Instem has this morning provided an update on trading for the year to December 2014 – the result for the full year is in line with market expectations (and we assume our estimates). A good level of order intake has resulted in 2015 having the highest-ever opening backlog. In conjunction with the FDA’s recent (December 2014) timeline announcement for the SEND data standard, this suggests that momentum may be about to return to a number of market areas
Instem’s update suggests that 2014 finished as expected, with the major contract from WIL Research contributing to a good end to the year. Given that the business had previously been experiencing what we described as “headwinds”, this is a pleasing result.
In addition to the WIL win, and the decent year-end performance, today’s announcement includes the statement that the SEND product (Centrus-submit) has been purchased by another top-20 pharma client. This suggests that the FDA’s recent ruling on the timing of SEND implementation is beginning to catalyse activity in this area. We will publish a fuller note on SEND in coming weeks, and continue to believe that this market development offers major potential, not just for the sale of Centrus-submit, but also for other software and services delivery.
We await the detail of FY14 delivery in the full-year results, due on 31 March, at which time we will gain a better understanding of the makeup of recent performance across the different business lines.
The current level of activity and optimism apparent in the statement, aligned with positive market dynamics, suggest a growing level of confidence in medium and long-term forecasts. This should allow the group to invest with confidence for both organic and potentially acquisition-driven growth.
For now, we take significant comfort from the overall performance of the group, and look forward to developments, both regarding SEND and otherwise, across the remainder of 2015 and beyond.