H116 group revenues were slightly ahead of the prior year in both US dollar and euro terms, helped by continued growth in Artnet AG NA O.N. (F:AYDGn), where revenues were up 17% despite weaker Q2 advertising performance. Reduced losses from Auctions and the benefit of lower costs within the Price Database segment helped drive an 11% uplift in group contribution margin, partially offset by increased central expenses. Stronger operating cash flow drove higher net cash, which at end June was €0.9m, from €0.5m at the year-end. Our FY16e and FY17e forecasts are unchanged.
Mixed market, but online growth strong
The art market had a mixed start to 2016, with a resurgence in Chinese interest and activity but a sharp downturn in investment in the US. The latest survey from ArtTactic shows some recovery in expectations in the US and Europe, but with a wide divergence of views. The continuing positive trajectory of the online segment is not in doubt. While the overall art market declined in 2015, online sales grew 24% to US$3.3bn as behavioural barriers kept coming down, with Hiscox/ArtTactic suggesting this section of the market could grow to US$9.6bn by 2020. This rate of growth is in line with projections for growth in other online luxury segments.
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