22nd Jan 2019 12:45
LONDON (Alliance News) - Instem PLC on Tuesday said its three key business areas all contributed positively in 2018, with strong margins and underlying earnings in line with management expectations.
Shares in Instem were up 7.5% at 273.00 pence on Tuesday.
Instem's Data Collection, Regulatory Solutions, and Informatics businesses, were all reported to have "made a positive contribution to the full-year performance".
The life science-focused IT firm said its margins strengthened in the year and that its underlying earnings before interest, taxation, depreciation, and amortization were all in line with the expectations of its management.
As at December 31, Instem's net cash stood at GBP3.6 million and is expected to increase in early 2019 on "delayed payments from a small number of larger pharma customers".
Receipt of these payments is expected to return Instem to "more normal working capital cycles".
The company is working to shift its new and existing clients away from perpetual software licences and onto recurring software-as-a-service subscriptions.
Services relating to SEND, or Standard for the Exchange of Nonclinical Data, were strong for the year and the order value received in the year for such services was multiplied more than five times from 2017.
Instem Chief Executive Phil Reason said: "In addition to a host of new client wins, many existing clients have extended their use of Instem's products and services and, importantly, have transitioned to our [software-as-a-service] solutions. The company looks forward to building on this momentum, particularly for SEND related services, where order backlog and future revenue visibility is continually improving."
Instem has made a cost provision in relation to its historical contract disputes. One of these disputes, which Instem said "does not affect ongoing operations" will be heard by German courts at an initial hearing on Tuesday.
"The company strongly believes that the claim should be dismissed. Notwithstanding this, the cost provision made in 2017 will be maintained in the 2018 accounts," Instem said.
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