Restore Plc (AIM:RST) shares rose 8% to 258.5p on Tuesday after the business-services group issued a trading update that analysts at Cavendish described as evidence it is “executing on dual strategic priorities”.
The broker said Restore had shown “clear progress” across the first eleven months of the year, with management pushing ahead on two fronts: buying small bolt-on businesses to lift growth, and tightening operations to push margins “above 20%”.
Despite what Cavendish called “headwinds”, the company has upgraded guidance for both 2025 and 2026.
A key part of the update was the sale of Harrow Green, a loss-making unit whose disposal the broker labelled “welcome news”, arguing that it removes “a persistent drag on Group profitability”. Shedding underperforming assets has been a recurring demand from investors, and the move is seen as cleaning up the portfolio ahead of further margin expansion.
Cavendish said the statement “reinforces our conviction in the investment case”, adding that it expected “a positive share price reaction”. Its target price sits at 594p, more than double Tuesday’s level, reflecting confidence that Restore can build on the operational improvements outlined in the update.
With the business focusing on disciplined acquisitions and better efficiency, the market appeared to give management the benefit of the doubt.
Cavendish says 'buy' up to 594p, Peel Hunt has a target of 304p and is also a 'buyer'.