Instem shares saw an uptick of 0.3% to 702.5p in late afternoon trading on Thursday after the group reported a strong trading update for HY1 2022, including a combined and inorganic revenue growth of approximately 39% to £27.6 million against £19.8 million year-on-year.
Instem confirmed its recurring software revenue rose over 60% over the financial term.
The company said its finalised acquisitions of The Edge Software Consultancy, d-Wise Technologies and PDS Pathology Data Systems over the last financial year started contributing fully for the first time over HY1.
The IT solutions firm added its operating profit climb in the period was anticipated to be at a lower rate than overall revenue growth as a result of inflationary pressures, which led to a higher level of remuneration for staff across the firm.
Instem commented the inflationary costs would be partially mitigated by the price increases announced in late April 2022.
The firm highlighted a strong balance sheet with closing cash at 30 June 2022 of £10.3 million, with available flexibility to execute acquisition opportunities as they arise.
Instem confirmed it was on track to meet FY 2022 market expectations on the back of a scalable platform and significant opportunities on the horizon.
“Consistent delivery is key and we are delighted with the continued successes of our organic and acquisitive growth strategies,” said Instem CEO Phil Reason.
“Visibility for H2 has improved through increased recurring revenue, the value of the order backlog for professional and outsourced services and reduced growth in staff numbers which in turn reflects a higher gross margin revenue mix.”