TIDMATG
RNS Number : 8028Z
Auction Technology Group PLC
26 May 2021
AUCTION TECHNOLOGY GROUP PLC
HALF YEAR RESULTS FOR THE SIX MONTHSED 31 MARCH 2021
Strong performance, with continued momentum and trading ahead of
Board expectations
London, United Kingdom, 26 May 2021 - Auction Technology Group
plc ("ATG", "the Company", "the Group") (LON: ATG), operator of the
world's leading marketplaces for curated online auctions, reports
strong financial results for the six months ended 31 March
2021.
Following its successful IPO, ATG has continued to lead the
evolution of the auction industry from offline to online. With
strong brands, a compelling proposition for both auctioneers and
bidders and multiple levers for growth, the Group is well
positioned to benefit from the significant opportunities ahead.
First Half 2021 Highlights
Financial results:
H1 2021 H1 2020 Var
GBPm GBPm
Adjusted(1)
Aggregate revenue(1&2) 34.5 23.3 48%
Aggregate Adjusted EBITDA(1,2 &3) 17.0 6.6 158%
Aggregate Adjusted EBITDA margin %(1,2&3) 49% 28% +21pp
Free cash flow(1) 14.5 0.1 14,400%
Net cash/(debt)(1) 6.1 (199.7) 103%
Reported
Revenue 34.5 6.5 431%
Operating loss (12.0) (6.4) (88%)
Loss before tax (22.6) (12.3) (84%)
Cash generated by/(used in) operations 8.7 (2.0) 535%
Financial Highlights:
-- Aggregate revenue of GBP34.5m, a 48% increase year-on-year
with growth in all six of the Group's marketplaces
-- Aggregate Adjusted EBITDA of GBP17.0m, a margin of 49%
-- Loss before tax of GBP22.6m after charges for exceptional
items and share based compensation, primarily related to the IPO,
and intangible asset amortisation
-- High cash generation, with GBP14.5m of free cash flow in the period and net cash of GBP6.1m
Operational Highlights:
-- Successful IPO, demonstrating confidence in the scale of the ATG opportunity
-- Total Hammer Value(1) ("THV") up 31% year-on-year, with the
attraction of new volume and verticals(1) to auctions further
expanding options for growth
-- Online share(1) of 37%, up 13pp year-on-year; shift from live
to timed(4) auctions continuing across ATG's marketplaces
-- 64m bidder sessions(1) , growth of 35% year-on-year driven by
the increasing appeal of the online channel and the quality of ATG
inventory
-- Gross merchandise value(1) ("GMV") of GBP1.1bn, up 101%
year-on-year as a result of the increased THV and online share
-- Acquired Auction Mobility(1) , expanding our white label
offering and breadth of services available to auctioneers
Current trading:
Trading for the year to date has been strong and as a result we
are currently trading ahead of Board expectations. However, we
remain mindful that we have yet to lap the very strong COVID-19
comparators and accordingly our expectations for FY22 currently
remains unchanged.
John-Paul Savant, Chief Executive Officer of Auction Technology
Group plc, said:
"I am very proud of all ATG has achieved in the past six months.
We have delivered strong operational and financial results whilst
simultaneously managing historically high levels of online auction
activity across all our marketplaces, integrating Proxibid in North
America and leading the company through a successful listing on the
London Stock Exchange. I am hugely grateful for the hard work and
commitment of the whole ATG team, who have enabled us to
demonstrate the value we provide to auctioneers, consignors and
bidders at a critical and challenging time.
"ATG has been well-positioned amidst the uncertainties created
by the pandemic, which has accelerated the auction industry's
ongoing structural shift from offline to online. Investment in our
technology, people and brand has made us the channel of choice for
auctioneers and bidders in all of our respective verticals and
geographies and enabled us to attract great talent, particularly in
our engineering team. The value and breadth of items listed on our
marketplaces, and the number of registered and active bidders have
grown significantly, reinforcing the virtuous circle of our
business model.
"We start life as a public company in a strong position. While
it is too early to predict the impact of lockdowns easing, we are
excited about the many growth opportunities ahead. We remain
committed to a shared success model with auctioneers to deliver
exceptional returns to their consignors, while providing bidders
with a convenient, secure, and engaging way to access the best
curated inventory of unique and specialised items in the
world."
(1.) Refer to the Glossary and reconciliation of Alternative
Performance Measures.
(2.) Aggregate measures have been used as the acquisitions of
Turner Topco Limited ("Standalone ATG") and Proxibid Inc ("Proxibid
group") on 13 February 2020 have affected the comparability of the
Group's half-year results of operations for 2021. The measures are
presented for the Group to provide comparisons of the Group's
results between HY20 and HY21 as if the acquisitions of Standalone
ATG and Proxibid group had occurred on 1 October 2019.
(3.) Adjusted EBITDA represents profit/(loss) before taxation,
finance costs (including non-operating gains and losses in respect
of financial instruments), depreciation and amortisation,
share-based compensation and exceptional items. The Group considers
this non-GAAP measure to be an important supplemental measure of
the Group's financial performance.
(4.) Live auctions are available to online and offline bidders
whereas timed auctions are held entirely online for a specific,
pre-determined timeframe.
Webcast presentation
There will be a webcast presentation for analysts this morning
at 9.30am. Please contact ATG@tulchangroup.com if you would like to
attend.
ATG is pleased to announce that it has appointed J.P. Morgan
Securities plc (which conducts its UK investment banking business
as J.P. Morgan Cazenove) and Numis Securities Limited to act as
joint corporate brokers to the Company, with immediate effect.
For further information, please contact:
J.P. Morgan Cazenove
(Joint corporate broker to
ATG) +44 207 742 4000
Bill Hutchings / James Summer
/ Will Vanderspar
Numis Securities Limited
(Joint corporate broker to
ATG) +44 207 260 1000
Nick Westlake / Matt Lewis
/ William Baunton
Tulchan Communications +44 207 353 4200
(Public relations advisor ATG@tulchangroup.com
to ATG)
Tom Murray, Sunni Chauhan,
Matt Low, Laura Marshall
ATG
For investor enquiries investorrelations@auctiontechnologygroup.com
For media enquiries press@auctiontechnologygroup.com
About Auction Technology Group plc
Auction Technology Group plc ("ATG") is the operator of the
world's leading marketplaces and auction services for curated
online auctions, seamlessly connecting bidders from around the
world to over 2,000 trusted auction houses across three major
sectors: industrial & commercial equipment, art & antiques,
and consumer surplus & retail returns.
The Group powers six online marketplaces using its proprietary
auction platform technology, hosting in excess of 30,000 live and
timed auctions and listing over 12 million items for sale each
year. ATG has been supporting the auction industry since 1971 and
the company has offices in the UK, USA and Germany.
Strategy Update
ATG's strategy is to lead the evolution of the auction industry
as a trusted partner to auctioneers and bidders by providing, on
the one side, an integrated suite of services for auctioneers that
drive exceptional auction sale results while reducing the cost of
operating their auction houses and, on the other side, providing
bidders with a trusted, convenient, safe, and engaging way to bid
at auction.
ATG is focused on six growth levers as it executes against that
strategy:
-- Extending our addressable market
-- Growing our online share
-- Enhancing the network effect within our verticals
-- Expanding operating leverage
-- Pursuing accretive M&A
-- Grow take rate via value added services
Over HY21, we have executed impactfully against this
strategy.
Extending our Addressable Market
ATG has increased THV to GBP3bn (+31%) in the period. We have
grown THV by attracting more assets to auction in our existing
verticals and by development of some new verticals. We believe this
shift has come from auctioneers and dealers moving assets that once
were sold at private treaty or via other channels into the online
auction space. This shift is occurring because ATG has demonstrated
that auctioneers can achieve the same or often better results for
their consignors when selling at online auction versus selling via
other channels and methods historically used with the result being
reflected in our financials. As we continue to enhance the ease of
buying online at auction for an ever-wider pool of bidders, we will
endeavour to actively grow this further, aided by the structural
shift already well underway in the industry.
Growing our Online Share
ATG has been able to grow online share significantly in all its
marketplaces. This has been facilitated by the general shift from
offline to online but also by more industrial auctioneers adopting
the timed auction format. We are pleased to report that the online
share growth at Proxibid has continued the strong momentum from the
previous six-month reporting period and now sits at 39% up from 32%
at the full year. On the bidder side, we have grown online share
through improved user experience on our UK Art & Antiques
("A&A") marketplace thesaleroom.com.
Overall online share has grown significantly to 37% in HY21 from
24% in HY20. Online share in all our core verticals has grown
significantly and remains at similar levels to those seen in the
second half of FY20. However, the material increase in the period
that we have seen in THV in new areas that have a lower online
penetration has meant that our total online share percentage has
reduced in the first half of FY21 compared to the second half of
FY20.Our overall GMV has continued to rise, up 101% year-on-year to
GBP1.1bn, and also up 15% on the second half of FY20.
Enhancing the Network Effect Within our Verticals
ATG has leveraged its two North American Industrial and
Commercial ("I&C") marketplaces (Proxibid and BidSpotter) to
enable auctioneers to cross-list on both marketplaces
simultaneously. This has attracted incremental bidders to our
auctions with the biggest impact being felt at BidSpotter where we
were able to add the large Proxibid bidder base to the existing
strong BidSpotter base to drive better outcomes for auctioneers. We
are continuing to build on our network effect with an enhanced
Search Engine Optimisation workstream underway, which we expect to
contribute from the final quarter of this calendar year.
Expanding Operating Leverage
We have invested significantly into the technology behind our
business, resulting in strong auction performance and total bidder
sessions growth of 35% year-on-year. At the same time, we have
expanded operating leverage by centralising key back-office
functions and streamlining processes, particularly in our Proxibid
division. This has enabled us to grow Aggregate Adjusted EBITDA
margins from 28% to 49%.
Pursuing Accretive M&A
ATG has a goal to streamline the various services and tools that
serve the auctioneer and bidder ecosystem to enable a seamless and
cost-effective solution for buying and selling at auction. We have
now integrated Lot-tissimo, our German A&A marketplace, into
the core ATG technology stack.
In October of 2020, we purchased Auction Mobility, the leading
provider of white label technology for the auction industry in
North America.
Operating and Financial Review
Revenue
HY20 HY20 Var
GBPm GBPm
Aggregate revenue(1)
Arts and antiques 8.1 6.7 21%
Industrial and commercial 21.5 14.2 51%
---- ---- -----
Total marketplace 29.6 20.9 42%
Auction services 3.5 0.8 338%
---- ---- -----
Digital revenues 33.1 21.7 53%
Content 1.4 1.6 (13%)
---- ---- -----
Total 34.5 23.3 48%
---- ---- -----
Reported revenue
Arts and antiques 8.1 1.7 376%
Industrial and commercial 21.5 4.2 412%
---- ---- -----
Total marketplace 29.6 5.9 402%
Auction services 3.5 0.2 1650%
---- ---- -----
Digital revenues 33.1 6.1 443%
Content 1.4 0.4 250%
---- ---- -----
Total 34.5 6.5 431%
---- ---- -----
Group
Reported revenue was GBP34.5m an increase of GBP28m, reflecting
a full six-month contribution for HY21 combined with underlying
business growth compared to a six-week contribution from 13
February 2020 for HY20. Aggregate revenue grew 48% reflecting
strong performance in both Arts and & Antiques and Industrial
and Commercial combined with the contribution from the acquisition
of Auction Mobility in the period.
Auctioneers across the Group's verticals and geographies
remained active, driving growth in THV above historical levels. In
addition, the trends accelerated by COVID-19, such as the shift to
online auctions, have continued, with the Group's online share
remaining elevated at similar levels (on a vertical-by-vertical
basis) to that seen in the second half of 2020.
The commentary below is based on Aggregate revenue which has
been used as the acquisitions of Proxibid and Standalone ATG on 13
February 2020 have affected the comparability of the Group's
half-year results of operations for FY21.
Art and Antiques ("A&A")
The six months ended 31 March 2020 started to see the beginnings
of disruption caused by COVID-19, particularly in the UK with some
reduction in levels of auction activity towards the end of the
period. Whilst the six months ended 31 March 2021 saw further
periods of lock down, overall auction activity was less impacted
than the first lockdown beginning in March 2020. The first half of
2021 has also benefitted from some deferral of activity from the
second half of 2020, again due to COVID-19, contributing to overall
good growth in THV in the period. COVID-19 has also led to an
acceleration of the structural trend toward online activity, which
has continued into the six months ended 31 March 2021.
The Group's revenue in the A&A segment was also supported by
a full contribution from the Group's key partnership with Bonhams
auction house (part of the Big 4(1) ), albeit Bonhams typically
carries below average online share, which has offset some of the
underlying increase in share seen during the period.
Lot-tissmo also performed strongly, benefitting from the same
COVID-19 tail winds as the rest of the Group, combined with the
historic relatively low online penetration resulting in faster
growth as it moves towards online share seen in other
marketplaces.
Industrial and Commercial ("I&C")
Revenue grew significantly in the I&C segment due to both
THV growth above historic levels and elevated online share. Overall
levels of activity amongst our auctioneer base remained extremely
high with a high level of inventory coming to market for sale
through auction. THV growth has further benefitted from growth in
verticals which have not traditionally been a major source of
activity (for example equine and real estate). Elevated levels of
THV began in the second half of FY20 and has remained through the
six months ended 31 March 2021.
I&C continued to benefit from the structural trends towards
online auctions and timed auctions which were significantly
accelerated as a result of the COVID-19 pandemic. In particular we
saw no material reversion to live auctions from auctioneers who
adopted timed auctions for the first time during the early months
of COVID-19.
On a like for like verticals basis, in the first half of 2021 we
have seen no significant reduction in online share versus that
achieved in the second half of 2020. However, headline levels of
online share have reduced due to the growth in non-traditional
vertical THV which tends to carry below average online share.
Auction Services
The significant increase in the Group's revenue attributable to
Auction Services was due to the acquisition of Auction Mobility on
16 October 2020. Auction Mobility is enjoying strong growth due to
increased take up of a white label offering as auctioneers respond
to an increasingly online market. As with both the A&A and
I&C segments, Auction Mobility also benefitted from an
increasing share of auctions being transacted online. As in
historic periods, revenue from the Group's back-office software
remained stable.
Content
The decline in revenue attributable to the Content segment was
principally due to a significant decline in revenue from
advertising fees generated by the Antiques Trade Gazette that began
in the second half of FY20 due to the impact of the COVID-19
pandemic. Whilst there has been some recovery in advertising
volumes, overall, it remains below levels achieved pre
pandemic.
Aggregate Adjusted EBITDA and Operating Loss
The Group reported an operating loss of GBP12m compared with an
operating loss of GBP6.4m in HY20, an increase of 88%.
Aggregate Adjusted EBITDA increased from GBP6.6m in the six
months ended 31 March 2020 to GBP17.0m in the six months ended 31
March 2021. Aggregate Adjusted EBITDA margin increased to 49%. The
Group continues to benefit from very high operating leverage with
the vast majority of the increase in revenue dropping through to
Aggregate Adjusted EBITDA. Whilst there was some increase in costs
in the current year following the acquisition of Auction Mobility,
this was partially offset by the benefits of synergies from the
integration of Proxibid undertaken during FY20, reduced travel and
entertaining costs due to COVID-19 and costs associated with agents
attending live auctions.
Despite the strong Aggregate Adjusted EBITDA, the Group incurred
an operating loss of GBP12.0m in the period. This principally
related to:
-- A share-based compensation charge of GBP10.4m, mainly
relating to equity grants made in the run up to the IPO
-- Exceptional costs of GBP9.1m, related to the IPO and the acquisition of Auction Mobility
-- Amortisation of intangible assets of GBP9.1m
These items are excluded from the Aggregate Adjusted EBITDA and
have been set out in detail in the Glossary and reconciliation of
Alternative Performance Measures.
Finance Costs
Net finance costs were GBP10.5m (HY20: GBP5.9m). Before the IPO
the Group incurred significant financing costs on secured loan
notes and preference shares. On IPO most of these borrowings were
repaid, with only GBP38.6m of debt outstanding at 31 March 2021.
Finance costs of GBP14.2m (HY20: GBP3.0m) relate both to the
interest costs on these borrowings and the cost of GBP1m for early
settlement of certain of the secured loans. Net finance costs were
partly offset by foreign exchange gains on external US$ borrowings
of GBP3.5m (HY20: loss of GBP2.8m).
Taxation
The tax charge of GBP1.5m (HY20: credit of GBP2.5m) is based on
the effective rate, estimated on a full year basis, being applied
to the reported loss for the six months ended 31 March 2021.
The Group's effective tax rate is a charge of 7% which reflects
adjustments for disallowable interest costs, costs associated with
the listing and certain fees relating to the acquisition of Auction
Mobility.
Foreign Currency Impact
The Group's reported performance is sensitive to movements in
both the US Dollar and the Euro against the British Pound sterling.
In the first half, sterling strengthened by 7% against the US
Dollar and declined by 1% against the Euro compared to HY20 as
shown in the table below.
Weighted average rate Closing
rate
HY21 HY20 Var HY21 HY20 Var
Euro 1.13 1.14 (1%) 1.17 1.14 3%
US Dollar 1.35 1.26 7% 1.38 1.24 11%
When comparing Aggregate revenue in HY20 to HY21, changes to
currency exchange rates had an adverse impact on Aggregate revenue
of GBP1.1m.
Cash flow and net debt
Net cash at 31 March 2021 stood at GBP6.1m (HY20: net debt of
GBP199.7m). The Group had cash on hand of GBP44.7m and borrowings
of GBP38.6m.
Cash generated from operations (before tax) amounted to GBP8.7m,
after incurring GBP9.1m in relation to exceptional items referred
to above. Capital expenditure in the period was GBP1.4m and
payments in relation to business acquisitions was GBP25.2m.
On completion of the IPO, the Group raised cash from the issue
of equity of GBP235.9m, net of share issue costs which was used to
repay debt and preference shares of GBP187.7m, leaving net inflows
from financing activities of GBP51.4m.
An analysis of Adjusted EBITDA used to generate free cash flow
is included below:
HY21 HY20
GBPm GBPm
Adjusted EBITDA 17.0 0.9
Movement in working capital (1.1) (0.6)
Capital expenditure (1.4) (0.2)
Free cash flow 14.5 0.1
----- -----
Free cash flow conversion 86% 14%
A reconciliation of the Group's cash generated by operations to
free cash flow and free cash flow conversion is set out in the
Glossary and reconciliation of Alternative Performance
Measures.
Earnings Per Share
Basic and diluted loss per share was GBP1 in HY21 compared to
GBP98,170 in HY20, due to the increase in loss year-on-year and the
increase in weighted average shares outstanding. The weighted
average number of shares in issue during the period was 23.5m
(HY20: 100 shares).
Adjusted earnings per share of 3.4 pence (HY20: 4,622,000.0
pence) are based on profit after tax adjusted to exclude
share-based payments, exceptional items and the amortisation of
acquired intangible assets and any related tax effects.
A reconciliation of the Group's basic and diluted loss per share
to Adjusted earnings per share is set out in the Glossary and
reconciliation of Alternative Performance Measures.
CAUTIONARY STATEMENT The announcement may contain
forward-looking statements. These statements may relate to (i)
future capital expenditures, expenses, revenues, earnings,
synergies, economic performance, indebtedness, financial condition,
dividend policy, losses or future prospects, and (ii) developments,
expansion or business and management strategies of the Company.
Forward-looking statements are identified by the use of such terms
as "believe", "could", "should", "envisage", "anticipate", "aim",
"estimate", "potential", "intend", "may", "plan", "will" or
variations or similar expressions, or the negative thereof. Any
forward-looking statements contained in this announcement are based
on current expectations and are subject to risks and uncertainties
that could cause actual results to differ materially from those
expressed or implied by those statements. If one or more of these
risks or uncertainties materialise, or if underlying assumptions
prove incorrect, the Company's actual results may vary materially
from those expected, estimated or projected. No representation or
warranty is made that any forward-looking statement will come to
pass. Any forward-looking statements speak only as at the date of
this announcement. The Company and its directors expressly disclaim
any obligation or undertaking to publicly release any update or
revisions to any forward-looking statements contained in this
announcement to reflect any change in events, conditions or
circumstances on which any such statements are based after the time
they are made, other than in accordance with its legal or
regulatory obligations (including under the UK Listing Rules and
the Disclosure Guidance and Transparency Rules of the Financial
Conduct Authority). Nothing in this announcement shall exclude any
liability under applicable laws that cannot be excluded in
accordance with such laws.
LEI Number: 213800U8Q9K2XI3WRE39
Condensed Consolidated Income Statement
for the six months ended 31 March 2021
Audited
8.5 months
Unaudited six months ended Unaudited 2.5 months ended ended
31 March 31 March 30 Sept
2021 2020 2020
Notes GBP000 GBP000 GBP000
Revenue 3,4 34,488 6,464 35,478
Cost of sales (11,451) (3,330) (15,042)
-------------------------- -------------------------- ------------
Gross profit 23,037 3,134 20,436
Administration expenses (35,193) (9,596) (25,594)
Other operating income 131 70 179
Operating loss (12,025) (6,392) (4,979)
Net finance costs 7 (10,540) (5,915) (14,000)
-------------------------- -------------------------- ------------
Loss before tax (22,565) (12,307) (18,979)
Tax (expense)/credit 8 (1,501) 2,490 2,591
-------------------------- -------------------------- ------------
Loss for the period (24,066) (9,817) (16,388)
-------------------------- -------------------------- ------------
Other comprehensive loss for the period
Items that may subsequently be transferred to profit and loss:
Foreign exchange differences on translation of foreign operations (1,594) (228) (440)
-------- -------- ---------
Other comprehensive loss for the period, net of tax (1,594) (228) (440)
Total comprehensive loss for the period (25,660) (10,045) (16,828)
-------- -------- ---------
Loss per share (GBP)
Basic 9 (1) (98,170) (163,880)
-------- -------- ---------
Diluted (1) (98,170) (163,880)
-------- -------- ---------
Condensed Consolidated Statement of Financial Position
as at 31 March 2021
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 Sept
2021 2020 2020
Note GBP000 GBP000 GBP000
ASSETS
Non-current assets
Goodwill 11 140,412 124,023 124,023
Other Intangible assets 11 75,884 81,731 74,830
Property, plant and equipment 379 540 478
Right of use asset 1,526 2,262 1,924
Trade and other receivables 85 90 88
---------
Total non-current assets 218,286 208,646 201,343
--------- --------- --------
Current assets
Trade and other receivables 10,307 8,188 9,044
Cash and cash equivalents 44,696 9,848 14,193
---------
Total current assets 55,003 18,036 23,237
--------- --------- --------
Total assets 273,289 226,682 224,580
--------- --------- --------
EQUITY AND LIABILITIES
Equity
Share capital 13 10 - -
Share premium 235,902 - -
Merger reserve 1,527 1,527 1,527
Share option reserve 1,351 55 276
Foreign exchange reserve (2,034) (228) (440)
Accumulated losses (31,140) (9,817) (16,388)
--------- --------- --------
Total equity 205,616 (8,463) (15,025)
--------- --------- --------
LIABILITIES
Non-current liabilities
Trade and other payables 1,607 2,118 2,100
Loans and borrowings 12 37,981 208,335 213,444
Lease liabilities 819 1,557 1,208
Deferred tax liability 10,538 11,668 11,588
---------
Total non-current liabilities 50,945 223,678 228,340
--------- --------- --------
Current liabilities
Trade and other payables 15,324 9,489 9,350
Loans and borrowings 12 661 1,222 1,159
Lease liabilities 743 756 756
---------
Total current liabilities 16,728 11,467 11,265
--------- --------- --------
Total equity and liabilities 273,289 226,682 224,580
--------- --------- --------
Condensed Consolidated Statement of Changes in Equity
for the six months ended 31 March 2021
Share Share Merger Share option Foreign exchange
capital premium Reserve reserve reserves Accumulated losses Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 13 January 2020 - - 1,527 - - - 1,527
Comprehensive loss
Loss for the
period - - - - - (16,388) (16,388)
Other
comprehensive
loss - - - - (440) - (440)
-------- -------- --------- ------------------ ----------------- ------------------ --------
- - - - (440) (16,388) (16,828)
Transactions with
owners
Share-based
compensation - - - 276 - - 276
-------- -------- --------- ------------------ ----------------- ------------------ --------
At 30 September
2020 - - 1,527 276 (440) (16,388) (15,025)
Comprehensive loss
Loss for the
period - - - - - (24,066) (24,066)
Other
comprehensive
loss - - - - (1,594) - (1,594)
-------- -------- --------- ------------------ ----------------- ------------------ --------
- - - - (1,594) (24,066) (25,660)
Transactions with
owners
Shares issued 15 247,431 - - - - 247,446
Share issue costs - (11,529) - - - - (11,529)
Share buyback (5) - - - - 5 -
Share-based
compensation - - - 10,384 - - 10,384
Share options
exercised - - - (9,309) - 9,309 -
At 31 March 2021 10 235,902 1,527 1,351 (2,034) (31,140) 205,616
-------- -------- --------- ------------------ ----------------- ------------------ --------
Share Share Merger Share option Foreign exchange
capital premium reserve reserves reserves Accumulated losses Total
GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
At 13 January 2020 - - 1,527 - - - 1,527
Comprehensive loss
Loss for the
period - - - - - (9,817) (9,817)
Other
comprehensive
loss - - - - (228) - (228)
-------- -------- --------- ------------------ ----------------- ------------------ --------
- - - - (228) (9,817) (10,045)
Transactions with
owners
Share-based
compensation - - - 55 - - 55
At 31 March 2020 - - 1,527 55 (228) (9,817) (8,463)
-------- -------- --------- ------------------ ----------------- ------------------ --------
Condensed Consolidated Statement of Cash Flows
for the six months ended 31 March 2021
Audited
8.5 months
Unaudited six months ended Unaudited 2.5 months ended ended
31 March 31 March 30 Sept
2021 2020 2020
Note GBP000 GBP000 GBP000
Cash flows from operating activities:
Loss before tax (22,565) (12,307) (18,979)
Amortisation of intangible assets 11 9,082 2,132 10,149
Depreciation of property, plant and
equipment 116 32 167
Depreciation of right of use assets 355 146 483
Loss on disposal of property, plant and
equipment - - 10
Share-based compensation 10,384 55 276
Foreign exchange gains (217) (90) (3)
Net finance costs 7 10,540 5,915 14,000
-------------------------- -------------------------- -----------
7,695 (4,117) 6,103
Working capital adjustments:
(Increase)/decrease in trade and other
receivables (591) 414 (670)
Increase in trade and other payables 1,573 1,702 2,248
-------------------------- -------------------------- -----------
Cash generated by operations 8,677 (2,001) 7,681
Income taxes paid (2,311) (2) (513)
-------------------------- -------------------------- -----------
Net cash generated from/(used in) operating
activities 6,366 (2,003) 7,168
-------------------------- -------------------------- -----------
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash
acquired 10 (24,948) (181,195) (181,195)
Additions to other intangible assets 11 (1,367) (188) (1,304)
Additions to property, plant and equipment (40) - (81)
Payment of deferred consideration (234) - -
-------------------------- -------------------------- -----------
Net cash used in investing activities (26,589) (181,383) (182,580)
-------------------------- -------------------------- -----------
Cash flows from financing activities:
Issue of share capital 13 247,435 - -
Share issue costs (11,529) - -
Repayment of loans and borrowings (70,013) (2,697) (2,697)
Repayment of preference shares (117,716) - -
Proceeds from loans and borrowings, net of
loan arrangement fees 25,382 86,088 86,088
Proceeds from the issue of preference
shares 714 111,859 111,859
Contingent consideration paid (492) (1,847) (1,847)
Payment of lease liabilities (401) (150) (580)
Interest paid (21,951) - (3,187)
-------------------------- -------------------------- -----------
Net cash generated from financing
activities 51,429 193,253 189,636
-------------------------- -------------------------- -----------
Net increase in cash and cash equivalents 31,206 9,867 14,224
-------------------------- -------------------------- -----------
Cash and cash equivalents at beginning of
the period 14,193 - -
Effect of foreign exchange rate changes (703) (19) (31)
-------------------------- -------------------------- -----------
Cash and cash equivalents at end of the
period 44,696 9,848 14,193
-------------------------- -------------------------- -----------
Notes to the condensed consolidated interim financial
statements
1. Group reorganisation
On 13 February 2020, Auction Topco Limited, through its
subsidiary Auction Bidco Limited simultaneously purchased Turner
Topco Limited and its subsidiaries and Proxibid Bidco Inc. and its
subsidiaries (together forming the "Auction Topco Limited Group").
Prior to the acquisition of Turner Topco Limited and Proxibid Bidco
Inc., Auction Topco Limited had no trading activity.
On 17 February 2021, as part of a capital reorganisation, all
shares held in Auction Topco Limited were transferred to Auction
Technology Group plc, a newly incorporated intermediate parent
entity, in a share for share exchange. Following this
reorganisation Auction Technology Group plc undertook an initial
public offering (IPO) on London Stock Exchange for a proportion of
its share capital.
As there were no changes in rights or proportion of control
exercised because of the insertion of Auction Technology Group plc
on top of the existing Auction Topco Limited Group, the
reorganisation does not constitute a business combination under
IFRS 3 'Business Combinations'. Following guidance from IAS 8
'Accounting Policies, Changes in Accounting Estimates and Errors',
the integration of the Company has been prepared under merger
accounting principles. This policy, which does not conflict with
IFRS, reflects the economic substance of the transaction. Under
these principles, the Group has presented its Financial Statements
of the Group as though the current Group structure had been in
place from the date of incorporation of Auction Topco Limited. The
comparative and current year consolidated reserves of the Group are
adjusted to reflect the statutory share capital, share premium and
merger reserve of Auction Technology Group plc as if it had always
existed. A merger reserve of GBP1,527,000 has been recognised as at
13 January 2020 to complete the equity position as a result of the
application of merger accounting.
These Condensed Interim Financial Statements are the first set
of financial statements presented for the newly formed Group and
the prior period comparison is to that of the former Auction Topco
Limited Group. Although there has been a capital reorganisation,
the underlying structure of the Group is unchanged and as such the
Unaudited Interim Condensed Consolidated Income Statement,
Unaudited Interim Condensed Consolidated Statement of Comprehensive
Income, Unaudited Interim Condensed Consolidated Statement of
Financial Position, Unaudited Interim Condensed Consolidated
Statement of Changes in Equity and Unaudited Cash Flow Statement
have been presented on a consistent basis to the prior periods.
2. Basis of preparation
Auction Technology Group plc ("the Company") is a company
domiciled and incorporated and registered in England and Wales.
These Condensed Consolidated Interim Financial Statements have
been prepared for the six months ended 31 March 2021 and were
approved by the Board of Directors on 25 May 2021.
These Condensed Consolidated Interim Financial Statements, which
have been reviewed and not audited, have been prepared in
accordance with IAS 34, "Interim Financial Reporting" as adopted by
the EU. The comparative information for the two and half months
ended 31 March 2020 has not been audited and has not been reviewed.
The Condensed Consolidated Interim Financial Statements do not
include all the information required for full annual financial
statements and should be read in conjunction with the Group's
Annual Report and Accounts for the period ended 30 September 2020
(being that of the Auction Topco Limited group) which have been
delivered to the Registrar of Companies. They are also available on
the Group's website ( www.auctiontechnologygroup.com ). The audit
report for those accounts was unqualified, did not draw attention
to any matters by way of emphasis without qualifying the report and
did not contain a statement under 498(2) or (3) of the Companies
Act 2006.
In determining the information to be disclosed in the notes to
the Condensed Consolidated Interim Financial statements in
accordance with IAS 34, the Group has taken into account its
materiality in relation to the Condensed Consolidated Interim
Financial Statements.
Accounting policies
The Condensed Consolidated Interim Financial Statements has been
prepared under the historical cost convention except for certain
financial instruments.
The accounting policies applied in these Condensed Interim
Financial Statements are the same as those applied in the most
recent annual financial statements for the predecessor group. Taxes
on income in the interim period is recognised by applying the
effective tax rate that would be applicable to expected total
annual profit or loss for the twelve-month period to the period's
result. Disallowable legal fees pertaining to the Auction Mobility
acquisition, IPO listing costs and disallowable interest costs
incurred in the period have been recognised and reflected in the
effective tax rate. The integration of the Company has been
prepared under merger accounting principles. This policy, which
does not conflict with IFRS, reflects the economic substance of the
transaction (refer to note 1). Under these principles, the Group
has presented its Financial Statements of the Group as though the
current Group structure had been in place from the date of
incorporation of Auction Topco Limited.
Alternative performance measures
In reporting financial information, the Group presents
alternative performance measures ("APMs") which are not defined or
specified under the requirements of IFRS. The Group believes that
these APMs, which are not considered to be a substitute for, or
superior to, IFRS measures, provide stakeholders with additional
helpful information on the performance of the business. The APMs
are consistent with how the business performance is planned and
reported within the internal management reporting to the Board and
Executive Committee. Some of these measures are also used for the
purpose of setting remuneration targets. The key APMs that the
Group uses include: Aggregate revenue; Aggregate Adjusted EBITDA;
Aggregate Adjusted EBITDA margin; Adjusted EBITDA; Adjusted
earnings per share; net debt; free cash flow and free cash flow
conversion. Each of these APMs, and others used by the Group, are
set out in the Glossary and reconciliation of Alternative
Performance Measures, including explanations of how they are
calculated and how they can be reconciled to a statutory measure
where relevant.
Impact of COVID-19
There continues to be uncertainty regarding the impact of the
coronavirus pandemic on businesses throughout the country. The
adverse consequences of the pandemic such as global market
uncertainty, closure of businesses and macroeconomic factors
reducing discretionary expenditure may have an impact on the
financial condition and results of the Group. However, the nature
of the Group's operations is such that the four reportable segments
diversify the Group's exposure to a recession, whilst the platforms
offer businesses a marketplace to sell their goods. Further the
pandemic has accelerated the transition of activity from offline to
online which has directly benefited the Group.
Going concern
The Company has been admitted to the premium listing segment of
the Official List of the FCA and London Stock Exchange's Main
Market for listed securities effective 26 February 2021. The
following changes took place:
-- Primary proceeds were used to, amongst other things, repay
all outstanding liabilities with financing parties except for the
loans under the Senior Facilities Agreement.
-- An Amendment and Restatement Deed resulted in GBP39.4m
(US$43.2m and GBP8m) left outstanding under the Senior Facilities
Agreement. The loan principal is repayable on 10 February 2027.
-- A GBP20m general purpose undrawn Revolving Credit Facility
("RCF") effective from 1 March 2021 is in place for 36 months.
In considering the forecast trading performance of the Company
and the enlarged Group, the Directors have considered the impact of
the COVID-19 pandemic. The assessment made recognises the inherent
uncertainty associated with any forecasting at the present
time.
The Group has performed strongly throughout the COVID-19
pandemic. This is largely due to the acceleration in auction
activity migrating from offline to online. The Group has also
benefitted from being more geographically diverse, due to its
recent US acquisition, and its portals which cater for insolvency
auctioneers which have benefitted from the current macroeconomic
environment. Due to recent performance the Directors believe that
trading performance will remain robust and do not expect any
adverse scenarios where the operations of the Group are adversely
affected by COVID-19.
In assessing the appropriateness of the going concern
assumption, the Directors have considered the ability of the Group
to meet the debt covenants and maintain adequate liquidity through
the forecast period. The Group has cash of GBP44.7m as at 31 March
2021. The Group's forecasts and projections, taking account of
reasonably possible changes in trading performance, show that the
Group is able to operate comfortably within the level of its
current facilities and meet its debt covenant obligations.
Sensitivities have been modelled to understand the impact of the
various risks outlined above on the Group's performance and the
Group's debt covenants/cash headroom, including consideration of a
reasonable worst-case forecast. Given the current demand for
services across the Group at the date of this report, the
assumptions in these sensitivities, when taking into account the
factors set out above, are considered to be highly unlikely to lead
to a debt covenant breach or liquidity issues under both
scenarios.
After making enquiries, the Directors have a reasonable
expectation that the Group has adequate resources to continue in
operational existence for the foreseeable future and that it
remains appropriate to continue to adopt the going concern basis in
preparing the financial information.
Judgements and estimates
The preparation of the Condensed Consolidated Interim Financial
Statements requires management to make judgements, estimates and
assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the
basis of making judgements about carrying values of assets and
liabilities that are not readily apparent from other sources.
Actual results may differ from these estimates.
In preparing these Condensed Consolidated Interim Financial
Statements, the significant judgements made by management in
applying the Group's accounting policies and the key sources of
estimation uncertainty were the same as those that applied to the
most recent annual financial statements for the predecessor group
for the year ended 30 September 2020 with the exception of the
below.
Contingent consideration arising on the acquisition of Auction
Mobility
The Group acquired Auction Mobility LLC on 16 October 2020. The
consideration payable comprises $33,000,000 which was paid on
completion, deferred consideration of $308,000 and a contingent
amount up to a maximum of $10,000,000 payable subject to the
achievement of certain revenue targets. Management have prepared a
forecast of the expected revenue performance and fair valued the
contingent consideration using a weighted average probability
model, discounting the cash outflow back using a risk-free rate.
The future performance of Auction Mobility is uncertain and the
potential range of outcomes is $nil to $10,000,000. The amount
recognised on acquisition was GBP3,918,000 (note 10). The Group's
total contingent consideration as at 31 March 2021 amounted to
GBP4,008,000. The Group regularly performs a review of the
underlying businesses to assess the impact of the fair value of the
contingent consideration. The change of GBP172,000 (2020: nil) in
these fair values was reported as a finance income in the Condensed
Consolidated Income Statement. Exchange differences to reserves
were recorded within foreign exchange differences on translation of
foreign operations in the Condensed Consolidated Statement of
Comprehensive Income.
2. Operating Segments
Management has determined the operating segments based on
information reviewed by the Board of Directors (the Chief Operating
Decision Maker (CODM)), which is used to assess both the
performance of the business and to allocate resources within the
Group. The assessment of performance and allocation of resources is
focused on the category of customer for each type of activity.
The Board of Directors has determined an operating management
structure aligned around the four core activities of the Group.
Following the acquisition of Auction Mobility during the period, a
fourth operating segment for Auction Services has been separated
from the previous three reported segments. The comparative split of
segmental revenue has been restated to split other Auction Services
products previously incorporated into A&A and I&C segment.
This movement is an alignment of how the businesses are managed
internally.
The four operating segments are as follows:
-- Arts and Antiques ("A&A"): focused on offering auction
houses that specialise in the sale of arts and antiques access to
the platforms thesaleroom.com and lot-tissimo.com. A significant
part of our services is provision of the platform as a marketplace
for the A&A auction houses to sell their goods. The segment
also generates earnings through additional services such as
marketing income. The Group contracts with customers predominantly
under service agreements, where the number of auctions to be held
and the service offering differs from client to client.
-- Industrial and Commercial ("I&C"): focused on offering
auction houses that specialise in the sale of industrial and
commercial goods and machinery access to the platforms
BidSpotter.com, BidSpotter.co.uk and Proxibid.com, as well as
i-bidder.com for consumer surplus and retail returns. A significant
part of our services is provision of the platform as a marketplace
for the I&C auction houses to sell their goods. The segment
also generates earnings through additional services such as
marketing income. We contract with customers predominantly under
service agreements, where the number of auctions to be held and the
service offering differs from client to client.
-- Auction Services: includes revenues from the Group's auction
house back-office product with Auction Mobility and other white
label products including Wavebid.com.
-- Content: focused on the Antiques Trade Gazette paper and
online magazine. The business focusses on two streams of income:
selling subscriptions to the Gazette and also selling advertising
space within the paper and online. The Directors have disclosed
information required by IFRS 8 for the Content segment despite the
segment not meeting the reporting threshold.
The accounting policies of the reportable segments are the same
as those described in the accounting policies section of the most
recent annual financial statements for the predecessor group. There
are no undisclosed or other operating segments.
An analysis of the results for the period by reportable segment
is as follows:
Unaudited Unaudited Audited
six months 2.5 months 8.5 months
ended ended ended
31 March 31 March 30 Sept
2021 2020 2020
GBP000 GBP000 GBP000
Revenue
A&A 8,138 1,701 8,352
I&C 21,468 4,154 24,684
Auction services 3,458 189 840
Content 1,424 420 1,602
----------- ----------- -----------
Total 34,488 6,464 35,478
----------- ----------- -----------
Adjusted EBITDA
A&A 7,045 1,412 6,932
I&C 18,677 3,323 19,747
Auction services 3,120 151 672
Content 452 134 513
Centrally allocated costs (12,318) (4,122) (11,979)
----------- ----------- -----------
Total 16,976 898 15,885
----------- ----------- -----------
Reconciliation from Adjusted EBITDA to loss
before tax
Adjusted EBITDA 16,976 898 15,885
Net finance cost (note 7) (10,540) (5,915) (14,000)
Amortisation of intangible assets (note 11) (9,082) (2,132) (10,149)
Depreciation of property plant and equipment (116) (32) (167)
Depreciation of right of use assets (355) (146) (483)
Share-based compensation (10,384) (55) (276)
Exceptional items (note 5) (9,064) (4,925) (9,789)
Loss before tax (22,565) (12,307) (18,979)
----------- ----------- -----------
The performance measure the Group uses to evaluate performance
is Adjusted EBITDA. The Group considers this non-GAAP measure to be
an important supplemental measure of the Group's financial
performance. Refer to the Glossary and reconciliation of
Alternative Performance Measures for further detail of the Group's
adjusted measures.
The Group does not monitor segmental asset by geography or
segmental debtors, and therefore have not disclosed this above.
3. Revenue
Unaudited Audited
2.5 months 8.5 months
ended ended
31 March 30 Sept
Unaudited six months
ended
31 March
2021 2020 2020
GBP000 GBP000 GBP000
Product and customer types
A&A 8,138 1,701 8,352
I&C 21,468 4,154 24,684
Auction services 3,458 189 840
Content 1,424 420 1,602
-------------------- ----------- ------------
34,488 6,464 35,478
-------------------- ----------- ------------
Primary geographical markets
United Kingdom 9,397 2,041 9,605
USA 23,316 4,075 24,116
Germany 1,775 348 1,757
-------------------- ----------- ------------
34,488 6,464 35,478
-------------------- ----------- ------------
Timing of transfer of goods and services
Point in time 31,113 5,837 32,886
Over time 3,375 627 2,592
-------------------- ----------- ------------
34,488 6,464 35,478
-------------------- ----------- ------------
Due to the nature of the Group's business, it is not materially
affected by seasonal or cyclical trading.
4. Exceptional items
Unaudited Unaudited Audited
six months 2.5 months 8.5 months
ended ended ended
31 March 31 March 30 Sept
2021 2020 2020
GBP000 GBP000 GBP000
Acquisition costs 1,300 4,925 7,963
Listing costs 7,764 - -
Restructuring costs - - 1,826
----------- ----------- -----------
Exceptional items 9,064 4,925 9,789
----------- ----------- -----------
The Group's exceptional costs in the period are in respect of
listing costs of the IPO and the acquisition costs predominantly
relating to the acquisition of Auction Mobility LLC on 16 October
2020. These costs comprise legal, professional and other
consultancy expenditure incurred. The business has undertaken
focussed acquisitive activity in the periods prior to the listing
of the IPO, including the acquisition of Auction Mobility which has
been strategically implemented to increase income, service range
and critical mass of the Group.
For the period ended 31 March 2020 and 30 September 2020,
acquisition costs comprise legal, professional and incidental
expenditure incurred in relation to the acquisition of Proxibid
Inc. and Turner Topco Limited. Restructuring costs comprise costs
levied by professional advisors and redundancy costs in connection
with restructuring activities.
5. Employee benefit expenses
From 1 October 2020 to 26 February 2021, the Group issued the
following share awards:
-- 6,500 Auction Topco Limited B Ordinary shares to certain employees.
-- 16,260 Auction Topco Limited A Ordinary shares to certain Non-Executive Directors.
-- 10,977 Auction Topco Limited B Ordinary shares
("Pre-admission Awards") were issued to the Executive Directors and
certain employees.
-- 8,097 Auction Topco Limited B Ordinary shares to the ATG
Employee Benefit Trust for the benefit of certain employees as a
staff gift and payment of associated tax liabilities for shares
awards issued to employees and Executive Directors.
-- The holders are subject to a service condition and, as such,
the shares represent remuneration for service thereby constituting
an IFRS 2 equity settled, share based arrangement. The
Pre-admission Awards are subject to a three-year holding
period.
Since 13 January 2020 to 17 February 2021, 231,293 Ordinary
shares in Auction Topco Limited have been issued to its employees
and Non-Executive Directors. As part of the Group reorganisation
described in note 1 and 13 the ordinary shares in Auction Topco
Limited were exchanged in a share for share exchange with Auction
Technology Group plc, subdivided such that the number of ordinary
shares increased by 100 to 23,129,300 and reduced by 9,627,043
shares as part of the share buyback. This resulted in 13,502,257
ordinary shares listed in the IPO. The fair value charge in the
period to 31 March 2021 is GBP10,280,000 (March 2020: GBP55,000 and
September 2020: GBP276,000).
On 26 February 2021, the Group granted conditional nil-cost
share options over 437,665 shares through a Long-term Incentive
Plan ("LTIP Awards") to the Executive Directors and other senior
management. It is expected that these awards will normally vest
over a three-year period subject to the recipient's continued
employment at the date of vesting and, for Executive Directors, the
satisfaction of performance conditions to be measured over three
financial years. The fair value charge in the period to 31 March
2021 is GBP104,000.
6. Net finance costs
Unaudited Unaudited Audited
six months 2.5 months 8.5 months
ended ended ended
31 March 31 March 30 Sept
2021 2020 2020
GBP000 GBP000 GBP000
Foreign exchange gain 3,524 - -
Bank interest 1 1 2
Movements in contingent consideration 172 - -
----------- ----------- -----------
Finance income 3,697 1 2
----------- ----------- -----------
Interest on secured loans (5,739) (872) (4,016)
Movements in contingent consideration - (31) (31)
Interest on lease liabilities (45) (13) (71)
Interest payable on preference shares (6,328) (1,846) (8,886)
Finance costs on loan notes (2,125) (326) (998)
Foreign exchange loss - (2,828) -
----------- ----------- -----------
Finance cost (14,237) (5,916) (14,002)
----------- ----------- -----------
Net finance costs (10,540) (5,915) (14,000)
----------- ----------- -----------
7. Taxation
The total tax expense recognised based on management's best
estimate of the effective tax rate for the full year is a charge of
7% (March 2020: credit of 20%) applied to the loss before tax of
the six-month period. Adjustments were made to reflect disallowable
interest costs and legal fees relating to the acquisition of
Auction Mobility and the listing costs of the IPO. In the period
ended 31 March 2021, GBP1,514,000 of the deferred tax liability
relating to the capitalised acquisition intangible assets was
unwound and credited to the Condensed Consolidated Statement of
Comprehensive Income.
The UK Budget on 3 March 2021 announced an increase in the UK
corporation tax rate from 19% to 25% with effect from 1 April 2023.
The effect of the rate increase is not reflected in the Condensed
Consolidated Interim Financial Statements as it was not
substantively enacted at the balance sheet date. If the rate
increase had been substantively enacted at the balance sheet date
an additional GBP2.8m UK deferred tax liability would be
recognised, resulting in an increase of GBP2.8m in the tax charge
for the period.
8. Loss per share
The calculation of the basic and diluted loss per share is based
on the following data:
Unaudited Unaudited Audited
six months 2.5 months 8.5 months
ended ended ended
31 March 31 March 30 Sept
2021 2020 2020
GBP000 GBP000 GBP000
Loss attributable to equity shareholders of
the Company (24,066) (9,817) (16,388)
----------- ----------- -----------
As set out in note 1, a reorganisation of the Group in February
2021 has resulted in a significant change in the capital structure
of the Company. This is reflected in the weighted average numbers
of shares used in the basic loss per share calculations which are
as follows:
Number Number Number
Weighted average number of shares 23,491,366 100 100
Effect of dilutive share options 4,027 - -
---------- ------ ------
Diluted weighted average number of shares 23,495,393 100 100
---------- ------ ------
GBP GBP GBP
Basic loss per share (1) (98,170) (163,880)
--- -------- ---------
Diluted loss per share (1) (98,170) (163,880)
--- -------- ---------
During the period ended 31 March 2021, the Group awarded
conditional share awards to Directors and certain employees through
a LTIP, see note 6 for further details. The awards have not yet
vested but as per IAS 33 these awards must be reflected through the
diluted EPS.
9. Acquisition of Auction Mobility LLC
On 16 October 2020, the Group acquired 100% of the equity share
capital of Auction Mobility LLC for a total maximum consideration
of $43,308,000 (equivalent to GBP33,350,000), comprising of upfront
cash consideration of $33,000,000 (equivalent to GBP25,424,000),
deferred consideration of $305,000 (GBP234,000) and contingent
consideration of up to a maximum $10,000,000 (equivalent to
GBP7,692,000), subject to the performance of the acquired company
against certain targets. Auction Mobility provides a customised
auction software platform, a leading white label app and web
developer, for auction houses. The purpose of the acquisition was
to further strengthen the Group's presence in the USA.
The Directors have calculated the fair value of the contingent
consideration expected to be paid, based on a weighted average
probability model, resulting in a liability of GBP3,918,000. The
key inputs to the model were revenue growth assumptions and
percentage probability weightings applied to forecast earn-out cash
flows based on the various scenarios modelled.
At the date of acquisition, Auction Mobility LLC had net assets
with a fair value of $13,786,000 (equivalent to GBP10,604,000). The
acquisition accounting is set out below and is provisional pending
final determination of the fair value of the assets and liabilities
acquired.
At fair
value
GBP000
Intangible assets - software 2,786
Intangible assets- Customer relationships 6,094
Intangible assets - brand 371
Intangible assets - non-compete 1,286
Trade receivables 462
Other debtors and prepayments 647
Cash and cash equivalents 476
Trade payables (129)
Accruals and contract liabilities (1,389)
-------------
Net assets on acquisition 10,604
Goodwill (note 11) 18,972
-------------
Total consideration 29,576
-------------
Consideration satisfied by:
Cash consideration 25,424
Contingent consideration 3,918
Deferred consideration 234
-------------
29,576
-------------
Net cash outflow arising on acquisition:
Cash consideration 25,424
Less: cash and cash equivalents balances acquired (476)
-------------
24,948
-------------
Goodwill arises as a result of the surplus of consideration over
the fair value of the separately identifiable assets acquired. The
main reasons leading to the recognition of goodwill is the future
economic benefits arising from assets which are not capable of
being individually identified and separately recognised, these
include the value of the assembled workforce within the business
acquired. All of the goodwill recognised is expected to be
deductible for income tax purposes.
Acquisition costs of GBP1,078,000 directly related to the
business combination have been immediately expensed to the
Condensed Income Statement as part of administrative expenses and
included within exceptional items (note 5).
Between 16 October and 31 March 2021, Auction Mobility LLC
contributed GBP2,755,000 to Group revenues and a profit of
GBP246,000 for the interim period ended 31 March 2021. If the
acquisition had occurred on 1 October 2020, Group unaudited revenue
would have been GBP34,488,000 and Group unaudited loss before tax
would have been GBP30,299,000.
10. Intangible assets
Software development
Goodwill costs Customer relationships Brand Non-compete Total
2021 GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
------------------------ ---------- ----------------------- ------------------------ ------- ----------- -------
At 1 October 2020 124,023 14,463 49,712 10,655 - 198,853
Additions arising
through business
combinations (note 10) 18,972 2,786 6,094 371 1,286 29,509
Additions - 1,367 - - - 1,367
Amortisation - (4,057) (4,206) (679) (140) (9,082)
Exchange differences (2,583) (532) (883) (284) (69) (4,351)
---------- ----------------------- ------------------------ ------- ----------- -------
At 31 March 2021 140,412 14,027 50,717 10,063 1,077 216,296
---------- ----------------------- ------------------------ ------- ----------- -------
The Group has reviewed each cash-generating unit for indicators
of impairment at the reporting date and no indicators were
identified. The value in use models, inputs and assumptions used at
30 September 2020 remain appropriate and no impairment is therefore
required in the period to 31 March 2021.
11. Loans and borrowings
The carrying amount of loan and borrowings classified as
financial liabilities at amortised cost approximates to their fair
value.
Unaudited Unaudited Audited
as at as at as at
31 March 31 March 30 Sept
2021 2020 2020
GBP000 GBP000 GBP000
Current
Secured bank loan 322 864 789
Unsecured loan notes 339 358 370
--------- --------- --------
661 1,222 1,159
--------- --------- --------
Non-current
Secured bank loan 37,981 80,312 77,754
Preference shares - 118,375 125,414
Subordinated loan notes - 9,286 9,947
Unsecured loan notes - 362 329
--------- --------- --------
37,981 208,335 213,444
--------- --------- --------
Total 38,642 209,557 214,603
--------- --------- --------
On 13 October 2020, new parties to the Senior Facilities
Agreement were entered with Macquarie and Sixth Street for
USD$75,000,000, of which $33,500,000 (equivalent of GBP25,679,000)
was drawn at this date. The loan carries an effective rate of
interest of EURIBOR+6.5% payable half yearly and is secured on the
assets of the Group.
An Amendment and Restatement Deed under the Senior Facilities
Agreement effective from 1 March 2021 resulted in GBP39.4m
(US$43.2m and GBP8m) available under the facility. The loan, net of
loan arrangement fees of GBP1.4m, was fully drawn as at 31 March
2021 and the principal is repayable on 10 February 2027. A GBP20m
general purpose undrawn Revolving Credit Facility ("RCF") effective
from 1 March 2021 is in place for 36 months.
Primary proceeds from the IPO were used to, amongst other
things, repay all outstanding liabilities with financing parties
except for the Senior Facilities Agreement and current unsecured
loan notes.
12. Share capital
Number Share
of shares capital
'000 GBP000
Ordinary shares in issue as at 31 March 2020 and
30 September 2020 1 -
Issue of new shares 42,323,050 15
Subdivision of shares 97,014,159 -
Share buyback (39,337,210) (5)
At 31 March 2021 100,000,000 10
------------ --------
As detailed in note 1, the Group completed a capital
reorganisation during February 2021. The issued share capital as at
31 March 2021 represents the authorised share capital of Auction
Technology Group plc. The issued share capital as at 31 March 2020
and 30 September 2020 have been restated to reflect the
reorganisation as a result of the application of merger
accounting.
During the period, 1,083,793 ordinary shares of 0.1p each with
an aggregate nominal value GBP10,838 were issued following the
share for share exchange for the entire share capital of Auction
Topco Limited and 41,239,257 ordinary shares of 0.01p each with an
aggregate nominal value of GBP4,124 were issued on IPO for cash
consideration of GBP247,435,000.
The Group completed the purchase for cancellation of 39,233,357
ordinary shares of 0.01p each and 103,853 ordinary shares of 0.1p
for cash consideration of GBP2. The aggregate nominal value of the
shares cancelled was GBP4,962.
The ordinary shares were subdivided such that the number of
ordinary shares increased by 100 and the nominal value of shares
decreased from 0.1p to 0.01p.
13. Related party transactions
On 13 February 2020 preference shares of GBP86,401,000 were
issued to funds advised by TA Associates Management LP. The
preference shares including interest amounting to GBP97,085,000
were repaid on 1 March 2021 (accrued interest as at March 2020:
GBP1,363,000 and September 2020: GBP6,562,000).
On 13 February 2020 preference shares of GBP26,093,000 were
issued to funds advised by ECI Partners LLP. The preference shares
including interest amounting to GBP29,377,000 were repaid on 1
March 2021 (accrued interest as at March 2020: GBP412,000 and
September 2020: GBP1,982,000).
On 13 February 2020 preference shares of GBP4,508,000 were
issued to members of the management team. The preference shares
including interest amounting to GBP5,269,000 were repaid on 1 March
2021 (accrued interest as at March 2020: GBP71,000 and September
2020: GBP342,000).
On 13 February 2020 a loan note of GBP385,000 was issued to a
member of the management team. Interest of GBP49,000 (accrued
interest as at March 2020: GBP6,000 and September 2020: GBP24,000)
was waived on 26 February 2021 and the loan note repaid on 26
February 2021.
On 13 February 2020 a subordinated loan note of USD$13,000,000
(equivalent of GBP9,334,000) was issued to funds held by ECI
Partners LLP and TA Associates Management LP. The subordinated loan
note and related accrued interest of US$15.157,000 (equivalent of
GBP10,883,000) (accrued interest as at March 2020: GBP158,000 and
September 2020: GBP759,000) were repaid on 1 March 2021.
On 30 September 2020, Tom Hargreaves, a director of the Company
received a loan of GBP7,000, the full amount and related interest
were repaid on 26 February 2021.
On 30 December 2020 preference shares of GBP272,000 were issued
to Breon Corcoran, a Non-Executive Director. On 15 January 2021
preference shares were issued to Non-Executive Directors, Scott
Forbes and Penny Ladkin-Brand for GBP221,000 each. The proceeds
from the redemption of their preference shares including interest
amounting to GBP724,000 were used to apply for the subscription of
Ordinary shares on IPO.
14. Events after the balance sheet date
There were no other events after balance sheet date.
Responsibility Statement
The Directors confirm that these Condensed Consolidated Interim
Financial Statements have been prepared in accordance with
International Accounting Standard 34 'Interim Financial Reporting',
as adopted by the European Union and that the interim management
report includes a fair review of the information required by DTR
4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during
the first six months and their impact on the condensed set of
financial statements, and a description of the principal risks and
uncertainties for the remaining six months of the financial year;
and
-- material related party transactions in the first six months
and any material changes in the related party transactions
described in the last annual report.
The Directors of Auction Technology Group plc are listed in the
Prospectus, taking effect from Admission to London Stock Exchange.
There have been no changes of director since Admission. A list of
Directors is maintained on the Company's website,
www.auctiontechnologygroup.com .
.
The Directors are responsible for the maintenance and integrity
of the Company's website.
By order of the Board,
John-Paul Savant
Chief Executive Officer
25 May 2021
Tom Hargreaves
Chief Financial Officer
25 May 2021
Glossary and reconciliation of alternative performance
measures
Glossary
A&A Arts and Antiques
Aggregate basis certain measures have been used as the acquisitions
of Turner Topco Limited and Proxibid Inc on
13 February 2020 have affected the comparability
of the Group's half-year results of operations
for 2021. The measures are presented for the
Group to provide comparisons of the Group's
results between HY20 and HY21 as if the acquisitions
had occurred on 1 October 2019
--------------------------------------------------------------
Auction Mobility Auction Mobility LLC
--------------------------------------------------------------
Bidder sessions web sessions on the Group's Marketplaces online
within a given timeframe
--------------------------------------------------------------
BidSpotter the Group's Marketplace operated via the www.BidSpotter.co.uk
and www.BidSpotter.com domain
--------------------------------------------------------------
Big 4 Christie's, Sotheby's, Phillips and Bonhams
A&A auction houses
--------------------------------------------------------------
EBITDA earnings before interest, taxes, depreciation
and amortisation
--------------------------------------------------------------
GMV gross merchandise value, representing the total
final sale value of all lots sold via winning
bids placed on the Marketplaces or the Platform,
excluding additional fees (such as online fee
and auctioneer's commissions) and sales of
retail jewellery (being new, or nearly new,
jewellery)
--------------------------------------------------------------
i-bidder the Group's marketplace operated by the www.i-bidder.com
domain
--------------------------------------------------------------
I&C Industrial and Commercial
--------------------------------------------------------------
KPIs key performance indicators
--------------------------------------------------------------
Live auctions Live auctions typically feature a physical
auction room (with bidders participating in
the room and by phone) supplemented by bids
made online. Lots are run consecutively and
so apart from the first lot there is no fixed
time for specific lots to be called
--------------------------------------------------------------
Lot-tissimo the Group's Marketplace operated via the www.lot-tissimo.com
domain
--------------------------------------------------------------
LTIP Awards the Company's Long-term Incentive Plan
--------------------------------------------------------------
Marketplaces the online auction marketplaces operated by
the Group
--------------------------------------------------------------
Online share represents GMV as a percentage of THV.
--------------------------------------------------------------
Proxibid the Group's Marketplace operated via the www.proxibid.com
domain
--------------------------------------------------------------
Proxibid group the operations of Proxibid Inc and its subsidiaries
prior to acquisition by Auction Topco Limited
--------------------------------------------------------------
The Saleroom the Group's Marketplace operated via the www.the-saleroom.com
domain
--------------------------------------------------------------
Standalone ATG the operations of Turner Topco Limited and
its subsidiaries prior to acquisition by Auction
Topco Limited
--------------------------------------------------------------
THV total hammer value, representing the total
final sale value of all lots listed on the
Marketplaces or the Platform excluding additional
fees (such as online fee and auctioneer's commissions)
and sales of retail jewellery (being new, or
nearly new, jewellery)
--------------------------------------------------------------
Timed auctions auctions which are held entirely online (with
no in-room or telephone bidders) and where
lots are only made available to online bidders
for a specific, pre-determined timeframe
--------------------------------------------------------------
Verticals like-for-like industry or inventory for example,
arts & antiques, industrial and construction,
consumer surplus and returns and sub-verticals
such as equine, real estate and classic cars.
--------------------------------------------------------------
Definitions and reconciliation of Alternative Performance
Measures
These half-year results contain various financial measures and
ratios that are not presented in accordance with IFRS requirements
or any other generally accepted accounting principles and which may
not be comparable with similarly titled measures used by others in
the Group's industry (collectively, the "Non-IFRS Financial
Measures").
Adjusted EBITDA
Adjusted EBITDA is the measure used by management to assess the
trading performance of the Group's businesses and is the measure of
segment profit that the Group presents under IFRS. The Group
considers this non-GAAP measure to be an important supplemental
measure of the Group's financial performance. Additionally, the
Group believes this measure is frequently used by investors,
securities analysts and other interested parties to evaluate the
efficiency of the Group's operations and its ability to employ its
earnings toward repayment of debt, capital expenditures and working
capital requirements.
Adjusted EBITDA represents profit/(loss) before taxation,
finance costs (including non-operating gains and losses in respect
of financial instruments), depreciation and amortisation,
share-based compensation and exceptional items. Adjusted EBITDA at
segment level is consistently defined with the above but excludes
central administration costs including directors' salaries.
Details of the charges and credits presented as adjusting items
are set out below and note 3 to the financial statements. The basis
for treating these items as adjusting is as follows:
Share-based compensation
The Group issued several share awards to employees and Directors
before the IPO and operates employee share schemes. Income
statement charges or credits relating to such schemes are a
significant non-cash charge or credit and are driven by a valuation
model which references the Group's share price and future
performance expectations. The income statement charge or credit is
consequently subject to volatility and does not fully reflect
current operational performance.
Exceptional items
Exceptional items are items of income or expense where, in the
judgement of the Directors, they need to be disclosed separately by
virtue of their nature or size in order to obtain a clear and
consistent presentation of the Group's underlying business
performance. They arise from portfolio investment decisions, from
changes to the Group's capital structure, as well as material
events that are expected to be non-recurring and outside the course
of ordinary operating activities. These items have been disclosed
separately in note 5.
The following table provides a reconciliation from loss before
tax to Adjusted EBITDA:
HY21 HY20 FY20
GBP000 GBP000 GBP000
Loss before tax (22,565) (12,307) (18,979)
Net finance cost (note 7) 10,540 5,915 14,000
Amortisation of intangible assets (note 11) 9,082 2,132 10,149
Depreciation of property plant and equipment 116 32 167
Depreciation of right of use assets 355 146 483
Share-based compensation 10,384 55 276
Exceptional items (note 5) 9,064 4,925 9,789
Adjusted EBITDA 16,976 898 15,885
-------- -------- --------
Adjusted EBITDA margin represents Adjusted EBITDA divided by
revenue.
HY21 HY20 FY20
GBP000 GBP000 GBP000
Reported revenue 34,488 6,464 35,478
Adjusted EBITDA 16,976 898 15,885
Adjusted EBITDA margin 49% 14% 45%
Aggregate revenue, Aggregate Adjusted EBITDA and Aggregate
Adjusted EBITDA margin
The Group has made certain acquisitions that have affected the
comparability of the Group's half-year results of operations for
2021. For ease of comparisons between HY20 and HY21, certain
figures are also presented for the Group in the Operating and
Financial Review of the Group to provide comparisons of the Group's
results between HY20 and HY21 as if the acquisitions of Turner
Topco Limited ("Standalone ATG") and Proxibid Inc ("Proxibid
group") had occurred on 1 October 2019. The adjustment below
reflects the revenue, Adjusted EBITDA and Adjusted EBITDA margin
from Proxibid group and Standalone ATG for the period 1 October
2019 to 12 February 2020.
The following table provides reconciliation of Aggregate revenue
and Aggregate Adjusted EBITDA from reported results for six months
ended 31 March 2020:
HY20
GBP000
Reported revenue from the date of acquisition 6,464
Revenue for the period from 1 October 2019 to 12 February 2020 16,828
------------
Aggregate revenue for the period from 1 October 2019 to 31 March 2020 23,292
------------
Adjusted EBITDA from the date of acquisition 898
Adjusted EBITDA for the period from 1 October 2019 to 12 February 2020 5,679
------------
Aggregate Adjusted EBITDA for the period from 1 October 2019 to 31 March 2020 6,577
------------
Aggregate Adjusted EBITDA margin 28%
Adjusted earnings per share
Adjusted earnings per share is based on adjusted earnings which
exclude share-based compensation, exceptional items, amortisation
of intangible assets and any related tax effects.
The number of shares in issue reflect the number of shares in
issue at the IPO adjusted for the dilutive effect of the
conditional nil-cost share options granted after IPO through LTIP
Awards to the Executive Directors and other senior management.
HY21 HY20
GBP000 GBP000
Loss attributable to equity shareholders of the
Company (24,066) (9,817)
Add back:
Amortisation of intangible assets (note 11) 9,082 2,132
Share-based compensation 10,384 55
Exceptional items (note 5) 9,064 4,925
Tax (1,091) (1,917)
Adjusted earnings 3,373 (4,622)
-------- -------
HY21 HY20
Number Number
Reported diluted weighted average number of shares 23,495,393 100
Add back: weighted average effect of shares issued
in the period 76,942,272 -
Number of ordinary shares and options granted at
IPO 100,437,665 100
----------- -------------
Adjusted earnings per share (pence) 3.4 (4,622,000.0)
The adjusted earnings per share figure has been disclosed since
the Directors consider it necessary in order to give an indication
of the adjusted trading performance.
Net cash/(debt)
Net debt comprises external borrowings net of arrangement fees,
cash and cash equivalents. Net debt excludes lease liabilities.
HY21 HY20 FY20
GBP000 GBP000 GBP000
Cash and cash equivalents 44,696 9,848 14,193
-------- --------- ---------
Current loans and borrowings (661) (1,222) (1,159)
Non-current loans and borrowings (37,981) (208,335) (213,444)
-------- --------- ---------
Total loans and borrowings (38,642) (209,557) (214,603)
Net cash/(debt) 6,054 (199,709) (200,410)
-------- --------- ---------
Free cash flow and free cash flow conversion
Free cash flow represents cash flow from operations less
capitalised development costs, which include development costs in
relation to software that are capitalised when the related projects
meet the recognition criteria under IFRS for an internally
generated intangible asset. Movement in working capital is adjusted
for balances relating to exceptional items. The Group monitors its
operational efficiency with reference to operational cash
conversion, defined as free cash flow as a percentage of Adjusted
EBITDA.
HY21 HY20
GBP000 GBP000
Adjusted EBITDA 16,976 898
Cash generated from operations 8,677 (2,001)
Exceptional items 9,064 4,925
Working capital from exceptional and other items (1,804) (2,610)
Additions to other intangibles assets (1,367) (188)
Additions to property, plant & equipment (40) -
Free cash flow 14,530 126
------- -------
Free cash flow conversion (%) 86% 14%
The Group uses adjusted cash flow measures for the same purpose
as adjusted profit measures, in order to assist readers of the
accounts in understanding the operational performance of the Group.
The two measures used are free cash flow and free cash flow
conversion. A reported free cash flow and cash conversion rate has
not been provided as it would not give a fair indication of the
Group's free cash flow and conversion performance given the high
value of exceptional items.
Further analysis of the adjusting items is presented in notes 3
and 5 to the Consolidated Financial Statements. The Group has
applied these principles in calculating adjusted measures and it is
the Group's intention to continue to apply these measures in
future, excluding the aggregate results for HY20 and FY20. These
aggregate measures will fall away after FY21.
Key performance indicators ("KPIs")
The Group monitors various key KPIs as defined in the Glossary
to track the financial and operating performance of its business,
including THV, GMV, online share and bidder sessions. These KPIs
are presented on an aggregate basis (as defined in the Glossary) to
illustrate certain growth trends of the underlying business
operations and have been used in this report.
Principal risks and uncertainties
The principal risks and uncertainties that affect the Group can
be found on page 4 of the 2020 Group Annual Report and Accounts
(being that of the Auction Topco Limited group).
RISK IMPACT
COVID-19 There have been changes in the macroeconomic conditions
as a result of the threat and uncertainty posed by the
Coronavirus outbreak. The outbreak has resulted in potential
risks to the business which are outlined below together
with how these risks have been mitigated.
Employees
The ability to work on a remote basis posed a potential
risk to the business, however a robust control environment
with good IT processes and controls in place has enabled
this to happen with limited impact on the business.
Trading environment
The closure of auction houses posed a potential risk
to revenue from live auctions. However, the business
has instead experienced an acceleration in auction activity
migrating from offline to online which has directly
benefitted the Group's performance. The Group has also
benefited from being more geographically diverse, due
to its recent US acquisition, and its portals which
cater for insolvency auctioneers have benefited from
the current macroeconomic environment.
-------------------------------------------------------------
Business Model The Group's business model may come under significant
pressure should a significant number of auctioneers
choose to take bidder generation, technology development
and customer service (amongst other things) in-house
and so bypass the Marketplaces or Platform, including
as a result of auctioneers who use the Group's white
label offering attempting to maintain their own platforms
rather than use the Group's Platform.
-------------------------------------------------------------
Technology An inability to maintain a consistently high-quality
and secure experience for the Group's auctioneers and
bidders across its Marketplaces or Platform or to keep
pace with innovation and changes in technology could
result in fewer auctioneers and/or bidders using the
Marketplaces or Platform.
-------------------------------------------------------------
Business interruption Security breaches and other disruptions to, or failures
and IT systems in, the Group's IT infrastructure and networks, or those
of third parties, could disrupt the Group's business,
compromise sensitive and confidential information, affect
the Group's reputation, increase its operational costs
and cause losses.
-------------------------------------------------------------
Acquisitions The Group has in the past made, and in the future may
make, acquisitions and investments, which may prove
unsuccessful or divert its resources, result in operating
difficulties and otherwise disrupt the Group's operations.
-------------------------------------------------------------
Brand The Group relies on its brand and reputation, which
could be impaired.
-------------------------------------------------------------
People The loss of senior executives or one or more of the
Group's key employees could adversely affect it business,
results of operations and financial condition.
-------------------------------------------------------------
Regulation The Group is subject to regulatory oversight by competition
authorities, including the Competition and Markets Authority
in the UK, which may impact its acquisition activity.
-------------------------------------------------------------
Foreign exchange Exposure to US Dollar exchange rate
-------------------------------------------------------------
The Board does not believe there has been a material change in
the principal risks in the first six months of 2021. The Board does
not expect a material change in these risks in the remaining six
months of the year.
Independent review report to Auction Technology Group plc
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 31 March 2021 which comprises the Condensed
Consolidated Income Statement, the Condensed Consolidated
Statements of Financial Position, the Condensed Consolidated
Statement of Changes in Equity, the Condensed Consolidated
Statement of Cash flows and related notes 1 to 15. We have read the
other information contained in the half-yearly financial report and
considered whether it contains any apparent misstatements or
material inconsistencies with the information in the condensed set
of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of, and
has been approved by, the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
Group are prepared in accordance with international accounting
standards in conformity with the requirements of the Companies Act
2006 and International Financial Reporting Standards as adopted by
the European Union. The condensed set of financial statements
included in this half-yearly financial report has been prepared in
accordance with International Accounting Standard 34 "Interim
Financial Reporting" as adopted by the European Union.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410 "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity" issued by the Financial Reporting Council for use in
the United Kingdom. A review of interim financial information
consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 31
March 2021 is not prepared, in all material respects, in accordance
with International Accounting Standard 34 as adopted by the
European Union and the Disclosure Guidance and Transparency Rules
of the United Kingdom's Financial Conduct Authority.
Use of our report
This report is made solely to the Company in accordance with
International Standard on Review Engagements (UK and Ireland) 2410
"Review of Interim Financial Information Performed by the
Independent Auditor of the Entity" issued by the Financial
Reporting Council. Our work has been undertaken so that we might
state to the Company those matters we are required to state to it
in an independent review report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company, for our review
work, for this report, or for the conclusions we have formed.
Deloitte LLP
Statutory Auditor
London, UK
25 May 2021
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END
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