Auction Technology shares below IPO price as hammer value grow slows

(Alliance News) - Auction Technology Group PLC on Thursday reported a sharp drop in annual profit ...

Alliance News 30 November, 2023 | 8:43AM
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(Alliance News) - Auction Technology Group PLC on Thursday reported a sharp drop in annual profit due to higher finance costs and despite a rise in overall revenue.

The London-based online auction operator said the economic environment has become "more challenging", hurting growth in the second half of its financial year. However, it predicted continued revenue growth in the new year, helped by burgeoning value-added services.

Auction Technology shares were down 14% at 539.00 pence in London early Thursday. The stock is down 10% from its 600p initial public offering price back in February 2021.

Pretax profit was GBP7.1 million in the 12 months that ended September 30, down 23% from GBP9.3 million the year before.

Revenue rose by 13% to GBP135.2 million from GBP119.8 million. Of this, 5% was organic growth. Gross merchandise value on the platform was down 3% at constant currency, however, partly due to slower growth in total hammer value. THV was up 3% at constant currency to GBP10.8 billion for the full year, though declined slightly in the second half of the year.

More positively, revenue from value-added services was up 27% in the recent year at constant currency.

Offsetting the revenue rise, net finance costs doubled to GBP15.4 million from GBP7.5 million. This was due to higher interest paid on loans and a foreign exchange loss.

Adjusted earnings before interest, tax, depreciation and amortisation was up 19% to GBP64.0 million from GBP54.0 million. This gave an adjusted Ebitda margin of 47%, improved from 45% in financial 2022.

Auction Technology said it expects to maintain this Ebitda margin in financial 2024. It expects organic revenue growth of 5% to 8%, with total growth revenue growth higher than this.

"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," said Chief Executive Officer John-Paul Savant.

"The strength of our marketplace business leadership and traction in our value-added services such as atgPay and atgShip, provide long runways for growth."

Auction Technology pays no dividend and said it doesn't expect to for the "foreseeable future".

By Tom Waite, Alliance News editor

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Auction Technology Group PLC 608.00 GBX 1.33 -

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