Instem breaks even after jump in orders

Life sciences software company Instem saw its shares climb on Monday after swinging to a first-half profit on the back of impressive order growth.

For the six months ended 30 June profit before tax came in at £0.1m, up from a loss of £0.6m for the same period last year, after receiving 75 orders for its SEND platform, up from just 23.

Consequently, revenue grew 2% to £10.5m and the AIM-traded company was able to further improve by cutting operating expenses by 7% to £9m, leading to an EBITDA increase of 135% to £1.4m.

At 30 June the company had cash and equivalents of £3.7m, up from £1.2m at the same point last year.

Phil Reason, chief executive of Instem, said: "We are very pleased with the performance of the business during H1 2018, with regulatory requirements delivering the expected significant increase in demand for our technology enabled outsourced services."

Regulatory success throughout the period included a contract estimated to be worth £0.75m for Instem’s worldwide medical products regulatory tracking system Samarind RMS from “a leading Fortune 500 company”.

Positives also came from the Asia-Pacific market, where bookings were up by over 60% as increased Chinese government funding drove more expansive research and development efforts in the region.

"While our strategy remains focused on organic revenue growth, expanding operational gearing and improving positive cashflow, management will continue to consider complementary acquisition targets, including transformational opportunities, to further develop our position as a market leading provider of IT solutions to the global life sciences market," said Reason.

Instem’s shares were up 5.00% at 315.00p at 0901 BST.