Auction Technology Group plc

so uh welcome and thank you for your interest in heg's 2024 full year results um the key theme i think that will hopefully communicate to you over the course of it is that the headline year-over-year numbers um don't fully tell the story of the progress that i think we've made in fiscal year 24. and uh becky if you don't mind going to slide four So as a reminder, and for those of you who are new, ATG creates value by connecting bidders from 170 countries around the world with 4,000 auction houses, and we facilitate the sale of over $13 billion per year of curated used items. And so online marketplaces ultimately create value by aggregating supply and demand and making it easier for people to buy and sell through that form. And I think when you look at what ATG has achieved in fiscal year 24, we've made strong progress in doing both of those things. And the overall story is that the result has been an improvement in our competitive position. Critically, that's been reflected in both positive momentum on GMV and in our take rate. And I think particularly when you look at the ANA side of our business, what we are excited by is the fact that it shows that when you follow the online marketplace playbook with a full complement of value-added services, as well as the marketplace and the white label, even in a difficult end market, you're able to grow as you'll see that our ANA division grew 12% overall, but 6% organically. And so the other thing I'll just mention is that as we go through this presentation, There's going to be more data than we typically have shared in the past, and we just felt that with so many moving parts, we would share a bit more than we normally do, some cohort-level data around bidders and a few other stats as well. This is not something that we're going to do on an ongoing basis, but we felt particularly in this period where it's just been a bit tumultuous that it was worthwhile to share that level of detail for this presentation. So last thing I'll just say on the previous slide is just that while ATG is doing the basics, what we are doing is transformational for the auction industry. And I think this is something that we'll hopefully come across in the presentation. So how did we do in fiscal year 24? Well, first of all, we improved our value to auctioneers and bidders by basically better connecting that supply and demand. And we increased the monetization of each transaction. And so that comes out really in these numbers that we share down below here. So first of all, GMV recovery. I know that's been an area of focus for many analysts and investors. And this is a perfect example of where the headline number doesn't tell the full story. you look at the minus 11 percent year over year that's not a great number but when you look at the improvement from the second half to the first half and the fact that the inc division actually was positive in the second half while the art and antiques division was moving steadily closer to positive in that second half from significant uh down uh numbers previously i think that's uh a key number that we wanted to highlight to people the second is that our take rates grew 0.6%. And as you'll notice, particularly in the ANA division, it approached at 10% overall, the 4.2% being the overall number. But that take rate growth was driven by adoption of our value-added services. So that's ATG Ship, ATG Amp, and ATG Pay. And we continue to grow that meaningfully with the number being up 35% year over year. Probably equally exciting to the first two numbers though is the third one, because I think the value of an online marketplace ultimately is the network effect that you're able to generate. And that's the true measure of a marketplace. And I think for us, again, we're excited by the stats that we can share this year. So 24 million lots listed, which is plus 7%, plus 2% in terms of the number of auctions, and the key number being plus 16% in terms of the bidder sessions that we're able to generate for the auctioneers. The launch of ATG Excel helped us better connect these marketplaces and generate more. And as we talked about previously, when we connected ESN into live auctioneers, for instance, we saw a plus 9% GMV uplift. The reason why I say the enhanced network effect is that ATG didn't have to go out and spend money to acquire these additional bidders or the additional inventory. It simply happened because we had the best supply and we attracted more bidders, and because we had the best bidders, we continued to attract a good amount of supply. We also feel that we've meaningfully strengthened our competitive position. So particularly with the differentiated product offering that ATG Excel has enabled us to present, which is a combination of white label and marketplace or marketplace to marketplace. So the reason we say, again, that this is differentiated and strengthened is that this is something that nobody else can do out in the market. And then finally, the strength in balance sheet and simplified operations. The fact that in a situation where we had difficult end markets and we're coming off the back of a tough first half, the ability to generate enough free cash flow to pay down our debt to 1.4 times, again, is something that we're very proud of. And so with that, I will turn it over to Tom to walk through the financial performance.

Morning, everybody. So I'll talk through the financials, starting off with the headlines. If we move to the next page. So revenue for the full year, 174.2 million, up 5% on a reported basis, 2% organic. Adjusted EBITDA of 80 million, that's up 2% year over year, giving an adjusted EBITDA margin of 46%. Our adjusted diluted EPS is 38.6 cents, was down 3% year over year. Adjusted fee cash flow, 65.8 million, that's 82% conversion from adjusted EBITDA. left us with at the end of the year net debt of 114.7 million that's leverage of 1.4 times if we go into some of the detail we'll start off with revenue on a segmental level So chart on the left-hand side at the top, see our arts and antiques revenue, 90.3 million, up 12% year over year on a reported basis. Included within there is the acquisition of ESN. There was a seven-month contribution in 23, 12 months in 24. The underlying ESN business grew very strongly, 24% year over year. But if you remove that, you're left with organic growth of 6%, which is fundamentally driven by value-added services. We'll see that in a moment. Industrial and commercial, 71.8 million. That's 1% growth year over year. Within the industrial commercial, we have four marketplaces. Three of those marketplaces did well. One had a difficult year, talked about it a lot at the half-year proxy bid. The key point here is the second half of the year was much better than the first half of the year for proxy bid, and we'll come on to that in a moment. All of that gave us total marketplace revenue growth of 7%. Auction services, 8.4 million. A bigger than normal decline there of 18% worth lingering on that for a short while. So within auction services, the majority of that revenue comes from Auction Mobility, one of our white label products. The heart of Auction Mobility's business is about bespoke white labels for larger marquee auctioneers. who also have an integrated proposition with both their own systems, but also our marketplace. So that business is absolutely our focus and doing quite well. But on top of that, historically, there's been a layer of auction houses, small auction houses who are not in our marketplace. And we've spent a lot of time time trying to acquire those auction houses and spending money acquiring them. They do a bit of activity and then go, so very low CLV for us. We actually decided to dial that back because we want to focus on marketplace and where White Label can supplement marketplace. That has meant that over the course, particularly the second half of the year, we have added less customers than we historically have, which is what's driving that reduction in revenue. It's also meant that we've saved some money, so actually the impact on the bottom line has been relatively muted. As we go forward next year, the impact of that is much lower because we haven't got the impact of reducing the ads anymore going forward and the churn associated with that. And our continued focus on auctionability will be about those larger auctioneers with the bespoke white labels. All of that adds up to revenue 174.2 million, as we've already said, growth of 5%, 2% organic. In terms of the key KPIs, actually the commentary for these makes much better sense when you're talking on a segmental level, so I will do, but the headlines, GMV 3.6 billion down 11% year over year. 6% once you exclude the impact of the INC rotated churn we had at half year and a group level take rate of 4.2% up from 3.6% last year. So if we move over and look at revenue again, but this time through the lens of product, and this is a bridge between 23 and 24. So you can see we had 165.9 million revenue in FY23. Commission is down. Commission is down 5% year over year, 4.7 million reduction, fundamentally driven by the decline in GMV. We've just mentioned, but that's been more than offset by value-added services growth. So we've got an extra 10 million of revenue. revenue from value-added services, 35% growth year over year, 24% of the total business and value-added services. So a very strong performance from VAS in FY24. Fixed fee is broadly neutral across the year. And you've got, as I already mentioned, the contribution from ESM, both the organic growth of that business, but also the four-year effect, adding 4.9 million. And then auction services, as I've just described, taking you to 174 million in total. In terms of the percentage point contribution to our overall growth, and the reason we highlight this is it is useful to look at this to understand the guidance for next year. So we grew by 5% in the full year. Of that 5 percentage points, There was a three percentage points contribution from commission, the declining commission. Then that was offset by a six percentage point contribution to growth and value-added services, fixed fees neutral. ESN added three percentage points of that three percent. Two percent was just the four-year effect and one percent was it just grew quite well, faster than the rest of the business. And then the impact of auction services taking you to five percentage points in total. If we move over... Look at ANA in a little bit more detail. See at the bottom there, the 90.3 million of revenue, 12% up year over year. And it's worth staying here before we get into any of the numbers. Whatever lens you look at arts and antiques performance in, in a difficult market and relative to many peers and other people reporting externally their performance, we have done extremely well. We are very pleased with what's happened in ANA in a difficult environment. And clearly the star performer there is that take rate, 8.7% last year, up to 9.8% this year, driven by strong value-added services growth across all of our value-added services product payments, shipping and marketing. John-Paul will talk about more later, but clearly there is a difficult environment, that GMV minus 6% year over year. Actually, if you look at the top, you might be surprised to see our THV grew 2% year over year, which might be counterintuitive. If you get underneath that, and I will show you that in a little bit more detail in a moment, in our core domestic markets of the UK, US, and Germany, our THV has declined, declined about 4% year over year. What you're seeing there is the contribution from more international auction houses. So these are houses based outside of those three geographies listing on a marketplace. And that's clearly a good thing, but those houses naturally have a much lower conversion rate than our core domestic houses. And so that is what you're seeing in that conversion rate coming down one percentage point to 14%. If we go to the next slide, we'll see that in a little bit more detail. So our THV in FY24 of 5.7 billion, this is the same number you've seen on the previous page, up 2% year over year. Of that THV, 73% comes from auction houses in our core markets of the US, UK, and Germany. 27% comes from international houses, so not a small contribution. But our lion's share of our revenue is coming from those core domestic-based auction houses. So you can see on the right-hand side, 93% of our GMV are those houses. THV movement in our core markets is far more important to the overall financial results. And actually the THV in those core markets is down minus 4% over the course of the year. A lot better than many other parties have reported, partly because we are at the sort of mid-market, which is a little bit more insulated, but it's still negative. If you look at the underlying conversion rates you can see there of our domestic core markets and other markets, you can see there in our core markets we're flat. And the overall total is being driven by the decline from 15 to 14. It's been driven by a mixed change and the increase in proportion of international auction houses. We move to the next page. INC is a complicated story. If you look at the bottom there, our marketplace revenue is 71.8 million, 1% up year over year. And you can see there the GMV, fundamentally the story behind that is the GMV decline, 12%, excluding rotated volume, still down 5%, and the THV number at the top there of minus 2% decline, but very much a tale of two halves. In the first half of the year, we were impacted by many things, comping, difficult asset prices, the impact of rate card, all things we talked about. It was a far cleaner period in the second half. And if you look at that table in the top right, You can see the comparison first half to second half. So in the first half of the year, THV was down 9%, actually grew 6% in the second half of the year. So that's good. I'll give you a bit more detail on that in a moment, giving you the full year average of 2. And our GMV declined 19%, so a big decline in the first half of the year, but much, much reduced in the second half of the year at minus 4. And actually, when you remove the impact of real estate and reason for thinking about real estate, it's quite lumpy. And we also have a very low take rate on real estate. It's not that significant in terms of the overall financials. Our GMV actually grew in the second half of the year. I'll show you that in a moment in a bit more detail. Final thing to note here before we get into a bit more detail on that is take rates. The take rate improved in INC as it did in ANA. That's fundamentally again down to VAS. VAS in INC has been a material contributor to our overall VAS performance. That is not solely a story about ANA. INC is also performing very well with regards to VAS. If we move over, so this is looking at THV and there's been a lot of noise about asset prices and the impact it has on our THV. And so we thought we'd provide this context. This is THV by half year going back a little while. So you can see right on the left hand side, there's first half, second half of 21, we're about 2.9, 2.8 billion. That then stepped up into 22 and 3.6 to 3.7. And then you've got that slightly crazy half year, first half of 23, 4.3 billion, which is a combination of both at peak asset price inflation and also for us, a lot of activity. And that led to that big spike in THV in half year 23, which at the time actually seemed like a good thing. It's not so good when you're having to comp against it later on. And so you see that step down normalised into the second half of 23. at 3.4 billion. And since then, we've been on a far more normal trajectory than we would have expected historically. So the first half of 24, that minus 9% decline was against that exceptional period. But now when we've got to the second half of the year, H224, we are going against a far more normal period of activity, 6% growth. It's kind of par what you would expect. The other thing worth highlighting here, that little black box or little dark blue box at the top of each bar, that is real estate activity. And the reason for showing it here is you can see it does move around half year on half year. And because it's reasonably large in terms of absolute value, it does have some impact on the reported numbers. But the take rate from real estate is one tenth the take rate and everything else. So actually, the impact on our revenue is relatively muted. If we go to the next page, when John Paul said we were giving some more detail than normal, this is a classic example of that because there's been so much going on with INC. We had a lot of moving parts. And the second half of the year is actually quite a relatively clean period. We did think it was appropriate to give some more detail so you can sort of have an have a an attempt to work out what's going on so this is comparing second half of 24 to second half of 23 both thv and gmv and looking at it through an asset category lens this is how we look at it internally so we we monitor this um what's going on with yellow grey green i'll explain what they are in a minute but if if you look at the table on the left hand side you see the numbers you've just seen on the previous page 3.6 billion of thv in the second half of 24 versus 3.4 billion in second half of 23 up six percent year over year then you've got the impact of real estate so real estate was down 42 not an abnormal swing for us but it does impact the headline if you remove that and get to a more underlying view and the view that's relevant more most relevant for our revenue you see we had a very good nine percent growth in thv in the second half of the year We look at the asset categories that are driving that. So yellow is construction equipment. That's the most important category for us. That's where proxy bids heartland is. See our THV, they actually grew 4% year over year. So not spectacular, but not bad. Most of the data you're seeing about asset prices and different indices are is talking about construction equipment. We are not immune to that. We have been through the sort of rapid deflation post that spike in the first half of 23, but asset prices are still coming down. But you cannot look at asset prices alone. You also need to look at volumes. So we are seeing softer prices and increased volumes. The net for that for us is a growth in THV of 4%. So it's not spectacular, but a solid performance. If you look at the chart on the bottom left-hand corner, corner of that you can see the conversion rate we're getting in construction equipment in yellow so that's a heartland for us that's a good conversion rate first second half of last year it was 35% this year 36% which is why GMV is up 6% year over year so we're very happy about that it's a It's a good, solid performance. Grey iron, so grey iron is commercial and industrial equipment, could be factories, manufacturing equipment, laboratory equipment, basically things that are difficult to move, generally stuff that doesn't have wheels. Again, an important area for us, real heartland asset category for us. GMV grew, THV grew 3% year over year. Again, a fairly normal number, unspectacular number. If you look at the charts at the bottom, you see the conversion rate you would get on grey it's a very high reflecting the fact that's a real strength of our effort for us most auction houses who specialize in crayon auctions are with us 100 timed auctions and in fact the variations you see period on period in the in the conversion rate is nothing to do with our share uh share movements it's just whether there happens to be other auction houses you don't specialize in grey sell some grey equipment and it It varies quarter to quarter or half to half, whether you've got some contribution from auction houses who run live auctions. But basically, that business remains a real strength, very high conversion rates. And actually, when you look to the GMV number on the right hand side, part of the reason why You know, the one area where we might have hoped things would be a little bit better, not there's anything underlying, it's the minus 1% in GMV and grey. And the first half of that number was the one area that did very well. And the second half was quieter. And sometimes that's the way it goes. Green, that's agricultural equipment. So you see there, THV grew 32% year over year, so well beyond the normal. That is where the rate card effects were most acute. So the number of our bigger green auctioneers were the people who enjoyed rate caps that we removed. When we removed them, some of those auctioneers, one or two of them left us. One or two of them stopped running all of their auctions. We are pleased to say we have now made up with all of them. Everybody's back. Everybody's running all their auctions with us. This is good. And that is exactly what you're seeing in that 32% growth in THVs. The fact that people are now back and with us and things are back to normal. You see the conversion rate on green, 23% to 19%. So green has historically had a lower conversion rate than grey and yellow. And the fact that we have an above average growth in green THV is depressing that. In fact, the biggest single factor between our overall conversion rate coming down. The auction houses who stopped running auction with us had below average conversion rates. The reason why they could do that is because they were less dependent on us, which as that 32% growth has come through, that's come through at a lower conversion level, which has depressed the average. But we are very pleased with that agricultural performance. The fact is it's back to normal and we are back to growth. And then there's a whole hodgepodge of stuff in there, difficult to pull out one particular factor. It's not arts and antique stuff, but it is of a similar variety, more consumer-orientated, and perhaps you're seeing something in that, but the numbers are relatively small. But overall, if you remove real estate, the fact that we were in growth in GMV, in INC is something, again, we are very pleased about. When we talked about the improving momentum, we were specifically talking about INC, and this is where you can see it. That has continued into the first two months of this year. I shouldn't read too much into any one short period of time, but frankly, we're pleased it has carried on a lot better than it not. So margin, not too much to say here. So we had 47 percent margin in 23. That's down one percentage points to 46. The biggest single impact in that is the mix of revenue and specifically commission declined. Commission has an above average contribution and almost 100 percent drop through. So whenever that goes down, it pulls down our overall total margin. The only thing to say on the cost base, it's not a massive thing, but Clearly, we've had a difficult year. That difficult year has meant bonuses and staff pay in FY24 are lower than they would in FY23. That has improved our margin by one percentage point. The reason for highlighting that is in our guidance for next year, we are mindful that bonuses we are hoping were expecting to be back to normal, which would give a drag that wouldn't otherwise be there in our margin. But everything else has panned out exactly as we said at the half year, particularly in terms of the phasing of costs that we talked about, which there was a lot of noise about at the time, but things have worked as expected. go to the next slide this is our overall profit and loss account a busy slide right hand side i've already talked about revenue five percentage points growth gross profit a little bit behind that because of that revenue mix four percentage points of growth admin expensive down a bit um so one percent down year over year three things going on there we had some exceptional items in the prior year related to the acquisition of esm which haven't repeated we haven't bought any businesses. Our share-based payment charge is lower, £8 million to £6 million. Part of that is some of the incentives that were put in place at the IPO and the LA acquisition have now run their course and so fallen out of the numbers. But also there's an element of performance-related charge there, which given performance wasn't as good last year, has meant there is some benefit in the FY24 number. Those two added together, gross profit and admin expenses give you operating profits. That's up 17% year over year to 32.4 million. And our finance costs looks like a big reduction, 26% to 14 million. Last year was influenced by some non-cash effects that we have on our intercompany loans. If you remove that, our underlying finance costs reduced by 3% year over year, so it's still a reduction. Within there, you've got higher effective rates. So in FY24, our loan, Our debt, which is the interest rate is determined by US SOFA, had a higher effective rate than 23 as part of that rising rate cycle, offset by the fact our debt is coming down and our leverage is coming down. The point of note there, all of the things being equal, we will continue to reduce the level of our debt next year as we produce cash, but next year we'll also have the benefit of reducing interest rates. So there should be a reasonably material reduction in our finance costs in FY25 versus FY24. And then final thing I'll say on there, and I just did diluted EPS, 38.6 cents, down 3% year over year. So despite the fact that EBITDA was up and finance costs were down a bit, it's gone down. That is due to tax rates. Tax rates in the UK had the first full year in 24 of the high UK corporation tax at 25%. In 23, we only had half a year of that. So that's knocked about three percentage points of our effective tax rate across the group. Go to the next slide. So our balance sheet, so we started the year with £141 million of debt, 1.8 times levered, bringing a BIC direct of 80, CAPEX of 11, working capital adverse, that's again due to performance related pay and bonus accruals, that will reverse next year when bonus payouts will be lower. Interest and tax £25.6 million, acquisition of ESN £12 million, that all happened in the first half, all those payments are done so that won't be there. at all in FY25. Bit of FX, that leads you to 114.7 million of debt at the end of the year, 1.4 times leverage. Which sort of leads us to the next slide. All of the things being equal, business is cash generative, will continue to reduce its leverage. So we thought there was no harm in reminding people of the board's capital allocation priorities and the fact that the board's mindful of this topic. No changes to approach. But as almost it goes without saying, the options that you can do that we're always evaluating, organic investment will always be a priority for us. particularly with regards to products and technology developments. M&A, no change in our approach there, disciplined approach, looking at accretive acquisitions, always on the lookout for that, but also be very selective. Then the final option is a legitimate option for us, particularly now as our leverage is down and our cost of debt is reducing, would be to return excess capital to shareholders through a share buyback. Nothing's changed, but it is a legitimate option for us that I think it was useful to remind people that the board is thinking about. And with that, I'll hand back to Jean-Paul.

Okay, so you go to the next slide. So I showed this slide before, and again, as I said, we create value by connecting the supply and demand. And in fiscal year 24, I think we did this considerably better and in a differentiated way. So if you look at the bottom on the left-hand side under bidders, We continue to advance ATG Pay, ATG Ship, and we could have put ATG Excel on that side as well for bidders. And the reason for that is that if you're a bidder and you log on to one of our platforms, well, then you're able to see the inventory from multiple others as well. So you're logging on through ESN and now you're seeing live auctioneers inventory at the same time. And that creates value for bidders because why do bidders come to aggregator marketplaces? It's because they want to see the aggregated inventory across many different sellers. And then similarly, we made big progress on connecting and making things easier for sellers to actually list with us and reach those bidders. So again, when we look at ATG AMP, which is what stands for Auctioneer Marketing Program, that's when auctioneers pay us to reach our bidder base. That's something that we continue to invest in, creating new programs, new pricing models, different ways to reach different types of auctioneers. And that's partly what helped us grow that number meaningfully in fiscal year 24. ATG Excel is the thing that we're also very excited by because that, again, is allowing auctioneers to reach multiple marketplaces and have their white label for timed auctions. And then the third part, which we talked about doing back in may but which we launched only in the middle of august was the atg partner network and this was done with the idea that auctioneers are looking all the time for ways they can reach more bidders we have lots of bidders within the atg network but we said how can we make it even more appealing to work with us is to partner with other classified sites that are out there and therefore it's a one-way stream it's basically an auctioneer comes through us uploads their inventory and then can present that inventory through an API connection onto the classified listing site. And then that classified bidder traffic is able to see the inventory and then connect right into ProxyBid. And so we connected with four different classified businesses in the course of the year. And the reason why I say this is meaningful is that if you look at some of the names know your first reaction will be well these are kind of quite niche names but in those niches each of these industries are quite important and the traffic on those sites is equivalent uh just below the traffic of all the proxy bit so again meaningful connections that we can bring auctioneers into contact with so if you move to the next slide In the past presentations, we've talked about the different horizons that ATG considers. So the foundation one was simply aggregating the critical mass of buyers and sellers to be the market leader in each of our niches and therefore to get that network effect moving. We're firmly now in horizon two. And in that area, the key thing that we're focused on is really connecting that supply and demand more effectively. So basically raising the value of coming to our marketplaces for an auctioneer and for a bidder. We're increasing the ease of selling and buying via the value added services we're offering. So whether it be payment, shipping, digital marketing, those are things that make it easier for an auctioneer to run their auction house and optimize the price they get. They also make it easier for the bidder because the bidder is able to see the relevant inventory that they want from a given auctioneer. They're also able to pay for it and to ship it more effectively. The new part that we're adding into Horizon 2 now as we look to fiscal year 25 is to increase our focus on the bidder. And I'll talk a little bit more about that coming up. But we're still continuing to work on the value-added services, pay, ship, and AMP. But we're also increasing our focus on the bidder experience with a focus on our taxonomy search and recommendation engine. And then we still have Horizon 3, where there is a vast array of opportunity for us still ahead. So I think for us, we're excited by the progress we've made in fiscal year 24. We've seen the investments that we made in terms of driving value-added services start to pay dividends. We've seen early dividends being paid from the investment we've made into the areas that will drive conversion rate and drive GMV. now we feel that we have additional levers that we can put into place to further drive that gmv and conversion rate and that sets us up for then going after the more transformational areas within the broader auction ecosystem turn to the next slide So why do I say again that we've expanded supply and demand? Well, it's just right there in the numbers. So 88,000 auctions up 2% year over year, 24 million lots listed. And then you see the number of bidder sessions and new account registrations. And the thing that I think that this is so important to show is because number one, it shows that whether it's a good market or a tough market, auctioneers and bidders are increasing their trust that they placed in ATG. uh... but i think also when you look at the numbers and break it down so to give you context three hundred minute three hundred ninety million bitter sessions is 4,430 per auction that we're bringing. And when you consider the fact that we are working with small and medium-sized auction houses for the most part, these are numbers that they could never reach on average on their own. And similarly, when you look at new account registrations, it's an average of 4,400 per day that we're generating. And whether you're Bonhams or you're a smaller auction house, these are still numbers that no auction house on their own can match. And the reason why this is all important is because it basically gets reflected in that value added services number that you saw. Why are auctioneers working with us more? Why are they taking our value added services? A large part of it is because they want to reach the bidders that we're bringing, and we're doing a better and better job at bringing them more bidders. Next slide. In the year, we drove engagement with auctioneers partly through a much more integrated technology suite. And why is that relevant? Well, if you look at what an auctioneer cares about at any given time, the number one thing they care about is they want to generate a strong asset price so that they can show their consignor that they're a good auctioneer to work with in the future. But they're also looking steadily for ways to lower their own operating costs, save time, and basically increase the velocity of selling because they have a limited sales team. They have limited people in-house. And the faster they can run an auction, the quicker they can bring it to market, the quicker they can get that team out in the field and looking for the next asset they can sell so that they can make more money. And so as we've integrated elements of the experience for the auctioneer, That increases their engagement with us. So as we brought in marketing and shipping and payments, and now we have ATG Excel. ATG Excel is huge because, as I'll show in upcoming slides, most auctioneers have a white label. If we want them to work with us on timed auctions, they need to have a way that they can do that where they can run on their white label and on the marketplace. And so with ATG Excel and now the partner network, they're able to run a timed auction our marketplaces while also running it on their white label and now through the partner network they can even connect beyond atg into a broader bidder network and the reason why that's so important is that number one it's easier for the auctioneer and we're going to make it even easier still in the next quarter where there'll be a single upload today you can run on your white label and in the marketplace but you still have the two uploads if you want to work on a separate marketplace In the second quarter of the year, that will be a single upload, which will make it even quicker and easier for auctioneers. But the key thing that we were really pleased with is the auctioneers who are doing it are telling us, I'm getting the same asset price that I expected to get when I used to run independently. Because ultimately, that is the most important thing, is that they can look their consigner in the face and say, I did the best job for you to get the maximum value. And similarly, they're seeing the benefit of lower costs because they can bring the assets to market faster, quicker, and the time savings for their team. so white label is something um that will be maybe an interesting one for people to appreciate why we highlight this because in the past i think we've heard lots of questions from people around white label as an area of concern and the reason was i think as covid uh went on and auctioneers became more aware of the uh of the In fact, the online world was going to be their future. People rightly expressed concern saying, well, does that mean more auctioneers will take white labels? And the answer was most of them did. But the reason why it's an exciting opportunity for ATG now is that we now have an opportunity to win back white label that has gone to third party white labels onto the ATG white label. And that represents an instant GMV gain when we do that because the traffic is already there. It's not about selling more. It's simply if they're selling through their own white label or through an independent white label and now they come to ours, we would capture all of that GMV and we would increase the likelihood that they would take a timed auction. So that is possible because we now have a differentiated offering, which is the ATG Excel offering, which allows for marketplace and white label cross-listing. And the reason why we're excited by this is that if you look at the penetration by each of our areas, so about 80% of INC GMV has white label and 60% of the ANA side. And as a result, we have a huge opportunity to win that segment back. When you see independent white label on the right hand side, 20 to 25% of ANA, 20 to 25% of INC. that's all gmv or thv that's sitting with someone else today when we win that onto our own white onto our own white label that's a big source of growth in both divisions that we think is right there for us and because of the differentiated offering that we bring with atg excel again it won't be overnight but we believe that this is something that over time the value proposition that we bring is significantly superior to everything else that's out there now and we expect to begin to win that traffic over And so go to the next slide. So one of the things I talked about in those time horizons is the fact that ATG is going to increase our focus on the bidder. And the key reason that we're increasing our focus on the bidder is number one, We've been working on the marketplace playbook and it's working. We're seeing what happens with value-added services. The second reason is because the more you focus on the bidder, once you get critical mass in a marketplace, that's really what attracts and retains the inventory on the sell side as well. So by focusing on the bidder, we actually are indirectly focusing on the sell side. And so ATG, as I think you're aware, has a very high reoccurring revenue rate where we don't have to resell our customer base year after year to work with us. It simply comes back. And the retention is incredibly high because of the stats that I put up here. So first of all, 55% of all bids placed in an auction for the auctioneers who work with us comes from ATG. That is something that they can't replace anywhere. And therefore, good times and bad, they are going to stay with us. And similarly, what's particularly exciting, because sometimes auctioneers will say, well, some of those bidders I'm familiar with. And therefore, we'd say, yep, but the 55% that will come through us, they chose to come through us. They may have known you were running an auction, but they chose to come through us. So they may be known to you. But the second stat is the one that's indisputable for them around the incremental value we're bringing, which is that 40% of the GMV came from bidders who were new to the auction house. So again, this is something that as we do this better, it retains inventory and attracts additional inventory. And the Excel and partner network are both key things that we've invested in that we believe are going to accelerate that. So on this slide, we just wanted to address the question around VAS. So we had continued success growing value-added services, plus 35%, but the CAGR has been plus 45%, and it's just continued to grow. Back in 2016, 17, 18, that number was virtually zero. And we've invested in this, we've been able to grow. But we still believe that we're in the very, very early days of what value-added services can be. And if you just take digital marketing, which is the highest margin product that we have that's out there, As we continue to add value to both auctioneers and bidders, the chances that auctioneers continue to spend money with us to reach those bidders goes up. And so if you look just at one example on the INC side, so BidSpotter has 0.7% penetration with digital marketing. or monetizes digital marketing at that rate. Proxibid today, which is seven times the size of BidSpotter, is only at 0.1%. So we believe that the opportunity just in Proxibid for digital marketing is massive because BidSpotter, the number is still continuing to go up at a good clip and Proxibid is in the very early days. And that's reinforced when you talk to an auctioneer. So if you talk to auctioneers, did your independent research, they would say that they typically spend more than 1% of the THV on marketing in some form or another. And the reason for that is they may do mail drops. They may do their own PPC. They may do work with people like us. They may advertise in classified sites. But the reason why they spend and they spend in good times or bad is because keep in mind, they're rarely selling on their own account. They're almost always selling for a consigner. And part of the deal that they set up when they work with that consignor is they agree that they will do marketing sufficient to get them the maximum asset price. If a consignor ever believes they haven't done that, well then the consignor won't be giving that auctioneer the asset again. And because we generate a better ROI than we believe any other place that they can go, we believe that we will attract a steadily increasing percentage of their digital marketing as we go forward. And so I won't cover ANA here because I think that that is much more well understood and appreciated. The key number, even on ANA though, that we're excited by is that on live auctioneers, it's approaching 1.9% of GMV that we're monetizing. And so that's contributing to that 10% take rate that you saw. But Etsy is at 4%. So we use that as a benchmark and we still believe, we may not be able to get to Etsy's levels, but we can get significantly above the 1.9% that we're at today. So the next slide is one that I think is the first time we've ever shared. And why are we sharing this? Well, I think, first of all, we want to share it because bidder retention for ATG is high. And as we retain high value bidders in our ecosystem, we're also steadily attracting new. So if you look at the chart down on the bottom left, 30% of our GMV in any given year for the INC side are from bidders who are new to ATG and 25% from the ANA side. And the reason why I think that this is such an exciting slide is that number one, it shows how We attract new bidders and that helps drive volume. And you saw in the previous slide, a couple of slides, where that is a huge source of value created for auctioneers that they can't get anywhere else. But I think what's even more exciting from an ATG perspective around this is that if any of you have bid on our sites, they've gotten better over the years, particularly if you look at live auctioneers where there's a more full buying experience available. but they're still not at the level of e-commerce. You still can't find lots as easily as you probably would expect that you could. You don't get the recommendations that you probably expect that you could. And so the investments that we're making now in taxonomy search and recommendation engine, we believe are going to materially drive the thickness of our new bidder cohorts larger. And so this is something that we're excited by. And again, we're investing in it this year, so you're probably not going to see the benefit of it this year. But as we head into 2026, that's something that we're very excited by. So the next slide that comes in is I think one of the questions that I think we've been asked over the years is just, is cross-pollination from people who buy in different online used marketplaces real? And I think what ESN has really shown is that unequivocally that is the case, where bidders can come to us organically through user experience improvements, but they can also come to us through M&A and through different buying formats, even people who are familiar with different buying formats. So whether you're looking at ESN in the way that they used to buy, generally showing up in person at someone's house, and saying, well, will these people actually buy online? The answer is they will. And so it's also a driver of retention for us on the ANA side, because again, the more bidders that we're able to bring, the more likely it is that an auctioneer will stay with us and take additional services. And so today, the second half of 24, we were able to get 49% of live auctioneers auctions cross-listed with ESN. And on those auctions, it drove an average of a 9% GMV uplift. And so again, when Tom was talking earlier about the fact that we did see our THV go down and we did see GMV go down on the ANA side on a year-over-year basis, but relative to the rest of the companies in our end market, we did materially better and we think that we can do even better still as we both connect in ESN and the rest of our network to help drive GMV even in difficult end market situations. So if you go to the next slide. So this one, there's a lot of data on here and I won't go through it in excruciating detail, but I think it's important because one of the things when you look at ATG is that it's easy to focus on individual products. But what's really important to think about is that at the end of the day, we are an online marketplace and we have multiple levers to drive conversion rate over time. And part of the reason is we've said that we're not gonna be splitting out our value-added services revenues in terms of each individual product revenue. is because we will use those different value-added services to drive conversion rate and to drive other business objectives that we have, and therefore product level revenue is going to be a less relevant statistic. But just looking at a selection of the things that we can do to drive conversion rate, and I do believe that, again, this is just scratching the surface of what you can do when you look at lots of the other marketplaces that are out there. So we have ATG Excel, where we can, again, connect more the inventory up to the bidders and that at least in the esn case is driven a nine percent uptick in gmv and that's um then you look at atg ship so again that product today uh early days still but growing and when you have shipping we're seeing on average five percent incremental gmv from that auction for atg um we also see incremental bidding activity for the auctioneer which helps them believe that they're getting a better price when they offer our shipping terms of the atg partner network this is again tens of millions of bidders who may or may not be within our network the reason i say may or may not is that it's early days for us it just launched a couple months ago we don't know the degree that many of these bidders may already no atg marketplaces and therefore they're converting they would have already been visiting our sites however the fact that they're able to see us in multiple places means that even even if we've seen them before maybe we wouldn't have captured that sale so even if they're a bidder that we've seen before and they come through one of the partner networks it's still volume that we now capture which we believe can drive gmv Search and discovery is another huge one. So keep in mind that just last year, we listed 24 million unique SKUs on our site worth 13 billion. And so the idea that anybody here or even professionals are gonna be able to troll through 24 million items per year and find what's relevant, we think is too big an ask. And so what we're investing in is better search and taxonomy so that we can present people with more relevant items from amidst all the items that we have. which again, we believe can help drive conversion because other businesses in our space are not able to do that. And then finally, we have the fixed fee incentives where we can drive the behavior to adopt the different services we have, which help drive GMV by playing with that fixed fee that we charge to auctioneers, because that's the amount that the auctioneers pay. And if they're able to shift that cost to other sectors in return for taking our services, well, then they'll do that. And then ultimately, on the right-hand side, I think we just put this up because this is on the INC side. There's no reason that over time, what time is, whether it's two years, five years, we don't know yet. But BidSpotter is at 85% average conversion rate, and that's for gray iron. And so that's not something maybe you would typically expect to have such a high conversion rate. But when you look at the INC side of our business, yellow, green, gray, we expect that we can get to much, much higher conversion rates than we currently have. And again, on the ANA side, as you saw, we're at kind of an 18% take rate on live auctioneers in our core markets. And we see no reason why that number shouldn't be much, much higher as we implement the basics of e-commerce and help raise the standard of buying and selling. So the next slide. Um, so we've talked over these years about the fact that ATG is on a journey to transform the auction industry. And we're doing that by steadily raising the standard of buying and selling on our marketplaces. And so, um, pre 2024, we kind of built up all the basics in, in the marketplace, but in 2024, where we really focused was on. connecting better and on introducing those value-added services in a more full way. But as you look to 2025, where are we headed? I've talked about the fact that we're investing more in the bidder And there are kind of three areas that we will be focused. So first is search and discovery. We'll be moving all of our marketplaces onto Elasticsearch, which, again, is much more robust than the engine that we're currently on. We're improving our taxonomy because we found that significant numbers of lots within our network, we were not able to identify what the category was, which meant that the bidder wasn't able to find them. information that was not powering our search properly. So by investing in taxonomy and making it easier for them to provide quality inputs, we'll get better outputs. And that will then in turn improve lot discovery and the power of our recommendation engine. We're also going to be expanding our ship solution again across all of live auctioneers. We have a level of adoption today and we will be expanding that significantly over the course of 2025. And then thirdly, we have the customer experience. So we are conducting much more extensive AB testing on the front end. It's something that we get asked about a lot, which is you're investing in a lot of different things, but your UX hasn't materially improved in different ways. This is something that we believe will begin to shift that over the course of fiscal year 25. And again, the focus though there is on ANA and specifically on live auctioneers. so um second to last slide here um what are we feeling now as we end fiscal year 24 and begin fiscal year 25 i think atg is really confident in our outlook this year and excited about the future and we feel that we are moving faster to accelerate the marketplace flywheel and to invest in the core elements of a good online marketplace the way that we've kind of viewed it in the past and i've talked about this is that to really know how fast atg can ultimately move you have to have the baseline capabilities in place and i think you've heard me talk before about the four wheels of the car i feel like two of those wheels were the supply and the demand the third wheel was the value-added services where you start to have some of the basic elements but the fourth wheel was really that upfront search discovery capability and so over the course of this year as we improve that i think probably more in 2026 but we are going to be in a position to really start to see where when you have all four wheels of the car, how fast it can move. As we enter the year, why do we feel good? I think beyond the fact that the external headwinds that have been working against us for the past 18 to 24 months are now largely gone. I think what I feel best about is the fact that coming into this year, we actually have more levers within our control that we can pull than we did a year ago. A year ago, we didn't have shipping, we didn't have Excel, and we didn't have the partner network. and now we have all three of those plus the ability to cross list marketplace to white label so we feel that we have kind of four levers going in plus the impact of digital marketing the combination of those we think we feel good atg excel's impact to help us continue to grow gmv momentum on inc we feel good about combination of atg ship esn and excel we think is going to be material in helping us drive gmv positive over the course of fiscal year 25 on the a a side we feel good about continuing to expand our take rate uh by driving vas adoption again of ship pay and amp and as you saw on the inc side there's a long runway ahead still and and you know the team is selling that well as we speak The white label sales representing a new opportunity for GMV that the commercial team in North America particularly is focused on. And then finally, as I said, this additional investment going in with a focus on the bidder. All of these things we think are great in the sense that we continue to drive the areas where we've proven to you we can, value-added services, but we also now are going to be taking more control of GMV and we are increasing our belief that we can grow that over the next year and beyond. And so, final slide. Um, our guidance for the year revenue, our guidance for the year is four to 6%. And adjusted EBITDA, uh, comparable to fiscal year 24, uh, is 45 to 46%. And I will leave you to read the rest. And with that, I think we are open for questions here.

Um, I'm sorry.

Gareth Davis from Deutsche News. Three for me to kick off, and apologies on the first one if you answered it, but... just for clarification, really helpful, the kind of breakdown by asset class. In terms of the gray conversion rate, the 77% to 74%, in my head, sort of as a category matures, I would have expected a slightly more stable conversion rate. Just understanding that, is that just the swing factor we should expect in any period because big ticket items are really important and

Yes, so actually, big ticket items are a factor. It's auction house mix. So as I said before, that level of fluctuation is quite normal. So we would not, and if you looked at it on a monthly basis or a quarterly basis, you would see more than that, frankly. We have a core auctioneer base in Grey Iron who is 100% timed, no change in that, the same faces, and we're always 100%. Whether it moves about is whether the other auctioneers for who Grey Iron is not their core business, but they happen to have some Grey Iron to sell, there's a sort of cohort of auctioneers, lot of on proxy bid actually who just sell whatever they can and some of that is grey iron if they're not signed up to timed and you get a bit more of that activity in the period it does distort that number um and so it's say it's quite normal it's just mix of auction houses if you look across all our asset categories actually that level of movement in in conversion is not super unusual It's part of the reason why we don't like giving the detail, because it's easy to over-read numbers into relatively small movements in percentage chains. But yeah, auction house mix.

And then the second one, on the INC side, decent improvement to 2.5% take rate. Can you give any flavor for kind of what sort of all singing, all dancing customer, what kind of take rate that you could be getting from them already? And at the low end on the other side, somebody that's paying a lower commission rate, what's the sort of spectrum of commission in INC?

I mean, it's quite straightforward. If you put aside real estate, which has already said it's got a very low commission. In fact, often real estate is monetized through fixed fees. The range on INC is between 1% to 5%. So some of INC are paying the similar rates to ANA and your larger auctioneers selling big yellow assets, big construction assets will be towards the lower end of that range. I mean, the way we do it is basically based on category of assets. So grey pricing is typically three. Agriculture and construction is typically two. If you're a larger auction house, you may have a rate that's slightly below that. If you're selling more consumer-oriented stuff, you're higher up the range at 5%.

And I think when you look over the long term too, If you look at typical marketplaces on ANA, it's anywhere from 9% to 15%. And as we showed, we're approaching 10% on ANA now, so getting to that marketplace norm. INC, there is no real comparable out there. And as a result, I think if you look out, I think thinking probably half of ANA is more realistic because whether it be payments where there'll be a lower take rate or you're looking at the commission, as Tom just explained, it's going to be a lower take rate. But on an average, I think when you look out over the long term, a five-ish percent is probably more realistic than anywhere near the 10 that you'd have on the other side.

And then final one, quite specific numbers one on the capex of 12 million. Is there kind of anything specific there in terms of projects that you'd call out? Or is that just a sort of maintenance level of capex looking forward that we should think about?

So there's a reasonable component within there, which is the continuation of the platform consolidation. But then the bulk of it is product and tech development. And really, we set that level at a number where we didn't want to be artificially constrained during the year, where there's stuff to do and we're thinking, oh, shit, we need to hit a number we've set externally. So it's set at a sensible level, we think. And really the question going forward is, to the extent that we've got things that we think we can get an ROI on, then of course we're going to spend. We're not going to be artificially constrained by targeting a specific number.

James?

Hi, it's James Lockie from Peel Hunt. I guess a follow-on from that question on take rates within ANA. So obviously that C2C is approaching the 10%, but within that there must be quite a range. It'd be good to understand the range of the possible within that space at the moment and where you think it might go. And the second question, on the slide where you've got the integrated technology suite that shows the 66% reduction in time spent, it looks like it's focusing more on repetitive work with the upload once sort of model there. eBay's rolled out, you know, Gen AI descriptions as sort of one example. Is there more you can do at that initial upload stage that could take that, you know, that 66% down further? I'm sorry, up, I guess. And then... So, you know, it's lots of moving pieces, but this time last year you guided to 5% to 8% organic growth based purely on our view of where VAS would land, I think you described at that point. Then you guided to 2.2 to 5% based on the proxy bid change. You've ended at that low end, that 2%. If we take that out, are you at the 5% of that bottom end of the first range? Just to give us some idea on that. Thank you.

So maybe I'll do the first two and then Tom can do the third. So in terms of the ANA take rate range, again, the easiest way to break it down is to say when you look at our fixed fees and then someone who does commission with us, well, then it's going to be somewhere around 5.5% to 6%. That would be the low end, right, with an ANA because we don't have discounting for people on the ANA side. If you're an auctioneer, it's going to be 5.5%, 6% if that's the minimum you do with us. And then if you took payments at 3.75% take rate, if you started using us for your digital marketing, and let's say that actually got up to 2% across the board, and then you've got shipping, which can add another, let's say, 50 basis points-ish, and then you add in the rest, you're getting up towards a 10% to 12% take rate. that you're getting on ANA for an ideal client with us. And that's before we've introduced additional services that we believe we can roll out. So when we look out to the long term, I'd say the opportunity for us to be in that marketplace norm of anywhere from 10 to 15% on ANA is something that we aspire to. And that's still in keeping with our strategy of a shared success model, because our view is we're benchmarking what an auctioneer pays for digital marketing, for payments, for shipping, for a white label. And we're looking and making sure that whatever we offer, we're saying we should be good value. The collective value that ATG brings should mean an auctioneer says either I'm saving money and therefore saving money that way, or I'm getting more bidders more effectively, so my CAC is lower, and therefore I can make more money for my consigner, or their sales force is more effective, whatever that may be. So that would be the range that I'd say, you know, entry-level person, five and a half, maximum at some point, you know, 15-ish percent.

Just to follow up, I think when we first started talking about ATG pay at the beginning, I think, as in whenever it was a couple of years ago, you talked about a 2% to 2.5% take rate, sort of an idea that we should think about. You just said 3.75% in your thing there. Is there a reason for the upgrade, I guess, or increase for that? And how's margins gone over time? Because I know, again, at the beginning, it was sort of around 20% to 25%. Has that progressed upwards? Yes.

So on the 3.75 is what we charge on ANA. So I'd still hold to the two-ish percent on average when you do.

The difference is the mix of payment methods and credit cards is higher than it would be on bank transfers. And so there's a bias towards credit cards and ANA. And margin. And a margin similar. So our margin is now about 30 percent on payments. Actually, the The lower the take rate, the higher the margin. But yeah, we don't see that changing dramatically. It has increased over the past year, but I think 30% is a sensible level at the moment.

And while payments wasn't our primary focus this year, there's still huge potential there, and we believe in that. And again, those margins can get higher too, because the key element that gets your margins from a 30% business to 50% plus is when you take risk in-house. But that's got to be a decision that we'd make very, very carefully. Um, the other question you had was around the, the, the fact that timed auctions reduce the time for an auctioneer, uh, by 66%. And so one of the things that we're looking at there, and you're asking, will gen AI, uh, kind of help? And absolutely. Uh, it's something, but right now, so in the last year, some of the things we didn't talk about the last year, we consolidated all our data warehouses. So we now have a single data warehouse. We also have a single, we implemented that all within Snowflake. We then have Amplitude that we put on top of that so that our teams can actually access the data more readily so that we've got kind of a common source of truth. Those are all foundational elements to eventually do more with AI. And it's also why we're investing this year in taxonomy and search and a recommendation engine, because if the inputs coming into the system are not quality, then the AI results will be garbage. And so what we're looking for is to improve that foundation so that the next step is to do exactly what you're talking about. And whether it be on relevant search for a bidder or quality time savings for an, we think that those are definitely material.

And with regard to our evolving guidance for the year, the fundamental difference between where we started out and where we've ended up is, as you say, is what happened in Proxybeard. That wasn't fully anticipated 12 months ago. Second half of the year, much better. But that 1% growth in INC is not where we saw the year initially when we started. It's probably also worth mentioning our overall numbers at minus four, minus 5% THV on arts and antiques. That is a pretty, so we did anticipate that in our numbers, but that's a pretty big drag on our overall revenue performance. You would expect an average some good years, some bad years, to be about 3% or 4% in ANA. That's just THV. If you factor in 3% or 4%, it has a material difference in our overall group revenue performance. So just re-emphasising the point made earlier, what's happened this year, the organic growth we've delivered, has been in a very difficult market context for a fundamental part of our business, arts and antiques.

Thank you, Morning. It's Lara Simpson from JP Morgan. I just wanted to come back to margin. Your guidance for next year is 45 to 46, so relatively flat. You spoke about investing more in the bidder experience. Just wondering if you can quantify the level of investments you're looking to make. And then I know hopefully we'll have the bonus payment reversal coming out next year. So just wondering about the other levers that you could pull, how you're thinking about, I suppose, leverage in the business and then the implications of that. given that margin set up. And then I just wanted to follow up again on your comments on capital allocation. I think a helpful reminder on the priorities, but interested just how you would characterize your appetite for M&A at this point in time, given, I suppose, where the share price is and what could be a high hurdle rate. And then with that, just interested a bit more in your consideration around returning cash to shareholders. I suppose, is there a certain level of balance sheet leverage that you're looking to hit from a threshold perspective or any other considerations on that? Thank you.

so on the first one um in terms of specific amounts it's hard to ever disentangle one one thing because when you're looking at the bitter experience it's going across an enhancement to our shipping product uh and rolling that out more uh aggressively across live auctioneers so that's a bitter investment there is both product investment that goes in there's operational support that goes in there's commercial team time thinking through the pricing and other things you do than the taxonomy and search elements that we're doing. You could say there's a few million going into that in the coming year, say a couple of million that's going to go against that. And then the broader based user experiences, user experience investments, those are again captured within the overall budget that we have. So there's nothing more beyond what you're seeing there, but it's around just doing much more extensive test and learn that we used to do before we put money in. And so for instance, we have four or five tests running right now. I won't talk about it now. We'll talk about it probably in May. But we're already just seeing little things that we change the impact that it has on the front end of the user experience. And so doing those tests with the idea that once you test it, then you can roll it out with more confidence that it generates a higher level of ROI. And I'll cover the M&A one, and then, Tom, you want to do the other? On M&A, as Tom said, we continue to look. And even though the hurdle rate is high and even though our share price is down, many other companies' values are also down. So just because the value is down doesn't mean that it may not make sense to go for something. That being said, we recognize that you have to be even more careful when your share price is lower than when it's high. And so as we have with every acquisition we've made, we will be very disciplined in how we go about that.

And with regard to target leverage, so there is an explicit target we've talked about. We're a business that lends itself to leverage because of our cash generation and the relative stability on a month-to-month, quarter-to-quarter basis. But there's no doubt that the threshold of 1.5 is an important one, a psychological one externally. Actually, our debt gets a bit cheaper when it gets below 1.5. The lower leverage is, the more likely it is we have options. I think that's a statement to be obvious, but it's very helpful that it's coming down.

Thank you. Paul Richards from Dalgate. Just sort of following on from that question as well, how do you think about balancing revenue growth and margin, 45% margin, 5% growth roughly? Is there an opportunity to take margin down a little bit near term to really accelerate that growth, or can you preserve margin and accelerate growth?

So right now, I think, as you said, we've given guidance that shows that we're going to retain our margins as they were in the past year. And we believe that the investments we're making are going to pay off in the form of more growth. So the bidder investments we focused on, the Excel partner network, plus the shipping, plus just steady improvements to the platforms, keeping them more and more stable, which in turn generates more revenue. I think for us right now, we believe that we can generate meaningful growth with the investments as they are. The investments that we're making, part of the reason you're not seeing us forecast is that We're waiting until we see that money start to come in instead of trying to outguess what's going to happen. And so we have a lot of belief that they're going to drive incremental growth. And if we saw that growth taking place, whether it be from the test and learn that I talked about in response to Laura's question or from one of our other initiatives, we may take margins down. We may invest more aggressively. But I think we're doing that based on the confidence that we'd see from the things that we have invested in working. and therefore be able to give you a more confident ROI on that.

Great. And in terms of acquisitions, is there any sort of clever technology out there that you're sort of coveting that you think would be a good acqui-hire or acquisition for you?

There are opportunities there. So if you look at our list of M&A businesses, there's all sorts of things, either complementary marketplaces, adjacent areas like ESM was, or technology. So everything's there. Whether there's anything imminent on that, we'll see. It always depends, right place, right time, then wanted to sell. But it's certainly something we look at. It's not out of the question.

I can't really finish without having a question on Trump, but if we do see the imposition of significant tariffs, then surely if the cost of new INC equipment goes up, then that makes recent secondhand equipment more attractive. So that would be a positive for your business, surely.

Yeah, it would be hard for us to... There's lots of moving parts. It's like whether it be chip supplies get cut off from Taiwan or that makes used asset prices go up. Or if you start seeing commodity prices go up, well, that makes used prices go up because farmers have more money and therefore they replace their equipment faster. Um, and similar to what you're describing, you know, we don't know the full impact yet and we don't know what the tariffs will be, but in theory, what you're describing, uh, should take place. Thank you.

Hi, uh, Ross Porter from RBC. Um, just a bit of a follow-on from that question, really. Um, The cyclicality of the business, what would you say you've learned about it over the last couple of years? Obviously coming through sort of extraordinary cycles into what you're describing now as a more normalised cycle. Yeah, so I guess just comments there on how you see that's changed.

This is a difficult position to defend given what's happened. But to me, still, the fundamental logic applies. Our A&A business is clearly pro-cyclical. It's not as cyclical as the wider market, but it is not immune to the wider market. And as the economy is good, that grows fast. When it's not so good, it goes down, which is what we're seeing now. In INC, the position always was there's some counter-cyclicality to that. I think you are seeing that now. That growth in THV is what you're seeing. There's a lot of noise about asset prices and movements, but the total value of items traded is growing. That has been hard to argue in a period we've had where we saw THV go down, but that really was an exceptional period, an exceptional COVID-related asset price inflation. So I think fundamentally, our position's not changed. In a normal world, there is some pro-cyclicality to ANA, and some counter-cyclicality to INC, and that's still there.

And so just following on from that, obviously when we saw the big asset price increases in INC, there was an idea that actually auction houses were bringing forward supply to take the benefit from those higher prices. Obviously at the lower point now, do you think there is a pool of latent supply that as asset prices start to increase will then start to come? So actually you're offset from price and volumes actually doesn't really apply then looking forward.

So I think that dynamic definitely happened in that peak period, the first half of 23, those very high prices attracted assets into the market. But I think that was exceptional. There will always be a supply and demand dynamic, which is driving prices up or down. It's quite natural. I don't foresee, and look, this is a bit of a mug's game for seeing what's going to happen with asset markets, but I don't foresee that dynamic repeating itself. So price is going down at the moment because supply is coming up. Ultimately, that's going to start reversing and there will be prices come back, which will happen because the volumes are impacted. it's just it's a market that's what happens at the top level the values traded are far more stable than the moving parts underneath it which is the key point we get paid on total value traded we're not bothered about the price or the volume independently of each other

And I think as well. So those are the external markets. And I think what we're excited by about where we are now and where I think we can get the next two years is that we've proven the value added services works and that that actually gets enhanced the more that you can grow GMV. We've now begun just this last year to invest against the things that drive GMV, and we're going to continue this year and into the next year. But when you look at the fact that on ANA, we have 18% share, there's a lot of room to grow our share, even if, let's say, THV goes down by a little bit. If we can get good at driving conversion, we should be able to grow GMV anyways, and we should continue to monetize around that with value-added services. And similarly, on proxy bid as we invest in the elements that will improve that side of the business for GMV, whether it be through ATG Excel and the white label and marketplace cross-listing. We think that's a place where we should be able to continue to grow it regardless of what goes on in the end markets. Clearly, it depends on the degree to which those end markets move, but in a steady state world, we should be good. Thanks very much. Okay, so again, thank you for taking the time to listen in on ATG's annual call. Again, we had a tale of two halves where the first half was not so great, second half much better, and I think that momentum is continuing as we begin fiscal year 25 and with more irons in the fire that we can continue to stoke and hopefully turn into something good in the year ahead. So thank you.