Instem, the AIM-listed provider of IT applications to the early development healthcare market, has registered FY12 revenues a tad below those achieved in FY11. The picture would have been worse had it not closed several last minute deals in December 2012. For the year, total revenue was £10.7m, down very slightly from £10.8m in FY11.
EBITDA (adjusted) margin was 18.5% in FY11 but down to 14.9% in FY12. One of the most significant costs for the company is (not surprisingly) the salary bill. However, this is likely to reduce in the current year due to a reduction in R&D requirements relating to its flagship product, Provantis 9. The current version was launched in July 2012 – following several years of investment (equating to “multiple millions”). Provantis 9 accounts for 80% of the company’s revenue and CEO, Phil Reason, expects R&D costs to reduce “by a third”.
Management are relatively optimistic for the coming year, but expect a similar pattern with contracts more likely to come in towards the end of the calendar year. Instem expects both revenue and margin to grow in FY13. Shares are down 3.5% this morning.