LONDON (ShareCast) - (Sharecast News) - Cambridge Nutritional Science reported lower first-half revenue but stronger margins on Monday, as the diagnostics company restructured its sales and marketing teams to focus on long-term growth.
Revenue for the six months ended 30 September fell to £3.9m from £4.1m a year earlier, while gross margin improved to 67.7% from 65.4%, driven by production efficiencies and product mix.

Adjusted EBITDA was £0.1m, down from £0.2m, and the company recorded a pre-tax loss of £0.4m compared with £0.2m in the prior-year period.

Cash at the half-year stood at £3.6m, down from £4.5m.

Operationally, the company reported strong productivity in its laboratory division, with CNS Lab sales rising 8% year on year and FoodPrint testing yields continuing to improve.

The AIM-traded firm said margin gains reflected higher productivity and efficiency, reinforcing its focus on operational performance.

CNS said it now expected full-year sales to be lower than last year, citing longer-than-expected sales cycles and weaker demand in mainland Europe.

The company added that its US laboratories were taking longer to commercialise FoodPrint, though it was "seeing encouraging signs".

Management said CNS remained well funded to pursue strategic initiatives, including the development of IVDR-compliant products and the new Gut Detective diagnostic offering.

The firm said it had restructured its sales team to separate customer service, acquisition and customer success functions, allowing greater focus on signing new distributors and expanding sales from existing clients.

"The first half of this year has been frustrating," said chair Carolyn Rand.

"We have seen some regions showing good growth, particularly where we are closer to the end user, whilst other key areas have not achieved their budget.

"We have therefore implemented a restructure of the sales teams to ensure more focus is given to understand the markets more deeply and deliver on customer needs and demands."

Rand said that would "take a little time to embed", so the company did not expect the second half to show any significant improvements.

"The positive news is that despite lower sales we have continued to grow our gross margin by another 2.3% in the first half and that profitability in the business continues at the adjusted EBITDA level, demonstrating the excellent work laying the foundations in these areas over the last few years.

"We remain confident in the long term future of CNSL as the new sales team structure beds in and starts to deliver."

At 1155 GMT, shares in Cambridge Nutritional Sciences were down 6.6% at 2.48p.

Reporting by Josh White for Sharecast.com.

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