Trading Update, FY22 Results Delay & Board Update

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated by the Market Abuse Regulation (EU) No.596/2014, as it forms part of UK law by virtue of the European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this announcement, this inside information is now considered to be in the public domain.

10 March 2023

AFERIAN PLC

("Aferian", the "Company" or the "Group")

Trading Update, FY22 Results Delay & Board Update

Aferian plc (LSE AIM: AFRN), the B2B video streaming solutions company, today provides an update on current trading and its impact on the outlook for the financial year ending 30 November 2023.

H1 FY23 current trading

The 24i business (which focuses on streaming video services) won six customers in the final quarter of 2022 and this momentum has continued in the first quarter of 2023. Trading continues in line with expectations. The focus for 24i in 2023 is to continue to grow revenue and ARR at double digit percentages whilst also increasing profit margins.

For our Amino business (which connects Pay TV to streaming services), as previously communicated, the wider macro-economic situation resulted in a decline of revenues in the second half of 2022 as some customers delayed their orders of new streaming devices, preferring to run down their existing inventory. This trend has continued longer than we expected and device sales in the first half have been materially lower than anticipated. While Amino continues to have a strong sales pipeline for second half of 2023, the recovery is now not expected until later in the financial year. As a result, management now expect Amino's outturn for the full year ending 30 November 2023 to be substantially lower than originally anticipated.

Actions to reduce the Group's cost base

The management team has already taken significant steps to identify and deliver efficiencies in the Group's cost base. These steps have already reduced the Group's annualised cost base by c.$5m. These cost reductions were underpinned by efficiencies identified in the operations and research & development teams of both our 24i and Amino divisions.

FY23 Outlook

Whilst it is early in the new financial year, in light of the above performance from the Amino division, the Board now expects Group revenue and adjusted EBITDA for the year ending 30 November 2023 to be substantially below its original expectations. Whilst device revenues continue to be negatively impacted by the current market environment, the Board has confidence in the growth drivers of the video streaming market as well as Aferian's ability to address that market. Notwithstanding the difficult trading conditions of the Amino business in the first half of the year, the Company is still expected to generate a positive material adjusted EBITDA for the full year.

Publication of audited results for the year ended 30 November 2022

The Company has already announced that it expects to report revenue and adjusted operating profit for the year ended 30 November 2022 in line with the trading update published on 8 December 2022.

The Company is in compliance with its banking covenants and is in discussions with its banks to ensure future covenant compliance. This will delay the announcement of the full year audited results for the year ended 30 November 2022. A further announcement will be made as and when practicable.

Intended Board Change

Subject to the satisfactory completion of the necessary NOMAD enquiry & due diligence process, the Board intend to appoint Max Royde to the Board as a Non-executive Director.

Max Royde is a managing partner at Kestrel Partners, an investment management company specialising in business-critical software companies, which has a beneficial holding in Aferian of 22,781,891 shares or 26.12% of the issued share capital of the Company.  

The person responsible for the release of this announcement on behalf of the Company for the purposes of MAR is Mark Carlisle.

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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 to 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 350 staff located in 11 offices, including in such 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.