INS.L Regulatory News (INS)

8 January 2014

Instem plc("Instem")

Trading Update and Notice of Results

Instem plc (AIM: INS), a leading provider of IT solutions to the global early development healthcare market, announces its pre close trading update for the year ended 31 December 2013.

At the time of our update on 22 November 2013 when we acquired Perceptive Instruments Limited, we noted that the outcome for the full year would rely on the placing of certain anticipated contracts. Several of these contracts were secured, however contractual discussions regarding a single perpetual licence with one large potential client remained ongoing at the year end and consequently results for the year ended 31 December 2013 are expected to be below market forecasts with profitability in line with the year ended 31 December 2012. Discussions with the client are on-going and, if successfully concluded, will increase the Board's expectations for 2014.

Overall order intake in the final quarter of the year was encouraging, with a mix of perpetual licence business and four additional Software-as-a-Service (SaaS) deals, the latter making negligible financial contribution in 2013 but will enhance performance in later years. We see the trend in SaaS sales as encouraging and going forward will help to balance the impact of single perpetual licence sales and improve future visibility.

High renewal rates for recurring revenue and receipts from new business ensure Instem's balance sheet remains strong, with net cash ahead of market expectations at £2.0m at 31 December 2013 (31 December 2012: £2.2m) after investing £1.7m on acquisitions during 2013.

Contracts signed were across all of Instem's product lines, including:

· Two of the SaaS deals being with top 10 pharma companies

· Further momentum for the growing Centrus product suite

· Strong order intake for our recently acquired clinical business

We are also pleased to report that following a strong period of trading, the first tranche of deferred consideration in respect of the acquisition of Logos Technologies is due at the end of January 2014, comprising £200,000 of cash and £250,000 in ordinary shares in Instem.

Instem will announce preliminary results for the year ended 31 December 2013 on 26 March 2014.

Phil Reason, CEO of Instem plc, commented: "Whilst it is disappointing that results for 2013 are expected to be below expectations due to the extended contract negotiations noted above, overall the year has seen Instem significantly enhance its market position. The new SaaS deals are particularly pleasing as we are increasingly steering clients and prospects in that direction.With the benefit of a full year's contribution from both the Logos Technologies and more recent Perceptive Instruments acquisitions, we look forward with confidence to 2014."

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About Instem plc

Instem is a leading supplier of IT applications to the early development healthcare market delivering compelling solutions for data collection, management and analysis across the R&D continuum. Instem applications are used by customers worldwide, meeting the rapidly expanding needs of life science and healthcare organisations for data-driven decision making leading to safer, more effective products.

Instem's established portfolio of software solutions increases client productivity in drug development by automating study-related processes and enabling high integrity data sharing. The product suite also offers the unique ability to generate new knowledge through the extraction and harmonisation of actionable scientific information.

Instem supports its clients through full service offices in the United States, United Kingdom and China with additional locations in India and a full service distributor based in Japan.

To learn more about Instem solutions and its mission, please visit www.instem.com or its investor centre http://investors.instem.com/