Half Year Trading Update
15 July 2019
("Instem", the "Company" or the "Group")
Half Year Trading Update
All business areas performing well with 100% increase in SEND outsourced services revenue
Positive outlook, with full year performance expected to be in line with expectations
Instem plc (AIM: INS), a leading provider of IT solutions to the global life sciences market, is pleased to announce a trading update for the six months to 30 June 2019 (the “period”).
All three areas of the business, Data Collection, Informatics and Regulatory Solutions performed well during the period, resulting in c.10% year-on-year revenue growth.
Software-as-a-Service (“SaaS”) based revenue pleasingly gained greater traction than expected during the period as more new customers chose SaaS subscriptions over perpetual licensing and a growing number of existing clients moved from on-premise deployments to SaaS, as planned. This increased SaaS revenue contribution has marginally reduced year-on-year total revenue growth for the period, due to the displacement of one-off licenses, however forward revenue visibility continues to increase as the Company enters the second half of the year. There was a related short-term impact on earnings but operating cashflow has been particularly strong with net cash at 30 June 2019 of £6.0m (FY18: £3.7m).
The positive market backdrop and growth in the size of the global pharmaceutical R&D pipeline resulted in all three business areas delivering positive operational progress during the period. Increased new customer wins in the Data Collection business, alongside continued growth in existing customer volumes across the Company’s Informatics and Regulatory Solutions technology enabled services, contributed to this performance. The Asia-Pacific region has again been a growing source of new business.
Revenue growth in excess of 20% from the Company’s augmented intelligence Informatics services demonstrated the increasing market appetite for sophisticated in-silico approaches to accelerate and improve on traditional pharmaceutical R&D processes.
Furthermore, Instem’s Regulatory Solutions business continues to lead the FDA (Food and Drug Administration) mandated market with its technology enabled outsourced services, which deliver electronic submissions using SEND (the Standard for the Exchange of Nonclinical Data), with revenue increasing over 100% compared to H1 2018.
The Company continues to build a healthy pipeline of new business, with the number of individual transactions increasing significantly year-on-year across all sectors of the life sciences industry. Importantly, further diversification of revenue by both type and geography is expected to continue to benefit performance through the remainder of the year.
Phil Reason, CEO of Instem plc, commented:
“The business has performed well during the period with above average growth in new data collection clients and technology enabled outsourced services growing strongly.”
“Furthermore, it was particularly pleasing to see a faster rate of transition than anticipated from perpetual software licensing to SaaS subscriptions. We believe our SaaS value proposition offers both Instem and our customers enduring benefits and increases shareholder value as the visibility of our revenue continues to improve.”
“The Board expects that full-year performance will be in line with expectations.”
For further information, please contact:
|Phil Reason, CEO||+44 (0) 1785 825600|
|Nigel Goldsmith, CFO|
|N+1 Singer (Nominated Adviser & Broker)||+44 (0) 20 7496 3000|
|Wallbrook Financial PR||Tel: +44 (0) 20 7933 8000|
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 customers worldwide and enable our 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 supports over 500 clients through offices in the United States, United Kingdom, France, Japan, China and India.
To learn more about Instem solutions and its mission, please visit instem.com.