Instem plc
Visit Instem plc
Description
Instem sells software products to a variety of customer types involved in the early drug development segment of the healthcare market, and to other life sciences R&D organizations.
Company Presentations
Our view
The group came to market in 2010 with a compelling story based on dominance of a niche market, good recurring revenues and strong cash generation. Instem, along with many other pharma services companies, is weathering an unforeseen market slowdown. Excluding the Clinical business, performance remains solid, particularly in pre-clinical and the SEND product areas. Management has taken decisive actions to address the weakness in Clinical and a further positive is the emerging opportunity to deliver technology-enabled outsourced services.
Financial Summary
Year end: December (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Revenue | 22.7 | 25.7 | 28.8 | 30.9 | 32.7 |
| Adj EBITDA | 4.1 | 4.9 | 5.8 | 6.3 | 7.0 |
| Fully adj PBT | 3.0 | 3.7 | 4.1 | 4.3 | 4.8 |
| Fully adj EPS (p) | 15.5 | 18.4 | 17.3 | 16.3 | 18.1 |
Profit & Loss
Year end: December (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Revenue | 22.7 | 25.7 | 28.8 | 30.9 | 32.7 |
| Adj EBITDA | 4.1 | 4.9 | 5.8 | 6.3 | 7.0 |
| Adj EBIT | 3.2 | 4.0 | 4.3 | 4.5 | 5.0 |
| Reported PBT | 1.7 | (0.9) | 2.8 | 3.1 | 3.6 |
| Fully adj PBT | 3.0 | 3.7 | 4.1 | 4.3 | 4.8 |
| NOPAT | 2.4 | 3.4 | 3.5 | 3.6 | 4.0 |
| Reported EPS (p) | 8.7 | (5.4) | 11.4 | 10.9 | 12.9 |
| Fully adj EPS (p) | 15.5 | 18.4 | 17.3 | 16.3 | 18.1 |
| Dividend per share (p) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
Cash Flow & Balance Sheet
Year end: December (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Operating cash flow | 1.8 | 5.7 | 8.9 | 3.2 | 3.5 |
| Free Cash flow | 0.6 | 4.1 | 6.6 | 1.8 | 3.0 |
| FCF per share (p) | 3.3 | 23.8 | 34.3 | 8.4 | 20.2 |
| Acquisitions | (0.2) | (1.3) | (0.3) | (0.3) | (0.4) |
| Disposals | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Capex | (1.6) | (1.4) | (1.4) | (1.4) | (1.4) |
| Shares issued | 0.1 | 0.6 | 15.0 | 0.0 | 0.0 |
| Net cash flow | 0.5 | 2.4 | 22.2 | 0.8 | 2.2 |
| Cash & equivalents | 3.6 | 6.0 | 28.2 | 29.0 | 31.1 |
| Net (Debt)/Cash | 3.6 | 5.1 | 26.7 | 27.8 | 30.3 |
Nav & Returns
Year end: December (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Net asset value | 16.4 | 16.8 | 33.8 | 39.6 | 43.3 |
| NAV/share | 105.1 | 106.1 | 164.8 | 193.3 | 211.5 |
| Net Tangible Asset Value | (1.0) | (1.3) | 19.0 | 24.3 | 26.9 |
| NTAV/share | (6.5) | (8.4) | 119.8 | 118.8 | 131.1 |
| Average equity | 15.1 | 16.6 | 25.3 | 36.7 | 41.5 |
| Post-tax ROE (%) | 9.7% | (5.6%) | 8.7% | 6.3% | 6.6% |
Metrics
Year end: December (£m unless shown)
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Revenue growth | 13.3% | 12.0% | 7.2% | 5.9% | |
| Adj EBITDA growth | 20.0% | 19.8% | 7.8% | 11.4% | |
| Adj EBIT growth | 24.7% | 8.4% | 5.7% | 10.3% | |
| Adj PBT growth | 23.4% | 9.5% | 6.4% | 11.1% | |
| Adj EPS growth | N/A | (6.0%) | (5.7%) | 11.1% | |
| Dividend growth | N/A | N/A | N/A | N/A | |
| Adj EBIT margins | 15.4% | 14.9% | 14.7% | 15.3% |