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Restore's (LON:RST) Returns Have Hit A Wall

Simply Wall St · 2d ago

There are a few key trends to look for if we want to identify the next multi-bagger. Firstly, we'll want to see a proven return on capital employed (ROCE) that is increasing, and secondly, an expanding base of capital employed. If you see this, it typically means it's a company with a great business model and plenty of profitable reinvestment opportunities. However, after briefly looking over the numbers, we don't think Restore (LON:RST) has the makings of a multi-bagger going forward, but let's have a look at why that may be.

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Understanding Return On Capital Employed (ROCE)

For those who don't know, ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business. To calculate this metric for Restore, this is the formula:

Return on Capital Employed = Earnings Before Interest and Tax (EBIT) ÷ (Total Assets - Current Liabilities)

0.061 = UK£32m ÷ (UK£627m - UK£98m) (Based on the trailing twelve months to June 2025).

Therefore, Restore has an ROCE of 6.1%. Ultimately, that's a low return and it under-performs the Commercial Services industry average of 9.4%.

Check out our latest analysis for Restore

roce
AIM:RST Return on Capital Employed December 10th 2025

Above you can see how the current ROCE for Restore compares to its prior returns on capital, but there's only so much you can tell from the past. If you'd like to see what analysts are forecasting going forward, you should check out our free analyst report for Restore .

What The Trend Of ROCE Can Tell Us

There hasn't been much to report for Restore's returns and its level of capital employed because both metrics have been steady for the past five years. It's not uncommon to see this when looking at a mature and stable business that isn't re-investing its earnings because it has likely passed that phase of the business cycle. With that in mind, unless investment picks up again in the future, we wouldn't expect Restore to be a multi-bagger going forward.

The Key Takeaway

We can conclude that in regards to Restore's returns on capital employed and the trends, there isn't much change to report on. Since the stock has declined 21% over the last five years, investors may not be too optimistic on this trend improving either. On the whole, we aren't too inspired by the underlying trends and we think there may be better chances of finding a multi-bagger elsewhere.

Restore does have some risks, we noticed 2 warning signs (and 1 which is a bit concerning) we think you should know about.

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