Cambridge Cognition Holdings plc (LON:COG) Chief Executive Officer Matthew Stork caught up with DirectorsTalk for an exclusive interview to discuss highlights from interim results, main drivers to the increased order book, how the acquisitions are progressing, debt funding and the outlook for this year and 2024.
Q1: Matthew, interim results have been announced today. Could you just take us through the highlights?
A1: Cambridge Cognition reported a very positive first half with a contracted order book up to nearly £20 million, orders up 5% on the preceding period and revenues just ahead of last year. It’s been difficult trading conditions, we’re seeing some improvements now.
In the first half we’ve had really good progress, you may well know that we made two acquisitions, one at the end of last year and one right at the beginning of this year. We’ve integrated those, reorganised the business as well, reduced costs substantially while continuing to grow our sales pipeline and deliver developments.
So, we’re in a good position for the second half and really looking forward to continuing to grow the business and move into profitability.
Q2: You mentioned an increased order book to £19.9 million for the company, what were the main drivers?
A2: Well, the biggest driver is that we’re now able to sell the combined solutions from the three companies, so touchscreen, cognitive assessments and eCOA from Cambridge Cognition, the voice-based assessments for the Winterlight Labs business that we acquired at the start of this year, and also the decentralised clinical trial solutions and that’s really helped drive that and move it forward.
Q3: You mentioned the two acquisitions of Clinpal and Winterlight Labs in late 2022 and January 2023, can we have an update on how they’re progressing and the impact that they’re having on the company?
A3: Right at the start of this year of course we were still completing the acquisition of Winterlight and then our objective for the first half was to integrate the acquisitions and gain early wins and we have done just that.
So, commercially, we’ve combined the sales teams, that was the first thing we did. We completed targeted cross-selling and joint promotion, particularly at conferences where all three companies or two of the three have been previously. We’ve integrated the businesses fully, so we’ve got one organisational structure, merging the teams for example, one product team, one sales team as I already discussed, one development team and so on.
At the same time, we’ve completed developments of new solutions for both Winterlight and Clinpal, expanding the breadth of the offering further as was planned when we made the acquisitions.
The impact really is considerable, in the short term alone we’re seeing numerous conversations with customers about combined offerings, which will help grow orders and revenues and we’re also continuing to position Cambridge Cognition as a leader in the space.
Moreover, we are really pleased with our new team members and really delighted, culturally the teams fit really well together and we’ve got much deeper expertise in the broader field now, so really good progress.
Q4: The company also announced a debt funding today, could you just talk us through the reasoning behind the funding and what it’ll actually allow the company to do?
A4: We announced a £3 million pound secured term loan to provide the company with additional working capital and to support continued investment in product development and solution integration.
Q5: Just thinking about going forward, how would you describe the outlook for the company for 2023 and next year?
A5: The outlook’s really really good for us in that, while we saw trading conditions being difficult late in 2022 and at the start of ‘23, we’ve seen a renewed level of engagement from major pharmaceutical companies, particularly with high level of interest in our solutions. We’d expect further improvement in the future, particularly as interest rates drop and investment flows more freely into the smaller biotech sectors.
We’ve got a really good healthy pipeline of opportunities now and that sizeable, contracted order book so we’re looking forward to more revenue growth. Having reduced costs over the first half, we’re in a good position to move towards profitability this half and further profitability next year. We’re really excited about the future, it’s a dynamic area and we’re looking forward to 2024 and beyond.
