Half Year Trading Update
04/08/2022 07:00
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RNS Number : 8417U Instem plc 04 August 2022
Instem plc
("Instem", the "Group" or the "Company")
Half Year Trading Update
Strong organic and inorganic growth with an over 60% increase in recurring
software revenue
Instem plc (AIM: INS), a leading provider of IT solutions to the global life
sciences market, announces a positive trading update for the six months to 30
June 2022 ("H1 2022").
Financial Highlights
Having completed the acquisitions of The Edge Software Consultancy Ltd ("The
Edge"), d-Wise Technologies, Inc ("d-wise") and PDS Pathology Data Systems
Ltd during the last financial year (together, the "Acquisitions"), H1 2022 is
the first reporting period in which they all contributed fully.
Combined organic and inorganic revenue for H1 2022 is expected to be in the
region of £27.6m (H1 2021: £19.8m), an increase of approximately 39%. In
addition, recurring software revenue grew by over 60% in the same period.
Consistent with the outlook commentary in our FY21 results, growth in H1 2022
operating profit is expected to be at a lower rate than overall revenue growth
on account of inflationary pressures, which led to increased rates of
remuneration for staff across the Group. This will be partially mitigated in
2022 via price increases that were announced in late April 2022.
The Group's balance sheet remains strong, with closing cash at 30 June 2022 of
£10.3m and the Group retains the flexibility to execute on acquisition
opportunities as they arise.
Operational Highlights
Despite wider global macro-economic challenges, Group growth was supported by
a robust underlying life sciences research and development market, and we have
continued to experience demand for our solutions across the entire drug
development value chain.
The earn-out periods for d-wise and The Edge have now completed with both
earn-out targets met in full. The integration of the Acquisitions is also now
substantially complete.
Outlook
The Company remains optimistic about the wider market opportunity - especially
given its broader reach following the integration of the Acquisitions. With a
scalable platform in place and significant opportunities, the Board is
confident that the enlarged group will continue to deliver growth across all
key financial and operational metrics. We are therefore confident that the
Group will deliver on the Board's expectations for the FY22 financial year.
Phil Reason, CEO of Instem, commented: "Consistent delivery is key and we are
delighted with the continued successes of our organic and acquisitive growth
strategies. Visibility for H2 has improved through increased recurring
revenue, the value of the order backlog for professional and outsourced
services and reduced growth in staff numbers which in turn reflects a higher
gross margin revenue mix."
For further information, please contact:
Instem plc Via Walbrook
Phil Reason, CEO
Nigel Goldsmith, CFO
Singer Capital Markets (Nominated Adviser & Joint Broker) +44 (0) 20 7496 3000
Peter Steel
Alex Bond
Rachel Hayes
Stifel Nicolaus Europe Limited (Joint Broker) +44 (0)20 7710 7600
Ben Maddison
Alex Price
Richard Short
Walbrook Financial PR +44 (0) 20 7933 8780
Tom Cooper instem@walbrookpr.com
Nick Rome
About Instem
Instem is a leading provider of IT solutions & services to the life
sciences market delivering compelling solutions for Study Management
Regulatory Submissions, Clinical Trial Acceleration, and Informatics-based
Insight Generation.
Instem solutions are in use by over 700 customers worldwide, including all the
largest 25 pharmaceutical companies, enabling clients to bring life enhancing
products to market faster. Instem's portfolio of software solutions increases
client productivity by automating study-related processes while offering the
unique ability to generate new knowledge through the extraction and
harmonisation of actionable scientific information.
Instem products and services address aspects of the entire drug development
value chain, from discovery through to market launch. Management estimate that
over 50% of all drugs on the market have been through some part of Instem's
platform at some stage of their development.
To learn more about Instem solutions and its mission, please
visit www.instem.com (http://www.instem.com/)
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