Auction bids call being taken
Total hammer and gross merchandise value under pressure / Image source: Adobe
  • Stock falls nearly 18% to 519p and a third of its value in 2023
  • Total hammer value and gross merchandise value pressured
  • Peel Hunt sees potential if macro headwinds taper

Worries about slowing growth are putting the squeeze on investor hopes for Auction Technology (ATG) as TMV (total hammer value) weakens. The London-based online auction operator said the economic environment has become ‘more challenging’, hurting growth in the second half of its financial year to 30 September 2023.

This sent shares in the company plunging, down almost 18% to 519p by midday and below the 600p initial public offering price back in February 2021. The stock has lost a third of its value this year.

WHAT THE COMPANY SAID

The FTSE 250 company reported annual revenue up 13% year-on-year at £135.2 million, boosted by February’s acquisition of EstateSales.NET. Strip that out however, and organic sales growth was just 5%. This led to a sharp drop in annual pre-tax profit, which fell from £9.3 million to £7.1 million, a 23% decline.

‘Outlook comments note that THV and GMV (gross merchandise value) are expected to continue to be impacted by underlying market growth which remains relatively uncertain’, said Numis.

ANALYST SEES POTENTIAL

But Auction Technology predicted continued revenue growth in the new year, helped by burgeoning VAS, or value-added services. ‘Revenue growth in VAS was 27%, with good adoption of digital marketing solutions and increased penetration of atgPay across LiveAuctioneers and Proxibid’ said analyst at Cavendish.

The company anticipates organic revenue growth of between 5% and 8% in fiscal 2024.

Broker Peel Hunt said any positive changes to the macro backdrop in coming months would provide upside against these numbers, ‘nevertheless, today’s news is not what the market was bidding for.’

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Issue Date: 30 Nov 2023