Cambridge Cognition Holdings plc (LON: COG), which develops and markets neuroscience technology to assess brain health, announces a trading update for the year ending 31 December 2018.
For FY2018, the Company adopted IFRS15, the new financial standard on revenue recognition, which has had a short-term adverse impact on the financial performance of the Company. Under IFRS15, revenue for FY2018 is expected to be in the region of £6.0m. Had revenue been reported using the same standard adopted as in the year ending 31 December 2017 (“FY2017”), FY2018 revenue would have been approximately £7.0m. This compares with £6.7m in FY2017.
Improved sales order intake in the year reflects the success achieved in digital health. Total sales order intake is expected to exceed £7.6m, compared with £5.1m in FY2017. In addition there are a number of materially significant contracts expected to be signed in Q1 2019. The order book is expected to be approximately £5.6m at 31 December 2018, an increase of 40% compared to the equivalent value of £4.0m at 31 December 2017.
As a consequence of the lower reported revenue in FY2018, the loss for the year is expected to be £1.5m (2017: loss of £0.3m). With a gross margin of over 90% on revenues impacted by the change to IFRS15, most of the reduction in revenue passes through to the bottom line. In addition, investment in the Company’s digital health portfolio and technology platform has been maintained at planned levels in order to ensure plans for the medium term development of the business and revenue growth remain on track.
Cash balances at year end are expected to be approximately £0.8m, similar to the £0.9m reported at the half year (31 December 2017: £1.9m).
Preliminary results for the year ended 31 December 2018 will be released on 21 March 2019.