Ending months of indecision, Instem Plc has chosen not to head for London’s Alternative Investment Market when the Unlisted Securities Market closes its doors. Instead the company will apply to the Official List. Many of the company’s private shareholders hold their shares in Personal Equity Plans, which are invalid on AIM. Although chairman and chief executive David Gare said he was unsure of the percentage of shares held in PEPs, the board felt it would be unwise for the company to force private investors to sell their holdings when it met all the criteria for a full listing. The decision, which was delivered along with the group’s interim results and news of an acquisition, is hoped to restore confidence and stability in company, but after an erratic morning, shares had slipped two pence to 182 pence by mid afternoon yesterday. Pre-tax profits at the Stone, UK-based firm fell 30% to 402,000 pounds during the half on revenue that was down 4% at 10.7m pounds. Instem said the consequences of the merger and acquisition activities in the international pharmaceutical industry had continued to affect the performance of its Laboratory Systems business adversely – and has decided that if it can’t beat them, it may as well follow s uit. Yesterday Instem announced the acquisition of Staffordshire neighbour Apoloco Ltd. The privately held software house has about 30 staff and specializes in systems for companies in the pharmaceutical and agrochemical industries. For the year to June 30 it achieved pre-tax profits of 140,000 pounds on revenue of 1.6m pounds. Gare said it was a straightforward merger. Apoloco’s products complemented those of its Laboratory Systems business. Under a newly created Instem-Apoloco division the company said both product range and customer base would be increased and business presence in the US would receive a boost. In the short term Gare said there are no plans to reduce head-count, but at some point both sites would be brought under one roof. The total consideration is 1.4m pounds, about 1m pounds of which will be cash, the remainder in shares. Both Instem’s computer systems business IMACS Information Management and Control Systems and its Electronics Manufacturing division performed well in the year. Gare said it received increased orders from electricity companies during the half, but the problem with predicting what will happen across the company as a whole is the lumpy nature of its contracts. Even Gare was reticent to provide any kind of forcast for the year as a whole. We’ll just take one step at a time. We’ll get Apoloco bedded in and a full listing before the end of the year. Dividend for the half was flat at 1.5p.
