4th Dec 2023 11:25
(Alliance News) - Auction Technology Group PLC has a weaker outlook and some tough macroeconomic conditions to grapple, but German bank Berenberg believes the stock is still a "winner".
Berenberg has a 710 pence price target on the stock and rates it at 'buy'.
Last week, the London-based online auction operator said the economic environment has become "more challenging", hurting growth in the second half of its financial year. However, it predicted continued revenue growth in the new year, helped by burgeoning value-added services.
Pretax profit was GBP7.1 million in the 12 months that ended September 30, down 23% from GBP9.3 million the year before.
Revenue rose by 13% to GBP135.2 million from GBP119.8 million. Of this, 5% was organic growth. Gross merchandise value on the platform was down 3% at constant currency, however, partly due to slower growth in total hammer value. THV was up 3% at constant currency to GBP10.8 billion for the full year, though declined slightly in the second half of the year.
Shares in the company plunged 23% on the day it reported. It gathered has some poise since then and was down 0.8% at 486.50 pence each in London on Monday morning.
"In our view, the resulting sell-off post-results creates an attractive entry point into a long-term winner," Berenberg analysts commented.
Berenberg moved its forecast for Auction Technology earnings in financial 2024 to the bottom end of guidance. Though an improvement in macro conditions present an "upide risk". It forecasts "zero growth" for the firm over the coming year, however.
By Eric Cunha, Alliance News news editor
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