TIDMAFRN
RNS Number : 1071E
Aferian PLC
28 June 2023
28 June 2023
AFERIAN PLC
("Aferian", the "Company" or the "Group")
Trading Update
- Continued strategic focus on software and services revenue growth in 24i
in fast growing video streaming market
- Focus on higher quality, higher margin streaming devices and
device management software in Amino
Aferian plc (LSE AIM: AFRN), the B2B video streaming solutions
company, announces a trading update for the six months ended 31 May
2023 (the "period"). Trading for the period was in line with the
trading and outlook communicated on the 31 May 2023.
Revenue performance
The Group has continued to make encouraging progress in
improving the quality of earnings and enhancing revenue visibility.
Aferian expects to report an improved exit run rate Annual
Recurring Revenue ("ARR") of c.$19.0m (31 May 2022: $15.8m),
representing 20% growth on the prior year, or 21% on a constant
currency basis. Higher margin software and services revenue for the
period is expected to be c.$13.7m (H1 2022: $12.0m), an increase of
14% versus the prior year, or 16% on a constant currency basis.
Device revenues in the first half are expected to be c.$9.4m,
representing a decrease of 71% year-on-year.
Consequently, Group revenue for the period is expected to be
c.$23.1m (H1 2022: $44.5m).
Cost reduction actions
As previously communicated, management actions taken in February
and June 2023 have reduced the Group's annualised cost base,
including capital expenditure, by c.$5m and a further c.$3m
respectively. This has saved a total of $3.4m operating costs and
$1.5m capital expenditure in the current financial year.
Balance sheet
Following proactive investment made in inventory within the
Amino business to de-risk supply chain delays, the Group's
inventory balance at 31 May 2023 was $8.6m (31 May 2022: $4.0m).
Net debt at 31 May 2023 was $13.0m (31 May 2022: $7.8m net cash).
Net debt is expected to reduce over the remainder of the current
financial year as inventory levels reduce. The Group remains in
compliance with its loan facilities covenants.
Outlook
For the full year ended 30 November 2023, 90% of management's
forecast Group revenues are contracted. The remaining 10% is
covered by a well-developed sales pipeline. Combined with the cost
reduction actions taken above, this provides the Board with
confidence in the expected outturn for the full year in which the
Group is expected to generate a positive material EBITDA.
The Group's strategy continues to be growing software and
services revenue in the fast-growing video streaming market through
the 24i division's streaming video platforms. Demand here remains
strong and the 24i management team are focused on accelerating
profitability in the second half of the financial year and
beyond.
The Amino division, which connects Pay TV to streaming services,
will now focus on higher quality, higher margin streaming devices
which can also be bundled with its SaaS device management platform.
This SaaS device management platform is also integrated with 3(rd)
party devices and sold on a standalone basis. With encouraging
initial traction, the Group will also look to continue to grow its
digital signage business.
At the Group level, the Board anticipates full year software and
services revenue growth of c.10% to 15% in this financial year. As
we move in to FY2024, the 24i business and management team will
focus primarily on the plan to deliver enhanced profitability and
cash generation.
Devices revenue in H2 2023 is expected to be higher than H1 2023
and this recovery is expected to continue in FY 2024 as inventory
levels continue to normalise within the supply chain.
Update on interim results announcement date
The Group expects to report its interim results for the six
months ended 31 May 2023 in August 2023.
-ENDS-
For further information please contact:
Aferian plc +44 (0)1954 234100
Mark Wells, Chairman
Donald McGarva, Chief Executive Officer
Mark Carlisle, Chief Financial Officer
Investec bank plc +44 (0)20 7597 5970
David Anderson / Patrick Robb / Nick Prowting / Cameron MacRitchie
FTI Consulting (Financial communications) +44 (0)20 3727 1000
Matt Dixon / Emma Hall / Tom Blundell / Aisha Hamilton
About Aferian plc
Aferian plc (AIM: AFRN) is a B2B video streaming solutions
company. Our end-to-end solutions bring live and on-demand video to
every kind of screen. We create the forward-thinking solutions that
our customers need to drive subscriber engagement, audience
satisfaction, and revenue growth.
It is our belief that successful media companies and services
will be those that are most consumer-centric, data driven and
flexible to change. We focus on innovating technologies that enable
our customers stay ahead of evolving viewer demand by providing
smarter, more cost-effective ways of delivering end-to-end modern
TV and video experiences to consumers. By anticipating
technological and behavioural audience trends, our software
solutions empower our customers to heighten viewer enjoyment, drive
growth in audience share and ultimately their profitability.
Aferian plc has two operating companies: 24i, which focusses on
streaming video experiences, and Amino, which connects Pay TV to
streaming services. Our two complementary companies combine their
products and services to create solutions which ensure that people
can consume TV and video how and when they want it. Our solutions
deliver modern TV and video experiences every day to millions of
viewers globally, via our growing global customer base of over 500
service providers.
Aferian plc is traded on the London Stock Exchange's AIM stock
market (AIM: symbol AFRN). Headquartered in Cambridge, UK, the
Company has over 300 staff located in 11 offices, including major
European cities as Amsterdam, Helsinki, Copenhagen and Brno, as
well as in San Francisco and Hong Kong. For more information,
please visit www.aferian.com .
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END
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