Analyst Note| Brian Bernard, CFA, CPA |
Ritchie Brothers Auctioneers posted a tougher quarter but ended fiscal 2020 with positive total revenue growth of 4% year over year. This was driven by revenue from service contracts, which grew 8% compared with 2019 and composed about 63% of total sales for the year. Gross transaction value (GTV) reached $5.4 billion for 2020, a 5% increase compared with 2019. Headwinds included border restrictions in the firm’s European markets that limited its ability to transport equipment, ultimately hindering auction volumes. Furthermore, near-term macroeconomic uncertainty led to conservatism among consigners that adopted a “wait and see” mentality that persisted year-round, exacerbating an already tight used equipment market. It appears this trend will likely persist for at least the first half of 2021.