Auction Technology shares rise after ‘better than feared’ update

Investors bid up Auction Technology Group, the online auctioneer, after a trading update highlighting “significantly improved momentum” was deemed “better than feared” by analysts.
Shares in the company, which enables auction houses to hold their sales online, jumped to their highest level in two months as it told shareholders that gross merchandise value (GMV) — the total costs of goods auctioned by its services — “has demonstrated significantly improved momentum” in the second half of its financial year.
However, because of headwinds in its underlying end markets having not yet reversed, the auctioneer said that GMV is expected to “still be slightly negative year-on-year”.
Because of this, the group anticipates revenues for the year that ended September 30 to be $174 million, slightly below previous guidance of $175 million to $180 million but up 2 per cent on an organic basis.
Analysts at RBC said that to have reached the bottom end of organic growth guidance marks “an achievement in what has been a very difficult year from an end-market perspective”, while JP Morgan noted that while annual revenues are forecast to be just shy of consensus expectations, “we see this result as much better than feared from a sceptical investor base”.
The company said its cost performance has been in line with expectations to deliver a “significantly improved” adjusted underlying margin in the second half, meaning that for the full year margins are anticipated to be between 45 per cent and 46 per cent.
Alongside its update, ATG announced that Tom Hargreaves has decided to step down as chief financial officer and as director of the company to take up a new role with an unnamed private equity-backed company.
The board has started the search for a replacement for Hargreaves, who will remain with the company until early next year.
Based in London, ATG grew out of the Antiques Trade Gazette magazine, which it still publishes, and operates online auctions for 4,000 auction houses in North America and Europe, specialising in industrial and commercial, and art and antiques. It hosts more than 86,000 auctions each year.
ATG was among the wave of technology-related businesses to float shares in London during 2021.
The shares closed up 23p, or 5.9 per cent, at 435p. They have lost about 40 per cent of their value since they were issued at 600p.