(Alliance News) - Instem PLC on Tuesday said it expects revenue to rise in the first half of 2023, driven by recurring software revenue growth.
The Staffordshire, England-based life science software company said it expects first half revenue to be around GBP29.7 million, up 10% from GBP27.0 million a year earlier.
Instem also noted that recurring software revenue grew by 27%. This excludes Samarind Ltd, which was sold in April and will be classified as a discontinued operation in the upcoming interim results statement.
Annual recurring revenue at July 1 was running around GBP41 million, up 28% from a rate of GBP32 million a year earlier.
Instem said overall performance was in line with management expectations, noting its balance sheet as remaining "strong" and "retaining the flexibility to execute on acquisition opportunities as they arise".
Instem expects revenue growth to be weighted to the second half, as it was in 2022, benefitting from increased software recurring revenue, predominantly from new business already secured and the "reliable" renewal of contracts with current clients.
It added that the board is "currently appraising a healthy pipeline" of acquisition opportunities "progressed to various stages".
"The company remains optimistic about the growth potential having positioned itself to provide solutions across the entire drug discovery and development life cycle," Instem said.
"The in silico growth opportunity, in particular, is expected to increase as the company addresses the pressing market need to reduce the cost and time of life sciences research and development, leveraging the integration of 'Toxhub' data and technology into its existing Centrus suite."
Chief Executive Officer Phil Reason added: "We are delighted with the continued momentum we are seeing, advocating our acquisition strategy and highlighting our standing across the drug research and development lifecycle. We believe there is significant potential to continue driving value and look forward to building on the company's growing market reach."
Shares in Instem were down 3.7% to 597.00 pence each in London on Tuesday morning.
By Greg Rosenvinge, Alliance News reporter
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