Instem PLC (AIM:INS) reported healthy organic growth in 2021, but said it had trimmed profit expectations for this year due to rising wage costs.
Helped by three sizeable acquisitions (The Edge, d-wise and PDS), the pharma services specialist’s revenues rose by 63% to £46mln in the year to end-December 2021, with underlying profits 25% better at £5mln.
Organic sales were up by 12% on a constant currency basis and by 7% in actual terms.
Phil Reason, chief executive, said the performance reflected the ‘resilience’ of the business especially given the COVID-19 backdrop.
Cash flow was strong, he added, while the trend towards regulatory-backed solutions and growing demand for artificial intelligence in pharma R&D underpinned the business model.
Reason noted that wage inflation has been a feature in recent months, which has prompted it to lower profit expectations ahead of price rises on contract renewals.
“Importantly, we already have good visibility for the current year with growing recurring SaaS and Annual Support revenues and a strong pipeline,” he said.
“The recent acquisitions highlight our ability to add scale and leverage existing customer relationships
“We look forward to advancing further acquisition opportunities after consolidating the 2021 additions."