- Revenues up 11%, EPS beats market expectations
- Shares fall on second half weighting disappointment
- 2023 guidance reiterated
Shares in online marketplace provider Auction Technology (ATG) fell 15% to 726p on Thursday despite full year adjusted earnings per share coming in higher than market expectations.
That leaves the shares down 45% for the year but around 21% above the 600p listing price in February 2021.
The fall reflects some disappointment that 2023 growth guidance is second half weighted and continued pressure on highly rated shares in a rising interest rates environment.
Auction Technology trades on a 2023 price to earnings ratio of 25 times compared with 12 times for the FTSE 250 index, according to Refinitiv data.
The company said it expected high single digit to low double-digit revenue growth in 2023 and flat EBITDA (earnings before interest, tax, depreciation, and amortisation) reflecting continued investments to support growth.
In the medium term the company anticipates mid-teens plus revenue growth and mid-high 40’s EBITDA margins.
SOLID PERFORMANCE
Including contributions from acquisitions revenues increased 11% to £119.8 million for the year ended 30 September.
A higher number of auction houses listing assets on ATG marketplaces and higher prices for secondary goods drove a 22% increase in hammer value to £10.1 billion.
Hammer value represents the total final sale value of lots listed on marketplaces at auction.
Adjusted EBITDA jumped 70% year-on-year to £54 million as high operational leverage offset ‘significant’ planned investments and the full-year impact of public company costs.
High operating leverage means a greater proportion of revenue growth turns into profit.
Adjusted earnings per share increased to 29.5p per share compared with 9.2p last year while adjusted free cash flow jumped 64% to £49.9 million, reflecting the firm’s capital light model.
DISRUPTING AUCTIONS
CEO John Paul-Savant commented: ‘ATG is in a unique position to transform the auction industry and we are building the team, products and technology platform to achieve this.
‘Our success demonstrates the resilience of the ATG model, both as the structural shift online of the auction industry has continued, and as our business has become increasingly diversified by vertical and by revenue stream.’
