Instem PLC (AIM:INS) said its recurring revenue base increased significantly over the first six months of 2022.
This predictable, stable income is highly prized by investors, who ascribe a premium to businesses that can bag repeatable sales.
In the half-year ended June 30, Instem, which develops software used in clinical trials, generated annual recurring revenues of £16mln, up 62% year-on-year.
Total revenues were up 39% to £ 27.6mln while underlying profits (EBITDA) increased 8% to £4.5mln.
Looking ahead, Instem said the market backdrop remained 'favourable’, adding it continued to see high demand for its products and solutions.
Assessing the mix of business going forward, Instem said lower-than-expected consulting and service revenue growth was expected to be offset by stronger advances in the higher-margin software sales.
"Our ability to increase revenues per client, add new clients as well as to increase recurring revenues underpins management's growth expectations in the current period and beyond,” said chief executive Phil Reason.