Auction Technology Group PLC Final Results

RNS Number : 7614N

Auction Technology Group PLC

27 November 2024

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
Revenue^1&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	+44 207 742 4000
(Joint corporate broker to ATG)
Bill Hutchings, James Summer, Will Vanderspar


Teneo Communications	+44 207 353 4200
(Public relations advisor to ATG)	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

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)

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

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