, the vote of the senior member who tenders a vote, whether in person or by proxy, will be accepted
to the exclusion of the votes of any other of the joint holders. For these purposes, seniority shall be determined by the order in
which the names stand on the Register of Members.
5.
In the case of a corporation, this Form of Proxy must be executed under its common seal or signed on its behalf by a duly
authorised officer.
6. To be valid any proxy form or other instrument appointing a proxy must be:
a. completed and signed;
b. sent or delivered to Capita Asset Services, PXS1, The Registry, 34 Beckenham Road, Beckenham, Kent, BR3 4ZF; and
c. received by Capita Asset Services no later than 2.00pm on 18 May 2017.
7. Completion of a Form of Proxy will not affect the right of a member to attend and vote at the Annual General Meeting.
8. To direct your proxy how to vote on the resolutions mark the appropriate box on your proxy form with an ‘X’. To abstain from
voting on a resolution, select the relevant “Vote withheld” box. A vote withheld is not a vote in law, which means that the vote
will not be counted in the calculation of votes for or against the resolution. If no voting indication is given, your proxy will vote
or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to
any other matter which is put before the meeting.
9. Shares held in uncertificated form (i.e. in CREST) may be voted through the CREST Proxy Voting Service in accordance with the
procedures set out in the CREST Manual. The message must be transmitted so as to be received by the Company’s agent, Capita
Asset Services Limited (CREST Participant ID: RA10), no later than 48 hours before the time appointed for the meeting. For
this purpose, the time of receipt will be taken to be the time (as determined by the time stamp applied to the message by the
CREST Application Host) from which the Company’s agent is able to retrieve the message by enquiry to CREST in the manner
prescribed by CREST.
10. You may not use any electronic address provided either in this form of proxy or any related documents (including the notice of
meeting) to communicate with the Company for any purposes other than those expressly stated.
"
RESTORE PLC > Annual Report and Accounts 93
Officers and advisers
COMPANY SECRETARY
Sarah Waudby
REGISTERED NUMBER AND OFFICE
05169780
The Databank
Unit 5 Redhill Distribution Centre
Salbrook Road
Redhill
Surrey
RH1 5DY
NOMINATED ADVISER & BROKER
Cenkos Securities plc
6.7.8 Tokenhouse Yard
London
EC2R 7AS
PUBLIC RELATIONS
FTI Consulting
200 Aldersgate
Aldersgate Street
London
EC1A 4HD
INVESTOR RELATIONS CONSULTANTS
Capital Access Group
Sky Light City Tower
50 Basinghall Street
London
EC2V 5DE
Trading Record
INDEPENDENT AUDITOR
RSM UK Audit LLP
Chartered Accountants
25 Farringdon Street
London
EC4A 4AB
SOLICITORS
Brabners LLP
55 King Street
Manchester
M2 4LQ
BANKERS
Barclays Bank PLC
1 Churchill Place
London
E14 5HP
The Royal Bank of Scotland plc
Floor 9
280 Bishopsgate
London
EC2M 4RB
REGISTRARS
Capita Asset Services
The Registry
34 Beckenham Road
Beckenham Kent
BR3 4TU
Year ended 31 December
Revenue
Adjusted profit before taxation*
Adjusted earnings per share*
Net debt
Net assets
2016
£’m
129.4
23.0
17.9p
72.3
152.1
2015
£’m
91.9
16.3
15.6p
60.6
104.7
2014
£’m
67.5
12.0
12.3p
30.9
67.0
2013
£’m
53.6
10.0
10.5p
16.0
47.1
2012
£’m
43.3
6.2
7.4p
17.8
36.3
* Before discontinued operations, exceptional items (including exceptional finance costs), amortisation of intangible assets and share-based payments charge.
Financial calendar
Annual General Meeting
Half year results
Financial year end
Full year results
Held in May
September
31 December
March
OVERVIEW STRATEGIC REPORT GOVERNANCE FINANCIAL STATEMENTS LOCATIONS
Head Office
T: 020 7409 2420
E: info@restoreplc.com
W: www.restoreplc.com
66 Grosvenor Street, London W1K 3JL
Restore Records Management
T: 01293 446 270
E: admin@restore.co.uk
W: www.restore.co.uk
The Databank, Unit 5 Redhill Distribution
Centre, Salbrook Road, Redhill, Surrey RH1 5DY
Restore Datashred
T: 0800 376 4422
E: customerhub@restore.co.uk
W: www.shredding.info
Unit Q1, Queen Elizabeth Distribution Centre,
Purfleet, Essex RM19 1NA
Restore Scan
T: 0333 043 5643
E: enquiries@restorescan.co.uk
W: www.restore.co.uk/scan
Unit 4 Tally Way, Agecroft Commerce Park,
Salford M27 8WJ
Harrow Green
T: 0345 603 8774
E: info@harrowgreen.com
W: www.harrowgreen.com
2 Oriental Road, Silvertown
London E16 2BZ
Relocom
T: 0345 313 1491
E: contactus@relocom.co.uk
W: www.relocom.co.uk
IT Efficient
T: 01462 813 132
E: ite@itefficient.com
W: www.restore.co.uk/it-disposal
Unit 4B-4F Shefford Industrial Park,
St Francis Way, Shefford, Bedfordshire SG17 5DZ
ITP Group
T: 0118 943 8001
E: info@itp-group.com
W: www.itp-group.com
Unit 1 Stadium Way, Tilehurst,
Reading, Berkshire RG30 6BX
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IT EQUIPMENT
RECYCLING
TECHNOLOGY
RELOCATION
CARTRIDGE RECYCLING
STORE
WORKPLACE RELOCATION
Report &
Financial
Statements
For the year ended
31 December 2016
SHRED
SCAN