Instem faces setback at year end

(ShareCast News) - Instem, an AIM-listed provider of IT solutions to the global early development healthcare market, reported a "strong" performance for the year ended 31 December 2016 but faced challenges with one of its divisions and contract delays.Revenues for the year increased by approximately 11%, around £18.1m up from £16.3m in 2015, generating adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of £1.2m.This rise in revenues was however offset by the disappointing performance of Instem Clinical and the delay in the signing of certain contracts, worth £1.2m. The group expect the contracts to be signed in the current year.Net cash as at 31 December 2016 was £4.1m compared to £2.2m in the previous period.Instem has continued to secure the majority of the SEND-related product and service contracts placed globally during 2016. The SEND format enables more efficient review of nonclinical data, offering improved data quality, accessibility and predictability.The group has won over 30 SEND-related contracts for its software solutions and technology-enabled outsourced services during the second half of 2016. The largest client was a top 10 global pharmaceutical company which has purchased the company's entire submit solution suite.The group's acquisitions of Samarind and Notocord, completed in May and September 2016, will make a full-year contribution in the current year.Chief executive Phil Reason said: "Although the slowdown in the early phase clinical market and contract delays were disappointing, other parts of the business continued to perform well and we made significant progress during the year. Importantly, the overall market dynamics for our products and services remains positive and we therefore look forward to the next financial year with increasing optimism."The share price rose 5.15% to 235p at 1602 GMT on Monday.