Instem Shares Rise As It Signs New Contract, Annual Profit Grows

26th Mar 2018 12:50

LONDON (Alliance News) - IT solutions provider Instem PLC posted on Monday significant profit growth in 2017, with the company likewise started the new year strongly.

Shares in the company were up 20% on Monday at a price of 226.00 pence each.

On a reported basis, pretax profit jumped to GBP797,000 from GBP23,000 in 2016, while adjusted pretax profit was GBP1.9 million, almost treble the prior year's GBP700,000.

Revenue for the year was GBP21.7 million, 19% higher than 2016's figure of GBP18.3 million. Recurring revenue rose 9% to GBP12.8 million, and software-as-a-service revenue climbed 10% to GBP4.4 million.

Instem also announced Monday a standard for the exchange of non-clinical data (SEND) contract extension.

The company said a second "top five" pre-clinical contract research organisation has extended its technology enabled outsourced SEND services contract to more than USD500,000, with an extra USD400,000 contract award, all of which will be booked in 2018.

SEND services orders have grown "strongly" year-on-year with 25 orders booked in the two months to February, compared to just six in the same period a year earlier. Several orders with existing clients have also been extended during the period, Instem said.

This has been mainly driven due to investigational new drug legislation from the US Food & Drug Administration which said studies started after December 17 last year must use the electronic SEND format, and this will result in "considerably" more SEND format submissions.

Instem said it has a "strong" new SEND business pipeline with both the number and value of contracts set to grow.

Restructuring enacted in 2017 as well as new contract wins highlight the potential for revenue growth in 2018, Instem said, and the company has improved visibility for the year. Instem said it is looking forward to "significant" revenue growth, enhanced profitability, and improved quality of earnings.

Chief Executive Phil Reason said: "Instem products and services now address aspects of the entire drug development value chain, from discovery through to market launch, and are currently deployed by over 500 companies, including all of the largest 25 pharmaceutical companies in the world. Management estimate that over 50% of all drugs on the market have been through some part of the Group's platform at some stage of their development."

Reason added: "While new software license revenue was particularly strong in 2017, we also focused on opportunities to increase SaaS revenues and were very pleased to deliver an increase of over 10% during 2017, with both new SaaS customers and existing clients switching from on-premise to SaaS deployment."

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