LONDON (ShareCast) - (Sharecast News) - Analysts at Berenberg upped their target price on support services firm Restore on Thursday following an "excellent year" for the business.
While Berenberg acknowledged that full details of Restore's recently wrapped up trading year won't be released until March, it stated that results were set to be in line with expectations, with double-digit growth in revenues and profits, as well as strong cash generation resulting in an attractive deleveraging story.

The German bank believes the performance proves its long-held view that Restore was a "highly cash-generative company" that had consistently recycled said cash into acquisitions, which had the resulting effect of exceptional items in the profit/loss column and relatively poor cash generation metrics.

"In a year without M&A, this thesis has effectively been proven, supporting a re-rating in the shares," said the analysts.

"Looking ahead, we see Restore as a business with highly visible revenue streams, reliable margins, a range of drivers for organic and inorganic growth, and an improving balance sheet."

In particular, the analysts noted that the company had hit its target for leverage reduction for the year, thanks to £34.0m of free cash flow generation, which was more than for the previous three years combined.

Berenberg retained its 'buy' rating on the shares and increase its price target from 515p to 560p.

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