before we can offer any really constructive help.
Obvious choice would be the Arcam unit paired with some good speakers, but that's probably going to cost twice your maximum budget.
You have to go with the maxim "surround sound receivers for surround sound, proper stereo for proper stereo, and never the twain shall meet" for best results.
Second best would be to use a secondhand 5.1 or 7.1 receiver with pre-amp outputs as a decoder then feeding the pre-amp outputs from that into the Aux or AV inputs on a proper stereo amplifier and thence to proper stereo speakers, which then double up as your front left and right speakers in your AV system Adding a receiver also means you'll be able to have a centre channel, which most consider a "must" for AV, and be able to add surround channels if / when you decide, or it is decided for you, to add surroud speakers.
Third option would be to use a secondhand Cyrus AV Master 8, or something like it, as an AV decoder. The Cyrus unit only takes fibre optic and coaxial digital inpouts (not HDMI) plus one stereo (RCA) source, though, and it doesn't support the latest audio codecs either, so no DTS:X or Atmos. It does, however, have power amps built into it for the centre and side surrounds for a 5.1 setup or could run a 7.1 setup using self-powered speakers.