AUCTION TECHNOLOGY GROUP
PLC
INTERIM RESULTS FOR THE SIX
MONTHS ENDED 31 MARCH 2024
London, United Kingdom, 16 May 2024
- Auction Technology Group plc ("ATG", "the Company", "the Group")
(LON: ATG), operator of world-leading marketplaces for curated
online auctions, today announces its unaudited financial results
for the six months ended 31 March 2024.
For FY24 and subsequent financial
periods, the Group has changed the presentational currency in which
the Group presents its financial results from pound sterling to US
dollars.
Financial results
|
|
|
HY24
|
HY23
|
Movement
|
Organic2
|
|
|
|
Revenue1&2
|
$86.0m
|
$80.8m
|
+6%
|
1%
|
|
|
|
Adjusted
EBITDA1
|
$35.7m
|
$37.8m
|
(6)%
|
|
|
|
|
Adjusted EBITDA margin
%1
|
42%
|
47%
|
(5)ppt
|
|
|
|
|
Operating profit
|
$10.5m
|
$11.8m
|
(11)%
|
|
|
|
|
Operating margin %
|
12%
|
15%
|
(3)ppt
|
|
|
|
|
Adjusted diluted earnings per
share1
|
16.6c
|
19.2c
|
(14)%
|
|
|
|
|
Basic earnings per share
|
5.3c
|
11.6c
|
(54)%
|
|
|
|
|
Adjusted net
debt1
|
$141.6m
|
$163.7m
|
$(22.1)m
|
|
|
|
|
Cash generated by
operations
|
$27.6m
|
$29.4m
|
(6)%
|
|
|
Financial highlights
· Revenue of $86.0m up 6%, driven by continued strong growth in
value-added services, event fees and the contribution from
EstateSales.Net ("ESN"). Revenue up 1% on an organic basis,
including marketplace revenue growth of 2%.
· Adjusted EBITDA of $35.7m, down 6% and adjusted EBITDA margin
of 42% down 5ppt, impacted by a higher mix of lower-margin shipping
and payments revenue, a lower mix of higher-margin commission
revenue and the phasing of costs in the year.
· Operating profit of $10.5m, down 11% year-on-year driven by
the change in revenue mix and phasing of costs through the year. 8%
increase in administrative costs includes a full period
contribution from ESN.
· Adjusted diluted earnings per share of 16.6c, down 14%
primarily due to the decrease in adjusted EBITDA; basic earnings
per share of 5.3c compared to 11.6c, driven by lower operating
profit and a lower tax credit, partially offset by lower net
finance costs.
· Strong
adjusted free cash flow generation of $27.7m was offset by the
timing of payments, including the final consideration and bonuses
for ESN of $12m paid in the half. As a result, closing adjusted net
debt of $141.6m was in line with $141.2m at FY23 year-end and
adjusted net debt/adjusted EBITDA ratio slightly increased to 1.9x
from 1.8x at FY23 year end.
Operational highlights
· Group
take rate3 excluding ESN up 0.7ppt to 3.9%, driven by
growth in value-added services, event fees and marketplace
mix.
· Strong
growth in value-added services, with revenue up 44% and now
accounting for 23% of the Group's revenue. Contribution across all
three services (Payments - "atgPay", shipping - "atgShip", Digital
Marketing - "atgAMP"): 59% of auctioneers use a paid-for
auctioneer digital marketing solution, 94% of US based
LiveAuctioneers and 48% of Proxibid auctioneers onboarded to atgPay
by end of March, and around 10,000 lots shipped with atgShip in the
half.
· Gross
Merchandise Value ("GMV") of $1.9bn down 17% year-on-year, impacted
by the previously highlighted normalisation of used Industrial
& Commercial ("I&C") asset prices, a lower conversion rate,
and weaker end markets in Art & Antiques ("A&A"). GMV down
9% when excluding the impact from the rotated volume which had high
service requirements but minimal revenue contribution as described
in our FY23 results. Improving momentum in GMV on Proxibid in March
and April.
· Positive results in the early stages of the rollout of atgXL,
our new cross-listing offering, combined with strong uptake of
ATG's white label solution. With limited distribution, atgXL has
provided auctioneers with a 9% uplift in GMV on average when an
auction is cross-listed.
· Very
strong period-on-period revenue growth at ESN with a positive
response to cross-listing ESN with other ATG
marketplaces.
John-Paul Savant, Chief Executive Officer of Auction
Technology Group plc, said:
"ATG is executing against the
investments we are making and where we've invested, we are
growing. Our focus in FY22 and FY23 was upgrading the online
auction user experience through the rollout and growth of
value-added services, and as outlined in December 2023, in FY24 we
are now focused on initiatives that drive GMV. We launched atgXL,
our new cross-listing offering, that further differentiates our
proposition for auctioneers and bidders and enhances our network
effect. Since the launch of these new products, we have been very
pleased with the auctioneer response, the trends in bidder activity
as well as the differentiation this gives ATG's white label over
competing white labels . This differentiation hinges on an
auctioneer's ability to run a white label whilst simultaneously
cross-listing onto multiple ATG marketplaces, all from a single
work flow, thus lowering operating costs and giving the auctioneer
greater exposure to bidders for minimal effort. The strong momentum
that we are seeing from our strategic programmes, as well as the
improved trajectory in Proxibid, gives us confidence in revenue
acceleration in the second half of FY24."
Current trading and outlook
Trading in the first six weeks of
the second half has been in line with the guidance communicated in
our trading update on 16 April 2024. We are therefore maintaining
our full year outlook for Group revenue to be in the range of
$175m-$180m, implying a mid-point growth rate of 7%, including
organic revenue growth of 2% - 5%. We expect improvement in organic
revenue growth in the second half driven by continued strong growth
from our strategic programmes including atgXL, atgShip and atgPay,
and improving GMV momentum on the Proxibid marketplace, as seen in
March and April, in conjunction with the easing of year-on-year
comparatives. We maintain our full year adjusted EBITDA margin
guidance of 46%, supported by the phasing of costs through the year
and a higher mix of high-margin commission revenue in the second
half.
Webcast presentation
There will be a webcast presentation
this morning at 9.30am. Please contact
ATG@teneo.com if you would like to attend.
For further information, please
contact:
|
ATG
|
|
|
For investor enquiries
|
rebeccaedelman@auctiontechnologygroup.com
|
|
For media enquiries
|
press@auctiontechnologygroup.com
|
|
|
|
|
Deutsche Numis
|
+44 207 260 1000
|
|
(Joint corporate broker to
ATG)
|
|
|
Nick Westlake, William Baunton, Tejas
Padalkar
|
|
|
J.P. Morgan Cazenove
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+44 207 742 4000
|
|
(Joint corporate broker to
ATG)
|
|
|
Bill Hutchings, James Summer, Will
Vanderspar
|
|
|
|
|
|
|
|
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Teneo Communications
|
+44 207 353 4200
|
|
(Public relations advisor to
ATG)
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ATG@teneo.com
|
|
Tom Murray, Matt Low, Arthur Rogers
|
|
About Auction Technology Group plc
Auction Technology Group plc ("ATG")
is the operator of world-leading marketplaces and auction services
for curated online auctions, seamlessly connecting bidders from
around the world to around 4,000 trusted auction houses across two
major sectors: Industrial & Commercial ("I&C") and Art
& Antiques ("A&A").
The Group powers eight online
marketplaces and listing sites using its proprietary auction
platform technology, hosting in excess of 85,000 live and timed
auctions each year. ATG has been supporting the auction industry
since 1971 and the Group has offices in the UK, US and
Germany.
CAUTIONARY STATEMENT The
announcement may contain forward-looking statements. These
statements may relate to (i) future capital expenditures, expenses,
revenues, earnings, synergies, economic performance, indebtedness,
financial condition, dividend policy, losses or future prospects,
and (ii) developments, expansion or business and management
strategies of the Company. Forward-looking statements are
identified by the use of such terms as "believe", "could",
"should", "envisage", "anticipate", "aim", "estimate", "potential",
"intend", "may", "plan", "will" or variations or similar
expressions, or the negative thereof. Any forward-looking
statements contained in this announcement are based on current
expectations and are subject to known and unknown risks and
uncertainties that could cause actual results to differ materially
from those expressed or implied by those statements. If one or more
of these risks or uncertainties materialise, or if underlying
assumptions prove incorrect, the Company's actual results may vary
materially from those expected, estimated or projected. No
representation or warranty is made that any forward-looking
statement will come to pass. Any forward-looking statements speak
only as at the date of this announcement. The Company and its
directors expressly disclaim any obligation or undertaking to
publicly release any update or revisions to any forward-looking
statements contained in this announcement to reflect any change in
events, conditions or circumstances on which any such statements
are based after the time they are made, other than in accordance
with its legal or regulatory obligations (including under the UK
Listing Rules and the Disclosure Guidance and Transparency Rules of
the Financial Conduct Authority). Nothing in this announcement
shall exclude any liability under applicable laws that cannot be
excluded in accordance with such laws.
LEI Number:
213800U8Q9K2XI3WRE39
1. The Group
provides alternative performance measures ("APMs") which are not
defined or specified under the requirements of UK-adopted
International Accounting Standards. We believe these APMs provide
readers with important additional information on our business and
aid comparability. We have included a comprehensive list of the
APMs in note 3 to the Condensed Consolidated Interim Statements,
with definitions, an explanation of how they are calculated, why we
use them and how they can be reconciled to a statutory measure
where relevant.
2. The Group
has made certain acquisitions that have affected the comparability
of the Group's results. To aid comparisons between HY24 and HY23,
organic revenue has been presented to exclude the acquisition of
EstateSales.Net on 6 February 2023. Organic revenue is shown
on a constant currency basis using average exchange rates for the
current financial period applied to the comparative period and is
used to eliminate the effects of fluctuations in assessing
performance.
3. Refer to
glossary for full definition of the terms. GMV and Take Rate
exclude the impact of the acquisition of ESN.
CEO REVIEW
ATG's HY24 results highlight the
progress we have made in diversifying revenue and opening up new
growth opportunities through execution against each of our six
strategic growth drivers. Value-added services have continued to
grow strongly and we are pleased with the early results from atgXL,
which differentiate ATG's offering to auction houses and bidders
alike. As we integrate our assets with atgXL, whilst improving the
end-to-end user experience by rolling out atgShip, atgPay and
atgAMP, we are increasingly differentiating our offering to provide
a seamless experience that raises online auctions to ecommerce
standards. The success of these investments, as well as the
improving momentum in GMV in March and April gives us confidence
that our rate of revenue growth will accelerate in the second half
and into FY25. As we begin the second half of FY24, ATG is a
stronger company with an increasingly differentiated set of
assets.
1. Expand the total addressable
market
In the first half of FY24, both
auctioneers and bidders continued to trust ATG as the platform to
deliver value for online auctions. The total number of auctioneers
on our marketplaces remains robust at just under 4,000, with the
number of auctions facilitated in the half increasing 3% to 44,000
and the number of lots listed growing 7% to 12.6m. We hosted 185m
bidding sessions, up 15%, benefiting from investments we had made
into search engine optimisation in FY23 as well as from promising
initial results from new bidder loyalty programmes.
Despite this positive volume
backdrop, Total Hammer Value ("THV") continued to be impacted by
the macroeconomic environment with Group THV down 7% at constant
currency to $6.7bn. In A&A, THV was 5% lower at $2.8bn and
included the negative impact from the timing of Easter in HY24
which tends to be a slower period for A&A auctions. In I&C,
THV was 9% lower at $3.9bn, which was largely expected given the
impact of the low margin high service volume we rotated and the
normalisation of used asset prices following a period of elevated
prices in the prior year. In the second half, we expect these
factors to have a lower impact on the rate of our THV growth due to
the easing of asset price normalisation as well as the end of the
year-on-year impact from the rotated volume.
2. Grow the conversion rate
Our confidence in ATG's ability to
grow the conversion rate is even stronger off the back of the early
results seen from atgXL and our integrated white label. More
bidders easily accessed by auctioneers drive an uplift in bidding,
GMV and thus conversion rate. As we make it even easier for
auctioneers to work with all of ATG's assets in a seamless way, as
well as offering a convenient and price competitive solution for
bidders, we still see significant potential to grow our conversion
rate over the medium term. In the first half, progress was impacted
by short term factors, largely in the I&C sector, and which we
now see steadily reversing, benefiting also from the promotion of
our integrated white label product. Auctioneers representing 16% of
Proxibid GMV have now taken up the ATG white label since the start
of January, demonstrating the attractiveness of our integrated
cross-listing solution and providing an incremental GMV
opportunity. These strategic actions, as well as the easing of
year-on-year comparatives, are driving an improvement in momentum
on Proxibid GMV since the start of the second half.
For A&A, the conversion rate was
flat at 15% having now stabilised post the Covid-19 period. In the
half, our new rate cards incentivise the adoption of timed
online-only auctions, where we have a 100% conversion rate, as well
as the adoption of ATG's value-add services. We have seen positive
initial results, including a 29% increase in THV derived from timed
auctions for TheSaleroom.
3. Enhance the network effect
In the first six months of HY24, we
have made great progress in our strategy to drive differentiated
value from our unique network of multiple marketplaces through the
rollout of atgXL. atgXL enables an auctioneer to upload their
inventory on an ATG marketplace or an ATG white label and then to
expose that inventory across other ATG marketplaces. It gives
auctioneers running timed auctions exposure to a wider pool of
bidders and it gives bidders access to a great selection of
inventory without having to hunt across multiple sites. Our updated
rate cards have provided a fixed fee incentive for auctions run
with atgXL. As noted above, this product also differentiates the
ATG white label as it is the only white label in the market that
lets an auctioneer preserve his/her own brand while also accessing
the larger bidder base of an aggregator marketplace. A common
average commission rate between an ATG white label and the
cross-listed ATG marketplace makes bidders and ATG increasingly
agnostic between the different channels. Since launch, around 800
atgXL auctions have been run, with over $100m of GMV generated from
these events. Auctioneers are seeing high value when they
cross-list with an average 9% uplift in GMV for a cross-listed
event.
4. Expand operational leverage
We continue to improve on our hub
and spoke operating model that provides ATG with exceptional
leverage. Following the retirement of our CPO in January, we are
delighted to welcome Megan Schoen to ATG, who was formerly CPO at
Shutterstock, and who brings with her deep product and marketing
experience from a two-sided global marketplace, leveraging data to
create better experiences for sellers and buyers. In HY24 we also
reorganised our North America product and marketing teams to ensure
greater focus and more streamlined decision making. With a view to
retaining operating leverage in the future, even as we scale our
product and engineering capabilities, in January we opened a new
ATG Tech Hub international office in Mexico. Here, we have
high quality engineers at a cost that allows us to add capacity
more quickly and cost effectively. In the first half, focus
within this project was on the development and rollout of
cross-listing products.
5. Grow the take rate via value-added
services
In HY24, the Group take rate
increased 0.7ppt to 3.9%, largely driven by value-added services
where revenue grew 44% on a constant currency basis and which now
accounts for 23% of total revenue.
atgAMP (paid-for digital marketing)
revenue growth remained strong with 59% of auctioneers having used
a marketing solution in the half, up from 56% last year, and 30% of
auction events supported by atgAMP, up 3ppt year-on-year. Average
spend per marketing event increased, including by 14% on Proxibid
and 31% on Bidspotter.com. In the half we introduced subscription
packages for advertising products as well as new self-serve
features. The return on investment on marketing spend for an
auctioneer is compelling with auctions supported by marketing
delivering around 2x to 3x the number of browsers per auction and
1.5x to 2x the number of auction registrations, versus an auction
without any atgAMP support.
atgPay revenue also grew in the
period. On LiveAuctioneers, we reached 94% of US auctioneers
onboarded by the end of March, whilst the penetration of atgPay in
US Gross Transaction Value averaged 61% throughout the period. The
onboarding of Proxibid auctioneers to atgPay has progressed,
reaching 48% by the end of March, highlighting the significant
future potential for payments on I&C marketplaces. Our current
atgPay product for Proxibid is suited for lower value card payments
and further expansion depends on additional feature developments
that we will work on in 2H24 and 1H25.
atgShip, our new integrated shipping
solution on LiveAuctioneers, grew strongly with over 270
auctioneers onboarded and with 9% of US listed items eligible for
shipping by the end of March. Around 10,000 lots were shipped
through atgShip in the half. Additional features to expand the
addressable market are being rolled out in June and July to help
sustain momentum in this exciting new product. Almost 40% of
bidders in a survey listed integrated shipping as the best thing
that LiveAuctioneers could do to improve the experience for them
and ATG is pleased to have been able to respond and see the early
results. We are encouraged by the early signs of favourable
marketplace bidder dynamics when shipping is offered. Auction
houses offering shipping at the start of the programme saw on
average an 10% increase in auction registrations and a 9% increase
in the number of bidders. These auctions also saw a 6%
improvement in the conversion rate for ATG demonstrating the
enhanced bidder experience offered on an ATG platform.
6. Pursue accretive M&A
ESN delivered another period of very
strong performance, growing revenues 36% in the half versus the
same six month period a year ago. Improvements to the subscription
funnel, refinements to pricing, a more visible presence for ESN in
the estate sales community combined with excellent commercial
execution by the team to shift estate sellers to regional and
national advertising features versus lower priced local features,
is driving these results. A key thesis behind our ESN acquisition
was the impact of cross-listing their 180m visitor sessions on our
other marketplaces. We have begun to cross-list ESN and
LiveAuctioneers, and as of March 2024, 12% of auctions on
LiveAuctioneers were cross-listed on ESN, with buyers originating
from ESN driving on average a 9% GMV uplift on the auctions they
are participating in. Our successes in these early days highlight
the significant opportunity available to us to further drive the
network effect between ATG and ESN's complementary buyer
bases.
Summary
We have demonstrated that executing
the marketplace playbook works for the auction industry. 44% growth
in value-added services demonstrates both the high return on
investment we offer auctioneers and our ability to monetize more
around the core transaction. The initial success of atgXL,
including the 9% uplift in GMV, differentiates ATG from all the
competition and accelerates our network effect, keeping the cost of
customer acquisition low while driving incremental performance. The
strong revenue growth at ESN shows how acquisitions add to ATG's
scale and accelerate our network effect, whilst also highlighting
that ATG buyers can come from all sectors of the secondary goods
market, and not just from auctions. The strength of these
initiatives, combined with the improvement momentum we are seeing
as we begin the second half, gives us confidence in our outlook and
builds excitement for ATG's future.
John-Paul Savant
Chief Executive Officer
CFO REVIEW
Group presentation of results
The financial results for HY24 are
presented for the six months ended 31 March 2024. The Group has
changed the presentational currency from
pound sterling to US dollars for FY24 and future financial
periods. Note 1 of the Condensed Consolidated
Interim Financial Statements provides further details on the change
in presentation currency.
On 6 February 2023, the Group
completed its acquisition of Vintage Software LLC., trading as
EstateSales.NET ("ESN"), for a consideration of $40m. The results
for ESN are included within the A&A operating segment. The
impact of the acquisition affects the comparability of the Group's
results. Therefore, to aid comparisons between HY23 and HY24,
organic revenue growth is presented to exclude the acquisition of
ESN on 6 February 2023. Organic revenue is shown on a constant
currency basis, using average exchange rates for the current
financial period applied to the comparative period and is used to
eliminate the effects of foreign exchange fluctuations in assessing
performance. Note 3 of the Condensed Consolidated Interim Financial
Statements includes a full reconciliation of all APMs presented to
the reported results for HY24 and HY23.
Revenue
|
|
HY24
$m
|
HY23
$m
|
Movement
Reported
|
Movement
Organic
|
|
Art & Antiques
("A&A")
|
44.6
|
38.2
|
17%
|
5%
|
|
Industrial & Commercial
("I&C")
|
35.2
|
35.8
|
(2)%
|
(2)%
|
|
Total marketplace
|
79.8
|
74.0
|
8%
|
2%
|
|
Auction Services
|
4.4
|
5.0
|
(12)%
|
(13)%
|
|
Content
|
1.8
|
1.8
|
-
|
(4)%
|
|
Total
|
86.0
|
80.8
|
6%
|
1%
|
Group
Group revenue increased 6%
year-on-year to $86.0m, driven by growth in marketplace revenue and
the acquisition of ESN. On an organic basis, revenue grew 1%, with
2% growth in marketplace revenue partially offset by declines in
both Auction Services and Content. Marketplace revenue growth was
primarily driven from value-added services and event fees, which
offset a decline in commission revenue, down 9% on an organic
basis. Commission revenue was driven by a 17% decline in GMV across
our marketplaces, partially offset by a favourable mix of average
commission rates including a higher contribution from
A&A.
Art
& Antiques
A&A revenue increased 17% to
$44.6m and includes the contribution from ESN. On an organic basis,
A&A revenue grew 5%, predominantly driven by the continued
strong adoption of value-added services, including atgPay and
atgShip. This growth in value-added services combined with the
impact of higher event fees, partly driven by new rate cards on
A&A marketplaces, resulted in a 1.2ppt increase in the take
rate to 9.5% (excluding the ESN acquisition). A&A marketplaces
saw encouraging early signs from the rollout of atgXL, which
incentivises both the adoption of timed auctions as well as the
adoption of an ATG white label product. These strategic initiatives
partially offset GMV which declined 8%, largely driven by the
weaker market backdrop including the timing of Easter, with the
conversion rate broadly flat year-on-year. ESN continued to perform
better than expected, driven by robust activity levels on the
platform as well as by strategic initiatives to optimise pricing
and marketing on the site.
Industrial & Commercial
I&C revenue declined 2% on a reported and on an organic basis to
$35.2m. Whilst the Bidspotter platforms delivered strong organic
growth driven from both stable GMV year-on-year and from the growth
in value-added services, this was offset by the performance on
Proxibid. As expected, Proxibid, one of the four
operating units in I&C, was impacted by end market dynamics
including the normalisation of used asset prices in some I&C
categories and exceptional auction activity in the prior year. In
addition, the conversion rate on Proxibid declined year-on-year
partly due to the impact from a new rate card launched in April
2023. As we lap the impact of the rate card, we are pleased with
the auctioneer response to our cross-listing offering, which is
driving a strong adoption of ATG's white label by I&C
auctioneers. I&C commission revenue decreased 12% in the first
half driven by a 19% decline in I&C GMV, or 9% decline
excluding the impact of the rotated volume which had high service
requirement but minimum revenue contribution. Partially
offsetting the decline in commission was the growth in both
value-added services and event fees, which drove a 0.5ppt increase
in the I&C take rate to 2.4%.
Auction Services
Auction Services revenue of $4.4m
declined 12% on a reported and 13% on an organic basis, impacted by
the strategic decision to pause additions to our existing white
label solution as we develop a new cross-listing white label
product, which is now live and for which we have seen strong
demand. Through the rollout of cross-listing and the better
integration of our white label solutions, we would expect ATG to
increasingly become the preferred provider for white label
solutions.
Content
Content revenue was broadly flat
year-on-year as growing subscription revenue offset declining
advertising volumes.
Financial performance
|
|
Reported
|
|
|
HY24
$m
|
HY23
$m
|
Movement
|
|
|
Revenue
|
86.0
|
80.8
|
6%
|
|
|
Cost of sales
|
(28.1)
|
(25.6)
|
10%
|
|
|
Gross profit
|
57.9
|
55.2
|
5%
|
|
|
Administrative expenses
|
(47.4)
|
(44.0)
|
(8)%
|
|
|
Other operating income
|
-
|
0.6
|
(100)%
|
|
|
Operating profit
|
10.5
|
11.8
|
(11)%
|
|
|
Adjusted EBITDA (as defined in note 3)
|
35.7
|
37.8
|
(6)%
|
|
|
Finance income
|
0.2
|
0.1
|
100%
|
|
|
Finance cost
|
(7.6)
|
(11.3)
|
(33)%
|
|
|
Net
finance costs
|
(7.4)
|
(11.2)
|
34%
|
|
|
Profit before tax
|
3.1
|
0.6
|
417%
|
|
|
Income tax credit
|
3.4
|
13.4
|
(75)%
|
|
|
Profit for the period attributable to the equity holders of
the Company
|
6.5
|
14.0
|
(54)%
|
|
Operating profit
The Group reported an operating
profit of $10.5m compared to $11.8m in the prior period. The
increase in revenue was offset by an increase in cost of sales,
largely related to the growth in lower margin value-added services,
as well as an increase in administrative expenses.
Gross profit increased 5% to $57.9m,
with the gross profit margin down 1ppt year-on-year impacted by the
growth in lower margin value-added services. Administrative
expenses increased by $3.4m to $47.4m and include a share-based
payment expense of $4.6m which is broadly in line with the prior
year (HY23: $4.7m). It also includes $0.8m of exceptional costs
related to the final costs from the acquisition of ESN (HY23:
$2.1m) and amortisation of acquired intangible assets of $13.9m
(HY23: $13.1m). Excluding the impact from the one-off exceptional
costs, amortisation of acquired assets and share-based payments,
administrative expenses increased $4.0m year-on-year reflecting a
full period cost contribution from ESN, annual pay increases and an
increase in the level of expected credit losses in the period. In
HY24 there are costs associated with the reorganisation of the
product and marketing teams and the establishment of the cost
efficient technology hub in Mexico, which should not repeat in the
second half.
Adjusted EBITDA
Adjusted EBITDA definitions and
reconciliations to the reported results are presented in note 3 of
the Condensed Consolidated Interim Financial Statements.
Adjusted EBITDA decreased from
$37.8m in HY23 to $35.7m and the adjusted EBITDA margin declined
5ppt to 42%, impacted by an increase in low margin value-added
services revenue, the decline of high margin commission revenue in
addition to the phasing of costs in the year.
Net
finance costs
Net finance costs were $7.4m
compared to $11.2m in HY23. Costs include the impact of a $0.6m
non-cash foreign exchange loss versus a $4.8m non-cash foreign
exchange loss in HY23 related to intergroup balances. Excluding
this impact, finance costs increased to $7.0m (HY23: $6.5m). In the
half the Group paid $9.3m of the Senior Term Facility and drew down
$9.5m on the Revolving Credit Facility to fund the payments related
to the ESN, of which $2.0m was subsequently repaid, resulting in a
decrease to our outstanding loan balance to $147.2m as at 31 March
2024. The lower average loan balance was offset by a higher average
interest rate of 8%. Other finance costs of $0.6m (HY23: $0.4m)
include commitment fees and loan origination amortisation on our
Senior Facility, movement in the deferred consideration as well as
interest on lease liabilities. Finance income of $0.2m primarily
relates to interest income in the year (HY23: $0.1m).
Profit before tax
After the impact of lower net
finance costs year-on-year, the Group reported a profit before tax
of $3.1m (HY23: $0.6m).
Taxation
The overall tax credit for the
period was $3.4m (HY23: $13.4m credit), as tax on profit in the
year was offset by a $2.9m deferred tax credit on unrealised
foreign exchange differences (HY23: $9.1m) and a $1.2m credit from
foreign exchange differences on US dollar denominated intra-group
balances which are not taxable for US tax purposes (HY23: $3.8m).
The unrealised foreign exchange differences were not recognised in
the Group's profit for the half year due to differences in the
functional currency basis under tax and accounting rules for the US
holding entities. This compares to a tax credit of $13.4m in HY23
largely driven by the deferred tax credit. The Group's effective
tax rate for HY24 of 109% (HY23: 138%) is higher than the UK tax
rate due the deferred tax credit on the foreign exchange movements
in the period. The tax rate on adjusted earnings of 19% reflects
the increase in the UK corporate tax rate to 25% from 1 April 2023,
our primary tax jurisdiction. The Group is committed to paying its
fair share of tax and manages tax matters in line with the Group's
Tax Strategy, which is approved by the Board and is published on
our website www.auctiontechnologygroup.com.
Earnings per share and adjusted earnings per
share
Basic and diluted earnings per share
was 5.3c compared to 11.6c and 11.4c respectively in HY23, driven
by the increase in profit before tax, offset by a lower tax credit
compared to HY23. The weighted average number of shares in issue
during the period was 121.6m (HY23: 120.8m shares), with the
increase year-on-year driven, as expected, by the impact of vested
equity incentive awards.
Adjusted diluted earnings per share
was 16.6c compared to 19.2c in HY23 and is based on profit after
tax adjusted to exclude share-based payment expense, exceptional
items (operating and finance costs), amortisation of acquired
intangible assets and any related tax effects. The decrease
year-on-year is largely due to the decrease in adjusted EBITDA and
an increase in the weighted average number of ordinary shares and
dilutive options.
A reconciliation of the Group's
diluted earnings per share to adjusted diluted earnings per share
is set out in note 3.
Foreign currency impact
Although the Group has changed its
presentational currency to US dollars, the Group's reported
performance is sensitive to movements in both the pound sterling
and the euro against the US dollar with a mix of revenues included
in the table below.
|
Revenue
|
HY24
$m
|
HY23
$m
|
|
United Kingdom
|
12.7
|
11.7
|
|
USA
|
70.4
|
66.6
|
|
Germany
|
2.8
|
2.5
|
|
Total
|
86.0
|
80.8
|
The average HY24 exchange rate of US
dollar against the pound weakened by 4.2% and by 1.9% against the
euro compared to HY23, as shown in the table below.
|
|
Average
rate
|
Closing
rate
|
|
|
HY24
|
HY23
|
Movement
|
FY23
|
HY24
|
HY23
|
Movement
|
FY23
|
|
Pound Sterling
|
1.25
|
1.20
|
4.2%
|
1.23
|
1.26
|
1.24
|
1.6%
|
1.22
|
|
Euro
|
1.08
|
1.06
|
1.9%
|
1.07
|
1.08
|
1.09
|
(0.9)%
|
1.06
|
The tax for the period was impacted
by movements in foreign currency exchange rates, resulting in a
movement in the tax credit of $4.1m. The weakening of the US dollar
against the pound sterling over the six months has given rise to a
gain of $0.1m on assets held and $5.2m on the external dollar loan.
A net gain of $5.3m has been recognised in the foreign currency
reserve.
Statement of financial position
Overall net assets at 31 March 2024
have increased by $15.3m to $661.8m since 30 September 2023. Total
assets decreased by $14.1m, mainly driven by the amortisation of
intangible assets of $19.1m and additions to internally developed
software of $5.0m. There was also a $12.0m cash outflow related to
the payment of deferred consideration of $10.0m and retention bonus
of $2.0m for the ESN acquisition. At 31 March 2024, management
undertook an impairment indicator test and determined a full
impairment assessment should be performed. Based on the assessment
it was concluded that no impairment was required at 31 March 2024,
however, both the A&A and Auction Services cash generating
units had limited headroom and were sensitive to a movement in any
one of the key assumptions. Refer to note 9 for further
details.
Total liabilities decreased by
$29.4m to $209.7m, primarily due to a decrease in trade and other
payables of $18.3m relating to the $12.0m payment of the ESN
deferred consideration and retention bonuses, the timing of
supplier payments and a decrease in deferred tax liabilities of
$6.4m, largely driven by the movement on the unrealised foreign
exchange differences and the unwind of the capitalised intangible
assets.
Cash flow and adjusted net debt
The Group generated $27.6m cash from
operations which was slightly lower than the prior period (HY23:
$29.4m), due to the decrease in high margin revenue and a working
capital outflow. $5.0m expenditure on additions to internally
generated software (HY23: $4.7m) primarily relates to investment in
new products such as atgPay and atgXL, spend on our search engine
optimisation programme, as well as our programme to migrate to a
single technology platform and is in line with our guidance
provided in November 23. Excluding the impact from working capital
from exceptional and other items, working capital was an outflow of
$2.8m which relates to the timing and size of performance related
payments in the half. In the period the Group paid $10.0m in
deferred consideration and $2.0m in retention bonuses related to
the ESN acquisition.
Adjusted net debt as at 31 March
2024 was $141.6m, a small increase from $141.2m as at 30 September
2023 although down from $163.7m as at 31 March 2023. In the half,
operating cash flow generation was offset by additions to
internally generated software, the timing of tax payments, in
addition to the deferred consideration related to ESN. The Group
had cash and cash equivalents excluding restricted cash of $5.6m
and borrowings of $147.2m as at 31 March 2024 (31 March 2023: cash
and cash equivalents excluding restricted cash $6.5m and borrowings
of $170.2m). Restricted cash reduced by $3.0m due to the payment of
restricted cash from the employee benefit trust as highlighted in
the FY23 Annual Report and Accounts. The Group paid $9.3m of its
Senior Term Facility during the period and there was a net $7.5m
drawdown on the Revolving Credit Facility to fund the ESN payments.
The adjusted net debt/adjusted EBITDA ratio was 1.9x as at 31 March
2024 versus 1.8x as at 30 September 2023, reflecting the timing of
payments in the first half. We expect to de-lever our balance sheet
over the remainder of FY24.
The Group's adjusted free cash flow
was $27.7m (HY23: $26.0m) and had a conversion rate of 77% (HY23:
69%). The increase in the adjusted free cash flow conversion
reflects a higher cash generated from operations when adjusted for
the impact from the working capital movement in exceptional items,
offset by a slightly higher spend on additions to internally
generated software.
|
Reconciliation of cash generated from operations to adjusted
free cash flow
|
HY24
$m
|
HY23
$m
|
|
Cash
generated from operations
|
27.6
|
29.4
|
|
Adjustments for:
|
|
|
|
Exceptional items
|
0.8
|
2.1
|
|
Working capital from exceptional and
other items
|
4.4
|
(0.5)
|
|
Additions to internally generated
software
|
(5.0)
|
(4.7)
|
|
Additions to property, plant &
equipment
|
(0.2)
|
(0.3)
|
|
Adjusted free cash flow
|
27.7
|
26.0
|
|
Adjusted free cash flow conversion
|
77%
|
69%
|
Reconciliation of adjusted EBITDA to adjusted free cash
flow
|
|
HY24
$m
|
HY23
$m
|
|
Adjusted EBITDA
|
35.7
|
37.8
|
|
Movement in working
capital
|
(7.3)
|
(6.1)
|
|
Add back: working capital from
exceptional and other times
|
4.4
|
(0.5)
|
|
Adjusted cash from operations
|
32.8
|
31.2
|
|
Additions to internally generated
software
|
(5.0)
|
(4.7)
|
|
Additions to property, plant &
equipment
|
(0.2)
|
(0.3)
|
|
Adjusted free cash flow
|
27.7
|
26.0
|
|
Adjusted free cash flow conversion
|
77%
|
69%
|
Risk and uncertainties
The Board retains ultimate
responsibility for the Group's Risk Management Framework and
continues to undertake ongoing monitoring to review the
effectiveness of the Framework and ensure the principal risks of
the Group are being appropriately mitigated in line with its risk
appetite. The principal risks and uncertainties which could
impact the Group for the remainder of the current financial year
remain those detailed on pages 30 to 33 of the 2023 Annual Report
available at www.auctiontechnologygroup.com.
A summary of the risks is included
as follows:
1. IT
infrastructure - stability and business continuity of auction
platforms
2. IT
infrastructure - inability to keep pace with innovation and
changes
3. Data
security/data loss
4.
Competition
5. Failure
to deliver expected benefits from acquisitions and/or integrate the
business into the Group effectively
6.
Attracting and retaining skills/capabilities and succession
planning
7.
Regulatory compliance
8.
Governance and internal control
9. Economic
and geo-political uncertainty
The Directors note that the global
geopolitical outlook suggests continuing potential for short-term
volatility and instability across markets. A number of these
risks and uncertainties could have an impact on the Group's
performance over the remaining six months of the financial year and
could cause actual results to differ from expected and historical
results.
Post balance sheet events
There were no post balance sheet
events.
Related parties
Related party disclosures are
detailed in note 14.
Going concern
In assessing the appropriateness of
the going concern assumption, the Directors have considered the
ability of the Group to meet the debt covenants and maintain
adequate liquidity through the forecast period. The Group's
forecasts and projections, taking account of reasonably possible
changes in trading performance, show that the Group is able to
operate comfortably within the level of its current facilities and
meet its debt covenant obligations. For further details see note
1.
Sensitivities have been modelled to
understand the impact of the various risks outlined above on the
Group's performance and the Group's debt covenants/cash headroom,
including consideration of a reasonable downside scenario.
Given the current demand for services across the Group at the date
of this report, the assumptions in these sensitivities, when taking
into account the factors set out above, are considered to be
unlikely to lead to a debt covenant breach or liquidity issues
under both scenarios.
After making enquiries, the
Directors have a reasonable expectation that the Group has adequate
resources to continue in operational existence until at least 30
June 2025 and therefore it remains appropriate to continue to adopt
the going concern basis in preparing the financial
information.
Tom
Hargreaves
Chief Financial Officer
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income or Loss
for the six months ended 31 March
2024
|
|
Note
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Revenue
|
4,5
|
86,022
|
80,795
|
165,886
|
|
Cost of sales
|
|
(28,128)
|
(25,628)
|
(53,301)
|
|
Gross profit
|
|
57,894
|
55,167
|
112,585
|
|
Administrative expenses
|
|
(47,382)
|
(43,989)
|
(85,624)
|
|
Other operating income
|
|
12
|
612
|
666
|
|
Operating profit
|
4
|
10,524
|
11,790
|
27,627
|
|
Finance income
|
6
|
148
|
90
|
220
|
|
Finance cost
|
6
|
(7,562)
|
(11,299)
|
(19,183)
|
|
Net
finance costs
|
6
|
(7,414)
|
(11,209)
|
(18,963)
|
|
Profit before tax
|
4
|
3,110
|
581
|
8,664
|
|
Income tax
|
7
|
3,392
|
13,445
|
11,879
|
|
Profit for the period attributable to the equity holders of
the Company
|
|
6,502
|
14,026
|
20,543
|
|
|
|
|
|
|
|
Other comprehensive income/(loss) for the period attributable
to the equity holders of the Company
|
|
|
|
|
|
Items that may subsequently be
transferred to profit and loss:
|
|
|
|
|
|
Foreign exchange differences on
translation of foreign operations
|
|
115
|
1,852
|
3,826
|
|
Fair value gain arising on hedging
instruments during the period
|
|
5,187
|
16,019
|
14,478
|
|
Tax relating to these
items
|
|
(1,296)
|
(3,525)
|
(3,186)
|
|
Other comprehensive income for the period, net of
tax
|
|
4,006
|
14,346
|
15,118
|
|
Total comprehensive income for the period attributable to the
equity holders of the Company
|
|
10,508
|
28,372
|
35,661
|
|
|
|
|
|
|
|
Earnings per share
|
|
cents
|
cents
|
cents
|
|
Basic
|
8
|
5.3
|
11.6
|
16.8
|
|
Diluted
|
8
|
5.3
|
11.4
|
16.7
|
The above results are derived from
continuing operations.
The Consolidated Financial
Statements for the six months ended 31 March 2023 and the year
ended 30 September 2023 have been restated throughout to be
presented in US dollars, as detailed in note 1.
Condensed Consolidated Statement of Financial
Position
as at 31 March 2024
|
|
Note
|
Unaudited
31 March
2024
$000
|
Restated
Unaudited
31
March
2023
$000
|
Restated
Audited
30
September
2023
$000
|
|
Assets
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
9
|
582,713
|
580,188
|
578,572
|
|
Other intangible assets
|
9
|
256,745
|
282,943
|
269,729
|
|
Property, plant and
equipment
|
|
883
|
870
|
874
|
|
Right of use assets
|
|
3,524
|
2,629
|
3,941
|
|
Trade and other
receivables
|
|
696
|
111
|
138
|
|
Total non-current assets
|
|
844,561
|
866,741
|
853,254
|
|
Current assets
|
|
|
|
|
|
Trade and other
receivables
|
|
20,182
|
22,899
|
21,821
|
|
Tax asset
|
|
1,175
|
889
|
124
|
|
Cash and cash equivalents
|
10
|
5,606
|
9,428
|
10,416
|
|
Total current assets
|
|
26,963
|
33,216
|
32,361
|
|
Total assets
|
|
871,524
|
899,957
|
885,615
|
|
Liabilities
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Loans and borrowings
|
11
|
(123,231)
|
(170,197)
|
(132,923)
|
|
Tax liabilities
|
|
(1,037)
|
(1,320)
|
(976)
|
|
Lease liabilities
|
|
(2,908)
|
(2,048)
|
(3,240)
|
|
Deferred tax liabilities
|
12
|
(43,189)
|
(58,917)
|
(49,629)
|
|
Total non-current liabilities
|
|
(170,365)
|
(232,482)
|
(186,768)
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
(13,934)
|
(30,738)
|
(32,194)
|
|
Loans and borrowings
|
11
|
(23,944)
|
-
|
(15,688)
|
|
Tax liabilities
|
|
(736)
|
(731)
|
(3,779)
|
|
Lease liabilities
|
|
(767)
|
(749)
|
(731)
|
|
Total current liabilities
|
|
(39,381)
|
(32,218)
|
(52,392)
|
|
Total liabilities
|
|
(209,746)
|
(264,700)
|
(239,160)
|
|
Net
assets
|
|
661,778
|
635,257
|
646,455
|
|
Equity
|
|
|
|
|
|
Share capital
|
13
|
17
|
17
|
17
|
|
Share premium
|
13
|
334,458
|
334,099
|
334,458
|
|
Other reserve
|
13
|
330,310
|
330,310
|
330,310
|
|
Capital redemption
reserve
|
|
7
|
7
|
7
|
|
Share option reserve
|
|
30,497
|
49,772
|
32,683
|
|
Foreign currency translation
reserve
|
|
(37,523)
|
(43,258)
|
(42,825)
|
|
Retained
earnings/(losses)
|
|
4,012
|
(35,690)
|
(8,195)
|
|
Total equity
|
|
661,778
|
635,257
|
646,455
|
Condensed Consolidated Statement of Changes in
Equity
for the six months ended 31 March
2024
|
|
Share
capital
$000
|
Share
premium
$000
|
Other
reserve
$000
|
Capital
redemption
reserve
$000
|
Share option
reserve
$000
|
Foreign currency translation
reserve
$000
|
Retained
earnings/(losses)
$000
|
Total
equity
$000
|
|
1 October 2022 (restated see note
1)
|
17
|
334,045
|
330,310
|
7
|
46,313
|
(61,129)
|
(47,162)
|
602,401
|
|
Profit for the year
|
-
|
-
|
-
|
-
|
-
|
-
|
20,543
|
20,543
|
|
Other comprehensive
income/(loss)
|
-
|
-
|
-
|
-
|
-
|
18,304
|
(3,186)
|
15,118
|
|
Total comprehensive income for the
year
|
-
|
-
|
-
|
-
|
-
|
18,304
|
17,357
|
35,661
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
|
|
Shares issued
|
-
|
413
|
-
|
-
|
-
|
-
|
-
|
413
|
|
Options exercised related to
previous business combination
|
-
|
-
|
-
|
-
|
(19,297)
|
-
|
19,297
|
-
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
5,667
|
-
|
2,313
|
7,980
|
|
30
September 2023 (restated see note 1)
|
17
|
334,458
|
330,310
|
7
|
32,683
|
(42,825)
|
(8,195)
|
646,455
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
6,502
|
6,502
|
|
Other comprehensive
income/(loss)
|
-
|
-
|
-
|
-
|
-
|
5,302
|
(1,296)
|
4,006
|
|
Total comprehensive income for the period
|
-
|
-
|
-
|
-
|
-
|
5,302
|
5,206
|
10,508
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
(2,186)
|
-
|
7,001
|
4,815
|
|
31
March 2024
|
17
|
334,458
|
330,310
|
7
|
30,497
|
(37,523)
|
4,012
|
661,778
|
Restated (see note 1) for the six
months ended 31 March 2023
|
|
Share
capital
$000
|
Share
premium
$000
|
Other
reserve
$000
|
Capital
redemption
reserve
$000
|
Share
option reserve
$000
|
Foreign
currency translation reserve
$000
|
Retained
losses
$000
|
Total
equity
$000
|
|
1 October 2022 (restated see note
1)
|
17
|
334,045
|
330,310
|
7
|
46,313
|
(61,129)
|
(47,162)
|
602,401
|
|
Profit for the period
|
-
|
-
|
-
|
-
|
-
|
-
|
14,026
|
14,026
|
|
Other comprehensive
income/(loss)
|
-
|
-
|
-
|
-
|
-
|
17,871
|
(3,525)
|
14,346
|
|
Total comprehensive income for the
period
|
-
|
-
|
-
|
-
|
-
|
17,871
|
10,501
|
28,372
|
|
Transactions with owners:
|
|
|
|
|
|
|
|
|
|
Shares issued
|
-
|
54
|
-
|
-
|
-
|
-
|
-
|
54
|
|
Share-based payments
|
-
|
-
|
-
|
-
|
3,459
|
-
|
971
|
4,430
|
|
31 March 2023 (restated see note
1)
|
17
|
334,099
|
330,310
|
7
|
49,772
|
(43,258)
|
(35,690)
|
635,257
|
Condensed Consolidated Statement of Cash
Flows
for the six months ended 31 March
2024
|
|
Note
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Cash flows from operating activities
|
|
|
|
|
|
Profit before tax
|
|
3,110
|
581
|
8,664
|
|
Adjustments for:
|
|
|
|
|
|
Amortisation of acquired intangible
assets
|
9
|
16,117
|
16,507
|
32,625
|
|
Amortisation of internally generated
software
|
9
|
2,944
|
1,946
|
4,725
|
|
Depreciation of property, plant and
equipment
|
|
203
|
193
|
391
|
|
Depreciation of right of use
assets
|
|
487
|
571
|
1,099
|
|
Share-based payment
expense
|
|
4,620
|
4,716
|
8,616
|
|
Finance income
|
6
|
(148)
|
(90)
|
(220)
|
|
Finance costs
|
6
|
7,562
|
11,299
|
19,183
|
|
Operating cash flows before movements in working
capital
|
|
34,895
|
35,723
|
75,083
|
|
Decrease/(increase) in trade and
other receivables
|
|
1,235
|
(4,809)
|
(3,956)
|
|
Decrease in trade and other
payables
|
|
(8,491)
|
(1,545)
|
(450)
|
|
Cash generated by operations
|
|
27,639
|
29,369
|
70,677
|
|
Income taxes paid
|
|
(8,894)
|
(5,191)
|
(10,120)
|
|
Net
cash from operating activities
|
|
18,745
|
24,178
|
60,557
|
|
Cash flows from investing activities
|
|
|
|
|
|
Acquisition of subsidiaries, net of
cash acquired
|
|
-
|
(30,010)
|
(30,004)
|
|
Additions to internally generated
software
|
9
|
(4,970)
|
(4,690)
|
(10,765)
|
|
Payment for property, plant and
equipment
|
|
(205)
|
(298)
|
(503)
|
|
Payment for right of use
assets
|
|
-
|
-
|
(230)
|
|
Finance income received
|
|
148
|
90
|
220
|
|
Net
cash used in investing activities
|
|
(5,027)
|
(34,908)
|
(41,282)
|
|
Cash flows from financing activities
|
|
|
|
|
|
Payment of deferred
consideration
|
|
(10,000)
|
-
|
-
|
|
Repayment of loans and
borrowings
|
|
(11,300)
|
(58,264)
|
(80,014)
|
|
Proceeds from loans and
borrowings
|
|
9,500
|
26,300
|
26,300
|
|
Interest element of lease
payments
|
|
(146)
|
(73)
|
(232)
|
|
Capital element of lease
payments
|
|
(361)
|
(531)
|
(964)
|
|
Issue of new share capital, net of
share issue costs
|
|
-
|
54
|
413
|
|
Interest paid
|
|
(6,306)
|
(6,044)
|
(13,097)
|
|
Net
cash used in financing activities
|
|
(18,613)
|
(38,558)
|
(67,594)
|
|
Cash and cash equivalents at
beginning of the period
|
|
10,416
|
57,876
|
57,876
|
|
Net decrease in cash and cash
equivalents
|
|
(4,895)
|
(49,288)
|
(48,319)
|
|
Effect of foreign exchange rate
changes
|
|
85
|
840
|
859
|
|
Cash and cash equivalents at the end of the
period
|
|
5,606
|
9,428
|
10,416
|
Notes to the Condensed Consolidated Interim Financial
Statements
1. Accounting policies
General information
Auction Technology Group plc (the
"Company") is a company incorporated in the United Kingdom under
the Companies Act. The Company is a public company limited by
shares and is registered in England and Wales.
These Condensed Consolidated Interim
Financial Statements have been approved on 15 May 2024.
These Condensed Consolidated Interim
Financial Statements for the period do not constitute statutory
financial statements within the meaning of s434 of the Companies
Act 2006. Statutory accounts for the year ended
30 September 2023 have been delivered to the Registrar of
Companies. They are also available on the Group's website
(www.auctiontechnologygroup.com). The audit report for those
accounts was unqualified, did not draw attention to any matters by
way of emphasis without qualifying the report and did not contain a
statement under 498(2) or (3) of the Companies Act 2006. These
Condensed Consolidated Interim Financial Statements have been
reviewed and not audited.
Basis of preparation
These Condensed Consolidated Interim
Financial Statements have been prepared in accordance with United
Kingdom adopted International Accounting Standard 34, "Interim
Financial Reporting". The Condensed Consolidated Interim Financial
Statements do not include all the information required for full
annual financial statements and should be read in conjunction with
the Group's Annual Report and Accounts for the year ended 30
September 2023 which have been prepared in accordance with the
requirements of the Companies Act 2006.
In determining the information to be
disclosed in the notes to the Condensed Consolidated Interim
Financial statements in accordance with IAS 34, the Group has taken
into account its materiality in relation to these Condensed
Consolidated Interim Financial Statements.
The Condensed Consolidated Interim
Financial Statements have been prepared under the historical cost
convention. There are no financial instruments measured at fair
value on a recurring basis.
The accounting policies applied in
these Condensed Consolidated Interim Financial Statements are the
same as those applied in the most recent annual financial
statements except for the change in presentation currency and taxes
on income. Tax on income in the interim period is recognised by
applying the effective tax rate that would be applicable to the
expected full year profit or loss to the period's
result.
Change in presentation currency
On 17 May 2023, the Group announced
that from the beginning of the current financial year, 1 October
2023, it would be changing the currency in which it presents
its financial results from pound sterling to US dollars. The
Group's US dollar denominated earnings account for over 80% of the
Group's revenues and profits. This change will reduce the impact of
currency movements on reported results. In accordance with IAS 8,
Accounting Policies, Changes in Accounting Estimates and Errors,
this change in presentation currency will be applied
retrospectively.
In accordance with the provisions of
IAS 21, "The Effects of Changes in Foreign Exchange Rates", the
historic consolidated financial information has been re-presented
from pound sterling to US dollars as follows:
·
Items of income and expenditure, other than single
material identifiable transactions, denominated in non-US dollar
currencies were translated into US dollars at the average exchange
rate (per month) of the reporting period. Single material
identifiable transactions, have been translated at the exchange
rate at the time of the transaction;
·
assets and liabilities denominated in non-US
dollar currencies were translated into US dollars at the exchange
rates at the relevant balance sheet dates;
·
share capital, share premium and other equity
items have been translated into US dollars at historical exchange
rates on the date of each relevant transaction;
·
all resulting exchange differences have been
recognised in other comprehensive income and in the foreign
currency translation reserve in accordance with the Group's
existing accounting policy; and
·
there is no impact to the Condensed Consolidated
Statement of Profit or Loss as a result of the
restatement.
The principal rates used for the
translation of results, cash flows and balance sheets in US Dollar
were:
|
|
Average
rate
|
Closing
rate
|
|
|
HY24
|
HY23
|
FY23
|
HY24
|
HY23
|
FY23
|
|
Sterling
|
1.25
|
1.20
|
1.23
|
1.26
|
1.24
|
1.22
|
|
Euro
|
1.08
|
1.06
|
1.07
|
1.08
|
1.09
|
1.06
|
New
and amended accounting standards adopted by the
Group
There were no new standards adopted
by the Group in the period but the following amendments became
applicable during the current reporting period:
· Amendment to IFRS 17: Insurance contracts
· Amendments to IAS 8: Definition of accounting
estimates
· Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure
of accounting policies
· Amendments to IAS 12: Deferred Tax related to assets and
liabilities arising from a single transaction
These amendments did not have a
material impact on the Group's accounting policies and have
therefore not resulted in any changes in these Condensed
Consolidated Interim Financial Statements.
Going concern
The Directors are required to assess
going concern at each reporting period. The Directors have
undertaken the going concern assessment for the Group for the
period to 30 June 2025. The Directors have assessed the Group's
prospects and after considering the current financial projections,
the bank facilities available and then applying severe but
plausible sensitivities. The Directors of the Company are satisfied
that the Group has sufficient resources for its operational needs
and will remain in compliance with the financial covenants in its
bank facilities until at least 30 June 2025. For this reason, the
Directors continue to adopt the going concern basis in preparing
these Condensed Consolidated Interim Financial Statements for the
Group. The process and key judgements in coming to this conclusion
are set out below:
Liquidity: The Group entered
into the Senior Facilities Agreement on 17 June 2021 which included
the Senior Term Facility for $204.0m for the acquisition of
LiveAuctioneers. The Senior Term Facility was drawn down in full on
30 September 2021 prior to completion of the acquisition of
LiveAuctioneers on 1 October 2021. During the period ended 31 March
2024, a payment of $9.3m was paid on the Senior Term Facility. In
the absence of any prepayments, the next scheduled repayment would
be $6.9m on 30 June 2024. The loan will be due for repayment on 17
June 2026. At 31 March 2024 the loan was subject to interest at a
margin of 3.00% over US SOFR.
In addition, the Group has a
multi-currency revolving credit working capital facility (the
"RCF") for $49.0m. Any sums outstanding under the RCF will be due
for repayment on 17 June 2026. On 6 February 2023, $9.5m was drawn
down to partly fund the deferred consideration and retention
bonuses for the acquisition of ESN in FY23, of which $2.0m has been
repaid as at 31 March 2024 and a further $4.5m as at 30 April 2024.
As at 31 March 2024 the Group has adjusted net debt of
$141.6m.
Covenants: The Group is subject
to covenant tests on the Senior Term Facility, with the most
sensitive covenant being the net leverage ratio covenant adjusted
net debt: trailing 12-month adjusted EBITDA. The net leverage ratio
covenant was a maximum of 4.0x, which reduced to 3.5x in Q2 FY23,
was 3.0x at 30 September 2023 and will reduce to 2.75x in Q4 FY24.
Under the base case forecasts and each of the downside scenarios,
including the combined downside scenario, the Group is forecast to
be in compliance with the covenants and have cash headroom, without
applying mitigating actions which could be implemented such as
reducing capital expenditure spend. At 31 March 2024, the net
leverage ratio was 1.9x compared to the limit of 3.0x and therefore
the Group was comfortably within the covenant.
Scenario planning: The
Directors have undertaken the going concern assessment for the
Group, taking into consideration the Group's business model,
strategy, and principal and emerging risks. As part of the going
concern review the Directors have reviewed the Group's forecasts
and projections, assessed the headroom on the Group's facilities
and the banking covenants. This has been considered under a base
case and several severe but plausible downside scenarios, taking
into consideration the Group's principal risks and uncertainties.
These scenarios include significant reduction in commission revenue
due to THV reduction, significant reduction in commission revenue
due to conversion rate decline and lower revenue growth from
value-added services across the Group. None of these scenarios
individually or collectively threaten the Group's ability to
continue as a going concern. Even in the combined downside scenario
modelled (the combination of all downside scenarios occurring at
once) the Group would be able to operate within the level of its
current available debt facilities and covenants.
2. Significant judgements and key sources of
estimation uncertainty
The preparation of the Group's
Condensed Consolidated Interim Financial Statements requires the
use of certain judgements, estimates and assumptions that affect
the reported amounts of assets, liabilities, income and
expenses.
In preparing these Condensed
Consolidated Interim Financial Statements, the significant
judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the
same as those that applied to the most recent annual financial
statements for the year ended 30 September 2023, except for the
following estimate:
Impairment of goodwill
At least on an annual basis, or if
there is an impairment indicator, management performs a review of
the carrying values of goodwill and intangible assets. This
requires an estimate of the value in use of the cash-generating
unit ("CGU") to which the goodwill and intangible assets are
allocated. To estimate the value in use, management estimates the
expected future cash flows from the
CGU and discounts them to their
present value at a determined discount rate, which is appropriate
for the country where the goodwill and intangible assets are
allocated to. Forecasting expected cash flows and selecting an
appropriate discount rate inherently requires estimation.
Sensitivity analysis has been performed over the estimates (see
note 9). The resulting calculation is sensitive to the assumptions
in respect of future cash flows, the discount rate and long-term
growth rate applied. Management considers that the assumptions made
represent their best estimate of the future cash flows generated by
the CGUs, and that the discount rate and
long-term growth rate used are
appropriate given the risks associated with the specific cash
flows.
3. Alternative performance
measures
The Group uses a number of
alternative performance measures ("APMs") in addition to those
measures reported in accordance with United Kingdom adopted
International Accounting Standards ("UK-adopted IAS"). Such APMs
are not defined terms under UK-adopted IAS and are not intended to
be a substitute for any UK-adopted IAS measure. The Directors
believe that the APMs are important when assessing the ongoing
financial and operating performance of the Group and do not
consider them to be more important than, or superior to, their
equivalent IAS measure. The APMs improve the comparability of
information between reporting periods by adjusting for factors such
as one-off items and the timing of acquisitions.
The APMs are used internally in the
management of the Group's business performance, budgeting and
forecasting, and for determining Executive Directors' remuneration
and that of other management throughout the business. The APMs are
also presented externally to meet investors' requirements for
further clarity and transparency of the Group's financial
performance. Where items of income or expense are being excluded in
an APM, these are included elsewhere in our reported financial
information as they represent actual income or costs of the
Group.
Adjusted EBITDA
Adjusted EBITDA is the measure used
by the Directors to assess the trading performance of the Group's
businesses and is the measure of segment profit.
Adjusted EBITDA represents
profit/(loss) before taxation, finance costs, depreciation and
amortisation, share-based payment expense and exceptional operating
items. Adjusted EBITDA at segment level is consistently defined but
excludes central administration costs including Directors'
salaries.
The following table provides a
reconciliation from profit before tax to adjusted
EBITDA:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Profit before tax
|
3,110
|
581
|
8,664
|
|
Adjustments for:
|
|
|
|
|
Net finance costs (note
6)
|
7,414
|
11,209
|
18,963
|
|
Amortisation of acquired intangible
assets (note 9)
|
16,117
|
16,507
|
32,625
|
|
Amortisation of internally generated
software (note 9)
|
2,944
|
1,946
|
4,725
|
|
Depreciation of property, plant and
equipment
|
203
|
193
|
391
|
|
Depreciation of right of use
assets
|
487
|
571
|
1,099
|
|
Share-based payment
expense
|
4,620
|
4,716
|
8,616
|
|
Exceptional operating
items
|
828
|
2,101
|
3,311
|
|
Adjusted EBITDA
|
35,723
|
37,824
|
78,394
|
The following table provides the
calculation of adjusted EBITDA margin which represents adjusted
EBITDA divided by revenue:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Reported revenue (note
4,5)
|
86,022
|
80,795
|
165,886
|
|
Adjusted EBITDA
|
35,723
|
37,824
|
78,394
|
|
Adjusted EBITDA margin
|
42%
|
47%
|
47%
|
The basis for treating these items
as adjusting is as follows:
Share-based payment expense
The Group has issued share awards to
employees and Directors: at the time of IPO; for the acquisition of
LiveAuctioneers; and operates several employee share schemes. The
share-based payment expense is a significant non-cash charge driven
by a valuation model which references the Group's share price. As
the Group is still early in its life cycle as a newly listed
business the expense is distortive in the short term and is not
representative of the cash performance of the business. In
addition, as the share-based payment expense includes significant
charges related to the IPO and LiveAuctioneers acquisition, it is
not representative of the Group's steady state operational
performance.
Exceptional operating items
The Group applies judgement in
identifying significant items of income and expenditure that are
disclosed separately from other administrative expenses as
exceptional where, in the judgement of the Directors, they need to
be disclosed separately by virtue of their nature or size in order
to obtain a clear and consistent presentation of the Group's
ongoing business performance. Such items could include, but may not
be limited to, costs associated with business combinations, gains
and losses on the disposal of businesses, significant
reorganisation or restructuring costs and impairment of goodwill
and acquired intangible assets. Any item classified as an
exceptional item will be significant and not attributable to
ongoing operations and will be subject to specific quantitative and
qualitative thresholds set by and approved by the Directors prior
to being classified as exceptional.
The exceptional operating items are
detailed below:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Acquisition costs
|
(828)
|
(2,101)
|
(3,311)
|
|
Exceptional operating items
|
(828)
|
(2,101)
|
(3,311)
|
The Group's exceptional costs were
in respect of the costs relating to the acquisition of ESN on 6
February 2023.
The business has undertaken focused
acquisitive activity which has been strategically implemented to
increase income, service range and critical mass of the Group.
Acquisition costs for ESN comprised of legal, professional, other
consultancy fees and retention bonuses for ESN employees payable
one year after the acquisition date. The retention bonus was
subject to service conditions and was accrued over the 12-month
period, and paid in full in February 2024. The net cash
outflow related to exceptional operating items in the period was
$2.0m (HY23: $1.6m, FY23: $2.0m).
Adjusted earnings and adjusted diluted earnings per
share
Adjusted earnings excludes
share-based payment expense, exceptional items (operating and
finance), amortisation of acquired intangible assets, and any
related tax effects.
The following table provides a
reconciliation from profit after tax to adjusted
earnings:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Profit attributable to equity shareholders of the
Company
|
6,502
|
14,026
|
20,543
|
|
Adjustments for:
|
|
|
|
|
Amortisation of acquired intangible
assets
|
16,117
|
16,507
|
32,625
|
|
Exceptional finance items
|
685
|
4,823
|
5,258
|
|
Share-based payment
expense
|
4,620
|
4,716
|
8,616
|
|
Exceptional operating
items
|
828
|
2,101
|
3,311
|
|
Deferred tax on unrealised foreign
exchange differences
|
(2,942)
|
(9,137)
|
(8,810)
|
|
Tax on adjusted items
|
(5,264)
|
(9,459)
|
(12,607)
|
|
Adjusted earnings
|
20,546
|
23,577
|
48,936
|
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
|
Number
|
Number
|
Number
|
|
Weighted average number of shares in
issue (note 8)
|
121,625,963
|
120,824,823
|
121,050,307
|
|
Diluted weighted average number of
shares (note 8)
|
123,582,309
|
122,686,044
|
123,088,377
|
|
|
cents
|
cents
|
cents
|
|
Adjusted diluted earnings per share (in
cents)
|
16.6
|
19.2
|
39.8
|
The basis for treating these items
not already defined above as adjusting is as follows:
Amortisation of acquired intangible assets acquired through
business combinations
The amortisation of acquired
intangibles arises from the purchase consideration of a number of
separate acquisitions. These acquisitions are portfolio investment
decisions that took place at different times and are items in the
Consolidated Statement of Financial Position that relate to M&A
activity rather than the trading performance of the
business.
Exceptional finance items
Exceptional finance items include
foreign exchange differences arising on the revaluation of the
foreign currency loans, intercompany and restricted cash, movements
in contingent and deferred consideration and costs incurred on the
early repayment of loan costs. These exceptional finance items are
excluded from adjusted earnings to provide readers with helpful
additional information on the performance of the business across
periods because it is consistent with how the business performance
is reported and assessed by the Board.
Deferred tax on unrealised foreign exchange
differences
In calculating the adjusted tax
rate, the Group excludes the potential future impact of the
deferred tax effects on unrealised foreign exchange differences
arising on intra-group balances. The unrealised foreign exchange
differences were not recognised in the Group's profit for the year
due to differences in the functional currency basis under tax and
accounting rules for the US holding entities.
Tax
on adjusted items
Tax on adjusted items includes the
tax effect of acquired intangible amortisation, exceptional
(operating and finance items) and share-based payment expense. In
calculating the adjusted tax rate, the Group excludes the potential
future impact of the deferred tax effects on deductible goodwill
and intangible amortisation (other than internally generated
software), as management provides users of its Group accounts a
view of the tax charge based on the current status of such items.
Deferred tax would only crystallise on a sale of the relevant
businesses, which is not anticipated at the current time, and such
a sale, being an exceptional item, would result in an exceptional
tax impact.
Organic revenue
The Group has made certain
acquisitions that have affected the comparability of the Group's
results. Organic revenue shows the current period results excluding
the acquisition of ESN on 6 February 2023. Organic revenue is shown
on a constant currency basis using average exchange rates for the
current financial period applied to the comparative period and is
used to eliminate the effects of fluctuations in assessing
performance. Refer to the Glossary for the full
definition.
The following table provides a
reconciliation of organic revenue from reported results:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
|
Reported revenue
|
86,022
|
80,795
|
|
Acquisition related
adjustment
|
(5,602)
|
(1,506)
|
|
Constant currency
adjustment
|
-
|
585
|
|
Organic revenue
|
80,420
|
79,874
|
|
Increase in organic revenue %
|
1%
|
|
Adjusted net debt
Adjusted net debt comprises external
borrowings net of arrangement fees, cash and cash equivalents and
allows management to monitor the indebtedness of the Group.
Adjusted net debt excludes lease liabilities and restricted cash
(see note 10).
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Cash at bank (note 10)
|
5,604
|
6,454
|
7,437
|
|
Current loans and borrowings (note
11)
|
(23,944)
|
-
|
(15,688)
|
|
Non-current loans and borrowings
(note 11)
|
(123,231)
|
(170,197)
|
(132,923)
|
|
Total loans and
borrowings
|
(147,175)
|
(170,197)
|
(148,611)
|
|
Adjusted net debt
|
(141,571)
|
(163,743)
|
(141,174)
|
Adjusted free cash flow and adjusted free cash flow
conversion
Adjusted free cash flow represents
cash flow from operations less additions to internally generated
software and property, plant and equipment. Internally generated
software includes development costs in relation to software that
are capitalised when the related projects meet the recognition
criteria under UK-adopted IAS for an internally generated
intangible asset. Movement in working capital is adjusted for
balances relating to exceptional items. The Group monitors its
operational efficiency with reference to operational cash
conversion, defined as free cash flow as a percentage of adjusted
EBITDA.
The Group uses adjusted cash flow
measures for the same purpose as adjusted profit measures, in order
to assist readers of the accounts in understanding the operational
performance of the Group. The two measures used are free cash flow
and free cash flow conversion. A reported free cash flow and cash
conversion rate has not been provided as it would not give a fair
indication of the Group's free cash flow and conversion performance
given the high value of working capital from exceptional
items.
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Adjusted EBITDA
|
35,723
|
37,824
|
78,394
|
|
Cash generated from operations
|
27,639
|
29,369
|
70,677
|
|
Adjustments for:
|
|
|
|
|
Exceptional operating
items
|
828
|
2,101
|
3,311
|
|
Working capital from exceptional and
other items
|
4,381
|
(459)
|
(1,348)
|
|
Additions to internally generated
software (note 9)
|
(4,970)
|
(4,690)
|
(10,765)
|
|
Additions to property, plant and
equipment
|
(205)
|
(298)
|
(503)
|
|
Payments for right of use
assets
|
-
|
-
|
(230)
|
|
Adjusted free cash flow
|
27,673
|
26,023
|
61,142
|
|
Adjusted free cash flow conversion (%)
|
77%
|
69%
|
78%
|
4. Operating segments
The operating segments reflect the
Group's management and internal reporting structure, which is used
to assess both the performance of the business and to allocate
resources within the Group. The assessment of performance and
allocation of resources is focused on the category of customer for
each type of activity.
The Board has determined an
operating management structure aligned around the four core
operations of the Group.
The four operating segments are as
follows:
·
Art & Antiques ("A&A") marketplaces:
focused on offering auction houses that specialise in the sale of
arts and antiques access to the platforms thesaleroom.com,
liveauctioneers.com, lot-tissimo.com and EstateSales.NET. A
significant part of the Group's services is provision of a platform
as a marketplace for the A&A auction houses to sell their
goods. The segment also generates earnings through additional
services such as listing subscriptions, marketing income, atgPay
and atgShip. The Group contracts with customers predominantly under
service agreements, where the number of auctions to be held and the
service offering differs from client to client.
·
Industrial & Commercial ("I&C")
marketplaces: focused on offering auction houses that specialise in
the sale of industrial and commercial goods and machinery access to
the platforms BidSpotter.com, BidSpotter.co.uk and proxibid.com, as
well as i-bidder.com for consumer surplus and retail returns. A
significant part of the Group's services is provision of the
platform as a marketplace for the I&C auction houses to sell
their goods. The segment also generates earnings through additional
services such as marketing income and atgPay. The Group contracts
with customers predominantly under service agreements, where the
number of auctions to be held and the service offering differs from
client to client.
·
Auction Services: includes revenues from the
Group's auction house back-office products with Auction Mobility
and other white label products including Wavebid.com.
·
Content: focused on the Antiques Trade Gazette
paper and online magazine. The business focuses on two streams of
income: selling subscriptions of the Gazette and selling
advertising space within the paper and online. The Directors have
disclosed information required by IFRS 8 for the Content segment
despite the segment not meeting the reporting threshold.
·
There are no undisclosed or other operating
segments.
An analysis of the results for the
period by reportable segment is as follows:
|
|
Unaudited six months ended 31
March 2024
|
|
|
A&A
$000
|
I&C
$000
|
Auction
Services
$000
|
Content
$000
|
Centrally
allocated
costs
$000
|
Total
$000
|
|
Revenue
|
44,575
|
35,235
|
4,364
|
1,848
|
-
|
86,022
|
|
Adjusted EBITDA (see note 3 for definition and
reconciliation)
|
36,034
|
29,604
|
2,473
|
690
|
(33,078)
|
35,723
|
|
Amortisation of intangible assets
(note 9)
|
(12,674)
|
(5,496)
|
(891)
|
-
|
-
|
(19,061)
|
|
Depreciation of property, plant and
equipment
|
(79)
|
(110)
|
(6)
|
(8)
|
-
|
(203)
|
|
Depreciation of right of use
assets
|
(338)
|
(116)
|
(4)
|
(29)
|
|
(487)
|
|
Share-based payment
expense
|
(658)
|
(889)
|
(40)
|
-
|
(3,033)
|
(4,620)
|
|
Exceptional operating items (note
3)
|
(828)
|
-
|
-
|
-
|
-
|
(828)
|
|
Operating profit/(loss)
|
21,457
|
22,993
|
1,532
|
653
|
(36,111)
|
10,524
|
|
Net finance costs (note
6)
|
-
|
-
|
-
|
-
|
(7,414)
|
(7,414)
|
|
Profit/(loss) before tax
|
21,457
|
22,993
|
1,532
|
653
|
(43,525)
|
3,110
|
|
|
Unaudited
six months ended 31 March 2023 (restated)
|
|
|
A&A
$000
|
I&C
$000
|
Auction
Services
$000
|
Content
$000
|
Centrally
allocated
costs
$000
|
Total
$000
|
|
Revenue
|
38,218
|
35,709
|
5,032
|
1,836
|
-
|
80,795
|
|
Adjusted EBITDA (see note 3 for definition and
reconciliation)
|
31,404
|
30,603
|
3,324
|
644
|
(28,151)
|
37,824
|
|
Amortisation of intangible assets
(note 9)
|
(11,746)
|
(5,874)
|
(833)
|
-
|
-
|
(18,453)
|
|
Depreciation of property, plant and
equipment
|
(66)
|
(117)
|
(4)
|
(6)
|
-
|
(193)
|
|
Depreciation of right of use
assets
|
(338)
|
(189)
|
(6)
|
(38)
|
|
(571)
|
|
Share-based payment
expense
|
(1,410)
|
(475)
|
(46)
|
-
|
(2,785)
|
(4,716)
|
|
Exceptional operating items (note
3)
|
(2,101)
|
-
|
-
|
-
|
-
|
(2,101)
|
|
Operating profit/(loss)
|
15,743
|
23,948
|
2,435
|
600
|
(30,936)
|
11,790
|
|
Net finance costs (note
6)
|
-
|
-
|
-
|
-
|
(11,209)
|
(11,209)
|
|
Profit/(loss) before tax
|
15,743
|
23,948
|
2,435
|
600
|
(42,145)
|
581
|
|
|
Audited
year ended 30 September 2023 (restated)
|
|
|
A&A
$000
|
I&C
$000
|
Auction
Services
$000
|
Content
$000
|
Centrally
allocated
costs
$000
|
Total
$000
|
|
Revenue
|
80,551
|
71,378
|
10,190
|
3,767
|
-
|
165,886
|
|
Adjusted EBITDA (see note 3 for definition and
reconciliation)
|
66,211
|
61,171
|
6,403
|
1,366
|
(56,757)
|
78,394
|
|
Amortisation of intangible assets
(note 9)
|
(24,383)
|
(11,235)
|
(1,732)
|
-
|
-
|
(37,350)
|
|
Depreciation of property, plant and
equipment
|
(129)
|
(236)
|
(10)
|
(16)
|
|
(391)
|
|
Depreciation of right of use
assets
|
(678)
|
(342)
|
(10)
|
(69)
|
|
(1,099)
|
|
Share-based payment
expense
|
(1,828)
|
(2,163)
|
(103)
|
|
(4,522)
|
(8,616)
|
|
Exceptional operating items (note
3)
|
(3,311)
|
|
|
|
|
(3,311)
|
|
Operating profit/(loss)
|
35,882
|
47,195
|
4,548
|
1,281
|
(61,279)
|
27,627
|
|
Net finance costs (note
6)
|
-
|
-
|
-
|
-
|
(18,963)
|
(18,963)
|
|
Profit/(loss) before tax
|
35,882
|
47,195
|
4,548
|
1,281
|
(80,242)
|
8,664
|
Segment assets are measured in the
same way as in the financial statements. These assets are allocated
based on the operations of the segment and the physical location of
the asset.
|
|
Unaudited
31 March 2024
|
Restated
Unaudited
31 March 2023
|
Restated
Audited
30 September 2023
|
|
Total
non-current
assets
$000
|
Additions
to
non-current
assets
$000
|
Total
non-current assets
$000
|
Additions
to
non-current
assets
$000
|
Total
non-current assets
$000
|
Additions
to
non-current
assets
$000
|
|
A&A
|
580,554
|
2,209
|
599,947
|
42,541
|
589,956
|
46,142
|
|
I&C
|
230,304
|
2,896
|
231,705
|
3,213
|
228,752
|
7,374
|
|
Auction Services
|
33,390
|
64
|
35,024
|
327
|
34,212
|
423
|
|
Content
|
313
|
6
|
65
|
7
|
334
|
314
|
|
|
844,561
|
5,175
|
866,741
|
46,088
|
853,254
|
54,253
|
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
By
geographical location
|
|
|
|
|
United Kingdom
|
153,632
|
158,283
|
153,003
|
|
USA
|
690,427
|
707,858
|
699,715
|
|
Germany
|
502
|
600
|
536
|
|
|
844,561
|
866,741
|
853,254
|
The Group has taken advantage of
paragraph 23 of IFRS 8 "Operating Segments" and does not provide
segmental analysis of net assets as this information is not used by
the Directors in operational decision making or monitoring of
business performance.
5. Revenue
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Product and customer types
|
|
|
|
|
A&A
|
44,575
|
38,218
|
80,551
|
|
I&C
|
35,235
|
35,709
|
71,378
|
|
Auction Services
|
4,364
|
5,032
|
10,190
|
|
Content
|
1,848
|
1,836
|
3,767
|
|
|
86,022
|
80,795
|
165,886
|
|
Primary geographical markets
|
|
|
|
|
by
location of operations
|
|
|
|
|
United Kingdom
|
12,732
|
11,655
|
24,096
|
|
USA
|
70,444
|
66,630
|
136,964
|
|
Germany
|
2,846
|
2,510
|
4,826
|
|
|
86,022
|
80,795
|
165,886
|
|
By
location of customer
|
|
|
|
|
United Kingdom
|
13,096
|
11,886
|
24,557
|
|
USA
|
65,088
|
60,907
|
125,308
|
|
Europe
|
4,566
|
4,471
|
8,645
|
|
Rest of world
|
3,272
|
3,531
|
7,376
|
|
|
86,022
|
80,795
|
165,886
|
|
Timing of transfer of goods and services
|
|
|
|
|
Point in time
|
76,594
|
73,960
|
150,274
|
|
Over time
|
9,428
|
6,835
|
15,612
|
|
|
86,022
|
80,795
|
165,886
|
Due to the nature of the Group's
business, it is not materially affected by seasonal or cyclical
trading.
6. Net finance costs
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Interest income
|
148
|
90
|
220
|
|
Finance income
|
148
|
90
|
220
|
|
Interest on loans and
borrowings
|
(6,399)
|
(6,110)
|
(12,985)
|
|
Amortisation of finance
costs
|
(332)
|
(293)
|
(612)
|
|
Movements in deferred
consideration
|
(131)
|
(66)
|
(263)
|
|
Foreign exchange loss
|
(554)
|
(4,757)
|
(4,995)
|
|
Interest on lease
liabilities
|
(146)
|
(73)
|
(232)
|
|
Interest on tax
|
-
|
-
|
(96)
|
|
Finance cost
|
(7,562)
|
(11,299)
|
(19,183)
|
|
|
|
|
|
|
Net
finance costs
|
(7,414)
|
(11,209)
|
(18,963)
|
7. Taxation
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Current tax
|
|
|
|
|
Current tax on profit for the
period
|
3,529
|
2,740
|
11,660
|
|
Adjustments in respect of prior
years
|
-
|
-
|
(205)
|
|
Total current tax
|
3,529
|
2,740
|
11,455
|
|
Deferred tax
|
|
|
|
|
Current year
|
(6,921)
|
(14,990)
|
(22,368)
|
|
Adjustments from change in tax
rates
|
-
|
(1,258)
|
(629)
|
|
Adjustments in respect of prior
years
|
-
|
63
|
(337)
|
|
Deferred tax
|
(6,921)
|
(16,185)
|
(23,334)
|
|
|
|
|
|
|
Tax
credit
|
(3,392)
|
(13,445)
|
(11,879)
|
The tax on the Group's profit before
tax differs from the theoretical amount that would arise using the
standard tax rate applicable to the profits of the Group as
follows:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Profit before tax
|
3,110
|
581
|
8,664
|
|
Tax at United Kingdom tax rate of
25% (2023: 22%)
|
777
|
128
|
1,907
|
|
Tax effect of:
|
|
|
|
|
Expenses not deductible for tax
purposes
|
66
|
127
|
(729)
|
|
Differences in overseas tax
rates
|
(89)
|
476
|
1
|
|
Deferred tax on unrealised foreign
exchange differences
|
(2,942)
|
(9,137)
|
(8,810)
|
|
Foreign exchange differences not
taxable for tax purposes
|
(1,204)
|
(3,844)
|
(3,077)
|
|
Adjustments from change in tax
rates
|
-
|
(1,258)
|
(629)
|
|
Adjustments in respect of prior
years
|
-
|
63
|
(542)
|
|
Tax
credit
|
(3,392)
|
(13,445)
|
(11,879)
|
The total tax expense recognised
based on management's best estimate of the effective tax rate for
the full year, excluding changes to US blended tax rate, foreign
exchange differences and exceptional operating items,
is 25% (HY23: 21%) applied
to the profit before tax of the six-month period.
The deferred tax credit on
unrealised foreign exchange differences of $2.9m (HY23: $9.1m,
FY23: $8.8m) arises from US holding companies with pound sterling
as their functional currency for the Condensed Consolidated
Financial Statements but US dollar functional currency under US tax
rules. Per the US tax basis these holding companies included an
unrealised foreign exchange loss of $10.6m on intra-group loans
denominated in pound sterling totalling £246.2m (HY23: $36.2m,
FY23: $34.6m on intra-group loans of £295.6m). Unrealised foreign
exchange differences are not taxable until they are realised,
giving rise to deferred tax.
The Group's profit before tax
includes foreign exchange gain of $4.8m from US holding companies
on their US dollar denominated intra-group balances (HY23: $15.6m,
FY23: $12.3m) which are not taxable for US tax purposes giving rise
to a permanent difference of $1.2m (HY23: $3.8m, FY23:
$3.1m).
The Group's tax affairs are governed
by local tax regulations in the UK, US and Germany. Given the
uncertainties that could arise in the application of these
regulations, judgements are often required in determining the tax
that is due. Where management is aware of potential uncertainties
in local jurisdictions, that are judged more likely than not to
result in a liability for additional tax, a provision is made for
management's best estimate of the liability, determined with
reference to similar transactions and third-party advice. This
provision at 31 March 2024 amounted to $1.0m (HY23: $1.3m, FY23:
$1.0m).
Tax recognised in other
comprehensive income:
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Current tax
|
(1,296)
|
(3,525)
|
(3,186)
|
Tax recognised in other
comprehensive income includes income tax on the Group's net
investment hedge.
8. Earnings per share
Basic earnings per share per share
is calculated by dividing the profit for the period attributable to
ordinary shareholders by the weighted average number of ordinary
shares outstanding during the period, after excluding the weighted
average number of non-vested ordinary shares.
Diluted earnings per share is
calculated by dividing the profit for the period attributable to
ordinary shareholders by the weighted average number of ordinary
shares including non-vested/non-exercised ordinary shares. During
the period and prior period, the Group awarded conditional share
awards to Directors and certain employees through an
LTIP.
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Profit attributable to equity shareholders of the
Company
|
6,502
|
14,026
|
20,543
|
|
|
Number
|
Number
|
Number
|
|
Weighted average number of shares in
issue
|
121,625,963
|
120,824,823
|
121,050,307
|
|
Weighted number of options vested
not exercised
|
1,083,615
|
-
|
1,338,182
|
|
Weighted average number of shares
held by the Employee Benefit Trust
|
(108,509)
|
(135,521)
|
(162,934)
|
|
Weighted average number of shares
|
122,601,069
|
120,689,302
|
122,225,555
|
|
Dilutive share options
|
981,240
|
1,996,742
|
862,822
|
|
Diluted weighted average number of shares
|
123,582,309
|
122,686,044
|
123,088,377
|
|
|
cents
|
cents
|
cents
|
|
Basic earnings per share
|
5.3
|
11.6
|
16.8
|
|
Diluted earnings per share
|
5.3
|
11.4
|
16.7
|
9. Goodwill and other intangible
assets
|
|
Software
$000
|
Customer
relationships
$000
|
Brand
$000
|
Non-compete
agreement
$000
|
Total acquired intangible
assets
$000
|
Internally generated
software
$000
|
Goodwill
$000
|
Total
$000
|
|
1 October 2022 (restated as detailed
in note 1)
|
33,463
|
195,926
|
37,170
|
887
|
267,446
|
7,886
|
546,167
|
821,499
|
|
Acquisition of business
|
2,605
|
11,521
|
3,174
|
-
|
17,300
|
-
|
22,422
|
39,722
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
10,765
|
-
|
10,765
|
|
Amortisation
|
(5,626)
|
(22,992)
|
(3,589)
|
(418)
|
(32,625)
|
(4,725)
|
-
|
(37,350)
|
|
Exchange differences
|
68
|
2,806
|
458
|
-
|
3,332
|
350
|
9,983
|
13,665
|
|
30
September 2023 (restated as detailed in note 1)
|
30,510
|
187,261
|
37,213
|
469
|
255,453
|
14,276
|
578,572
|
848,301
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
4,970
|
-
|
4,970
|
|
Amortisation
|
(2,185)
|
(11,885)
|
(1,838)
|
(209)
|
(16,117)
|
(2,944)
|
-
|
(19,061)
|
|
Exchange differences
|
-
|
852
|
158
|
-
|
1,010
|
97
|
4,141
|
5,248
|
|
31
March 2024
|
28,325
|
176,228
|
35,533
|
260
|
240,346
|
16,399
|
582,713
|
839,458
|
|
|
Software
$000
|
Customer
relationships
$000
|
Brand
$000
|
Non-compete
agreement
$000
|
Total
acquired intangible assets
$000
|
Internally
generated software
$000
|
Goodwill
$000
|
Total
$000
|
|
1 October 2022 (restated as detailed
in note 1)
|
33,463
|
195,926
|
37,170
|
887
|
267,446
|
7,886
|
546,167
|
821,499
|
|
Acquisition of business
|
2,605
|
11,521
|
3,174
|
-
|
17,300
|
-
|
22,382
|
39,682
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
4,690
|
-
|
4,690
|
|
Amortisation
|
(3,444)
|
(11,103)
|
(1,751)
|
(209)
|
(16,507)
|
(1,946)
|
-
|
(18,453)
|
|
Exchange differences
|
68
|
3,105
|
521
|
-
|
3,694
|
380
|
11,639
|
15,713
|
|
31 March 2023 (restated as detailed
in note 1)
|
32,692
|
199,449
|
39,114
|
678
|
271,933
|
11,010
|
580,188
|
863,131
|
At 31 March 2024, management have
considered if any impairment indicators exist and undertook an
impairment assessment which concluded no impairment was required.
However, both the A&A marketplaces and Auction Services CGUs
are sensitive to a movement in any one of the key assumptions.
Management have therefore performed sensitivity analysis based on
reasonably possible scenarios including increasing the discount
rates and reducing the CAGR on the future forecast cash flows, both
of which are feasible given the current future uncertainty of
macroeconomics. For the I&C marketplaces CGU, there is no
realistic change of assumption that would cause the CGU's carrying
amount to exceed its recoverable amount.
For the A&A marketplaces CGU,
under the base case there is headroom of $185.6m at 31 March 2024
(FY23: $302.6m). The year-on-year decrease in headroom is driven by
the reduction in five-year CAGR by five ppt following the
performance in the first six months of FY24 and the current market
trends which are being seen. This headroom reduction is net of the
impact from the reduction in the pre-tax discount rate from 12.7%
to 11.9%. For the recoverable amount to fall to the carrying value,
the discount rate would need to be increased to 14.7% from 11.9%
(FY23: 17.4% from 12.7%), the long-term growth rate reduced to a
negative 0.9% from 3.0% (FY23: negative 4.5% from 3.0%), or the
CAGR from FY24 on the latest five-year future forecast cash flows
reduced by six ppt (FY23: nine ppt). With an uncertain
macroeconomic outlook, it is difficult to model the precise impact
on business performance at this time. Should there be an economic
downturn the A&A segment is likely to be impacted in the short
term due to reduced sales and margins, but it would then be
expected to return to higher growth in later years.
For Auction Services with a headroom
of $4.0m (FY23: $7.4m) for the recoverable amount to fall to the
carrying value, the discount rate would need to be increased to
11.4% from 10.5% (FY23: 13.4% from 11.4%), the long-term growth
rate reduced to 1.8% from 3.0% (FY23: 0.2% from 3.0%), or the CAGR
on the five-year future forecast cash flows reduced by three ppt
(FY23: two ppt). Auction Services is particularly sensitive to the
long-term growth rate and discount rate applied.
10. Cash and cash equivalents
Cash and cash equivalents comprise
cash at bank and in hand and restricted cash. The carrying
amount of these assets approximates to their fair value.
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Cash at bank
|
5,604
|
6,454
|
7,437
|
|
Restricted cash
|
2
|
2,974
|
2,979
|
|
|
5,606
|
9,428
|
10,416
|
Restricted cash consists of cash
held by the Trustee of the Group's Employee Benefit Trust relating
to share awards for employees. Prior to the IPO, the EBT
facilitated the making of pre-IPO equity awards to beneficiaries of
the sub-fund out of sweet equity that had been allocated to
management by the private equity investors. However, not all of the
assets in the sub-fund were allocated to beneficiaries on IPO.
Given February 2024 was three years since the Company's IPO it has
been agreed that the legacy sub-fund should be wound up by the
trustee in February 2024 and the assets of the sub-fund be
distributed to its beneficiaries.
11. Loans and borrowings
The carrying amount of loan and
borrowings classified as financial liabilities at amortised cost
approximates to their fair value.
|
|
Unaudited
six months
ended
31 March
2024
$000
|
Restated
Unaudited
six
months
ended
31
March
2023
$000
|
Restated
Audited
Year
ended
30
September
2023
$000
|
|
Current
|
|
|
|
|
Senior Term Facility
|
23,944
|
-
|
15,688
|
|
|
23,944
|
-
|
15,688
|
|
Non-current
|
|
|
|
|
Senior Term Facility
|
115,731
|
148,438
|
132,923
|
|
Revolving Credit Facility
|
7,500
|
21,759
|
-
|
|
|
123,231
|
170,197
|
132,923
|
|
|
|
|
|
|
|
147,175
|
170,197
|
148,611
|
The Group entered into a Senior
Facilities Agreement on 17 June 2021 which included:
- A
senior term loan facility (the "Senior Term Facility") for $204.0m
for the acquisition of LiveAuctioneers. The Senior Term Facility
was drawn down in full on 30 September 2021 prior to completion of
the acquisition of LiveAuctioneers on 1 October 2021. In HY24 a
payment of $9.3m (HY23 and FY23: $53.7m), was paid on the Senior
Term Facility. In the absence of any prepayments, the next
scheduled repayment would be $6.9m on 30 June 2024. The loan will
be due for repayment on 17 June 2026.
- A
multi-currency revolving credit working capital facility (the
"Revolving Credit Facility") for $49.0m. Any sums outstanding under
the Revolving Credit Facility will be due for repayment on 17 June
2025, subject to the optionality of a further 12-month extension.
On 6 February 2024, $9.5m (HY23 and FY23: $26.3m) was drawn down to
partly fund the payment of deferred consideration and retention
bonuses relating to the acquisition of ESN in FY23, of which $2.0m
has been repaid during the six months ended 31 March 2024 (HY23:
$4.6m, FY23: $26.3m).
- The
Senior Facilities Agreement contains an adjusted net leverage
covenant which tests the ratio of adjusted net debt against
adjusted EBITDA and an interest cover ratio which tests the ratio
of adjusted EBITDA against net finance charges, in each case as at
the last date of each financial quarter, commencing with the
financial quarter ending 30 September 2021. The Group has complied
with the financial covenants of its borrowing facilities during the
six months ended 31 March 2024.
12. Deferred taxation
The movement
in net deferred tax liabilities is as follows:
|
|
Unaudited
31 March
2024
$000
|
Restated
Unaudited
31
March
2023
$000
|
Restated
Audited
30
September
2023
$000
|
|
1 October (restated as detailed in
note 1)
|
(49,629)
|
(72,175)
|
(72,175)
|
|
Amount credited to Condensed
Consolidated Statement of Profit or Loss
|
6,921
|
16,185
|
23,334
|
|
Exchange differences
|
(481)
|
(2,927)
|
(788)
|
|
|
(43,189)
|
(58,917)
|
(49,629)
|
The net deferred tax liabilities
include deferred tax asset of £nil at 31 March 2024 (HY23: £nil;
FY23: £nil).
13. Share capital
|
|
Unaudited
31 March
2024
$000
|
Restated
Unaudited
31
March
2023
$000
|
Restated
Audited
30
September
2023
$000
|
|
Authorised, called up and fully
paid
|
|
|
|
|
121,736,968 ordinary shares at 0.01p
each
(HY23: 121,133,406, FY23: 121,491,412)
|
17
|
17
|
17
|
|
|
17
|
17
|
17
|
The movements in share capital,
share premium and other reserve are set out below:
|
|
Number
of
shares
|
Share
capital
$000
|
Share
premium
$000
|
Other
reserve
$000
|
|
1 October 2023 (restated as detailed
in note 1)
|
121,491,412
|
17
|
334,458
|
330,310
|
|
Share options exercised
|
245,556
|
-
|
-
|
-
|
|
31
March 2024
|
121,736,968
|
17
|
334,458
|
330,310
|
During the period, 245,556 ordinary
shares of 0.01p each with an aggregate nominal value of £25 ($31)
were issued for options that vested for a cash consideration of
£nil. These included Long-term Incentive Plan Awards ("LTIP
Awards") and shares issued to the Trust for LTIP Awards that have
vested in the period.
14. Related party transactions
During the six months ended 31 March
2024, the Group paid rent of $60,600 (HY23: $20,000, FY23: $80,000)
to McQuade Enterprises LLC, a company owned by the previous owners
of ESN. There were other no related party transactions. The Group's
related party transactions for FY23 are disclosed in the Group's
2023 Annual Report. There have been no material changes in the
related party transactions described in the last annual report
except as detailed above.
15. Events after the balance sheet
date
There were no events after the
balance sheet date.
Responsibility Statement
The Directors confirm that to the
best of our knowledge:
· these
Condensed Consolidated Interim Financial Statements have been
prepared in accordance with United Kingdom adopted International
Accounting Standard 34 "Interim Financial Reporting",
· the
interim management report includes a fair review of the information
required by DTR 4.2.7R (indication of important events and their
impact during the first six months and description of principal
risks and uncertainties for the remaining six months of the year);
and
· the
interim management report includes a fair review of the information
required by DTR 4.2.8R (disclosure of related parties' transactions
and changes therein).
By order of the Board,
John-Paul
Savant
Tom Hargreaves
Chief Executive
Officer
Chief Financial Officer
15 May
2024
15 May 2024
Glossary
|
A&A
|
Art & Antiques
|
|
atgAMP
|
the Group's auctioneer marketing
programme
|
|
atgPay
|
the Group's integrated payment
solution
|
|
atgShip
|
the Group's integrated shipping
solution
|
|
atgXL
|
the Group's cross-listing solution
enabling auctioneers to simultaneously run auctions across ATG
marketplaces and ATG white label
|
|
Auction Mobility
|
Auction Mobility LLC
|
|
Bidder sessions
|
web sessions on the Group's
marketplaces online within a given timeframe
|
|
BidSpotter
|
the Group's marketplace operated via
the www.BidSpotter.co.uk and www.BidSpotter.com domain
|
|
EBITDA
|
earnings before interest, taxes,
depreciation and amortisation
|
|
ESN
|
the Group's marketplace operated via
the www.EstateSales.NET domain
|
|
GMV
|
gross merchandise value,
representing the total final sale value of all lots sold via
winning bids placed on the marketplaces or the platform, excluding
additional fees (such as online fees and auctioneers' commissions)
and sales of retail jewellery (being new, or nearly new,
jewellery)
|
|
i-bidder
|
the Group's marketplace operated by
the www.i-bidder.com domain
|
|
I&C
|
Industrial &
Commercial
|
|
LiveAuctioneers
|
the Group's marketplace operated via
the www.liveauctioneers.com domain
|
|
Lot-tissimo
|
the Group's marketplace operated via
the www.lot-tissimo.com domain
|
|
LTIP Awards
|
the Company's Long-term Incentive
Plan
|
|
Marketplaces
|
the online auction marketplaces
operated by the Group
|
|
Conversion rate
|
represents GMV as a percentage of
THV; previously called 'online share'
|
|
Organic revenue
|
Organic revenue shows the current
period results excluding the acquisition of ESN on 6 February 2023.
Organic revenue is shown on a constant currency basis using average
exchange rates for the current financial period applied to the
comparative period and is used to eliminate the effects of
fluctuations in assessing performance.
|
|
Proxibid
|
the Group's marketplace operated via
the www.proxibid.com domain
|
|
The Saleroom
|
the Group's marketplace operated via
the www.the-saleroom.com domain
|
|
Take rate
|
represents the Group's marketplace
revenue, excluding EstateSales.NET, as a percentage of GMV.
Marketplace revenue is the Group's reported revenue excluding
Content and Auction Services revenue
|
|
THV
|
total hammer value, representing the
total final sale value of all lots listed on the marketplaces or
the platform, excluding additional fees (such as online fees and
auctioneers' commissions) and sales of retail jewellery (being new,
or nearly new, jewellery)
|
|
Timed auctions
|
auctions which are held entirely
online (with no in-room or telephone bidders) and where lots are
only made available to online bidders for a specific,
pre-determined timeframe
|
Independent Review Report to Auction Technology Group
plc
Conclusion
We have been engaged by the Company
to review the condensed set of financial statements in the
half-yearly financial report for the six months ended 31 March 2024
which comprises the Condensed Consolidated Statement of Profit or
Loss, Condensed Consolidated Other Comprehensive Income or Loss,
the Condensed Consolidated Statement of Financial Position, the
Condensed Consolidated Statement of Changes in Equity, the
Condensed Consolidated Statement of Cash Flow and related notes 1
to 15. We have read the other information contained in the half
yearly financial report and considered whether it contains any
apparent misstatements or material inconsistencies with the
information in the condensed set of financial
statements.
Based on our review, nothing has
come to our attention that causes us to believe that the condensed
set of financial statements in the half-yearly financial report for
the six months ended 31 March 2024 is not prepared, in all material
respects, in accordance with United Kingdom adopted International
Accounting Standard 34 and the Disclosure Guidance and Transparency
Rules of the United Kingdom's Financial Conduct
Authority.
Basis for conclusion
We conducted our review in
accordance with International Standard on Review Engagements 2410
(UK) "Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" (ISRE) issued by the Financial
Reporting Council. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
As disclosed in note 1, the annual
financial statements of the Group are prepared in accordance with
UK adopted international accounting standards. The condensed set of
financial statements included in this half-yearly financial report
has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting".
Conclusions Relating to Going Concern
Based on our review procedures,
which are less extensive than those performed in an audit as
described in the Basis for Conclusion section of this report,
nothing has come to our attention to suggest that management have
inappropriately adopted the going concern basis of accounting or
that management have identified material uncertainties relating to
going concern that are not appropriately disclosed.
This conclusion is based on the
review procedures performed in accordance with this ISRE, however
future events or conditions may cause the entity to cease to
continue as a going concern.
Responsibilities of the Directors
The Directors are responsible for
preparing the half-yearly financial report in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority.
In preparing the half-yearly
financial report, the Directors are responsible for assessing the
company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going
concern basis of accounting unless the Directors either intend to
liquidate the company or to cease operations, or have no realistic
alternative but to do so.
Auditor's Responsibilities for the review of the financial
information
In reviewing the half-yearly report,
we are responsible for expressing to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less
extensive than audit procedures, as described in the Basis for
Conclusion paragraph of this report.
Use
of our report
This report is made solely to the
company in accordance with guidance contained in International
Standard on Review Engagements 2410 (UK) "Review of Interim
Financial Information Performed by the Independent Auditor of the
Entity" issued by the Financial Reporting Council. To the fullest
extent permitted by law, we do not accept or assume responsibility
to anyone other than the Company, for our work, for this report, or
for the conclusions we have formed.
Ernst & Young LLP
Reading
15 May 2024
