Instem plc Trading Update (2886J)
August 15 2023 - 2:00AM
UK Regulatory
TIDMINS
RNS Number : 2886J
Instem plc
15 August 2023
15 August 2023
Instem plc
("Instem", or the "Company")
Half Year Trading Update
Instem plc (AIM: INS), a leading p rovider of IT solutions to
the global life sciences market, announces a trading update for the
six months to 30 June 2023 ("H1 2023").
Financial Highlights
Revenue for H1 2023 is expected to be in the region of GBP29.7m
(H1 2022: GBP27.0m), an increase of approximately 10.2%, with
recurring software revenue growing by 27%. This excludes Samarind
Limited, which was sold on 1 April 2023 and will be classified as a
discontinued operation in the H1 2023 results statement. Annual
Recurring Revenue ("ARR") at 1 July 2023 was c.GBP41m (1 July 2022:
GBP32m). Overall performance was broadly in line with management
expectations.
Closing cash at 30 June 2023 was GBP8.4m (30 June 2022:
GBP10.3m), after GBP5.8m of deferred consideration paid in H1 2023
in relation to certain of the Company's previous acquisitions. The
Group's balance sheet remains strong, retaining the flexibility to
execute on acquisition opportunities as they arise. The Board is
currently appraising a healthy pipeline of opportunities progressed
to various stages.
Operational Highlights
The Company commenced the next phase of its development,
positioning itself at the forefront of the growing Artificial
Intelligence ("AI") opportunity with an increased focus on in
silico solutions as part of a blended growth strategy, building on
the relationships and fundamentals of the established business.
The transfer of the ToxHub Platform (the "Platform") and launch
of Centrus(R) announced in May 2023 enables existing and new
clients to utilise a single repository from which to unlock new
knowledge through the application and deployment of cutting-edge
algorithms.
The Company also renewed its long-standing agreement with the
National Toxicology Program ("NTP"), run by the US National
Institute of Environmental Health Sciences ("NIEHS") during the
period - providing further potential for Instem to broaden its in
silico presence. The size and scale of this extension underpins
increased revenue visibility.
Post period end, the Company grew its Provantis footprint
further, with Altasciences signing a three-year subscription order
worth $3.1m. This follows the acquisitions of Calvert Labs and
Sinclair Research by Altasciences and the subsequent decision to
standardise on Provantis and to transition from on-premises
deployment to Instem's cloud-based solutions, increasing its
Provantis user licences from 250 to more than 600.
Outlook
The Company remains optimistic about the growth potential having
positioned itself to provide solutions across the entire drug
discovery and development life cycle. The in silico growth
opportunity, in particular, is expected to increase as the Company
addresses the pressing market need to reduce the cost and time of
life sciences research and development, leveraging the integration
of "Toxhub" data and technology into its existing Centrus
suite.
As in 2022, it is expected that revenue growth will be second
half weighted benefitting from increased software recurring
revenue, predominantly from new business already secured and the
reliable renewal of contracts with current clients.
With an increasing number of customer touch points and cross
selling opportunities management is confident that Instem's
performance will be broadly in line with the Board's expectations
for the full year.
Phil Reason, Instem CEO, commented: "We are delighted with the
continued momentum we are seeing, advocating our acquisition
strategy and highlighting our standing across the drug research and
development lifecycle. We believe there is significant potential to
continue driving value and look forward to building on the
Company's growing market reach."
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
Stifel Nicolaus Europe Limited (Joint
Broker) +44 (0) 20 7710 7600
Ben Maddison
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 IT solutions & services provider to the
life sciences market, radically reducing the cost and time taken
for drugs to come to market across the discovery and development
lifecycle. Its workflow software and data science solutions are
targeted at increasing life science R&D efficiency, and are
currently used by over 700 customers worldwide, including the
largest 25 pharmaceutical companies.
Instem provides a compelling set of solutions - with more than
50% of global preclinical drug safety data collected over the past
20 years using its software. The Company is focused on increasing
touchpoints across the drug development lifecycle - from discovery
and non-clinical testing through clinical trials and up product
launch. It is positioning itself at the forefront of broader market
trends - with the aim of monetising growing demand for data insight
that leverages artificial intelligence ("AI") and in silico-based
solutions.
Its AI solutions include predictive data analytics, simulation
and modelling, with a current total addressable market of over
GBP600m, a serviceable addressable market of c.GBP150m and multiple
opportunities to grow. The Group's broader portfolio helps clients
collect, analyse, report and submit data to regulatory agencies
with confidence and to reveal new insights from public and
proprietary data with a total addressable market worth close to
GBP2.0bn.
It has an established client base and is well positioned to grow
revenues from existing and new clients. Its blended growth strategy
will build on strong relationships and fundamentals with growing
levels of high margin SaaS revenues underpinning continued
profitable growth.
To learn more about Instem solutions and its mission, please
visit www.instem.com
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