Cambridge Nutritional Sciences revenue falls 16% as losses widen

Cambridge Nutritional Sciences PLC (AIM: CNSL) has reported a difficult set of full-year results, with weaker international demand pushing revenue down and turning the previous year's adjusted profit into a loss.

The specialist medical diagnostics company also recorded a £3.0 million goodwill impairment, contributing to a statutory loss after tax of £5.8 million. Cash and deposits fell from £4.9 million to £2.6 million.

There are some brighter details beneath those headlines. Gross margin improved, manufacturing yields increased and testing activity grew in the UK and India. Management has also reduced the UK cost base and reorganised its sales operation.

The question for investors is whether those operational gains can now translate into revenue growth before the smaller cash cushion becomes a more pressing concern.

Cambridge Nutritional Sciences' key FY2026 figures

Metric	FY2026	FY2025	Change
Revenue	£7.0 million	£8.3 million	Down 16.3%
Gross margin	67.8%	65.3%	Improved
Adjusted EBITDA	£0.4 million loss	£0.4 million profit	Down £0.8 million
Statutory pre-tax result	£4.4 million loss	£1.6 million profit	Swing to loss
Loss after tax	£5.8 million	£1.6 million profit	Swing to loss
Cash and deposits	£2.6 million	£4.9 million	Down £2.3 million
Basic earnings per share	2.4p loss	0.7p profit	Swing to loss

Adjusted EBITDA means earnings before interest, tax, depreciation and amortisation, excluding exceptional items and share-based payment charges. It is intended to show underlying trading performance, although it is not a statutory accounting measure.

Investors can read the original company announcement for the complete audited accounts.

Why revenue fell

Revenue declined by 16.3% to £7.0 million, reflecting delayed purchasing and marketing decisions among distributors and customers facing difficult economic conditions.

Management also pointed to lost clients at distributors in the Americas and Europe, lower revenue from Asia and the Far East, geopolitical conflict, supply-chain disruption and inflation.

Performance varied considerably by product:

Revenue stream	FY2026	FY2025	Change
FoodPrint	£4.3 million	£4.8 million	Down 12%
Food Detective	£1.0 million	£1.8 million	Down 46%
CNSLab services	£1.7 million	£1.6 million	Up 2%
Other	£0.1 million	£0.1 million	Down 3%

Food Detective was the weakest area, with revenue almost halving. FoodPrint, which remains the largest product category, also contracted.

Geographically, India was the clearest success, with revenue growing 23% in Sterling terms and 35% in rupee terms. UK revenue was broadly stable at £1.7 million, while demand for testing through CNSLab increased by 11%.

That was outweighed by declines of 33% in the Americas, 24% in Africa and the Middle East, and 24% in Asia and the Far East.

These results expand on themes already visible in the company's earlier FY2026 trading update, where lower revenue was accompanied by improving margins.

Better margins could matter if sales recover

Gross margin increased from 65.3% to 67.8%, supported by manufacturing improvements, reduced costs and a greater contribution from higher-margin FoodPrint products.

Production yields rose from 52.3% to 64.7%. In straightforward terms, a greater proportion of manufacturing output is becoming saleable product rather than waste, increasing capacity and reducing unit costs.

The company said scrap costs were reduced by 9%, while labour hours were optimised across manufacturing and laboratory operations. Administrative expenses before exceptional items fell to £4.1 million from £4.7 million.

These are meaningful improvements. If revenue grows, a higher gross margin and lower fixed-cost base should allow more of each additional pound of sales to reach earnings. That is the operational leverage management is targeting.

For now, though, the sales decline was too large for those efficiencies to prevent adjusted EBITDA moving from a £0.4 million profit to a £0.4 million loss.

Restructuring leaves a leaner operation

Cambridge Nutritional Sciences completed a UK restructuring programme in March 2026. UK full-time equivalent headcount fell to 58 from 76 at the start of the financial year, while the Board voluntarily accepted a 10% salary reduction.

Management expects the associated cost savings to become visible during the current financial year.

The sales and marketing teams were also reorganised, with a new Customer Success team created to provide partners with technical, marketing and nutritional support. A new Regional Sales Manager joined in April 2026, followed by Global Sales Director Erik Melgaard Pedersen in June.

The company hopes the revised structure will allow sales staff to focus more heavily on converting opportunities in Europe, India and the US. However, the size and value of the sales pipeline were not disclosed, so investors cannot yet assess how quickly it might affect revenue.

One positive commercial development was a new five-year agreement with the company's UK white-label partner. Its financial value was not disclosed.

The statutory loss needs context

The £5.8 million loss after tax was significantly affected by non-cash accounting adjustments.

The largest was a £3.0 million goodwill impairment, which reduced the carrying value of goodwill to nil. An impairment recognises that an asset is no longer expected to generate enough value to support its previous balance-sheet valuation. It does not represent a new cash payment, but it reflects weaker expectations used in assessing the business.

The company also derecognised a £1.4 million deferred tax asset. Management said this does not prevent historical losses from being used to offset future profits, but it contributed to total equity falling from £11.4 million to £5.7 million.

There was also a £0.3 million bad debt provision relating to products shipped to a distributor in the Americas. Management intends to continue pursuing recovery of the outstanding amount.

Cash and going concern sensitivity

Cash and deposits fell by £2.3 million to £2.6 million. The group recorded a £1.2 million operating cash outflow and spent £0.7 million on investing activities, including equipment and intangible assets.

The balance sheet had no short-term borrowings at year-end and net current assets stood at £4.0 million. Management believes resources are sufficient to fund the IVDR regulatory project and future growth.

The directors adopted the going concern basis through to 31 March 2028. Their reverse stress test indicated that revenue could fall by a further 15% and gross margin deteriorate by an additional 15% before forecast cash resources were exhausted, after considering mitigating actions.

This is not management's forecast. It does, however, show why future trading matters. Cambridge Nutritional Sciences retains cash and has no reported short-term borrowings, but its capacity to absorb a prolonged period of weaker sales is not unlimited.

What investors should watch next

The main test is revenue conversion. Improved margins, higher yields and lower overheads are helpful, but they need to be combined with stabilising international demand.

Investors following Cambridge Nutritional Sciences PLC should watch for:

• Evidence that the new sales leadership is converting the pipeline
• Continued growth in UK testing and India
• Stabilisation in FoodPrint and Food Detective revenue
• Cash performance following the restructuring
• Recovery of the £0.3 million distributor receivable
• Progress towards IVDR completion in 2027

The company enters FY2027 with a leaner operation and demonstrably better production efficiency. However, the revenue decline, adjusted loss and reduced cash balance mean execution now carries more weight. Operational groundwork has been laid, but investors still need evidence that it can produce sustainable sales growth and a return to profitability.