Instem PLC (AIM:INS) said revenue for the first half of 2022 is expected to be 39% higher than a year ago, with the anticipated pressure on profits from inflation partially mitigated by price increases.
Boosted by it being the first reporting period in which its three recent acquisitions of The Edge, d-wise and PDS all contributed fully, combined organic and inorganic revenue for the first six months of the year is expected to be in the region of £27.6mln, up from £19.8mln a year earlier.
The underlying life sciences research and development market was said to be “robust”, with continued demand for its services across the entire drug development value chain, with recurring software revenue growing over 60%.
Inflationary pressure on staff pay means first-half operating profit growth is expected to be at a lower rate than revenue growth, though this was flagged by Instem in its outlook alongside April’s final results.
The company said this will be partially mitigated in 2022 via price increases that were announced in late April.
Cash on the balance sheet stood at £10.3mln at the end of June and the company said it “retains the flexibility to execute on acquisition opportunities as they arise”.
The earn-out periods for the d-wise and The Edge acquisitions have now completed with both targets met in full, it added, with the integration of both deals also now “substantially complete”.
Looking forward, the board expressed confidence that the group will deliver on the board's expectations for the FY22 financial year.