Auction Technology revenue rises as it adjusts margin forecasts

Online marketplace operator Auction Technology Group reported a 6% improvement in first-half revenue in an update on Tuesday, to $86m, as it narrowed its full-year margin guidance.

The FTSE 250 company said that on an organic basis, revenue managed a modest 1% rise year-on-year for the six months ended 31 March.

That growth was primarily attributed to the robust performance of EstateSales.Net (ESN), acquired in February last year.

Marketplace revenue experienced 2% organic growth, propelled by the expansion of value-added services and event fees, which effectively countered a decline in commission revenue.

Specifically, revenue in the art and antiques segment rocketed 17% to $44.6m, including ESN contributions, and by 5% on an organic basis.

The board said the increase was fuelled by the continuous adoption of value-added services, notably atgPay and atgShip.

However, industrial and commercial (I&C) revenue experienced a 2% organic decline to $35.2m.

Proxibid, within the I&C sector, encountered challenges due to market dynamics, such as the normalisation of used asset prices in certain categories and a lower year-on-year conversion rate.

Despite the challenges, ATG said it was satisfied with the response from auctioneers to its new cross-listing offering.

The board said the initiative was driving solid adoption of its white label, which was expected to lead to an enhanced trajectory for Proxibid in the future.

“We expect our full year group revenue to be in the range of $175m to $180m, implying a mid-point growth rate of 7%, including organic revenue growth of 2% to 5% and a strong contribution from ESN,” the ATG board said in its statement.

“Revenue growth in the second half of the 2024 financial year will be driven by the continued growth in value-added services, less challenging comparatives for the upcoming period, and encouraging trends seen from the roll out of cross-listing and ATG white label across the group.

“The group now expects its 2024 adjusted EBITDA margin to be 46% due to the mix of revenue with a higher contribution of lower margin value-added services relative to higher margin I&C commission revenue.”

ATG said it would report its interim results for the six months ended 31 March on 16 May.

At 0901 BST, shares in Auction Technology Group were down 13% at 542p.

Reporting by Josh White for Sharecast.com.