Why the Cogstate share price tumbled today

Cogstate Limited (ASX: CGS) disappointed investors today.

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This morning Cogstate Limited (ASX: HSN) reported its half-year results for the period ending December 31 2018. Below is a summary of the results with comparisons to the prior corresponding half year.

  • Net loss before tax of $2.8m
  • Net loss of $1.6m before non-recurring restructuring costs
  • Revenue of $11.1m, compared to $13.4m
  • EBITDA loss of $2.6m, down 1,049%
  • For second half of fiscal 2019 forecasting net loss between $1.5m to $2m
  • Cash balance of $4.1m
  • Has entered into a $2m debt facility that with cash balance is expected to meet forecast cash requirements of business

The CogState share price is down 26% to 35 cents on the back of what is a poor looking report with the human cognition testing and clinical trials services business facing a long road back to win investor confidence.

The poor result was blamed on a number of factors including the unexpected cancelling of clinical trials, and lower than forecast new sales contracts.

CogState will need to turn around performance reasonably quickly as a net debt position is unlikely to impress either investors or its bankers for too long.

Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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