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Annual Report for the year ended 31 December 2020
The UK’s leading provider of integrated
information and data management,
technology recycling and commercial
relocation services
Highlights
Overview
At a glance
Key facts
Strong. Opportunity.
Chairman’s Introduction
Our Divisions
Strategic report
Our Business Model and Strategy
Chief Executive Officer’s Statement
Chief Financial Officer’s Statement
Risk Management
Principal risks and mitigation controls
Environmental, Social and Governance Strategy (ESG)
Governance
Board of Directors
Governance Statement
Audit Committee Report
Directors’ remuneration report
Directors’ report
Statement of Directors’ responsibilities
Independent auditors’ report
Financial statements
Consolidated statement of comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the Group financial statements
Company statement of financial position
Company statement of changes in equity
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
1
2
3
4
6
8
13
16
22
25
26
27
36
38
41
43
48
50
51
57
58
59
60
61
88
89
90
91
92
106
111
111
111
For more information please see
www.restoreplc.com
Highlights
1
A resilient performance throughout the year with a profitable result and
strong cash generation. Looking ahead, we have a solid foundation and
substantial opportunity to grow in the markets we serve.
Restore’s strategy to expand through organic growth, strategic acquisition and margin improvement is
confirmed by macro trends, growing market opportunities and our strong Environmental, Social and
Governance credentials.
The Group has significant financial capacity, and the business is well placed for future growth.
-15%
£182.7m
Revenue
£
-35%
£23.2m
Adjusted profit
before tax*
+0.2x
1.8x
Leverage**
-8.2p
15.0p
Adjusted basic
earnings per share*
Operational highlights
Financial highlights
O Strong start to 2020 before a resilient, profitable and
O COVID-19 impact mainly in Q2 with sustained recovery
cash generative performance in challenging conditions
and a strong bounce back in H2
O Highly effective management response to COVID-19 with
all businesses fully operational throughout the pandemic
O Restore Records Management continued net box
pattern throughout H2 and strategic progress on
acquisitions and cost reductions giving confidence to
short and mid-term growth potential
O Revenue of £182.7m reflecting the short term peak
disruption of COVID-19 in Q2
growth of 0.9% with storage income +1.4%
O Sustained recovery in H2 with activity approaching 90%
O Restore Digital underlying business strong despite
of pre COVID-19 levels by Q4
summer exams sessions cancellation
O Actions taken to deliver structural cost benefits of
O Restore Datashred impacted in the short term by reduced
activity and volumes but paper pricing increased
£2m p.a., together with enhanced flexibility, through site
consolidation and reduced headcount to provide future
margin benefit
O Restore Harrow Green performance robust throughout
the period with additional office reconfigurations
O Strong cash generation with substantial further
reduction in net debt of £22.4m from £88.5m to £66.1m
O Restore Technology acquisition of E-Recycling in Q4,
developing scale and capability
O Adjusted profit of £23.2m (2019: £35.6m) with H1 at
£10.0m improving to £13.2m in H2
O Strategic momentum continues with two further
acquisitions in the high growth Technology recycling
market completed since December 2020
O Growing pipeline of attractive opportunities capable of
further accelerating development
O Strong market positions improved with substantial room
to grow; Restore is well positioned for a full recovery and
substantial growth
O Non-cash impairment of £8.6m on intangible assets and
historic investment
O Statutory profit before tax of £4.0m (2019: £24.8m)
* Before amortisation of intangible assets, impairments and exceptional items (reconciled in note 10)
** Calculated using adjusted EBITDA for financial convenants (reconciled on page 22)
Overview | Restore plc Annual Report 2020 At a glance
2
Restore is the UK’s leading provider of integrated information and data
management, technology recycling and commercial relocation services.
Providing physical and virtual data storage, digitisation and automation
of data, secure data erasure and destruction, relocation and IT recycling
services, Restore’s mission is to be the most trusted and environmentally
responsible provider to the private and public sector.
We have a strong track record of success and a clear strategy to grow
through organic momentum, acquisition and synergy from scale and
cost efficiency.
Delivering excellence
The business has a strong Board and a highly
effective business management structure.
Each business unit is operated individually but
under our One Restore principle and through the
supervision of a strong Executive Committee that
further binds the business together.
ESG principles are fundamental to how the business
is run and are at the centre of what we provide
to customers.
Our success is reflected in excellent customer
satisfaction ratings, high customer retention rates
and repeat business.
FULL UK COVERAGE WITH
OVER 80 STORAGE AND
PROCESSING CENTRES NATIONWIDE
We provide safe and secure services in:
Data storage through Restore Records Management
Digitalisation and automation of data through Restore Digital
Secure erasure and destruction of data through Restore Datashred
Commercial and workplace relocation through Restore Harrow Green
IT asset deployment, management and decommissioning
through Restore Technology
Overview | Restore plc Annual Report 2020
3
Key Facts
Restore plc has two divisions, Document Management and Relocation.
Restore’s Document Management division comprises of Restore Records Management, Restore Digital and Restore Datashred providing
services in information and data storage, digitisation and automation of data and secure data erasure and destruction. Restore’s Relocation
division comprises of Restore Harrow Green and Restore Technology. Restore Harrow Green is the UK leader in commercial relocations
while Restore Technology is the UK leader in IT asset deployment, management, and decommissioning.
Our Markets
Divisions
Document Management
Relocation
Market
Position No.2
£450m
Market
Size
No.2
No.2
£250m-300m £220m
Market
Growth
Market
Share*
Sites
c.1-2%
c.3-4%
c.0-1%
22%
48
8%
7
19%
11
No.1
£350m
c.0-1%
12%
9
No.1
£525m
c.5-6%
5%
6
Strong and
improving
£1.9b
c.3%
c.11%
81
1,863
318
Highly accredited
national provider of
secure paper disposal
and recycling services
352
UK’s leading
commercial
relocation business
160
UK’s largest secure
IT disposal and
recycling provider
296
Highly regarded
national provider of
large scale digital
processing and
transformation
services
• Physical document
to digital image
processing
Employees 737
Our
services
Fully integrated,
cost effective and
customer focused
document storage
and management
services provider with
national scale but
local service
• Long term storage of
physical records
• Secure digital tapes
back up storage
• Heritage asset
protection and
storage
• Recurring and project
based document
management services
Our Income
Revenue Mix
8%
Restore Technology
19%
Restore Harrow Green
15%
Restore Datashred
* Management’s estimate of market share
• Digital transformation
• Paper recycling
consultancy
services and sales
• Intellectual Property
asset destruction
• Cloud-based
document
management services
• Process outsourcing
including digital
mailroom
• Secure on site
• Office and commercial
and offsite paper
destruction
• Highly accredited IT
asset collection and
disposal
• High security onsite
destruction services
• IT refurbishment and
resale
• Asset installation
• Asset relocation
services
• IT hardware secure
storage
relocations
• Full project
management
• Furniture, light industrial
and IT asset projects
• Short and medium
term asset storage
• Recurring relocation
and installation
support services
Recurring profit
48%
Restore Records
Management
10%
Restore Digital
e
g
a
t
n
e
c
r
e
P
100
90
80
70
60
50
40
30
20
10
0
Adhoc
Recurring activities
Long term contracts
Rental / Fixed Income
Overview | Restore plc Annual Report 2020 Strong
4
We have predictable, recurring revenues
We are strongly cash-generative
We provide mission critical services where our expertise and scale
provide assurance and efficiency in areas that are vital but non-
core to our customers operations.
Consistent with the value placed on our services, the majority of
revenue is contracted, and recurring in nature. This is particularly
true of our Records Management business which accounts for
around 70% of Group operating profit and the 22 million records
we store for our customers produce consistent, steadily growing
revenue streams. Our other four business units exhibit high
customer retention rates and benefit from contracted, recurring
revenues.
We have attractive operating margins
Our operating margins are excellent and reliable, averaging more
than 20% over the past three years. This core strength of the
business has been strongly demonstrated through the COVID-19
pandemic with flexibility in cost structures ensuring profitability
was protected, despite the economic and social disruption caused
by the crisis.
The security of margins reflects the critical nature of the services
we provide to customers and the benefit of our scale gives us
significant economic and service advantages. Our services are
specialist in nature and with continued investment in technology
and facilities we will maintain our strong cost advantage of
efficiency with scale. The services we provide are critical to our
customers’ day-to-day operations but cannot be performed
effectively in-house.
We are well-invested
We provide full coverage across the UK for all of our services. We
have consistently improved the quality of our operating sites and,
going forward, remaining within our historic capex envelope we
can maintain this quality. We also continue to look at opportunities
for business units to co-locate their sites and improve our cost and
service footprint as we expand.
The business has a track record of strong cash generation,
demonstrating the quality of the Group’s earnings. The strength
and reliability of these cashflows provides significant potential for
investment and capacity to secure further finance for expansion.
Operationally, we are very disciplined on cash management
and strategically, we invest in cash generative growth. The
predictability of our business model, the high quality of our
customers, the very low levels of bad debt and the addition of
cash generating businesses through acquisition, gives the Group a
significant advantage in the sectors in which we operate.
We have delivered consistent growth in earnings
per share
The Group has an excellent record in sustained growth in adjusted
earnings per share, increasing from 6.9p in 2011 to 23.2p in 2019.
A lower EPS for 2020 reflects the impact of COVID-19, although the
performance remains a respectable 15.0p.
We have provided attractive dividends
The Board’s objective is to provide shareholders with a regular
dividend and from 2011 to 2019 dividends increased substantially.
Despite a pause in dividend for 2020, the Board intends to return
to providing dividends and continuing to reward shareholders for
their valued support.
We hold strong market positions with substantial
room to grow
In all of the five markets we operate in we are either the UK market
leader or the number two and all markets show steady growth.
However, the fragmented nature of many of the markets we
operate in and our modest share of 11% when taken together
means we have significant opportunity to grow.
Revenue (£’m)
Adjusted profit before tax* (£’m)
2018
2019
2020
£195.5m
2018**
£215.6m
£182.7m
2019
2020
£33.5m
£35.6m
£23.2m
*Before amortisation of intangible assets, impairment and exceptional items.
**2018 comparative restated to apply consistent accounting policies.
Overview | Restore plc Annual Report 2020 Opportunity
5
We know our markets and deliver for customers
We have a clear strategy to drive acquisition growth
We have deep experience and knowledge of the UK’s private
and public sector working environments. We only focus on
‘B2B’ opportunities and understand how to improve efficiency
and provide low cost solutions for our customers. We know
what decision makers need and we tailor our services to their
requirements. We are highly disciplined and deliver excellent levels
of service to customers, generating strong customer satisfaction
and retention.
We have significant opportunity to grow market
share in all our sectors
The Group has grown quickly through organic growth and the
addition of new businesses to become the number one or two in
the markets in which we operate.
With underlying growth across the sectors and operating across
a mixture of mature and less developed markets, the Group has a
variety of opportunities to substantially expand market share from
a relatively low 11% today.
We have a clear strategy to deliver organic growth
We have a clear strategy to grow organically and faster than the
market through our high performance culture, scale advantage and
commitment to high customer satisfaction.
Although customer churn rate is generally low in our sectors, each
business unit has consistently grown its customer portfolio and
recurring revenues.
In addition, operating as part of a wider Group, each business
provides services to other Group businesses with cross-selling,
providing better customer outcomes and more strategic
relationships that our competition cannot match.
We have a demonstrated competence for successfully integrating
new businesses into the Group and we plan to continue to build
capability and further scale through the addition of earnings
enhancing acquisitions which in turn deliver synergy opportunities
to further enhance margins.
With substantial financial headroom and highly competent
mergers and acquisitions and integration teams, the business has
an excellent track record of identifying the right businesses for
acquisition and operating from relatively low levels of leverage, the
business has ample capacity to finance investment.
We have opportunity to grow operating margins
After a period of successful organic and acquisition driven growth,
we see a substantial opportunity to deliver synergy and increased
efficiency across the Group which will in turn benefit and grow
operating margins.
A significant focus is the property portfolio which we believe can
be rationalised to deliver cost savings over the next ten years. In
addition, by taking advantage of the increasing scale and hence
buying power of the Group we see opportunities to improve the
unit cost in many areas.
We have excellent customer relationships to cross
sell more services
We know that existing customers are our first priority, and we
deliver high levels of customer satisfaction leading to high
retention rates. From this consistency in delivery, we generate
repeat business and have a platform from which to sell more
services from all five of our business units. This repeat business
and cross-selling is one of the key foundations to generating
sustained organic growth of the business.
Adjusted basic earnings per share* (p)
Dividend per share (p)
2018**
2019
2020
22.5p
23.2p
2018
2019
2.4p
6.0p
15.0p
2020
Nil
*Before discontinued operations, amortisation of intangible assets, impairment and exceptional items.
**2018 comparative restated to apply consistent accounting policies.
Overview | Restore plc Annual Report 2020 6
Chairman’s Introduction
“From the start of the outbreak, Restore has reacted
quickly and effectively, ensuring COVID-secure
ways of working, providing continuity of service and
maintaining the capacity of the business in readiness
for a return to growth.”
Martin Towers | Chairman
Finally, I am pleased that the Group’s cash generation continues to
be a major strength with net debt reduced from £88.5m at the end
of 2019 to £66.1m at 31 December 2020.
Strategy progress
The Group held a very well attended virtual Capital Markets Day
in November and a recording of this event together with the
presentation can be found on the investor relations section of the
Group’s website at www.restoreplc.com
The presentation reaffirmed Restore’s unchanged strategy in the
light of COVID-19 and set out the significant growth opportunities
that lie ahead. Restore’s strategy is to generate sustained organic
growth from existing and new customers and to target the
substantial acquisition opportunities that exist in most of the
markets in which we operate. In addition, as a result of previous
acquisitions and business consolidation, the Group can drive
margin improvement through scale, synergy and consolidation.
The senior management team’s bench strength is being
considerably upgraded under Charles’ leadership and this process
continues into 2021. Thus, and despite the challenges presented
by the virus outbreak, the business made significant progress
in delivery of its strategy during the year. Records Management
delivered another year of organic growth in boxes of 0.9%;
underlying market share gains have been achieved in Restore Digital
and Harrow Green as continuity of service and customer focus led
to contract expansion. New wins and strategic acquisitions in 2020
and early 2021 have promoted Restore Technology to number one
in the IT asset disposal and recycling market.
Alongside this revenue building activity, the business has
progressed a number of operational improvements that will
result in margin improvements in the near term including 3 site
consolidations across Restore Digital and Restore Datashred and a
reduction in headcount of c.250 in Q4.
A source of competitive advantage is that the Group operates
from a number of modern purpose built facilities with spare
capacity for growth. An emerging strategic approach to property
management and space utilisation will be a further driver of
margin enhancement in years to come.
Introduction
Restore entered 2020 in good shape with our new management
team established and plans well underway to progress our
strategy to expand through organic growth, acquisitions and
margin opportunities as the Group continues to improve its
operating efficiency.
The arrival of the COVID-19 virus in March 2020, and its
subsequent evolution into a Global pandemic, required a rapid
reassessment of our goals for 2020 as the unprecedented social
restrictions and significant commercial disruption took effect.
From the start of the outbreak, Restore has reacted quickly and
effectively, ensuring COVID-secure ways of working, providing
continuity of service and maintaining the capacity of the business
in readiness for a return to growth.
Whilst our expansion plans were impacted in the short term by
the virus outbreak, our refocus on safety, our customers and
improving the business has served us well and we enter 2021 fully
prepared for the bounce back.
Finally, I am tremendously proud of our teams who responded
admirably in what continues to be a challenging environment.
I would like to extend my personal thanks to our Board, the
management and our staff for the significant efforts they have
made over the last year and continue to make in supporting
Restore and the UK’s recovery.
Results
The business started well in 2020 with growth in the first quarter
despite the emergence of COVID-19 in March. The second quarter
saw significant disruption with our first half results reflecting
strong cash generation and a profitable performance although
down on 2019.
The second half improved as we anticipated with revenue exiting
2020 at around 88% of pre COVID-19 levels with a particularly
strong performance from our Records Management business,
which represents 70% of profits, at 95% of pre-COVID-19 levels.
As a result, the business is reporting full year revenue of £182.7m,
down 15% on 2019 with adjusted profit of £23.2m for the year, down
35% on 2019. The resulting adjusted earnings per share is 15.0p for
2020, compared with 23.2p for 2019. I note that EPS is now stated
after the effects of IFRS16 and share-based payments charges.
Overview | Restore plc Annual Report 2020 Overview | Restore plc Annual Report 2020
7
Environment Social and Governance (ESG)
credentials
The Board and I are pleased to see the increasing focus on ESG
matters across the commercial, social and investor communities
and we have increased the visibility of Restore’s position on these
matters in this year’s strategic report on pages 12 to 34.
Dividends
Your Board is not proposing a dividend for the year ended
31 December 2020 having considered that whilst the business
has delivered a profitable result and good cash generation,
the interests of shareholders and the Group is best served by
preserving funds for investment requirements.
Restore’s credentials in this area are very strong. They are reflected
in how we operate the business and by the services we provide to
customers.
With strong indications of activity recovering to pre COVID-19 levels,
the Board would anticipate the reinstatement of dividends for the
2021 financial year.
ESG is in our DNA and our challenge is to continue to push
ourselves to be class leading and to ensure our stakeholders have
the opportunity to contribute to the development of our plans.
Health and Safety
During the year, our business led health and safety compliance
group continued to evolve with an expansion of cross Group
working and sharing of best practice. This became extremely
beneficial as COVID-19 impacted and policy and operating
procedures were quickly adapted and communicated to staff and
customers.
Alongside the team’s excellent response to continued safe working,
we also recruited a new role of Group Head of Risk. The role
oversees health and safety and risk and will further develop the
Group’s governance framework that will complement the existing
structures set out by the QCA code and other key governance
frameworks.
Summary and outlook
2020 has been the most challenging year for Restore and our
people in our history. However, with the increased activity levels
seen in H2, the return of all staff in December and the cessation of
the Group’s use of Coronavirus Job Retention Scheme (“CJRS”), our
confidence is building.
The business has shown tremendous financial and operating
resilience and on the assumption that a successful vaccination
programme in the UK allows a progressive return back to more
established trading patterns during 2021, Restore, with its leading
national market positions and strong management teams, is
well placed to take full and early advantage of improved trading
conditions as they arise.
Martin Towers | Chairman
18 March 2020
8
No.2
UK Market Position
£87.6m
2020 Revenue
20 million
Boxes under
management
>730
Staff
48
Sites
Accreditations
Cyber Essentials
ISO9001
14001, 27001
“National, full service storage business
with excellent customer service that
is fully integrated and focused on long
term sustained growth”
Restore Records Management is the largest business unit in the Group
accounting for a majority of operating profit.
With a consistent track record of organic growth and expansion through
acquisition, we have become one the UK’s largest and most trusted
providers of fully integrated document storage and management services.
Our customer focused staff serve more than 6,000 high quality
customers across the private and public sectors, providing storage
and retrieval solutions for hard copy documents, magnetic data
storage tapes and heritage assets. Around three-quarters of revenue
is generated from storage fees which provide a predictable and
consistent income stream together with strong cash generation,
whilst requiring only modest levels of capital investment to maintain.
Our commercial proposition is that we can realise significantly lower
storage and management costs than a customer could achieve through
application of their own resources and that customer processes can be
significantly enhanced through utilisation of Restore’s highly accredited
experience in handling high volumes of physical records.
Operating from 48 locations across the UK, the property estate is
primarily leasehold and provides a mixture of deep and active storage
options. The majority of facilities take the form of large, modern
industrial units, although the business also operates from a number of
cost effective locations in hardened aircraft shelters and former stone
mines. The current capacity utilisation is around 94% which provides
the optimum balance of cost effectiveness and operating efficiency.
Looking forward, management believe this is a market that can
continue to grow organically with many customers continuing to
produce paper documentation as part of their processes with further
opportunity to secure unvended records that are using valuable office
space and have yet to be outsourced to the storage marketplace.
The business is well invested and capital requirements are relatively
low but after a period of fast growth through acquisition, we have the
opportunity to expand margins through rationalisation, particularly
consolidation of the property estate, and by achieving further operating
efficiency through scale.
We have a strong track record of providing customers with local service
within an organisation that has national scale and can offer a number of
tailored document management service solutions.
Our Divisions
Document
Management
Restore’s Document Management
division comprises of Restore Records
Management, Restore Digital and
Restore Datashred providing services
in information and data storage,
digitisation and automation of data and
secure data erasure and destruction,
working together to deliver customer
requirements across the Document
Management sector.
Revenue (£’m)
2018
2019
2020
Operating profit (£’m)*
2018
2019
2020
£147.6m
£159.5m
£134.1m
£38.5m
£45.1m
£33.2m
*2018 stated before IFRS16.
Overview | Restore plc Annual Report 2020 9
No.2
UK Market Position
No.2
UK Market Position
£18.5m
2020
Revenue
50m
Cloud hosted
documents
> 290
Staff
7
Sites
Accreditations
ISO 9001, 27001,
14001, 45031,
22301, BS10008,
Cyber Essentials Plus
£28.0m
2020
Revenue
849,000
Trees
saved
> 310
Staff
11
Sites
4.6/5
Trust pilot
“National digital transformation business
focused on business critical document
and information management services”
With national presence and scale, Restore Digital provides
complex digital solutions including high volume processing of
physical documents into digital images or data, customer process
transformation and digital document storage and management
solutions.
A high proportion of our revenue is recurring or contracted. This
includes the annual UK exam scanning season and other large long-
term projects such as the digitisation of health records.
From this solid platform, the business has built extensive industry
knowledge and has operational and financial capacity to expand.
The sector is well established but evolving rapidly. We are at the
forefront of developing complex customer transformation solutions
and building new and innovative products for both public and private
sector organisations.
We have an excellent reputation for successful delivery of complex
projects and can quickly scale with customer requirements.
Operating from 7 sites across the UK, the business is well invested
but has relatively low investment requirements with the majority of
cost relating to operational labour, asset leases, IT network costs and
product investment.
Being part of the wider Restore Group, the opportunity for synergy
is significant and the business works in partnership with other Group
companies to achieve tailored customer solutions.
As part of a growing market and with an increasing customer base, we
are well placed to grow organically and through selective acquisition for
scale or capability.
“Trusted paper shredding and recycling”
Restore Datashred is a highly accredited and trusted supplier of secure
paper destruction services, operating with national scale but providing
local customer service.
Competing with many smaller or less regulated suppliers, we are the
most sophisticated operator in this fragmented and under-optimized
recycling market.
Serving over 32,500 customers across more than 78,000 locations from
SMEs to large national organisations, excellence in service delivery and
positive customer experience is reflected in the 4.6/5 trust pilot rating.
The majority of income is highly contracted and the business provides
both onsite destruction or secure collection and destruction at one of
the regionally located processing plants. An average of 80,000 tonnes
of paper is processed each year which is subsequently sold into the
recycled pulp market for reuse.
Other competitors in the sector are more reliant on shredded paper
resale values than us and, as such, the business is more resilient and
able to take advantage of fluctuations in the highly commoditised
shredded paper market.
Having grown through acquisition, we are currently number 2 in the
UK marketplace. The business’s scale is particularly important in a
sector where the key factor driving profitability is route density and
operational efficiency.
As part of a high quality public company environment, the business is
operated to high standards of control, providing customers with a high
degree of confidence in governance over their confidential waste disposal.
Looking ahead, as organisations respond to increasing environmental
obligations and regulation, management believe that we have
significant opportunity to grow share through organic expansion and
market consolidation.
Overview | Restore plc Annual Report 2020 Our Divisions
Relocation
10
No.1
UK Market Position
Restore Relocation division comprises
of Restore Harrow Green and Restore
Technology. Restore Harrow Green is
the UK leader in commercial relocations
while Restore Technology is the
UK leader in IT asset deployment,
management, and decommissioning.
Revenue (£’m)
2018
2019
2020
£47.9m
£56.1m
£48.6m
Operating profit (£’m)*
2018
2019
2020
£5.8m
£7.7m
£4.0m
£33.3m
2020
Revenue
308,000 pa
Desks
relocated
>350
Staff
9
Sites
130
Fleet size
“The UK’s No.1 business relocation
organisation”
Restore Harrow Green is the UK’s leading commercial relocation
company, supporting corporate and public sector clients with their
complex and demanding workspace move projects.
The business provides a full project management service and delivers
seamless physical relocation and installation of workspace, furnishings,
documents and IT equipment so that relocated staff simply turn up at
their new facility and can operate immediately post move.
In addition to the core office moves business, we also provide expert
relocation services to a number of discrete sectors including IT, life
sciences and military personnel.
These highly valued capabilities further underline our market leading
position in the commercial relocations sector. The business also offers
international move support for individuals or whole office relocations.
For many organisations, the additional services we can provide simplify
a complex logistics challenge. For many clients, legacy furniture disposal
and access to paper and IT recycling provide useful complementary
solutions, triggered by a decision to change location.
With a team of its size above over 350 staff and operating a fleet of
over 130 vehicles from 9 sites across the UK, we have the size and
experience to manage significant complexity scale and can flex resources
to accommodate demanding timetables required by clients seeking to
minimise downtime.
Customer satisfaction is very high and whilst one-off moves are critical,
over half of our revenue is generated through incremental activity and
office reconfigurations from existing customers who typically develop a
close and long term partnership with us.
We are particularly strong in London and have the opportunity to grow
regionally. Additionally, there is potential to enter into further channels
that require a high level of competence in moving assets including
museums and the health sector.
Importantly, we also play a key role in introducing new customers
to other Group companies as a physical move is often a trigger for
housekeeping or business process development where the Group is well
placed to provide additional services.
*2018 stated before IFRS16.
Overview | Restore plc Annual Report 2020 11
No.1
UK Market Position
£15.3m
2020
Revenue
372,000 pa
Assets
processes
>160
Staff
6
Sites
Accreditations
ADISA Certified,
ISO 9001, 14001,
27001, 45001, National
Police clearance
“The UK’s largest, highly accredited
full‑service IT asset recycling and
secure disposal business”
Restore Technology is the UK’s largest market leading IT asset
deployment, management and decommissioning business with the
highest levels of process and security certification in the sector.
The majority of income is attributable to secure decommissioning
services but with the provision of early and mid-life services, we
support direct and sales channel partners with physical support for the
whole asset lifecycle.
Our products include software imaging, physical installation and
asset tagging at early stage initiation, through the mid-life provision
of relocation services, hardware and software upgrades and at end of
life, fully secure and certificated decommissioning solutions through
repurposing, recycling or destruction.
The IT asset management and disposal market is growing, but not yet
mature, and we have the potential to become the key reference point
in the sector.
With an existing network of 6 processing sites across the UK, and the
capability to operate onsite or remotely, our technical expertise and
scale have substantial backing through the Group to invest and grow
its product breadth and uniquely operate effectively with large channel
partners and direct customers.
Operating in a fragmented and largely unregulated market, we provide
customers with a trusted supply chain. The accredited processes
provide high levels of customer assurance over the significant and
under-estimated data risk on asset decommissioning. Additionally, with
high levels of asset repurposing and zero landfill, the business provides
a strong environmental case for organisations seeking to develop their
ESG policies.
The market for assurance backed IT lifecycle and decommissioning
services is increasingly visible and growing. With Restore’s recent
investment in its class leading site at Bedford and successful
integration of 3 new ITAD businesses into our portfolio during the past
18 months, the business is very well placed to continue to expand
significantly both organically and through further acquisition.
Case study – Restore Records Management:
Scan on Demand for HM Land
Registry
The HMLR currently stores 88 million files in our
Coventry record centre and, thanks to the sterling
efforts of the operations and Public Sector teams, their
caseworkers working from home can still access vital
files for house move applications, deed changes and
dispute resolution.
At short notice, we’ve set up a scan on-demand service
that meets ISO27001 and BS10008 standards and
assigned experienced team members to the project,
to ensure its success. The team is currently processing
around 200 file scans for a specific lease project, along
with 50 scan-on-demand requests each day.
HMLR’s Central Operations Manager, Eve Foster, has
thanked Restore and ‘specifically the team at Cross
Point for the continued support they have provided to
HMLR during this challenging period’. She added:
“Without this service,
caseworkers wouldn’t be able
to process some essential
applications.”
Overview | Restore plc Annual Report 2020 Restore plc Annual Report 2020
12
Strategic Report
£600-700m
of revenue to consolidate
Reduce Costs
better for less cost
Margin expansion
c.4% Revenue pa
Grow faster than market
Acquisitions
Organic
Base profit
Value Creation Roadmap
Our Business Model & Strategy
13
Restore is the UK’s leading provider of integrated information and data
management, technology recycling and commercial relocation services.
Providing physical and virtual data storage, digitisation and automation of data,
secure data erasure and destruction, relocation and IT recycling services, Restore’s
mission is to be the most trusted and environmentally responsible provider to the
private and public sector.
Our services are critical to customer operations, reduce their costs and enhance
their organisation. With national presence and integrated businesses we lead the
sectors in which we operate.
Store data
Digitise/process
data
Securely destroy
data
Move teams &
IT assets
Erase data &
recycle IT assets
Our strengths
Our competitive advantage is based on bringing scale advantage to the markets
we operate in to drive down costs and investing in our people and technology to
deliver industry leading customer experience. We are focused on cash generative
growth which creates value that is shared with our investors and used to fund
continued growth.
Our strategy
The strategy we are driving is based on three core elements:
O Organic Growth – grow faster than the market relying
on high retention, repeat business and cross-selling the
wider services of the Group
O Acquisitions – four of the five markets have significant
acquisition opportunities in still largely fragmented and
in some cases immature markets
O Margin Expansion – after many years of acquisitive
growth the cost base is much larger giving us further
buying power to reduce cost. Additionally there is a
significant opportunity in real estate rationalisation as
we grow further.
A
c
q
u
i
s
i
t
i
o
n
s
nic Gro w t h
a
g
r
O
Engaged
Team
Customer
Excellence
4 of 5
markets
Scale
High
Retention
Upsell
Creating
Stakeholder
Value
Incremental
Capability
Online
Sales &
Service
Property
Rationalisation
Manage
Risk
Market
test costs
M
argin Exp a n s i
n
o
Strategic Report | Restore plc Annual Report 2020
Our Business Model & Strategy continued
14
+15%
Compound Annual Growth Rate
since 2011 in adjusted earnings
per share
+29%
Compound Annual Growth Rate
since 2011 in revenues
Our business philosophy
Our customers’ needs
We believe in empowering management and operate the Group
through autonomous business units supported by a small head
office. This provides customer responsiveness, operational
excellence and a more profitable cash generative outcome.
Many industries, particularly B2B services, are based around
an established channel to market. The key advantage that our
business units derive from being part of the Group is that they all
share a similar channel to market. Through our long established
Groupwide Customer Relationship Management system, we know
who the key decision makers are within our customers and to be
able to offer them the other services that we provide.
Our key resources and capabilities
Restore provides a range of data management services. These
services are operationally complex and mission-critical. These
services generate recurring revenues and are highly contracted.
High-quality performance is essential and, if this is delivered,
customers are unlikely to change supplier.
Our business units benefit from being market leaders in sectors
where scale generates significant cost effectiveness and enables
larger multi-branch customers to be serviced by a single supplier. In
a world where data in both a physical and digital form is becoming
more valuable and subject to increasing regulation the services we
provide which store, digitise, process, securely destroy and erase
data are in increasing demand.
O Competitive advantage through scale and market knowledge
Customer Benefits
O Longstanding customer relationships
O Nationwide coverage providing a one stop shop
O Sector leading technology investments
O Motivated, capable people
O Track record in integrating acquisitions
O Responsible leadership
O Business model based on positive environmental outcomes
Reduce costs
Transform ways of working
Eliminate data loss
Security of data
Improved quality & compliance
Strategic Report | Restore plc Annual Report 2020 15
Our Customer Base
Our Acquisition strategy
Our customer base covers a broad range of both private and
public sector entities. Examples of our market sector penetration
includes:
FTSE 100 companies
>80%
Top 50 UK accountancy practices
>80%
Top 100 UK legal practices
>90%
Local authorities in England, Wales and Scotland
>70%
UK National Health Trusts
>85%
Our business units benefit from scale in the UK market. The
services we provide are those where customers see little benefit in
changing suppliers. Acquisitions are the logical way to accelerate
business growth and create value.
The synergies we can generate from acquisitions means that we
can offer the owners of the acquired businesses an attractive
valuation while achieving a highly attractive return on capital for
our investors.
We have a proven track record in integrating acquired businesses
and in maintaining and improving service levels to our acquired
customers who see benefit in now being serviced by a company
with increased financial strength and service excellence.
Acquisitions in the year
Restore Digital
Complete Scanning Ltd
July 2020
Restore Technology
E-Recycling Ltd
October 2020
Strategic Report | Restore plc Annual Report 2020
Chief Executive
Officer’s Statement
“A year of significant strategic
progress with a resilient
financial performance setting
up the business for a strong
bounce back as the macro
environment recovers”
Adjusted earnings per share (p)*
Introduction
16
Charles Bligh | CEO
7.4
10.5
12.3
15.6
17.9
2012
2013
2014
2015
2016
2017
2018
2019 onwards includes IFRS16 and share-based payments.
2019
2020
15.0
Dividend per share (p)
22.5
25.2
23.2
2012
1.5
2013
2014
2015
2016
2017
2018
2019
2020
Nil
1.9
2.4
2.4
3.2
4.0
5.0
6.0
* 2018 and prior excluded IFRS16 and share-based payments. From 2019,
IFRS16 and share-based payments result in a charge to earnings. The
effect in 2019 was to reduce EPS by 4.4p.
We started 2020 with strong growth and ambitions to expand our
market share in all our segments. With the arrival of COVID-19, we
quickly shifted the business to focus on three priorities for the year
– customers, staff and the bounce back. Our speed of response
and ongoing management has been excellent and I am delighted
to report that customer retention and satisfaction has been very
strong throughout the entire year which will increase loyalty with our
customers for long term benefit. Staff safety was already a top priority
and the adaptation of the business to COVID-secure practices was
rapid and seamless. This has been illustrated through full continuity
of service and critically, strong staff engagement and an overall
improvement in health and safety statistics during the year.
The business rebounded quickly from the peak restrictions in Q2
with increasing profitability throughout the year. We continued
to focus on the transformation of our cost structure, and this
will have lasting benefits. We have also maintained business
capacity and continued with our strategy to invest in our products,
infrastructure, and customer service experience. I am delighted
with the progress of the various transformation related initiatives
across the Company which will come to market in 2021 and 2022
to drive our organic sales.
We go into 2021 with a clear strategy for growth in information
and data management, technology recycling, and commercial
relocation services. We are highly confident in our potential to
deliver sustained growth with the recurring nature of our revenues
and highly cash generative business model. We have significant
flexibility to grow organically and with acquisitions. With a very
strong balance sheet and substantial headroom in credit facilities,
we are well placed to invest in acquisition opportunities in the
fragmented markets we operate in. The impact of COVID-19 will
in all likelihood mean that a number of owner operators who were
looking to exit in the next five to ten years could quicken these
decisions in the coming years and with our excellent reputation
based on trust to acquire businesses we are well placed to have a
significant pipeline of companies to acquire across all our markets.
Our number one or two market positions have been strengthened
as a result of the crisis and as we start to see the improving
environment, supported by the roll out of the vaccination
programme, we look forward to building our market share
further through both organic performance and realisation of the
substantial acquisition opportunities.
Strategic Report | Restore plc Annual Report 2020 17
Results
Document Management Division
I am pleased to report a resilient financial performance in the
context of a challenging year and the clear impact of COVID-19
on general economic activity across the UK. For the year to 31
December 2020, the business achieved revenue of £182.7m, down
15% on 2019 and adjusted profit before tax to £23.2m, down 35%
on 2019. Adjusted operating margin decreased by 363bps to 17.3%
and earnings per share on an adjusted basis were down 35% at
15.0 pence (2019: 23.2 pence).Our disciplined approach to cash is
a core competence and I am delighted with the cash performance
for the year which saw net debt reduce by £22.4 million from
£88.5 million at 31 December 2019 to £66.1 million at 31 December
2020. This further year of debt reduction emphasises the cash
generative nature of the Group with net debt reduced by over £45
million since 2018.
A continued focus for the team is cost management and
during the year we made significant changes to reduce costs
structurally across the Group. We closed three operating sites
(two Digital, one Datashred) and implemented a restructuring
programme that led to a reduction in staffing levels of c.250
by the end of the year. We would anticipate that c.50% of this
saving will be maintained despite increasing activity levels. We
also continued the rationalisation of our Records Management
property portfolio with the transfer of boxes to the newly extended
Rainham facility and a number of other strategic discussions are
in flight to provide increased capacity for growth in the Records
Management business.
We paused our acquisition activity in March 2020 but resumed
activity with vendors in summer 2020. We completed two
small but important acquisitions in our Digital and Technology
businesses. We entered 2021 with an enhanced pipeline (quality
and quantity improved) of acquisition opportunities across all
business units. After the year ended, we also completed the
acquisition of Computer Disposals Ltd in January and The Bookyard
in March.
Our Document Management division comprises Restore Records
Management, Restore Digital and Restore Datashred. For 2020
revenue was £134.1 million, down £25.4 million on 2019 with
operating profit of £33.2 million, a reduction of £11.9 million
on 2019.
Restore Records Management storage revenue increased by 1.4%
but overall revenue declined 9% to £87.6m with the reduction in
activity revenues. We store approximately 20 million boxes or box
equivalents and 1.6 million data tapes, and this stream of recurring
revenues forms the foundation of profitability for the Group.
After a slow start to the year due to the impact of COVID-19
restrictions, we continued to grow through winning new business
and through box expansion from our existing customers to deliver
for the full year, 0.9% net box growth. This is an outstanding result
and shows the robust nature of the business model and the fact
that customers continued to generate records for storage during
severe restrictions and reduced economic activity.
Occupancy rates closed the year within target range, ending
2020 at 94% (2019 95.7%) which we consider to be the optimal
level. The extension in Rainham completed on budget in Q4 2020
providing over 700k new box slots to enable growth in London/
South East and also the consolidation of sites. We have further new
site developments in the pipeline which will come on stream in
2021 to increase capacity for both organic and acquisition growth
but also to allow for continued site rationalisation to increase
margins. During 2020 we focused operational resources within key
sites to move/destroy boxes to improve the density and efficiency
of sites to improve operational productivity going forward.
We have a clear strategy to deliver organic growth and build on
the 1.5% net box growth in 2019 and 0.9% in 2020. The long
term trends of digitisation are positive for Restore because for
most companies they require a hybrid plan of physical and digital
records management which only the incumbent storage partner
can provide. We are actively helping our customer grow their
existing physical storage and also transitioning to digital which
drives significant additional revenue. Flexible working is a positive
trend for Records Management because there is a large un-
vendored market (records still stored in offices) which we believe
is c.£100 million pa in potential revenues.
Strategic Report | Restore plc Annual Report 2020 Chief Executive Officer’s Statement continued
18
With companies looking to have shorter leases and either
downsizing or upsizing, the use of valuable office space to store
records is not economically or environmentally feasible, driving
an increase in market size over the next 10-20 years. Our net box
growth will be driven by winning some market share with rationale
pricing and also growth in existing customers because we see the
trend of organic box increase being greater than destructions.
A number of NHS (GP records scanning) contracts were won
and delivered successfully in year. Toward the end of the year
the business was successful in securing a substantial multi-year
contract for Lancashire and South Cumbria CCGs in partnership
with EMIS Health. We anticipate further awards in 2021 from the
NHS DPS framework. Sales forecasts are strong in this sector
where we anticipate further multi-million TCV awards in 2021.
We have excellent retention rates with customers and indeed 55%
of boxes stay in our facilities for an average of 16 years and 79% of
boxes have no destruction dates. This high retention model based
on great customer service with an increasing investment in digital
tools, coupled with a growing market, underpins our confidence in
organic net box growth for the future.
We have a clear margin expansion strategy in the business as
we grow. We are driving further scale and the resulting improved
economics. We are also investing in new customer portals and
other operational investments in fleet to drive down costs and
deliver an improved customer experience. A key area of reducing
costs is in our property portfolio. Over the next ten years we see
substantial opportunity to rationalise the property portfolio as we
grow both organically and with acquisitions to deliver a significant
increase in capacity with lower cost. Our strategy is to reduce
buildings by up to 50% and move c.5.8 million boxes to new
facilities. This will improve density by 25% and reduce property
costs by c.25% leading to cost reduction of c.£5 million pa. It will
also have further benefits of reducing operational costs per box
with this improved density. The building of new facilities will fall
within the normal capex envelope for the business.
Growth with acquisitions is a key priority. The market is fragmented
with over £100m of revenues in companies of <£10m turnover
providing a substantial pipeline of opportunity for the next 10+
years to grow. We have maintained an excellent reputation in the
market to be a trusted buyer of businesses and with a dedicated
acquisition team we are involved in constant and wide ranging
discussions to be the buyer of choice when the timing is right.
During 2020 we continued these discussions and we expect
acquisition activity to increase during 2021.
Restore Digital, our scanning business, saw revenues decrease
from £22.6 million to £18.5 million as a result of the cancellation
of the 2020 summer exam scanning contract with underlying
business development strong. Capacity and operating margin
ratios were maintained and with the increasing quality of
contracts we are seeing, the consolidation of 2 sites and
increasing breadth of product capability, the business is making
very good strategic progress.
The business overall performed exceptionally well with growth
in income from existing customers and new contract wins in the
year. With almost all the revenue decrease associated with the
cancellation of exams scanning, and normalising performance for
this effect, the like for like performance of the business was flat
which is an excellent result for the year. This shows the growing
strength of the business and the high value and essential nature of
the projects we deliver for customers.
Strong relationships and excellent service delivery in the Nuclear sector
have generated significant new opportunities for 2021 and beyond.
In line with strategy, Cloud & Consulting revenue grew by 21%. As
a result of one of these projects and in strategic partnership with
The APS Group, on behalf of National Records Scotland, we have
been awarded a contract to provide critical services in support of
the Scottish Census 2022.
We participate in a market of c.£300 million with mid-single digit
market share and a strong number two market position. Therefore,
we have significant room to grow both organically and with
acquisitions. We are clear where the growth will be generated with
three service areas, of 1) Scale/Digitisation/Preservation 2) Cloud/
Consultancy and 3) Process Outsourcing (ie Digital Mailroom).
We have an increased pipeline vs the same time last year in all
these areas and with the long term trends of digitisation, records
conversion and digital transformation increasing there is significant
opportunity to grow.
Restore Datashred, our secure shredding and recycling business
was impacted during 2020 with the reduction of office working.
Revenue declined from £41.0 million to £28.0 million as service
visits reduced, and paper volumes declined as expected with
COVID-19 restrictions and non essential office working. We did
however keep all operating sites open with substantial activity
across public sector and essential industries. Recycled paper
pricing increased during the year to be on average c.£150 per tonne
from a low of c.£125 per tonne during 2020.
During H2 we saw an increase in demand from customers for
both purge work in readiness to return to the office and general
office demand but with further restrictions at the end of year this
impacted the rate of the increase in activity.
There was intense focus on the cost structure of the business
during 2020. We closed our site in Cuffley with work absorbed into
our flagship Crayford facility servicing London. We made further
changes to the operational setup of the business during 2020
which will drive operational efficiency. With increasing demand
during 2021 and returning to pre COVID-19 levels we expect to see
this structural improvement lead to a sharp rise in profit margins
and productivity over the next 24 months.
We significantly improved the leadership in the business with
three senior appointments: Operations Director (Q2 2020), Sales
Director (Q3 2020) and Commercial Director (Q4 2020). We
delivered an improving experience to customers with the Trustpilot
rating improving from 4.5 to 4.6/5 and we won a prestigious
industry award to be the Paper Recycling Business of the year from
Letsrecycle.
Strategic Report | Restore plc Annual Report 2020 19
Our strategy is to grow the business substantially through
organic growth and acquisition and with this scale improve our
margins significantly. We are delivering on the cost actions and
are confident of the margin glide path. Although there is in the
short term uncertainty over the return to office trajectory, we do
expect increasing activity as we progress through the year and
the overall market to return to near pre COVID-19 levels. Given the
market is very fragmented and the smaller operators would have
been impacted more severely we expect this to drive increasing
acquisition opportunities in the medium term. This will deliver
increasing returns as we absorb acquisitions into our existing
UK footprint and capacity without any significant investment in
additional infrastructure. We are also developing and launching a
complete set of work from home offerings for the corporate and
public sector market, which provide more secure ‘send back to
base’ or ‘secure pickup’ options to drive further demand.
Relocation Division
Our Relocation division comprises Restore Harrow Green and
Restore Technology. It saw revenue decrease by £7.5 million to
£48.6 million with operating profit decreasing by £3.7 million to
£4.0 million.
Restore Harrow Green started the year strongly, but the impact of
COVID-19 caused a delay in major relocation projects leading to a
soft Q2 and summer period but ending the year with a significant
increase in activity. Overall revenue decreased from £41.5 million
to £33.3 million.
We performed better than our peers with the benefit of some
long term contracts with Public Sector customers throughout the
UK including working heavily in the Defence, Health, NHS and
Pharmaceutical industries.
This was supported by winning and delivering significant project
and contract wins in a tighter market. We secured our position
on multiple frameworks in the public sector including the YPO
(Yorkshire Purchasing Organisation) & CCS (Crown Commercial
Service), Whilst also securing contracts for Network Rail (UK
Contract), Manchester and Salford University and delivering
projects for organisations such as Freshfields, HMRC and
Penguin Books. As such, our market leading position has been
strengthened and sector expertise further expanded.
Throughout 2020 we continued to focus on the transformation of
the business with the start of the electrification of the fleet with 5
new vehicles. Improving our customer experience from sale to post
project completion is important and our aim is to lead the industry.
We have further improved our customer experience via improved
processes and portals with investments in digital service to deliver in
2021. We made progress on our environmental credentials with the
renewal of our Planet Mark Certification (7th year) and increasing our
partnerships with organisations in re-distributing unwanted office
furniture rather than going direct to recycling centres.
Case study – Restore Digital
Lloyd George patient record
scanning for the NHS
EMIS and Restore Digital have been working together
since 2017 to support GP surgeries across the whole of
England. To date we have digitised over 2.2 million patient
records for 1.6m patients.
For over 30 years, EMIS have been working to ensure
that healthcare professionals across the NHS have all
the information they need by providing instant access
to electronic patient records. EMIS technology is used
by over 10,000 different organisations across every
major healthcare setting, connecting healthcare teams,
enabling efficiencies and supporting better patient care.
When the COVID-19 pandemic struck the UK, EMIS
worked tirelessly alongside the NHS to ensure healthcare
professionals were equipped with the technology they
needed to respond to the crisis; from adapting to remote
working, through to delivering the vaccination. At the same
time, as the need for additional clinical space became more
urgent because of social distancing, together we have
provided an ‘On-Premise’ Packing Team service to deploy
into GP surgeries, ahead of digitising the notes to remove
the burden of cataloguing and packing patient files from
practice staff and to expedite the freeing up of all available
space within surgeries to allow additional consulting rooms.
Since October last year, we have removed over almost 6000
boxes worth of notes from 20 practices – the equivalent to
some two and a half tennis courts in space re-claimed! We
have a further 30 practices to assist between now and the
end of June and hope by 2022 to have supported upwards of
200 practices for one contract alone.
Strategic Report | Restore plc Annual Report 2020 Chief Executive Officer’s Statement continued
20
Restore Harrow Green delivered improved operating margins
versus the prior year with the disciplined management of
resources and strict cost control. This margin improvement
offset some of the impact of the revenue decline. We also believe
that we improved our market share during the year with various
competitors closing facilities, allowing us to win projects with
customers for the first time.
Our strategy is to grow organically with an increased focus on
channel partners to access the market and to broaden the services
we provide. One significant area of opportunity is to build a large
e-commerce website for the re-sale of recycled IT equipment.
We currently sell equipment exclusively through eBay which will
remain an important channel but a Restore Technology website will
drive increased margins in the business.
The impact of COVID-19 on the commercial office market is
uncertain but our relationships with our customers are indicating
that a return to the office will happen with a more flexible
approach. This supports our belief that the trend to have shorter
leases with the ability to scale up or down and the increasing
co-working market will mean that companies move offices more
often and have substantial change in the future. This is a large
positive for Restore Harrow Green because it will drive more office
relocation projects and sustained activity for change.
Our strategy in Restore Harrow Green is to grow organically and
expand into new customer segments that value certainty of
delivery and at the same time be a conduit for further opportunity
for the rest of the Group. One customer segment we already have
a strong market share in is Life Sciences and the pharmaceutical
industry. To grow further we have opened a new location in
Cambridge which will increase the storage capacity by over 10%
across Restore Harrow Green and provide further foundations for
growth in this important customer segment.
Restore Technology saw revenues increase by £0.7 million to
£15.3 million. The result would have been significantly higher, but
we saw a softening of the collection of used IT equipment with
customers using equipment with increased home working and
delaying large infrastructure projects. We made one acquisition
during the year, E-Recycling on 30 October 2020. The addition of
E-Recycling will further enhance the Group’s strong position in this
rapidly growing high security asset destruction market, an entry
point to the large data centre market which will provide increased
access to a number of strategic sales channels and strengthen
Restore’s national coverage.
We are now the largest IT recycling business (ITAD) in the UK but
still with only single digit market share across corporate and public
sector. This is a large and growing market and with the increasing
awareness of the environmental impact of used technology and
data security the value of the ITAD market will only increase. It
is important to have scale in this market to have the lowest cost
structure. Increasingly customers value dealing with a large and
trusted business to securely manage their data security.
The market for IT recycling is directly correlated with the wider IT
market. The global IT industry experienced a robust year during
2020 with companies investing in equipment to mitigate the
pandemic. We strongly believe that we are likely to see increased
IT investment by companies over the next several years with
organisations frustrated by the lack of agility and flexibility in the
face of the pandemic. With this increase in IT investment, we will
see a direct correlation with the increase in the IT recycling market.
With a highly fragmented market we have significant opportunity
to grow scale through the acquisition of smaller ITAD businesses
across the UK which drive synergy benefits.
Outlook
Looking ahead, we are weathering the impact of COVID-19
with strong liquidity and we are seeing a strong bounce back in
customer activity and sales pipeline. Specifically, in our Records
Management business on the back of net box growth of 1.5% in
2019 and 0.9% in 2020 our expectation is organic net box growth
of between 1-2% in 2021.
Across all business units we have a clear strategy to grow
organically and with acquisitions and to improve margins overall at
the same time. As shown in the Capital Markets Day presentation
in November 2020, our objective is to deliver consistent double
digit returns to shareholders with a substantial increase in profits
with growth across all business units.
All the markets we operate in are growing and with our number
one or number two market positions we are well placed to grow
organically at a faster pace than the overall markets. With the
recurring nature of our revenues and exceptional cash generation,
which was demonstrated both in 2019 and 2020, we are well
placed to capitalise on the market changes ahead. With this
strength and our disciplined growth strategy we will remain at
the forefront of shaping our markets in the coming years and will
deliver a substantial increase in profits and shareholder value.
In January we completed the acquisition of Computer Disposals
Ltd (CDL) which will provide an additional facility in the North West
of England and complements Restore Technology’s existing sites in
Birmingham, Bedford, Bristol, Portsmouth and Dunsfold. CDL will
increase revenues by c.£8 million pa.
In March we completed a further acquisition in Restore Technology
of The Bookyard, adding significant Apple recycling and
e-commerce capability to the Group.
Trading since the start of the year has been in line with the Board’s
expectations.
Charles Bligh
Chief Executive Officer
18 March 2021
Strategic Report | Restore plc Annual Report 2020 21
Case study – Restore Harrow Green
Restore supports Crisis at Christmas 2020
Christmas is a time of sharing, indulgence and good
times with family and friends for most of us, but sadly,
not everyone is fortunate enough to have the means
of celebrating as they’d like. This year the onset of the
pandemic has made matters even harder for many who
have lost their livelihoods or been unable to get back on
their feet in what has been a very difficult few months.
Restore Harrow Green has always been very conscious of
the struggles of the homeless and less fortunate, which is
why every winter we make sure to collect, donate to and
promote a number of charities close to our hearts, with
Crisis at Christmas being a cause for which we collect a
large quantity of goods for as well as handle their logistical
challenges where possible.
This year a big part of the Restore Group came together,
including Restore Harrow Green, Restore Records
Management, Restore Digital as well as our head office,
Restore plc, each of which donated £500. This gave us a
total of £2,000 with which to purchase necessities for the
homeless that Crisis supports over the holiday period. With
the donated money we purchased £500 worth of men and
women’s clothing as well as £500 worth of groceries (toiletries,
food, and drink) and delivered them to their London depot
for distribution. We also purchased a further £500 worth of
groceries which was sent to Crisis’ centre in Newcastle.
Ian Richards, Head of Crisis at Christmas, said: “I am
stunned by the big-heartedness of our supporters and
especially at Christmas time. I would like to thank Restore
for their donation of new clothing and groceries which helps
us provide homeless people with vital support at Christmas.
“Our guests and the staff and
volunteers I have the pleasure of
working alongside, tell me that
they are grateful that our work
at Christmas time is just the
beginning of ending someone’s
homelessness. During our time
with guests, we encourage them to
become a member of Crisis where
they can access support to end
their homelessness. It’s personally
rewarding that this all begins
with the work my team and our
supporters make happen.”
Strategic Report | Restore plc Annual Report 2020 22
Chief Financial Officer’s
Statement
“Restore has shown financial
resilience and adaptability in
a challenging year. The Group
has delivered a profitable result
with substantial debt reduction,
once again illustrating the
highly cash generative nature
of the business.”
Financial Highlights
Revenue
Adjusted profit before tax*
Statutory profit before tax
EBITDA**
Adjusted EBITDA***
Net debt
2020
£’m
182.7
23.2
4.0
57.4
37.4
66.1
2019
£’m
215.6
35.6
24.8
70.0
54.0
88.5
Neil Ritchie | CFO
Introduction
Restore entered 2020 with strong expectations for a year of further
growth, building on the Group’s strong track record of underlying
organic growth, successful integration of acquisitions and margin
enhancement through cost and synergy.
However, after a good start and with revenue growth in the first
quarter, the Group was confronted with the impact of COVID-19
from March. Management responded quickly to the challenges
presented, ensuring continuity of income, careful cost management
and cash preservation steps whilst also protecting capacity in
anticipation of future recovery.
The Group’s revenue streams that are reliant on access to customer
premises were impacted, particularly in Q2, although the recovery
path towards pre COVID-19 levels of activity has been steady and
reliable.
With a strong base of recurring revenues, especially from storage
income in Records Management, and the continuation of strong
cash generation in the year, Restore has ended 2020 in good
condition despite the challenging environment.
Adjusted profit before tax is stated before amortisation, impairment of
intangible assets and investment, and exceptional items (note 10)
COVID-19 impacts
*
**
***
Earnings before interest, taxation, depreciation, amortisation, impairment
and exceptional items (page 57)
EBITDA adjusted for share-based payments (2020: £1.0m; 2019: £3.8m)
and excluding IFRS16 (2020: (£21.0m); 2019: (£19.8m)) for financial
convenants
The most significant impact of COVID-19 on the Group’s financial
performance relates to revenue streams that require access
to customer sites or the provision of assets to our plants for
processing. Activity driven revenues in Restore Datashred were
particularly affected during the year. A steady recovery in activity
levels during H2 was experienced, and in the case of Restore
Technology this effect is considered mainly deferred rather than
lost income.
A further impact of reduced activity was on resource requirements.
The Group chose to utilise the CJRS with over 1,000 staff placed
into the scheme during the early stages of the virus outbreak.
As new ways of working with customers were established and as
activity levels improved, the number of staff on the CJRS reduced
in proportion to revenue improvement with the Group ending its
use of the scheme in December 2020.
2020 revenue as proportion of 2019 revenue
Q1
Q2
Q3
Q4
102%
68%
83%
88%
Strategic Report | Restore plc Annual Report 2020 23
The Board acknowledges the value CJRS has provided in deferring
restructuring decisions and in successfully preserving roles.
However, as a result of the reduced activity levels, a strategic
review of activity and organisation was undertaken in H2 and
regretfully, c.250 staff left the business under a redundancy
programme in Q4 at a total cost of £1.0 million.
A further impact of COVID-19 was in relation to dividend proposals.
The initial uncertainty on the length and severity of the virus
outbreak led the Board to adopt a conservative approach to
liquidity management and a final dividend for the financial year
ended 31 December 2019 and an interim dividend for the financial
year ended 31 December 2020 were not proposed.
Income Statement and profit performance
The Group’s revenue for the year ended 31 December 2020
was £182.7 million (2019: £215.6 million), a reduction of 15%
year on year. Around 50% of Restore’s revenues are fixed or
highly contracted in nature and the majority of this relates to
storage income which increased by 1.4% in comparison to 2019.
COVID-19 restrictions impacted the Group’s other activity driven
income streams with the peak effect experienced in April before a
sustained recovery through the balance of the year.
A number of strategic and tactical cost actions were implemented
during 2020. This included the consolidation of three operating
sites across Datashred and Digital and a reduction in headcount of
c.250 in Q4. As a result of these actions and due to the underlying
flexibility of the business model, the impact of lower revenues has
been substantially reduced at the profit level.
Adjusted profit before tax was £23.2 million for the year compared
with £35.6 million for 2019 and reduced due to the lower revenue
described above. Operating margins were positive through the
pandemic but diluted in the first half to 16% before improving
steadily to achieve 19% for the second half (2019: 21%).
The statutory profit before tax for 2020 was £4.0 million
(2019: £24.8 million) and is stated after a £7.0 million non-cash
impairment arising on the intangible asset value of Restore
Datashred and a £1.6 million write down of a 40% minority interest
in a legacy investment as reported at the half year results.
Adjusted profit items
Due to the one-off nature of exceptional costs and the non-
cash element of certain charges, the Directors believe that the
alternative performance measures of adjusted profit before tax
and adjusted earnings per share provide shareholders and other
stakeholders with a useful representation of the Group’s underling
earnings and performance. The adjusting items in arriving at the
underlying adjusted profit before tax are as follows:
Statutory profit before tax
Adjustments
– Amortisation
– Impairment
– Exceptional costs
Adjusted profit before tax
Exceptional Costs
2020
£’m
4.0
8.3
8.6
2.3
2019
£’m
24.8
8.1
–
2.7
23.2
35.6
Restore’s strategy is to grow through organic expansion, acquisition for
scale or capability and margin improvement from synergy and cost. To
deliver these goals, costs of a one-off or unusual nature may occur and
in order to give a suitable representation of the underlying earnings of
the Group, these costs are shown separately.
Acquisition transaction costs
Acquisition related restructuring costs
Restructuring and redundancy
Other exceptional items
Total
2020
£’m
2019
£’m
0.1
0.1
1.3
0.8
2.3
0.1
2.3
–
0.3
2.7
In 2020 acquisition related exceptional costs of £0.2 million
are substantially reduced as the financial impact of previous
acquisitions unwinds. Redundancy and site consolidation costs of
£1.3 million were incurred and will deliver future margin benefit.
Other exceptional items include legacy share option costs and
provision for settlement of historic legal cases.
Strategic Report | Restore plc Annual Report 2020 Chief Financial Officer’s Statement continued
Earnings Per Share (EPS)
Basic adjusted earnings per share are calculated by reference of the
adjusted profit for the year, less a standard tax charge, to the weighted
average number of shares in issue during the year. The year on year
reduction in adjusted EPS reflects decreased profitability in 2020.
Basic adjusted earnings per share from
continuing operations
Basic earnings per share from continuing
operations
2020
2019
15.0p
23.2p
0.2p
13.4p
Basic earnings per share reflect the statutory profit after tax divided by
the weighted average number of shares in issue during the year. The
reduction in 2020 reflects the decreased profitability for the year.
Taxation
UK corporation tax is calculated at 19% (2019: 19%) of the
estimated assessable profit for the year.
The significant items increasing the effective tax rate are the
expenses not deductable for taxation, (being impairment of
goodwill and investment) and the effect of the 2% rate change in
UK corporation tax which impacted the deferred tax position. In
prior periods, the future UK corporation tax rate had been assumed
at 17% as previously announced. In March 2020 it was announced
that this would remain at 19%. The adjustment in respect of this
change in rate has been included in the 2020 tax charge.
Interest cost
During the year the following finance costs were incurred in
relation to bank borrowings and IFRS16 notional interest costs.
Interest on bank loans and overdrafts
Interest on finance lease liabilities
Amortisation of deferred finance costs
Total
Cash generation and financing
2020
£’m
2.8
5.4
0.3
8.5
2019
£’m
3.6
5.7
0.3
9.6
Restore’s high proportion of predictable, recurring revenues
and resilient margins, together with disciplined working capital
management, delivered a further year of strong cash generation.
24
As a result of this cash generation, the Group’s borrowings
continued to reduce steadily to £66.1 million at 31 December 2020
(2019: £88.5 million). The pro-forma adjusted EBITDA leverage
increased from 1.6x to 1.8x at 31 December 2020 reflecting the
decrease in profits when measured against the net debt although
normalising EBITDA to 2019 levels in anticipation of continued
recovery, leverage would be 1.2x.
The Group continues to have significant headroom within its
borrowing facilities with the current Revolving Credit Facility (RCF),
which runs to March 2023, providing borrowing capacity of up
to £160 million. This leaves the Group with flexibility to invest as
opportunities arise.
Statement of Financial Position
Restore continues to invest in the infrastructure in the business
although at slightly lower levels than in 2019 with capex investment
of £7.3 million (2019: £9.0 million) during the year. Whilst physical
asset investment is maintained at an appropriate level, the Group
has increased the proportion of its investment towards IT and
digital assets to enable greater efficiency and connectivity within
the business and with customers.
During the year, the Group acquired E-Recycling Ltd for £4.5 million
from existing cash and debt facilities. This acquisition added
capability in high security destruction to Restore Technology’s
product capability and has been followed by the acquisitions of
Computer Disposals Ltd and The Bookyard Ltd (a leading Apple
recycling and spare parts business) in 2021 as the strategy to
expand in the IT disposal and recycling sector is progressed.
The net assets for the Group at 31 December 2020 were
£218.6 million (2019: £218.5 million) with the working capital ratio
of current assets to current liabilities, excluding cash and IFRS16
liabilities, a healthy 1.1x (2019: 1.2x).
Neil Ritchie
Chief Financial Officer
18 March 2021
Net debt @
31 December
2018
Net debt @
31 December
2019
£111.3m £95.0m £88.5m £73.9m £66.1m
Net debt @
30 June
2019
Net debt @
30 June
2020
Net debt @
31 December
2020
Strategic Report | Restore plc Annual Report 2020 Risk Management
Risk Committee
The Risk Committee consists of Sharon Baylay, Senior Independent
Non-Executive Director as Chair, the Executive Directors and the
Group Head of Risk acting as Secretary. Other senior leaders across
the Group are invited to attend as required to discuss and progress
areas of risk management.
During the year, the Committee was developed to further enhance
the identification and mitigation of risk across the Group. The Board
adopted an updated terms of reference which can be found on the
Group’s website at www.restoreplc.com and a new sub-committee
structure was formed.
These sub-committees are in place across different functional
specialisms including health and safety, property, IT and cyber risk,
compliance and quality. These specialist teams support the Risk
Committee directly and continue to be enhanced.
Meetings and activity in the year
The Risk Committee is pro-active in seeking to understand current
and future risks with detailed risk registers maintained and reviewed
by the Risk Committee at least annually.
The team meets at least three times a year to discuss existing and
emerging risks facing the Group and more broadly in the macro
-environment.
Across Restore and the wider environment, 2020 saw significant
increase in levels of risk as result of COVID-19. The Committee
is pleased to report that management action in response was
measured and effective in steering the business through a turbulent
year.
25
Activities of the Risk Management team during the year included:
O COVID-19 – Presenting a number of safety, operational and
financial challenges, the outbreak of this virus has required a
careful balance between ensuring the health and safety of our
people and our customers and maintaining business operations
and provision of our critical services. The Group successfully
maintained safe working and continuity of business services
throughout the pandemic and assisted the NHS and other front
line services in their efforts in fighting the virus
O Brexit – Operating primarily across the UK, Restore is largely
insulated from the risks that might result from BREXIT
disruption. Our sub-committee in this area effectively assessed
and continues to monitor the constantly evolving situation
O Property – A Group-wide review of security and IT network
infrastructure across the property estate was performed during
the year. Whilst the current status was deemed satisfactory, a
long term investment plan to further enhance connectivity and
improve efficiency and monitoring capability is underway
O Risk register – A full review of each Business Unit risk register
was undertaken by the Committee with senior leaders from
each business
O Business as usual – Ongoing management of business as
usual risk has been undiluted. We were pleased to appoint a
new Head of Group Risk during 2020 and this newly created
role is responsible for further developing the Group’s risk
management frameworks.
Future Plans
The Risk Committee intends to continue to develop its structure
during 2021 including further development of sub-committees and
their respective terms of reference and development of the Group’s
risk management framework.
A broad agenda for 2021 has been established and shall include
cyber crime, a review of external H&S audit and benchmarking and
property amongst other matters.
Restore plc Board
Executive Committee
Risk Committee
Board
Board
Board
Board
Board
Senior
Leadership
Team
Senior
Leadership
Team
Senior
Leadership
Team
Senior
Leadership
Team
Senior
Leadership
Team
H&S
Property
Quality
ESG
Cyber &
InfoSec
Data
Protect
Strategic Report | Restore plc Annual Report 2020 Principal risks and mitigation controls
26
The following provides an overview of the key risks Restore faces. All are regularly reviewed and drive improvement action across the business.
Risk
Potential impact
Risk mitigations
Finance and
liquidity
Lack of liquidity driven by lack of
profitability, failure to meet banking
covenants or reduced appetite from banks
to lend impacting the continuation of the
strategy of the Group.
Systems,
technology and
cyber attack risk
Financial and operational impact of a loss
of systems or operational data in one or
more of the Group’s operations impacting
day to day services.
All of the Group’s businesses benefit from high levels of recurring revenues
leading to strong cash generation and current trading is more than adequate
to service financial obligations.
The Group’s credit line is provided by a broad and supportive banking
syndicate with a credit facility up to £160m in place and the business
operates well within borrowing covenants. Historically the Group has not
had any issues in raising capital to fund its acquisition strategy. In addition
further mitigating actions are available including cost or capex freezes as well
as reducing discretionary payments such as dividends.
The Group has disaster recovery plans in place in all of its businesses which are
reviewed at appropriate intervals. Systems data is stored in high security data
centres and is fully replicated via a point to point network to secondary data
centres where necessary. In addition to the mitigations that have previously been
in place, the Group is undertaking a programme of security enhancements.
Business property
Market changes
Damage or loss of access to business
property through fire, flood, terrorism, loss
of power or services.
Regular risk assessments and audits are undertaken to ensure risks are
mitigated as far as is practical. Investment levels have been maintained and the
Group is developing a strategic security and networking programme. Insurance
cover is maintained over business property and covers business interruption.
Material change to business dynamics such
as a shift in the document storage market
which results in a reduction in the volume of
documents stored. The Group is subject to
potential volatility of recycled paper pricing
in Restore Datashred.
Business KPI’s are monitored to identify any potential market trends to enable
appropriate actions to be taken. In the event of a reduction in the storage of
documents the Group expects to be able to manage its property portfolio down
over a period of time in line with the nature of any such reduction. In respect
of paper pricing, conservative assumptions have been built into the financial
forecasts and further pricing reductions would not significantly impact the Group.
Material increase
in UK business
property costs
Due to the high level of property costs
in the Group, particularly in the records
management business, a material increase
in property costs could have a significant
impact on the Group.
The Group has a strategy to improve property cost through consolidation,
increased density and enhanced capacity utilisation mitigating this risk.
HR and succession
planning
Lack of succession planning across the
Group for any potential key management
positions.
Succession planning exercises have been undertaken for all of the
key positions in the Group to identify potential internal development
opportunities and where external appointments may be required.
Loss of confidential
customer records
Potential financial and reputational impact
of a loss of customer records/data.
Serious injury or
death through
workplace
accidents
As many of the Group’s operations involve
physical labour, use of machinery and
transport, there is a potential exposure to
accidents, including RIDDOR incidents.
UK or Global public
health crisis
Worsening of the COVID-19 pandemic or
a new global health crisis might impact
economic activity levels or restrict the
Group’s ability to perform its services.
Unmatched changes
in environmental
legislation /
societal attitudes
to environmental
impact
Failure to monitor and adapt to changing
environmental legislation across the
devolved nations or a failure to lead
or keep pace with societal attitudes to
environmental impact of business exposes
Restore’s reputation.
The Group’s Chief People Officer is responsible for HR strategy which
includes retention and further developing succession plans.
The Group ensure all staff adhere to training guidelines and understand data
protection legislation. Where appropriate vehicles are tracked and staff vetted.
All of the Group’s operations maintain accreditations appropriate to the activities
undertaken. The Group also maintains adequate insurance for such events.
The Group operates an effective H&S Committee and has well established
and continually improving H&S risk assessment processes, incident reporting
procedures, and H&S training in place to improve Restore’s H&S culture.
Creating a strong H&S culture helps to drive down incident rates, increases
colleague productivity and wellbeing and ultimately improves margins.
The Group’s Head of Risk oversees the Company’s risk analysis process and
provides observations on emerging public health risks to the Board through
the Risk Committee. Restore provides a number of critical business and public
sector services and the Group’s strength and depth in H&S and underlying
business agility was central to successful and safe continuity of business
operations throughout the pandemic.
Whilst an emerging risk, the Group can already demonstrate good progress
in mitigating this risk; there has been continued investment in property, a
strategic approach to fleet rotation towards new technology, and improving
carbon assessment to evolve a carbon reduction strategy.
Strategic Report | Restore plc Annual Report 2020 Environment, Social and Governance Strategy (ESG)
27
Our commitment
Restore is fully committed to meeting its obligation to limit the impacts of climate
change, meeting our duty to our local communities and ensuring we act responsibly.
During the year the Board continued to assess our CSR policies and have discussed
extensively how to evolve our ESG strategy further. We continue to focus on this critical
area, developing a robust strategy and action plan.
ESG and Restore
ESG at Restore is an internal consideration, as our commitment to ESG principles shapes how we operate the
business, and also an external consideration as we provide services that help our customers meet their own
ESG obligations.
The principle areas we consider are set out below. We recognise we can always do more in this area and that
this area is constantly evolving. The subjects are assessed at Board level and through our operating structures
as we manage and develop the business.
Environmental
Social
Governance
Internal contribution
Internal contribution
Sustainable land use
Zero landfill objective
Fleet electrification
Energy consumption
management
External contribution
Paper recycling services
Technology asset
refurbishment and reuse
Zero landfill technology asset
decommissioning
Property consolidation
Sophisticated and well
invested health and safety
team
Significant regional
employment
Apprenticeship scheme
External contribution
Charity and community
sponsorship programmes
Major contributor to UK plc
through low risk tax policy
Fair treatment of suppliers
strategy
Internal contribution
QCA code adoption
Effective Board and sub-
committee framework
Extensive ISO compliance
Gender pay strategy
Risk Management framework
External contribution
Secure storage of physical and
digital assets
Certificated confidential waste
destruction
Certificated asset disposal
Strategic Report | Restore plc Annual Report 2020 28
ESG continued
Environment
RECYCLED
50,000 tonnes of paper
SAVING
849,000 trees
from being felled
RECYCLED
372,000 IT assets
WITH
<1% going to landfill
Restore is committed to limit and enhance its environmental impact on
the planet and to ensure the sustainability of the resources we use in
delivering our services.
We aim to ensure good corporate citizenship through a strong culture
of high efficiency, limiting consumption of limited resources, and by
promoting environmentally friendly policies across our operations.
The services we offer, provide a significant benefit to the
environment by supporting our customers in reducing their
consumption of resources and to contribute to sustainability
through recycling and responsible waste management.
We have implemented an ‘energy portal’ across the Restore Group,
tracking carbon against the majority of our properties. An incentive
scheme has been deployed for staff, targeting a reduction of
‘carbon-output’ via analysis from the portal. The buying policy for
energy contracts is REGO (Renewable Energy Guarantee of Origin).
O At our largest facility (54 acres of secure underground storage in
Monkton Farleigh) we followed a ten point plan from ‘The Carbon
Trust’, resulting in our investment of significant capital spend. We
underwent a long-term retro-fit from dehumidifiers to bespoke
air-handling equipment, resulting in a substantial reduction of our
carbon-footprint
O Restore Technology operates a flagship facility at Cardington
Point in Bedford. Sixty one solar panels with daylight
harvesting capability and ninety one smart motion detecting
LG lights are reducing energy usage by up to 70%. While anti-
leak and water waste reduction procedures mean this building
is as efficient and sustainable as we can make it.
Environmental impacts
Restore has two areas of focus in relation to environmental
management. An extensive property portfolio consisting of a
variety of property types ranging from warehouses, former airfields
and mines and a large fleet of vehicles.
We aim to limit or enhance our impact on the planet in the
following ways:
Buildings and infrastructure
O Restore Records Management has completed its site extension
in Rainham, East London. Photovoltaic panels and smart,
low energy lighting is one aspect of the modern building
method employed to reduce environmental impacts. Further
Photovoltaic panels are planned at our Coventry site with our
Landlord
O At Rainham we have installed electric charging points for
vehicles, which we run from the energy we produce ourselves.
EV chargers have also been installed at Redhill, Tewksbury, and
Upper Heyford
O At our site in Ipswich anaerobic digesters run on a mix of locally
sourced vegetables, maize silage and apple pressings to produce
‘dark green’ energy. It’s a sustainable source that helps create
long-term balance for the local farming community and land, and
provides renewable energy for local businesses, and beyond
Fleet
O Restore Datashred is currently trialling electrification of collection
vehicles. It is our anticipation that the Group will transition several
hundred vehicles to electric power over the next ten years
O The Group has moved its company car policy to one of ‘hybrid or
electric only’ thus supporting the UK’s low emission objectives
O In line with these fleet goals, Restore is installing a network of
electric charging points across its property estates so journeys
between sites will be made fossil fuel free.
Our services
O The storage services we provide enable organisations to
efficiently store their records in high density, low cost locations
O This reduces pressure on land resources to maintain long term
asset storages
O Digital services, digitising assets and providing data management
services enables efficient storage and communication where
physical storage or movement is not required
O A significant buying decision in the Heritage storage arena was a
desire from institutions to re-purpose existing sites for the storage
of our Nation’s priceless collections, avoiding additional carbon
output from new property builds. Upper Heyford was chosen by
the institution’s buying consortium. The Hardened Air-craft shelters
as Scheduled Monuments have become perfect hosts in their
conversion for Heritage collection storage.
Strategic Report | Restore plc Annual Report 2020 29
Sustainability
Sustainability is at the core of Restore’s purpose and business
model. A large part of the services that our businesses offer are the
responsible and secure disposal of office-sourced paper, digital media,
textiles, archive box contents, IT equipment and furniture. We are
committed to a target of 0% landfill from processing operations.
Our values determine that we are good citizens and responsible
curators of Earth’s resources, so that energy conservation,
waste management and the prevention of pollution are key
considerations for us, and form part of the work carried out by our
Group Environmental Committee.
We strive to:
O Reduce consumption of materials and promote re-use and
recycling, including furniture unsuitable for redistribution
O Achieve ongoing improvement in environmental performance
and minimise the impact of our operations on the
environment
O Minimise the impact of our buildings, structures, and
operational plant by reducing visibility and noise.
In practical terms, this is expressed through areas such as:
Recycling
O Restore Datashred processes and recycles approximately
80,000 tonnes of paper a year (50,000 in 2020 due to
COVID-19)
O Restore Technology, processed 372,000 IT assets, either
refurbishing or stripping them down to component level.
Use of natural resources
O Greener fleet management: across the Group, telematics,
careful route planning and regular driver training all contribute
to environmental performance, reducing running costs and
our carbon footprint. All measured through schemes such as
FORS and Masternaut, the latter rating us as performing 10%
better than our industry average
O Greener vehicles: Restore Datashred is making rapid progress
towards having a total Clean Air Zone and Ultra Low Emission
Zone-compliant fleet
O Greener energy: photovoltaic panels, smart sensors to reduce
lighting costs and, in the Ipswich area, bioenergy supplied to
two of our Records Management facilities from a local power
plant that uses locally produced biomass to fuel it
O Greener security: we use Inergen™ Premier as the inert gas
in our fire suppression system as it has the smallest carbon
footprint possible
O We are also moving to a more agile and flexible way of
working for our back-office colleagues, with a blend of home-
working and office-working in the future, contributing to
reduced carbon emissions from travel
O Archive boxes: the boxes we use are made from 70% recycled,
along with responsibly sourced FSC-certified raw material,
archive box cardboard is sent for recycling as KLS (Kraft Liner
Substitute) and is turned into cardboard reels (cores) used in
toilet rolls, paper rolls, carpet rolls, cling film rolls.
Supporting customers with their sustainability targets by
helping them to:
O Make more efficient use of their workspace and public service
facilities by helping create smart office settings and by storing
records
O Speed up access to important stored records through file
tracking software and scan-on-demand services, while saving
on vehicle journeys
O Reduce their carbon footprint by designing and implementing
a digital transformation strategy whose aims include radically
reduced paper use and increased recycling
O Contribute to charitable causes through donations of
furniture, IT equipment and payments in lieu of cash-back
programmes – a scheme both Restore Harrow Green and
Restore Technology offer to their customers
O Keep track of their environmental impact after every
transaction through Restore Datashred’s Environmental
Report, available through their online customer portal. This
report details how much paper has been recycled, how many
trees have been prevented from being felled, and how much
water and energy have been saved. Restore Technology
also supplies online custom sustainability reports, which
document recycling levels, reduction in environmental
impacts, energy savings and how many waste toxins have
been diverted from landfill.
Working with trusted organisations
We look to demonstrate our credentials through accreditation and by
learning best practise from sector experts including:
O The Carbon Trust: we continue to follow the plan produced for us
a number of years ago by the Trust to reduce our environmental
impacts through recycling and reducing energy consumption
O Restore Harrow Green is now in its 7th year of certification
of the scheme, which has proven an excellent gauge of
our performance but also a way of highlighting where
improvements are needed
O The report for 2019/2020 has shown an increase in carbon
footprint, but this is to be expected at times of growth
and change
O In H2 of 2019 we experienced a significant increase in
business activity, which culminated in a record performance
year. This in turn resulted in a rise in travel emission of tC02e,
or 31% on the previous year, due to increased fleet demand.
The COVID-19 pandemic in 2020 also impacted output, due
to the need to deploy a larger number of vehicles when
transporting our workforce to customer sites, in order to
adhere to social distancing regulations
O We anticipate that in this year’s report our carbon footprint
will be lower as in 2020 we acquired our fleet’s first 5 electric
vehicles, with further investment in the electrification
process to come. Overall, our three-year average is still a
6.7% net reduction in carbon per employee, which is still an
achievement. Our continued focus is long term reduction in
all areas
Strategic Report | Restore plc Annual Report 2020 ESG continued
O Restore Records Management plan a process of roll-out with
e
Scope 3 (other indirect)
30
Emissions are a consequence of your actions that occur
at sources you do not own or control and are not classed
as Scope 2 emissions. Examples of Scope 3 emissions are
business travel by means not owned or controlled by your
organisation. No other Scope 3 emissions are included in this
report
f
g
h
Intensity ratio calculations have been calculated based on
the average number of employees in the year
Energy consumption data is captured through utility billing
metre reads or estimates
We are also moving to a more agile and flexible way of working
for our back-office colleagues, with a blend of home-working
and office-working in the future, contributing to reduced
carbon emissions from travel.
The emissions and energy usage presented covers the operations
of all entities within the Group. As the Group only operates in the
UK, the statistics show the emissions and energy consumption in
the UK.
Climate Change
Restore’s exposure to direct climate risk is assessed as low, but
we remain alive to the changing political, legislative, and social
environmental forces. Though not significantly affected we
recognise the existential threat human activities are having on
our ecosystems and remain committed to reducing our impacts
wherever possible. We are therefore developing a comprehensive
approach to environmental and social governance to build on
the good work already achieved. Moreover we are implementing
a progressive fleet electrification strategy, a commitment
underpinned by our membership of The Climate Group EV-100
and an expanding network of EV chargers at our sites, and have
invested in an online energy port to more accurately assess
energy use.
the Planet Mark services in Q3 of 2021.
Detailed information about all our initiatives and ideas can be found
on the part of our website dedicated to Corporate Responsibility
www.restoreplc.com
Emissions and Energy use
We report our carbon dioxide emissions following the Greenhouse
Gas protocol.
Global Green House Gas(GHG) Emissions b
Total CO2e (tonnes)
Scope 1 CO2e emissions (Tonnes) c
Scope 2 CO2e emissions (Tonnes) d
Scope 3 CO2e emissions (Tonnes) e
Intensity Ratio
Average Full Time Employee (FTE)
Total CO2e per FTE (tonnes) f
Market-based emission
Scope 2 CO2e market-based emissions (tonnes) d
Total gross Scope 1 & 2 (market-based) emissions
(tonnes)
Energy consumption used to calculate above
emissions (kWh) g
Year ended
31 December
2020
11,039
7,675
3,281
83
2,006
530
243
7,918
45,116,798
As this is the first year of SECR reporting for Restore plc there
is not a requirement for performance comparison with the
previous year. Going forward there will be a rolling year on year
comparison.
a
b
The carbon reporting year for our GHG emissions is
1 January to 31 December 2020. The carbon reporting year
is fully aligned to the financial reporting year covered by the
Directors’ report
Reported emissions come from consumption of grid
supplied electricity, self generated electricity, grid supplied
natural gas, company owned and operated transport,
privately owned transport for business use, LPG, light and
heavy goods vehicles
c
Scope 1 (direct emissions)
Emissions are those from activities owned or controlled by
the organisation. Examples of Scope 1 emissions include
emissions from combustion in owned or controlled boilers,
furnaces and vehicles; and emissions from chemical
production in owned or controlled process equipment.
d Scope 2 (energy indirect)
Emissions are those released into the atmosphere that are
associated with your consumption of purchased electricity,
heat, steam and cooling. These indirect emissions are a
consequence of your organisation’s energy use, but occur at
sources you do not own or control
Strategic Report | Restore plc Annual Report 2020
31
Social
Group diversity as at 31 Dec 2020
33%
26%
27%
Board of
Directors
Senior
management
team
Total
employees
67%
74%
73%
Restore recognises its significant responsibility to the people working across
our business, our suppliers, our customers and to the wider community.
The Board, senior management and our staff seek to make a
positive impact on the lives of those with whom we interact, and
we strive to make a positive contribution to society beyond the
value of the products we provide.
Collaborative working has similarly been a key priority. We have
created more cross functional working, sharing expertise and best
practice opportunities while maintaining our devolved structures
that allow us the flexibility to win in the marketplace.
The culture of doing the right thing is in our DNA and whilst we can
always improve, we are dedicated to this philosophy.
Inclusion and diversity
We focus on our social responsibility in a number of areas we set
out below.
Our People
Restore is committed to equality and fairness and we do not
discriminate on the grounds of gender, gender reassignment,
marital status, race, ethnic origin, disability, sexual orientation,
religion or age.
Restore comprises of five business units that have grown together,
increasingly working together under a ONE Restore banner which
extends to common systems and back office processes while
operating as discrete stand alone and empowered businesses in
their own right.
We aim to ensure our workforce is representative of society and
that each employee feels respected and able to give their best.
With increased investment in our recruitment team we are
committed to building strategies to actively attract more diversity
into our business.
At Restore we know that to maintain and build upon the great
service that we offer our customers, we must ensure that we
continue to invest in a safe, inclusive and rewarding environment
for our employees to work in.
As part of this ongoing investment, Angie Wiseman, our Chief
People Officer joined the team in early 2020 to represent staff
interests and as a member of the Executive Committee is tasked
with developing and progressing our people strategy.
Over the last year, we have also been focused on ensuring
our colleagues have a voice and have put particular focus on
developing our employee engagement plans both on a localised
and Group level. We have provided all colleagues access to regular
two-way communication through our new Intranet. We conducted
a people survey in addition to town hall sessions and actively
encouraged staff to participate in new ideas and ways to improve
the working at Restore experience.
Wellbeing is also a particular area of focus for us. We have been
promoting our Employee Assistance programme, launched an
associated wellbeing app, have put Mental Health first aiders in
place, along with other communications and support tools for
colleagues.
We continue to operate a whistleblowing policy across the Group
that provides employees with guidance on how to raise concerns
about fraud, security, unethical behaviour, health and safety,
bullying, discrimination, bribery and corruption, data protection
and any other matter they feel should be reported.
With increasing scale comes the ability to offer greater
development and career opportunities to our people whilst
maintaining the flexibility to treat people as individuals.
We actively communicate on and celebrate diversity events within
the business.
Our Board are proud to have good representation of gender across
the plc Board with four to two male to female ratio. We have good
representation of female management in senior executive and
subsidiary leadership roles, thirty nine to fourteen male to female
ratio, but recognise that senior manager female representation can
be improved which forms part of our consideration of development
and recruitment strategies.
We are committed to identifying and addressing any risks of
Modern Slavery across all parts of our business and supply
chain, including those of our subcontractors and partners. Our
statement can be found on our website www.restoreplc.com. In
Restore’s supply chain our Terms & Conditions ensure mandatory
compliance with:
O Modern Slavery and Human Trafficking Policy
O Environmental Policy
O Corporate and Social Responsibility Policy
O Equal Opportunity Policy
O Dignity at Work Policy.
Strategic Report | Restore plc Annual Report 2020 ESG continued
Health and safety
Health and safety and the wellbeing of our employees, sub-
contractors and customers is of paramount importance to
us. During 2019 and 2020 we have invested in new structures
and reviewed the business in detail to ensure we had the right
governance and accountabilities in place, and mechanisms for
continuous improvement, as well as providing comprehensive
training for our employees.
Health and safety is overseen by our health and safety
compliance group who report to the Risk Committee and
ultimately the Group Board with both the CEO and CFO actively
participating in health and safety matters.
We strive for continuous improvement through new policies and
procedures, audits, risk assessments, training sessions and toolbox
talks and with the recruitment of a dedicated Head of Risk in 2020,
we are evolving a more strategic approach to health and safety
with improvement in use of media assets for training and greater
depth of reporting to improve working practises further.
Health and safety is the first agenda item at the plc Board meetings
and at subsidiary meetings and the team is fully dedicated to
strong health and safety.
In addition to the central and subsidiary level oversight, we have
regional or site based Health and Safety Committees, which
are attended by at least three employees, per Committee, on
a quarterly basis. This encourages everyone’s voice to be heard
and we can monitor any concerns raised by employees. The
Committees report into our Health and Safety Compliance Group.
Community and charitable initiatives
We care for the communities in which we work and take part in
a number of Group-wide initiatives to ensure our presence is a
positive one for our neighbours and colleagues.
For many years, teams from across the Group have worked
together with Crisis at Christmas, donating many boxes of
clothing, toiletries, food, transport and their time to help the
charity set up their shelters every December.
Each business in the Group supports charities and community
groups with whom they have a personal connection.
For 2020, Restore Harrow Green raised money for charities, including
Macmillan and Crisis at Christmas and continued their working
relationship with St Joseph’s Hospice in London, voluntarily moving
furniture and equipment so that hospice employees could focus on
their frontline work.
Business2schools partnership
Restore Harrow Green also partnered Business2schools, a small
charity with dreams of helping schools and companies come together
under an umbrella of sustainability and growth. The scheme has a
twofold benefit for the schools; by acquiring computers of much
higher specs than they would be able to purchase, the students learn
on better machines than they would normally, and the schools are
free to divert their IT budgets to other uses.
32
Proud to support our local East End community
Archive boxes that would usually house confidential files, account
ledgers, patient records or x-rays were put to more immediate use
by staff and volunteers in the London Borough of Tower Hamlets.
Our Records Management Team supported the local council to
pack essential food and household supplies into our sturdy Restore
boxes which, during the COVID-19 crisis, provided a vital lifeline to
the most vulnerable in the Tower Hamlets area. After hearing of the
Council’s need for boxes, Restore stepped in, and provided and filled
8,000 boxes, which were delivered around the East End of London.
Manchester Digital Centre Foodbank donation
In December, the Manchester Production team delivered the
equivalent of 20 food hampers to Salford Food Bank to support
families in need at Christmas.
Salford Food Bank relies heavily on donations from the general
public and businesses throughout the year to help and support the
local area. Given the challenges this year has brought to so many,
it was truly an honour to pull this together with the team and give
something back to the local community and families in desperate
need during Christmas time.
Datashred’s Mission Christmas project
In the run-up to Christmas, we were on a prime-time local
radio spot several times a day, in association with the Cash
for Kids Mission Christmas appeal. We were delighted to be
involved in helping bring the magic of Christmas to thousands of
disadvantaged children in the Greater Manchester area.
In total, Mission Christmas raised a magnificent £1,074,853 worth
of gifts. Supporters and volunteers then worked tirelessly to deliver
out to 30,712 children, helping bring them a glow of hope and the
feeling that someone does care.
Datashred were the online donate sponsor – appearing in a radio
jingle on network radio and in the online campaign – and helped
raise a wonderful £18,087 in online donations. When you consider
that 2019’s online donation total was £7,924 you can see why we
and Mission Christmas are so delighted.
Computers for homeschooling children
Working with National Grid, Restore Technology pledged to
support the initiatives to get 1,000 laptops for school children
and students struggling with learning during COVID-19. Restore
Technology handled the sourcing of the laptops, donating the
majority from Restore’s stock while using our network of contacts
to order in the remainder. The laptops were worth over £200,000.
We processed the laptops, cleaning and testing them before
installing Windows 10 on every device. Once complete, Restore
were delighted to carry out the distribution process, delivering
them to the required locations.
Eight hundred of the laptops were delivered to various primary and
secondary schools, with the rest being sent to the youth charity,
The Prince’s Trust.
Whether our people undertake business-led fundraising or their
own, personal projects – many involving extraordinary physical
and emotional effort – it is clear that Restore people are, as our
Company values state, ‘good people’.
Strategic Report | Restore plc Annual Report 2020 33
Governance
Accreditations as at 31 Dec 2020
ISO 9001
ISO 14001
ISO 27001
Key:
Restore Records Management
Restore Digital
Restore Datashred
Restore Harrow Green
Restore Technology
Governance at Restore relates to how we run the business and the
services we offer.
Management of the Business
Process Accreditation
The business is led by a highly qualified and experienced Board
with sector and specialism relevance drawn from working across
FTSE 100 and FTSE 250 organisations. The Group has adopted
the QCA code of conduct and our application of the code to our
business can be found on www.restoreplc.com.
In addition to the main Board, the Group operates Audit,
Remuneration, Nomination and Risk Committees each of which is
led by a one of our highly qualified Non-Executive Directors.
As ESG evolves as a subject area, the Board is reviewing leadership
over this area although ESG is inherently managed within the
business rather than seen as a standalone topic
The strong governance structure extends into the day to day
running of the business through the highly competent Executive
Committee comprising the CEO and CFO, Company Secretary, our
Chief People Officer each of the business unit Managing Directors,
and the Director of Corporate Development.
Legal Structure, Market Compliance and Assurance
While the main Board assesses operation of the Group as a whole,
each Business Unit is operated as a standalone business with its
own Senior Leadership Team under the direct guidance of the CEO
and CFO who sit on the business unit boards.
These subsidiary boards meet regularly to assess performance
and develop business strategy across a balanced scorecard of
management areas.
The legal structure is relatively straight forward and is maintained
to a good standard with high quality professional support including
KPMG, Field Fisher and Peel Hunt.
Peel Hunt act as the Groups nominated advisor (Nomad) and guide
management in ensuring adherence to current and preparing for
future market requirements and best practise.
Reporting assurance is provided by PwC who act as the Group’s
auditors with rotation from time to time in accordance with good
practise.
Restore is recognised as the sector leader in providing secure,
highly accredited services to public and private sector organisation.
Delivering consistent high quality is central to our customer
focused approach and assurance is provided to the Board and
customers through the extensive Quality and Compliance Team
who manage process quality to an exceptionally high standard.
Processes are subject to both internal and external audit and
our continuous improvement culture ensures our operational
leadership team are continually enhancing process effectiveness to
improve quality and efficiency
Directors Duties
The Directors of the Company, as those of all UK companies, must
act in accordance with a set of general duties. These duties are
detailed in section 172 of the UK Companies Act 2006 which is
summarised as follows:
Directors of a company must act in the way they consider, in good
faith, would be most likely to promote the success of the company
for the benefit of its shareholders as a whole and, in doing so have
regard (amongst other matters) to:
O The likely consequences of any decisions in the long-term
O The interests of the company’s employees
O The need to foster the company’s business relationships with
suppliers, customers and others
O The impact of the company’s operations on the community
and environments
O The desirability of the company maintaining a reputation for
high standards of business conduct; and
O The need to act fairly as between shareholders of the company’.
Strategic Report | Restore plc Annual Report 2020
Strategic Report | Restore plc Annual Report 2020
34
For further details on how we engage with our shareholders, please
see page 39.
This Strategic Report on pages 12 to 34 was approved by the Board
of Directors on 18 March 2021 and signed on their behalf by:
Charles Bligh
Chief Executive Officer
18 March 2021
Neil Ritchie
Chief Financial Officer
18 March 2021
ESG continued
As part of their induction at Restore plc, Directors are briefed on
their duties and they can access professional advice on these,
either from the Company Secretary or, if they judge it necessary,
from an independent adviser. It is important to recognise that in
a large organisation such as ours, the Directors fulfil their duties
partly through a governance framework that delegates day-to-day
decision-making to employees of the Company and details of this
can be found in our Governance Statement on pages 38 to 40.
The following paragraphs summarise how the Directors’ fulfil their
duties
Risk Management, we provide business-critical services to our
clients. As we grow, our business and our risk environment also
become more complex. It is therefore vital that we effectively
identify, evaluate, manage and mitigate the risks we face, and that
we continue to evolve our approach to risk management.
For details of our principal risks and uncertainties, and how we
manage our risk environment please see pages 25 to 26.
Our People, the Company is committed to being a responsible
business. Our behaviour is aligned with the expectations of our
people, customers, investors, communities and society as a whole.
People are at the heart of our services. For our business to succeed
we need to manage our people’s performance and develop and
bring through talent while ensuring we operate as efficiently as
possible.
For further details on our people, please see page 31.
Business Relationships, our strategy is based on three core
elements, organic growth, acquisitions and margin expansion. We
need to develop and maintain strong customer relationships and
we value all of our suppliers.
The Group has a formal policy in place for new suppliers, which
includes new suppliers contracting with and agreeing to Restore’s
terms of business. Existing supplier relationships are also
periodically reviewed.
For further details on how we work with our customers and
suppliers, please see pages 13 to 14.
Community and Environment, the Company’s approach is to use
our position of strength to create positive change for the people
and communities with which we interact. We want to leverage
our expertise and enable colleagues to support the communities
around us.
For further details on how we interact with communities and the
environment, please see pages 28 to 32.
Shareholders, the Board is committed to openly engaging with
our shareholders, as we recognise the importance of a continuing
effective dialogue, whether with institutional investors, private,
or employee shareholders. It is important to us that shareholders
understand our strategy and objectives, so these must be
explained clearly, feedback heard and any issues or questions
raised properly considered.
Restore plc Annual Report 2020
35
35
Governance
36
Board of Directors
Our key principle is that power and responsibility go hand in
hand. Our people know what is expected of them and we give
them the power to make their own decisions.
Martin Towers
Non-Executive Chairman Age 68
Charles Bligh
CEO
Age 53
Neil Ritchie FCA
CFO
Age 49
Charles Bligh was appointed CEO of the
Group in March 2019.
Neil Ritchie was appointed CFO of the
Group in October 2019.
Charles was previously Chief Operating
Officer and main Board Director at
TalkTalk Telecom Group plc, which he
joined in 2011. He previously spent
20 years at IBM Corporation in various
countries, culminating in his role as Vice
President, Commercial Sector in UK and
Ireland.
Charles was until December 2020
a trustee of the National Children
Orchestras of Great Britain.
Neil is a Chartered Accountant and was
previously Chief Financial Officer of AIM-
listed Mulberry Group plc and prior to
this spent 14 years with the technology
business Dyson, where he held a variety
of commercial and finance roles.
Neil serves on the Board as an Executive
Director, reporting to CEO Charles Bligh.
Martin Towers was appointed Chairman
in January 2018 having joined the Board
as a Non-Executive Director in September
2017.
Martin stepped down as Non-Executive
Chairman of Norcros plc with effect from
30 July 2020 and stepped down as Non-
Executive Chairman of Tyman plc with
effect from 1 December 2020.
Martin was Group Finance Director of
Kelda Group plc from 2003 until 2008 and
was previously Group Finance Director
of McCarthy & Stone plc, The Spring
Ram Corporation plc and Allied Textile
Companies plc. Martin served as Chief
Executive of Spice plc from 2009 until its
sale to Cinven in 2010 and was Non-
Executive Director of Homestyle Group
plc from 2004 to 2006, KCOM Group
plc from 2009 to 2015 and was a Senior
Independent Director of RPC Group plc
from 2009 to 2018.
Martin is Chairman of the Company’s
Nomination Committee and a member of
the Audit and Remuneration Committee.
Governance | Restore plc Annual Report 2020
37
Sharon Baylay
Senior Independent Director
Age 52
Susan Davy
Non-Executive Director
Age 51
Jamie Hopkins
Non-Executive Director
Age 52
Sharon Baylay joined the Board in
September 2014.
Susan Davy joined the Board in January
2019.
Jamie Hopkins joined the Board in January
2020.
Susan has been Chief Executive Officer at
Pennon Group plc since July 2020 having
served as Pennon’s Chief Finance Officer
for the previous five years.
Susan is Chair of CBI South West, a Board
member of Water UK and has previously
been a member of the A4S (Accounting
for Sustainability) CFO leadership
network.
Susan is Chair of the Company’s
Audit Committee and a member of
the Nomination and Remuneration
Committees.
He was previously Chief Executive
Officer of Workspace Group plc from
2012 until May 2019. Formerly served
as Chief Executive and then a Non-
Executive Director of Mapeley plc from
2002 until 2010 and a Director of Chester
Properties from 2009 to 2012. Also acted
as Investment Director of Delancey
Estates and Savills between 1990 to 2002.
A member of the Royal Institution of
Chartered Surveyors. Jamie is currently a
Non-Executive Director at Allsop LLP and
St Modwen.
Jamie is Chairman of the Company’s
Remuneration Committee and a member
of the Audit and Nomination Committee.
Sharon is Non-Executive Director and
Remuneration Committee Chair of Hyve
plc, the listed organiser of international
trade exhibitions and conferences.
Sharon is also Non-Executive Chair at
Unique X Ltd, backed by the Business
Growth Fund (BGF), and also Non-
Executive Chair at Foundation SP Ltd,
backed by Lloyds Development Capital
(LDC). She has previously been Marketing
Director and main Board Director of
the BBC, responsible for Marketing
Communications and Audiences, and
spent much of her career at Microsoft
where she was Board Director of
Microsoft UK and Regional General
Manager of MSN International.
Sharon is also a holder of the FT/Pearson
Non-Executive Director Diploma and a
Fellow of Chartered Institute of Marketing.
Sharon is Restore plc’s Senior
Independent Director, Chair of the Group’s
Risk Committee and is a member of the
Company’s Nomination, Remuneration
and Audit Committees.
Governance | Restore plc Annual Report 2020 Governance Statement
38
The role of the Board
O approval of changes in accounting policies
The Board ensures that the Group is managed for the long-term
benefit of all shareholders with corporate governance being an
essential element of this and has adopted the Quoted Companies
Alliance (QCA) Corporate Governance Code which is considered
appropriate for an AIM listed company. The Board is responsible
for the overall leadership, strategy, development and control of the
Group in order to achieve its strategic objectives.
The Group provides 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.
The Group is led and controlled by the Board which currently
consists of two Executive Directors and four Non-Executive
Directors and is chaired by Martin Towers. 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, and there is a written statement of matters which require
Board approval. These include:
O any changes to the range of services offered by the Group
O approval of Group policies
O approval of conduct of any major litigations
O approval of policies on political and charitable contributions.
Skills Experience and Independence
The Board is satisfied that there is a suitable balance between
Company knowledge and independence in order to discharge
its duties and responsibilities effectively. All Non-Executives are
considered to be independent and are able to commit the required
time necessary to fulfil their roles. Information is circulated to
the Directors in advance of the meetings. No one individual has
powers to make decisions.
During 2020 there were eleven Board meetings.
As the Group has developed, the composition of the Board has
been under review to ensure that it remains appropriate. All
Directors retire annually and are required to be reappointed by the
shareholders at the AGM.
O the release of all RNS announcements except for those
relating to the share-based incentives or notifications of
changing in holdings from investors
Further information on the remuneration arrangements for the
Directors and senior management is set out in the Directors’
Remuneration Report on pages 43 to 47.
O the release of all press announcements
O the issue of equity outside of the existing share-based
incentive schemes
O the issue of new grants under existing share-based incentive
schemes
O the creation of any new equity-based employee incentive
schemes or bonus schemes for the Executive members
O the disposal of any Group company
O the annual budget, business plan and Group strategy
O any change in auditors
O Directors share dealing
O market purchase of shares in the Group
The Board takes decisions regarding the appointment of new
Directors and this is done following a thorough assessment of a
potential candidates’ skills and suitability for the role.
The Directors are responsible for preparing the financial statements
as set out in the Statement of Directors’ Responsibilities on
page 50. The responsibilities of the auditors are described in the
Independent auditor’s report.
The Board considers and reviews the requirement for continued
professional development and undertakes to ensure that
their awareness of developments in corporate governance
and the regulatory framework is current, as well as remaining
knowledgeable of any industry-specific updates.
The Nomad and external advisers also support this development,
by providing guidance and updates as required.
The biographies of each of the Directors, including their experience
and skills are shown on pages 36 and 37.
O approval of material capex outside of the Group budget
Board Committees
O appointment of new Directors and approval of Directors
remuneration
O major new contracts
O approval of annual report and interim statement
O approval of all dividends
The Company has established an Audit Committee, chaired by
Susan Davy, comprising the Chairman and Non-Executive Directors
who are responsible for monitoring the integrity of the financial
statements of the Company, advising on appropriate accounting
policies and reviewing management judgements, reviewing
effectiveness of internal control and approving the external audit
plan and reviewing the effectiveness of the external auditor,
Governance | Restore plc Annual Report 2020 Governance Statement continued
39
PricewaterhouseCoopers LLP. The Audit Committee report is set
out on pages 41 and 42.
The Company has an established Remuneration Committee,
chaired by Jamie Hopkins, comprising the Chairman and Non-
Executive Directors and its report is set out on pages 43 to 47.
The Nomination Committee comprises of the Non-Executive
Directors. The Committee is chaired by Martin Towers unless the
matter under discussion is his own succession. Other Directors are
invited to attend as appropriate. The Committee is also assisted
by executive search consultants as and when required. The
Committee’s principal responsibility is to lead the process for Board
appointments and to make recommendations for maintaining an
appropriate balance of skills on the Board. It is anticipated that the
Committee will usually meet to discuss succession planning for key
senior executives.
The Board and Nomination Committee undertake regular
assessments of management to ensure that they maintain a
successful strategy in order that succession plans are in place. The
Board aim to maximise development of internal talent and where
appropriate involve external recruitment.
Our Chairman continues to ensure that contributions made to
the Board are relevant, independent, effective and encourage
debate. Over the next 12 months further review of the Board
functionality will be undertaken to include assessments of whether
Board members attend and actively contribute to meetings as well
as thoughts on board composition, external advisers and other
relevant matters.
Relations with Shareholders
The Chief Executive Officer and the Chief Financial Officer are the
Company’s principal contact for investors, fund managers, the
press and other interested parties. The Company meets regularly
with its large investors and institutional shareholders who along
with analysts are invited to meetings by the Company after the
announcement of the Company’s results. The Company conducts
bi-annual investor roadshows in the UK and holds a Capital Markets
Day each November. At the Annual General Meeting, investors are
given the opportunity to question the entire Board.
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 misstatement 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:
O Management structure – the Board meets regularly to discuss
all issues affecting the Group
O Investment appraisal – the Group has a clearly defined
framework for investment appraisal and approval is required
by the Board where appropriate.
2020 Board and Committee meetings and attendance
Number of
Board meetings
Total 11
Number of
Audit Committee
meetings
Total 5
Number of
Remuneration
Committee
meetings
Total 4
Number of
Nomination
Committee
meetings
Total -
11
11
11
11
4
11
11
5
5
5
5
2
5
5
2
2
4
4
4
4
4
–
–
–
–
–
–
–
Executive Directors
Charles Bligh
Neil Ritchie
Non-Executive Directors
Martin Towers
Sharon Baylay
James Wilde*
Susan Davy
Jamie Hopkins**
*
Retired 21 May 2020
** Appointed 2 January 2020
Governance | Restore plc Annual Report 2020 40
Governance Statement continued
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 review this
during 2021.
Martin Towers
Chairman
18 March 2021
Governance | Restore plc Annual Report 2020 Audit Committee Report
41
Audit Committee
O review of internal management reports on processes across
The Audit Committee consists of Susan Davy as Chair and the
other independent Non-Executive Directors.
Meetings and attendance
The Audit Committee has met five times in the year and all
members attended all Committee meetings. The Committee is
scheduled to meet four times in 2021.
The meetings are also attended by the Chief Executive Officer and
Chief Financial Officer. The external auditor attends meetings by
invitation. Other members of senior management attend meetings
by invitation.
Principal responsibilities
The principal responsibilities of the Committee are focused on the
key areas elsewhere:
O ensuring the adequacy of the financial reporting; an activity
that includes the assessment of the application of accounting
policies given underlying standards, testing of accounting
judgements made in preparing financial reporting and the
assessment as to whether the presentation is fair balanced
and understandable
O reviewing the effectiveness of the internal control
environment.
The responsibilities are discharged throughout the year in
accordance with a schedule of business reflecting the annual
reporting cycle of the Group. As part of the half year and year end
reporting review process we reviewed and challenged the key
financial reporting judgements of management. Significant matters
considered by the Committee both during the year and in relation
to the year end financial statements are laid out in this report.
the Group
O considered the auditor’s report on its audit of the annual
results focusing on key findings
O assessed external auditor effectiveness in respect of the
previous year’s external audit process
O recommended to the Board reappointment of the external
auditor for approval at the Annual General Meeting with the
Committee being authorised to agree the external auditor’s
remuneration
O considered and approved the audit plan and audit fee
proposal for the external auditor
O considered the auditor’s report on control themes and
observations for the year ended 31 December 2020, which did
not identify any significant deficiencies
O recommended to the Board the reappointment of PwC as
senior statutory auditor following a thorough review and
benchmarking of their operation following the conclusion of
the 2019 audit.
At the Committee meetings throughout the year the Committee
and the external auditor have discussed significant matters arising
in respect of financial reporting during the year together with the
areas of particular focus. These included:
O a detailed review of Group’s intangible assets and investments
in order to assess the appropriate carrying value
O reviewed the level of distributable reserves in Group
companies and approved a corporate restructuring project to
increase these reserves
Looking ahead to 2021, the Committee will continue to monitor
developments and adapt its approach where necessary to best
support the Group’s stakeholders.
O considering relevant alternative performance measures for
the Group in order to show the underlying profit and earnings
per share
Matters considered by the Audit Committee
The calendar of business of the Committee sets in place a
framework for ensuring that it manages its affairs efficiently
and effectively. The most significant matters the Committee
considered are set out below;
O monitored the integrity of the financial statements of the
Group and the half-year and full-year results announcements
relating to the Group’s financial performance, including
reviewing and discussing significant financial reporting
judgements contained in the statements
O considered the need for an internal audit function for the
Group
O reviewing corporate tax matters
O reviewing the Group’s treasury policy, and
O monitored developments over the year in relation to
COVID-19 and the implication for corporate reporting.
External auditor
O reviewing the internal assessment of going concern on behalf
of the Board
O advised the Board that the presentation of the Annual Report
& Accounts is fair, balanced and understandable in accordance
with reporting requirements and recommended their approval
for publication
The Audit Committee oversees the relationship with the external
auditor and reviews their performance and ongoing independence.
The Audit Committee has reviewed the independence of
PricewaterhouseCoopers LLP and the conduct of the audit for the
financial year ended 31 December 2020. The Committee concluded
that the external audit process has been effectively run and that
PricewaterhouseCoopers LLP remains independent and has
Governance | Restore plc Annual Report 2020 42
Audit Committee Report continued
recommended their reappointment. The external auditor attends
meetings by invitation and the Committee meets with the external
auditor without management present at least once a year.
Risk management and internal controls
The Board is responsible for the effectiveness of the Company’s
risk management and internal controls. The Committee has
received a report on policies and procedures in place, the
assurance work done to check adherence to those polices and the
follow up actions taken to address any issues identified.
A whistleblowing policy is in place across the Group to encourage
employees to report any malpractice or illegal acts or omissions. All
reported incidents are followed up and the actions taken reviewed
by the Restore plc Board.
Susan Davy
Chair of the Audit Committee
18 March 2021
Governance | Restore plc Annual Report 2020 Directors’ remuneration report
Remuneration Committee
Directors’ Remuneration Policy
43
The Group’s Remuneration Policy is aimed at aligning the interests
of the Executive Directors with the growth strategy of the Group
and creation of shareholder value over the longer-term.
The Committee reviews the Remuneration Policy periodically to
ensure that it:
O reinforces the achievement of Restore’s long-term goals and
support its culture
O reflects market practice
O is competitive for companies of similar size and complexity;
and
O is simple.
The Committee is responsible for determining the remuneration
policy for the Executive Directors and senior management, as well
as its implementation over time, with the aim of ensuring that
this supports the delivery of the Group’s strategy. The Committee
has an agreed set of Terms of Reference which are available on
our website www.restoreplc.com. These are kept under regular
review to ensure that they remain appropriate and reflect any
changes which may be required as a result of changing regulation,
legislation, or best practice.
The members of the Remuneration Committee are Jamie Hopkins
(who chairs the Committee) and the Non-Executive Directors.
The Committee meets at least once a year and at other times as
appropriate and uses Ellason where appropriate as remuneration
consultants. In 2020, the Committee met four times. Its main
activities during the year were to:
O review the approach to senior executive remuneration
to ensure it remains fit-for-purpose and appropriately
incentivises delivery of the Group’s strategy
O review and agree parameters for the 2020 designated Annual
Bonus Scheme and Long-Term Incentive Plan (LTIP)
O approve the individual packages of the Executive Directors
and senior management members
O approve a loan to the Restore employee benefit trust in order
to purchase Company shares in the market on order to be
able to satisfy share-based awards
O review and agree the structure of this Directors’ remuneration
report.
The Committee is committed to adhering to good practice for
executive pay and pay reporting.
Governance | Restore plc Annual Report 2020 Directors’ remuneration report continued
Executive Directors’ remuneration policy
44
Objective
Policy
Opportunity
Element of
package
Base salary
Benefits
To provide a competitive base salary for
the market in which the Group operates, to
help attract, motivate and retain directors
with the experience and capabilities
required to achieve the Group’s strategic
aims.
To provide a market competitive benefits
package as part of a competitive total
package.
Pension
To provide an appropriate level of
retirement benefit.
Salaries are reviewed annually taking
into account Group performance,
role, experience, and market
positioning.
Salary increases are reviewed in
the context of, and generally set in
line with, the increases awarded to
the wider workforce.
Executive Directors receive
benefits in line with market
practice, principally private medical
insurance, life assurance and a car
allowance.
Executive Directors are eligible to
participate in the Group’s defined
contribution pension plan or receive
a cash allowance in lieu thereof.
Set at a level which the
Committee deems appropriate.
Pension contributions are paid at
an agreed rate.
Incentive plan
Objective
Operation
Opportunity
Performance linkage
Annual bonus
Rewards achievement
of short-term financial
and strategic goals.
The maximum
annual bonus
opportunity is
125 per cent of
base salary.
The performance measures,
weightings and targets are set
annually by the Committee. The
bonus opportunity will be linked
to the achievement of challenging
financial and, when appropriate,
non-financial performance targets.
Details of the measures and
their weightings will be disclosed
annually in the Annual Report on
Remuneration.
The outcome of the annual
bonus is based on the
achievement of annual
performance targets set at
the start of the year. The
Committee has discretion to
amend the pay-out should the
formulaic outcome not reflect
the Committee’s assessment
of underlying business
performance. Any bonus earned
is paid in cash.
Awards may also be subject
to clawback for a period of up
to three years in the event of
material financial misstatement
or gross misconduct, at the
discretion of the Committee.
Incentive plan
Objective
Operation
Opportunity
Performance linkage
LTIP
To drive and reward
the achievement of
longer-term objectives,
support retention
and promote share
ownership by Executive
Directors.
The vesting of LTIP awards will
be subject to the achievement of
defined performance targets.
Performance measures include
Return on Capital Employed
and Total Shareholder Return
measured over the performance
period.
Awards of nil-cost share options
may be made annually. Vesting will
be subject to the achievement of
specified performance conditions
over a period of three years. To
the extent that an award vests, it
may be subject to a further holding
period of up to two years.
Awards may also be subject to
malus over the vesting period,
and clawback for a period of up
to two years after vesting, at the
discretion of the Committee.
Dividend equivalents may also
accrue over the vesting period and
be paid on any awards that vest.
The normal
maximum LTIP
opportunity is
125 per cent of
salary in respect of
a financial year.
Under the LTIP
rules, an award of
up to 175 per cent
of salary may be
granted in respect
of a financial year
in exceptional
circumstances.
Governance | Restore plc Annual Report 2020 Directors’ remuneration report continued
45
Non-Executive Directors’ remuneration policy
The remuneration policy for the Non-Executive Directors is to pay fees necessary to attract an individual of the calibre required, taking into
consideration the size and complexity of the business and the time commitment of the role.
Details are set out in the table below:
Approach to setting fees
Basis of fee
Other items
The fees of the Non-Executive Directors
are agreed by the Chairman and Executive
Directors. Fees are reviewed annually.
Fees are set taking into account the level
of responsibility, relevant experience
and specialist knowledge of each
Non- Executive Director.
Fees may include a basic fee and additional
fees for further responsibilities (for
example Chairman of the Remuneration
and Audit Committee). Fees are paid in
cash.
Non-Executive Directors do not receive any
benefits or pension contributions. Travel
and other reasonable expenses incurred in
the course of performing their duties are
reimbursed.
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 six months’ notice.
Executive Directors
Charles Bligh
Neil Ritchie
Date of contract
Notice period
12 December 2018
16 May 2019
6 months
6 Months
The Non-Executive Directors do not have service contracts but have letters of appointment.
Non-Executive Directors
Date of letter
Notice period
Martin Towers
Sharon Baylay
Susan Davy
Jamie Hopkins
10 August 2017
12 August 2014
12 December 2018
28 November 2019
3 months
3 months
3 months
3 months
Annual Report on Remuneration
Directors’ Emoluments
The aggregate emoluments of the Directors of the Company during 2020 and 2019 were:
£’000
Executive Directors
Charles Bligh
Neil Ritchie
Non-Executive Directors
Martin Towers
Sharon Baylay
James Wilde*
Susan Davy
Jamie Hopkins**
*
**
retired 21 May 2020
appointed 2 January 2020
Salary & Fees
Bonus
Benefits
Pension Costs
420
290
97
56
18
50
50
981
–
–
–
–
–
–
–
–
17
13
–
–
–
–
–
43
15
–
–
–
–
–
30
58
1,069
Total
2020
480
318
97
56
18
50
50
Governance | Restore plc Annual Report 2020 Directors’ remuneration report continued
46
During the year both the Executive Directors and the Non-Executive Directors took a 20% salary cut whilst the impacts of COVID-19 were
being assessed.
Using targets set in January 2020 and before the COVID-19 restrictions the achievement for the CEO/CFO against the profit target was
zero and the achievement against the cash target was close to 100% therefore a bonus was due to the CEO/CFO for the year. Given the
circumstances of the year and notwithstanding the exceptional circumstances shown by the whole leadership team, the Board and the
Executive Directors have agreed that there will not be a CEO/CFO cash bonus for the year.
£’000
Executive Directors
Charles Bligh
Neil Ritchie
Non-Executive Directors
Martin Towers
Sharon Baylay
James Wilde
Susan Davy
Salary
& Fees
344
75
90
55
45
49
658
Bonus
Benefits
Pension
Costs
Total
2019
231
40
–
–
–
–
271
13
3
–
–
–
–
16
34
4
–
–
–
–
38
622
122
90
55
45
49
983
Long Term Incentive plan (LTIP)
Awards were made in 2020 under the Long Term Incentive Plan to senior employees of the Company. The awards are calculated as a
percentage of the participants’ salaries and scaled according to seniority.
Share options were awarded as follows to Charles Bligh and Neil Ritchie on 3 June 2020 shown in the table below.
Charles Bligh
Neil Ritchie
Number of options
Percentage of salary
Date from which
awarded
145,917
80,000
awarded
exercisable
Expiry date
125%
100%
2 June 2023
2 June 2023
2 June 2030
2 June 2030
In 2019 share options were awarded as follows to Charles Bligh and Neil Ritchie on 21 March 2019 and 1 October 2019 respectively.
Number of options
Percentage of salary
Date from which
awarded
253,840
110,295
awarded
exercisable
Expiry date
175%
20 March 2022
20 March 2029
150% 30 September 2022
30 September 2029
Charles Bligh
Neil Ritchie
Legacy Share Plans
2010 share option scheme
The last grants under this scheme were made in 2018, the share options under the scheme have no performance conditions.
The closing price for Restore plc shares at 31 December 2020 was 415.0p. During the year the market price of the Company’s ordinary
shares ranged between 554.0p and 286.0p.
Governance | Restore plc Annual Report 2020 Directors’ remuneration report continued
47
Directors’ Interests in Shares
The beneficial interests of the Directors who were in office at 31 December 2020 in the shares of the Company (including family
interests) were as follows:
Number of ordinary
shares
of 5p each
2020
Number of
ordinary shares
of 5p each
2019
26,012
14,346
15,000
2,563
–
7,406
16, 802
6,000
15,000
1,750
–
–
Charles Bligh
Neil Ritchie
Martin Towers
Sharon Baylay
Susan Davy
Jamie Hopkins
As at 18 March 2021 there has been no change in any of the above holdings.
Jamie Hopkins
Chairman of the Remuneration Committee
18 March 2021
Governance | Restore plc Annual Report 2020 Directors’ report
Directors’ report
Restore plc is an AIM listed support services company focused
on providing services to offices and workplaces in the public and
private sectors. The Company is incorporated and primarily in the
United Kingdom where the vast majority of trading occurs.
Restore plc has two divisions: Document Management and
Relocation. As a Group we provide safe and secure services in:
O Document storage, cloud and media storage
O Document shredding
O Digital services, including specialist project scanning
O Commercial and workplace relocation; and
O Management of IT assets from full deployment until end of
life Recycling or Re-Use.
The Directors present their report together with the audited
consolidated financial statements for the year ended 31 December
2020.
The Governance statement on pages 38 to 40 also forms part of
this Directors’ report.
Review of the Business
The Strategic report on pages 12 to 34 provides an operating and
financial review of the business, the Group’s trading for the year
ended 31 December 2020, as well as risk management and an
indication of future developments.
Result and Dividend
The Group has reported its Consolidated Financial Statements
in accordance with International Financial Reporting Standards
as adopted by the European Union. The Group’s results for the
year are set out in the Consolidated statement of comprehensive
income on page 57.
The Directors do not recommend a final dividend for the year
(2019: nil per share). An interim dividend of nil was paid during
the year (2019: 2.4p). The Directors expect to resume dividend
payments during 2021.
Directors
On 2 January 2020 Jamie Hopkins was appointed to the Board and
as Chairman of the Remuneration Committee.
On 21 May 2020, James Wilde retired from the Board.
48
The Directors of the Company who were in office during the year
and up to the date of signing the financial statements were:
Executive
Charles Bligh
Neil Ritchie
Independent Non-Executive
Martin Towers (Chairman)
Sharon Baylay (Senior Independent Director)
James Wilde (retired 21 May 2020)
Susan Davy
Jamie Hopkins (appointed 2 January 2020)
The biographical details of the Directors are given on pages 36 and 37.
Directors’ remuneration, long-term executive plans, pension
contributions, benefits and interests are set out in the Directors’
remuneration report on pages 43 to 47.
The Company maintains liability insurance for its Directors
and Officers, the Company’s articles of association allow the
indemnification of Directors out of the assets of the Company to
the extent permitted by law. Indemnities in favour of the Directors
have not been entered into during the year.
Share Capital and Substantial Shareholdings
Full details of the authorised and issued share capital of the
Company are set out in note 25 to the financial statements.
At 16 March 2021, the latest practicable date prior to the approval
of this document, the Company had been notified of the following
interests amounting to 3% or more of the voting rights attaching
to the Company’s issued share capital:
Significant Shareholder
Octopus Investments
Invesco
Franklin Resources
Canaccord Genuity Group Inc
Polar Capital
Charles Stanley Group
Slater Investment
M&G
Janus Henderson Group plc
Property Values
Percentage of
issued share capital
11.3%
11.3%
9.7%
7.4%
4.5%
3.9%
3.9%
3.1%
3.1%
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 2020, for the
Group’s freehold properties, some of which have a market value in
excess of the book value recorded.
Governance | Restore plc Annual Report 2020 Directors’ report continued
49
Employee Involvement process
Related party transactions
The Directors believe that the involvement of employees is an
important part of the business culture. Employees are its most
important asset and contribute to the successes achieved to
date (view our Environment Social and Governance Strategy on
pages 27 to 34).
Equal Opportunities
The Group is committed to eliminating discrimination and
encouraging diversity. Its aim is that each employee is able to
perform to the best of their ability. The Group will not make
assumptions about a person’s ability to carry out their work, for
example on their ethnic origin, gender, sexual orientation, marital
status, religion or beliefs, age or disability.
Disabled Employees
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.
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. For further
details see our Environment Social and Governance Strategy on
pages 27 to 34.
Refer to page 30 for our reporting in respect of emissions and
energy use.
Any related party transactions required to be disclosed under the
AIM rules are disclosed in note 35 to the financial statements.
Modern Slavery Act
Our Anti-slavery policy, which sets out our commitment to
preventing modern slavery and human trafficking from occurring
within any part of our business and supply chain, is available on our
website www.restoreplc.com.
Post Balance Sheet Events and Future Developments
Details of post balance sheet events are given in note 36 of the
financial statements. The Board intends to continue to pursue its
business strategy as outlined in the Strategic report on pages 12 to 34.
Annual General Meeting
The notice of the Annual General Meeting to be held on 27 May
2021 is set out on pages 106 to 110.
Going Concern
The Directors are satisfied that the Group has adequate resources
to continue in operation for a period of at least 12 months from the
approval of these consolidated financial statements and that it is
appropriate to prepare financial statements on the going concern
basis. Further details are given in note 2 to the financial statements
on page 61.
Approval
This Directors’ report was approved by order of the Board on
18 March 2021.
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.
Further details on health and safety are given on page 32.
Sarah Waudby
Company Secretary
18 March 2021
Political and Charitable Donations
Donations of £9,000 were made by the Group for charitable
purposes during the year (2019: £8,000). The Group does not make
political donations. Further details on our charitable initiatives are
given on page 32.
Financial Risk Management
Information in respect of the financial risk management objectives
and policies of the Group, is contained in note 3.
Governance | Restore plc Annual Report 2020 Statement of Directors’ responsibilities
50
Directors’ confirmations
In the case of each director in office at the date the directors’
report is approved:
O so far as the director is aware, there is no relevant audit
information of which the group’s and company’s auditors are
unaware; and
O they have taken all the steps that they ought to have taken as a
director in order to make themselves aware of any relevant audit
information and to establish that the group’s and company’s
auditors are aware of that information.
The directors are responsible for preparing the Annual Report and
the financial statements in accordance with applicable law and
regulation.
Company law requires the directors to prepare financial statements
for each financial year. Under that law the directors have prepared
the group financial statements in accordance with international
accounting standards in conformity with the requirements of
the Companies Act 2006 and international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union and company financial statements in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006.
Under company law, 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 company and of the
profit or loss of the group for that period. In preparing the financial
statements, the directors are required to:
O select suitable accounting policies and then apply them
consistently;
O state whether applicable international accounting standards in
conformity with the requirements of the Companies Act 2006
and international financial reporting standards adopted pursuant
to Regulation (EC) No 1606/2002 as it applies in the European
Union have been followed for the group financial statements
and international accounting standards in conformity with the
requirements of the Companies Act 2006 have been followed
for the company financial statements, subject to any material
departures disclosed and explained in the financial statements;
O make judgements and accounting estimates that are reasonable
and prudent; and
O prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the group and
company will continue in business.
The directors are also responsible for safeguarding the assets of
the group and company and hence for taking reasonable steps for
the prevention and detection of fraud and other irregularities.
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the group’s and
company’s transactions and disclose with reasonable accuracy
at any time the financial position of the group and company and
enable them to ensure that the financial statements comply with
the Companies Act 2006.
The directors are responsible for the maintenance and integrity
of the company’s website. Legislation in the United Kingdom
governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Governance | Restore plc Annual Report 2020 51
Independent auditors’ report
to the members of Restore plc
Report on the audit of the financial
statements
Our audit approach
Overview
Opinion
In our opinion, Restore plc’s group financial statements and
company financial statements (the “financial statements”):
O give a true and fair view of the state of the group’s and of the
company’s affairs as at 31 December 2020 and of the group’s
profit and the group’s and company’s cash flows for the year
then ended;
O have been properly prepared in accordance with international
accounting standards in conformity with the requirements of
the Companies Act 2006; and
O have been prepared in accordance with the requirements of
the Companies Act 2006.
We have audited the financial statements, included within the
Annual Report, which comprise: the Consolidated and Company
statements of financial position as at 31 December 2020;
the Consolidated statement of comprehensive income, the
Consolidated and Company statements of cash flows, and the
Consolidated and Company statements of changes in equity for
the year then ended; and the notes to the financial statements,
which include a description of the significant accounting policies.
Separate opinion in relation to international financial
reporting standards adopted pursuant to Regulation
(EC) No 1606/2002 as it applies in the European Union
As explained in note 2 to the group financial statements, the
group, in addition to applying international accounting standards
in conformity with the requirements of the Companies Act 2006,
has also applied international financial reporting standards adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union.
In our opinion, the group financial statements have been properly
prepared in accordance with international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union.
Basis for opinion
We conducted our audit in accordance with International Standards
on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities
under ISAs (UK) are further described in the Auditors’ responsibilities
for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the
ethical requirements that are relevant to our audit of the financial
statements in the UK, which includes the FRC’s Ethical Standard,
and we have fulfilled our other ethical responsibilities in accordance
with these requirements.
Audit scope
O We performed full scope audits at the parent company
(comprising Restore Records Management and head office),
Restore Datashred, and Restore Harrow Green.
O Our full scope audits account for 82% of group revenue and
77% of profit before tax and exceptional items.
O We completed an analytical review of Restore Digital and
Restore Technology.
Key audit matters
O Impairment of intangible assets and goodwill (group and parent)
O Impact of COVID-19 (group and parent)
Materiality
O Overall group materiality: £1,150,000 based on 5% of three-year
average of profit before tax, adjusted for exceptional items.
O Overall company materiality: £870,000 based on 5% of three-year
average of profit before tax, adjusted for exceptional items.
O Performance materiality: £862,500 (group) and £652,500
(company).
The scope of our audit
As part of designing our audit, we determined materiality and
assessed the risks of material misstatement in the financial
statements.
Capability of the audit in detecting irregularities,
including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with
our responsibilities, outlined in the Auditors’ responsibilities for
the audit of the financial statements section, to detect material
misstatements in respect of irregularities, including fraud.
The extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we
identified that the principal risks of non-compliance with laws and
regulations related to General Data Protection Regulation (GDPR),
UK Tax Legislation, breaches of Employment Law and Health and
Safety Executive Legislation, and we considered the extent to
which non-compliance might have a material effect on the financial
statements. We also considered those laws and regulations that
Governance | Restore plc Annual Report 2020 Independent auditors’ report continued
52
have a direct impact on the preparation of the financial statements
such as the Companies Act 2006. We evaluated management’s
incentives and opportunities for fraudulent manipulation of the
financial statements (including the risk of override of controls),
and determined that the principal risks were related to posting
inappropriate journal entries to manipulate financial results
and potential management bias in accounting estimates. Audit
procedures performed by the engagement team included:
O Discussions of compliance with the Group Head of Risk,
Chief People Officer, Divisional management teams, the
Group management team and external tax advisors including
consideration of known or suspected instances of non-
compliance with laws and regulation and fraud.
O Inspection of external press releases, legal correspondence and
whistle-blowing reports.
O Challenging the assumptions and judgements made by
management in determining their significant accounting
estimates, in particular in relation to impairment of intangible
assets and goodwill (see related key audit matters below).
O Identifying and testing journal entries, in particular any journal
entries posted with unusual account combinations including
unusual or unexpected journal postings to the income
statement and unusual words.
There are inherent limitations in the audit procedures described
above. We are less likely to become aware of instances of
non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the financial
statements. Also, the risk of not detecting a material misstatement
due to fraud is higher than the risk of not detecting one resulting
from error, as fraud may involve deliberate concealment by, for
example, forgery or intentional misrepresentations, or through
collusion.
Key audit matters
Key audit matters are those matters that, in the auditors’
professional judgement, were of most significance in the audit of
the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not
due to fraud) identified by the auditors, including those which had
the greatest effect on: the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement
team. These matters, and any comments we make on the results
of our procedures thereon, were addressed in the context of our
audit of the financial statements as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on
these matters.
This is not a complete list of all risks identified by our audit.
Impact of COVID-19 is a new key audit matter this year since it
has brought increased estimation uncertainty to key areas of
the financial statements. Adoption of IFRS 16 “Leases”, which
was a key audit matter last year, is no longer included because of
management’s consistent application of the accounting standard
subsequent to the initial adoption and because no new significant
management judgments have been taken this year. Otherwise, the
key audit matters below are consistent with last year.
Key audit matter
How our audit addressed the key audit matter
Impairment of intangible assets and goodwill
(group and parent)
As at 31 December 2020, the net book value of intangible assets and
goodwill held by both the group and parent company is significant,
£247.4m and £172.9m respectively. Goodwill is subject to an annual
impairment test and impairment tests for intangible assets are also
required if there are any indications of an impairment trigger.
We applied particular focus to the Datashred CGU given the
impairment booked at half-year and the Datashred CGU being
most impacted by COVID-19. In evaluating management’s annual
impairment assessment for goodwill, we performed the following
procedures:
Management prepared a discounted cash flow model at a cash
generating unit (‘CGU’) level in order to support the carrying value
of intangibles and goodwill.
We determined there to be a significant audit risk that the carrying
value of goodwill and intangible assets may not be supportable when
compared to its recoverable amount given deterioration in trading
conditions during the financial year due in particular to COVID-19 and
with a £7m impairment recognised at half-year by management for
the Datashred CGU. We determined impairment to be a key audit
matter because of the complexity, estimates and judgement involved
in management’s assessment.
Refer to Note 13 and Note 37 of the financial statements
(‘Intangible assets’).
O We assessed the allocation of goodwill and acquired intangibles
to CGUs;
O We evaluated the allocation of assets to the CGUs and assessed
whether this was a reasonable basis for allocation;
O We obtained the Board-approved 2021 budget and 2022-2024
Strategic Plan which formed the basis of the model used in
management’s impairment calculation. We considered whether
data used in the impairment model was consistent with the
Board-approved cash flows;
O We challenged management forecasts and compared
future cash flow expectations to historic levels as part of our
assessment as to whether the planned performance was
considered achievable, particularly for Datashred;
Governance | Restore plc Annual Report 2020 Independent auditors’ report continued
53
Key audit matter
How our audit addressed the key audit matter
Impairment of intangible assets and goodwill
(group and parent) (continued)
O We reviewed key assumptions used by management (revenue
growth, EBITA, discount rate, and long term growth rate)
and sensitised these to determine whether there were any
reasonably possible changes in these assumptions that would
lead to an impairment;
O Where possible, we corroborated key assumptions through to
contracts and third party data sources such as external market
data available;
O We assessed the appropriateness of the discount rate and
long term growth rate applied using the support of our internal
valuation experts;
O We ensured that the key sensitivity was appropriately disclosed
in accordance with IAS 36, ‘Impairment of assets’.
Based on our work, we have concluded that management’s
assessment is supportable and related disclosures are appropriate.
In response to the these risks we performed the following
procedures:
i)
ii)
Refer to our Key Audit Matter above for procedures over
impairment of goodwill and intangible assets;
With respect to management’s going concern analysis, we
evaluated management’s base case and downside scenario,
challenging key assumptions together with assessing the
Group’s available facilities, compliance with banking covenants
and the reasonableness of management’s planned mitigating
actions. Our conclusions in respect of going concern are set
out separately in this report.
iii)
We tested a sample of HMRC claims and associated cash
receipts in respect of the CJRS income recorded. We assessed
management’s accounting treatment and disclosures to
confirm they were in line with the standards.
We undertake a substantive audit and therefore do not place
reliance on controls. However, recognising the risk that the
general control environment may have been impacted as a result
of the pandemic we discussed with management including IT
management to understand how the business had adapted;
management did not identify any deterioration in the operation
of key controls. We did not identify any significant control
observations as a result of our substantive audit.
We conducted our year end work remotely but we did not encounter
any difficulties in performing our audit testing or in obtaining the
required evidence to support our audit conclusions. We considered
the appropriateness of management disclosures in the financial
statements in respect of the impact of the current environment
and the increased uncertainty around certain accounting estimates
outlined above and consider these to be appropriate.
Impact of COVID-19 (group and parent)
The Group has been comparatively resilient through the COVID-19
pandemic as most of the Group’s divisions have a high proportion of
recurring, secured revenue.
The revenue streams most impacted were those that require access to
customer premises or provision of assets to the plants for processing,
with activity driven levels in Datashred particularly affected.
The key areas COVID-19 has had the most impact are:
i)
ii)
iii)
The Group has intangible assets and goodwill held by both
the group and parent of £247.4m and £172.9m respectively as
at 31 December 2020. Given the impact of the pandemic on
the Group’s trading results to date, there is heightened risk of
impairment, in particular to the Datashred CGU.
The risk of ongoing restrictions and changes to customer
operations has been considered in the going concern
assessment with a severe but plausible downside model being
considered alongside the base case to assess whether there
is any heightened risk in relation to liquidity and covenant
compliance.
The group took advantage of the HMRC Coronavirus Job
Retention Scheme (‘CJRS’), claiming compensation in
respect of UK employee wages over the period from March
to December 2020. This has been disclosed in Note 32 in
accordance with IAS 20, ‘Accounting for government grants and
disclosure of government assistance’.
The Group also moved to remote working to comply with
government guidelines and adapt their ways of working leading to
potential risks around operation of controls and remote accessing
of IT systems.
Governance | Restore plc Annual Report 2020 Independent auditors’ report continued
54
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed
enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the
group and the company, the accounting processes and controls,
and the industry in which they operate.
The group operates in the United Kingdom through two divisions
which comprise five business units: Restore Records Management,
Restore Datashred and Restore Digital (within the Document
Management division), and Restore Harrow Green and Restore
Technology (within the Relocation division). There is also a central
head office function. There were considered to be three financially
significant operating units which required a full scope audit being
the parent company (comprising Restore Records Management
and head office), Restore Datashred, and Restore Harrow Green.
The remaining operating units were not individually financially
significant enough to require a full scope audit but were subject
to review procedures by the group engagement team. The group
team performed procedures on exceptional items.
Materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for materiality.
These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing
and extent of our audit procedures on the individual financial
statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial
statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Financial statements – Group
Financial statements – Company
Overall
materiality
£1,150,000.
£870,000.
How we
determined it
5% of three-year average of profit before tax,
adjusted for exceptional items
5% of three-year average of profit before tax, adjusted for
exceptional items
Rationale for
benchmark
applied
Based on the benchmarks used in the annual
report, profit before tax adjusted for exceptional
items is the primary measure used by the
shareholders in assessing the performance of
the Group. A three-year average measure has
been used given the significant and one-off
impact of COVID-19 on the Group’s financial
performance during the year. In the prior year,
profit before tax and exceptional items for the
year was used as our benchmark, resulting in
overall materiality of £1,500,000.
Based on the benchmarks used in the annual report, profit
before tax adjusted for exceptional items is the primary measure
used by the shareholders in assessing the performance of the
Parent. A three-year average measure has been used given the
significant and one-off impact of COVID-19 on the Company’s
financial performance during the year. In the prior year, profit
before tax and exceptional items for the year was used as our
benchmark, resulting in overall materiality of £1,200,000.
For each component in the scope of our group audit, we allocated
a materiality that is less than our overall group materiality. The
range of materiality allocated across components was between
£335,000 and £800,000. Certain components were audited to a
local statutory audit materiality that was also less than our overall
group materiality.
We use performance materiality to reduce to an appropriately
low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically,
we use performance materiality in determining the scope of
our audit and the nature and extent of our testing of account
balances, classes of transactions and disclosures, for example in
determining sample sizes. Our performance materiality was 75% of
overall materiality, amounting to £862,500 for the group financial
statements and £652,500 for the company financial statements.
In determining the performance materiality, we considered a
number of factors - the history of misstatements, risk assessment
and aggregation risk and the effectiveness of controls – and
concluded that an amount at the upper end of our normal range
was appropriate.
We agreed with those charged with governance that we would
report to them misstatements identified during our audit above
£57,500 (group audit) and £43,500 (company audit) as well as
misstatements below those amounts that, in our view, warranted
reporting for qualitative reasons.
Governance | Restore plc Annual Report 2020 Independent auditors’ report continued
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the
company’s ability to continue to adopt the going concern basis of
accounting included:
O Management has prepared a going concern paper, alongside
detailed calculations supporting their assessment of future
cash flows, available funding sources and covenant compliance.
Management have highlighted why they are comfortable that
the Group remains a going concern for the period of at least
one year from the signing of the financial statements. We have
understood, evaluated and challenged the key assumptions
made by management in their paper and are satisfied with
rationale used in these forecasts;
O We have agreed the underlying cash flow projections to
management forecasts;
O We have tested the mathematical accuracy for the forecast models;
O We have considered the basis for the forecasts by reference to
historical performance of the Group and assessing a severe but
plausible downside scenario of how COVID-19 may continue to
impact the business and the recovery during FY21;
O We have evaluated key assumptions regarding the growth
projections for FY21 and FY22 across all business units;
O We have reviewed the terms of the financing agreements and
forecasts used in the compliance testing of the covenants for
FY21 and January- June FY22 and tested the calculation of the
covenant ratios based on the forecast results and cash flows;
O We have considered availability of extra financing through both
Debt and Equity;
O We have assessed the impact of the mitigating factors available
to management to reduce cash outflows and increase cash
availability such as reduced capex spend, selling of contracts/
freehold sites and debt factoring;
O We have assessed the appropriateness of the related
disclosures in the financial statements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
group’s and the company’s ability to continue as a going concern
for a period of at least twelve months from when the financial
statements are authorised for issue.
55
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
However, because not all future events or conditions can be
predicted, this conclusion is not a guarantee as to the group’s and
the company’s ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
Reporting on other information
The other information comprises all of the information in the
Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other
information. Our opinion on the financial statements does not
cover the other information and, accordingly, we do not express an
audit opinion or, except to the extent otherwise explicitly stated in
this report, any form of assurance thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit, or otherwise appears to be materially misstated. If we identify
an apparent material inconsistency or material misstatement, we
are required to perform procedures to conclude whether there is
a material misstatement of the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We
have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors’ Report, we also
considered whether the disclosures required by the UK Companies
Act 2006 have been included.
Based on our work undertaken in the course of the audit, the
Companies Act 2006 requires us also to report certain opinions
and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the
audit, the information given in the Strategic report and Directors’
Report for the year ended 31 December 2020 is consistent with
the financial statements and has been prepared in accordance with
applicable legal requirements.
In light of the knowledge and understanding of the group and
company and their environment obtained in the course of the
audit, we did not identify any material misstatements in the
Strategic report and Directors’ Report.
Governance | Restore plc Annual Report 2020 56
Use of this report
This report, including the opinions, has been prepared for and
only for the company’s members as a body in accordance with
Chapter 3 of Part 16 of the Companies Act 2006 and for no other
purpose. We do not, in giving these opinions, accept or assume
responsibility for any other purpose or to any other person to
whom this report is shown or into whose hands it may come save
where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if,
in our opinion:
O we have not obtained all the information and explanations we
require for our audit; or
O adequate accounting records have not been kept by the
company, or returns adequate for our audit have not been
received from branches not visited by us; or
O certain disclosures of directors’ remuneration specified by law
are not made; or
O the company financial statements are not in agreement with
the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Kate Wolstenholme (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
London
18 March 2021
Independent auditors’ report continued
Responsibilities for the financial statements and the
audit
Responsibilities of the directors for the financial
statements
As explained more fully in the Statement of Directors’
responsibilities, the directors are responsible for the preparation
of the financial statements in accordance with the applicable
framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control as
they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the directors are responsible
for assessing the group’s and the company’s ability to continue as
a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group or the company or
to cease operations, or have no realistic alternative but to do so.
Auditors’ responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
Our audit testing might include testing complete populations of
certain transactions and balances, possibly using data auditing
techniques. However, it typically involves selecting a limited
number of items for testing, rather than testing complete
populations. We will often seek to target particular items for testing
based on their size or risk characteristics. In other cases, we will
use audit sampling to enable us to draw a conclusion about the
population from which the sample is selected.
A further description of our responsibilities for the audit of the
financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditors’ report.
Governance | Restore plc Annual Report 2020 Consolidated statement of comprehensive income
For the year ended 31 December 2020
57
Revenue – continuing operations
Cost of sales
Gross profit
Administrative expenses
Amortisation of intangible assets
Impairment of intangible assets
Impairment of investment
Exceptional items
Operating profit
Finance costs
Profit before tax
Taxation
Profit after tax
Other comprehensive income
Total comprehensive income for the year from
continuing operations
Loss from discontinued operations
Profit attributable to owners of the parent
Earnings/(loss) per share attributable to owners
of the parent (pence)
Total – basic
Total – diluted
Continuing operations – basic
Continuing operations – diluted
Discontinued operations – basic
Discontinued operations – diluted
Note
4
13
13
16
6
7
8
9
5
10
Year ended
31 December
2020
£’m
Year ended
31 December
2019
£’m
182.7
(105.9)
76.8
(45.1)
(8.3)
(7.0)
(1.6)
(2.3)
12.5
(8.5)
4.0
(3.8)
0.2
–
0.2
–
0.2
0.2p
0.2p
0.2p
0.2p
–
–
215.6
(120.3)
95.3
(50.1)
(8.1)
–
–
(2.7)
34.4
(9.6)
24.8
(7.9)
16.9
–
16.9
(0.2)
16.7
13.4p
12.9p
13.6p
13.1p
(0.2p)
(0.2p)
The reconciliation between the statutory results shown above and the non-GAAP adjusted measures are shown below:
Operating profit – continuing operations
Adjustments for:
Amortisation of intangible assets
Impairment of intangible assets
Impairment of investment
Exceptional items
Adjustments
Adjusted operating profit
Depreciation of property, plant and equipment and right of use assets
Earnings before interest, taxation, depreciation, amortisation,
impairment, and exceptional items (EBITDA)
Profit before tax
Adjustments (as stated above)
Adjusted profit before tax
Note
13
13
16
6
10
7
Year ended
31 December
2020
£’m
Year ended
31 December
2019
£’m
12.5
8.3
7.0
1.6
2.3
19.2
31.7
25.7
57.4
4.0
19.2
23.2
34.4
8.1
–
–
2.7
10.8
45.2
24.8
70.0
24.8
10.8
35.6
Financial Statements | Restore plc Annual Report 2020 Consolidated statement of financial position
As at 31 December 2020
Company registered no. 05169780
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Investments
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Corporation tax receivable
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liabilities – borrowings
Financial liabilities – lease liabilities
Current tax liabilities
Provisions
Non-current liabilities
Financial liabilities – borrowings
Financial liabilities – lease liabilities
Deferred tax liabilities
Provisions
Total liabilities
Net assets
EQUITY
Share capital
Share premium account
Other reserves
Retained earnings
Equity attributable to the owners of the parent
58
31 December
2020
£’m
31 December
2019
£’m
Note
13
14
15
16
23
17
18
20
19
20
21
24
20
21
23
24
25
26
27
28
247.4
70.6
107.1
–
3.4
428.5
0.9
41.2
0.3
26.4
68.8
497.3
(38.8)
–
(16.7)
–
(0.4)
(55.9)
(92.5)
(104.0)
(19.8)
(6.5)
(222.8)
(278.7)
218.6
6.3
150.3
6.0
56.0
218.6
257.5
71.8
115.1
1.6
3.8
449.8
1.4
47.9
–
17.0
66.3
516.1
(35.5)
(0.4)
(16.5)
(3.9)
(0.1)
(56.4)
(105.1)
(111.0)
(18.4)
(6.7)
(241.2)
(297.6)
218.5
6.2
150.3
6.1
55.9
218.5
These financial statements on pages 57 to 105 were approved by the Board of Directors and authorised for issue on 18 March 2021 and
were signed on its behalf by:
Charles Bligh
Chief Executive Officer
Neil Ritchie
Chief Financial Officer
Financial Statements | Restore plc Annual Report 2020
Consolidated statement of changes in equity
For the year ended 31 December 2020
Attributable to owners of the parent
Balance at 1 January 2019
Profit for the year
Total comprehensive income for the year
Transactions with owners
Dividends
Transfers (note 27)
Share-based payments charge
Current tax on share-based payments
Deferred tax on share-based payments
Deferred tax taken directly to equity
Balance at 31 December 2019
Balance at 1 January 2020
Profit for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares during the year
Current tax on share-based payments
Deferred tax on share-based payments
Share-based payments charge
Purchase of treasury shares
Balance at 31 December 2020
Share
capital
£’m
6.2
–
Share
premium
£’m
150.3
–
–
–
–
–
–
–
–
6.2
6.2
–
–
0.1
–
–
–
–
–
–
–
–
–
–
–
150.3
150.3
–
–
–
–
–
–
–
6.3
150.3
Other
reserves
£’m
Retained
earnings
£’m
3.8
–
–
–
(0.7)
2.1
0.3
0.6
–
6.1
6.1
–
–
–
0.8
(1.3)
1.2
(0.8)
6.0
45.7
16.7
16.7
(8.0)
0.7
–
–
–
0.8
55.9
55.9
0.2
0.2
(0.1)
–
–
–
–
56.0
218.6
59
Total
equity
£’m
206.0
16.7
16.7
(8.0)
–
2.1
0.3
0.6
0.8
218.5
218.5
0.2
0.2
–
0.8
(1.3)
1.2
(0.8)
Financial Statements | Restore plc Annual Report 2020 Consolidated statement of cash flows
For the year ended 31 December 2020
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 property, plant and equipment
Disposal of subsidiary, net of cash disposed
Cash flows used in investing activities
Cash flows from financing activities
Dividends paid
Purchase of treasury shares
Repayment of revolving credit facility
Lease principal repayments
Net cash used in 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
Bank overdraft
60
Year ended
31 December
2020
£’m
Year ended
31 December
2019
£’m
66.9
(8.0)
(7.2)
51.7
(7.3)
(3.4)
(0.3)
–
–
(11.0)
–
(0.8)
(13.0)
(17.1)
(30.9)
9.8
16.6
26.4
26.4
–
26.4
71.3
(8.7)
(5.7)
56.9
(9.0)
(2.2)
(0.6)
0.2
(0.2)
(11.8)
(8.0)
–
(17.4)
(14.3)
(39.7)
5.4
11.2
16.6
17.0
(0.4)
16.6
Note
29
12
12
20
20
Financial Statements | Restore plc Annual Report 2020 61
Notes to the Group financial statements
For the year ended 31 December 2020
1. General Information
Restore plc and its subsidiaries specifically focus on providing
services to offices and workplaces in the public and private sectors
and has two divisions: Document Management and Relocation. The
Group primarily operates in the UK. The Company is a public limited
company limited by shares incorporated and domiciled in England,
the United Kingdom. The address of its registered office is The
Databank, Unit 5 Redhill Distribution Centre, Salbrook Road, Redhill,
Surrey, RH1 5DY, England.
The Company is listed on the AIM.
These Group consolidated financial statements were authorised for
issue by the Board of Directors on 18 March 2021.
2. Significant Accounting Policies
Basis of Preparation
The consolidated financial statements of Restore plc have been
prepared in accordance with International Accounting Standards
in conformity with the requirements of the Companies Act 2006
(‘IFRS’) and the applicable legal requirements of the Companies
Act 2006. In addition to complying with International Accounting
Standards in conformity with the requirements of the Companies
Act, the consolidated financial statements also comply with
International Financial Reporting Standards adopted pursuant to
Regulation EC No 1602/2002 as it applies in the European Union.
The financial statements have been prepared on a historical cost
basis, except for certain financial assets and liabilities which are
held at fair value. The accounting policies have been consistently
applied, other than where new policies have been adopted.
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 12 to 34.
a period of at least 12 months from the approval date of these
financial statements. Thus they continue to adopt the going
concern basis of accounting in preparing the annual financial
statements. In making this assessment, the Directors have
considered the financing arrangements available to the Group and
the Group’s cashflow forecasts, taking into account reasonably
possible downside trading scenarios, including the impact of
COVID-19 on the business.
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.
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.
The Group meets its day-to-day working capital requirements
through its financing facilities which are due to expire on
26 March 2023. Details of the Group’s borrowing facilities are given
in note 22 of the financial statements.
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.
The Group’s budget for 2021 and forecasts for 2022, 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
Segmental Reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
62
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 Pricing
The revenue is measured at the transaction price agreed under
contract and the consideration is due on full delivery of services to
the client in line with the agreed timeframe.
Revenue Recognition
Revenue is recognised in accordance with IFRS15. Revenue for
services is recognised in the Consolidated income statement on the
delivery of those services based upon the proportion of the total
delivered at the year end date. It is recognised at the fair value of
consideration received or receivable net of discounts, VAT, returns,
rebates and after eliminating intra-group sales.
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 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. Revenue is recognised based upon the value
of work completed, or 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
over the service period and is 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.
Sale of goods
Revenue from the sale of goods is recognised when control of
the goods has been transferred to the customer, the amount
of revenue can be measured reliably and the recovery of the
consideration is probable.
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, acquisition costs relating
to business combinations, and national insurance costs on the
legacy exercise of share options.
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 amortisation of intangible
assets, impairment charges, exceptional items and a standard tax
charge.
Government grants
Government grants are recognised in the Consolidated Statement
of Comprehensive Income so as to match with the related expenses
that they are intended to compensate. They are recorded as an
offset to the relevant expense and are capped to match the relevant
cost incurred.
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.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
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 5–10%
customer attrition rate is appropriate giving the life of customer
relationships as ten to twenty years, depending upon the nature
of the customer contract. All customer relationships are being
amortised on a straight-line basis. 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. The useful economic
lives of the Group’s different asset classes are set out below:
63
Freehold and long leasehold
buildings
Long leasehold land
Basis
2–5% per annum
over the remaining life of the
lease
Leasehold improvements
over the life of the lease
Plant and machinery
5–50% per annum
Racking
5% per annum
Office equipment, fixtures
and fittings
Motor vehicles
Leased Assets
10–40% per annum
20–25% per annum
Leases are recognised as a right of use asset and a corresponding
liability at the date at which the leased asset is available for use by
the Group. Each lease payment is allocated between the liability and
finance cost. The finance cost is charged to profit or loss over the
lease period so as to produce a constant periodic rate of interest
on the remaining balance of the liability for each period. The right
of use asset is depreciated over the shorter of the asset’s useful life
and the lease term on a straight-line basis.
Assets and liabilities arising from a lease are initially measured on
a present value basis. Lease liabilities include the net present value
of fixed lease payments (less any lease incentives receivable) and
variable lease payment that are based on an index or a rate. The
group is exposed to potential future increases in variable lease
payments based on an index or rate, which are not included in the
lease liability until they take effect. When adjustments to lease
payments based on an index or rate take effect, the lease liability is
reassessed and adjusted against the right-of-use asset.
The lease payments are discounted using the interest rate implicit
in the lease. If that rate cannot be determined interest rate
structures based on the lessee’s incremental borrowing rate have
been used, to reflect the rate that the lessee would have to pay to
borrow the funds necessary to obtain an asset of similar value in a
similar economic environment with similar terms and conditions.
The Group have applied the practical expedient as permitted by
IFRS16 to apply a single discount rate to a portfolio of leases with
reasonably similar characteristics. To determine the incremental
borrowing rate, the Group starts with a risk-free interest rate which
factors in Group specific credit risk, and makes adjustments specific
to the lease, for example based on the type of asset being leased
and the lease term.
Right of use assets are measured at cost comprising the amount of
the initial measurement of the lease liability, lease payments made
at or before the commencement date less any lease incentives
received, initial direct costs and restoration costs.
Payments associated with short-term leases and leases of low-
value assets are recognised on a straight-line basis as an expense
in profit or loss. Short-term leases are leases with a lease term of
12 months or less and low-value assets comprise IT-equipment and
small items of office furniture.
Financial Statements | Restore plc Annual Report 2020
Notes to the Group financial statements continued
64
Extension and termination options are included in a number of
property and equipment leases across the Group. These terms
are used to maximise operational flexibility in terms of managing
contracts. The majority of extension and termination options held
are exercisable only by the Group and not by the respective lessor.
Extension options (or periods after termination options) are only
included in the lease term if the lease is reasonably certain to be
extended (or not terminated).
Investments
Investments are carried at cost. An impairment test is performed on
the carrying value of the investment when there is an impairment
trigger. 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.
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 IFRS 9 ‘Financial Instruments’, are recorded initially at fair value
and subsequently measured at amortised cost. A provision for
impairment is established when the Company considers that there
is a significant increase in credit risk, in line with the expected credit
loss (‘ECL) model. The movement in the provision is recognised in
profit or loss.
Any other receivables are recognised at their initial fair value less
the value of the impairment calculated.
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, overdrafts, 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.
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
IFRS 9, 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 IFRS
9 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
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
65
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.
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.
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
payments.
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.
The Group recognise an accrual in respect of National Insurance
payable on the exercise of all share options. The liability recognised
depends on the number of options that are expected to be
exercised, and the liability is adjusted by reference to the fair value
of the options at the end of each reporting period.
Pensions
The Group operates a number of defined contribution pension
schemes. Contributions are charged to profit or loss as incurred.
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.
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.
Exceptional items
Management is required to exercise judgement in identifying items
of expenditure or income which are one-off and non-recurring in
nature, and which are presented as exceptional items within the
financial statements. Principally included within exceptional items,
and as disclosed in note 6, are costs in respect of restructuring
and reorganisation incurred by the Group during the year. These
items warrant separate additional disclosure within the financial
statements in order to fully understand the underlying performance
of the Group.
Determination of lease term (IFRS16)
In determining the lease term used to calculate the present value of
future lease payments as required by IFRS16, management exercise
judgement in considering all facts and circumstances that create
an economic incentive to exercise an extension option, or not
exercise a termination option. Extension options (or periods after
termination options) are only included in the lease term if the lease
is reasonably certain to be extended (or not terminated).
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.
Valuation of separable intangibles on acquisition
The Group has made two acquisitions during the year. The key
estimate that has been made is in respect of the valuation of
customer relationships.
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
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
66
acquisitions made in the year related to customer relationships and
were valued at £2.2m (2019: £1.9m) as detailed further in note 13.
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 and
long-term growth rate in order to calculate the present value of
those cash flows. Further details are given in note 13.
Incremental borrowing rate (IFRS16)
The Group have applied the practical expedient as permitted by
IFRS16 to apply a single discount rate to a portfolio of leases with
reasonably similar characteristics. To determine the incremental
borrowing rate, the Group starts with a risk-free interest rate which
factors in Group specific credit risk, and makes adjustments specific
to the lease.
Adoption of New and Revised Standards
The Group has applied the following new standards and
amendments to standards which were effective for the first time
during the financial year: Definition of Material – Amendments to
IAS 1 and IAS 8; Definition of a Business – Amendments to IFRS 3;
Interest Rate Benchmark Reform – Amendments to IFRS 7, IFRS 9 and
IAS 39; and Revised Conceptual Framework for Financial Reporting.
New standards and interpretations not yet adopted
As at 31 December 2020, the following standards and interpretations
had been issued but were not mandatory for annual reporting
periods ending on 31 December 2020: Covid-19-related Rent
Concessions – Amendments to IFRS 16; Interest Rate Benchmark
Reform – Phase 2 – Amendments to IFRS 7, IFRS 4 and IFRS 16;
Classification of Liabilities as Current or Non-current – Amendments
to IAS 1; Property, Plant and Equipment: Proceeds before intended
use – Amendments to IAS 16; Reference to the Conceptual
Framework – Amendments to IFRS 3; Onerous Contracts – Cost of
Fulfilling a Contract – Amendments to IAS 37; Annual Improvements
to IFRS Standards 2018-2022; and Sale or contribution of assets
between an investor and its associate or joint venture – Amendments
to IFRS 10 and IAS 28.
These new standards and interpretations are not expected to have a
material effect on the Group financial statements.
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 may use 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.
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 2020 and 2019, 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. The Group
does not currently hold any interest rate swaps.
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.
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.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
67
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 22.
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.
The Group’s strategy is to strengthen its capital base in order to sustain the future development of the business.
Debt to Capital Ratio
Borrowings
Less: cash and cash equivalents (note 20)
Net debt
Total equity
Debt to capital ratio
2020
£’m
92.5
(26.4)
66.1
218.6
0.3
2019
£’m
105.5
(17.0)
88.5
218.5
0.4
On a consistent accounting policy basis, the gearing reduced during 2020 compared to that in 2019 as a result of the strong cash
generation in the year. The Group does not have any externally imposed capital requirements.
Fair value estimation
The fair value of financial instruments is market value.
4. Segmental Analysis
The Group is organised into two operating segments, Document Management and Relocation, and incurs Head Office costs. Services per
segment operate as described in the Strategic report. The vast majority of trading of the Group is undertaken within the United Kingdom.
Segment assets include intangibles, property, plant and equipment, right of use assets, 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:
Revenue – Continuing operations
Restore Records Management
Restore Datashred
Restore Digital
Document Management division
Restore Harrow Green
Restore Technology
Relocation division
Total Revenue
2020
£’m
87.6
28.0
18.5
134.1
33.3
15.3
48.6
182.7
2019
£’m
95.9
41.0
22.6
159.5
41.5
14.6
56.1
215.6
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
68
Major customers
For the year ended 31 December 2020 no customers individually accounted for more than 3% (2019: 3%) of the Group’s total revenue.
Segmental information
Profit before tax
Document Management division
Relocation division
Head office
Amortisation of intangible assets
Impairment of intangible assets and investments
Exceptional items
Share-based payments charge (including related NI)
Operating profit
Finance costs
Profit before tax
Segment assets
Segment liabilities
Capital expenditure
Depreciation and amortisation
Segment assets
Segment liabilities
Capital expenditure
Depreciation and amortisation
5. Discontinued operations
2020
£’m
33.2
4.0
(4.5)
(8.3)
(8.6)
(2.3)
(1.0)
12.5
(8.5)
4.0
Head
Office
£’m
13.6
87.1
0.2
0.1
Head
Office
£’m
0.1
102.0
0.2
0.1
2019
£’m
45.1
7.7
(3.8)
(8.1)
–
(2.7)
(3.8)
34.4
(9.6)
24.8
31 December
2020
Total
£’m
497.3
278.7
7.3
34.0
31 December
2019
Total
£’m
516.1
297.6
9.0
32.9
Document
Management
£’m
Relocation
£’m
427.4
160.0
6.6
29.6
56.3
31.6
0.5
4.3
Document
Management
£’m
Relocation
£’m
447.2
164.5
7.8
29.2
68.8
31.1
1.0
3.6
There were no discontinued operations in 2020. The 2019 discontinued operations relate to the Group’s sale of ITP Group Holdings Limited,
a printer cartridge recycling business, on 25 February 2019, in exchange for a 40% stake in Ink and Toner Recycling Limited, also a printer
cartridge recycling company, and resulted in a loss on disposal of £0.2m.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
6. Exceptional Items
Acquisition – transaction costs
Acquisition related restructuring costs
Restructuring and redundancy
Other exceptional
Total
69
2020
£’m
0.1
0.1
1.3
0.8
2.3
2019
£’m
0.1
2.3
–
0.3
2.7
Restore’s strategy is to grow organically, through acquisition and from unlocking margin expansion opportunities, particularly through the
development of synergies across the Group. To deliver these goals, costs of a one-off or unusual nature may occur and in order to give a
suitable representation of the underlying earnings of the Group, these are shown separately.
The Group went through a restructuring and redundancy programme during the year principally driven by the COVID-19 pandemic. As a
result, the Group has been able to reduce costs in the business on an ongoing basis through redundancies and site closures but had to
incur some one-off redundancy costs during 2020 in order to implement this (£1.3m).
Acquisition related restructuring and transaction costs were £0.2m in 2020, a reduction of £2.2m on 2019 due to lower levels of acquisition
activity and the unwind of acquisition related restructuring costs from prior year acquisitions.
Other exceptional costs of £0.8m relate to the employer’s national insurance on the exercise of legacy share options in the year (£0.3m),
costs recognised in respect of a prior year legal liability (£0.3m) and the costs associated with a corporate restructure (£0.2m).
7. Operating Profit
The following items have been included in arriving at operating profit:
Amortisation of intangible assets
Depreciation of property, plant and equipment and right-of-use assets
Impairment of intangible assets
Impairment of investment
Gain on disposal of property, plant and equipment and right-of-use assets
Share-based payments charge (including related NI)
Fees payable to the company’s auditors:
– Audit of the parent company and consolidated financial statements
– Audit of the company’s subsidiaries pursuant to legislation
Expenses by function:
Staff costs (note 32)
Depreciation of property, plant and equipment and right-of-use assets
Gain on disposal of property, plant and equipment and right-of-use assets
Property related costs (excluding rent)
Materials costs
Subcontractor costs
Selling and distribution expenses
Transport costs
Computer costs
Audit and tax costs
Legal and professional costs
Telecommunication costs
Exceptional items
Other expenses
Total cost of sales and administrative expenses
Amortisation and impairment of intangible assets and investment
Total operating costs
2020
£’m
8.3
25.7
7.0
1.6
(0.1)
1.0
0.2
0.1
62.6
25.7
(0.1)
11.5
10.5
12.3
11.4
6.1
5.1
0.4
3.3
0.7
2.3
1.5
153.3
16.9
170.2
2019
£’m
8.1
24.8
–
–
–
3.8
0.2
0.1
73.1
24.8
–
8.5
11.0
20.6
6.5
13.5
4.8
0.3
3.2
0.7
2.7
3.4
173.1
8.1
181.2
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
8. Finance Costs
Interest on bank loans and overdrafts
Interest on lease liabilities
Amortisation of deferred finance costs
Total
9. Taxation
Current tax:
UK corporation tax on profit for the year
Adjustment in respect of previous periods
Total current tax
Deferred tax: (note 23)
Current year
Adjustment in respect of previous periods
Total deferred tax
Total tax charge
2020
£’m
2.8
5.4
0.3
8.5
2020
£’m
4.1
(0.4)
3.7
0.6
(0.5)
0.1
3.8
The 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 19% (2019: 19%)
Effects of:
Expenses not deductible
Income not chargeable for tax purposes
Adjustment in respect of corporation tax for previous periods
Adjustment in respect of deferred tax for previous periods
Share-based payments charge
Effect of change in rate used for deferred tax
Tax charge
2020
£’m
4.0
0.8
2.0
–
(0.4)
(0.5)
0.2
1.7
3.8
70
2019
£’m
3.6
5.7
0.3
9.6
2019
£’m
7.3
–
7.3
(1.3)
1.9
0.6
7.9
2019
£’m
24.8
4.7
3.6
(2.7)
–
1.9
0.2
0.2
7.9
The tax charge for the year is higher than the profit before tax multiplied by the rate of corporation tax (2019: higher).
In the Spring Budget 2020, the UK Government announced that from 1 April 2020 the corporation tax rate would remain at 19% (rather than
reducing to 17%, as previously enacted). This new law was substantively enacted on 17 March 2020. Deferred taxes at the balance sheet
date have been measured using these enacted tax rates and reflected in these financial statements.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
71
10. 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
Weighted average number of shares in issue
Share options
Weighted average fully diluted number of shares in issue
Total fully diluted earnings per share
Continuing profit for the year
Continuing basic earnings per share
Continuing fully diluted earnings per share
Discontinued loss for the year
Discontinued basic loss per share
Discontinued fully diluted loss per share
Adjusted earnings per share
2020
2019
125,214,737
124,164,022
£0.2m
0.2p
£16.7m
13.4p
125,214,737
124,164,022
3,543,950
5,097,959
128,758,687
129,261,981
0.2p
£0.2m
0.2p
0.2p
–
–
–
12.9p
£16.9m
13.6p
13.1p
(£0.2m)
(0.2p)
(0.2p)
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
Impairment of intangible assets and investments
Adjusted continuing profit for the year
2020
£’m
4.0
8.3
2.3
8.6
23.2
2019
£’m
24.8
8.1
2.7
–
35.6
The adjusted earnings per share, based on the weighted average number of shares in issue during the year, 125.2m (2019: 124.2m) is
calculated below:
Adjusted profit before tax (£’m)
Tax at 19% (£’m)
Adjusted profit after tax (£’m)
Adjusted basic earnings per share
Adjusted fully diluted earnings per share
11. Dividends
2020
23.2
(4.4)
18.8
15.0p
14.6p
2019
35.6
(6.8)
28.8
23.2p
22.3p
The directors do not recommend a final dividend for the year ended 31 December 2020 (2019: £nil per share). An interim dividend of £nil
was paid during the year (2019: 2.4p).
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
72
12. Business Combinations
On 1 July 2020, the Group acquired the trade and assets of Complete Scanning Limited, a digital business, for consideration of £0.3m.
£0.2m of customer relationships were recognised on acquisition.
On 31 October 2020, the Group completed the acquisition of E Recycling Limited and its subsidiary, Euro-Recycling Limited (together
‘Euro-Recycling’). Euro-Recycling is a technology business, and was acquired for cash consideration of £4.0m. Deferred consideration of
£0.5m is payable on a contingent basis over two years from the acquisition date. 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.
Intangibles – customer relationships
Property, plant and equipment and right-of-use assets
Trade and other receivables
Cash
Trade and other payables
Corporation tax
Deferred taxation
Lease liabilities
Net assets acquired
Goodwill
Consideration
Satisfied by:
Cash to Vendors
Deferred consideration
Total consideration
£’m
2.0
0.4
0.7
0.7
(0.4)
(0.1)
(0.4)
(0.1)
2.8
1.7
4.5
4.0
0.5
4.5
During the year, deferred consideration of £0.1m was paid, in relation to the acquisitions of Crimson UK Limited and FDA Limited.
Post acquisition results
The table below gives the revenue and profit for the acquisitions completed in the year and included in the consolidated results.
Revenue
Profit before tax since acquisition included in the Consolidated statement of comprehensive income
2020
£’m
0.5
0.1
2019
£’m
2.2
0.2
If the acquisitions had been completed on the first day of the financial year, Group revenue would have been £184.9m and Group
continuing profit before tax would have been £4.7m.
The acquisitions made during the year were to further extend national coverage, increase customers and sites and increase the Group’s
market share in its digital and technology services.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
13. Intangible Assets
Cost
1 January 2019
Arising on acquisition of subsidiaries
Arising on acquisition of trade and assets
Additions – external
31 December 2019
Arising on acquisition of subsidiaries
Arising on acquisition of trade and assets
Additions – external
Disposals
31 December 2020
Accumulation amortisation and impairment
1 January 2019
Charge for the year
31 December 2019
Charge for the year
Impairment
Disposals
31 December 2020
Carrying amount at 31 December 2020
Carrying amount at 31 December 2019
Goodwill
£’m
Customer
Relationships
£’m
Trade names
£’m
Applications
Software IT
£’m
163.4
0.7
–
–
164.1
1.7
–
–
–
124.0
1.3
0.6
–
125.9
2.0
0.2
–
–
165.8
128.1
10.6
–
10.6
–
7.0
–
17.6
148.2
153.5
19.4
7.0
26.4
7.1
–
–
33.5
94.6
99.5
4.3
–
–
–
4.3
–
–
–
–
4.3
1.9
0.3
2.2
0.3
–
–
2.5
1.8
2.1
5.0
–
–
1.1
6.1
–
–
1.3
(0.2)
7.2
2.9
0.8
3.7
0.9
–
(0.2)
4.4
2.8
2.4
Amortisation is charged to profit or loss as an administrative expense.
73
Total
£’m
296.7
2.0
0.6
1.1
300.4
3.7
0.2
1.3
(0.2)
305.4
34.8
8.1
42.9
8.3
7.0
(0.2)
58.0
247.4
257.5
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
The changes to goodwill during the year were as follows:
Cost
1 January 2019
Acquired – Secure IT Asset Disposals
31 December 2019
Acquired – Euro-Recycling
31 December 2020
Accumulated impairment
1 January 2019 and 31 December 2019
Impairment
31 December 2020
Carrying amount at 31 December 2020
Carrying amount at 31 December 2019
Goodwill has been allocated to the Group’s operating segments or divisions as follows:
Document Management
Relocation
Annual test for impairment
2020
£’m
139.4
8.8
148.2
74
£’m
163.4
0.7
164.1
1.7
165.8
10.6
7.0
17.6
148.2
153.5
2019
£’m
146.4
7.1
153.5
Under IAS 36, Goodwill is tested annually for impairment, irrespective of there being any impairment indicators. For the purpose of
impairment testing, goodwill and other intangibles are allocated to business units which represent the lowest level at which that those
assets are monitored for internal management purposes. The recoverable amount of each cash-generating unit (‘GCU’) is determined from
value-in-use calculations. The calculations use pre-tax cash flow projections based on financial budgets and forecasts approved by the
Directors.
While Goodwill is to be assessed for impairment at least annually, given the material effect of COVID-19 on the economy, an impairment
assessment was also conducted at the half-year. At the half-year, the Group’s revenue projections within the model were reduced with
a prudent baseline view taken which resulted in a non-cash impairment of £7.0m being charged to the income statement in relation to
historic acquisitions in the Datashred business.
At the year-end, another impairment review was conducted including downside scenario modelling, which indicated that no further
impairment was required to the Datashred business. This model also indicated no impairment to any of the Group’s other CGU’s. The year-end
model utilises forecasts based upon the Group’s budget for FY21 and the Group’s Strategy Plan for FY22, FY23 and FY24. Over the 4 year
forecast, the CGUs have compound average growth rates for revenue ranging from 5%-17%, with pre IFRS16 EBITDA average margin varying
between 12%-41%. Terminal cash flows are based on the Group’s 4 year projections, assumed to grow perpetually at 2%. In accordance with
IAS 36, the growth rates for beyond the initially forecast years do not exceed the long-term average growth rate for the industry. The forecasts
have been discounted at a pre-tax rate of 8.8% (2019: 7.6%). This discount rate was calculated using a pre-tax rate based on the weighted
average cost of capital for the Group.
Sensitivity
Other than the Datashred CGU, the Group have not identified any reasonably possible changes that would result in an impairment. For
Datashred, as an impairment was recognised in the year, we have considered what would cause an additional impairment. An additional
impairment would result if the Datashred business was to not return to pre-COVID-19 levels of trading by FY24, which is considered
unlikely.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
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
30.0
0.3
–
–
–
30.3
0.2
–
–
30.5
1.6
0.6
–
–
2.2
0.6
–
2.8
27.7
28.1
15.8
4.9
–
–
–
20.7
2.1
(0.3)
–
22.5
3.5
1.5
–
–
5.0
1.6
(0.3)
6.3
16.2
15.7
39.1
2.1
–
0.1
–
41.3
2.9
(1.9)
0.3
42.6
12.7
3.9
–
–
16.6
3.9
(1.9)
18.6
24.0
24.7
4.5
0.6
(0.1)
–
0.2
5.2
0.8
(0.1)
–
5.9
2.2
1.0
(0.2)
0.1
3.1
0.9
(0.1)
3.9
2.0
2.1
3.4
–
(0.1)
0.2
–
3.5
–
(1.9)
0.1
1.7
1.7
0.7
(0.1)
–
2.3
0.6
(1.9)
1.0
0.7
1.2
Cost
1 January 2019
Additions
Disposals
Acquisitions
Transfer from assets
held for sale
31 December 2019
Additions
Disposals
Acquisitions
31 December 2020
Accumulated depreciation
1 January 2019
Charge for the year
Disposals
Transferred to assets
held for sale
31 December 2019
Charge for the year
Disposals
31 December 2020
Net book value
31 December 2020
31 December 2019
Capital expenditure contracted for but not provided in the financial statements is shown in note 33.
Depreciation is charged to profit or loss as an administrative expense.
75
Total
£’m
92.8
7.9
(0.2)
0.3
0.2
101.0
6.0
(4.2)
0.4
103.2
21.7
7.7
(0.3)
0.1
29.2
7.6
(4.2)
32.6
70.6
71.8
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
15. Right of use assets
Cost
1 January 2019
Additions
Disposals
31 December 2019
Additions
Disposals
31 December 2020
Accumulated depreciation
1 January 2019
Depreciation charge for the year
31 December 2019
Charge for the year
Disposals
31 December 2020
Net book value
31 December 2020
31 December 2019
16. Investments
Investments
76
Total
£’m
120.3
12.0
(0.1)
132.2
10.6
(6.9)
135.9
–
17.1
17.1
18.1
(6.4)
28.8
107.1
115.1
2019
£’m
1.6
Office
equipment,
fixtures and
fittings
£’m
Leasehold
Property
£’m
Motor
Vehicles
£’m
110.2
6.3
(0.1)
116.4
6.8
(6.3)
116.9
–
13.3
13.3
13.5
(5.8)
21.0
95.9
103.1
0.7
0.1
–
0.8
0.5
(0.1)
1.2
–
0.6
0.6
0.5
(0.1)
1.0
0.2
0.2
9.4
5.6
–
15.0
3.3
(0.5)
17.8
–
3.2
3.2
4.1
(0.5)
6.8
11.0
11.8
2020
£’m
–
The Group holds a 40% investment in Ink and Toner Limited, a printer cartridge recycling business company. This shareholding is being held
as an investment at historic cost, as due to the shareholder structure the Directors did not have the ability to exhibit significant influence
over the operations of the business. This investment was fully impaired during 2020, as a result of an impairment review conducted at the
half year.
17. Inventories
Finished goods and goods for resale
£7.0m (2019: £5.5m) of inventories were recognised as an expense in cost of sales in the year.
2020
£’m
0.9
2019
£’m
1.4
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
18. Trade and Other Receivables
Trade receivables
Less: provision for impairment of trade receivables
Trade receivables – net
Other receivables
Prepayments and accrued income
77
2019
£’m
29.0
(0.4)
28.6
0.7
18.6
47.9
2020
£’m
22.8
(0.3)
22.5
0.6
18.1
41.2
The average credit period is 35 days (2019: 41 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
Additional provision
Utilised
Released
31 December
2020
£’m
0.4
0.2
(0.1)
(0.2)
0.3
2019
£’m
1.8
–
(1.0)
(0.4)
0.4
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 22 for an analysis of trade receivables that were past due but not
impaired.
Customer incentives are included within prepayments as follows:
Incentives recognised – 31 December
Credit to income in the year
19. Trade and Other Payables
Trade payables
Other taxation and social security
Other payables
Accruals and deferred income
2020
£’m
3.5
2.3
2020
£’m
12.5
12.4
–
13.9
38.8
2019
£’m
4.9
2.4
2019
£’m
14.4
6.4
0.1
14.6
35.5
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
46 days (2019: 39 days).
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
20. Financial Liabilities – Borrowings
Current
Bank loans and overdrafts
Bank loans – secured
Deferred financing costs
Non-current
Bank loans – secured
Deferred financing costs
78
2019
£’m
0.4
–
–
0.4
106.0
(0.9)
105.1
2020
£’m
–
–
–
–
93.0
(0.5)
92.5
The bank debt is due to The Royal Bank of Scotland plc, Barclays Bank plc, Bank of Ireland, Clydesdale Bank plc and Allied Irish Bank 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 22. Under the bank facility the Group is required to meet quarterly covenant tests in respect of 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 due within one year
Bank loans due after one year
21. Financial Liabilities – lease liabilities
Obligations under leases – present value of lease liabilities
Repayable by instalments:
In less than one year
In two to five years
More than five years
22. Financial Instruments
2020
£’m
26.4
–
(92.5)
(66.1)
2020
£’m
120.7
16.7
51.8
52.2
120.7
2019
£’m
17.0
(0.4)
(105.1)
(88.5)
2019
£’m
127.5
16.5
52.8
58.2
127.5
The Group’s financial instruments comprise cash at bank, bank loans 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 at bank
Bank overdraft
Cash and cash equivalents
2020
£’m
26.4
–
26.4
2019
£’m
17.0
(0.4)
16.6
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
79
An expected credit loss (‘ECL’) model in accordance with IFRS 9 has been applied to the Group’s trade receivables. The Group have utilised
a simplified approach which is permitted by the standard, which applies a credit risk percentage based upon historical risk of default against
receivables that are grouped into age brackets. The group’s trade receivables share similar risk characteristics and therefore we have chosen
to apply the same default percentage of 1.3% on all outstanding receivables. The Group has a low credit risk on its trade receivables and
historic defaults.
We review our loans and receivables in line with the application of IFRS 9 and the expected credit loss (‘ECL’) model in accordance with our
Group policy and this will continue on an ongoing basis.
As at 31 December 2020, trade receivables of £1.3m (2019: £1.4m) 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
2020
£’m
0.8
0.5
2019
£’m
0.5
0.9
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
2020
£’m
23.1
(147.1)
2019
£’m
29.8
(147.6)
Trade and other receivables/payables are carried through comprehensive income where the carrying values are either fair value or
approximate fair value.
Currency and interest rate risk profile of financial liabilities
All bank borrowings were subject to floating interest rates, at LIBOR plus a margin of between 1.79% and 2.51%, depending on the leverage
covenant.
The interest rate risk profile of the Group’s gross borrowings for the year was:
Floating
rate financial
liabilities
£’m
Weighted
average
interest rates
%
Currency
Sterling at 31 December 2020
Sterling at 31 December 2019
Total
£’m
92.5
105.5
92.5
105.5
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
Interest rate sensitivity
2020
£’m
92.5
2.3
2.8
2019
£’m
105.5
At 31 December 2020, 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 £0.5m (2019: £0.6m) 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 reduced during the current year due to the increased reduced 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.
Financial Statements | Restore plc Annual Report 2020 O
80
Notes to the Group financial statements continued
Maturity of financial liabilities
The maturity profile of the carrying amount of the Group’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 two and five years
More than five years
Bank
debt
£’m
–
92.5
–
92.5
Other
financial
liabilities*
£’m
43.1
51.8
52.2
147.1
2020
Total
£’m
43.1
144.3
52.2
239.6
*
Other financial liabilities include trade payables, interest accruals, amounts owing under lease arrangements and contingent and deferred consideration.
Borrowing facilities
The Company has a finance facility with The Royal Bank of Scotland plc, Barclays Bank plc, Bank of Ireland, Clydesdale Bank plc and Allied
Irish Bank which expires on 26 March 2023. The enlarged facilities consist of a single £160m RCF (which is partly reduced by an on demand
net overdraft facility of £1.5m). In addition there is an uncommitted accordion facility (RCF) of £30.0m, and an overdraft of £1.5m. £1.5m of
the overdraft facility was unutilised at 31 December 2020 (2019: £1.1m). Committed but undrawn borrowing facilities as at 31 December
2020 amounted to £65.5m (2019: £52.5m).
All of the Company’s borrowings are in sterling.
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 due to the current interest rates incurred and forecasted market rates. This policy is reviewed on a regular basis by the Board.
23. Deferred Tax
Summary of balances
Deferred tax liabilities
Deferred tax assets
Net position at 31 December
2020
£’m
(19.8)
3.4
(16.4)
2019
£’m
(18.4)
3.8
(14.6)
A UK corporation rate of 19% (effective 1 April 2020) was substantively enacted on 17 March 2020, reversing the previously enacted
reduction in the rate from 19% to 17%. This will increase the company’s future current tax charge accordingly. The deferred tax liability at
31 December 2020 has been calculated at 19% (2019: 17%).
The recent change in the UK corporation tax rate to 25% in 2023 announced on 3 March 2021 has not been reflected in the calculation of
deferred tax as the rate has not yet been substantively enacted.
The movement in the year in the Group’s net deferred tax position is as follows:
1 January
Charge to income statement for the year
Tax (charged)/credited directly to equity
Acquisitions
31 December
2020
£’m
(14.6)
(0.1)
(1.3)
(0.4)
(16.4)
2019
£’m
(15.1)
(0.7)
1.4
(0.2)
(14.6)
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
The following are the major deferred tax liabilities and assets recognised by the Group and the movements thereon during the year:
Deferred tax liabilities
Accelerated
capital
allowances
£’m
Intangible
assets
£’m
Properties
£’m
(1.0)
0.3
–
(0.7)
(0.1)
–
(0.8)
(0.3)
(0.5)
(0.8)
(15.7)
(0.9)
(0.2)
(16.8)
(0.8)
(0.4)
(18.0)
(0.8)
(17.2)
(18.0)
(0.9)
–
–
(0.9)
(0.1)
–
(1.0)
–
(1.0)
(1.0)
Share-based
payments
£’m
Losses
£’m
Provisions
£’m
Leases
£’m
1.2
0.3
0.6
–
2.1
–
(1.3)
0.8
0.5
0.3
0.8
0.3
(0.3)
–
–
–
–
–
–
–
–
–
1.0
(0.1)
(0.9)
–
–
–
–
–
–
–
–
–
–
1.7
–
1.7
0.9
–
2.6
0.9
1.7
2.6
1 January 2019
(Charge)/credit to income for the year
Acquisition
31 December 2019
Charge to income for the year
Acquisition
31 December 2020
Deferred tax liabilities are analysed as follows:
Current
Non- current
Total
Deferred tax assets
1 January 2019
Charge to income for the year
Credit/(charge) directly to equity
Transactions with owners
31 December 2019
Credit to income for the year
Charge directly to equity
31 December 2020
Deferred tax assets are analysed as follows:
Current
Non- current
Total
24. Provisions
1 January 2020
Additional provision
Utilised/released
31 December 2020
81
Total
£’m
(17.6)
(0.6)
(0.2)
(18.4)
(1.0)
(0.4)
(19.8)
(1.1)
(18.7)
(19.8)
Total
£’m
2.5
(0.1)
1.4
–
3.8
0.9
(1.3)
3.4
1.4
2.0
3.4
Dilapidation
provision
£’m
6.8
0.2
(0.1)
6.9
The dilapidation provision relates to the future anticipated costs to restore leased properties into their original state at the end of the lease
term. This provision has been discounted at an average discount rate of 3.9%.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
Provisions are analysed as follows:
Current
Non-current
Total
2020
£’m
0.4
6.5
6.9
In 2019, the dilapidation provision was included within lease liabilities. The disclosure has been amended to match the current year
presentation in separating out the dilapidation provision from lease liabilities.
25. Called Up Share Capital
Authorised:
199,000,000 (2019: 199,000,000) ordinary shares of 5p each
Allotted, issued and fully paid:
125,654,025 (2019: 124,419,734) ordinary shares of 5p each
The issued ordinary share capital is as follows:
Date
1 January 2019
14 June 2019 – exercise of share options
24 September 2019 – exercise of share options
18 October 2019 – exercise of share options
23 December 2019 – exercise of share options
31 December 2019
16 January 2020 – exercise of share options
22 April 2020 – exercise of share options
16 June 2020 – exercise of share options
9 July 2020– exercise of share options
19 August 2020 – exercise of share options
31 December 2020
2020
£’m
10.0
6.3
Number of
ordinary
shares
123,940,899
386,357
20,768
16,377
55,333
124,419,734
478,000
42,142
33,077
340,536
340,536
125,654,025
82
2019
£’m
0.1
6.7
6.8
2019
£’m
10.0
6.2
Issue
price
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
The 1,234,291 (2019: 478,835) ordinary shares shown as issued above are as a result of the exercise of share options which were net-
settled at the market price on the day of exercise (note 31).
26. Share Premium Account
1 January and 31 December
2020
£’m
150.3
2019
£’m
150.3
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.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
27. Other Reserves
1 January 2019
Current tax on share-based payments
Deferred tax on share-based payments
Share-based payments charge
Transfers*
31 December 2019
Current tax on share-based payments charge
Deferred tax on share-based payments charge
Share-based payments charge
Purchase of treasury shares
31 December 2020
83
Total
£’m
3.8
2.1
0.3
0.6
(0.7)
6.1
0.8
(1.3)
1.2
(0.8)
6.0
Share-based
payments
reserve
£’m
Treasury
shares
£’m
3.8
2.1
0.3
0.6
(0.7)
6.1
0.8
(1.3)
1.2
–
6.8
–
–
–
–
–
–
–
–
–
(0.8)
(0.8)
*
In 2019 a net amount of £0.7m was reclassified from share-based payments reserve to retained earnings in respect of lapsed and exercised options.
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.
The Group’s Employee Benefit Trust (‘EBT’) was established on 15 January 2019. The Trustee of the EBT holds shares in the Company for
future satisfaction of options to employees granted under the Group’s Share Option Plans. These shares are accounted for as treasury
shares.
28. Retained Earnings
1 January
Profit for the year
Deferred tax credited directly to equity
Issue of shares
Dividends
Transfers*
31 December
2020
£’m
55.9
0.2
–
(0.1)
–
–
56.0
2019
£’m
45.7
16.7
0.8
–
(8.0)
0.7
55.9
*
In 2019 a net amount of £0.7m was reclassified from share-based payments reserve to retained earnings in respect of lapsed and exercised options.
Retained earnings are the balance of income retained by the Group. Retained earnings may be distributed to shareholders by a dividend
payment.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
29. Cash Inflow from Operations
Continuing operations
Profit before tax
Depreciation of property, plant and equipment and right-of-use assets
Amortisation of intangible assets
Net finance costs
Share-based payments charge
Impairment of intangible assets and investments
Gain on disposal of property, plant and equipment and right-of-use assets
Decrease/(increase) in inventories
Decrease in trade and other receivables
Increase in trade and other payables
Net cash generated from operating activities
Net cash used by operating activities – discontinuing operations
Net cash generated from total operations
30. Pensions
84
2019
£’m
24.8
24.8
8.1
9.5
3.8
–
–
(1.0)
1.0
0.5
71.5
(0.2)
71.3
2020
£’m
4.0
25.7
8.3
8.5
1.2
8.6
(0.1)
0.5
7.8
2.4
66.9
–
66.9
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 £1.8m (2019: £1.7m) represents
contributions payable to these schemes by the Group at rates specified in the rules of the plan.
31. Share-Based Payments
Savings Related Share Option Scheme (Sharesave)
The Group operates a Savings Related Share Option Scheme which is open to all employees with more than 6 months continuous service.
This is an approved HMRC scheme and was established in 2018.
Under Sharesave, participants remaining in the Group’s employment at the end of the three year savings period are entitled to use their
savings to purchase shares in the Company at a stated exercise price.
Employees leaving for certain reasons are able to use their savings to purchase shares within six months of their leaving. No new options
were granted during 2020 (2019: 668,439 granted).
Options were valued using a stochastic model. The fair value per option and the assumptions used in the calculation for the options issued
in 2019 were as follows:
Grant date
Share price at grant date
Exercise price
Share options
Expected volatility
Risk free rate
Expected dividends expressed as a dividend yield
Fair value per option
2020
–
–
–
–
–
–
–
2019
339.0p
274.0p
668,439
30%
0.8%
1.3%
139.8p
The total fair value of options issued in 2019 was £0.9m. The volatility was measured by calculating the standard deviation of the natural
logarithm of share price movements.
Financial Statements | Restore plc Annual Report 2020 85
Notes to the Group financial statements continued
A reconciliation of share option movements over the two years to 31 December 2020 is:
Outstanding at 1 January
Issued under Sharesave
Lapsed
Cancelled
Exercised from Sharesave
Outstanding at 31 December
Exercisable at 31 December
2020
Weighted
average
exercise
price
306.0p
–
–
327.0p
–
2020
Number
781,703
–
–
(104,168)
–
2019
Weighted
average
exercise
price
432.0p
274.0p
405.0p
418.0p
–
2019
Number
590,311
668,439
(17,492)
(459,555)
–
677,535
302.7p
781,703
306.0p
–
–
–
–
There were no options granted in 2020. The exercise price of the 2019 grant was 274.0p. The weighted average remaining contractual life of
the options outstanding at 31 December 2020 was 1.2 years (2019: 2.2 years).
Long Term Incentive Plan (LTIP)
A new LTIP was established in 2018 and the first awards were made in 2019. Under the Long Term Incentive Plan, shares are conditionally
awarded to senior employees of the Company. The awards are calculated as a percentage of the participants’ salaries and scaled according
to seniority.
Performance is measured at the end of the three year performance period. If the required performance conditions have been met, the
awards vest and may be subject to a further holding period of up to two years.
Outstanding at 1 January
Number of options over ordinary shares granted
Number of awards forfeited
Outstanding at 31 December
Exercisable at 31 December
2020
Number
691,184
615,556
(85,325)
2019
Number
–
691,184
–
1,221,415
691,184
–
–
The weighted average remaining contractual life of the LTIP awards is 8.9 years (2019: 9 years).
Volatility is a measure of the amount by which the underlying share price is expected to fluctuate during the life of the option.
Valuation details
The fair value of the options granted without market-based performance conditions is estimated using a Black-Scholes model taking
into account the terms and conditions upon which the options were granted. The fair value of the options granted with market-based
performance conditions are estimated using Monte Carlo model taking into account the terms and conditions upon which the options
were granted.
The following table lists the inputs to the model used for the 2020 grants.
2020 LTIP share awards
Dividend Yield
Expected Volatility
Risk Free rate of return
Expected life of options (years)
Weighted Average share price
Fair value at date of grant
Exercise price
Model Used
Long-Term incentive plan
Subject to
ROIC
Subject to
TSR
0%
28.83%
0.69%
3
£3.66
£3.75
£nil
0%
28.83%
0.69%
3
£3.66
£1.25
£nil
Black Scholes
Monte Carlo
The volatility is based on the historical observed volatility from trading in the Company’s shares over a period equal to the time to expiry for
each option.
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
86
Legacy Share Schemes
Share option scheme
The Restore share option scheme was introduced in April 2010 and the last award under the scheme was made in December 2018. Under
the scheme the Remuneration Committee could grant options over shares in the Company to Directors and employees of the Group.
Options were 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
options is 10 years. Awards under the scheme were generally reserved for employees at senior management level and above.
Between 2010 and 2018 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.
A reconciliation of the share option movements over the two years to 31 December 2020 is:
Outstanding at 1 January
3,625,072
234.6p
4,711,429
2020
Weighted
Average
Exercise
price
2020
Number
2019
Number
Granted
Exercised
Lapsed
Forfeited
Exercised from EIP
Outstanding at 31 December
Exercisable at 31 December
–
–
(371,000)
294.7p
–
(375,000)
(325,000)
–
–
506.7p
–
(386,357)
312.1p
240.2p
3,625,072
2,325,072
–
(450,000)
(1,159,072)
1,645,000
1,095,000
2019
Weighted
Average
Exercise
price
241.6p
–
151.0p
501.0p
–
–
234.6p
105.0p
The 371,000 options exercised as shown in the table above were net-settled at the market price on the day of exercise and resulted in
75,219 ordinary shares being issued (note 25), (2019: 375,000 options exercised, 92,478 ordinary shares issued).
The exercisable options outstanding at 31 December 2020 had an exercisable price of between 50.0p and 516.0p and a weighted average
remaining contractual life of 3.8 years (2019: 6.5 year).
As the scheme is a legacy scheme no options were issued in the year (2019: nil). The volatility of the options previously issued was
measured by calculating the standard deviation of the natural logarithm of share price movements.
Executive Incentive Plan (EIP)
On 26 November 2016, the performance conditions under the EIP were met and the performance units previously held by the Directors
were converted into nil-cost options which were granted on 5 December 2016. During 2020, Charles Skinner exercised his remaining
1,159,072 nil cost options resulting in 1,159,072 ordinary shares being issued (note 25).
32. Directors and Employees
Staff costs during the year
Wages and salaries
Social security costs
Post employment benefits
Share-based payments charge (including related NI)
Average monthly number of employees during the year
Directors
Management
Administration
Operatives
2020
£’m
53.9
5.9
1.8
1.0
62.6
2019
£’m
61.5
6.1
1.7
3.8
73.1
2020
Number
2019
Number
2
114
386
1,504
2,006
2
114
391
1,658
2,165
Financial Statements | Restore plc Annual Report 2020 Notes to the Group financial statements continued
87
During the year, the Group made use of the Coronavirus Job Retention Scheme (CJRS). The CJRS income received of £7.5m has been
accounted for as a government grant in accordance with IAS 20, and has been deducted in reporting the related staff costs expense.
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*
* £0.2m (2019: £nil) related to bonus payment in respect of the previous period.
Key management compensation
Short-term employment benefits
Social security costs
Post employment benefits
Other benefits
Share-based payments charge
Long-term incentives vesting*
* £0.3m (2019: £0.3m) of employers national insurance has been categorised within exceptional items.
The key management of the Group are management attending divisional board meetings.
33. Capital Commitments
Capital expenditure
Contracted for but not provided in the financial statements
2020
£’m
1.3
2019
£’m
2.9
0.7
1.7
2020
£’m
5.5
0.4
0.9
0.1
1.0
–
7.9
2020
£’m
3.3
2019
£’m
4.8
0.6
0.3
0.1
3.8
1.5
11.1
2019
£’m
5.7
The capital commitments consist of £3.0m (2019: £4.9m) in respect of general plant and equipment and £0.3m (2019: £0.8m) in respect of
land and buildings.
34. Contingent Liabilities
The Company has entered into a bank cross guarantee with its subsidiaries. The guarantee amounts to £66.1m at 31 December 2020
(2019: £88.5m). The assets of the Company and its subsidiaries are pledged as security for the bank borrowings, by way of a fixed and
floating charge.
35. Related Party Transactions and Controlling Party
The remuneration of key management personnel and details of the Directors’ emoluments are shown in note 32. No dividends were paid
during 2020 (2019: £1,075, £320, £112 were paid to Charles Bligh, Martin Towers and Sharon Baylay respectively).
The Directors do not consider there to be a controlling party.
36. Post Balance Sheet Events
On 8 January 2021, the Group purchased the entire issued share capital of Computer Disposals Ltd, an experienced and successful IT
Recycling and asset disposition business for consideration of £12.7m (plus an adjustment for cash acquired less indebtedness). The
acquisition of Computer Disposals accelerates Restore Technology’s existing capability with the addition of 83 highly skilled customer
focused colleagues, additional fleet capability, as well as some new customers.
On 1 March 2021, the Group purchased the entire share capital of The Bookyard Ltd, a leading Apple recycling and spare parts business,
for consideration of £0.8m. This acquisition further strengthens Restore Technology’s capability in the growing Apple market within the
business.
Financial Statements | Restore plc Annual Report 2020 Company statement of financial position
At 31 December 2020
Company registered no. 05169780
ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Right of use assets
Investments
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Corporate tax receivable
Cash and cash equivalents
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Financial liabilities – borrowings
Financial liabilities – leases liabilities
Provisions
Non-current liabilities
Financial liabilities – borrowings
Financial liabilities – lease liabilities
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
The Company’s profit for the financial year was £8.3m (2019: £15.2m).
88
2019
£’m
177.1
53.2
80.8
98.0
3.7
412.8
0.5
30.8
0.3
7.9
39.5
452.3
(17.0)
(0.4)
(10.6)
–
(28.0)
(105.1)
(81.3)
(41.8)
(14.0)
(5.7)
(247.9)
(275.9)
176.4
6.2
150.3
5.5
14.4
176.4
Note
37
38
39
40
47
41
42
44
43
44
45
48
44
45
45
47
48
49
2020
£’m
172.9
53.9
73.8
89.0
3.1
392.7
0.4
31.2
0.3
17.0
48.9
441.6
(17.1)
–
(10.9)
(0.3)
(28.3)
(92.5)
(74.8)
(16.7)
(15.3)
(5.5)
(204.8)
(233.1)
208.5
6.3
150.3
5.4
46.5
208.5
These financial statements were approved by the Board of Directors and authorised for issue on 18 March 2021 and were signed on its
behalf by:
Charles Bligh
Chief Executive Officer
Neil Ritchie
Chief Financial Officer
Financial Statements | Restore plc Annual Report 2020
Company statement of changes in equity
For the year ended 31 December 2020
Attributable to owners of the parent
Balance at 1 January 2019
Profit for the year
Total comprehensive income for the year
Transactions with owners
Dividends
*Transfers
Share-based payments charge
Current tax on share-based payments
Deferred tax on share-based payments
Deferred tax taken to equity
Balance at 31 December 2019
Balance at 1 January 2020
Profit for the year
Total comprehensive income for the year
Transactions with owners
Issue of shares during the year
Impact of corporate restructure
Share-based payment charge
Current tax on share-based payments
Deferred tax on share-based payments
Purchase of treasury shares
Balance at 31 December 2020
Share
capital
£’m
6.2
Share
premium
£’m
150.3
–
–
–
–
–
–
–
–
6.2
6.2
–
–
0.1
–
–
–
–
–
–
–
–
–
–
–
–
–
150.3
150.3
–
–
–
–
–
–
–
–
6.3
150.3
Other
reserves
£’m
Retained
earnings
£’m
3.7
–
–
–
(0.7)
1.6
0.3
0.6
–
5.5
5.5
–
–
–
–
1.2
0.8
(1.3)
(0.8)
5.4
4.9
15.2
15.2
(8.0)
0.7
–
–
–
1.6
14.4
14.4
8.3
8.3
(0.1)
23.9
–
–
–
–
* A net amount of £nil has been reclassified from share-based payments reserve to retained earnings in respect of lapsed and exercised options (2019: £0.7m).
46.5
208.5
89
Total
equity
£’m
165.1
15.2
15.2
(8.0)
–
1.6
0.3
0.6
1.6
176.4
176.4
8.3
8.3
–
23.9
1.2
0.8
(1.3)
(0.8)
Financial Statements | Restore plc Annual Report 2020 Company statement of cash flows
For the year ended 31 December 2020
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 trade and assets
Disposal of subsidiary, net of cash disposed
Cash flows used in investing activities
Cash flows from financing activities
Dividends paid
Purchase of treasury shares
Repayment of revolving credit facility
Principal lease repayments
Net cash used in 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
Bank overdraft
90
Year ended
31 December
2020
£’m
Year ended
31 December
2019
£’m
51.5
(6.8)
(5.6)
39.1
(5.5)
–
–
(5.5)
–
(0.8)
(13.0)
(10.3)
(24.1)
9.5
7.5
17.0
17.0
–
17.0
55.0
(7.3)
(4.6)
43.1
(6.4)
(0.4)
(0.2)
(7.0)
(8.0)
–
(17.4)
(9.7)
(35.1)
1.0
6.5
7.5
7.9
(0.4)
7.5
Note
50
44
44
44
Financial Statements | Restore plc Annual Report 2020 91
Company accounting policies
For the year ended 31 December 2020
These financial statements for the Company have been prepared under the historical cost convention and in accordance with International
Accounting Standards in conformity with the requirements of the Companies Act 2006 (‘IFRS’) and the applicable legal requirements of
the Companies Act 2006. In addition to complying with International Accounting Standards in conformity with the requirements of the
Companies Act, the Company financial statements also comply with International Financial Reporting Standards adopted pursuant to
Regulation EC No 1602/2002 as it applies in the European Union. The Directors consider that the accounting policies as shown on pages 61
to 66 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 as follows.
Going Concern
The going concern basis has been applied in these financial statements.
The going concern position is discussed further in the consolidated financial statements of the Group on page 61 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 88 of the financial statements.
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements
For the year ended 31 December 2020
Goodwill
£’m
Customer
Relationships
£’m
Applications
Software
£’m
102.1
–
–
102.1
–
102.1
3.8
–
3.8
–
3.8
98.3
98.3
90.9
–
0.4
91.3
–
91.3
8.8
4.5
13.3
4.6
17.9
73.4
78.0
2.8
0.5
–
3.3
0.8
4.1
2.1
0.4
2.5
0.4
2.9
1.2
0.8
37. Intangible Assets
Cost
1 January 2019
Additions – external
Arising on acquisition of trade and assets
31 December 2019
Additions – external
31 December 2020
Accumulated amortisation and impairment
1 January 2019
Charge for the year
31 December 2019
Charge for the year
31 December 2020
Carrying amount
31 December 2020
31 December 2019
Amortisation is charged to profit or loss as an administrative expense.
The changes to goodwill during the year were as follows:
Cost
1 January 2019 and 31 December 2019
1 January 2020 and 31 December 2020
Accumulated impairment
1 January 2019 and 31 December 2019
1 January 2020 and 31 December 2020
Carrying amount at 31 December 2020
Carrying amount at 31 December 2019
Annual test for impairment
92
Total
£’m
195.8
0.5
0.4
196.7
0.8
197.5
14.7
4.9
19.6
5.0
24.6
172.9
177.1
£’m
102.1
102.1
3.8
3.8
98.3
98.3
Under IAS 36, Goodwill is tested annually for impairment, irrespective of there being any impairment indicators. The recoverable amount
is determined from value-in-use calculations. The calculations use pre-tax cash flow projections based on financial budgets and forecasts
approved by the Directors.
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
93
At the year-end, an impairment review was conducted which indicated that no impairment was required. The year-end model utilises
forecasts based upon the Group’s budget for FY21 and the Group’s Strategy Plan for FY22, FY23 and FY24. Terminal cash flows are based
on the Group’s 4 year projections, assumed to grow perpetually at 2%. In accordance with IAS 36, the growth rates for beyond the initially
forecast years do not exceed the long-term average growth rate for the industry. The forecasts have been discounted at a pre-tax rate of
8.8% (2019: 7.6%). This discount rate was calculated using a pre-tax rate based on the weighted average cost of capital for the Group.
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.
38. 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
23.7
0.3
–
24.0
0.3
24.3
0.9
0.6
1.5
0.6
2.1
22.2
22.5
10.6
4.4
0.2
15.2
1.7
16.9
2.9
1.0
3.9
1.1
5.0
11.9
11.3
27.1
0.6
–
27.7
2.3
30.0
7.2
2.0
9.2
2.0
11.2
18.8
18.5
1.9
0.4
–
2.3
0.4
2.7
1.1
0.3
1.4
0.3
1.7
1.0
0.9
0.1
–
–
0.1
–
0.1
0.1
–
0.1
–
0.1
–
–
Total
£’m
63.4
5.7
0.2
69.3
4.7
74.0
12.2
3.9
16.1
4.0
20.1
53.9
53.2
Cost
1 January 2019
Additions
Acquisitions
31 December 2019
Additions
31 December 2020
Accumulated depreciation
1 January 2019
Charge for the year
31 December 2019
Charge for the year
31 December 2020
Net book value
31 December 2020
31 December 2019
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.
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
39. Right of use assets
Cost
1 January 2019
Additions
31 December 2019
Additions
Disposals
31 December 2020
Accumulated depreciation
1 January 2019
Depreciation charge for the year
31 December 2019
Depreciation charge for the year
Disposals
31 December 2020
Net book value
31 December 2020
31 December 2019
94
Total
£’m
85.8
6.0
91.8
4.1
(5.4)
90.5
–
11.0
11.0
11.1
(5.4)
16.7
73.8
80.8
Leasehold
Property
£’m
Motor
Vehicles
£’m
84.8
5.2
90.0
3.0
(5.1)
87.9
–
10.4
10.4
10.3
(5.1)
15.6
72.3
79.6
1.0
0.8
1.8
1.1
(0.3)
2.6
–
0.6
0.6
0.8
(0.3)
1.1
1.5
1.2
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
40. Investments
Shares in subsidiary undertakings
Cost
1 January 2019
Capital contribution – subsidiary share-based payment
Additions
31 December 2019
Capital contribution – subsidiary share-based payment
Corporate restructuring*
Addition – Restore Group Holdings Limited
31 December 2020
Accumulated impairment
1 January 2019 and 31 December 2019
Impairment
31 December 2020
Net book value
31 December 2020
31 December 2019
95
£’m
135.0
0.9
1.6
137.5
0.9
(85.1)
76.8
130.1
39.5
1.6
41.1
89.0
98.0
* During the year the Group carried out a corporate restructuring which resulted in a number of the Company’s directly owned subsidiaries becoming indirectly
owned. The subsidiaries impacted were: Harrow Green Limited, Restore Technology Limited, Restore Digital Limited, and Restore Datashred Limited. Restore
Group Holdings Limited was incorporated during the year and is now the direct parent entity of these subsidiary undertakings.
The Group’s 40% investment in Ink and Toner Limited (£1.6m), a printer cartridge recycling company was fully impaired during the year.
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
96
At 31 December 2020 the Company held directly and indirectly equity and voting rights of the following undertakings:
Company
Holding Company
Class of
holding
% held
Country of
incorporation
Nature of
business
The holding company is registered at The Databank, Unit 5 Redhill Distribution Centre, Salbrook Road, Redhill, Surrey RH1 5DY.
*Restore Group Holdings Limited
Ordinary
100%
England and
Wales
Holding company
Document Management Division
All companies within this division are registered at The Databank, Unit 5 Redhill Distribution Centre, Salbrook Road, Redhill, Surrey RH1 5DY.
*Baxter Confidential Limited
*Data Solutions 2019 Limited
*Datashred Limited
*ID Secured Limited
*Lombard Recycling Limited
Optical Records Systems Limited†
ORS Group Limited†
*Peabody QED Thurrock Management Limited†††
Restore Datashred Limited**††
Restore Digital Limited**†
*Restore Shred Limited
*Restore (Spur) Limited
Safe-Shred UK Limited††
*Wansdyke Security Limited
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
33%
100%
100%
100%
100%
100%
100%
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Dormant
Management of
real estate
Shredding
Services
Digital Services
Dormant
Dormant
Dormant
Dormant
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
97
Company
Relocation Division
Class of
holding
% held
Country of
incorporation
Nature of
business
All UK companies within this division are registered at 2 Oriental Road, Silvertown, London, E16 2BZ.
E-recycling Limited
Euro-Recycling Limited
Harrow Green Limited
*The ITAD Works Limited
*Ink and Toner Recycling Limited††††
International Technology Products (UK) Limited††††
International Technology Products GmbH***
ITP Group Holdings Limited††††
Office Green Limited**††††
Relocom Limited
Restore Technology Limited**
Secure IT Destruction Limited
Secure IT Disposals Limited
Takeback Limited††††
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
40%
40%
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
40% Germany
40%
40%
100%
100%
100%
100%
40%
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
England and
Wales
Technology
Dormant
Relocation
Dormant
Printer Cartridge
Recycling
Printer Cartridge
Recycling
Printer Cartridge
Recycling
Holding
Company
Printer Cartridge
Recycling
Dormant
Technology
Dormant
Dormant
Printer Cartridge
Recycling
* Held directly
** The Company has taken the exemption from audit under section 479A of the Companies Act 2006.
*** The registered address is Röntgenstraße 4, Hainburg, D-63512, Germany.
† The registered address is Unit 2, Tally Close, Agecroft Commerce Park, Swinton, Manchester, M27 8WJ.
†† The registered address is Unit Q1, Queen Elizabeth Distribution Centre, Purfleet, Essex, RM19 1NA.
††† The registered address is 3rd Floor Solar House, 1-9 Romford Road, London, E15 4RG.
†††† The registered address is Riley Accounting Solutions, Gable End, Sparrow Hall Business Park, Leighton Road, Edlesborough, Bedfordshire, LU6 2ES.
Dormant companies are exempt from filing accounts under section 394 of the Companies Act 2006.
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
41. Inventories
Finished goods and goods for resale
£2.7m (2019: £2.7m) of inventories were recognised as an expense in cost of sales in the year.
42. 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
98
2019
£’m
0.5
2019
£’m
12.6
(0.1)
12.5
0.3
0.3
10.7
23.8
7.0
30.8
2020
£’m
0.4
2020
£’m
11.3
(0.1)
11.2
3.8
0.4
8.1
23.5
7.7
31.2
The average credit period is 38 days (2019: 40 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
Utilised in year
31 December
2020
£’m
0.1
–
0.1
2019
£’m
0.3
(0.2)
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 46 for an analysis of trade receivables that were past due but
not impaired.
43. Trade and Other Payables
Trade payables
Amount due to group undertakings
Other taxation and social security
Other payables
Accruals and deferred income
2020
£’m
6.6
0.4
5.7
0.1
4.3
17.1
2019
£’m
7.0
0.2
2.9
0.1
6.8
17.0
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 52 days (2019: 62 days).
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
44. Financial Liabilities – Borrowings
Current
Overdraft on demand
Bank loans – secured
Deferred financing costs
Non-current
Bank loans – secured
Deferred financing costs
99
2019
£’m
0.4
–
–
0.4
106.0
(0.9)
105.1
2020
£’m
–
–
–
–
93.0
(0.5)
92.5
The bank debt is due to The Royal Bank of Scotland plc, Barclays Bank plc, Bank of Ireland, Clydesdale Bank plc and Allied Irish Bank 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 46. Under the bank facility the Group is required to meet quarterly covenant tests in respect of 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 overdrafts
Bank loans due after one year
45. Other Financial Liabilities
Financial liabilities – present value of lease liabilities
Repayable by instalments:
In less than one year
In two to five years
More than five years
Amount due to group undertakings
2020
£’m
17.0
–
(92.5)
(75.5)
2020
£’m
85.7
10.9
37.5
37.3
85.7
2020
£’m
16.7
2019
£’m
7.9
(0.4)
(105.1)
(97.6)
2019
£’m
91.9
10.6
36.8
44.5
91.9
2019
£’m
41.8
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
100
46. Financial Instruments
The Company’s financial instruments comprise cash at bank, bank loans 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 at bank
Bank overdraft
Cash and cash equivalents
2020
£’m
17.0
–
17.0
2019
£’m
7.9
(0.4)
7.5
An expected credit loss model has been applied which permits a simplified approach for the Company’s impairment of trade receivables.
This model applies a credit risk percentage based upon historical risk of default against receivables that are grouped into age brackets. The
Company’s trade receivables share similar risk characteristics and therefore we have chosen to apply the same default percentage of 1.3%
on all outstanding receivables. The Company has a low credit risk on its trade receivables and historic defaults.
As at 31 December 2020 trade receivables of £0.4m (2019: £0.3m) 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
2020
£’m
0.3
0.1
2019
£’m
0.2
0.1
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
Currency and interest rate risk profile of financial liabilities
2020
£’m
15.4
97.2
2019
£’m
13.6
112.1
All bank borrowings were subject to floating interest rates, at LIBOR plus a margin of between 1.79% and 2.51%, 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 2020
Sterling at 31 December 2019
Floating
rate
financial
liabilities
£’m
92.5
105.5
Total
£’m
92.5
105.5
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
Interest rate sensitivity
2020
£’m
92.5
At 31 December 2020, 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 £0.5m lower (2019: £0.6m lower). 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.
Weighted
average
interest
rates
%
2.3
2.8
2019
£’m
105.5
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
101
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 two and five years
Five years or more
Bank
debt
£’m
–
92.5
–
92.5
Other
financial
liabilities*
£’m
22.4
37.5
37.3
97.2
2020
Total
£’m
22.4
130.0
37.3
189.7
* Other financial liabilities include trade payables, accruals, amounts owing under leases and contingent and deferred consideration.
Borrowing facilities
The Company has a finance facility with The Royal Bank of Scotland plc, Barclays Bank plc, the Bank of Ireland, Clydesdale Bank plc and
Allied Irish Bank which expires on 26 March 2023. The enlarged facilities consist of a single £160m RCF (which is partly reduced by an on
demand net overdraft facility of £1.5m). In addition there is an uncommitted accordion facility of £30.0m, and overdraft of £1.5m. An offset
facility is in place and on a gross basis; £1.5m of the overdraft facility was unutilised at 31 December 2020 (2019: £0.9m). Details of security
are given in note 20. Committed but undrawn borrowing facilities as at 31 December 2020 amounted to £65.5m (2019: £52.5m).
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 80)
47. Deferred Tax
Summary of balances
Deferred tax liabilities
Deferred tax asset
Net position at 31 December
2020
£’m
(15.3)
3.1
(12.2)
2019
£’m
(14.0)
3.7
(10.3)
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
The movement in the year in the Company’s net deferred tax position is as follows:
1 January
(Charge)/credit to profit or loss for the year
Tax (charged)/credited directly to equity
31 December
102
2020
£’m
(10.3)
(0.6)
(1.3)
(12.2)
2019
£’m
(13.6)
1.0
2.3
(10.3)
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 2019
Credit to income for the year
31 December 2019
Charge for the year
31 December 2020
Deferred tax liabilities are analysed as follows:
Current
Non-current
31 December 2020
Deferred tax assets
Deferred tax assets are analysed as follows:
1 January 2019
Credit to income for the year
Credit directly to equity
Transactions with assets
31 December 2019
Credit to income for the year
Charge directly to equity
31 December 2020
Deferred tax assets are analysed as follows:
Current
Non-current
31 December 2020
Accelerated
capital
allowances
£’m
Intangible
assets
£’m
(0.8)
–
(0.8)
(0.7)
(1.5)
(0.7)
(0.8)
(1.5)
(14.0)
0.8
(13.2)
(0.6)
(13.8)
(0.6)
(13.2)
(13.8)
Total
£’m
(14.8)
0.8
(14.0)
(1.3)
(15.3)
(1.3)
(14.0)
(15.3)
Share‑based
payments
£’m
Leases
£’m
Total
£’m
1.2
–
0.6
0.3
2.1
0.1
(1.3)
0.9
0.3
0.6
0.9
–
–
1.6
–
1.6
0.6
–
2.2
0.6
1.6
2.2
1.2
–
2.2
0.3
3.7
0.7
(1.3)
3.1
0.9
2.2
3.1
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
48. Provisions
1 January 2020
Charge for the year
31 December 2020
Provisions are analysed as follows:
Current
Non-current
Total
2020
£’m
0.3
5.5
5.8
In 2019, the dilapidations provision was included within lease liabilities. The disclosure has been amended to match the current year
presentation in separating out the dilapidation provision form the lease liabilities.
49. Share Capital
Authorised:
199,000,000 (2019: 199,000,000) ordinary shares of 5p each
Allotted, issued and fully paid:
125,654,025 (2019: 124,419,734) ordinary shares of 5p each
The issued ordinary share capital is as follows:
Date
1 January 2019
14 June 2019 – exercise of share options
24 September 2019 – exercise of share options
18 October 2019 – exercise of share options
23 December 2019 – exercise of share options
31 December 2019
16 January 2020 – exercise of share options
22 April 2020 – exercise of share options
16 June 2020 – exercise of share options
9 July 2020 – exercise of share options
19 August 2020 – exercise of share options
31 December 2020
2020
£’m
10.0
6.3
Number of
ordinary
shares
123,940,899
386,357
20,768
16,377
55,333
124,419,734
478,000
42,142
33,077
340,536
340,536
125,654,025
The 1,234,291 (2019: 478,835) 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 31).
103
Dilapidation
provision
£’m
5.7
0.1
5.8
2019
£’m
–
5.7
5.7
2019
£’m
10.0
6.2
Issue
price
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
5.0p
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
50. Cash generated from Operations
Continuing operations
Profit before tax
Depreciation of property, plant and equipment and right-of-use assets
Amortisation of intangible assets
Net finance costs
Share-based payments charge
Impairment of investment
Increase in inventories
Increase/(decrease) in trade and other receivables
Decrease in trade and other payables
Net cash generated from operating activities
51. Share-Based Payments
Details of the share-based payments can be found in note 31.
52. Directors and Employees
Staff costs during the year
Wages and salaries
Social security costs
Other pension costs
Share-based payments charge
Average monthly number of employees during the year
Directors
Management
Administration
Operatives
Total amounts for Directors’ remuneration and other benefits
Emoluments for Directors’ services
104
2019
£’m
18.7
14.8
4.9
8.7
2.0
–
–
(2.1)
8.0
55.0
2019
£’m
20.2
2.0
0.7
2.0
24.9
2020
£’m
11.7
15.1
5.0
7.6
0.3
1.6
0.1
6.4
3.7
51.5
2020
£’m
19.2
2.2
0.7
0.3
22.4
2020
Number
2019
Number
2
51
89
686
828
2020
£’m
1.3
2
52
84
669
807
2019
£’m
2.9
Directors’ remuneration shown above included the following amounts in respect of the highest paid
Director:
Salary and benefits*
0.7
1.7
*£0.2m (2019: £nil) related to bonus payment in respect of the previous period.
Financial Statements | Restore plc Annual Report 2020 Notes to the Company financial statements continued
Key management compensation
Short-term employment benefits
Social security costs
Post employment benefits
Share-based payments charge
Long-term incentives vesting
53. Capital Commitments
Capital expenditure
Contracted for but not provided in the financial statements
105
2019
£’m
2.7
0.6
0.2
2.0
1.5
7.0
2019
£’m
4.1
2020
£’m
3.2
0.7
0.2
0.3
–
4.4
2020
£’m
1.2
Total capital commitments consist of £0.9m (2019: £3.3m) in respect of general plant and equipment and £0.3m (2019: £0.8m) in respect of
land and buildings.
54. Contingent Liabilities
The Company has entered into a bank cross guarantee. The guarantee amounts to £66.1m at 31 December 2020 (2019: £88.5m). 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 35.
Financial Statements | Restore plc Annual Report 2020 Notice of Annual General Meeting
106
Restore plc
Notice is hereby given that the Annual General Meeting of Restore
plc (“the Company”) will be held at 15/19 Cavendish Place, London,
W1G 0QE on 27 May 2021 at 2.00pm for the following purposes:
Ordinary Business
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.
1.
2.
To receive the Company’s annual accounts for the financial
year ended 31 December 2020, together with the Directors’
report and the auditors’ report on those accounts.
To re-appoint PricewaterhouseCoopers 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.
11. That, subject to the passing of resolution number 10 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 10 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:
3.
To authorise the directors to set the auditors’ remuneration.
11.1 the allotment of equity securities in connection with a
4.
5.
6.
7.
8.
9.
To re-appoint Charles Bligh, who retires by rotation pursuant
to the Company’s articles of association, as a director of the
Company.
To re-appoint Neil Ritchie, who retires by rotation pursuant
to the Company’s articles of association, as a director of the
Company.
To re-appoint Martin Towers, who retires by rotation pursuant
to the Company’s articles of association, as a director of the
Company.
To re-appoint Sharon Baylay, who retires by rotation pursuant
to the Company’s articles of association, as a director of the
Company.
To re-appoint Susan Davy, who retires by rotation pursuant
to the Company’s articles of association, as a director of the
Company.
To re-appoint James Hopkins, who retires by rotation pursuant
to the Company’s articles of association, as a director of the
Company.
Special Business
As special business, to consider and, if thought fit, to pass the
following resolutions which will be proposed as to resolution 10
as an ordinary resolution and as to resolutions 11, 12, 13 and 14 as
special resolutions:
10. 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 £2,094,233.75 (being 41,884,675 ordinary
shares of 5 pence each) provided that this authority shall,
unless renewed, expire at the conclusion of the next annual
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
11.2 the allotment (otherwise than pursuant to paragraph 11.1
above) of equity securities up to an aggregate nominal
amount of £314,135.05,
and shall expire upon the expiry of the general authority
conferred by resolution 10 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.
12. That, subject to the passing of resolution number 10 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 10 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:
12.1 the allotment of equity securities up to an aggregate
nominal amount of £314,135.05; and
12.2 used for the purposes of financing (or refinancing, if
such refinancing occurs within six months of the original
Other Information | Restore plc Annual Report 2020
Notice of Annual General Meeting continued
107
transaction) a transaction which the directors determine
to be an acquisition or other capital investment of a
kind contemplated by the Statement of Principles on
Disapplying Pre-Emption Rights most recently published
by the Pre-Emption Group prior to the date of this notice,
14. That the draft regulations produced to the meeting and, for
the purposes of identification, initialled by the Chairman be
adopted as the articles of association of the Company in
substitution for, and to the exclusion of, the existing articles of
association.
and shall expire upon the expiry of the general authority
conferred by resolution 10 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.
By order of the Board
Registered Office
Sarah Waudby
Company Secretary
18 March 2021
The Databank
Unit 5
Redhill Distribution Centre
Salbrook Road
Redhill
Surrey RH1 5DY
13. That the Company be and is hereby generally and
PLEASE NOTE:
You will not receive a form of proxy for the Annual General Meeting
in the post. Instructions on how to vote electronically and how to
register are detailed in the Notes. You will still be able to vote in
person at the Annual General Meeting, and may request a hard
copy proxy form directly from the registrars, Link Group, 10th
Floor, Central Square, 29 Wellington Street, Leeds, LS1 4DL at
enquiries@linkgroup.co.uk (telephone number: 0371 664 0391
if calling from the United Kingdom, or +44(0)371 664 0391 if
calling from outside the United Kingdom. Calls are charged at the
standard geographical rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable international
rate. Lines are open between 09:00 – 17:30, Monday to Friday
excluding public holidays in England and Wales.
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 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:
13.1 the maximum number of Ordinary Shares authorised to
be purchased is 12,565,402;
13.2 the minimum price which may be paid for each Ordinary
Share is 5 pence (exclusive of expenses payable by the
Company); and
13.3 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.
Other Information | Restore plc Annual Report 2020
Notice of Annual General Meeting continued
108
Notes: These notes are important and require your immediate
attention.
1.
2.
3.
4.
Only those members entered on the register of members
of the Company at close of business on 25 May 2021 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 25 May 2021 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.
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.
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.
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 Annual
General Meeting.
5.
You can vote either:
·
·
by logging on to www.signalshares.com and following the
instructions;
by requesting a hard copy form of proxy directly from
the registrars, Link Group, at mailto:enquiries@linkgroup.
co.uk or on Tel: 0371 664 0391 if calling from the United
Kingdom, or +44(0)371 664 0391 if calling from outside
the United Kingdom. Calls are charged at the standard
geographical rate and will vary by provider. Calls outside
the United Kingdom will be charged at the applicable
international rate. Lines are open between 09:00 – 17:30,
Monday to Friday excluding public holidays in England and
Wales;
6.
7.
8.
9.
·
in the case of CREST members, by utilising the CREST
electronic proxy appointment service in accordance with
the procedures set out below.
In order for a proxy appointment to be valid a form of proxy
must be completed. In each case the form of proxy must
be received by Link Group at 10th Floor, Central Square, 29
Wellington Street, Leeds, LS1 4DL by 2.00pm on 25 May 2021.
If you return more than one proxy appointment, either by
paper or electronic communication, the appointment received
last by the Registrar before the latest time for the receipt of
proxies will take precedence. You are advised to read the terms
and conditions of use carefully. Electronic communication
facilities are open to all Shareholders and those who use them
will not be disadvantaged.
The return of a completed form of proxy, electronic filing or
any CREST Proxy Instruction (as described in note 11 below)
will not prevent a shareholder from attending the Annual
General Meeting and voting in person if he/she wishes to do
so.
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 27 May 2021 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, Link Group (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. 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
Other Information | Restore plc Annual Report 2020
Notice of Annual General Meeting continued
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.
11. 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.
12. Any shareholder attending the Annual General Meeting has
the right to ask questions. The Company must cause to be
answered any such question relating to the business being
dealt with at the meeting but no such answer need be given if:
(a) to do so would interfere unduly with the preparation for the
meeting or involve the disclosure of confidential information;
(b) the answer has already been given on a website in the
form of an answer to a question; or (c) it is undesirable in the
interests of the Company or the good order of the meeting
that the question be answered.
13. You may not use any electronic address (within the meaning of
Section 333(4) of the Companies Act 2006) provided in either
this Notice or any related documents (including the form of
proxy) to communicate with the Company for any purposes
other than those expressly stated.
14. Copies of all service agreements or letters of appointment
under which the directors of the Company are employed or
engaged by the Company 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.
15. 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.
109
EXPLANATION OF RESOLUTIONS
Resolution 10 – authority to allot shares
At the last annual general meeting of the Company held on 21 May
2020, the directors were given authority to allot ordinary shares
in the capital of the Company up to a maximum nominal amount
of £2,081,628.90 representing approximately one third of the
Company’s then issued ordinary share capital.
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 £2,094,233.75 representing approximately one third
of the Company’s issued ordinary share capital as at 16 March 2021 (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 2022 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 11 – disapplication of statutory pre-emption
rights
Resolution 11 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
(otherwise than in connection with a rights issue or other pro-
rata offer to existing shareholders) up to a maximum nominal
value of £314,135.05, representing approximately 5 per cent
of the issued ordinary share capital of the Company as at
16 March 2021 (the latest practicable date before publication of
this document).
Resolution 12 – disapplication of statutory pre-emption
rights to finance an acquisition or other capital
investment
In addition to the powers granted by Resolution 11, Resolution 12
will empower the directors to allot ordinary shares in the capital of
the Company for cash on a non-pre-emptive basis:
•
•
up to a maximum nominal value of £314,135.05, representing
approximately 5 per cent of the issued ordinary share capital of
the Company as at 16 March 2021 (the latest practicable date
before publication of this document); and
used only for the purposes of financing (or refinancing, if such
financing occurs within six months of the original transaction)
a transaction which the directors determine to be an
acquisition or other capital investment of a kind contemplated
by the Statement of Principles of Disapplying Pre-Emption
Rights most recently published by the Pre-Emption Group
prior to the date of this notice.
The rights of pre-emption disapplication sought pursuant to
Resolutions 11 and 12 represent, in aggregate, approximately
10% of the issued ordinary share capital of the Company as at
16 March 2021. This aggregate percentage is the same authority as
sought at the last annual general meeting of the Company held on
21 May 2020.
Other Information | Restore plc Annual Report 2020 110
Notice of Annual General Meeting continued
Resolution 13 – authority to make market purchases of
own shares
Resolution 13 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 12,565,402 (representing
approximately 10 per cent. of the Company’s issued ordinary share
capital as at 16 March 2021 (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.
Resolution 14 – adopting new articles of association
Resolution 14 adopts new articles of association of the Company.
The changes are designed to reflect evolving market practice
as regards the holding of electronic general meetings, including
AGMs, and make provision for members to attend, speak and vote
at such meetings by electronic means.
Other Information | Restore plc Annual Report 2020 Officers and advisers
111
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
Peel Hunt LLP
Moor House
120 London Wall
London, EC2Y 5ET
Public Relations
Buchanan Communications Limited
107 Cheapside
London, EC2V 6DN
Investor Relations Consultants
RMS Partners
160 Fleet Street
London, EC4A 2DQ
Independent Auditor
PricewaterhouseCoopers LLP
1 Embankment Place
London, WC2N 6RH
Financial and Tax Advisers
KPMG
15 Canada Square
Canary Wharf
London, E14 5GL
Trading Record
Year ended 31 December
Revenue
Adjusted profit before taxation*
Adjusted earnings per share*
Net debt
Net assets
Solicitors
Fieldfisher LLP
Level 5
Free Trade Exchange
37 Peter Street
Manchester, M2 5GB
Bankers
Barclays Bank PLC
1 Churchill Place
London, E14 5HP
The Royal Bank of Scotland plc
Floor 9
280 Bishopsgate
London, EC2M 4RB
Bank of Ireland
Bow Bells house
1 Bread Street
London, EC4M 9BE
Clydesdale Bank plc
40 St Vincent Place
Glasgow, G1 2HL
Allied Irish Bank
1 Undershaft
London, EC3A 8AB
Registrars
Link Asset Services
Unit 10 Central Square
29 Wellington Street
Leeds, LS1 4DL
2020
£’m
182.7
23.2
15.0p
66.1
218.6
2019
£’m
215.6
35.6
23.2p
88.5
218.5
2018**
£’m
2017**
£’m
2016**
£’m
195.5
37.5
25.2p
111.3
216.0
172.0
31.3
22.4p
78.2
155.9
129.4
23.0
17.9p
72.3
152.1
*Adjusted profit before tax is stated before amortisation and impairment of intangible assets and investment and exceptional items
**Excludes the impact of IFRS 16 and adjusted for share-based payments
Financial calendar
Annual General Meeting
Half year results
Financial year end
Full year results
Held in May
July
31 December
March
Other Information | Restore plc Annual Report 2020 Designed and Printed by Perivan
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Head Office
15/19 Cavendish Place
London, W1G 0QE
T: 020 7409 2420
E:
info@restoreplc.com
W: www.restoreplc.com
Restore Records Management
The Databank, Unit 1 Redhill Distribution Centre,
Salbrook Road, Redhill, Surrey, RH1 5DY
T: 01293 446 270
E: admin@restore.co.uk
W: www.restore.co.uk/records
Restore Datashred
Unit Q1, Queen Elizabeth Distribution Centre,
Purfleet, Essex, RM19 1NA
T: 0800 376 4422
E: customerhub@restore.co.uk
W: www.restore.co.uk/datashred
Restore Digital
Unit 2 Tally Close, Agecroft Commerce Park,
Swinton, Manchester, M27 8WJ
T: 0333 043 5643
E:
info@restoredigital.co.uk
W: www.restore.co.uk/digital
Restore Harrow Green
2 Oriental Road, Silvertown,
London, E16 2BZ
T: 0345 603 8774
E:
info@harrowgreen.com
W: www.harrowgreen.com
Restore Technology
Cardington Point, Telford Way,
Bedford, MK42 0PQ
T: 01462 813 132
E: technology@restore.co.uk
W: www.restore.co.uk/technology