Half Yearly Report

26 September 2017

Instem plc

(“Instem”, the “Company” or the “Group”)

Half Yearly Report

Instem plc (AIM: INS.L), a leading provider of IT solutions to the global life sciences market, announces its unaudited half year results for the six months ended 30 June 2017.

Financial Highlights 

  • Total revenues increased 13% to £10.3m (H1 2016: £9.1m)
    • Recurring revenues increased 23% to £6.5m (H1 2016: £5.3m), of which SaaS was £1.7m (H1 2016: £1.2m)
    • Proportion of recurring revenue to total revenue increased to 63% (H1 2016: 58%)
  • EBITDA* of £0.6m (H1 2016: £1.2m)
  • Adjusted** profit before tax of £0.1m (H1 2016: £1.0m)
  • Adjusted** basic earnings per share of 0.2p (H1 2016: 6.3p)
  • Reported loss before tax of £0.6m (H1 2016: profit of £0.1m)
  • Reported basic loss per share of 4.4p (H1 2016: earnings per share of 0.4p)
  • Seasonal net operating cash outflow of £1.4m (H1 2016: £1.5m)
  • After acquisition related payments of £0.5m in H1 2017 and £1.7m in H2 2016, net cash balance as at 30 June 2017 of £1.2m (H1 2016: £4.8m)

*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 the amortisation of intangibles on acquisitions. Profit is adjusted in this way to provide a clearer measure of underlying operating performance. 

Operational Highlights 
Significant Strategic progress:

  • Completion of a Group-wide re-organisation to improve efficiency and agility:
    • Non-recurring costs of £0.3m recognised during the period
    • Estimated operational cost savings of £1.5m per annum
  • Further investment in resources to help secure the opportunity in SEND

Underlying trading remains strong:

  • Regulatory Solutions Business saw increasing demand from the recently mandated Standard for the Exchange of Nonclinical Data (“SEND”) and continued to increase market share, winning the majority of technology and outsourced services contracts
  • Major expansion of a Study Management contract with the US Government
  • Confirmation of the Target Safety Assessment opportunity addressed by our informatics-based KnowledgeScan service

Phil Reason, CEO of Instem plc, commented: 
“Following a period of planned strategic progress, Instem is now undoubtedly better positioned for profitable growth than ever before.  While our target markets are generally experiencing stability or growth, our focus is moving toward annually recurring revenue and higher margins, with less reliance on perpetual software license sales.

We are particularly excited by the growth potential for our technology-enabled outsourced services for SEND and Target Safety Assessment where there are increasing regulatory drivers, competitive differentiators and customer activity remains high.

The continued investment in our outsourced services team has increased our monthly revenue generation and the full benefit of the overhead reductions implemented at the end of the first half of the year will also be realised in the second half of 2017 and beyond.   Consequently, we anticipate earnings for the full year to be in line with market expectations.”

Download the full report

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  
Wallbrook Financial PR Tel: +44 (0) 20 7933 8780
Paul Cornelius or instem@walbrookpr.com
Sam Allen  
Helen Cresswell  

About Instem

Instem is a leading provider of IT solutions and 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.