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(Sharecast News) - Video streaming technology company Aferian said in a trading update on Tuesday that it continued to make "strong progress" in improving the quality of earnings and enhancing revenue visibility in its first half.
The AIM-traded firm said it expected to report exit run rate annual recurring revenue ("ARR") of about $15.8m for the six months ended 31 May, up 16% year-on-year, or 26% on a constant currency basis.
Higher margin software and services revenue was expected to be around $12m - up 21%, or 28% at constant exchange rates.
Device revenues in the first half were expected to be down around 8% year-on-year to $33m, which the board put down to shipping and production delays amid Covid-19 lockdowns and restrictions in China, and thus difficulties in delivering devices to customers.
To mitigate against further potential delays, second half production had been weighted into the third quarter.
The board said it expected the company's order book to drive device revenues higher in the second half.
As a result, group revenue for the period was expected to have fallen slightly to approximately $45m, from $45.3m a year ago.
The group's balance sheet remained "strong", the directors said, and as at 31 May, the group had net cash of $7.6m, and undrawn credit facilities of $50m.
Aferian said it was "confident" in delivering its expectations for the full financial year ending 30 November.
"The first half saw us continue our momentum from 2021 despite continued challenges brought by the pandemic and global supply chain issues," said chief executive officer Donald McGarva.
"Our quality of earnings and revenue visibility has continued to improve and we have continued to make pleasing progress in executing and innovating against our 2025 strategy.
"Our recent acquisition of the Filter will allow us to further address the convergence of streaming and pay television, and our rapid integration of the Filter's complementary technologies have already enabled the launch of our advanced personalisation service, 24iQ, in May."
At 1400 BST, shares in Aferian were down 2.65% at 128.5p.
Reporting by Josh White at Sharecast.com.
