3rd Jun 2020 11:23
(Alliance News) - Instem PLC on Wednesday swung to a loss for 2019 on impairment charges and despite an increase in revenue.
It also said it has won a contract with South Korean contract research organisation Biotoxtech.
Shares in the provider of IT solutions to the life sciences market were trading 14% higher at 545.00 pence each on Wednesday in London.
For 2019, Instem posted revenue of GBP25.7 million, up 13% year-on-year from GBP22.7 million. Software-as-a-Service revenue increased by 16% to GBP6.4 million while recurring revenue - made up of annual support contracts and SaaS subscriptions - were up 9% to GBP14.9 million.
Pretax loss for the year amounted to GBP900,000 versus a profit of GBP1.7 million in 2018. The loss was attributed to a non-cash impairment provision of GBP3.2 million against goodwill and other intangible assets in the company's Alphadas early phase clinical data collection business.
Looking ahead, Instem said that while the Covid-19 pandemic has resulted in an uncertain outlook, it remains confident in its longer-term prospects as most of its revenue comes from clients whose laboratories are regarded as essential businesses.
"Majority of our revenue comes from clients whose laboratories are regarded as "essential businesses" and therefore remain active, with many working on Covid-19 related vaccines and therapies. Consequently, we have remained very busy, have good visibility over a strong H1 2020 performance and continue to have confidence in the longer term outlook for the business," said Chief Executive Phil Reason.
As at the end of December, the company had cash of GBP6.0 million.
In a separate statement, Instem said said it has won a contract worth USD1 million with Biotoxtech, a non-clinical contract research organisation in South Korea.
Under the contract, Instem will provide preclinical data collection services, analysis and regulatory submissions management to automate and optimize study-related processes at Biotoxtech's research & development facility in South Korea's North Chungcheong province.
Most of contract will be recognised as revenue for 2020 with the remainder expected to be recognised in 2021.
By Ife Taiwo; [email protected]
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