Instem plc Trading Update (5329I)
July 26 2012 - 2:01AM
UK Regulatory
TIDMINS
RNS Number : 5329I
Instem plc
26 July 2012
Instem plc ("Instem" or the "Company")
Trading Update
Instem (AIM: INS.L), a leading provider of IT applications to
the global early development healthcare market, today gives an
update on current trading.
As stated in the 2011 interim results and the full year results
released in March 2012, license income is becoming increasingly
second-half weighted and this trend is expected to continue in the
current year, with first half revenue marginally below that of the
comparable period in 2011. Despite opening 2012 with a strong order
book and a good pipeline of new opportunities, the Company is
continuing to experience timing delays in new order placement and,
following a detailed review, the Board believes the revenue and
profitability for the full year ending 31 December 2012 are likely
to be materially lower than current market expectations.
The pharmaceutical market, particularly large pharma, is still
going through a period of major structural changes and, with the
uncertainty this creates, clients and prospects are deferring
investment decisions. Despite this, underlying demand for Instem
solutions remains strong with several large, multi-site prospects
in the pipeline. In several instances, selection decisions have
already been made in Instem's favour by prospective customers but
order dates and final contract size remain subject to additional
procurement processes.
The fundamentals of the business remain strong and Instem
continues to:
-- increase its substantial annual recurring revenues;
-- remain solidly profitable and cash generative, with GBP1.84m
net cash as at 30 June 2012 (GBP1.33m at 30 June 2011);
-- win the majority of new business placed in its core early
development safety assessment market; and
-- benefit from high barriers to entry for competitors.
Enhanced revenue opportunities and reduced costs resulting from
the completion of the last major phase of the redevelopment of its
core Provantis(R) product suite during 2012 are expected to
contribute positively to future business performance.
Overall, while the Board remains cautious regarding the timing
of deal flow, it is confident in the medium to long-term prospects
for the business, which remains well positioned to benefit from the
trends in its end markets towards multi-site, collaborative and
outsourced R&D.
Notice of Results
The Company expects to report interim results for the 6 months
ended 30 June 2012 on 19 September 2012.
For further information, please contact:
Instem plc +44 (0) 1785 825 600
Phil Reason, CEO
Nigel Goldsmith, CFO
N+1 Brewin (Nominated Adviser &
Broker) +44 (0) 20 3201 3710
Aubrey Powell
Luke Boyce
Newgate Threadneedle +44 (0) 20 7653 9850
Caroline Evans-Jones
Fiona Conroy
About Instem plc
Instem (AIM: INS.L) is a leading supplier of IT solutions to the
early development healthcare market. Instem's pre-clinical study
management solutions accelerate drug and chemical development by
increasing productivity, automating processes and enhancing
practices that lead to safer and more effective drugs.
Instem has over 130 customers in North America, Europe, China,
India and Japan, including sixteen of the top twenty pharmaceutical
and biotech companies such as GlaxoSmithKline and AstraZeneca. The
Group employs over 110 people in seven offices in the US, UK, China
and India; and a full service distributor in Japan. It is estimated
that approximately half of the world's pre-clinical drug safety
data has been collected over the last 20 years via Instem
software.
To learn more about Instem please visit the Company's website,
www.instem.com, or its investor centre
http://investors.instem.com/.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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