Aferian PLC on Wednesday said trading for the recent half year was in line with expectations and showed ‘encouraging progress’ despite revenue falling, and said it has confidence in its full-year outlook.

Aferian is a Cambridge, England-based business to business company providing video streaming solutions.

Shares were down 16% at 12.00 in London on Wednesday morning.

The company said group revenue for the half year ended May 31 is expected to be around $23.1 million, down from $44.5 million the previous year. Aferian said it should report an improved exit run rate annual recurring revenue of around $19.0 million on May 31, up 20% from $15.8 million on the same date in 2022.

Higher margin software and services revenue for the half year is anticipated to be around $13.7 million, up 14% from $12.0 million the prior year. Device revenues are expected to be around $9.4 million, down 71% from $32.5 million.

Aferian said its inventory balance at May 31 was $8.6 million, up from $4.0 million at the same time a year prior. This followed ‘proactive investment’ in inventory within its Amino business, in order to de-risk supply chain delays. Net debt at May 31 was $13.0 million, up from $7.8 million, but Aferian expects this to reduce throughout the rest of the year as inventory levels reduce.

Aferian said 90% of its forecast revenue is contracted for the full year ending November 30, with the group’s ‘well-developed’ sales pipeline covering the rest.

‘Combined with the cost reduction actions taken above, this provides the board with confidence in the expected out-turn for the full year,’ Aferian commented.

Aferian intends to focus on growing software and services revenue for its 24i division and accelerating profitability from the current half year onwards, as well as growing its digital signage business. The Amino division will focus on higher quality and margin streaming devices.

Aferian anticipates between 10% and 15% full-year software and services revenue growth for the 24i business. Devices revenue should start to recover this year, with revenue for the current half year expected to be higher, and continue to re-grow as inventory levels continue to normalise.

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