Continued buoyancy in H217 has delivered another successful year for Deutsche Grundstuecksauktionen AG (DE:DGRG). 2017 saw a double-digit increase in gross turnover comfortably exceed management expectations, while a 7% rise in an already generous dividend would have been significantly greater but for unusually high commission reversals on historic transactions. Positive prospects reflect sustained favorable macro factors and a record start to 2018 thanks to a bumper €15m Berlin auction lot and likely associated payout (surplus cash – DGA has no debt – allows profit to be distributed almost entirely by way of dividend).
H217 maintains high tempo
While not repeating the step-change in financials of H1, DGA’s second half performance was nonetheless creditable, matching year-on-year gross turnover from autumn and winter auctions. Indeed, net commission rate almost held steady despite the change in mix of lots sold (average sales price up 10%, including the most valuable item then to date at €7m). Net profit was however a casualty (down by a third), albeit exceptionally depressed by the reversal of €0.3m net commission on several historic auction transactions. Also, major subsidiary, Westdeutsche, faced an outstanding comparative. The group lot selling quota fell again owing to concessions on minimum bids to secure orders but was still high at c 86%.
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