ATG FY23 Results: Diversified revenue mix, created more value for customers and executed against strategic levers

John-Paul Savant, Chief Executive Officer of Auction Technology Group plc, said: “We have continued to deliver a robust financial performance and to execute well against each of our six strategic growth drivers. We have streamlined our operating model to accelerate the speed with which we make decisions. As ATG continues to lead the transformation of the auction industry, we are focused on what our auctioneer partners and our bidders care about most: raising the experience of buying at auction to eCommerce standards by investing in the user experience, including payments, shipping and timed auction formats. The goal is to expand the pool of online bidders by removing friction points and, in so doing, to drive higher asset values for auctioneers and their consignors. We continue to make good progress both organically and via acquisition, with our successful integration of ESN highlighting yet again our unique opportunity for accretive inorganic growth within the fragmented secondary goods market.

“Whilst the macroeconomic environment has become more challenging and impacted our rate of growth in the second half, we are strengthening our core proposition with the introduction of revenue streams that are less correlated with sector trends. The strength of our marketplace business leadership and traction in our value-added services such as atgPay and atgShip, provide long runways for growth.”

Please find the full results statement here

Financial results

 Financial highlights

• Revenue of £135.2m, up 13%, driven by strong growth in value-added services and further diversification of revenues, contribution from EstateSales.NET (“ESN”) and a favourable movement in foreign exchange. Revenue up 5% and marketplace revenue up 6% on an organic basis.
• Adjusted EBITDA of £64.0m, up 19% year-on-year; adjusted EBITDA margin of 47%, up 2ppt with high operational leverage driven by growth in high-margin digital marketing and recurring event fee revenue.
• Operating profit of £22.5m, up 34% year-on-year and includes the impact of exceptional items related to the ESN acquisition, share-based payments, and intangible asset amortisation.
• Adjusted diluted earnings per share of 32.6p, up 11% as the growth in adjusted EBITDA was partially offset by higher net finance costs and an increase in the effective tax rate; basic earnings per share of 13.9p compared to a loss of 5.1p, driven by higher adjusted EBITDA and a deferred tax credit offsetting the impact of higher net finance costs.
• Adjusted net debt/adjusted EBITDA ratio significantly improved to 1.8x from 2.4x 12 months ago as strong cash generation more than offset financing for the acquisition of ESN. Closing adjusted net debt reduced to £115.7m from £131.4m.

Operational highlights

• Value-added services revenue up 27% at constant currency, with multiple services contributing – strong adoption of paid-for auctioneer digital marketing solutions, continued penetration of atgPay across LiveAuctioneers and Proxibid, and successful launch of atgShip, our new integrated shipping service, on LiveAuctioneers. Value-added services now account for 18% of total revenue.
• Strong growth of event fees and value-added services drove an increase in the take rate³, up 0.3ppt to 3.6%.
• Total Hammer Value³ (“THV”) up 3% at constant currency to £10.8bn for the full year, with a small decline in THV in the second half year-on-year impacted by the normalisation of Industrial & Commercial (“I&C”) asset prices and exceptional activity in the prior year, and by a softening in Art & Antiques (“A&A”) auction markets.
• Gross Merchandise Value³ (“GMV”) declined 3% at constant currency, impacted by slowdown in THV and the commercial decision to rotate volume with high service requirements and minimal revenue contribution. Excluding this impact, GMV would be flat and conversion rate would be down 1ppt year-on-year reflecting the physical auction reopening impact post the Covid-19 pandemic.
• Progress on single technology platform programme including value-added services modules in addition to the launch and roll out of integrated bidding, which enables timed auctions to be concurrently held across ATG marketplaces and on an ATG white label.
• Consolidation of North American operations to streamline decision making and to drive operational leverage and efficiency.
• Successful acquisition of ESN, a leading US estate sales platform, expanding our addressable market and adding a new pool of bidders; integration on track and business performing ahead of initial business case.
• Progress against ESG programmes including pledge to achieve Net zero emissions by 2040.