9 Jan 2012 07:00
9 January 2012
Embargoed for 07:00
Instem Life Science Systems plc
("Instem" or the "Company")
Pre-Close Trading Update
Instem (AIM:INS.L), a leading provider of IT applications to the global early development healthcare market, today gives an update on trading for the year ended 31 December 2011.
Trading in the last quarter of 2011 has been mixed. The Company believes that, in its traditional area of Early Development Safety Assessment, it has won most of the contracts placed worldwide. Furthermore, BioWisdom has exceeded our expectations in the period since its acquisition in March 2011. However, as a result of conservative investment policies by contract research organisations, which had already delayed some orders from earlier in the year, some of the expected opportunities that were due for completion in December 2011 have now been delayed into 2012, with the result that revenues failed to meet our plans for the year.
As a consequence, turnover for the year is only expected to be slightly ahead of last year while profits will be materially below market expectations, although tight cost control has meant that the impact has been minimised and profit margins remain strong.
The Company's cash position at the year end also remains strong at £3.3m (2010: £3.3m).
Outlook
While the shortfall in revenues is very disappointing, the Board is encouraged by the strength of recurring revenues and the opening backlog position for 2012. There are a number of contract discussions presently ongoing, some of which had been expected to be concluded in December 2011, but should now complete in the first half of 2012.
The Board believes that its strategies for investment in China and new products, such as Centrus, enhance the overall competitive position of the Company. As a result Provantis is expected to increase its dominance as the leading pre-clinical data management system in global pharmaceutical markets.
Acquisition Strategy
The Board continues to evaluate opportunities to acquire complementary businesses within its fragmented marketplace, seeking to capitalise on the drive by pharmaceutical companies to consolidate the number of their software suppliers, but we only intend to buy businesses on what we consider to be the right terms.
Notice of Results
Instem expects to release its preliminary statement of results for the year to 31 December 2011 on Wednesday 28 March 2012.
For further information, please contact:
Instem plc | +44 (0) 1785 825600 |
Phil Reason, CEO | |
Nigel Goldsmith CFO | |
Brewin Dolphin - Financial Advisor, Broker & NOMAD | +44 (0) 0845 213 4730 |
Mark Brady | |
Sean Wyndham-Quin | |
Threadneedle Communications | +44 (0) 20 7653 9850 |
Caroline Evans-Jones | |
Fiona Conroy | |
About Instem Life Science Systems plc
Instem (AIM:INS.L) is a leading supplier of IT solutions to the early development healthcare market. Instem's study management solutions accelerate drug and chemical development by increasing productivity, automating processes and enhancing practices that lead to safer and more effective drugs.
Instem has over 80 customers in North America, Europe, China, India and Japan, including seven of the top ten pharmaceutical and biotech companies such as GlaxoSmithKline and AstraZeneca. The Company employs over 100 people in six offices in the U.S, UK, and China; with additional resource locations in India and a full service distributor in Japan. It is estimated that approximately half of the world's pre-clinical drug safety data has been collected over the last 20 years via Instem software.
To learn more about Instem please visit the Company's website, www.instem-lss.com, or its investor centre http://investors.instem-lss.com/.