Instem, 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).
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.
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.