Technology solutions provider to life sciences company Instem (INS:AIM) reported first-half revenues to 30 June up 20% to £14 million and adjusted pre-tax profit of £2.1 million compared with £0.8 million last year. The shares were unmoved at 515p.
Organic growth of 12% was in line with the company’s medium term target while recurring revenues grew 20% to reach £8.4 million, representing 60% of total sales.
The mature Study Management and data collection division, which represents around half of the business, saw a slight fall in revenues due to some delays in new business.
However, the company won a contract with a ‘prominent South Korean’ non-clinical contract research organisation (CRO), worth around $1 million, the majority of which will be recognised in the second half.
The Informatics division performed very well from a low base increasing revenues to £1.7 million from £0.4 million. Management see ‘tremendous growth potential’ in augmented intelligence and machine learning to provide predictive analytics solutions for clients wanting to leverage huge volumes of historical data.
The Regulatory Solutions division grew revenues by 33% to £5.3 million, driven by demand from the US Federal Drug Agency (FDA) and a backlog of mandatory conversion reports, underpinning demand for Instem’s technology.
M&A AMBITIONS
A key leg of Instem’s growth strategy is to acquire businesses to consolidate a highly fragmented market as well as enter adjacent markets. The company raised a net £15 million in July 20 to provide funds for existing deals in the pipeline one of which is now going through due diligence.
Research from Pharma Intelligence showed a record number of new drugs in the global pharmaceutical research and development pipeline, which provides a strong backdrop for Instem to build on the current momentum into the second half.
