Published on: March 13, 2023

Hardware-related headwinds persist

Aferian on Friday provided an update on current trading, reaffirming the previous commentary around the FY22 outcome and describing strong early momentum in FY23 for the 24i (software) business. However, customer destocking in the Amino (devices) business has been more prolonged than previously expected and previously signalled. Management now expects FY23 revenue and adjusted EBITDA to be ‘substantially below its original expectations’. We withdraw our FY23 estimates in advance of further detail at the time of the FY22 results, which appear likely to be delayed as the group works with its banks to ensure compliance with future covenant tests. We note that the group ended FY22 with net cash of $4m, that cost savings of some $5m have been implemented, and that management still expects a ‘positive material adjusted EBITDA’ for FY23.