Following a year of investment and reorientation in FY14, artnet had good success in FY15 in turning its Gallery segment back into growth and in building strong web traffic – and hence group advertising revenues – with Artnet AG NA O.N. (F:AYDGn) News. In US dollar terms, FY15 group revenues were up 4% y-o-y, with currency swelling this to a 24% rise in euro terms. This implies a strong Q4, following top-line reported growth of 1% for Q1-Q3. The shift in mix is helping gross margins and with stable operating costs in US dollars, artnet has marched forward into profitability, with further progress forecast for FY16 and FY17.
News drives the top line
The art market had a mixed 2015, with good growth in the US but a sharp downturn in Chinese activity, domestically and internationally. The growth in the use of online resources attracted a number of new auction market entrants and increased competition in the galleries segment. artnet’s FY15 top-line growth reflects the success of artnet News, with the website now attracting 2.1 million monthly average visitors (+35%). These visitors provide an attractive demographic for advertisers and growth of in ad revenues (now reported within underlying segments) narrowed the News segmental operating loss from US$1.3m to US$0.8m. Across the group, control of admin and general costs helped build operating margin and return the group to profit. artnet News will likely be the main driver of FY16 revenues, aided by mobile app launches, with management also confident of stronger progress in Auctions, following from higher buyer and seller registrations in 2015.