Auction Technology shares sink 27% as profit slumps despite higher revenue

Shares of online auction platform Auction Technology (LSE: ATG) continued falling in afternoon trading, dropping nearly 27% after the London-based company reported a steep 23% decline in annual profit despite a 13% rise in revenue.

The drop extends ATG’s losses so far this year to 40% as investors reacted to disappointing full-year results that showed slowing growth and surging finance costs weighing on the bottom line. Specifically, higher interest expenses and foreign exchange losses led to a doubling of net finance costs to £15.4 million, offsetting the benefit of a 19% increase in adjusted EBITDA.

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While CEO John-Paul Savant highlighted “long runways for growth” from value-added services like payment processing and shipping, he acknowledged the economic environment has become “more challenging” in the second half, contributing to slower gross merchandise value growth. Total hammer value was up just 3% for the full year.

Going forward, ATG predicts continued top-line growth but cautioned it may moderate from the 13% rate in fiscal 2022. It expects to maintain a 47% EBITDA margin. The company pays no dividend for now as profits sink.