Total Brain (ASX:TTB) is the developer of a neuroscience-based mental health monitoring and support platform powered by the largest standardised neuroscientific database in the world formed over almost two decades and with >$50m of R&D funding. The company has reported H1 FY22 revenues of $5.41m, its best-ever half-year result and an increase of 171% on the previous corresponding period (pcp). TTB reported an underlying EBITDA loss of $1.35m, a significant improvement on the $3.78m loss reported in H1 FY21 and better than our forecast for a $3.9m EBITDA loss. Underlying NPAT was a loss of $2.23m, compared with a $3.91m net loss in the pcp. The jump in revenues was driven by recent licensing deals for its iSPOT-D (International Study to Predict Optimised Treatment for Depression) in the precision medicine segment, which yielded $3m in revenues, as well as a 14.6% increase in revenues from its population health segment. Costs for the half were 9.3% ahead of pcp and 5.3% ahead of our forecasts, chiefly driven by increased investment in human capital. We have upgraded our FY22 revenue forecasts to reflect the H1 result and maintained our cost expectations, mindful of the company’s target to reduce 25% of its cost base on an annualised basis in this half. Our base-case DCF valuation has increased to $0.86/share (previously $0.77/share). In our view, continued evidence that TTB is gaining traction and generating revenue from its target segments should underpin the share price.
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Best-ever half-year revenues
- Published:
03 Mar 2022 -
Author:
Finola Burke -
Pages:
8
Total Brain (ASX:TTB) is the developer of a neuroscience-based mental health monitoring and support platform powered by the largest standardised neuroscientific database in the world formed over almost two decades and with >$50m of R&D funding. The company has reported H1 FY22 revenues of $5.41m, its best-ever half-year result and an increase of 171% on the previous corresponding period (pcp). TTB reported an underlying EBITDA loss of $1.35m, a significant improvement on the $3.78m loss reported in H1 FY21 and better than our forecast for a $3.9m EBITDA loss. Underlying NPAT was a loss of $2.23m, compared with a $3.91m net loss in the pcp. The jump in revenues was driven by recent licensing deals for its iSPOT-D (International Study to Predict Optimised Treatment for Depression) in the precision medicine segment, which yielded $3m in revenues, as well as a 14.6% increase in revenues from its population health segment. Costs for the half were 9.3% ahead of pcp and 5.3% ahead of our forecasts, chiefly driven by increased investment in human capital. We have upgraded our FY22 revenue forecasts to reflect the H1 result and maintained our cost expectations, mindful of the company’s target to reduce 25% of its cost base on an annualised basis in this half. Our base-case DCF valuation has increased to $0.86/share (previously $0.77/share). In our view, continued evidence that TTB is gaining traction and generating revenue from its target segments should underpin the share price.