AUCTION TECHNOLOGY GROUP
PLC
FULL YEAR RESULTS FOR THE
YEAR ENDED 30 SEPTEMBER 2024
SOLID PROGRESS AGAINST
STRATEGIC INITIATIVES WITH IMPROVING MOMENTUM IN THE CORE
BUSINESS
London, United Kingdom, 27 November
2024 - Auction Technology Group plc ("ATG", "the Company", "the
Group") (LON: ATG), operator of world-leading marketplaces for
curated online auctions, today announces its audited financial
results for the year ended 30 September 2024. The Group has transitioned its presentational currency from
pound sterling to US dollars in FY24 and re-represented the
comparatives.
Financial results
|
|
|
FY24
|
FY23
|
Movement
|
Organic2
|
|
|
|
Revenue1&2
|
$174.2m
|
$165.9m
|
+5%
|
+2%
|
|
|
|
Adjusted
EBITDA1
|
$80.0m
|
$78.4m
|
+2%
|
|
|
|
|
Adjusted EBITDA margin
%1
|
46%
|
47%
|
-1ppt
|
|
|
|
|
Operating profit
|
$32.4m
|
$27.6m
|
+17%
|
|
|
|
|
Adjusted diluted earnings per
share1
|
38.6c
|
39.8c
|
-3%
|
|
|
|
|
Basic earnings per share
|
19.7c
|
16.8c
|
+17%
|
|
|
|
|
Adjusted net
debt1
|
$114.7m
|
$141.2m
|
+$26.5m
|
|
|
|
|
Cash generated by
operations
|
$71.6m
|
$70.7m
|
+1%
|
|
|
Financial highlights
· Revenue up 5% to $174.2m, driven by +12% A&A revenue and
+1% I&C revenue. Revenue up 2% on an organic basis, including
marketplace organic revenue growth of 3%, with a higher rate of
organic marketplace growth in second half at 4%.
· Adjusted EBITDA up 2% to $80.0m with adjusted EBITDA margin of
46%, down 1ppt year-on-year correlated with revenue mix.
· Operating profit increased 17% to $32.4m, driven by higher
adjusted EBITDA, lower share-based payments charges and lower
exceptional costs year-on-year.
· Adjusted diluted earnings per share of 38.6c, down 3% as
increase in adjusted EBITDA and lower net finance costs offset, as
expected, by higher effective tax rate; basic earnings per share of
19.7c up 17%
· Continued strong adjusted free cash flow generation of $65.8m
(FY23: $61.1m) resulting in significant deleverage with closing
adjusted net debt of $114.7m down from $141.2m and adjusted net
debt/adjusted EBITDA ratio at 1.4x, down from 1.8x
Operational highlights
· GMV3
Recovery: GMV at $3.6bn,
down 11% at a headline level, but with significant improvement in
momentum as year progressed and stronger underlying trends. GMV
down 4% in second half and positive in the first eight weeks of
FY25 driven by recovery in I&C.
· Take Rate3
Growth: Take rate increased from
3.6% to 4.2% based on continued success extending value-added
services (shipping, payments and auctioneer paid-for digital
marketing) with value-added services now representing 24% of
Group revenue.
· Enhanced both sides of the
marketplace: expanded supply &
demand including 23.8m lots listed, +7%; 88,000+ auctions
facilitated, +2%; 390m web sessions across all sites, +16%.
Promising results from initial investments to further drive GMV by
making it even easier for auctioneers to reach more bidders with
the launch of cross-listing between ATG marketplaces and ATG white
label ("atgXL").
· Strengthened
Competitive
Position: Differentiated the
ATG offering with the launch of an integrated white label plus
marketplace solution. Over 20% penetration of atg white label in
Proxibid I&C GMV already achieved. Opportunity to grow
this meaningfully.
· Consolidated systems &
operations: Unified multiple data
warehouses, consolidated systems across the Group in both finance
and HR leading to efficiencies across the business.
· Optimised
our
Acquisition: Grew ESN revenues
+24% versus same twelve-month period a year ago and enhanced
flywheel for LiveAuctioneers via ESN cross-listing,
+9% GMV uplift.
John-Paul Savant, Chief Executive Officer of Auction
Technology Group plc, said:
"ATG continued to deliver growth,
generate strong cash flow and execute against investments that
improve the user experience and capture more of the auction value
chain, despite some continued headwinds in our end-markets. Having
connected our $13 billion of supply with 390 million sessions of
demand enhanced by atgXL, and having raised the standard of buying
online at auction via atgShip and atgPay for participating
auctioneers, we are now accelerating the introduction of enhanced
buyer search and recommendation algorithms across our 24 million
items. Beyond connecting supply and demand, atgXL differentiates
our proposition as auctioneers can now run their white label and an
ATG marketplace via timed auction at the same
time."
"Our strong cash generation
positions us to migrate our acquired technology platforms as well
as to invest to raise e-Commerce standards for improved customer
experience. We expect that our program of continuous improvements
will result in extending the addressable base of buyers and sellers
and contribute to ATG's outperformance of the underlying market we
serve, with underlying conversion rate improvements as well as
incremental transaction revenue from value-added
solutions."
Current trading and outlook
Trading in the first eight weeks of
FY25 has continued to show positive momentum from the second half
of FY24. ATG remains confident in its ability to sustain this
growth through the delivery of its strategic initiatives. For FY25
we expect
· Revenue growth in the range of 4-6%, supported by the
continued growth of value-added services and positive GMV growth,
also reflecting uncertain end markets.
· Adjusted EBITDA margin of 45% to 46% reflecting operational
leverage from revenue growth offset by ongoing investment into the
business.
Webcast presentation
There will be an in-person and
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
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+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 approximately 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 88,000 live and timed
auctions each year and facilitating the sale of approximately 24
million secondary goods items. ATG has offices in the UK, North
America, Germany and Mexico.
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, 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 FY24 and FY23,
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 is executing against an online
marketplace strategy that focuses on the development of core
capabilities in order to accelerate the marketplace flywheel. Over
the past eight years, we have built and acquired technology
platforms that have enabled us to grow our extensive auctioneer and
bidder base, and drive volume through our marketplaces. In the last
two years, we have begun to further monetise each online auction
transaction by offering premium solutions for both auctioneers and
bidders including value-added services, such as atgAMP (marketing),
atgPay (payments) and atgShip (shipping). We remain focused on
bringing the overall quality of our auction experience up to global
e-commerce standards which will drive continued value for
auctioneers and bidders alike.
In FY24, we extended beyond the core
transaction to drive network effects across our marketplaces
substantially through the launch of our cross-listing solution,
atgXL, which enables an auctioneer to simultaneously run a timed
auction across multiple ATG marketplaces and an atg white label.
This past financial year presented challenges too including soft
A&A markets, the impact of the Proxibid rate card
standardisation and I&C asset price deflation, before more
recent normalisation. Nevertheless, our steadfast focus and
progress against these strategic programmes was undaunted and we
were able to deliver solid growth.
Our strong financial model, EBITDA
margins and cash generation underpinned significant balance sheet
deleveraging with our net debt to adjusted EBITDA leverage ratio at
year-end improving to 1.4x. Furthermore, the improved momentum of
GMV in the second half, especially for the I&C sector, as well
as our exposure to the North America market, accounting for over
80% of revenues, portends well for the year ahead.
I was delighted to welcome Scott
Forbes to the role of Chair of ATG in August following the
resignation of Breon Corcoran six months after his CEO appointment
at IG Group Holdings plc. I am grateful for Breon's contributions
from IPO through his departure and have also been fortunate to
benefit from Scott's considerable digital marketplace experience
including over forty cumulative years as board director and chair.
Following the announcement in October 2024 that Tom Hargreaves will
be leaving ATG, I would also like to personally thank Tom for his
partnership and contributions as CFO over the last eight years, and
to wish him the best in the next phase of his career.
1. Expand the total addressable
market
The trust of our auctioneers and
bidders is built on the value we deliver to them. Auctioneer
loyalty remained strong in FY24, with retention of auctioneers in
GMV terms at 98%, and with around 4,000 auctioneers on our sites at
year-end. Auctioneer retention reflects the value ATG delivers
through increasing the number of bidders, with ATG on average
providing 56% of all bids placed in auctions (hosted on ATG
marketplaces) and 40% of GMV coming from bidders who were new to
the auction house. Volumes of auctions remained robust in FY24. We
facilitated over 88,000 auctions and listed 23.8 million lots, up
2% and 7%, respectively year-on-year. Bidding sessions across our
sites including ESN grew 16% to over 390 million, highlighting the
structural trend towards making sustainable purchases, with 1.6
million new account registrations, up 3%.
Against this positive volume
backdrop, Total Hammer Value ("THV") across the Group was broadly
flat year-on-year at $13.2bn, or up 2% excluding the impact of the
planned rotated volume, which had high service requirements but
minimal revenue contribution as described in our FY23 results.
There were also some headwinds from pricing in both markets and a
negative mix impact due to fewer sales of higher priced items. THV
was further affected by the mix of assets listed on our
marketplaces, including an increase in A&A items from
auctioneers outside our core geographies (North America, UK and
Germany) and a decrease in real estate auctions in I&C, both of
which tend to be volatile in nature. However, the diversity in the
range of assets we sell, in addition to the relatively lower-priced
points versus some parts of the auction market, provided
resilience. Furthermore, prices in I&C used assets stabilised
in the second half of the year with THV delivering positive growth
in the second half.
2. Grow the conversion
rate
The headline conversion rate of 27%
for FY24, down 4ppt, was impacted both by asset category mix on our
marketplaces as well as the Proxibid rate card standardisation. In
A&A, a flat conversion rate for THV from our core geographies,
which drives the vast majority of our A&A revenue, was masked
by the growth in other THV, which has a significantly lower
conversion rate whilst also being inherently volatile. A similar
impact from asset mix was seen in I&C, including from the
decline in real estate auctions which tend to be run as an
online-only timed format with a 100% conversion rate, yet a minimal
commission impact. However, the underlying conversion rate for many
I&C asset categories improved in the second half, once the
impact from the rate card standardisation was lapped.
ATG is investing to further
strengthen its leading competitive position, by making it easier
for auctioneers to use a range of channels to access the online
market through the launch of our marketplace integrated white label
solution. We estimate that white label penetration amongst our
auctioneers is already high, with around 60% of A&A and around
80% of I&C in GMV terms having either an ATG or an
independent white label solution. We estimate that the winning bids
for 20-25% of A&A THV and I&C THV currently go through an
independent white label solution. The opportunity for ATG is
therefore to win share from the independent white label providers,
with our new integrated product offering auctioneers a superior
solution through providing the ability to run an online-only timed
auction on an ATG marketplace concurrently with an atg white label.
We have already achieved over a 20% penetration of our integrated
white label solution in Proxibid I&C GMV, representing an
almost $40m additional GMV opportunity. At
the same time, we made the strategic decision to refocus away from
pursuing smaller low margin customers who are using our stand-alone
only white label solution and have a low life-time value, whilst
focusing on the majority of revenue in Auction Services which comes
from larger auctioneers who have bespoke
white label solutions but also use our marketplaces.
We are also investing to improve the
user experience by making it even easier for buyers to buy on an
ATG marketplace and drive our conversion rate. This includes
through investing in our search function to help improve the
experience for bidders, particularly for those who are new to
auction. We are encouraged by the initial signs of our investments
and are accelerating our investments in some areas, although we
acknowledge that it will take time for our initiatives to have the
full impact on increasing the conversion rate.
3. Enhance the network
effect
Over FY24, ATG made good progress to
drive the network effect across our marketplaces and white label.
We launched atgXL, which enables an auctioneer to have a single
upload of inventory to our system, to then push that inventory to
multiple ATG marketplaces as well as to an atg white label, and to
have a single place to manage bids for an online-only timed
auction. Using atgXL, auctioneers save up to 66% of their time by
only uploading the catalogue once, whilst also benefiting from
paying a single event fee, even with the auction hosted on multiple
ATG marketplaces. Bidders also have access to a greater selection
of inventory without needing to hunt across multiple sites. In
FY25, we aim to develop and roll out atgXL for live
auctions.
Towards the end of the year, we also
launched the ATG Partner Network, which enables auctioneers to
cross-list their auction on four third party partner listing-only
sites that also specialise in I&C used asset sales. The partner
sites we are working with are all high traffic classified sites,
offering the potential for our auctioneers to unlock significantly
more bidders and providing ATG with a source of one-way traffic.
Whilst the programme is in early stages, we have seen some
encouraging initial results and we are looking to develop a Partner
Network for our A&A marketplaces.
4. Grow the take rate via value-added
services
We have continued to execute
strongly against the roll out of value-added services, with revenue
from atgAMP, atgShip and atgPay collectively growing 35%
year-on-year and now accounting for 24% of Group revenue. This
growth has contributed to the Group take rate increasing by 0.6ppt
to 4.2%. 31% of auction events were supported by atgAMP in FY24
(FY23: 27%), with auctioneers attracted to the high return of
investment that our marketing products offer, as well as new
features such as new dynamic ad units. 61% of US Gross Transaction
Value on LiveAuctioneers was processed through atgPay in FY24 with
96% of US based auction houses on LiveAuctioneers now onboarded to
atgPay. atgShip, our integrated delivery solution, saw strong
adoption in its first year of launch with shipping available on
over 10% of inventory on LiveAuctioneers in the second half.
Importantly, atgShip continues to have a positive impact on bidding
behaviour, with auctions featuring atgShip seeing a 9% increase in
bidding activity and a 5% GMV uplift on average. We continue to see
strong growth opportunities for all three services in FY25,
including through driving penetration of marketing on I&C
platforms and continuing to drive the adoption of shipping on
LiveAuctioneers.
5. Expand operational
leverage
In FY24, ATG has continued to drive
efficiencies through improvements to our hub and spoke operating
model and the modernisation of our platforms. This included through
the reorganisation of our North America product and marketing
teams, welcoming a new Chief Product Officer to ATG, as well as
through the consolidation of our financial and people related
back-office systems. We also established a tech hub in Mexico which
has enabled us to quickly add high-quality engineers in a
cost-effective way and we have made good progress on our technology
consolidation programme, with a focus on the development of atgXL,
as well as on the integration of the Proxibid technology stack. We
also now have a unified data warehouse providing a single
comprehensive view of all our data, thereby enabling us to improve
analytics and support more efficient decision-making, including
through the application of AI.
6. Pursue accretive
M&A
The acquisition of ESN has
highlighted ATG's ability to find, acquire and integrate
value-accretive businesses. ESN's revenue grew 24% year-on-year in
FY24, primarily driven by improvements in the subscription funnel
for estate sellers, refinements to pricing, advertising growth and
strong execution by the ESN team. The acquisition has also
demonstrated that people ready to buy arts and antiques at auction
are not just those who are traditionally buying, but also a much
broader pool of buyers who are buying through other channels in the
secondary goods market. Through enabling cross-listing on ESN,
auctioneers on LiveAuctioneers have been able to tap into a
complementary yet separate pool of potential bidders with strong
initial results; in the second half of FY24, 49% of auctions on
LiveAuctioneers were cross-listed on EstateSales.NET, with buyers
originating from ESN driving on average a 9% uplift on the auctions
in which they participate. We have also begun to incentivise ESN
sellers to switch to use an ATG marketplace as their platform of
choice if and when they host auctions of higher value items
selected from their estate sales. We are pleased with the initial
response to this initiative from estate sellers.
Summary
ATG delivered another year of growth
and continued to execute well against its strategic initiatives.
Much progress was made with product and platform development this
past year. Our cash-generative model allows us to further
fortify our platform in FY25 as we increase auctioneer reach to an
expanded set of even more bidders who are better positioned than
ever to discover and bid on the widest range of unique secondary
market merchandise and contribute significantly to the efficacy of
the circular economy. Our cash-generative model also enabled us to
significantly reduce balance sheet leverage, whilst our strong
market position, diversified revenue base and resilient shared
success business model positions us to continue to deliver
significant value for all our stakeholders. I would like to thank
all of our shareholders, bidders, auctioneers and especially our
400 employees who make our success possible.
John-Paul Savant
Chief Executive Officer
CFO REVIEW
Group presentation of results
The financial results for FY24 are
presented for the year ended 30 September 2024. The Group has
changed its presentational currency from pound sterling to US
dollars for FY24 and future financial periods. The FY23
comparatives have been re-presented in US dollars. Note 1 of the
Consolidated 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 in FY24
and FY23 from the date of the acquisition. The impact of the
acquisition affects the comparability of the Group's results.
Therefore, to aid comparisons between FY23 and FY24 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
fluctuations in assessing performance. Note 3 includes a full
reconciliation of all APMs presented to the reported results for
FY24 and FY23.
Revenue
|
|
FY24
$m
|
FY23
$m
|
Movement
Reported
|
Movement
Organic
|
|
Arts & Antiques
("A&A")
|
90.3
|
80.5
|
12%
|
6%
|
|
Industrial & Commercial
("I&C")
|
71.8
|
71.4
|
1%
|
0%
|
|
Total marketplace
|
162.1
|
151.9
|
7%
|
3%
|
|
Auction Services
|
8.4
|
10.2
|
(18)%
|
(18)%
|
|
Content
|
3.7
|
3.8
|
(3)%
|
(5)%
|
|
Total
|
174.2
|
165.9
|
5%
|
2%
|
Group
Group revenue increased 5%
year-on-year to $174.2m, driven by growth in marketplace revenue
and the acquisition of ESN. On an organic basis, revenue grew 2%
including organic marketplace revenue growth of 3% driven by the
growth in value-added services revenue which offset a 6% reduction
in commission revenue primarily impacted by a 11% decrease
in GMV. In the second half, organic marketplace revenue growth
improved to 4%, largely due to the improvement in the trend of GMV
which was down 4%. Marketplace revenue growth was partially offset
by declines in both Auction Services and Content of 18% and 5%
respectively.
Arts & Antiques
Revenue in the A&A segment grew
12% to $90.3m including the ESN acquisition, and grew 6% on an
organic basis. Organic revenue growth was predominantly driven by
the strong growth of all value-added services in A&A including
atgAMP, atgPay and atgShip, with a resultant 1.2ppt increase in the
take rate to 9.8%. GMV across A&A declined 6%, impacted by a
softer market environment, particularly for higher-value items. The
overall conversion rate in A&A was down 1ppt at 14%. The
A&A conversion rate for our core geographies, which generate
the vast majority of A&A revenues, was stable year-on-year.
Thus the decline was driven by a dilutive impact from an increase
in the listings of auctioneers from other geographies who typically
have a significantly lower conversion rate. ESN delivered strong
growth, up 24% year-on-year, largely driven by an updated pricing
structure and the growth of marketing revenue.
Industrial & Commercial
I&C revenue increased 1% on a
reported basis and was flat year-on-year on an organic basis at
$71.8m. I&C commission revenue fell by 7%, impacted by a 12%
decline in I&C GMV, or a 5% decline when excluding the impact
of the rotated volume which had high service requirements but
minimal revenue contribution. I&C THV was negatively impacted
by the normalisation of asset prices in some used asset categories,
although showed momentum in the second half as asset prices
stabilised with THV positive in the second half. Whilst the
headline conversion rate in I&C fell 4ppt to 38%, this was
impacted by asset category mix, including a decline in real estate
which tends to be lumpy and is largely via timed auctions, although
has a minimal commission rate, as well by the Proxibid rate card
standardisation which had a reducing impact over the course of the
year. GMV growth was also positive in the second half when
excluding low commission rate real estate, as a result of improved
end markets as well as stabilisation in the conversion rate due to
early positive signs from strategic initiatives to drive GMV such
as the roll out of atgXL and the adoption of atg white label. The
continued growth in value-added services also provided support to
I&C revenue contributing to a 0.3ppt increase in the take rate
to 2.5%.
Auction Services
Auction Services revenue of $8.4m
declined 18% on a reported basis. Our strategic decision to focus
on our marketplace integrated cross-listing product, resulted in
both the cessation of new customer additions to our stand-alone (no
presence on our marketplaces) product as well as the churn of a
limited number of international customers in auction services who
do not use our marketplaces, with both sets of customers being
small auctioneers who are low margin for ATG and have a low
lifetime value. Larger auctioneers, who have bespoke white label
solutions whilst also using our marketplaces and account for the
majority of revenue, remain in auction services. We expect this
impact to be significantly lower in future years. We aim for ATG to
increasingly become the preferred provider for white label
solutions to our marketplace customers, through our atgXL product,
with revenue generated from cross-listed auctions to be recognised
in marketplace revenue.
Content
Content revenue declined 3% to
$3.7m, as expected, impacted by the historic gradual decline in
print advertising.
Financial performance
|
|
Reported
|
|
|
FY24
$m
|
FY23
$m
|
Movement
|
|
|
Revenue
|
174.2
|
165.9
|
5%
|
|
|
Cost of sales
|
(57.0)
|
(53.3)
|
7%
|
|
|
Gross profit
|
117.2
|
112.6
|
4%
|
|
|
Administrative expenses
|
(84.8)
|
(85.7)
|
(1)%
|
|
|
Other operating income
|
-
|
0.7
|
(100)%
|
|
|
Operating profit
|
32.4
|
27.6
|
17%
|
|
|
Adjusted EBITDA (as defined in note 3)
|
80.0
|
78.4
|
2%
|
|
|
Finance income
|
0.3
|
0.2
|
50%
|
|
|
Finance cost
|
(14.3)
|
(19.2)
|
(26)%
|
|
|
Net
finance costs
|
(14.0)
|
(19.0)
|
(26)%
|
|
|
Profit before tax
|
18.4
|
8.6
|
114%
|
|
|
Income tax credit
|
5.8
|
11.9
|
(51)%
|
|
|
Profit for the period attributable to the equity holders of
the Company
|
24.2
|
20.5
|
18%
|
|
Operating profit
The Group reported an operating
profit of $32.4m compared to $27.6m in the prior year, driven by
the increase in gross profit and broadly flat administrative
expenses year-on-year.
Gross profit increased 4% to
$117.2m, driven by the 5% increase in revenue, partially offset by
a 1ppt decrease in the gross margin to 67%, driven by the decline
in high margin commission revenue. Administrative expenses
decreased by $0.9m to $84.8m, benefiting from a lower share-based
payment expense of $6.0m (FY23: $8.6m) due to changes in the Senior
Management Team as well due to the financial performance of the
Group, in addition to a decrease in exceptional costs year-on-year
to $1.1m (FY23: $3.3m) primarily relating to final costs from the
ESN acquisition. Administrative expenses also include the
amortisation on acquired intangible assets of $28.1m (FY23:
$27.0m). Excluding the impact of these costs, administrative
expenses increased $2.8m reflecting full-year cost contribution
from the ESN acquisition versus seven months in the prior year, an
increase in the level of expected credit losses in the period
(particularly from Auction Services), and investments in the
business to support future growth such as the establishment of a
tech hub in Mexico. This increase in costs was partially offset by
lower performance-related pay year-on-year.
Adjusted EBITDA
Adjusted EBITDA definitions and
reconciliations to the reported results are presented in note
3.
Adjusted EBITDA increased from
$78.4m to $80.0m year-on-year, driven by revenue growth. The
adjusted EBITDA margin decreased by 1ppt to 46% impacted by the
changing mix of revenue with the decline in high margin commission
revenue. As expected, the adjusted EBITDA margin improved
significantly in the second half, driven by the phasing of costs in
the year and an improving trend in commission revenue.
Net
finance costs
Net finance costs were $14.0m
compared to $19.0m in FY23. Costs include the impact of a $0.5m
non-cash foreign exchange loss versus a $5.0m loss in FY23 related
to intergroup balances. Excluding this impact, finance costs
decreased to $13.8m (FY23: $14.2m), benefiting from a lower average
loan balance over the year offsetting a higher average interest
rate of 8%, which is based on the Secured Overnight Financing Rate
("SOFR"). In the year, the Group repaid $27.7m on the Senior Term
Facility. As a result, the total loan balance decreased from
$148.6m to $121.5m as at 30 September 2024.
Other finance costs of $1.3m (FY23:
$1.2m) include commitment fees and loan origination amortisation on
our Senior Term Facility, movement in the deferred consideration as
well as interest on lease liabilities. Finance income of $0.3m
primarily relates to interest income in the year (FY23: $0.2m). In
FY25, we would expect interest costs to be lower reflecting a lower
interest rate as a result of both forward interest rate
expectations and a planned debt refinance in FY25, as well as
reflecting a lower average loan balance.
Profit before tax
After the impact of lower net
finance costs year-on-year, the Group reported a profit before tax
of $18.4m (FY23: $8.6m).
Taxation
The Group's statutory tax credit of
$5.8m (FY23: $11.9m) with an effective tax rate credit of 32%
(FY23: credit of 137%) includes unrealised foreign exchange
differences and non-deductible foreign exchange differences
on intra-group loan balances of $11.5m (FY23: $11.9m).
The intra-group loan which gave rise to the foreign exchange
differences has been redenominated at the end of FY24, and
therefore there are not expected to be significant deferred
tax movements in the tax charge going forward. The tax charge,
excluding these permanent differences, is $5.7m (FY23: $nil). Other
reconciling items included non-deductible share-based payment
expense and adjustments in respect of prior years and tax rates. In
FY23 other reconciling items also included allowable deductions on
exercise of share associated with the LiveAuctioneers
acquisition.
The tax rate on adjusted earnings of
19%, which includes the benefit of deductible goodwill, increased
from 16% in the prior year, reflecting the increase in the UK
corporate tax rate. The Group expects the tax rate on adjusted
earnings to remain at 19% in FY25 subject to no further changes in
tax rates in our key jurisdictions.
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
were 19.7c and 19.5c respectively compared to 16.8c and 16.7c
respectively in FY23, benefiting from the increase in profit before
tax. The weighted average number of shares during the year was
122.7m (FY23: 122.2m), with the increase due to the impact of
vested equity incentive awards.
Adjusted diluted earnings per share
was 38.6c compared to 39.8c in FY23 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 versus
FY23 is driven by the higher effective tax rate of 19% versus 16%
in FY23 reflecting the increased tax rate in the UK, which offsets
the increase in adjusted earnings largely due to higher adjusted
EBITDA. The weighted average number of ordinary shares and dilutive
options in the year was 123.8m (FY23: 123.1m).
A reconciliation of the Group's
profit after tax to adjusted earnings 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.
The tax for the period was
significantly impacted by movements in foreign currency exchange
rates, resulting in a reduction in the tax charge of $11.5m. The
weakening of the US dollar against pound sterling has given rise to
a gain of $1.0m on assets held and $13.0m on the external dollar
loan. A net loss of $14.0m has been recognised in the foreign
currency reserve.
|
Revenue
|
FY24
$m
|
FY23
$m
|
|
United Kingdom
|
25.3
|
24.1
|
|
North America
|
143.3
|
137.0
|
|
Germany
|
5.6
|
4.8
|
|
Total
|
174.2
|
165.9
|
The average FY24 exchange rate of US
dollar against pound sterling weakened by 3.3% and by 1.9% against
the euro compared to FY23, as shown in the table below, resulting
in a small positive impact on our Group revenue.
|
|
Average
rate
|
Closing
rate
|
|
|
FY24
|
FY23
|
Movement
|
FY24
|
FY23
|
Movement
|
|
Pound Sterling
|
1.27
|
1.23
|
3.3%
|
1.34
|
1.22
|
9.8%
|
|
Euro
|
1.09
|
1.07
|
1.9%
|
1.12
|
1.06
|
5.7%
|
Statement of financial position
Overall net assets at 30 September
2024 have increased by $41.3m to $687.8m since 30 September 2023.
Total assets decreased by $20.7m, driven by a $3.7m cash outflow
related to the prepayment of our Senior Term Facility, a net
reduction in intangible assets of $25.5m (including additions of
$10.8m and amortisation charge of $39.0m) and an $11.4m increase in
goodwill due to foreign exchange movements. The Group's goodwill
and intangibles were tested for impairment at 30 September 2024 and
no impairment was recognised. Refer to note 9 for further
details.
Total liabilities decreased by
$62.0m, primarily due to a reduction in loans and borrowings of
$27.1m, a decrease in deferred tax liabilities of $15.0m, which is
largely driven by the movement on the unrealised foreign exchange
differences and the unwind of the capitalised acquisition
intangible assets, and the $18.9m reduction in trade and other
payables including the $12.0m payment of deferred consideration and
bonus for ESN.
Cash flow and adjusted net debt
The Group generated $71.6m cash from
operations, a small increase from the prior year (FY23: $70.7m).
Expenditure on additions to internally generated software was
$10.8m (FY23: $10.8m) primarily relating to investments in new
products such as atgXL, atgPay and atgShip, as well as investment
to consolidate our technology platforms. Spend was in line with the
guidance we provided at the start of FY24. Excluding the impact
from exceptional and other items, working capital was an outflow of
$3.0m (FY23: outflow of $5.8m) and primarily relates to performance
related pay accruals and the timing of trade activity. In the year,
the Group paid $10.0m in deferred consideration and $2.0m in
retention bonuses related to the ESN acquisition.
Adjusted net debt as at 30 September
2024 was $114.7m, a decrease from $141.2m as at 30 September 2023
due to strong operating cash generation. The Group had cash and
cash equivalents excluding restricted cash of $6.8m and borrowings
of $121.5m as at 30 September 2024 (30 September 2023: cash and
cash equivalents excluding restricted cash of $7.4m and borrowings
of $148.6m).
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
repaid $27.7m of its Senior Term Facility during the year and the
drawdown on the Revolving Credit Facility to fund the ESN payments
was fully repaid in the second half. The adjusted net debt/adjusted
EBITDA ratio was 1.4x as at 30 September 2024 versus 1.8x as at 30
September 2023.
The Group's adjusted free cash flow
was $65.8m (FY23: $61.1m), a conversion rate of 82% (FY23: 78%).
The increase in the conversion rate reflects higher cash generated
from operations.
|
Reconciliation of cash generated from operations to adjusted
free cash flow
|
FY24
$m
|
FY23
$m
|
|
Cash
generated from operations
|
71.6
|
70.7
|
|
Adjustments for:
|
|
|
|
Exceptional items
|
1.0
|
3.3
|
|
Working capital from exceptional and
other items
|
4.4
|
(1.4)
|
|
Additions to internally generated
software
|
(10.8)
|
(10.8)
|
|
Additions to property, plant and
equipment
|
(0.4)
|
(0.5)
|
|
Payments for right of use
assets
|
-
|
(0.2)
|
|
Adjusted free cash flow
|
65.8
|
61.1
|
|
Adjusted free cash flow conversion
|
82%
|
78%
|
Reconciliation of adjusted EBITDA to adjusted free cash
flow
|
|
FY24
$m
|
FY23
$m
|
|
Adjusted EBITDA
|
80.0
|
78.4
|
|
Movement in working
capital
|
(7.4)
|
(4.4)
|
|
Add back: working capital from
exceptional and other items
|
4.4
|
(1.4)
|
|
Adjusted cash from operations
|
77.0
|
72.6
|
|
Additions to internally generated
software
|
(10.8)
|
(10.8)
|
|
Additions to property, plant and
equipment
|
(0.4)
|
(0.5)
|
|
Payments for right of use
assets
|
-
|
(0.2)
|
|
Adjusted free cash flow
|
65.8
|
61.1
|
|
Adjusted free cash flow conversion
|
82%
|
78%
|
Dividends
As per the Group's dividend policy,
the Group sees strong growth opportunities through organic and
inorganic investments and, as such, intends to retain any future
earnings to finance such investments. The Company will review its
dividend policy on an ongoing basis but does not expect to declare
or pay any dividends for the foreseeable future. Therefore, no
dividends have been paid or proposed for FY24 or FY23.
Post balance sheet events
There were no post balance sheet
events.
Related parties
Related party disclosures are
detailed in note 15.
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.
The Group has its Senior Loan
Facility in place which is due to expire in June 2026. The
assessment assumes that the Group will continue to have access to
this funding throughout the viability period on the basis that the
Group will either renew the facility or have sufficient time to
agree an alternative source of finance on
comparable terms.
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 31
December 2025 and therefore it remains appropriate to continue to
adopt the going concern basis in preparing the financial
information.
Tom
Hargreaves
Chief Financial Officer
Consolidated Statement of Profit or Loss and
Other Comprehensive Income or Loss
for the year ended 30 September 2024
|
|
Note
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Revenue
|
4,5
|
174,148
|
165,886
|
|
Cost of sales
|
|
(56,924)
|
(53,301)
|
|
Gross profit
|
|
117,224
|
112,585
|
|
Administrative expenses
|
|
(82,596)
|
(85,834)
|
|
Net impairment (loss)/gain on trade
receivables
|
10
|
(2,224)
|
210
|
|
Other operating income
|
|
24
|
666
|
|
Operating profit
|
|
32,428
|
27,627
|
|
Finance income
|
6
|
258
|
220
|
|
Finance costs
|
6
|
(14,303)
|
(19,183)
|
|
Net finance costs
|
6
|
(14,045)
|
(18,963)
|
|
Profit before tax
|
|
18,383
|
8,664
|
|
Income tax
|
7
|
5,809
|
11,879
|
|
Profit for the year attributable to
the equity holders of the Company
|
|
24,192
|
20,543
|
|
|
|
|
|
|
Other comprehensive income/(loss)
for the year 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
|
|
944
|
3,826
|
|
Fair value gain arising on hedging instruments
during the year
|
|
13,019
|
14,478
|
|
Tax relating to these items
|
7
|
(3,255)
|
(3,186)
|
|
Other comprehensive income for the
year, net of income tax
|
|
10,708
|
15,118
|
|
Total comprehensive income for the
year attributable to the equity holders of the Company
|
|
34,900
|
35,661
|
|
|
|
|
|
|
Earnings per share
|
|
cents
|
cents
|
|
Basic
|
8
|
19.7
|
16.8
|
|
Diluted
|
8
|
19.5
|
16.7
|
The above results are derived from continuing
operations.
The Consolidated Financial Statements for the
year ended 30 September 2023 have been restated throughout to be
presented in US dollars, as detailed in note 1. In addition, net
impairment (loss)/gain on trade receivables is separated from
administrative expenses, where they were reported in previous
periods.
Consolidated Statement of Financial
Position
as at 30 September 2024
|
|
Note
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
Restated
1 October
2022
$000
|
|
ASSETS
|
|
|
|
|
|
Non-current assets
|
|
|
|
|
|
Goodwill
|
9
|
589,989
|
578,572
|
546,167
|
|
Other intangible assets
|
9
|
244,274
|
269,729
|
275,332
|
|
Property, plant and equipment
|
|
827
|
874
|
550
|
|
Right of use assets
|
|
2,699
|
3,941
|
1,915
|
|
Trade and other receivables
|
10
|
1,427
|
138
|
100
|
|
Total non-current assets
|
|
839,216
|
853,254
|
824,064
|
|
Current assets
|
|
|
|
|
|
Trade and other receivables
|
10
|
17,423
|
19,965
|
16,725
|
|
Contract assets
|
5
|
1,499
|
1,856
|
927
|
|
Tax assets
|
|
-
|
124
|
1,754
|
|
Cash and cash equivalents
|
11
|
6,826
|
10,416
|
57,876
|
|
Total current assets
|
|
25,748
|
32,361
|
77,282
|
|
Total assets
|
|
864,964
|
885,615
|
901,346
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Non-current liabilities
|
|
|
|
|
|
Loans and borrowings
|
12
|
(98,530)
|
(132,923)
|
(167,391)
|
|
Tax liabilities
|
|
-
|
(976)
|
(1,200)
|
|
Lease liabilities
|
|
(2,549)
|
(3,240)
|
(1,185)
|
|
Deferred tax liabilities
|
13
|
(34,673)
|
(49,629)
|
(72,175)
|
|
Total non-current
liabilities
|
|
(135,752)
|
(186,768)
|
(241,951)
|
|
Current liabilities
|
|
|
|
|
|
Trade and other payables
|
|
(11,491)
|
(30,343)
|
(19,097)
|
|
Contract liabilities
|
5
|
(1,639)
|
(1,851)
|
(1,886)
|
|
Loans and borrowings
|
12
|
(22,953)
|
(15,688)
|
(34,606)
|
|
Tax liabilities
|
|
(4,483)
|
(3,779)
|
(535)
|
|
Lease liabilities
|
|
(886)
|
(731)
|
(870)
|
|
Total current liabilities
|
|
(41,452)
|
(52,392)
|
(56,994)
|
|
Total liabilities
|
|
(177,204)
|
(239,160)
|
(298,945)
|
|
|
|
|
|
|
|
Net assets
|
|
687,760
|
646,455
|
602,401
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share capital
|
14
|
17
|
17
|
17
|
|
Share premium
|
14
|
334,463
|
334,458
|
334,045
|
|
Other reserve
|
14
|
330,310
|
330,310
|
330,310
|
|
Capital redemption reserve
|
|
7
|
7
|
7
|
|
Share option reserve
|
|
31,418
|
32,683
|
46,313
|
|
Foreign currency translation reserve
|
|
(28,862)
|
(42,825)
|
(61,129)
|
|
Retained earnings/(losses)
|
|
20,407
|
(8,195)
|
(47,162)
|
|
Total equity
|
|
687,760
|
646,455
|
602,401
|
The Consolidated Financial Statements for the
year ended 30 September 2023 have been restated throughout to be
presented in US dollars and the Consolidated Statement of Financial
Position has been restated to separately disclose contracts assets
and contract liabilities, as detailed in note 1.
Consolidated Statement of Changes in
Equity
for the year ended 30 September 2024
|
|
Note
|
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
|
14
|
-
|
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 year
|
|
-
|
-
|
-
|
-
|
-
|
-
|
24,192
|
24,192
|
|
Other comprehensive
income/(loss)
|
|
-
|
-
|
-
|
-
|
-
|
13,963
|
(3,255)
|
10,708
|
|
Total comprehensive income for the
year
|
|
-
|
-
|
-
|
-
|
-
|
13,963
|
20,937
|
34,900
|
|
Transactions with owners
|
|
|
|
|
|
|
|
|
|
|
Shares issued
|
14
|
-
|
5
|
-
|
-
|
-
|
-
|
-
|
5
|
|
Share-based payments
|
|
-
|
-
|
-
|
-
|
(1,265)
|
-
|
7,665
|
6,400
|
|
30 September 2024
|
|
17
|
334,463
|
330,310
|
7
|
31,418
|
(28,862)
|
20,407
|
687,760
|
Consolidated Statement of Cash Flows
for the year ended 30 September 2024
|
|
Note
|
Year
ended
30
September 2024
$000
|
Restated
Year ended
30 September
2023
$000
|
|
Cash flows from operating
activities
|
|
|
|
|
Profit before tax
|
|
18,383
|
8,664
|
|
Adjustments for:
|
|
|
|
|
Amortisation of acquired intangible
assets
|
9
|
32,484
|
32,625
|
|
Amortisation of internally generated
software
|
9
|
6,532
|
4,725
|
|
Depreciation of property, plant and
equipment
|
|
426
|
391
|
|
Depreciation of right of use assets
|
|
939
|
1,099
|
|
Loss on derecognition of right of use
assets
|
|
99
|
-
|
|
Share-based payment expense
|
|
6,015
|
8,616
|
|
Finance income
|
6
|
(258)
|
(220)
|
|
Finance costs
|
6
|
14,303
|
19,183
|
|
Operating cash flows before
movements in working capital
|
|
78,923
|
75,083
|
|
Decrease/(increase) in trade and other
receivables
|
|
1,907
|
(3,078)
|
|
Decrease/(increase) in contract
assets
|
|
433
|
(878)
|
|
Decrease in trade and other payables
|
|
(9,383)
|
(211)
|
|
Decrease in contract liabilities
|
|
(253)
|
(239)
|
|
Cash generated by
operations
|
|
71,627
|
70,677
|
|
Income taxes paid
|
|
(13,396)
|
(10,120)
|
|
Net cash from operating
activities
|
|
58,231
|
60,557
|
|
Cash flows from investing
activities
|
|
|
|
|
Acquisition of subsidiaries, net of cash
acquired
|
|
-
|
(30,004)
|
|
Additions to internally generated
software
|
9
|
(10,843)
|
(10,765)
|
|
Payment for property, plant and
equipment
|
|
(362)
|
(503)
|
|
Payment for right of use assets
|
|
-
|
(230)
|
|
Receipt of interest on lease
receivable
|
|
9
|
-
|
|
Receipt of lease asset
|
|
132
|
-
|
|
Finance income received
|
|
249
|
220
|
|
Net cash used in investing
activities
|
|
(10,815)
|
(41,282)
|
|
Cash flows from financing
activities
|
|
|
|
|
Payment of deferred consideration
|
|
(10,000)
|
-
|
|
Repayment of loans and borrowings
|
12
|
(37,150)
|
(80,014)
|
|
Proceeds from loans and borrowings
|
12
|
9,500
|
26,300
|
|
Payment of interest on lease
liabilities
|
|
(281)
|
(232)
|
|
Payment of lease liabilities
|
|
(749)
|
(964)
|
|
Shares issued
|
14
|
5
|
413
|
|
Interest paid
|
12
|
(12,459)
|
(13,097)
|
|
Net cash used in financing
activities
|
|
(51,134)
|
(67,594)
|
|
Cash and cash equivalents at the beginning of
the year
|
|
10,416
|
57,876
|
|
Net decrease in cash and cash
equivalents
|
|
(3,718)
|
(48,319)
|
|
Effect of foreign exchange rate
changes
|
|
128
|
859
|
|
Cash and cash equivalents at the end
of the year
|
11
|
6,826
|
10,416
|
Notes to the Consolidated 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.
Restatements
· The
Consolidated Financial Statements for the year ended 30 September
2023 have been restated throughout to be presented in US dollars as
set out below.
· The
Consolidated Statement of Profit or Loss has been restated to
separate net impairment (loss)/gain on trade receivables from
administrative expenses, where they were reported in previous
periods.
· The
Consolidated Statement of Financial Position has been restated to
separately disclose contracts assets (FY23: $1.8m, FY22: $0.9m) and
contract liabilities (FY23: $1.8m, FY22: $1.9m), as defined within
the accounting policies of the Consolidated Financial Statements.
All balances relating to contract assets and contract
liabilities had previously been included in trade and other
receivables and trade and other payables respectively. There
is no impact to the Consolidated Statement of Profit and Loss and
Other Comprehensive Income or Loss, the Consolidated Statement of
Changes in Equity or the Consolidated Statement of Cash Flows as a
result of this restatement.
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 reduces 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 was 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 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 Dollars
were:
|
|
Average rate
|
Closing rate
|
|
FY24
|
FY23
|
FY24
|
FY23
|
FY22
|
|
Pound sterling
|
1.27
|
1.23
|
1.34
|
1.22
|
1.12
|
|
Euro
|
1.08
|
1.07
|
1.12
|
1.06
|
0.98
|
Basis of
preparation
The Consolidated Financial Statements
consolidate those of the Company and its subsidiaries (together
referred to as the "Group").
The Consolidated Financial
Statements have been prepared and approved by the Directors in
accordance with UK-adopted International Accounting Standards
("UK-adopted IAS") and with the requirements of the Companies
Act 2006.
The Consolidated Financial Statements have been
prepared under the historical cost convention, except for certain
financial instruments which have been measured at fair value. All
accounting policies set out below have been applied
consistently to all periods presented in these Consolidated
Financial Statements.
The information for the year ended 30 September
2023 does not constitute statutory accounts for the purposes of
Section 435 of the Companies Act 2006. A copy of the accounts for
the Company for the year ended 30 September 2023 has been delivered
to the Registrar of Companies. The auditor's report on those
accounts was not qualified and did not contain statements under
Section 498(2) or 498(3) of the Companies Act 2006. The accounts
for the year ended 30 September 2024 have been audited and
finalised on the basis of the financial information presented by
the Directors in this Preliminary Statement and will be delivered
to the Registrar of Companies following the Annual General
Meeting.
New and
amended accounting standards adopted by the Group
The following amendments became applicable
during the current reporting period:
· 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
· Amendment to IAS 12: International Tax Reform - Pillar Two
Model Rules
The adoption of the standards and
interpretations has not led to any changes to the Group's
accounting policies or had any other material impact on the
financial position or performance of the Group. The Group is
not in scope for Pillar Two rules, as it does not meet the
threshold of annual revenue of €750m and therefore the amendment to
IAS 12 in relation to Pillar Two has no impact.
New and
amended accounting standards that have been issued but are not yet
effective
New standards and interpretations that are in
issue but not yet effective are listed below:
· Amendment
to IFRS 16: Lease Liability in a Sale and Leaseback
· Amendments
to IAS 1: Classification of Liabilities as Current or
Non-current
· Amendments
to IAS 1: Non-current Liabilities with Covenants
· Amendments
to IAS 7 and IFRS 7: Supplier Finance Arrangements
· Amendments
to IAS 21: Lack of Exchangeability
· Amendments
to IFRS 9 and IFRS 7: Classification and Measurement of Financial
Instruments
· IFRS 18:
Presentation and Disclosure in Financial Statements
With the exception of the adoption
of IFRS 18, the adoption of the above standards and interpretations
are not expected to lead to any material changes to the Group's
accounting policies nor have any other material impact on the
financial position or performance of the Group. IFRS 18 was issued
in April 2024 and is effective for periods beginning on or after 1
January 2027. Early application is permitted and comparatives will
require restatement. The standard will replace IAS 1 Presentation
of Financial Statements and although it will not change how items
are recognised and measured, the standard brings a focus on the
income statement and reporting of financial performance.
Specifically classifying income and expenses into three new defined
categories - "operating", "investing" and "financing" and two new
subtotals "operating profit and loss" and "profit or loss before
financing and income tax", introducing disclosures of management
defined performance measures and enhancing general requirements on
aggregation and disaggregation. The impact of the standard on the
Group is being assessed and it is not yet practicable to quantify
the effect of IFRS 18 on these Consolidated Financial Statements,
however there is no impact on presentation for the Group in the
current year given the effective date - this will be applicable for
the Group's FY28 reporting period.
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 31
December 2025. The Directors have assessed the Group's prospects,
both as a going concern and its longer-term viability. 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 31 December 2025. For this reason, the Directors
continue to adopt the going concern basis in preparing
the Consolidated Financial Statements for the year ended
30 September 2024.
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.
The loan is due to be fully repaid by 17 June 2026. In the absence
of any other prepayments, the next scheduled repayment would be
$6.1m on 31 March 2025. At 30 September 2024 the loan balance
outstanding was $122.6m and was subject to interest at a margin of
2.75% 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 13 February 2024, $9.5m was drawn down to partly
fund the payment of deferred consideration and retention bonuses
relating to the acquisition of ESN, and has been repaid in
full.
The Directors are in the early stages of
renegotiations on the financing arrangements for the Group in
advance of the current facilities expiring in June 2026. The
Directors assume that the Group will continue to have funding
throughout the going concern period and the three-year viability
period on the basis that the Group will either renew the facility
or have sufficient time to agree an alternative source of finance
on comparable terms. As at 30 September 2024 the Group has adjusted
net debt of $114.7m and is in a net current liability position
which includes the current Senior Term Facility of
$23.0m.
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 2.75x at 30
September 2024. 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
30 September 2024, the net leverage ratio was 1.4x compared to the
limit of 2.75x 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, and assessed the headroom on the Group's
facilities and the banking covenants. This has been considered
under a base case and several plausible but severe downside
scenarios, taking into consideration the Group's principal risks
and uncertainties.
These scenarios include:
· significant
reduction in marketplace revenue due to an 8% reduction in THV
versus the base case
· significant
reduction in marketplace revenue due to conversion rate decline of
6% versus the base case; and,
· 50% lower
revenue growth from value-added services across the Group versus
the base case.
None of these scenarios individually, or in the
combined scenario, which reduces adjusted EBITDA by $21m, 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. Accordingly, the Directors continue to adopt the
going concern basis in preparing the Consolidated Financial
Statements for the year ended 30 September 2024.
Climate
change
The Group has assessed the impacts of climate
change on the Group's Consolidated Financial Statements, including
our commitment to achieving Net Zero by 2040 and the actions the
Group intends to take to achieve those targets. The assessment did
not identify any material impact on the Group's significant
judgements or estimates at 30 September 2024, or the assessment of
going concern and the Group's viability over the next three years.
Specifically, we have considered the following areas:
· the
physical and transition risks associated with climate change;
and
· the actions
the Group is taking to meet its carbon reduction and Net Zero
targets.
As a result, the Group has assessed the
potential impacts of climate change on the Consolidated Financial
Statements, and in particular on the following areas:
· the impact on the Group's future cash flows, and the resulting
impact such adjustments to the future cash flows would have on the
outcome of the annual impairment testing of goodwill balances (see
note 9), the recognition of deferred tax assets and our assessment
of going concern;
· the
carrying value of the Group's assets, in particular the recoverable
amounts of intangible assets and property, plant and equipment;
and
· changes to
estimates of the useful economic lives of intangible assets and
property, plant and equipment.
2. Significant
judgements and key sources of estimation
uncertainty
The preparation of the Group's Consolidated
Financial Statements requires the use of certain judgements,
estimates and assumptions that affect the reported amounts of
assets, liabilities, income and expenses.
Estimates and judgements are evaluated
continually, and are based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the circumstances.
Key estimation uncertainties are the key
assumptions concerning the future and other key sources of
estimation uncertainty at the reporting date that may have a
significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next period. Changes
in accounting estimates may be necessary if there are changes in
the circumstances on which the estimates were based, or as a result
of new information or more experience.
For the year ended 30 September 2024, the key
sources of estimation are detailed below:
Impairment of goodwill for Auction Services cash-generating
unit
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.
Forecasting expected cash flows and selecting
an appropriate discount rate inherently require estimation. The
resulting calculation for Auction Services is sensitive to any one
of the key assumptions in respect of future cash flows, the
discount rate and long-term growth rate applied. Sensitivity
analysis has been performed over the estimates (see note 9).
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.
Significant judgements are those that the Group
has made in the process of applying the Group's accounting policies
and that have the most significant effect on the amounts recognised
in the financial statements. For the year ended 30 September 2024,
there were no significant judgements.
The significant judgements disclosed in the
annual financial statements for the year ended 30 September 2023
which are no longer applicable are:
· Goodwill
and other intangible assets arising from business combinations as
no business combinations have occurred in FY24, and no changes have
been made in FY24 to the judgements in respect of goodwill and
other intangible assets previously recognised.
· Functional
currency of subsidiaries as there have been no changes to the
functional currency of the US holding entities during the year. The
impact of the US holding entities having a functional currency of
pound sterling does impact the deferred tax as a result of
movements in exchange rates but the level of judgement is not
expected to significantly change the amounts recognised in the
Consolidated Financial Statements.
3. Alternative
performance measures
The Group uses a number of alternative
performance measures ("APMs") in addition to those measures
reported in accordance with 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 UK-adopted
IAS. 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:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Profit before tax
|
18,383
|
8,664
|
|
Adjustments for:
|
|
|
|
Net finance costs (note 6)
|
14,045
|
18,963
|
|
Amortisation of acquired intangible assets
(note 9)
|
32,484
|
32,625
|
|
Amortisation of internally generated software
(note 9)
|
6,532
|
4,725
|
|
Depreciation of property, plant and
equipment
|
426
|
391
|
|
Depreciation of right of use assets
|
939
|
1,099
|
|
Share-based payment expense
|
6,015
|
8,616
|
|
Exceptional operating items
|
1,145
|
3,311
|
|
Adjusted EBITDA
|
79,969
|
78,394
|
The following table provides the calculation of
adjusted EBITDA margin which represents adjusted EBITDA divided by
revenue:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Reported revenue (note 4, 5)
|
174,148
|
165,886
|
|
Adjusted EBITDA
|
79,969
|
78,394
|
|
Adjusted EBITDA margin
|
46%
|
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 lifecycle 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:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Acquisition costs
|
(828)
|
(3,311)
|
|
Finance transformation
|
(317)
|
-
|
|
Total exceptional operating
items
|
(1,145)
|
(3,311)
|
The acquisition costs were primarily 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
comprise legal, professional, other consultancy expenditure
incurred and retention bonuses for ESN employees payable one year
after completion. The retention bonus is subject to service
conditions and was accrued over the period.
Costs of $0.3m were incurred as a result of the
transformation of the North America finance department. These
exceptional operating items include the sublease of the Omaha
office which is no longer being occupied by the finance team, the
merger of trading entities and costs associated with the system
finance transformation which were not capitalised. These costs
include professional fees, retention costs and loss on
derecognition of a right of use asset.
The net cash outflow related to
exceptional operating items in the period was $2.5m (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:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Profit attributable to equity
shareholders of the Company
|
24,192
|
20,543
|
|
Adjustments for:
|
|
|
|
Amortisation of acquired intangible
assets
|
32,484
|
32,625
|
|
Exceptional finance items
|
906
|
5,258
|
|
Share-based payment expense
|
6,015
|
8,616
|
|
Exceptional operating items
|
1,145
|
3,311
|
|
Deferred tax on unrealised foreign exchange
differences
|
(8,054)
|
(8,810)
|
|
Tax on adjusted items
|
(8,929)
|
(12,607)
|
|
Adjusted earnings
|
47,759
|
48,936
|
|
|
Number
|
Number
|
|
Diluted weighted average number of
shares (note 8)
|
123,848,562
|
123,088,377
|
|
|
|
|
|
|
cents
|
cents
|
|
Adjusted diluted earnings per share
(cents)
|
38.6
|
39.8
|
The basis for treating these items not already
defined above as adjusting is as follows:
Amortisation
of acquired intangible assets 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 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 loans. 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 (see note
7).
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 the
Group prefers to give users of its 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
Year
ended
30
September 2024
$000
|
Restated
Unaudited
Year ended
30 September
2023
$000
|
|
Reported revenue
|
174,148
|
165,886
|
|
Acquisition related adjustment
|
(11,982)
|
(7,063)
|
|
Constant currency adjustment
|
-
|
945
|
|
Organic revenue
|
162,166
|
159,768
|
|
Increase in organic revenue
%
|
2%
|
|
Adjusted net
debt
Adjusted net debt comprises external borrowings
net of arrangement fees and cash at bank which allows management to
monitor the indebtedness of the Group. Adjusted net debt excludes
lease liabilities and restricted cash (see note 11).
Cash and cash equivalents includes cash held by
the Trustee of the Group's Employee Benefit Trust, which is not
available to circulate within the Group on demand. This has been
included in restricted cash.
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
Cash at bank (note 11)
|
6,824
|
7,437
|
|
|
|
|
|
Current loans and borrowings (note
12)
|
(22,953)
|
(15,688)
|
|
Non-current loans and borrowings (note
12)
|
(98,530)
|
(132,923)
|
|
Total loans and borrowings
|
(121,483)
|
(148,611)
|
|
Adjusted net debt
|
(114,659)
|
(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.
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Adjusted EBITDA
|
79,969
|
78,394
|
|
|
|
|
|
Cash generated by
operations
|
71,627
|
70,677
|
|
Adjustments for:
|
|
|
|
Exceptional operating items
|
1,145
|
3,311
|
|
Working capital from exceptional and other
items
|
4,282
|
(1,348)
|
|
Additions to internally generated software
(note 9)
|
(10,843)
|
(10,765)
|
|
Additions to property, plant and
equipment
|
(362)
|
(503)
|
|
Payment for right of use assets
|
-
|
(230)
|
|
Adjusted free cash flow
|
65,849
|
61,142
|
|
Adjusted free cash flow conversion
(%)
|
82%
|
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:
· Arts &
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 such as 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 year by
reportable segment is as follows:
|
|
Year ended
30 September 2024
|
|
A&A
$000
|
I&C
$000
|
Auction
Services
$000
|
Content
$000
|
Centrally
allocated
costs
$000
|
Total
$000
|
|
Revenue
|
90,289
|
71,795
|
8,406
|
3,658
|
-
|
174,148
|
|
Adjusted EBITDA (see note 3 for
definition and reconciliation)
|
72,398
|
60,746
|
5,040
|
1,224
|
(59,439)
|
79,969
|
|
Amortisation of intangible assets
(note 9)
|
(25,688)
|
(11,413)
|
(1,915)
|
-
|
-
|
(39,016)
|
|
Depreciation of property, plant
and equipment
|
(158)
|
(240)
|
(12)
|
(16)
|
-
|
(426)
|
|
Depreciation of right of use
assets
|
(678)
|
(199)
|
(5)
|
(57)
|
-
|
(939)
|
|
Share-based payment expense
|
(1,477)
|
(1,810)
|
(65)
|
-
|
(2,663)
|
(6,015)
|
|
Exceptional operating items (note 3)
|
(828)
|
-
|
-
|
-
|
(317)
|
(1,145)
|
|
Operating profit/(loss)
|
43,569
|
47,084
|
3,043
|
1,151
|
(62,419)
|
32,428
|
|
Net finance costs (note 6)
|
-
|
-
|
-
|
-
|
(14,045)
|
(14,045)
|
|
Profit/(loss) before tax
|
43,569
|
47,084
|
3,043
|
1,151
|
(76,464)
|
18,383
|
|
|
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.
|
|
30
September 2024
|
30 September 2023
(restated)
|
|
Total
non-current
assets
$000
|
Additions
to
non-current
assets
$000
|
Total
non-current
assets
$000
|
Additions
to
non-current
assets
$000
|
|
By operating segment
|
|
|
|
|
|
A&A
|
572,367
|
5,033
|
589,956
|
46,142
|
|
I&C
|
234,171
|
6,088
|
228,752
|
7,365
|
|
Auction Services
|
32,398
|
105
|
34,212
|
423
|
|
Content
|
280
|
18
|
334
|
314
|
|
|
839,216
|
11,244
|
853,254
|
54,244
|
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
By geographical location
|
|
|
|
United Kingdom
|
68,202
|
70,698
|
|
United States
|
765,716
|
777,618
|
|
Germany
|
5,298
|
4,938
|
|
|
839,216
|
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
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Product and customer
types
|
|
|
|
A&A
|
90,289
|
80,551
|
|
I&C
|
71,795
|
71,378
|
|
Auction Services
|
8,406
|
10,190
|
|
Content
|
3,658
|
3,767
|
|
|
174,148
|
165,886
|
|
Primary geographical
markets
|
|
|
|
by location of operations
|
|
|
|
United Kingdom
|
25,299
|
24,096
|
|
United States
|
143,282
|
136,964
|
|
Germany
|
5,567
|
4,826
|
|
|
174,148
|
165,886
|
|
by location of customer
|
|
|
|
United Kingdom
|
25,889
|
24,557
|
|
United States
|
132,708
|
125,308
|
|
Europe
|
8,892
|
8,645
|
|
Rest of world
|
6,659
|
7,376
|
|
|
174,148
|
165,886
|
|
Timing of transfer of goods and
services
|
|
|
|
Point in time
|
155,285
|
150,274
|
|
Over time
|
18,863
|
15,612
|
|
|
174,148
|
165,886
|
The Group has recognised the following assets
and liabilities related to contracts with customers:
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
Restated
1 October
2022
$000
|
|
Contract assets
|
1,499
|
1,856
|
927
|
|
Contract liabilities
|
(1,639)
|
(1,851)
|
(1,886)
|
The following table shows how much of the
revenue recognised in the current reporting period relates to
carried-forward contract liabilities:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Revenue recognised that was included in the
contract liabilities balance at the beginning of the
year
|
1,797
|
1,782
|
6. Net finance
costs
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Interest income
|
249
|
220
|
|
Interest on lease receivable
|
9
|
-
|
|
Finance income
|
258
|
220
|
|
|
|
|
|
Interest on loans and borrowings
|
(12,437)
|
(12,985)
|
|
Amortisation of finance costs
|
(679)
|
(612)
|
|
Foreign exchange loss
|
(525)
|
(4,995)
|
|
Movements in deferred consideration
|
(131)
|
(263)
|
|
Interest on lease liabilities
|
(281)
|
(232)
|
|
Interest on tax
|
(250)
|
(96)
|
|
Finance costs
|
(14,303)
|
(19,183)
|
|
|
|
|
|
Net finance costs
|
(14,045)
|
(18,963)
|
7.
Taxation
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Current tax
|
|
|
|
Current tax on profit for the year
|
9,731
|
11,660
|
|
Adjustments in respect of prior
years
|
214
|
(205)
|
|
Total current tax
|
9,945
|
11,455
|
|
Deferred tax
|
|
|
|
Current year
|
(15,967)
|
(22,368)
|
|
Adjustments from change in tax rates
|
(278)
|
(629)
|
|
Adjustments in respect of prior
years
|
491
|
(337)
|
|
Deferred tax
|
(15,754)
|
(23,334)
|
|
|
|
|
|
Tax credit
|
(5,809)
|
(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 profits of the Group as
follows:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Profit before tax
|
18,383
|
8,664
|
|
Tax at United Kingdom tax rate of 25% (FY23:
22%)
|
4,596
|
1,907
|
|
Tax effect of:
|
|
|
|
Deferred tax on unrealised foreign exchange
differences
|
(8,054)
|
(8,810)
|
|
Foreign exchange difference not taxable for tax
purposes
|
(3,440)
|
(3,077)
|
|
Non-deductible expenditure
|
1,313
|
1,278
|
|
Deductible items
|
(582)
|
(1,695)
|
|
Movement in provisions for tax
uncertainties
|
(439)
|
(312)
|
|
Differences in overseas tax rates
|
370
|
1
|
|
Adjustments from change in tax rates
|
(278)
|
(629)
|
|
Adjustments in respect of prior
years
|
705
|
(542)
|
|
Tax credit
|
(5,809)
|
(11,879)
|
The deferred tax credit on unrealised foreign
exchange differences of $8.1m (FY23: $8.8m) arises from US holding
companies with pound sterling as their functional currency for the
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 $30.6m on
intra-group loans denominated in pound sterling totalling £246.2m
(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 (see note 13). On 25 September 2024,
the intra-group loan was redenominated into US dollars and a loss
of $0.7m realised. From this date there is no foreign exchange
exposure on this loan and deferred tax liability at 30 September
2024 is $nil.
The Group's profit before tax includes foreign
exchange gain of $13.5m (tax effected: $3.4m) from US holding
companies on their US dollar denominated intra-group balances
(FY23: $12.3m, tax effected: $3.1m) which are not taxable for US
tax purposes.
Non-deductible expenditure primarily relates to
share-based payments and in FY23 it also included non-deductible
exceptional operating items.
Deductible items include research and
development tax credits and in FY23 it also included deductions for
the exercise of management rollover options and restricted stock
units granted for the acquisition of LiveAuctioneers.
The movement in provisions for tax
uncertainties reflects releases due to the expiry of relevant
statutes of limitation. The Group's tax affairs are governed by
local tax regulations in the UK, North America 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 expected value of the liability, determined with
reference to similar transactions and third-party advice. This
provision at 30 September 2024 amounted to $0.6m (FY23:
$1.0m).
In the current period, uncertain tax
liabilities are recorded within current tax liabilities on the face
of the Consolidated Statement of Financial Position. In the prior
period, uncertain tax liabilities were recorded within non-current
tax liabilities. Management has reassessed the fact pattern of the
uncertain tax liabilities taking into account requirements of IAS 1
and considers that they are better reflected as current tax
liabilities.
Tax recognised in other comprehensive
income:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Current tax
|
(3,255)
|
(3,186)
|
Tax recognised in other comprehensive income
includes current tax on the Group's net
investment hedge.
8. Earnings per
share
Basic earnings per share is calculated by
dividing the profit for the year attributable to ordinary
shareholders by the weighted average number of ordinary shares
outstanding during the year, after excluding the weighted average
number of non-vested ordinary shares.
Diluted earnings per share is calculated by
dividing the profit for the year attributable to ordinary
shareholders by the weighted average number of ordinary shares
including non-vested/non-exercised ordinary shares. During the year
and prior year, the Group awarded conditional share awards to
Directors and certain employees through an LTIP.
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Profit attributable to equity
shareholders of the Company
|
24,192
|
20,543
|
|
|
Number
|
Number
|
|
Weighted average number of shares in
issue
|
121,711,636
|
121,050,307
|
|
Weighted average number of options vested not
exercised
|
1,082,642
|
1,338,182
|
|
Weighted average number of shares
held by the Employee Benefit Trust
|
(67,210)
|
(162,934)
|
|
Weighted average number of
shares
|
122,727,068
|
122,225,555
|
|
Dilutive share options
|
1,121,494
|
862,822
|
|
Diluted weighted average number of
shares
|
123,848,562
|
123,088,377
|
|
|
|
|
|
|
cents
|
cents
|
|
Basic earnings per share
|
19.7
|
16.8
|
|
Diluted earnings per
share
|
19.5
|
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
|
|
Cost
|
|
|
|
|
|
|
|
|
|
1 October 2022 (restated as detailed in note
1)
|
47,347
|
232,108
|
42,940
|
1,672
|
324,067
|
21,911
|
546,167
|
892,145
|
|
Acquisition of business
|
2,605
|
11,521
|
3,174
|
-
|
17,300
|
-
|
22,422
|
39,722
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
10,765
|
-
|
10,765
|
|
Exchange differences
|
683
|
4,416
|
624
|
-
|
5,723
|
687
|
9,983
|
16,393
|
|
30 September 2023 (restated as
detailed in note 1)
|
50,635
|
248,045
|
46,738
|
1,672
|
347,090
|
33,363
|
578,572
|
959,025
|
|
Additions
|
-
|
-
|
-
|
-
|
-
|
10,843
|
-
|
10,843
|
|
Exchange differences
|
780
|
5,048
|
702
|
-
|
6,530
|
975
|
11,417
|
18,922
|
|
30 September 2024
|
51,415
|
253,093
|
47,440
|
1,672
|
353,620
|
45,181
|
589,989
|
988,790
|
|
Amortisation and
impairment
|
|
|
|
|
|
|
|
|
|
1 October 2022 (restated as detailed in note
1)
|
13,884
|
36,182
|
5,770
|
785
|
56,621
|
14,025
|
-
|
70,646
|
|
Amortisation
|
5,626
|
22,992
|
3,589
|
418
|
32,625
|
4,725
|
-
|
37,350
|
|
Exchange differences
|
615
|
1,610
|
166
|
-
|
2,391
|
337
|
-
|
2,728
|
|
30 September 2023 (restated as
detailed in note 1)
|
20,125
|
60,784
|
9,525
|
1,203
|
91,637
|
19,087
|
-
|
110,724
|
|
Amortisation
|
4,412
|
23,925
|
3,694
|
453
|
32,484
|
6,532
|
-
|
39,016
|
|
Exchange differences
|
780
|
3,026
|
299
|
-
|
4,105
|
682
|
-
|
4,787
|
|
30 September 2024
|
25,317
|
87,735
|
13,518
|
1,656
|
128,226
|
26,301
|
-
|
154,527
|
|
Net book value
|
|
|
|
|
|
|
|
|
|
1 October 2022 (restated as detailed in note
1)
|
33,463
|
195,926
|
37,170
|
887
|
267,446
|
7,886
|
546,167
|
821,499
|
|
30 September 2023 (restated as detailed in note
1)
|
30,510
|
187,261
|
37,213
|
469
|
255,453
|
14,276
|
578,572
|
848,301
|
|
30 September 2024
|
26,098
|
165,358
|
33,922
|
16
|
225,394
|
18,880
|
589,989
|
834,263
|
Included within internally generated software
is capital work-in-progress of $5.7m (FY23: $4.3m).
The expected amortisation profile of acquired
intangible assets is shown below:
|
|
Software
$000
|
Customer
relationships
$000
|
Brand
$000
|
Non-compete
agreement
$000
|
Total
$000
|
|
One to five years
|
19,639
|
92,964
|
18,161
|
16
|
130,780
|
|
Six to 10 years
|
6,459
|
60,871
|
11,210
|
-
|
78,540
|
|
11 to 15 years
|
-
|
11,523
|
4,551
|
-
|
16,074
|
|
30 September 2024
|
26,098
|
165,358
|
33,922
|
16
|
225,394
|
Impairment
assessment
The goodwill and intangibles attributed to each
of the group of cash-generating units ("CGUs") are assessed for
impairment at least annually or more frequently where there are
indicators of impairment. The Group tests for impairment of
goodwill at the operating segment level representing an aggregation
of CGUs, the level at which goodwill is monitored by management. No
group of CGUs is larger than an operating segment as defined by
IFRS 8 Operating Segments before aggregation. The recoverable
amount for the group of CGUs has been determined on a value in use
basis ("VIU").
The table below sets out the carrying values of
goodwill and other acquired intangible assets allocated to each
group of CGUs at 30 September 2024 along with the pre-tax discount
rates applied to the risk-adjusted cash flow forecasts and the
long-term growth rate.
|
2024
|
Goodwill
$000
|
Acquired
intangible assets
$000
|
Valuation
method
|
Long-term
growth
rate
|
Pre-tax
discount
rate
|
|
A&A marketplaces
|
367,618
|
194,215
|
VIU
|
3%
|
11.8%
|
|
I&C marketplaces
|
197,707
|
23,878
|
VIU
|
3%
|
11.9%
|
|
Auction Services
|
24,664
|
7,301
|
VIU
|
3%
|
10.3%
|
|
Total
|
589,989
|
225,394
|
|
|
|
|
2023 (restated)
|
Goodwill
$000
|
Acquired
intangible assets
$000
|
Valuation
method
|
Long-term
growth rate
|
Pre-tax
discount
rate
|
|
A&A marketplaces
|
364,604
|
215,977
|
VIU
|
3%
|
12.7%
|
|
I&C marketplaces
|
189,304
|
30,468
|
VIU
|
3%
|
12.7%
|
|
Auction Services
|
24,664
|
9,008
|
VIU
|
3%
|
11.4%
|
|
Total
|
578,572
|
255,453
|
|
|
|
When testing for impairment, recoverable
amounts for all the groups of CGUs are measured at their value in
use by discounting the future expected cash flows from the assets
in the group of CGUs. These calculations use cash flow projections
based on Board approved budgets and approved plans. While the Group
prepares a five-year plan, levels of uncertainty increase as the
planning horizon extends. The Group's plan focuses more closely on
the next three years, however for the purposes of the impairment
testing the five-year forecasts are used as we do not anticipate
the long-term growth rate to be achieved until after this
time.
The key assumptions and estimates used for
value in use calculations are summarised as follows:
|
Assumption
|
Approach
|
|
Risk-adjusted cash flows
|
are determined by reference to the budget for
the year following the balance sheet date and forecasts for the
following four years, after which a long-term perpetuity growth
rate is applied. The most recent financial budget approved by the
Board has been prepared after considering the current economic
environment in each of the Group's markets. These projections
represent the Directors' best estimate of the future performance of
these businesses.
|
|
CAGR
|
is the five-year compound annual growth rate
from FY24 of the risk-adjusted cash flows above.
|
|
Long-term growth rates
|
are applied after the forecast period. These
are based on external reports on long-term GDP growth rates for the
main markets in which each CGU operates. Therefore, these do not
exceed the long-term average growth rates for the individual
markets.
|
|
Pre-tax discount rates
|
are derived from the post-tax weighted average
cost of capital ("WACC") which has been calculated using the
capital asset pricing model. They are weighted based on the
geographical area in which the CGU group's revenue is generated.
The assumptions used in the calculation of the WACC are benchmarked
to externally available data and they represent the Group's current
market assessment of the time value of money and risks specific to
the CGUs. Movements in the pre-tax discount rates for CGUs since
the year ended 30 September 2023 are driven by changes in
market-based inputs. Any unsystematic risk on the CGUs has been
inherently built into the cash flows of each of the CGUs and
therefore no additional element of risk has been included in the
discount rates used at 30 September 2024.
|
Sensitivity
analysis
At 30 September 2024 under the impairment
assessments prepared there is no impairment required. Management
have 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. The Auction
Services CGU is sensitive to a movement in any one of the key
assumptions.
For Auction Services, with a headroom of $0.9m
(FY23: $7.4m), for the recoverable amount to fall to the carrying
value, the discount rate would need to be increased to 10.5% from
10.3% (FY23: 13.4% from 11.4%), the long-term growth rate reduced
to 2.7% from 3.0% (FY23: 0.2% from 3.0%), or the CAGR on the
five-year future forecast cash flows reduced by 0.5 ppt (FY23: 2
ppt). In the future forecast cash flows there is an assumption that
the take rate CAGR improves by 2% over the five-year period. If
this is not achieved this would give rise to an impairment of
$7.5m.
For the A&A and I&C marketplaces CGUs,
there is no reasonable change of assumption that would cause the
CGU's carrying amount to exceed its recoverable amount. Under the
base case scenario for the A&A marketplaces CGU there is
headroom of $147.8m at 30 September 2024 (FY23: $302.6m). The
year-on-year decrease in headroom is largely driven by the
reduction in five-year CAGR based on the slower consumer
environment experienced in FY24. Under the base case scenario for
the I&C marketplaces CGU there is headroom of $74.5m at 30
September 2024 (FY23: $417.5m). The year-on-year decrease in
headroom is largely driven by the reduction in five-year CAGR based
on the slower consumer environment in A&A and softer
performance in I&C in FY24.
10.
Trade and other receivables
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
Current
|
|
|
|
Trade receivables
|
13,807
|
15,819
|
|
Less: loss provision
|
(1,505)
|
(500)
|
|
|
12,302
|
15,319
|
|
Other receivables
|
2,199
|
1,329
|
|
Prepayments
|
2,786
|
3,317
|
|
Lease receivable
|
136
|
-
|
|
|
17,423
|
19,965
|
|
Non-current
|
|
|
|
Other receivables
|
1,276
|
138
|
|
Lease receivable
|
151
|
-
|
|
|
1,427
|
138
|
|
|
18,850
|
20,103
|
The Group applies the IFRS 9 Financial
Instruments simplified approach to measuring expected credit losses
using a lifetime expected credit loss provision for trade
receivables and contract assets. To measure expected credit losses
on a collective basis, trade receivables and contract assets are
grouped based on similar credit risk and ageing. The contract
assets have similar risk characteristics to the trade receivables
for similar types of contracts. The expected loss model
incorporates current and forward-looking information on
macroeconomic factors affecting the Group's customers.
The average credit period on sales is 30 days
after the invoice has been issued. No interest is charged on
outstanding trade receivables. At 30 September 2024 there were
no customers who owed in excess of 10% of the total trade debtor
balance (FY23: $nil).
The ageing of trade receivables at 30 September
was:
|
|
2024
|
2023
(restated)
|
|
Gross
$000
|
Loss
provision
$000
|
Expected
loss rate
%
|
Gross
$000
|
Loss
provision
$000
|
Expected loss
rate
%
|
|
Within 30 days
|
11,011
|
351
|
3%
|
12,120
|
52
|
0%
|
|
Between 30 and 60 days
|
1,176
|
25
|
2%
|
1,310
|
3
|
0%
|
|
Between 60 and 90 days
|
479
|
23
|
5%
|
640
|
12
|
2%
|
|
Over 90 days
|
1,141
|
1,106
|
97%
|
1,749
|
433
|
25%
|
|
30 September
|
13,807
|
1,505
|
11%
|
15,819
|
500
|
3%
|
The movement in the loss provision during the
year was as follows:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
1 October
|
500
|
935
|
|
Increase/(decrease) in loss allowance
recognised in
Consolidated Statement of Profit or Loss
|
2,224
|
(210)
|
|
Uncollectable amounts written off
|
(1,233)
|
(234)
|
|
Exchange differences
|
14
|
9
|
|
30 September
|
1,505
|
500
|
Trade receivables and contract assets are
written off where there is no reasonable expectation of recovery.
Indicators that there is no reasonable expectation of recovery
include, amongst others, the failure of a debtor to engage in a
repayment plan with the Group, and a failure to make contractual
payments for a period of greater than 120 days past due.
Impairment losses on trade receivables and
contract assets are presented as net impairment losses within
operating profit. Subsequent recoveries of amounts previously
written off are credited against the same line item. The carrying
amount of trade and other receivables approximates to their fair
value. The total amount of trade receivables that were past due but
not impaired was $0.5m (FY23: $1.9m).
The decrease in trade receivables held by the
Group is driven by the focused effort on collections pre-year end
in addition to the increased level of amounts written off in the
year relating to aged balances which were deemed uncollectable. The
increase in the loss provision is due to the level of uncollectible
amounts written off in the year which impacts the expected credit
loss model calculation combined with the specific risk factors
identified for specific customer groups.
11. Cash
and cash equivalents
Cash and cash equivalents comprise cash at bank
and restricted cash. Cash at bank includes cash in transit due from
credit card providers. The carrying amount of these assets
approximates to their fair value.
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
Cash at bank
|
6,824
|
7,437
|
|
Restricted cash
|
2
|
2,979
|
|
|
6,826
|
10,416
|
Restricted cash consists of cash held by the
Trustee of the Group's Employee Benefit Trust ("EBT") 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 was 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.
12.
Loans and borrowings
The carrying amount of loans and borrowings
classified as financial liabilities at amortised cost approximates
to their fair value.
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
Current
|
|
|
|
Secured bank loan
|
22,953
|
15,688
|
|
Non-current
|
|
|
|
Secured bank loan
|
98,530
|
132,923
|
|
|
121,483
|
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 FY24, a
payment of $27.7m (FY23: $53.7m) was paid on the Senior Term
Facility. In the absence of any other prepayments, the scheduled
repayment in FY25 is $6.1m on 31 March 2025 and then $8.7m
quarterly from 30 June 2025. 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 by 17 June 2026. On
13 February 2024, $9.5m (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, and has been fully
repaid by 30 September 2024.
· 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 the
covenant is measured 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 year ended 30 September 2024.
The movements in loans and borrowings are as
follows:
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
1 October
|
148,611
|
201,997
|
|
Repayment of loans and borrowings
|
(37,150)
|
(80,014)
|
|
Proceeds from loans and borrowings
|
9,500
|
26,300
|
|
Accrued interest and amortisation of finance
costs
|
13,116
|
13,597
|
|
Interest paid
|
(12,459)
|
(13,097)
|
|
Exchange differences
|
(135)
|
(172)
|
|
30 September
|
121,483
|
148,611
|
The currency profile of the loans and
borrowings is as follows:
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
US dollar
|
121,483
|
148,611
|
The weighted average interest charge
(including amortised cost written off) for the year is as
follows:
|
|
Year
ended
30
September
2024
%
|
Year ended
30
September
2023
%
|
|
Secured bank loan
|
8%
|
8%
|
13.
Deferred taxation
The movement of net deferred tax liabilities is
as follows:
|
|
Capitalised goodwill and intangibles
$000
|
Tax
losses
$000
|
Share-based payments
$000
|
Foreign
exchange
$000
|
Research
and development
$000
|
Other
temporary
differences
$000
|
Total
$000
|
|
1 October 2022 (restated as detailed in note
1)
|
(65,101)
|
6,832
|
1,267
|
(15,350)
|
-
|
177
|
(72,175)
|
|
Amount credited to Consolidated Statement of
Profit or Loss
|
8,055
|
4,644
|
827
|
7,634
|
1,900
|
274
|
23,334
|
|
Exchange differences
|
(834)
|
-
|
111
|
-
|
-
|
(65)
|
(788)
|
|
30 September 2023 (restated as detailed in note
1)
|
(57,880)
|
11,476
|
2,205
|
(7,716)
|
1,900
|
386
|
(49,629)
|
|
Deferred tax assets
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Deferred tax liabilities
|
(57,880)
|
11,476
|
2,205
|
(7,716)
|
1,900
|
386
|
(49,629)
|
|
|
|
|
|
|
|
|
|
|
1 October 2023 (restated as detailed
in note 1)
|
(57,880)
|
11,476
|
2,205
|
(7,716)
|
1,900
|
386
|
(49,629)
|
|
Amount credited/(charged) to Consolidated
Statement of Profit or Loss
|
5,568
|
546
|
(672)
|
8,038
|
1,627
|
647
|
15,754
|
|
Exchange differences
|
(621)
|
-
|
172
|
(322)
|
(31)
|
4
|
(798)
|
|
30 September 2024
|
(52,933)
|
12,022
|
1,705
|
-
|
3,496
|
1,037
|
(34,673)
|
|
Deferred tax assets
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Deferred tax liabilities
|
(52,933)
|
12,022
|
1,705
|
-
|
3,496
|
1,037
|
(34,673)
|
Tax losses include unrelieved interest in the
US, where there are sufficient taxable profits forecast to be
available in the future to enable them to be utilised. These losses
are available indefinitely. Tax on foreign exchange include
unrealised foreign exchange differences arises from US holding
companies with pound sterling as their functional currency for the
Consolidated Financial Statements but US dollar functional currency
under US tax rules (see note 7). On 25 September 2024, the
intra-group loan which has given rise to the temporary differences
on foreign exchange was redenominated into US Dollars realising the
foreign exchange and reducing the temporary difference to $nil. A
deferred tax asset of $3.5m (FY23: $1.9m) relates to the US
research and development credit which is spread over future years
rather than fully deductible in the year it arises.
No deferred tax asset has been recognised in
respect of unused tax losses in the UK of $0.8m (FY23: $0.9m) as it
is not considered probable that there will be future taxable
profits available to offset these tax losses. The losses may be
carried forward indefinitely. The temporary differences relating to
the unremitted earnings of overseas subsidiaries amounted to $0.8m
(FY23: $1.1m). However, as the Group can control whether it pays
dividends from its subsidiaries and it can control the timing of
any dividends, no deferred tax has been provided on the unremitted
earnings on the basis there is no intention to repatriate these
amounts. In presenting the Group's deferred tax balances, the Group
offsets assets and liabilities to the extent we have a legally
enforceable right to set off the arising income tax liabilities and
assets when those deferred tax balances reverse.
14.
Share capital and reserves
|
|
30
September
2024
$000
|
Restated
30
September
2023
$000
|
|
Authorised, called up and fully paid
|
|
|
|
121,819,130 ordinary shares at 0.01p each
(FY23: 121,491,412)
|
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 2022 (restated as detailed in note
1)
|
120,525,304
|
17
|
334,045
|
330,310
|
|
Shares issued
|
680,794
|
-
|
413
|
-
|
|
Shares issued in respect of
share-based payment plans
|
285,314
|
-
|
-
|
-
|
|
30 September 2023 (restated as
detailed in note 1)
|
121,491,412
|
17
|
334,458
|
330,310
|
|
Shares issued
|
1,978
|
-
|
5
|
-
|
|
Shares issued in respect of
share-based payment plans
|
325,740
|
-
|
-
|
-
|
|
30 September 2024
|
121,819,130
|
17
|
334,463
|
330,310
|
For the year
ended 30 September 2024
327,718 ordinary shares of 0.01p each with an
aggregate nominal value of £33 ($42) were issued for options that
vested for a cash consideration of £4,000 ($5,000). These included
Long-term Incentive Plan Awards ("LTIP Awards"), Share Incentive
Plan ("SIP") and Employee Stock Purchase Plan ("ESPP") and to the
Trust for LTIP Awards that have vested in the year.
For the year
ended 30 September 2023
966,108 ordinary shares of 0.01p each with an
aggregate nominal value of £97 ($118) were issued for options that
vested for a cash consideration of £328,000 ($413,000). These
included management rollover options and restricted stock units
granted in FY22 for the acquisition of LiveAuctioneers, Long-term
Incentive Plan Awards ("LTIP Awards"), shares issued under the
Share Incentive Plan ("SIP") and Employee Stock Purchase Plan
("ESPP") and to the Trust for LTIP Awards that have vested in the
year.
15.
Related party transactions
In FY24, the Group paid rent of $122,700 (FY23:
$80,000) to McQuade Enterprises LLC, a company owned by the
previous owners of ESN. There were other no related party
transactions.
Key management
personnel compensation
The Group has determined that the key
management personnel constitute the Board and the members of the
Senior Management Team.
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Short-term employee benefits
|
2,757
|
3,907
|
|
Post-employment benefits
|
83
|
75
|
|
Share-based payment expense
|
2,536
|
4,797
|
|
Total key management personnel
compensation
|
5,376
|
8,779
|
Remuneration
of Directors
The total amounts for Directors' remuneration
were as follows:
|
|
Year
ended
30
September
2024
$000
|
Restated
Year ended
30
September
2023
$000
|
|
Short-term employee benefits
|
1,131
|
1,269
|
|
Non-Executive Directors' fees
|
497
|
410
|
|
Post-employment benefits
|
66
|
59
|
|
Share-based payment expense
|
569
|
1,994
|
|
Total Directors'
remuneration
|
2,263
|
3,732
|
16.
Events after the balance sheet date
There were no other events after the balance
sheet date.
Glossary
|
A&A
|
Arts & Antiques
|
|
atgAMP
|
The Group's auctioneer marketing
programme
|
|
atgPay
|
the Group's integrated payment
solution
|
|
atg Partner Network
|
the Group's partnerships with other Industrial
& Commercial sites, which enables an auctioneer to cross-list
on these sites
|
|
atgShip
|
the Group's integrated shipping
solution
|
|
atgXL
|
the Group's cross-listing solution
enabling auctioneers to simultaneously run timed 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
|
|
Big 4
|
Christie's, Sotheby's, Phillips and Bonhams
A&A auction houses
|
|
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
|
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
|
