Market's view on Auction Technology Group

Published on April 2024

  • Stock watchers have noted concerns with the company’s trading statement, highlighting what it lacks, such as reporting on profit margins and reduced commission rates, while pointing out stagnant sales.
  • Criticism was raised on the company’s satisfaction with a mere 3% increase in like-for-like sales without any mention of profits or margins.
  • Significant shareholders like Blackrock and Jupiter have been selling their stakes.
  • The Chairman, Breon Corcoran, has shifted focus to a CEO role at IG Group, raising concerns about his diminished attention towards the company.
  • Observations about the company’s erratic share price movements have been linked to the directors’ decision to buy a US property portal amidst a collapsing property market.
  • Dissatisfaction has been expressed regarding large sales by directors and a major anonymous shareholder reducing their stake to below 3%.
  • The valuation of the company is questioned, particularly considering the high level of debt versus operating profit and a significantly negative net asset value when excluding goodwill and intangibles.
  • The company’s attempt to increase charges through platforms like the-saleroom has been met with resistance due to high fees.
  • Speculations about the company possibly listing on the OTC markets in the US if its US acquisition turns into a significant revenue source.
  • Concerns were raised about the company being overvalued with comparisons to failed businesses like Purple Bricks.
  • It is noted that the company has a high price-to-sales ratio and has been diluting shareholders, with a lack of inspiring investors in its shareholder base.
  • Recent acquisitions by the company are questioned, especially considering their focus on low growth sectors.
  • Analysts from Berenberg are bullish on the company, citing potential diversification and new revenue streams despite current operational challenges.
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