Auction Technology Group plc

Well, firstly, you'll realize very quickly this morning that Megan was obviously the last one who practiced with the mic, so let me just bring it down to an appropriate level. And, well, look, firstly, welcome to our half-year results presentation. We obviously appreciate your continued interest in ATG. And I am delighted to be here as the new CEO. and to clearly get the benefit of the team's great work on the reaction of the markets this morning. No better to be... What was it Napoleon said? Don't give me generals, give me lucky generals. So clearly I was a lucky general this morning. So thank you to all of the team for making it very easy for me this morning. And so I'm sure the question that's top of all your minds is why did I join ATG? And... So what I can tell you is very simple. Look, I completed my diligence. I was very excited about the growth potential of this business. I mean, great oaks from acorns they become. And so, you know, I'm very confident in the original hypothesis of the business. I accept maybe the path hasn't been quite as straight as you all liked it to be, but I'm pretty sure that the opportunity absolutely remains intact. And so I'm excited to take the business and achieve that growth. The other key thing is, look, I think the strategy generally makes sense. So I've not turned up and thought, wow, I'm going to have to change the strategy here. The strategy, I think, is very clear. So what that really now allows me to do is just focus on improving and accelerating the execution of the business, and that's where the effort is going to go. Look, live formats remain a very strong growth format across global marketplaces. It's where the excitement is in any marketplace business. I've had the pleasure – of working with the top 30 marketplaces globally for the last 15 years. So, you know, it's where all the action is and we're ahead of the pack in that niche opportunity. And sometimes I think that can get lost on people. My only reflections on the company is, look, it's really clear today, probably demonstrating that more than anything, that we've strengthened the confidence over the last six months by improving the accuracy and predictability of our forecasting. reducing the risks of earning surprises and being clear on our focus areas. And I think that goes with great credit to Sarah and her team and obviously Chris and our IR team. So it's kind of, that's a key milestone for us. Look, we've grown single digit top line in the first half, but we need to be realistic. We've done that supported by lower margin VAS revenue. And so we're now going to be really starting to focus on strengthening the core fundamentals of the business, to restore a sustainable high margin growth with live auctioneers, I think, being the best bellwether you can use to see how we can achieve that. And then finally, look, you know, our continued strong free cash flow generation has enabled us to deliver efficiently while increasing our balance sheet optionality. And so I think, you know, at the heart of every great business at the end of the day is great cash conversion. And that's, you know, a key element of this business and something we want to be very focused on. Before I hand over to the team, I think it would be remiss of me not to acknowledge and thank on behalf of the board, the company and all the shareholders through the journey, Jean-Paul's 10 years of leadership of the business. You know, he, like all great CEOs, made good value for his shareholders on the journey. Not all maybe, but the vast majority. And I think, you know, the reality is it's from his 10 years of hard work that we get the pleasure of taking that platform forward. So on behalf of the company, I thank him for that. So now, without further ado, it's my great pleasure to hand over to Sarah to present the main sections of the financial results. And then she's going to be supported by Megan, who's our Chief Digital Officer, who will give you an update on our product progress. But thank you for coming.

The mic is only going to go up for the presentation. Okay, thank you, Duncan. And it's great to have Megan with us this morning as well. We've got a fair bit to get through. Well, I personally have a fair bit to get through. So I have had an extra coffee this morning. You'll be glad to know. And I will be taking you through both the financial highlights and then the business and segment performance after that as well. Then Megan will do a deep dive into our arts and antiques business, specifically live auctioneers and cherish. And then we'll wrap up and take questions. That's the order of play for this morning. With no further ado, I'll go to the results highlights. which you will have seen over the last couple of hours. Summary being ATG delivered well in the first half of the year. We had strong revenue and profit growth. And in addition, we are announcing a modest upgrade to our full year expectations. ANA has good momentum. We saw GMV growth of 5% on a pro forma basis. And that was led by higher average item value, continued take rate expansion, as a result of our work on live auctioneers and the growth in shipping. And this has contributed to strong revenue growth in the segment of 12.5%. In the IMC division, headwinds have impacted our performance in the form of cyclical agriculture market headwinds, which I think are well trailed externally, and continued medium-term competitive trends. We do continue to work to drive progress in the segment with the proxy bid re-platforming on track. Cash conversion, as Duncan said, continues to be strong. We have good operating and free cash flow generation, and this has enabled us to delever significantly with leverage down 0.4 turns to 1.8 times at the end of March. Our capital allocation policy remains unchanged and the board will consider best uses of excess capital towards the end of the year. I'll talk about that a bit more later in the presentation. And lastly, our levers are working. Organic investment across live auctioneers and Cherish is delivering. We do continue to see take rate expansion driven by our value-added services. The Cherish integration is on track and we are benefiting from cost savings that we executed across the group. So with that, as you will be aware, and I think as I've well trailed over the last few months, we did say that we would be updating our KPIs to give a cleaner read that would be more aligned to how we run the business and will also simplify the ATG story and give you a foundation for consistent messaging and also consistent assessment of performance. And I should also say these new KPIs are much more aligned to industry standards. So just to talk you through the headlines, items sold will be our volume metric going forward, and we'll replace all of the previous scale metrics. The reason we talk about items rather than lots, which is what the language would be used for, is that Cherish obviously can't have lots being a list price business. And so we will be talking about items going forward so we can encapsulate both parts of the business. Average item value is our measure of pricing. And what you'll effectively now be able to do is take items sold and average item value, and that will get you to GMV. So it's a much cleaner kind of flow through the key KPIs. And then we've heard many times about exclusions from various metrics. And so GMB definition remains the same, but we've refined it to include cherish and real estate and ATG white label. And that better aligns GMB to reported revenue. And lastly, on take rate, we've refined the definition of take rate in the same way as I've just described for GMB. And again, that will provide a cleaner read on the monetization of our platforms. So with that, and I consciously did that up front because we will use this terminology all the way through the presentation, I will move to the financial highlights. Revenue was at 7.9% on a pro forma constant currency basis. And that was driven by a strong performance in ANA with a good contribution from Cherish. Adjusted EBITDA at 9.9%. benefiting from commission growth on live auctioneers, the operational synergies from Cherish and group-wide cost efficiencies. Our margin was 33.9% and pleasingly on a pro forma basis, margins were up 0.6 percentage points year on year. As expected, our half one margins are below our full year guidance and to be clear, our margin expectations for the full year remain unchanged. Adjusted EPS, 19.9 cents, up 4.7% year-on-year, supported by the EBITDA expansion. Strong adjusted free cash flow of 26.5 million, significantly up year-on-year, and a continued strong operating cash conversion of 85%. These benefited from the higher adjusted EBITDA and also strong cash management. And lastly, we saw rapid deleveraging with net debt to EBITDA down to 1.8 times. If I now move on to group performance, as I mentioned, revenue grew 7.9% on a pro-performer basis, despite a flat GMV performance. Two key drivers here, the strong performance on ANA, including Cherish, both of which have higher take rates than industrial and commercial, So we saw a mixed benefit and then value added services, which on a pro forma basis grew 21.8% year on year. Items sold were up 2% on a pro forma basis, driven primarily by INC, which also saw a corresponding lower average item value based on some of the headwinds that I've described, meaning that overall GMB remained flat. Take rate continued to expand, and that was led by the segment mix, as I said before, of ANA and Cherish having higher take rates, but also our growth in value-added services. And that meant that our take rate improved to 7.1% in the half. Just to remind you of what I mean when I say pro forma, this reflects the inclusion of Cherish in the prior year as well as this year. And we have got a reconciliation in the appendix, which reconciles to the reported numbers that we showed in the half year last year. I'll turn to arts and antiques. And revenue grew ahead of expectations at 12.5%, with contributions from ATG shipping, good growth in Cherish, and importantly, commission growth on live auctioneers from the actions that we've taken. Items sold were relatively flat, with good growth in higher value items offset by volume decline in lower value items. And this helped to drive up the average item value in arts and antiques by 5%. And we talked about this a bit at the full year, but our investments in live auctioneers have focused on surfacing items for buyers that have a higher value and a higher propensity to sell. And that has allowed us to increase our average item value. Cherish was also supportive. Take rates up five percentage points on a reported basis and one percentage point on a pro forma basis. Again, benefiting from the growth of shipping and the growth in Cherish, which as I said, has a higher take rate. Pleasingly, the Cherish integration is on track and we remain on track for a full year run rate of 8 million of synergies in FY27 as we previously communicated. In addition to that, we will see 6 million of those operational synergies delivered in the P&L in fiscal 26 with circa 3 million in the first half. And accordingly, on the back of that, Cherish was profitable in the first half. If I now turn to industrial and commercial, the performance was impacted by market headwinds leading to a year-on-year revenue decline of 1.8%. This decline was driven by first of all, challenging agriculture markets with a significant decline in GMV on our green iron or agriculture business. Secondly, competitive dynamics including the ongoing adoption of third party white label solutions by some of our auction houses and also the impact of auction house consolidation. I'll talk about those a little bit more in the segment performance later. Items sold on IMC grew 4% in the period. And as I said before, this was offset by a decline in average item value as a result of the headwinds that I've discussed. And that led to an overall decline in GMV of 2%. Take rate remains stable. Turning to the group P&L, gross profit was up 2.2% on a pro forma basis. and gross margin diluted by 3.4 percentage points as a result of the revenue mix impacts from both shipping and cherish, as we expected. Adjusted operating costs were pleasingly down 5.7% on a pro forma basis, which is primarily driven by the realisation of cherish synergies and the cost efficiency actions that we've taken. Adjusted EBITDA, as I said, up 9.9%. with a 0.6 percentage point improvement on a pro-reformer basis, which really demonstrates some of our synergy captures. Finance costs up 40.4% on a reported basis, as we expected, as this reflects the increased net debt post a acquisition of Cherish. However, our leverage directory remains positive with leverage now at 1.8 times. And then EPS up 4.7% on a reported basis with the expansion of EBITDA partially offset by the increases in finance costs. And then if I turn to cash flow, cash generation remains a core strength of the business. With Warhooking Capital broadly flat, and no significant shift in cycle from Cherish. CapEx was $6.3 million in the half versus $5.9 million last year. And that's as we continue to take, as I've said a few times on various calls in the past, continues to take a disciplined approach to capital allocation and targeting investments in the strongest returning areas. So we've seen no step change in remote on capital as expected. Interest costs were higher year on year and in line with our expectations as a result of the higher net debt. Tax, significantly lower than the prior year. Timing of payments normalised in the first half versus the first half last year. And we've also seen benefits of being able to utilise US cherished tax losses and changes in the US R&D policy changes. And then we continue to generate good cash flow Adjusted free cash flow of 26.5 million, which is materially up year on year. And as I said, conversion rate to 85% versus 84% last year, so a really strong performance. The strong cash flow performance allows us to continue paying down debt and make strong progress against our guidance of well below two times by the end of fiscal 26. I'm now going to move and talk about cost savings as a lever for our business. So to improve efficiency and organisational effectiveness, we decided to implement an additional cost savings programme at the end of the first half. These savings help support the path to delivery of the fiscal 27 numbers, provide us flexibility to focus on the highest returning investments and support fiscal 26 delivery. Just to be clear, this is in addition to the cherished synergies that we've been talking about for some time. and in addition to the cost savings that we communicated in November. In terms of the differences this makes to the organisation, practically, we have reorganised the business to have one global commercial and operating organisation. And we now have global function owners with more accountability while we have localised teams who remain focused on delivery. In addition, we also have an ongoing review of costs to hone accountabilities, and increase agility. Things included here will be use of AI for automation and cost reduction, eliminating duplicative leadership roles, and refocusing our resources around the priority product areas, some of which Megan's going to talk about a bit later. The additional programme will give us around a full year benefit of circa 4 million in FY27, as well as a partial benefit this year, albeit less given the timing of the execution. And this supports our upgraded four-year guidance and supports our targeted investments in arts and antiques. To enact these changes, there is a $2 million additional P&L charge in exceptionals that we took in the first half. I'm going to move on to capital allocation. And I think the most important thing here is to say that our capital allocation framework remains unchanged. We set out our updated framework in November. It remains unchanged and the significant delivering we've seen in the first half illustrates the optionality that we have ahead of us. Just to reiterate, our current focus is on firstly, efficient and targeted organic investments, such as those Megan is going to present today, which are supported by our ongoing cost efficiency programme that I've mentioned. And then secondly, the continued focus on deleveraging the business. The board will consider the best use of excess capital, including shareholder returns, closer to the end of the year, once leverage reaches a range of around one and a half times. We'll look forward to hearing investors' views on the options for returning capital to shareholders as we meet you over the next few weeks. And just for clarity, our view on M&A is also unchanged. is not required to deliver a strategy. Moving on to the building blocks of fiscal 26 performance. You'll have seen this chart at the full year. So just to lay out some of the key principles and then I'll move on to the upgraded guidance. So in November, we set out the key building blocks for our guidance for fiscal 26. Our confidence in the full year delivery has increased following the good first half performance. And this is reflected in the upgraded guidance. Revenue growth for the year, we've always said will be more weighted to the first half because of the timing of the rollout of ATG ship. But we do still expect shipping to contribute positively to growth in the second half. In addition, we do continue to develop AMP, our marketing program, and have started leveraging our marketing playbook across Cherish. In the first half, we took fixed fee and targeted pricing actions to grow revenue, and we continue to see the benefit of the work and investment on live auctioneers, which is driving GMB and commission revenue. Adjusted EBITDA will continue to be supported by the execution of synergies on Cherish and the cost efficiency actions, which I've already mentioned. which will have a fuller impact in fiscal 27. As expected, and in line with our guidance, there is a dilutive impact to margin of the impact of the chair-ish integration and the dilutive impact of value-added services, particularly shipping, as we've laid out before. We continue to expect to report full-year margins in the range of 34.5% to 35.5%. towards the bottom end of that range, given the success of Cherish and Shipping, which are obviously lower margin growth. If I then turn to the updated fiscal 26 guidance, we are upgrading our guidance for the full year after the good first half. We now expect revenue growth five to six percent on a pro forma constant currency basis which to be clear is in the 248 to 250 million dollars range with an adjusted EBITDA margin as I said of thirty four and a half to thirty five and a half percent exceptionals guidance for the full year will be seven million which is higher than we set out in November And that was due to the one-off costs of actioning the cost efficiencies that I've mentioned and also corporate project activity in the first half. To be clear, all other areas of guidance remain unchanged and remain in line with the expectations we set out in November. And that completes the financial highlights. So I'm gonna briefly change hats and move on to talk about operational formats and performance and segments. So we do continue to invest in the business and we remain focused on delivering our core objectives. Over the last two years, there have been a significant number of changes at the executive and board levels, adding relevant operational, marketplace, technology and finance steps, which obviously includes the appointment of Duncan, who has the experience to guide ATG through the next phase of our journey. And May is an important month for ATG because Duncan's obviously joined in May. I joined a year ago this week, one year ago, and Megan joined two years ago this week. So we have lots of change in May, it would seem. So we've done a lot of upgrade of the leadership team, as I said, and I think that's important for future delivery. On industrial and commercial, and I am going to talk about this a bit more in a minute, we're managing headwinds, which I'll expand on very shortly. Despite this, we are focused on the modernization and the re-platforming of Proxibid, and I'll take you through our phase plan for that. I've talked about value-added services a few times, so I won't elaborate further, but the key point here is that where we've invested, we have delivered significant benefits. Work continues on creating a modernized buying experience on live auctioneers specifically. Megan's going to talk about that in a bit more detail. And this is starting to generate positive momentum in our key financial KPIs. And lastly, as I said previously, the integration of Cherish is on track. And additionally, it showed good growth in the period as it benefits from the scale of being part of the wider ATG network. So IMC. We had a relatively soft first half on industrial and commercial. As we saw the cyclical agriculture, we saw cyclical agricultural market headwinds, as well as the continuation of medium term trends have impacted the group. So taking those in turn, firstly, the well-documented macro headwinds impacting the agriculture market, which have reduced value and activity. Secondly, we've seen continued adoption of third-party white labels. Importantly, these auction houses remain using our own marketplaces as well, but with a reduced share, so impacting GMBN revenue. And thirdly, we've seen some auction house consolidation. These dynamics together mean that we have seen commission revenue under pressure, as demonstrated by the chart on the top right. On the upsides, In recent years, we have been able to grow the monetization of that GMV through our AMP marketing program. And you can see that in the chart on the bottom right. While not benefiting GMV, it has meant that the total revenue has remained stable. We also believe there's good upside from commercially trading the business harder. So if I go now specifically into asset mix, And I think this is a chart we've shown previously, showing GMV and revenue by the type of category we have within IMC. And you can see that we are in GMV growth on yellow and grey iron, with the declines focused on green iron or agricultural equipment. The competitive dynamics of white label adoption and auction house consolidation together with the broader macro challenges facing the agricultural market, which is well trailed externally, have led to a significant reduction in both GMB and revenue at 27% and 17% respectively. Comparatively, we've seen a more stable performance on yellow and grey iron, which coincides with trends seen of US heavy duty inventory tightening and combined with marginally higher prices. If I then move on to some cohort analysis showing the loyalty of our buyers and sellers on the platform, we do still have very strong buyer and seller loyalty. And it's a key strength of the business. Consistently, over 80% of G and B on INC is from buyers returning to our platforms. And this high level remains stable. In tandem, seller loyalty also remains high. with more than 90% of GMV on proxy bid, coming from sellers who've been on the platform for over five years. Moving on to the proxy bid replatforming, which we've talked about a few times, that migration is on track, and it's important to our plans for industrial and commercial, and is one of the foundations that will unlock better performance. We hit the milestone of going live with our first timed auction house in the first half for testing. In the second half of calendar 26, we'll be focused on adding live auction and value-added services functionality, as well as working with a broader cohort of auction houses to expand our operational learnings. During calendar year 27, we will be rolling out the platform more broadly. Before that happens, we can drive targeted fixed fee pricing and value-added services adoption on the platform. We can benefit from the operational discipline of having one joined up commercial organisation and we're able to deepen our loyalty programme with existing sellers. Once the migration is complete, we will additionally be able to develop and innovate our which will allow us to capture some exciting opportunities, such as the work being done on the arts and antiques side of the business. We'll be able to apply the commercial benefits we've developed for ANA, so things like AI rankings, item categorisation, price prediction and enhanced search capability. Importantly, we'll also be able to reduce OPEX, CAPEX and cost to serve, which is important because much of our investment has gone into the proxy bid replatforming over the last years. And then finally and importantly, our white label solution as a result will become more compelling as a choice to auctioneers. I'll now move on to arts and antiques. And in this segment, we're really pleased to be able to say that our targeted investment and testing is now moving the key metrics, directly contributing to GMV and revenue growth up 5% and 12.5% in the first half. As you can see from the charts on the right-hand side, we're seeing pleasing growth in value-added services revenue, and more recently in GMV and commission revenue growth. Megan's going to talk about this in more detail shortly, so I won't say too much other than just to say we're focused on three things. Converting demand into transactions by enhancing the user experience. maximising price realisation and sell-through using proprietary data that we have and driving higher revenue per transaction and deepening the value of the offer to customers through value-added services. We are clearly proving out what drives performance and iterating quickly to catch the opportunity. To be clear, and I know this is something that we often discuss in smaller groups, we have focused our investment on live auctioneers which is our largest arts and antiques platform, and that's in alignment with our disciplined capital allocation approach. However, all the work is being done in such a way that the learnings can then be replicated across to our other platforms over time. And with that, after hearing me for a long time, I will now hand over to Megan to talk about live auctioneers specifically.

Thanks, Sarah. As promised, I will adjust the mic to max height so you can all hear me. Great. Good morning, everyone. I'm Megan Schoen. I'm the Chief Digital Officer at ATG. That means I lead product, marketing, technology, and data for the group. I joined ATG after leading product at large consumer marketplaces where the levers that grow a marketplace are very well understood. Reduce friction, sharpen discovery, and use data to match buyers and inventory better. When I arrived at ATG, what struck me and excited me was the scale of the opportunity to bring that same playbook to the ATG marketplaces. We have clear headroom in the buyer experience, sitting on top of unique inventory and seller relationships that no one else has. As Sarah mentioned, we chose to start on LiveAuctioneer because it's our biggest ANA site and a logical starting point to prove out the playbook. Over the next few slides, I'm going to take you under the bonnet and showcase where we invested, what it's moving, and where we still see a long runway ahead. So first, where we put the investment. We started by reweighting the ANA investment across three explicit fronts. First, trust and buyer experience. We're focused on driving more bidders, more bids, and ultimately more items sold. Second, discovery and ranking. Better matches, higher sell-through, and better price realization on our marketplaces. And third, shared intelligence and platform leverage. We are building services and solutions that can be leveraged across multiple marketplaces to drive faster innovation, lower unit costs, and higher ROI. What we actually did in practice is simplify bidding and onboarding flows. Fewer steps from when someone arrives to when they ultimately place their first bid. We've also been leaning in on AI to better understand our inventory through things like visual recognition, and then implementing ranking models in our search and recommendations that learn from real user behavior and optimize sell-through. We've also looked at how we can standardize and highlight the most pertinent decision-making criteria for our buyers, cleaner item pages, and clearer information hierarchy across our inventory. And we've seen the results on every dimension we've invested. In the first half, we improved GMB on live auctioneers by over 8%. and lots sold by over 9%, increasing take rate by 2 percentage points. I'm going to take you through just a small sample of the successful experiments that we ran in the first half of the year to give you a sense of the type of work that we're doing on live auctioneers and the results from those actions. It's important to note, every initiative was run as a controlled experiment with a holdout group. The lists I'm going to share are measured against control, not year-on-year. So first, let's talk about trust and buyer experience. When I say trust and buyer experience, what I mean in practical terms is removing every unnecessary step, decision, or moment of hesitation between a buyer landing on an item and ultimately bidding on it. This is important because every successful low-effort bid increases the chance that buyers come back, that they opt into alerts, and ultimately bid on the next item. So friction reduction here compounds over time. Some examples of what we did. We auto-approved returning bidders so that trusted buyers no longer have to wait for the auctioneer to re-approve them every time. We suggested bid amounts on our item detail pages, so every bidder now sees clear guidance on what is a good, strong, and competitive bid, rather than starting from a blank slate and having to guess. We reduced steps in the bidding flow, tightening the path from when someone is interested to when they actually place a bid. And we focused on getting more users to opt into notifications. Unlike traditional e-commerce, timing matters, and it can be very confusing in auctions. When we get someone to opt in, we can prompt them at the right moment and guide them through the process. Across a variety of these winning experiments, we saw a 9% growth in bidders, demonstrating that our friction reduction work measurably grows the active bidder base, and a nearly 80% improvement in opted-in users. the re-engagement pool we can talk to has grown substantially, which makes every future campaign and alert that much more effective. Turning to our investment in discovery and ranking, our second pillar. Reducing friction drives more bids than bidders, but friction reduction only pays off if buyers are seeing the right items in the first place. The single biggest unlock in any two-sided marketplace is matching supply to demand. Helping buyers find the item they want helping sellers price and present it well, and helping us prioritize the items most likely to sell. Doing this at ATG is harder than a typical marketplace. Every item is one of a kind. There's no set price. Value is decided by who shows up to bid. And every auction house has its own conventions for describing items. There simply isn't an off-the-shelf engine for this, so we built it ourselves on our own data. That's where AI comes in for us. It sits behind discovery, ranking, recommendations, and relevance. It's the layer that helps us turn an unstructured catalog of one of a kind items into something a buyer can navigate. And every new buyer, new item, every new bid improves those models. So what does this actually look like in practice? Three proprietary models do most of the heavy lifting for us today, each one answering a different commercial question. Our price and sell-through model uses machine learning to help us understand what's likely to sell and for how much. Today we are using this as an input into ranking. Items that are more likely to sell get more visibility. Our similar items model helps us understand what else this buyer might want. Because we know one seller might list this as a Darth Vader action figure and the other might describe it as a plastic man with a breathing problem, The model has to go beyond keyword matching and seller descriptions, using visual recognition to find comparable items in our inventory. We also use engagement and demand signals to understand what buyers are responding to right now. We take indicators like views, saves, bids, and feed those signals into rankings so that the display of items reflects what buyers are actually responding to. Our testing efforts this year have already driven a 2% improvement in search to bid rate. That means more of our searches are turning into actual bids. And a 10% improvement in average item value, which means our buyers are finding better matched, higher value items, so each transaction is worth more. We've made tremendous progress both in standing up the models and running a meaningful volume of controlled experiments. But every one of these models is still early in its testing curve. We have a long runway of experiments ahead. Crucially, as Sarah mentioned, these are platform models. The same models can be deployed across the rest of our marketplaces, so our investments here compound rather than duplicate. Understanding the inventory is half the job. Presenting it consistently so a buyer can decide quickly and confidently is the other half. When a buyer lands on an item, they decide within seconds if it's what they're looking for. To do that confidently, they need three things in the same place every time. Trust signals, so things like purchase protection or house ratings. Logistics, so information about shipping and payments. And comparison detail, value estimates, condition reports. We redesigned item pages on live auctioneers to surface all three. Same information hierarchy, regardless of which auction house listed the item. Listings come in from thousands of sellers in every format imaginable. And just by normalizing them into one consistent format, we enable apples-to-apples comparison across sellers, which builds trust and supports more bids, which we saw in the results, a 20% increase in both bids and wins. We test these capabilities on live auctioneers because that's where we can validate the impact the fastest, but we're building them with all of our marketplaces in mind. Cherish is where we're starting to see that intent show up in practice, which brings us to the next slide. Cherish pro forma revenue grew healthily in the first half, and our synergies are on track. With 75% already delivered, we have high confidence in delivering the rest by the end of the year. But the synergy program isn't the headline of the Cherish story for me. The bigger opportunity is what happens when you take the live auctioneer's playbook to Cherish, and that's what we're now putting to work. We're still in early innings, but signals are encouraging. The similar items model is now matching inventory cross-marketplace, so a live auctioneer's buyer can be shown a relevant Cherish item and vice versa. Also, levers proven on live auctioneers are being adapted for Cherish. We've added make and offer suggestions on item detail pages. We've updated our recommendations models to leverage engagement signals. And we have a queued pipeline of further experiments. We've also launched Cherish Auctions, giving Cherish's existing sellers access to both fixed price and auction formats for the first time. Nascent, but it extends the playbook into a new format on the same supply base. We expect a lot of the learning from live auctioneers to translate to Cherish, but Cherish also opens up something our traditional auction-only marketplaces can't. An entirely new TAM in home and design, a fixed price format, and a set of testing levers that come with it. In-cart upsells, urgency signals, add-ons, bundles and promotions, the conversion mechanics that retail e-commerce has been refining for two decades applied for the first time to our audience and our data. So Cherish doesn't just inherit our playbook, it lets us extend it into formats and levers that auction alone could not reach. And every learning we generate flows back into how we think about commerce across the rest of the group. The H1 numbers start to validate the model. The experiments are working, the metrics that matter are moving, and the playbook is starting to transfer to Cherish. But the headroom in front of us is materially larger than what we have captured to date. Here are just some of the areas that we are focused on. First, matching buyers to inventory across the network. What a live auctioneer's bidder is looking for might sit on Cherish and vice versa. We know what every buyer wants, including, uniquely to auction, who bid and lost. And matching supply and demand wherever it fits across our network is largely ahead of us. Both sides win. More conversion from buyers we already have, more demand for inventory we already carry. Second, pricing intelligence at the point of listing. Today we use our pricing intelligence to rank live inventory in the marketplace. The bigger unlock is upstream, helping sellers price right at the point of listing before the item ever arrives in search. Same supply, more sold, at better prices. Third, personalization and re-engagement at scale. Most of how we engage buyers today is one-size-fits-all. With real-time intent and cross-marketplace reach, we can talk to every buyer as an audience of one. Right inventory, right moment, right channel. The unlock is more repeat bidding and greater lifetime value. And last, but certainly not least, Catalog, quality, and data enrichment. This is the foundation underneath everything else. The cleaner and richer our catalog data, the better every other model on this slide performs. Discovery, pricing, matching. It's the multiplier on the rest of the runway. Each of these four levers acts on a different part of the funnel. So improvements compound rather than overlap. So to bring this together, focused investment, a validated playbook, capabilities, built ones for the whole network, and a long runway of levers still ahead. We've made progress this year with real headroom still in front of us. And with that, I'll hand it back to Sarah.

Thanks, Megan. And hopefully what you can hear from that and what is very clear is that there's a significant opportunity ahead of us and we're fairly early in the journey. So just to summarise, we have delivered a positive first half. We're raising our guidance for the full year with well underpinned assumptions. We've been disciplined in our financial management resulting in continued strong cash generation, and we've put in place a targeted cost reduction plan, which will support margins in fiscal 27 and beyond. As you've just heard from Megan, we have increasing confidence from the early results of our investment in arts and antiques, and specifically live auctioneers, which has delivered a good increase in GMV and take rate. Our industrial and commercial segment is managing both market headwinds in agriculture and medium term competitive dynamics. We're focused on re-platforming with the benefits that this provides as well as commercially trading the business harder. To conclude, we have a significant opportunity ahead of us through executing our strategic plan with material value creation still to unlock We've got an increasing number of levers to drive the business. And we're focused on delivery of our upgraded financial commitments. And with that, thank you for your attention. I'm very happy to take questions. I think Duncan is going to chair the questions. In reality, I'm sure I will be answering most of them.

Yeah. I get how to do something this morning. Gareth, do you want to kick us off?

Three for me to kick off. You made an interesting sort of almost throwaway comment about ATG Pay that you're seeing real benefits as ATG ship is so successful. Can you just put a bit of kind of context on what the opportunity still is there and how sort of penetrated you are into that opportunity around ATG Pay? The second one on the INC business, you noted that customers are still on the platform, but they're choosing an alternative white label. What's compelling about someone else's white label if they're not actually churning off you? They are staying on the platform. And you also sort of mentioned that once proxy bid replatforming is done, you think that's going to sort of make your offering more compelling. Can you just elaborate a little bit on what that is? And then the final one, is maybe for Duncan if he's allowed to answer questions at this stage, but just high level from a data perspective. I mean, I think of you, your background very, very heavily data driven in terms of sort of the three businesses you've built and scaled as I think of them. When you think about ATG, I mean, I don't question the fact that data is theoretically there, but I couldn't tell you how good they are at collecting that data, using the data. when you've gone through your diligence process, what's the opportunity there? How good are they? And what do you think the opportunity is on the data side?

Yeah, thank you, Gareth. So why don't we take the questions where I'll ask Sarah to go on ATG Pay. We'll then perhaps ask Megan to take INC. Between service, maybe I've got a comment there before Megan answers, and then happy to take the last one. So, Sarah.

Yeah, sure. So ATG pay is something we've talked about for a while. To be clear, it's arts and antiques focused. And I think we've said a few times from an industrial and commercial perspective, it's much harder to roll that out given some of the complexities around stated vehicles in the US. So we're very focused on that on arts and antiques. As you kind of said, Gareth, we are seeing when you take our shipping product, you also use our payments product. And so on the back of that, we have seen improved uptake of pay and good growth in the first half. So very much those two things come in tandem together. So we're pleased with the performance of ATG pay on our ANA business and as we continue to accelerate shipping, because we will lap the mandate of shipping on live auctioneers, but there is still an opportunity there for sure, which is for us to increase the penetration of the proportion of customers taking our own shipping products, and that's where our focus will move to. So I think we would expect to see continued growth in ATG pay on the back of that, and it's very much an area that follows on from shipping, but again, no different from what we said before, it will be less of a focus on industrial and commercial products.

So, Megan, do you want to take on CNN and I'll have a comment at the end of that?

Yeah, sure. So when we look at the white label providers in the market, there's not one large-scale player who's taking share. It's a bunch of fragmented, smaller players in the ecosystem that I think a lot of our auction houses are trialing to some extent because they're offering, in some cases, reduced pricing. We think that we have a very interesting opportunity in the future as we get to the end of the proximate migration because we will have a very compelling white label product in market. one that happens to be very tightly integrated with the rest of our marketplaces and so it will allow our auction houses to move seamlessly between having a branded website of their own that's fully featured and more featured than the competitors in the marketplace and also distribute their inventory to drive demand across our multiple marketplaces.

Yeah and I think just to finish on that point I think we should just step back and think about also you know everyone is sort of always got AI at the front of their mind and I know the market's always a little bit sort of unclear on that but This is where AI I think is going to be very much to our favour. Small independent white labels producing platforms for small auction houses are going to really struggle to deliver futuristic AI compliant environments that can give real reach and activity for those auction houses. So I think what you're going to start to see is our ability to deliver a more integrated three-way offer for our client base over the next couple of years. should give us a very strong differentiation to bring back many of those clients back to our platform. So I think those are the three opportunities for us on INC. And then on the data perspective, Gareth, and this is with a lot of respect to the team. So what I would say is Megan and her team have done an unbelievably good job of starting to capture, catalogue, produce and put into a format, a kind of shared service format, all of the data across the business but I think everyone across the business I think would recognize that we really taken that information and being able to monetize that and get real hard competitive advantage on the buyer side of our ecosystem I think the answer would be no and that we have a real upside opportunity to drive the business really informing and giving buyers a much greater insight and experience to a what they should or shouldn't be paying for things and more importantly, giving them a much more in-depth knowledge base for them to build from. And for many of you that remember the history, things like CAP and Black Book and other kind of formats that have worked effectively in other marketplaces are there for us to take. So, shall we move to the next question in the room? Who should we, Sarah, who do you think we should?

James, and then to Alistair and to Sean.

Hi, it's James Lock here from Peel Hunt. A very follow-up on the white label one. Historically, you said that one of the things you think would make your white label more attractive, notwithstanding the investment you make to make it better by itself, is the third-party network that you had previously been looking at, wondering whether or not that still sits within the strategy going forward. Second question, on the guidance, on the margin guidance, I know you said, I think you said towards the bottom end of the margin range, but it would be good to understand what levers you've got to get you to the middle of the range or the top of the range. The top of the range, obviously, I think it says around 37% margin for the second half, but it would be good to understand are there levers you can pull to get yourself from the bottom and then up? And then AI, not specifically the way you were talking about it earlier, but you talk about AI in terms of efficiency gains. It would be good to understand specifically how it's being used in your dev team today around rolling out updates, any metrics around hours saved or time to market would be useful, please. Thank you. Okay.

Yeah. So what we'll do then, if that's okay, James, is I'm going to ask Megan to take the white label question and the AI one, and we'll ask Sarah to sort of separate that with the guidance. So Megan, do you want to take the white label question?

So in general, our value proposition as we think about why someone would continue to or move into our white label, part of that is distribution. So it's distribution within our marketplaces and outside of our marketplaces. So we still have what we call APNs, our third-party network, where we are distributing that inventory across a broader set of demand than we even own internally. And that, of course, will be fully a part of our strategy as we roll out the new platform on proxy bids. So unchanged there.

Great. And Sarah, do you want to take the levers on guidance?

Yeah, sure. So we've obviously upgraded the revenue guidance from 4% to 5% to 5% to 6%. And that comes across a range of areas that includes, we said, good growth on Cherish, whereas previously I think we said we wouldn't expect a material amount of growth on Cherish this year because we were focused on the synergies. So we're pleased with the Cherish growth. And then secondly, shipping was always going to be a big part of our business, but has actually been a little bit stronger. And therefore, as a result of those, you've got two areas of growth, which are on the lower end of the margin range. So that's why we say we're driving towards the bottom of the range, albeit that's still obviously a significant EBITDA total benefit. In terms of opportunities to get to the middle of the range, and I'll just kind of extend that out into future and into future years, I think a couple of things. When you think about our margin overall this is we're at a structural low point this year um we've had these full year benefits that have had the full year impact of shipping we've had cherish now integrated for 12 months and so we believe we are at a structural low and we've got operating leverage benefits to come and so if i sort of think about the benefits more broadly and then i'll maybe come back to 26 the things we are sort of thinking about in terms of drivers of that, the improvements in margin going forward, it would be a combination of higher margin commission growth, which is what we've demonstrated in the first half on live auctioneers particularly and also on Cherish. So moving that growth to be more from high margin commission, that would be the first thing. The second would be around cost efficiencies and I think I said when I joined that I thought there was a cost efficiency opportunity. We've done what I would call housekeeping changes at the beginning of the year, and we've done a bit more of an organisation around a global structure in the last few weeks. We will continue to look at how we become more efficient, not just because it saves money, but also because it means you can be more effective and more agile as an organisation and much clearer on accountabilities. So that's something we will definitely continue to look at. But there is a benefit of circa 4 million into next year from those activities, the changes we've just made. And then the third thing is the margins around Cherish, which we said we'll have the full 8 million of operational synergies in 27. And we said we'll get six of those, three of which were in the first half this year. So we see that being a continued improvement on the margins as well. So I guess if you step back from it there, the elements of where we see margin growth over time, I think if you move specifically to this year, it's probably the very similar themes, but we are very focused on the opportunity ahead of us on live auctioneers. Similarly, we're very focused on maintaining that good growth on Cherish. And then we have a small benefit, but a benefit of the cost actions. And the reason that's small is because of the timing of when we do it. So we are focused on all of the same levers for this financial year as well as in the future.

Just a quick follow-up before the last question. Just your appetite for investing for growth. Historically, you know, your margins have been where they are and you say they're structural now, but what's your appetite for going, you know what, let's invest more to grow revenue faster?

Yeah.

Yeah, go on.

I'll get Duncan to add to it in a second, but... As you know, we did have a step up in capital two years ago, I think it was. It was prior to my time. We feel the level of investment in the business right now is appropriate. What I would say, and we've been quite clear on this from a capital allocation perspective, is efficiency around costs can help us accelerate that investment should we choose to.

Yeah, and I think that's the key point. We will be self-helping ourselves to prioritise spend where we think we can get better gains. So, you know, that means we can live within our own world and our own cost base, but let's use that cost base more effectively. I mean, at the end of the day, you know, chief executives really have two primary purposes in businesses. Number one is to absolutely make sure we're optimising the capital and spend we put into the business to get the best results. And number two is get shareholders' value creation. So, you know, that's it, right? There's not much more tricky than that. You know, easy to say, hard to do, but that's going to be the focus. And then just before Megan gives you the specifics on the AI, I've had the privilege of the last two years of working very closely with the Magnificent Seven on their AI developments. In fact, I've been co-working, in fact, I've had dedicated teams in with Amazon on building Rufus for the last two years, which is their geo platform. So I've had a very, very ringside seat to what's happening in the AI space. It's kind of classic that the markets are getting well ahead of themselves and where the actual progress is in some of that stuff, but that's normal. But what I can tell you is I've joined the company and for what is a relatively small company when you compare it to the Magnificent Seven, I've been really pleased with the engagement, certainly the more recent engagements with some of the way we're adopting technology. AI for efficiency, but Megan, do you want to give this on the developers specifically?

Yeah, so as Duncan said, the ethos of how we're approaching AI is how we can leverage it to help us move faster and more efficiently, and we've implemented tools like Cloud Code and Cursor within our development practices, and we are saying that we are moving faster, which is great, and we have some experimentation coming up around how we can best leverage those tools. The other thing that's been very exciting for our organization outside of just development is we've started leveraging AI as a layer for us as we look at our business analytics. So what used to take a very long time relying on a human to write SQL could take, you know, multiple weeks to get insights. We're now leveraging tools that sit on top of our database that allow anyone in the business to actually ask in human language for questions about the business and get those insights in real time. we have realized an over 80% improvement in time to insight, which is a metric that we look at, which is very important, particularly for my teams, because it helps us identify where we have opportunity areas and major friction pain points, so we can go address those in real time.

Thanks, James. I think we're going to move to Alistair, and then Sean, and then Ross.

Thanks very much, Alastair from Investec. Just a follow-up to my first question, so just two. You touched on market share trends in the context of white label a little bit. Talk about market share trends perhaps more generally. We've seen Richie Brothers talk about share gains. Any thoughts on what you're seeing on that front? And then secondly on share-ish, you mentioned the similar items model. Any concerns that you're seeing from auctioneer customers that potentially losing bidders might be being sent away from the auction market rather than sort of coming back to them.

Thanks. Yeah, great. Thank you. And I think we'll ask Sarah to take the first one, and then we'll come back to you, Megan, for the second, if that's okay. So, Sarah, do you want to take the question on market share trends more generally?

Yeah, of course. Thanks, Alistair. So there isn't really a comparable, directly comparable analysis business that we can directly compare to as well, you know, there's not, you know, a plethora of market data in this space. And each of our competitors are different from us. So you referenced Ritchie Brothers, they have a very different business model to us. So they have a very big salvage business, they've done quite a lot of inorganic activity, and they're less exposed to the some of the green iron headwinds. So there isn't a like for like comparator. Having said that on green iron specifically, We think we're probably at the lower end of the market performance on green iron specifically. So that's kind of how I would think about the overall market. What we have said is that the performance between quarter one and quarter two has been pretty stable. And therefore, you know, we should expect something broadly similar in the second half. So what we are seeing is stability. We certainly have seen in the first half stability in terms of the overall performance. So it's hard to say from a market perspective. But yeah, I think one of the questions we get asked quite often is, how are you different from Ritchie Brothers? And they're the primary reasons.

Yeah, look, I think just to add to that, what I'd say is that I was really delighted when I joined and through the diligence to see that Sarah's absolutely taken the front foot to change the measurement that we use across our business. because what was very clear to me was total hammer value is just a totally unreliable measure to be trying to judge things by. And so, if you look at the underlying, I've spent my career looking at building market share indexes and there was nothing in there that would give you the confidence to really use it as a reliable source. So I think that's great that we'd already made the choice to move away from that because I just think it would give the wrong guide. And look, ultimately with that basis, You know, anyone can claim market share gains in a market where you can't measure it. So it's kind of a relatively easy number to target. But what I can tell you is, look, on our IMC business, no one's under any illusions that we need to get focused on the core fundamentals of that business and the core fundamentals of our growth in there. So, you know, that's... a very early message I've been able to help the team focus on. So, yeah, that's where I'd say there. And then, Megan, would you like to take us on the cherish similar items model, please?

Yeah, so to be very clear, the similar items model is not a strategy to flood both marketplaces with all inventory. The similar items model allows us to understand what similar inventory exists across the network so that when someone, for example, bids and loses, we have a plethora of inventory that we can potentially target that person with. So it's not cannibalistic of our auction houses selling more inventory, but rather it's an opportunity for us to showcase the best inventory we have based on the demand signals we have to the right person at the right time in a very, very targeted way, whether that's, you know, on site or via email. But our strategy will not be to have all inventory exist in all places.

Morning, everyone, and thank you for taking questions. Sean Kearney from Pamela. James got my question on margin growth going forward, so I've got two questions, one of which is slightly related to that. You guys clearly need to confer a bit more before you come into the room.

You're not tag-teaming enough, are you? Carry on, Sean, sorry.

I understand why proxy business is going to take a little bit more time before you can move some of the features over from live auctioneers. What we haven't discussed is maybe estate sales and the sale room, obviously it's a slightly different model there, but what are you doing there to grow that business and bring those two businesses forward? And when would be the time to start talking about that in a little more detail? And then secondly, you're changing around the rankings on live auctioneers to sell items more effectively, which makes a lot of sense. Could you just talk a bit about where you see the opportunities for ad load, yield, et cetera, within that and how you think that can grow going forward?

Yeah, okay. Yeah, two great questions, by the way, Sean. So perhaps, Sarah, you wouldn't mind taking the first one, I think, because that makes sense. And then Megan, I'm sure, will be delighted to talk to you about ad yield. So, you know, so let's go that direction.

Yes, I'll start with the roll up to the platforms point that you've made. We have always focused our investment on live auctioneers and proxy bid because they are by far our two largest sites. So on proxy bid, that's very much focused on the re-platforming. On arts and antiques, it's all the things that Megan has described today. That is not one big bang, it's lots of small things that we've been iterating, testing, understanding what works and what has the biggest impact to our GMV. And our view on that, both from a capital allocation perspective and really understanding what works once, we are doing all of that work on live auctioneers and we will not roll it out to other platforms until we've got the proven model which we can then roll out more broadly. So that's how we're sort of thinking about the investment on live auctioneers as being almost like the bellwether of the remaining platforms. And we want to see that we can grow GMV and take rate as a result, which we're now starting to see on live auctioneers. But that's the order of which we will think about it. And then we will look at it, you know, other platforms going forward. But for now, live auctioneers and proxy bid remain the two that we're most focused on.

Yeah, and look, Sean, just to slightly build on that, what I would say is it's not, it's not, It's not gone amiss on me that we don't really have the greatest track record over the last four years of saying what we're going to do and then doing it. I don't think it's fair to say that. We might as well get that in the room. And look, my primary focus right now, as I mentioned right at the start, is when we say this is what we're going to do, that we turn up and deliver it on that day. So it's hard to be in the marketplace business where if you say you're going to deliver something by X, that it doesn't turn up. People get a bit upset with that. So we need to, you know, live that dream in our core messaging and delivery as a company. So on all of the proxy big programs, we're not going to be really looking at how we accelerate them. We're absolutely going to be focused on how we make sure we deliver on them. So that's the message I'd leave you with. And then, Megan, do you want to take the yield conversation, which I'm sure you could go from two minutes to 50 minutes, depending on how you want to.

I'll keep it very, very brief for this audience. I think, as I think about what we're doing in our marketplaces generally, it's bringing intelligence to how we are displaying the inventory that we have. And that is very, very true for organic search, right, for the things that show up that are not paid for. The same fundamental logic in most scaled marketplaces applies to advertising placements as well, which I think is largely an opportunity ahead of us where we can get much more intelligent about how we're showing advertising that delivers value, that's measurable, and how that sits within what we would call our organic search results or non-paid placement. So, opportunities are bound.

Yeah, without doubt. Having just spent, you know, 14 years building or contributing probably a third of the 60 billion Amazon benefits in advertising each year, I think it's fair to say I think we've got a long way up. So, but, you know, everyone's got to start somewhere. So, Ross, would you like to go next?

Thanks. Ross Broadfoot from RBC. Three, please. Obviously, change the KPI stack now. How should we think about whether there is a shift to online and indeed a shift to timed auctions without a functioning THV and conversion rate metric? Number two, you've obviously flagged you're expecting INC to continue on a similar trend for the rest of this year. What gives you comfort that the things you flagged in terms of agricultural pressures, white label adoption, and climate consolidation have stabilized. And then number three, you've called out $4 million of cost savings in FY27 as a result of current actions. So given we're halfway through FY26, is it fair to assume a $2 million benefit built into your upgraded guidance today? Thank you.

Thank you, Ross. So on the KPI stack, Sarah, it's probably best for you to take that. You know, I'm actually willing to touch on a little bit of the INC similar trend because that's a big area that I did diligence coming in. So I'm happy to think about that a little more and then we'll perhaps return back to Sarah for the 4 million. That's okay, Ross?

Yeah, sure. Thanks, Ross. So I guess in terms of KPIs, One of the questions I get asked quite often is, will there be another change? Are we going to keep changing? And I'm conscious we have made a number of changes in previous times. The reason I'm very comfortable with the changes that we've made more broadly are because it is how we run the business. It does focus on the things that drive the best financial outcome. And we are, I know certainly in the past, we've had exclusions for things and we're absolutely trying to remove some of those and make it much more relevant so you can actually take take number of items sold times average item value gives you GMB times take rate gives you revenue. So I think that will help you model all of the various parts. In terms of your question on online specifically, I think we probably talked to the point around is the market data relevant from a THV perspective, and I think we're clear that that's not. Online is one of many factors that drive our success. And the way we think about it, back to the KPIs, is that fundamentally the most important thing for us to be doing is driving GMV. And then continuing to drive tape rate, but fundamentally driving GMV is going to be our driver of success. And so, yes, a shift between live and timed, or online and live is a part of that, but it's certainly not the only one. And we would probably be more... You have to focus on the things in your control, right? And We are very focused on what I would call controlling the controllables and really driving home those things. So I think the actions we are taking are around the opportunities I cherish and continuing to make benefits of that acquisition, work on live auctioneers, et cetera, which will drive GMV. And fundamentally, that's the outcome we're looking for. So shifts in the market between in the room and online are part of that, but certainly not the only part. I mean the short answer is we haven't really used it internally historically in the same way as we've used it externally. It is relevant for a small group of auctioneers where they have a certain set of characteristics and so we might use it on a very micro basis but it's not a measure that we have or will be using internally which is why I'm very comfortable and the reason we don't do that is for the same reasons as why we're moving away from THB So absolutely we are moving to the metrics we genuinely use day in and day out to run the business.

Yeah, and just for the benefits of those who aren't in the room, that was around a follow-on question about are we continuing to use a refinement of THV within the business? And I think Sarah sort of summarised it fairly well that it's not. THV is really an outside-looking view. It's not really a core component of the internal activities. And then... Coming back, Ross, to your question around INC and similar trends about, you know, how do we get comfort around white label? Look, the trend on white label has been very clear for the last couple of years. There has been the obvious movement. You know, as the team outlined, you know, it's relatively small players that are aggressive in trying to get their market, you know, market position with auctioneers there. You know, it's obvious for auctioneers why they may choose to do that in the short term because they are saving money. I mean, it's not, It's not exactly then and perhaps allows a little bit more headroom for, you know, people to pay more for the product and therefore ultimately give them more commission. So it's a kind of fairly clear position as to why they've considered white label. I think, you know, the scale of auctioneers left that could consider that kind of balance is now much smaller. It's not zero, but it's a much smaller percentage risk. and has been there before and I think what we would actually say is we're now much more on the front foot as an organisation as we come through the back end of the half around our proposition to balance that so it's not like we see that we've lost that opportunity to large entrenched credible big organisation that's going to be hard to win back. We really do think I think what we can see through 27 and 28 is if we get the product mix right, we can have a very concerted effort of bringing that business back because there's, it's not like we're sitting there worried that we've lost it to a Google or something, we've lost it to a very credible, hard to win back organisation. So that's where I'd say on white label, I'd actually say, you know, we're on balance through my dealing instance, I'd actually say in terms of sort of trading impact, you know, consolidation actually has as much impact white label and is probably we need to balance that in the way that we look and clearly we have absolutely no control on consolidation but it's clearly a trend that's going to carry on. Our objective is to make sure that we're getting a really tight focus on those fundamentals of the INC business and more importantly getting a real focus on the buyer group because it's really the buyer group that are going to dictate how the seller group now behave and we need to look again without being critical and saying we need to up our game on the buyer side of the house. And then Sarah, do you want to come back and just address the 4 million question of Ross if that's okay?

Yeah, so the way we've thought about cost efficiencies more generally is clearly there's a cost saving but also there's an organisational benefit of being much more agile. The 4 million next year is a full year benefit. We undertook the actions just before the end of the half And a number of those changes, people won't actually leave until partway through the second half. So you would expect certainly less than a million dollars of that benefit to come through in this financial year, probably significantly less than that. And then secondly, we talked about quite a bit of executive change, and that also comes with a cost. And so I would broadly think about it that There is a small benefit from the cost savings this year, but especially given that executive change, it will be immaterial for this year.

Okay. Last question. Just before, do we have any from remote? Great. Okay, so Laura, the floor is yours.

Thanks for morning. It's Laura Simpson from JP Morgan. Maybe just two questions for me. Coming back again to the margin and profitability, I know we've spoken a lot about the optimisation and savings. How are we thinking about vast profitability? I know it's always ahead when we've spoken in the past about shipping and being dilutive, but what are you doing to improve the profitability of the vast solutions, particularly shipping? And maybe you can give us a gauge on how that's progressed maybe over the last 12 to 18 months as you've ramped up the role there. And then maybe one for you, Duncan, if I may, you obviously spoke about INC and a lot of work you did there on the due diligence. If we take a step back, how are you thinking about that business strategically going forward? What did you like about the asset? It feels like we're probably at an infection there where maybe you need to reinvest a bit more to reignite growth or you could take the growth and run it for cash. You also spoke about unlocking value for shareholders. So just interested in your first thoughts on the strategic positioning of that asset.

Yeah, great. Thank you, Laura. And do you want to start with the VAS services and how we think about margin in those?

Yeah, yeah, of course. So, first of all, I would just say that each of our value-added services are profitable, which is an important point to make. Yes, they are lower margin, but they generate real dollars of EBITDA. That's the third thing I'd say. We have been very focused over the last 12 to 18 months on rollouts. and adoption, which has been quite, for shipping, as you know, is the mandation of sellers offering our shipping product on live auctioneers. And so it's been very much focused on rollout. We will be, or are, and particularly as we're lapping the shipping, we are becoming much more focused on two things. One is improving the penetration and customer usage and customer feedback around, buyer feedback around those services. And the second then is to say, These services are profitable, but how do we look at how we continue to optimize margins in the same way as we would do any other part of the business? So I'd say what you will see is a bit of a shift towards those two things, improving buyer penetration and customer feedback, and then secondly, looking at optimizing margins in the same way as you would any part of the business.

And then, look, turning to the importance of IMC and the balance of that, I think was really a question how we would think about it. What I would say is, look, firstly, it's very clear that there are real synergies between the two sides of the types of marketplace that we run, but there is definitely nuance in the way that they appeal to the end markets. So, you know, so we get operational benefits, but, you know, fundamentally they behave slightly differently. I do believe, you know, in fairness to Ritchie Brothers, they have demonstrated that you can operate the INC business successfully. And it's not when you sort of look at the recipe that they operate, okay, they are consolidating a little more and they get the benefit of that. But beyond that, it's not clear to me why we can't operate and be as successful. And look, we have a very, very strong business there. And we just need to get some pride back in it and really focus on how we're going to get it back to believe that it can be a growth business. And it's not obvious to me with some focus why we can't achieve that. So I think, you know, I think, again, if I was going to sort of say, look, where do I think we've been slightly out of balance? I think we've been slightly out of balance where we've pivoted a bit too hard on vast products and not enough on fundamentals. And I think, you know, as the business gets its head back into the world of fundamentals, You know, VAS is there, you know, the kind of hints in the name, it's meant to be value-add. It's not the core of what our business is. And so we want the benefits of value-added products. Of course we do, because they're there for our customers to get the benefit of what they do. I get the disappointment, you know, that you introduce things like ATG Ship and it dilutes margins. But, you know, at the end of the day, for a customer, it's a fairly fundamental hygiene service to provide to So, you know, you don't really get the choice of it. I accept we don't want to make our growth strategy linked to it. But, you know, at the end of the day, you know, that's the balance we've got. But I think, you know, what I see initially with INC is if we can get back to core fundamentals, get really focused on the business, drive the market and the bidders, the customers that I've already spoken to and I've spoken to a lot, you know, directly, you know, they really value this business. They really value proxy bid. We just got to get, you know, slightly sharper in our game in helping that progress a bit better.

Thank you.

Yeah. So, look, thank you. I mean, it's been an absolute privilege to be here as Chief Executive for the first time round. Hopefully, you've enjoyed the information we've been able to take you through today on the results. And look, again, I just want to thank Sarah and the team and, of course, Megan for here today, but all of ATG's people. You know, we have had a strong set the first half results. The business is sort of getting its head where it needs to be. The team has done a good job. in transitioning from pretty choppy waters a year ago. And look, we really are feeling, and I'm here with a very clear message, this is a business that is going to be going up and going up pretty quick. So thank you very much.