TIDMINS
RNS Number : 7833I
Instem plc
30 March 2015
Instem plc
("Instem", the "Company" or the "Group")
Unaudited Preliminary Results
Instemplc (AIM: INS.L), a leading provider of IT applications to
the global early development healthcare market, announces its
unaudited preliminary results for the year ended 31 December
2014.
Financial Highlights
-- Revenues increased 18% to GBP13.4m (2013: GBP11.4m)
o Recurring revenues increased to GBP9.2m (2013: GBP8.2m),
representing 69% of total revenues
o Software as a Service (SaaS) revenues increased 20% to GBP1.8m
(2013: GBP1.5m)
-- Adjusted EBITDA* for the year amounted to GBP1.9m (2013:
GBP1.8m)
-- Cash balance as at 31 December 2014 of GBP1.7m (2013:
GBP2.1m)
o After GBP0.3m of deferred acquisition consideration paid in
2014
-- Adjusted earnings per share** of 8.4p (2013: 8.6p)
*Earnings before interest, tax, depreciation, amortisation,share
based payment charges and non-recurring costs.
**After adjusting for the effect of foreign currency exchange on
the revaluation of inter-company balances included in finance
income/(costs), non-recurring items and amortisation of intangibles
on acquisitions.
Operational Highlights
-- Significant WIL Research contracts won in H1 and H2, with the
latter valued at over $7m over four years
-- Multi-year National Institute of Environmental Health
Sciences ("NIEHS") contract extended with additional sites and
users
-- Further client wins extended our market leading position in China
-- US Food & Drug Administration mandating drug submissions
using SEND (Standard for the Exchange of NonClinical Data)
-- Multiple orders for submit(TM), Instem's solution implementing SEND
-- Both 2013 acquisitions successfully integrated
Phil Reason, CEO of Instemplc, commented:
"In contrast to 2013, when the preclinical and early clinical
market was generally reluctant to commit to any significant
investment decisions, 2014 was a period when many of our customers
revisited their near-term ambitions and began to evaluate their
ongoing information management requirements. This resulted in a
very strong second half performance.
"As we enter the current financial year, our order backlog is at
record levels, underpinning our 2015 expectations. In addition,
December's decision by the FDA to mandate the future use of SEND
was a key event for which Instem has been planning and we have
already begun to see increasing interest and orders for the Group's
SEND compliant products across a range of customers.
"Total research and development pipelines within the pharma
sector have increased by almost 9% to approximately 12,300 drug
candidates during 2014, which makes us particularly positive about
our outlook for the future as we can now see sustainable growth
across our target markets."
For further information, please contact:
Instem plc Tel: +44 (0) 1785 825 600
Phil Reason, CEO www.instem.com
Nigel Goldsmith, CFO
N+1 Singer (Nominated Adviser Tel: +44 (0) 20 7496 3000
& Broker)
Richard Lindley / Nick Owen
Walbrook PR Ltd Tel: 020 7933 8780
Sam Allen / Helen Cresswell or instem@walbrookpr.com
/ Paul Cornelius
About Instem
Instem is a leading supplier of IT applications to the early
development healthcare market, delivering compelling solutions for
data collection, management and analysis across the R&D
continuum. Instem applications are in use by customers worldwide,
meeting the rapidly expanding needs of life science and healthcare
organizations for data-driven decision making leading to safer,
more effective products.
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 harmonization of actionable scientific information.
Instem supports over 400 clients through full service offices in
the United States, United Kingdom and China with an additional
location in India and a full service distributor based in
Japan.
To learn more about Instem solutions and its mission, please
visit www.instem.com.
Chairman's Statement
As previously stated, our near term ambitions for the period
were to consolidate our market position and fully integrate the
recent acquisitions. I am pleased to report both of these ambitions
were completed successfully during the year.
From a market perspective, Instem continues to be the leading
supplier of information solutions to the preclinical and early
clinical market place. Furthermore, this market is experiencing a
strong recovery as global pharmaceutical organisations invest
significant financial and human resources to accelerate their own
drug development and acquire third party candidates for high value
and high growth markets. We believe that Instem continues to be
well placed to benefit from increased focus on the tools and skills
required to increase the capital efficiency of these global
pharmaceutical and biotechnology companies and their partners.
During the year, we achieved strong organic growth through
expansion contracts with existing customers, winning contracts with
new customers and successfully integrating the acquisitions of
Instem Clinical Holdings Limited and Perceptive Instruments
Limited, which both contributed a full-year of trading, to record a
period of strong revenue growth of 18%.
From an organic growth point of view, we were particularly
pleased to extend the contract with WIL Research for our Provantis
and Submit solutions for their toxicology systems and processes
worldwide. We also extended our Provantis contract with the
National Institute of Environmental Health Sciences ("NIEHS"),
which is part of the US National Institute of Health.
With regard to new clients, we won eight new contracts for our
Submit suite during the period, expanded our international revenues
across Asia-Pacific with two new contracts with the National
Shanghai Centre for Drug Safety Evaluation and Research, a leading
Chinese Contract Research Organisation ("CRO") and a multi-year
contract with a leading multi-national organisation to support its
standards for the exchange of non-clinical data.
During the period, the Company was pleased to confirm that the
initial earn out criteria for the Instem Clinical acquisition were
successfully achieved, triggering the first two payments to the
vendors. Furthermore, the recently integrated Perceptive
Instruments acquisition performed well during the period making a
solid contribution to revenue and profits.
We have successfully diversified our revenue base, further
reducing the Group's dependence on particular products, market
sectors or geographies whilst continuing to invest in the
capabilities of our product portfolio and staff. Contract renewal
rates remained high through the year and we ended 2014 with a
record backlog of orders. Furthermore, in December 2014 SEND
received final mandatory guidance from the FDA, setting the dates
by which all regulatory submissions must comply with the standard;
this is a key development in our market that should provide
significant impetus for our products.
We therefore look forward to the future with confidence and
believe Instem will become an increasingly valuable player in the
field of supporting drug development through the application of
leading information technology solutions.
Finally, I would like to take this opportunity to thank all our
staff, customers and partners for their ongoing support.
David Gare, Non-Executive Chairman.
29(th) March 2015
Chief Executive's Statement
The year in review represents a period of significant progress
for the Group in terms of expanding the product portfolio and
diversifying the revenue base by product and territory.
Instem continues to be a leading supplier to the world's largest
life science organisations and laboratories, delivering solutions
to streamline R&D processes, resulting in increased client
efficiency and shorter product development timelines. Following a
subdued first half of the year, the global pharmaceutical industry
in general, and the Contract Research Organisations (CROs) that
service it in particular, witnessed a strong recovery in the second
half of the year.
Total Group revenue for 2014 increased approximately 18% over
the previous year as a combination of 11% organic growth and 7%
contribution from the Perceptive Instruments acquisition, which
only contributed one month of revenue in 2013.
As a result of the improving market and our increasing industry
presence, new business opportunities improved significantly in both
size and quality during the year and we converted the majority of
our new business using our SaaS or Hosted delivery models, helping
reduce the medium-term cost of ownership for clients and the cost
of client support for Instem. The SaaS model also improves revenue
visibility and quality of earnings for the Group. SaaS revenue for
the year increased 20%.
Profitability of the Group also increased during the year, with
Adjusted Earnings before Interest, Tax, Depreciation and
Amortisation increasing 5% despite significant investment in our
products and people during the period.
Operational Review
To capitalise on our increased product portfolio and market
presence we added to our Sales, Marketing and Implementation
Services teams during the year and made significant progress in
scaling up our Pune, India operation, from where we can flexibly
and cost effectively provide a range of software development,
testing, client support and back-office implementation services. To
support our growth in India and elsewhere in the Asia-Pacific we
extended our ISO9001:2008 accreditation to cover both our Pune and
Shanghai offices.
Product Portfolio
With major version upgrades for all current Provantis and
ALPHADAS clients, the increased deployment of our Submit suite and
the general migration to our Software-as-a-Service and Hosted
deployment models, we also invested further in the Company's data
centre infrastructure across both the US and China.
PreClinical - Provantis(R) and Perceptive Instruments
The Group's pre-clinical software suite, Provantis, advanced its
market leading position in the year with significant contracts with
the National Institute of Environmental Health Sciences ("NIEHS")
and WIL Research, a leading CRO, in both the first and second half
of the year.
The addition of 100 additional Provantis users and two
additional sites for NIEHS illustrated the compelling value
proposition of the Group's SaaS delivery model and confirms it
remains the leading solution in the marketplace today. Importantly,
this provides further confidence that this particular customer will
generate revenue at the upper end of the forecast US$6.2m to
US$7.6m range over the ten-year period envisaged when the contract
was initially signed in 2013. The contracts signed with WIL
Research were also representative of our leading position in the
CRO sector. In particular, the contract signed in the second half
of the year was worth US$7.0m over four years, which is
significantly larger than the average contract size for the
Group.
Perceptive Instruments, acquired in November 2013 to enhance the
Group's study workflow and automation solutions, won over 30 new
clients in the first full year post acquisition, recorded its first
sale of its new Cyto Study Manager Solution, which was also
launched in the year, and achieved its first sale into Japan of its
AMES Study Manager product.
Electronic Regulatory Submissions - submit(TM)
Importantly, the Group extended its market leading position in
the SEND market with its proprietary Submit solution suite. During
the year, the Group hired experienced staff members from Roche,
AstraZeneca and Eli Lilly to accelerate product development and
penetration in this exciting space, resulting in the release of
important updates and additional software modules in the Submit
suite for managing and viewing SEND data sets.
The Group won eight new Submit clients during the year,
including some of the world's largest pharmaceutical companies and
CROs and now has the majority of those enterprises instrumental in
the development of the SEND protocol over the past 10 years,
representing a significant endorsement of the Group's solution.
This important market is set to receive a significant boost
following the issue of definitive guidance by the FDA in December
2014 as to the deadline when all regulatory submissions must be
made using SEND.
Early Clinical - ALPHADAS(TM)
Following strong order intake in 2013, Instem Clinical focused
considerable attention on a series of related updates to our
ALPHADAS product suite and the corresponding client
implementations. With a growing client list and many more parallel
implementation projects, we took the opportunity to strengthen the
implementation and support team.
The Group implemented several important ALPHADAS projects during
the year and continues to cycle clients onto the latest version of
the product suite. New business across Europe was particularly
strong for ALPHADAS, whilst several opportunities in North America
were delayed as early phase clinical CROs continued to restructure
and realign their resource requirements.
Instem Scientific
Instem Scientific has always had a blend of product sales for
big data informatics and related consulting services in the
information sciences. While recurring product support revenue from
existing clients has been robust, the ongoing restructuring in big
pharma has steadily reduced their internal capabilities in this
area, reducing demand for additional product licenses. However,
consistent with their strategic move to an outsourcing model, there
was growing client interest in our consulting expertise and
particularly our capability to leverage our sophisticated
technology suite. Consequently, we have repositioned our approach
to address this emerging opportunity. We expect to see the benefits
of this change in the coming years, as demand for consulting
expertise is usually a lead indicator for increasing demand for
other products and services across this market sector.
Market Overview
Citeline(R), which claims to have the world's most comprehensive
source of real-time R&D intelligence for the pharmaceutical
industry, recently reported that the global drug pipeline had
increased by 8.8% in the past year, alongside a 27% increase in
market launches of new active substances. Supported by high capital
inflows, the biggest growth segment was small to mid-tier pharma,
with a year-on-year increase of more than 10% in the number of
companies with an active drug development portfolio.
Following the strong growth recorded in 2013, the growth in 2014
represents the largest annual drug pipeline rise on record, in
absolute terms, and there is further evidence that the global
pharmaceutical market is now moving resources from late stage
clinical development into early compound development work in order
to refill the pipeline of preclinical candidates.
These drug development activities require specialist services
and technologies with a particular focus on IT solutions which
enable organisations to improve cost efficiencies and ensure they
are able to meet the ever increasing regulatory demands of the
industry. The regulatory bodies' preference for the electronic
capture, storage and transfer of data for new drug submissions
continues to grow and pharmaceutical organisations are seeking
tools that can help them to identify suitable drug candidates from
vast volumes of historic data, in addition to managing their
compliance risk with the authorities.
PreClinical market
A sustained recovery in study volumes is currently being
reported by PreClinical CROs as pharmaceutical organisations are
currently seeking to replenish early stage pipelines after five
years focused predominately on late stage clinical candidates. This
is supported by the recent Citeline(R) report, which shows the
PreClinical drug pipeline increased by 10.5% in the last year, with
CROs accounting for the majority of the increase.
With increased preclinical study volume helping to create
opportunities with the pharma sponsors, PreClinical CROs continue
to report strong demand in North America, but a continuation in
suppressed demand from Europe and Japan. Numerous CROs have been
adding or looking to add additional capacity.
Early Stage Clinical market
The recent market study from Citeline(R) reported a 4.9%
increase in the Early Stage Clinical pipeline, less than in 2013,
and this supports anecdotal evidence that the Early Stage Clinical
market is growing less consistently, with some CROs reporting
marked increases in study volume and others still with capacity to
spare.
The early stage clinical market is immediately downstream of
preclinical and there may therefore be a delay before the increased
preclinical investment delivers an improved flow of drug candidates
to the clinic. The restructuring of the early phase clinical CRO
market, as experienced in recent years, is expected to continue
with CRO performance quite variable.
Nevertheless opportunities exist within the early stage clinical
market for the deployment of Instem's software solutions. These
opportunities are resulting from an increasing recognition of the
need to control data quality and integrity and because levels of
automation within the early stage environment remain low.
Government and Academic Research
Funding for Government/Academic institutions undertaking later
stages of life sciences research in North America, China and Europe
continues to grow to cover gaps that are not sufficiently
attractive to commercial enterprises. This enables them to invest
in both study automation solutions and in innovative approaches to
the process of R&D using novel scientific, informatics and big
data approaches.
Financial Review
Instem's revenue model consists of perpetual license income with
annual support contracts, professional services fees and SaaS
subscriptions. Total revenue for the twelve months to 31 December
2014 increased 18% to GBP13.4m compared to the same period last
year. From a territory perspective, demand for our products and
services from customers in North America continued to increase
whilst new business in Europe was more muted, reflecting the lower
levels of pharmaceutical R&D activity in the region.
During the period, organic revenue increased 11% with the
remaining 7% revenue growth from a full-year contribution of the
Perceptive Instruments acquisition. The organic revenue growth was
driven primarily from the increased sales of our Submit suite with
total revenue benefiting from a full year contribution from the
Perceptive Instruments acquisition, which made negligible revenue
contribution in 2013.
Total recurring revenue, from support contracts and SaaS based
subscriptions, increased 12% during the year to GBP9.2m, now
representing 69% of total revenue and 79% of total operating
expenses of the Group. SaaS based revenue, which provides enhanced
total returns and increased revenue visibility, increased 20% to
GBP1.8m.
Adjusted Earnings before Interest, Tax, Depreciation,
Amortisation and share based payments, increased 5% to GBP1.9m.
Development costs incurred during the period were GBP1.3m of which
GBP0.3m was capitalised. The non-recurring costs included a charge
of GBP0.06m relating to a trade dispute, net of insurance proceeds,
and GBP0.07m of professional fees associated with the Perceptive
Instruments acquisition in 2013.
Profit before tax decreased by GBP0.5m to GBP0.2m due to
increased amortisation of intangibles, increased FRS17 pension
charge and net foreign exchange losses. In 2013 the acquired
subsidiaries contributed GBP0.6m. After consolidation and IFRS
adjustments, the core business before acquisitions reported a
post-tax loss in 2013 of GBP0.05m due primarily to a delay in one
particularly significant perpetual licence and non-recurring costs
of GBP0.2m.
The Group claimed and received research and development tax
credits during the year of GBP0.1m (2013: GBP0.05m).
Cash generated from operations was GBP0.5m (2013: GBP2.0m)
impacted by the late WIL contract win in December 2014, the cash
receipt from which is due in 2015, and late receipt of three annual
fee renewals. The Group had cash reserves of GBP1.7m as at 31
December 2014, compared with GBP2.1m as at 31 December 2013, after
making two deferred consideration cash payments for the Instem
Clinical acquisition during the year amounting to GBP0.3m. In
addition, cash consideration amounting to GBP0.3m was taken in the
form of a Loan Note included within current financial liabilities
at the year-end, which was paid in January 2015.
There was an increase in the funding deficit on the Company's
defined benefit pension scheme during the period calculated in
accordance with the provisions of IAS19 that amounted to GBP0.5m,
net of deferred tax (2013: GBP0.6m), which has been recognised in
Other Comprehensive Expense. This was a non-cash charge in the
period and arose primarily as a result of forecast lower gilt
yields, partially offset by higher expected returns on assets. As
part of the scheme's triennial actuarial valuation as at 5 April
2011, the Company agreed a schedule of payments to the scheme with
the trustees and the Pensions Regulator that is designed to
eliminate the funding deficit over an eight year period. The
scheme's actuarial valuation as at 5 April 2014 is currently in
process and will be reported in the six month results to 30 June
2015. The defined benefit pension scheme has remained closed to new
members since 2000 and to future accrual since 2008.
The increase in the merger reserve of GBP0.6m was due to the
premium arising from the issue of shares as part of the deferred
consideration payment relating to the Instem Clinical
acquisition.
In line with previous periods, and our current policy of
retaining cash within the business to capitalise on the available
growth opportunities, the Board has not recommended the payment of
a dividend.
Principal risks and uncertainties
The principal risks and uncertainties remain unchanged from
those described in our 2013 Annual Report.
Outlook
In contrast to 2013, when the preclinical and early clinical
market was generally reluctant to commit to any significant
investment decisions, 2014 was a period when many of our customers
revisited their near-term ambitions and began to evaluate their
ongoing information management requirements. This resulted in a
very strong second half performance.
As we enter the current financial year, our order backlog is at
record levels, underpinning our 2015 expectations. In addition,
December's decision by the FDA to mandate the future use of SEND
was a key event for which Instem has been planning and we have
already begun to see increasing interest and orders for the Group's
SEND compliant products across a range of customers.
Total research and development pipelines within the pharma
sector have increased by almost 9% to approximately 12,300 drug
candidates during 2014, which makes us particularly positive about
our outlook for the future as we can now see sustainable growth
across our target markets.
Phil Reason
Chief Executive
29(th) March 2015
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2014
Note Year ended Year ended
31 December 2014 31 December 2013
Continuing Operations GBP000 GBP000
REVENUE 2 13,429 11,361
Operating expenses (11,699) (9,685)
Amortisation of internally generated intangibles (297) (226)
PROFIT FROM OPERATIONS BEFORE AMORTISATION OF ACQUIRED INTANGIBLES,
SHARE BASED PAYMENT AND
NON-RECURRING COSTS 1,433 1,450
Amortisation of intangibles arising on acquisition (640) (394)
Share based payment (108) (96)
PROFIT BEFORE NON-RECURRING COSTS 685 960
Non-recurring (costs)/income (123) (200)
PROFIT FROM OPERATIONS 562 760
Finance income 9 145
Finance costs (359) (207)
PROFIT BEFORE TAXATION 212 698
Taxation 4 (62) (169)
PROFIT FOR THE YEAR 150 529
OTHER COMPREHENSIVE EXPENSE
Items that will not be reclassified to profit and loss account
Actuarial loss on retirement benefit obligations (621) (587)
Deferred tax on actuarial loss 124 30
(497) (557)
Items that may be reclassified to profit and loss account
Exchange differences on translating foreign operations 34 (90)
OTHER COMPREHENSIVE EXPENSE FOR THE YEAR (463) (647)
TOTAL COMPREHENSIVE EXPENSE FOR THE YEAR (313) (118)
PROFIT ATTRIBUTABLE TO OWNERS OF THE PARENT COMPANY 150 529
TOTAL COMPREHENSIVE EXPENSE ATTRIBUTABLE TO OWNERS OF THE PARENT
COMPANY (313) (118)
Earnings per share from continuing operations
Basic 5 1.2p 4.5p
Diluted 5 1.2p 4.5p
Consolidated Statement of Financial Position
As at 31 December 2014
31 December 2014 31 December 2013
ASSETS GBP000 GBP000 GBP000 GBP000
NON-CURRENT ASSETS
Intangible assets 12,439 12,887
Property, plant and equipment 263 265
Deferred tax assets 574 388
TOTAL NON-CURRENT ASSETS 13,276 13,540
CURRENT ASSETS
Inventories 506 307
Trade and other receivables 4,432 2,908
Cash and cash equivalents 1,676 2,053
TOTAL CURRENT ASSETS 6,614 5,268
TOTAL ASSETS 19,890 18,808
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 8,175 7,236
Current tax payable 231 7
Financial liabilities 1,903 1,250
TOTAL CURRENT LIABILITIES 10,309 8,493
NON-CURRENT LIABILITIES
Financial liabilities 281 1,836
Retirement benefit obligations 3,881 3,506
TOTAL NON-CURRENT LIABILITIES 4,162 5,342
TOTAL LIABILITIES 14,471 13,835
EQUITY
Share capital 1,221 1,176
Share premium 7,892 7,892
Merger reserve (326) (932)
Shares to be issued 378 270
Translation reserve 228 194
Retained earnings (3,974) (3,627)
TOTAL EQUITY ATTRIBUTABLE TO
OWNERS OF THE PARENT 5,419 4,973
TOTAL EQUITY AND LIABILITIES 19,890 18,808
Consolidated Statement of Cashflows
For the year ended 31 December 2014
Year ended Year ended
31 December 2014 31 December
2013
GBP000 GBP000 GBP000 GBP000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before taxation 212 698
Adjustments for:
Depreciation 127 96
Amortisation of intangibles 937 620
Share based payments and shares
to be issued 108 96
Retirement benefit obligations (398) (412)
Net foreign exchange gains - 84
Finance income (9) (145)
Finance costs 359 207
1,336 1,244
CASH FLOWS FROM OPERATIONS BEFORE
MOVEMENTS IN WORKING CAPITAL
Movements in working capital:
Increase in inventories (196) (210)
(Increase)/Decrease in trade and
other receivables (1,436) 823
Increase in trade and other payables 743 (889) 31 644
CASH GENERATED FROM OPERATIONS 447 1,888
Finance costs (65) (9)
Income taxes 100 35 74 65
NET CASH GENERATED FROM OPERATING
ACTIVITIES 482 1,953
CASH FLOWS FROM INVESTING ACTIVITIES
Finance income received 9 61
Purchase of intangible assets (369) (407)
Purchase of property, plant
and equipment (124) (171)
Payment of deferred consideration (302) -
Acquisition of subsidiaries - (2,710)
Cash acquired with subsidiaries - 1,134
NET CASH USED IN INVESTING
ACTIVITIES (786) (2,093)
CASH FLOWS FROM FINANCING ACTIVITIES
Loan notes repaid - (250)
NET CASH USED IN FINANCING ACTIVITIES - (250)
NET DECREASE IN CASH AND CASH EQUIVALENTS (304) (390)
Cash and cash equivalents at
start of year 2,053 2,450
Effects of exchange rate changes
on the balance of cash held
in foreign currencies (73) (7)
CASH AND CASH EQUIVALENTS AT
END OF YEAR 1,676 2,053
Consolidated Statement of Changes in Equity
Called Share Merger Shares Translation Retained Total
up share Premium Reserve to be reserve earnings Equity
capital issued
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
Balance as
at
1 January 2013 1,176 7,892 (932) 174 284 (3,599) 4,995
Profit for
the year - - - - - 529 529
Other comprehensive
expense for
the year - - - - (90) (557) (647)
Total comprehensive
income - - - - (90) (28) (118)
Share based
payment - - - 96 - - 96
Balance at
31 December
2013 1,176 7,892 (932) 270 194 (3,627) 4,973
Profit for
the year - - - - - 150 150
Other comprehensive
expense for
the year - - - - 34 (497) (463)
Total comprehensive
income - - - - 34 (347) (313)
Shares Issued 45 - 606 - - - 651
Share based
payment - - - 108 - - 108
Balance as
at 31 December
2014 1,221 7,892 (326) 378 228 (3,974) 5,419
Notes to the Financial Statements
1. Basis of Preparation
FINANCIAL INFORMATION
The preliminary financial information does not constitute
statutory accounts within the meaning of section 434 of the
Companies Act 2006 but is derived from accounts for the years ended
31 December 2014 and 31 December 2013. The figures for the year
ended 31 December 2013 were audited. The preliminary financial
information is prepared on the same basis as will be set out in the
statutory accounts for the year ended 31 December 2014. The figures
for the year ended 31 December 2014 are unaudited.
The preliminary financial information was approved for issue by
the Board of Directors on 29 March 2015.
The statutory accounts for the year ended 31 December 2014 will
be delivered to the Registrar of Companies following the Company's
Annual General Meeting. Statutory accounts for the year ended 31
December 2013 have been filed with the Registrar of Companies. The
auditor's report on those 2013 accounts was unqualified and did not
contain any statement under Section498 (2) or (3) of the Companies
Act 2006.
GENERAL INFORMATION
The principal activity of the Group is the provision of world
class information solutions for Life Sciences research and
development. Instem plc is a company incorporated in England and
Wales under the Companies Act 2006 and domiciled in the UK. The
registered office is Diamond Way, Stone Business Park, Stone,
Staffordshire, ST15 0SD.
BASIS OF ACCOUNTING
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRS), as adopted by the European Union (EU), this
announcement does not in itself contain sufficient information to
comply with IFRSs.
The Group's accounting reference date is 31 December.
GOING CONCERN
Having made appropriate enquiries, the directors consider that
the Group has adequate resources to enable it to continue in
operation for the foreseeable future. The Group has a significant
proportion of recurring revenue from a well-established global
customer base, supported by a largely fixed cost base.
The financial position of the Group, its cash flows and
liquidity position are set out in the primary statements of this
financial information. Detailed projections have been made for the
12 months following the approval of the financial statements and
sensitivity analysis undertaken. This work gives the directors
confidence as to the future trading performance.
Accordingly the directors continue to adopt the going concern
basis for the preparation of the financial statements.
2. Segmental Reporting
For management purposes, the Group is currently organised into
one operating segment - Global Life Sciences.
Segment results, assets and liabilities include items directly
attributable to a segment as well as those than can be allocated on
a reasonable basis.
2014 2013
GBP000 GBP000
INFORMATION BY PRODUCT TYPE
Licence fees 2,734 2,282
Annual support fees 6,984 6,307
SaaS subscription fees 1,822 1,543
Professional services 1,763 1,175
Funded development initiatives 126 54
-------- --------
13,429 11,361
======== ========
2014 2013
GBP000 GBP000
INFORMATION BY GEOGRAPHICAL LOCATION
UK 2,141 2,496
Rest of Europe 2,699 1,991
USA and Canada 7,583 5,871
Rest of World 1,006 1,003
-------- --------
13,429 11,361
======== ========
NON-CURRENT ASSETS EXCLUDING DEFERRED TAXATION
2014 2013
GBP000 GBP000
INFORMATION BY GEOGRAPHICAL LOCATION
UK 12,664 13,120
USA and Canada 16 14
Rest of World 22 18
---------------- ---------------
12,702 13,152
================ ===============
MAJOR CUSTOMERS
No single customer generated more than 10% of the Group revenue
(2013: Nil).
3. Adjusted earnings before interest, tax, share based payments,
non-recurring items and depreciation and amortisation
2014 2013
GBP000 GBP000
Profit from operations before amortisation of acquired intangibles, 1,433 1,450
share based payment and non-recurring costs
Add back
Depreciation 127 96
Amortisation of internally generated intangibles 297 226
1,857 1,772
======== ======
4. Income Taxes
2014 2013
Income taxes recognised in profit GBP000 GBP000
or loss
Current tax:
UK corporation tax on profits of
the year - 42
Foreign tax 272 147
Foreign tax in respect of previous
years 239 (227)
Adjustments in respect of previous
years (171) 121
Adjustments in respect of R&D tax (92) -
credit
-------- ----------
Total current tax 248 83
-------- ----------
Deferred tax:
Current year charge (30) 11
Adjustment in respect of previous
years (103) 11
Retirement benefit obligation (53) 64
-------- ----------
Total deferred tax (186) 86
-------- ----------
Total income tax recognised in
the current year 62 169
======== ==========
2014 2013
GBP000 GBP000
The income tax expense can be reconciled
to the accounting profit as follows:
Profit before tax 212 698
-------- ----------
Profit before tax multiplied by
standard rate of corporation tax
in the UK 23.25% (2013: 23.25%) 49 162
Effects of:
Expenses not deductible for tax
purposes 30 50
Fixed asset timing differences (9) 1
Differences in overseas tax rates 109 63
Adjustments in respect of prior
years (35) (95)
Tax losses utilised in respect
of subsidiaries - (15)
Tax losses utilised/carried forward (82) 3
Total income tax expense recognised
in profit or loss 62 169
======== ==========
5. Earnings per share
Basic and fully diluted
Basic earnings per share are calculated by dividing the profit
attributable to ordinary shareholders by the weighted average
number of ordinary shares in issue during the year. Diluted
earnings per share is calculated by adjusting the weighted number
of ordinary shares outstanding to assume conversion of all dilutive
potential shares arising from the share option scheme. The dilutive
impact of the share options is calculated by determining the number
of shares that could have been acquired at fair value (determined
as the average market share price of the Company's shares) based on
the monetary value of the subscription rights attached to the
outstanding share options.
2014 2013
Weighted Weighted
Profit after average number Earnings per Profit after average number Earnings per
tax of shares share tax of shares share
GBP000 '000 Pence GBP000 '000 Pence
Earnings per
share - Basic 150 12,063 1.2 529 11,765 4.5
Potentially
dilutive
shares - 155 - - 15 -
--------------- --------------- --------------- --------------- --------------- ---------------
Earnings per
share -
Diluted 150 12,218 1.2 529 11,780 4.5
=============== =============== =============== =============== =============== ===============
Adjusted
2014 2013
Adjusted Weighted Adjusted Weighted
Profit after average number Earnings per Profit after average number Earnings per
tax of shares share tax of shares share
GBP000 '000 Pence GBP000 '000 Pence
Earnings per
share - Basic 1,009 12,063 8.4 1,017 11,765 8.6
Potentially
dilutive
shares - 155 - - 15 -
--------------- --------------- --------------- --------------- --------------- ---------------
Earnings per
share -
Diluted 1,009 12,218 8.3 1,017 11,780 8.6
=============== =============== =============== =============== =============== ===============
Reconciliation of adjusted profit after tax: 2014 2013
GBP'000 GBP'000
Reported profit after tax 150 529
Non-recurring costs 123 200
Amortisation of acquired intangibles 640 394
Foreign exchange differences on revaluation of
inter-co balances 96 (84)
Sundry expenses - (22)
--------- ---------
1,009 1,017
===== =====
Copies of the Annual Report and Accounts are to be posted to the
Company's shareholders and will be available, along with this
announcement, on Instem's website at
http://investors.instem.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SEAESUFISEDD
Instem (LSE:INS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Instem (LSE:INS)
Historical Stock Chart
From Jul 2023 to Jul 2024
