TIDMINS
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 GBP59m (FY2021: GBP46m), an
increase of approximately 28%. In addition, annual recurring
revenue (annual support and Software-as-a-Service, "SaaS") grew by
approximately 40% to GBP34m, 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 GBP13.7m as at 31 December 2022 (FY2021: GBP15.0m), after making
deferred and contingent payments on the Acquisitions of
GBP5.3m.
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 GBP7.9m
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
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END
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