Trading Update
31/01/2023 07:00
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RNS Number : 3164O Instem plc 31 January 2023
Instem plc
("Instem", the "Group" or the "Company")
Trading Update
Instem plc (AIM: INS), a leading provider of IT solutions to the global life
sciences market, announces a trading update for the year ended 31 December
2022 (the "Period").
Financial Highlights
Combined organic and inorganic revenue for the Period is expected to be in the
region of £59m (FY2021: £46m), an increase of approximately 28%. In
addition, annual recurring revenue (annual support and Software-as-a-Service,
"SaaS") grew by approximately 40% to £34m, in the same period. Revenue
benefited from full-year contributions from the three acquisitions completed
during 2021: The Edge Software Consultancy Ltd, d-Wise Technologies, Inc and
PDS Pathology Data Systems Ltd (the "Acquisitions").
While operating profit was impacted by salary inflation during the first half,
the Company successfully implemented price increases that positively impacted
the H2 performance. Furthermore, the combination of growing levels of higher
margin SaaS revenues and significant contract wins resulted in full year
profit materially in line with market expectations(1).
The Company remains cash generative with a closing cash balance of £13.7m as
at 31 December 2022 (FY2021: £15.0m), after making deferred and contingent
payments on the Acquisitions of £5.3m.
Operational Highlights
Further integration of the Acquisitions enhanced the Company's reach, routes
to market, cross-selling opportunities and ability to win and service larger
contracts. During the second half, the Company announced its largest ever
contract win, worth in excess of $12m over five years, which demonstrated the
execution of the Company's SaaS strategy and the value of its inorganic growth
strategy through the d-Wise acquisition, further expanding Instem's global
coverage and end-to-end solutions.
Board Changes
Following the appointment of Mary Dolson as an Independent Non-Executive
Director to the Board and Chair of the Audit Committee, effective 9 January
2023, David Sherwin, Non-Executive Director, has announced his intention to
step down from the Board effective 31 January 2023.
Change of Auditor
The Board announces that the Company has appointed PKF Littlejohn LLP as
Instem's independent auditor. Following this change, the Company expects to
report its results for the year ended 31 December 2022 in May 2023.
The re-appointment of PKF Littlejohn LLP will be subject to approval by
shareholders at the next Annual General Meeting of the Company to be held
later in 2023.
In accordance with Section 519 of the Companies Act 2006, the Company's
previous auditor, Grant Thornton UK LLP, has deposited with the Company, a
statement confirming that there are no circumstances connected with its
resignation which it considers should be brought to the attention of the
Company's members or creditors.
Outlook
The Company has positioned itself to deliver continued growth, both
organically and via acquisition. With the industry backdrop remaining
favourable and a significantly enhanced platform and product set, demand for
the Company's solutions is expected to remain high - ensuring that the Company
is well placed to deliver continued growth and margin improvement in the
coming years.
Phil Reason, CEO, commented: "Post completion of the Acquisitions, we have
proven our ability to scale rapidly and win and service larger contracts. We
remain focused on further growing SaaS revenues, resulting in enhanced
visibility and a higher margin revenue mix. Looking forward we expect to see
further benefit to the enlarged Group as we convert a strong current order
book."
"My fellow directors and I would also like to take this opportunity to thank
David Sherwin for his contribution to the business over a period now
approaching 50 years. David initially joined Instem as a trainee accountant in
1973 and was Finance Director of the previously publicly listed Instem plc
from 1984 to 1998. David has been a Non-Executive Director of the Group ever
since. He has seen much change over that period, during which his support,
guidance and friendship has always been a constant."
1. The Board understands that consensus market expectation adjusted profit
before tax is £7.9m
This announcement contains inside information for the purposes of the retained
UK version of the EU Market Abuse Regulation (EU) 596/2014 ("UK MAR").
For further information, please contact:
Instem plc Via Walbrook
Phil Reason, CEO
Nigel Goldsmith, CFO
Singer Capital Markets (Nominated Adviser & Broker) +44 (0) 20 7496 3000
Peter Steel
Alex Bond
Oliver Platts
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
Joe Walker
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 of
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 during their development.
To learn more about Instem solutions and its mission, please visit
www.instem.com (http://www.instem.com/)
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