REG - Aferian PLC - Trading Statement

AferianAnnouncement

28/06/2023 07:00

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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 (http://www.aferian.com/) .

 

 

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