20 July 2016 – trading update/acquisition The company has stated that trading in the first six months of the year has been in line with expectations and the integration of Wincanton Records Management is continuing according to plan. Margins within the records management business have increased during the period as expected, with the scanning business and relocations business also doing well. Although the document shredding business also traded well it lacked the scale to make a significant difference to the results although the acquisition of PHS Data Solutions will help to improve this. PHS is the second largest provider of document shredding services in the UK as well as having a significant records management business and a presence in document scanning. The acquisition is costing £83.1m on a cash and debt free basis and is being funded through a combination of debt and the issue of new shares. Approximately £35m has been raised through the issue of new shares at 290p with the balance coming from debt finance. In the year to 31 March 2016, PHS reported operating profit before certain central costs of £8.4m. The acquisition is in line with the group’s long term strategy and we retain our recommendation of LONG TERM BUY.
Restore – 322p
