Cambridge Cognition shares tumble as revenues fall short of expectations

Neuroscience technology developer Cambridge Cognition has seen revenues fall short of expectations and losses widen as a result of a switch in accounting practices.

For the 2018 trading year, Cambridge adopted IFRS15, the new financial standard on revenue recognition, which it said had caused a "short-term adverse impact" to its financial performance.

The AIM-listed group expects revenues to be roughly £6m - shy of both the £7m it would've reported if not for the change and the £6.7m recorded a year earlier.

Despite its "improved sales order intake", Cambridge anticipates to turn in a loss of £1.5m for the year, a 400% widening on the previous year, as a result of the lower revenue.

"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," said Cambridge.

Looking forward, the group said it had a number of "materially significant contracts" waiting to be signed in the first quarter of its 2019 trading year and an order book of approximately £5.6m, an increase of 40% year-on-year.

Cambridge will post its full-year results on 21 March 2019.

As of 0850 GMT, Cambridge shares had tumbled 31.54% to 68.80p.