Unaudited Results for the Year Ended 31 December 2021 & Investor Presentation

26 April 2022

Instem plc
("Instem" or "the Company")

Unaudited Results for the Year Ended 31 December 2021 & Investor Presentation

Instem plc (AIM: INS), a leading provider of IT solutions to the global life sciences market, announces its unaudited results for the year ended 31 December 2021 (the "Period").

Financial Highlights

  • Revenues increased 63% to £46.0m (2020: £28.2m)
    • Recurring revenue (annual support and SaaS) increased 43% to £24.1m (2020: £16.9m) with SaaSrevenues increasing 21% to £9.7m (2020: £8m)
    • Organic revenue growth of 7% to £30.1m (2020: £28.2m)
    • Organic constant currency revenue growth of 12%
    • SaaS Annual Recurring Revenue (“ARR”) of £11.5m at 1 January 2022
  • Adjusted EBITDA* of £8.3m (2020: £5.9m)
  • Reported profit before tax of £3.0m (2020: profit of £2.5m)
  • Adjusted profit before tax** of £5.0m (2020: £4.0m)
  • Fully diluted earnings per share of 7.4p (2020: 11.6p earnings per share)
  • Adjusted fully diluted earnings per share** of 16.3p (2020: 19.1p)
  • Gross cash balance at 31 December 2021 of £15.0m (2020: £26.7m, reflecting the equityraise in July 2020 to fund the 2021 acquisitions).

For an explanation of the alternative performance measures in the report, please refer to page 12 in the full report.
*Earnings before interest, tax, depreciation, amortisation and non-recurring items.
**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

  • Strong organic growth with little impact from COVID-19
  • New business revenue came from both new and existing clients
  • Further expansion of footprint in the Asia-Pacific region
  • Continued transition to the SaaS model further increased recurring revenue and earnings visibility
  • Transformed the scale and reach of the business through acquisitions of:
    • The Edge Software Consultancy ("The Edge")
    • d-Wise Technologies Inc ("d-wise")
    • PDS Pathology Data Systems Ltd (“PDS”)

Post Period-End Highlights

  • New banking facility finalised with HSBC of up to £20m, £10m of which is committed
  • Earn outs met in full for d-wise and The Edge (PDS has no earn out provision)
  • No known exposure to Russia or Ukraine

Phil Reason, CEO of Instem, commented: "The performance during the year highlighted our resilience - especially given the COVID-19 backdrop, and I would like to thank all of our staff for their continued efforts and hard work. Our proven model continues to generate strong cash flows while the combination of increasing demand for regulatory-backed solutions and a growing demand for artificial intelligence and in silico solutions in the drug R&D process underpins our confidence in further leveraging our software and service portfolio. As such, we now have the platform in place to capitalise on the various opportunities ahead of us and we look forward to reporting further progress as we continue to execute our growth strategy.

In common with other businesses, we have seen wage inflation in recent months and, accordingly, we are moderating our profit expectations for the current year ahead of price rises on contract renewals flowing through positively to revenue. Importantly, we already have good visibility for the current year with growing recurring SaaS and Annual Support revenues and a strong pipeline.

The recent acquisitions of The Edge, d-wise and PDS highlight our ability to add scale and leverage existing customer relationships with a view to further enhancing earnings, while providing a strong platform for continued growth.  We look forward to advancing further acquisition opportunities after consolidating the 2021 additions."

Investor Presentation: 16:00 today
Management will be providing a presentation and hosting an Investor Q&A session on the results and future prospects today at 16:00, through the digital platform Investor Meet Company. Investors can sign up for free and add to attend the presentation via the following link
https://www.investormeetcompany.com/instem-plc/register-investor

Questions can be submitted pre event and at any time during the live presentation via the Investor Meet Company Platform.

Download the full report:

Instem Full Year Results PDF

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  
Rachel Hayes  
Joint Broker (Stifel Nicolaus Europe Limited) +44 (0) 20 7710 7600
Ben Maddison  
Alex Price  
Wallbrook Financial PR Tel: +44 (0) 20 7933 8780
Tom Cooper instem@walbrookpr.com
Nick Rome  
Nicholas Johnson  

About Instem

Instem is a leading provider of IT solutions & services to the life sciences market delivering compelling solutions for Study Management and Data Collection; Regulatory Solutions for Submissions and Compliance; and Informatics-based Insight Generation.

Instem solutions are in use by over 700 customers worldwide, including all 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 at some stage of their development.

To learn more about Instem solutions and its mission, please visit instem.com.