Unaudited Interim Results

24 September 2014

Instem plc
("Instem" or the "Group")

Unaudited Interim Results

Instem plc (AIM: INS.L), a leading provider of IT systems and services to the global life sciences community, announces its unaudited interim results for the six months ended 30 June 2014.

The Group has made good progress in the first half, concentrating on the integration of acquisitions, a corporate reorganisation to align management and staff with core lines of business and substantial investment in the initiation of the 10-year NIEHS contract. The first half results do not reflect the benefit of these major structural changes but the focus and momentum created is reflected in our expectations for the second half, which we anticipate will be a significant improvement on the second half of 2013.

In addition, whilst there are sufficient well-qualified new contract opportunities in Q4 to meet expectations for 2014, there is some uncertainty around the anticipated receipt of a small number of high value contracts in the period. If these contracts are not received by the year-end this could have a material impact on the results for the full year.

Financial Highlights

  • Revenues increased 4% to £5.7m (H1 2013: £5.5m)
    • Recurring revenues remained constant at £4.2m representing 74% of total revenues (H1 2013: £4.2m representing 76% of total revenues)
    • Software as a Service (SaaS) revenues increased 6% to £0.8m (H1 2013 £0.7m)
  • Adjusted operating profit* of £0.05m (H1 2013: £0.7m)
  • Seasonal net operating cash outflow of £1.6m (H1 2013 £0.6m)
  • Cash balance as at 30 June 2014 of £(0.2)m (30 June 2013: £0.9m), reflecting normal seasonality in cash collection, acquisition related payments of £0.2m and lower receipts from new business
  • Adjusted** (loss)/earnings per share of (1.2)p (H1 2013: 3.2p)
  • Basic loss per share of (4.7)p (H1 2013: (0.7)p)

*before amortisation of intangibles, share based payments and non-recurring costs
**After adjusting for the effect of foreign currency exchange on the revaluation of inter-Group balances included in finance income/(costs), non-recurring items and amortisation of intangibles on acquisitions.

Operational Highlights

  • Provantis pre-clinical study management suite continued to enhance its market leading position
    • Initial contract from WIL Research - for Provantis, Centrus submit™ and Logbook
    • Contract with NCDSER, former Shanghai government laboratory, enhancing position in China market
    • Multi-year NIEHS contract extended with 2 additional sites and 100 additional users
  • Further contract wins for the submit™ data management system
  • Successful initial period for newly acquired Perceptive Instruments including signing of 20 new clients for traditional products and launch of new product Cyto Study Manager
  • Contracts with Nuvisan and CRU Hungary for the Alphadas clinical study management product
  • Upgraded entire product portfolio during period under review, enhancing competitive position

Phil Reason, CEO of Instem plc, commented: “Whilst the market held back on investment commitments during the first half, we continued to make good strategic progress during the period under review. All our business lines achieved important favourable contract decisions and key product software releases were made. Importantly, our two recent acquisitions are contributing to revenues and progressing well.

“We believe that we are well positioned to benefit from market dynamics whereby global pharmaceutical organisations are now reallocating investment from late to early stage development work. Furthermore, the market is increasingly recognising the benefit of IT solutions which enable efficiencies in R&D processes and satisfy growing regulatory requirements.

“Whilst there are sufficient well-qualified new contract opportunities in Q4 to meet expectations for 2014, there is some uncertainty around the anticipated receipt of a small number of high value contracts in the period. If these contracts are not received by the year-end this could have a material impact on the results for the full year.”

Download the full results:

PDF file Instem Interim Results PDF (255 KB)

For further information, please contact:

Instem plc www.instem.com
Phil Reason, CEO +44 (0) 1785 825600
Nigel Goldsmith, CFO  
N+1 Singer (Nominated Adviser & Broker) +44 (0) 20 7496 3000
Richard Lindley  
Nick Owen  
James White  
Wallbrook Financial PR Tel: +44 (0) 20 7933 8000
Paul Cornelius or instem@walbrookpr.com
Sam Allen  
Helen Cresswell  
Paul Whittington  

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 rapidlyexpanding needs of life science and healthcare organisations 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 450 clients through full service offices in the United States, United Kingdom and China with additional locations in Japan and India.

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