Cambridge Cognition Holdings plc (AIM: COG), which develops and markets digital solutions to assess brain health, is pleased to announce its preliminary unaudited results for the year ended 31 December 2023 as well as an update on its outlook and current trading.
Financial highlights
· Revenue up 7% to £13.5m (2022: £12.6m).
· Gross profit increased by 8%, with margin improving from 73.9% to 79.9%.
· Adjusted operating loss of £1.1m for the year (2022: £0.1m profit), exceeding market expectations, with profitability achieved in the second half.
· Loss per share 10.1 pence (2022: 1.3 pence loss per share).
· Cash balance of £3.2m at 31 December 2023 (31 December 2022: £8.3m).
· Continued reduction in cost base post year-end.
Corporate and operational highlights
· Successful integration of two acquisitions, Clinpal and Winterlight, diversifying our offering and realising annualised cost synergies in excess of £1.5m.
· Launched a novel automated quality assurance product, AQUA, based on the Winterlight technology.
· Major contract wins included two £2m+ clinical trials and one for £1m combining CANTAB, Winterlight and AQUA.
· Contracted order book of £17.2m at 31 December 2023 providing good visibility over future revenues (2022: £17.6m).
· Approximately 69% of our revenue in 2023 (2022: 68%) from top 10 customers, all of whom have been long-term clients.
· Post-period end, strengthened the sales and marketing teams to drive commercialisation.
Outlook and current trading
The Company’s pipeline of opportunities for the remainder of 2024 is healthy. The first quarter has already seen an increase in contract wins compared to the same period last year, however, with several major contract delays, the majority of new business is expected to occur in the second half of 2024. Depending on the timing of these contract wins, the Company expects full year revenues to be within the range of £13.0m to £15.0m.
With an objective to increase profitability, the Company has reduced its 2024 operating and research and development costs further, resulting in annualised overhead savings in excess of £2m (which were in addition to the 2023 cost synergies noted above). As a result, the Company expects to generate a full year adjusted operating profit at least in line with or ahead of current market expectations.
The Company’s focus in 2024 continues to be commercialising our digital solutions for Central Nervous Systems (“CNS”) clinical trials. It has recently made a step change in commercial capability with four new sales and marketing related hires with deep experience in the clinical trials market. This has already resulted in an increase in new lead generation and the number and value of proposals being submitted.
As a digital health technology provider operating in the large and growing CNS clinical trial market, with a healthy pipeline of opportunities, strengthened commercial team and substantially reduced cost base, the Company looks forward to delivering profitable growth in 2025 and beyond. In the meantime, it continues to manage working capital based on its current expectations.
Management and board changes
The Company has recently broadened its Board with two additional Non-Executive Directors, Nick Rogers and Stuart Gall, post period-end. The Company is already benefitting from their expertise and they are making significant contributions to support future growth.
The Company has also strengthened its commercial leadership. Alex Livingstone-Learmonth joined Cambridge Cognition as Chief Commercial Officer in February, bringing a wealth of sector experience, having worked in the clinical trial technology, services and solutions industry for over 20 years.
In addition, Stephen Symonds, who joined the Company as Chief Financial Officer in April 2022, will step down by 30 September 2024 to join an unrelated business. Stephen has made an important contribution to the leadership and development of the Company and will continue as CFO to support a smooth handover while a successor is recruited. The Board wishes him well in his future endeavours.
Matthew Stork, Chief Executive Officer of Cambridge Cognition, commented:
“With continued revenue growth in 2023, over the last five years we have delivered a CAGR of 20% plus. The start of 2024 has seen year-on-year orders growth and we have stepped-up our commercialisation capability and activities. Pharma companies are investing more in CNS drug development and we anticipate that market conditions will improve throughout 2024. With a focus on commercial growth, tight control of costs and operating in fast-growth markets, we believe the long-term future for Cambridge Cognition is a bright and profitable one.“
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.
