Aferian PLC, a B2B video streaming solutions company, has announced its unaudited results for the six months ended 31 May 2023. The company reported a performance in line with the trading update announced on 28 June 2023. The restructuring of the cost base in the 24i and Amino divisions has generated significant annualized cost savings and provided a stronger platform for growth. Demand in the 24i division remained strong, with a strategic focus on growing software and services revenue in the fast-growing video streaming market. The Amino division has been refocused on higher quality, higher margin streaming and device management opportunities. The company has seen good initial customer engagement in the Pay TV and digital signage markets. The company's higher margin software and services revenue was up 17% year on year, and it closed the period with exit run rate Annual Recurring Revenue (ARR) up 19%. The company has a high percentage of contracted revenue for the full year and a well-developed pipeline, and it remains confident in the full year outcome and its positioning in the video streaming market.
Financially, the company reported total revenue of $23.3 million for H1 2023, a decrease of 48% compared to H1 2022. This decrease was primarily due to a decline in device revenue. However, software and services revenue increased by 17% year on year. The company reported an adjusted operating loss of $4.2 million, compared to a profit of $2.4 million in H1 2022. The company has taken management actions to reduce its annualized cost base by approximately $8 million, and additional cost reduction actions are underway. The company's net debt at 31 May 2023 was $12.9 million, compared to net cash of $4.0 million at 30 November 2022. The company successfully raised $4.0 million through an equity placing in July 2023, which will be used for general working capital.
In terms of strategic and operational highlights, the 24i division continues to win new customers and grow recurring revenue. The division launched two significant platform enhancements in March 2023. The Amino division has been refocused on higher quality, higher margin streaming and device management opportunities, and the company has seen good initial customer engagement in the Pay TV and digital signage markets. The company's inventory balance at 31 May 2023 was $8.6 million, and it expects net debt to reduce over the remainder of the current financial year as Amino inventory levels decrease further. The company remains in compliance with its loan facilities covenants. No interim dividend payment will be made for H1 2023.