Auction Technology Group PLC (LSE:ATG) shares were up about 3% at 298p after the company posted full-year results that came in slightly ahead of expectations, despite a hefty accounting charge that pushed it deep into the red.
The operator of online auction and list-price marketplaces reported revenue of $190.2 million for the year to 30 September, up 9% on a reported basis and 4% organically.
Growth was led by its Arts and Antiques segment, which includes Chairish, the US marketplace it bought for $85 million in August. Industrial and Commercial sales rose 2.9%.
Adjusted earnings before interest, tax, depreciation and amortisation slipped 4% to $76.8 million, with margins narrowing to 40.4%.
The group recorded an operating loss of $134.2 million, driven by a non-cash goodwill impairment charge of $150.9 million, along with higher exceptional costs and a softer adjusted profit performance.
Cash generation remained robust. Adjusted operating cash flow rose 12% to $73.7 million with conversion improving to 96%, helping to produce $45.5 million of free cash flow.
Net debt increased to $174 million following the Chairish deal, lifting leverage to 2.2 times adjusted earnings.
Operationally, total gross merchandise value held steady at $3.3 billion. More lots and more auctions ran through the platform, and the company continued to lift its take rate, which measures the cut it earns from transactions.
Early progress was made integrating Chairish, with $4 million of expected synergies already delivered.
Chief executive John-Paul Savant said the group had made “critical strategic progress”, even if financial outcomes had fallen short of internal hopes. He said ATG remained focused on expanding supply, broadening its buyer base and improving the marketplace experience to drive future revenue.
For the year ahead, ATG expects revenue growth of 4% to 5%, driven by value-added services such as atgShip. It is guiding to an adjusted EBITDA margin of 34.5% to 35.5% and expects leverage to fall below two times by the end of the period.