Good day, ladies and gentlemen, and welcome to the Auction Technology Group's half-year results 2023. At this time, all participants are in listen-only mode. Later, we will conduct a question and answer session through the phone lines, and instructions will follow at that time. I would like to remind all participants that this call is being recorded. I will now hand over to John-Paul Savant, CEO, to open the presentation. Please go ahead, sir.
Hello, welcome to ATG's half-year results. We're very happy to be able to speak to you today about these results, and we feel really good about them. Becky, if you can go to slide 5. Just kind of setting it up a little bit, I think before diving into this slide, one of the things we feel best about as we come to these results is just as we exited December, there were three big questions out there we felt about ATG that all the investors were posing us. One was, on the art and antique side, how procyclical would you be?
Would you be able to grow off the really incredible growth that you saw during COVID, or would you see a reversal in your volume or people moving back offline once they were able to go attend auction houses? The second big question was around the Industrial Commercial group and people saying, "Okay, well, are you going to see the volume that will compensate for the fact that asset price inflation may be a little bit less?" The third point that people were looking at was, would the ATGPay, which was being launched onto Proxibid, receive a good response, and would there be good adoption or not?
I think one of the things that we're most happy about as we come to these results is the fact that we think we've addressed all three of those questions while strengthening the business and increasing the competitive moat around what we do. We'll cover that in a little bit more detail between Tom and me coming up. For now, just on this slide, this is for the people who are less familiar, maybe for the first time on this call. What does ATG do? Well, we are unlocking the value of the curated secondary goods market and accelerating the growth of the circular economy. The key way that we do that is we connect bidders from around the world to auction houses around the world.
We work with several thousand, about 4,000 auction houses, connecting to bidders in 160 countries around the world. Those auction houses are listing $10 billion-$12 billion per year that we help facilitate the sale of over 20 million items per year. We connect them to bidders who are generating, now with our acquisition of EstateSales.NET, over 270 million web sessions per year for those auction houses. The key reason bidders come to us is because we offer the best selection of specialized and unique inventory. They come to us for the convenience because they can bid on dozens of auctions at any given time, they come to us because of trust, because everything that we sell on our site is listed by an expert auctioneer and in a curated format.
Auctioneers come to us because of the technology that we provide for the cost savings and operational efficiencies. More than anything, they come for the bidders because those bidders help generate higher asset sale prices for the consignors. That, that's kind of the essence of what we do. Go to the next slide. These are one of those happy slides where it shows everything up and to the right. The key reason that we wanted to do this was because the big questions about ATG way back were, could we grow during COVID? People wondered.
When we grew, people said, "Could you grow on top of that exceptional growth?" They were saying, "Well, now that COVID's over, could you grow again?" I think what we like to show is that whether you look at an organic basis or through the acquisitions we've made, it means that we are in fact growing, and you can see that that GMV is going up. In terms of the revenue growth, you can see that again, it's not just translating into volume of what's being sold, but that we're actually growing revenues as well. We're growing organically, but again, with our seventh acquisition, which is a core part of our story, that's accelerating that growth even further.
Finally, we were able to do that despite this uncertain economic macroeconomic backdrop while improving our financial profile. Next slide. I mentioned before a little bit about the three big questions we felt that were out there about us, but this slide gives a few more of the highlights. Again, we are able to grow GMV by 5% to $1.9 billion. That compares to last year at a total of $3.3 billion. As expected, we saw acceleration in our GMV and as a result, revenue in the back half of the first half of the year, so in the second quarter. That has continued into these early months of the second half.
Our take rate, as you see, was flat. That was because we were able to see the higher listing fees offset the growth of I&C. For people unfamiliar, I&C has a slightly lower take rate, but than the Art and Antiques division. With the listing fee increases that we passed through successfully, that kept that impact on the overall take rate minimal. We also saw very strong growth in marketing and demand for payments. If you look at again, we re-referenced Etsy quite a few times. Etsy has 3.8% of its revenue, or it monetizes its GMV at a rate of 3.8% through the digital marketing it sells to people who sell on their site. Today, ATG is at 0.6%.
We saw a really good increase in the demand there. We also saw progress at LiveAuctioneers with our other value-added service, which was payments. It's now at 83% adoption. The comment that we made in the press release this morning, and then, which I referred to at the beginning, is that we're very pleased with the fact that we have 21% of the Proxibid auctioneers now, having signed up to our payments product. The fifth point here is around integrated bidding. One of the things that we've been investing in beyond value-added services and the Take Rate is just improving the ability for auctioneers to cross-list on different marketplaces. We've made, significant progress there as well.
Lastly, we were able to do this while making, as I said, our seventh acquisition, and this business is performing ahead of expectations and I'll talk a little bit more about that later. To the next slide. Over to Tom.
Good morning, everybody. I will take you through the financials, starting with the highlights that you can see on this slide. Revenue of GBP 67.3 million, that's up 17% year-over-year on a reported basis and 5% on an organic basis. Adjusted EBITDA of GBP 31.5 million, up 18% year-over-year. Our Adjusted EBITDA margin was 47%. That's 1 percentage point higher than prior year. Adjusted diluted EPS of GBP 0.16, up 19% year-over-year. Free cash flow of GBP 21.8 million. That's a 69% conversion. We ended the period with GBP 132.4 million in adjusted net debt. If we move over the page. Talk a little bit more in detail about revenue here. On the left-hand side, you can see revenue by segment.
As John-Paul has already mentioned, the first half of last year, so half year 1 of 2022, was really the last period that we had that was impacted by COVID. That impact was actually concentrated in the first four months of that period, October to January 2022. By the time that we got to February, basically the world had reopened, and we saw that normalization of activity levels across all parts of our business. For February and March, were relatively clean, non-COVID comparatives. For the first half of this year, we're going against sort of easier comps as we get through the half year. If you look at that total revenue number, I already said $67.3 million. The growth rate for the period was 5%.
As you went through the period, as the comps got easier, the rate of growth accelerated. If you looked at the exit rates, for February and March and also April, where we were going against clean, non-COVID months, the rate of growth was 9% overall. Just moving up. Total marketplace revenue of $61.6 million, organic growth of 6% year-over-year, with A&A growing at 4% and I&C, 7%. We'll talk about that in more detail on the next two slides. Auction services revenue of $4.2 million, growth of 2% year-over-year. Organic decline of 7%. Auction services is largely our white label business. The white label business saw exactly that, the same COVID normalization or post-COVID normalization as the other, as the marketplace.
It's in fact a little bit stronger we saw there. As we continue to move further away from COVID, that rate of decline will improve on a month-on-month basis, quarter-on-quarter basis. The business is stable. Content, a small part of the business, $1.5 million revenue, 6% decline, consistent with historic movements in that business. If you look at the mix of revenue by product on the right-hand side, you can see that I&C commission comprises 37% of our revenue in the first half year, and A&A commission, 21% revenue. In aggregate, commission was 58% of our total revenue. It's still the largest stream. You see, interestingly, the growth and importance of value-added services are now 17% of the mix versus 15% last year.
That's payments and marketing are growing within there. Marketing, in particular, in the first half, gave a strong performance, 20% growth on an organic basis year-over-year. That's across all marketplaces, something that we expect to continue into the second half of the year. Payments in I&C didn't materially contribute to that growth. Again, that will be a feature of the second half of the year with the launch of payments on Proxibid. If you move up to the next box, other marketplace revenue. Other marketplace revenue largely represents the fees that we charge for hosting auctions. Prior to COVID, we used to increase those fees every year. For the last 3 years during COVID, we didn't do that because of all the other things that were going on and the growth in GMV. Now we're post-COVID. We introduced...
We sort of reintroduced increases in our fee charges. That, combined with increasing volumes of auctions being hosted, has contributed to very strong growth in our fixed fee revenue of 25% year-over-year, which has driven that increase in share from 15% to 17% that you can see there. If we move over, talk in a little bit more detail about I&C. You can see on the top left hand the chart of GMV. Last year was $1.3 billion. It's worth saying that last year's number was exceptional. That 35% growth that we saw last year was really the standout number in the numbers we reported a year ago. There were a lot going on in last year. You had the benefit of COVID, we all talked about, which was still in those numbers.
We also had very high asset price inflation. Many of our categories were prices were going up double-digit last year. That was offset by volumes, lower volumes last year, and it was really those lower volumes that were driving the higher prices. As we've got into this year, those volumes have come back. You can see there the 14% growth in the volume of lots, which has more than offset the impact of moderating prices. Asset prices have been coming down. The reason they've been coming down is 'cause volumes have been going up. That's exactly the dynamic that we talked about last time, and that's exactly what's played out in this half year.
Despite the fact we had that exceptional performance last year, we've still managed to grow GMV and I&C by 7% on an organic basis year-over-year. Take Rate broadly flat. Within there, you've got some impact from the mix of assets being sold, being offset by improving value-added sales and particularly marketing. As I've just said, there wasn't really a material contribution from payments in I&C in the first half. That's something that will feed through in the second half. Whilst we did change the pricing structure in I&C, principally in Proxibid in the first half, that happened towards the end of the half. Again, there isn't a big contribution to that in the Take Rate that we're reporting there for our first half of 2023. That will feed through in the second half.
You take that GMV growth of 7% with a broadly flat Take Rate, you get overall, marketplace, I&C revenue growing by 7% year-over-year. If we move over to A&A. A&A last year, GMV growth of 1%. Now, A&A was really where the impact of COVID was most transparent, where you could see it. That 1% growth you could see last year was really a function of decent growth in the first four months of that period, sort of October to January. When the world reopened, the step back in activity that came in from February onwards gave you an overall growth rate of 1%.
You can't see on here, but the number we reported last time for second half growth in GMV, actually decline in GMV, was 11% in the second half of last year. As we've moved further away from COVID, that rate of decline has improved. You can see in the first half of 2023, overall, it was 3% decline. Again, when you look within how that's performed across the half, by the time we've got to fully lapping COVID, when you get to February, March, and also into April, GMV is now back into growth in A&A. About 5 percentage points growth we've seen across the last three months to the end of April. That really affects the wider robustness of the A&A markets.
Last time, lots of questions about how would A&A hold up in a sort of softer economic environment, in a weaker macroeconomic environment. To date, we expect going forward, there hasn't really been any impact to that, and the wider end markets continue to perform well. If we look at the Take Rate, that's grown from 7.6% to 8.3%. The same dynamic as last year. GMV performance has been more than offset by Take Rate. That Take Rate is a function of continuing penetration of value-added services, with marketing being a particular call-out this time, and also the benefit of some of those changes in fixed fees that I've just talked about. You multiply that GMV by the Take Rate improvement, you get organic revenue growth in A&A of 4%.
When you look at the reported revenue growth of 18%, that also includes two months contribution from EstateSales.NET. EstateSales.NET is going to be reported in A&A. Still early days, but to date, performing ahead of our expectations. Moving over. You can see here the full P&L. On the right-hand side, you see our headline reported revenue growth, revenue of $67.3 million. That's reported growth of 17% year-over-year with organic growth of 5%. The difference between the reported and organic, you've got that two-month contribution from EstateSales.NET I've just talked about, worth about 2 percentage points, and the balance is FX. Over 80% of our revenue is now in dollars. The pound has weakened relative to the dollar compared to last year.
The average rate in the first half of last year is 1.34. This year, the average rate $1.2 equals GBP 1, so that has boosted our revenue by about 9 percentage points. That geographic split of revenue is mirrored in our cost base. When you look at the movement in our costs, you'll also see the impact of FX in that. Our cost of sales have increased 15% year-over-year, not a million miles away from the revenue growth. Our gross margin has stayed constant at 68% year-over-year. We've got our admin expenses, GBP 36.7 million, up 22% year-over-year. You've got FX in there, you've got EstateSales.NET in there. You've also got GBP 1.7 million of exceptional costs related to the acquisition of EstateSales.NET.
All the fees that we paid in relation to that, largely. You've got a GBP 1.4 million increase in our share-based payments charge. Our share-based payments charge, if you're familiar with the accounting, you amortize that cost over the life of the scheme. Our schemes were introduced at the point of IPO two years ago. The average life of one of our schemes is three years. It'll take three years for that charge to normalize. We're two years in now, so it's still stepping up. By the time we get to this point next year, it should have plateaued at its sort of ongoing level.
If you sort of remove all those effects and remove FX and try and create a sort of organic growth rate or rate of change in our cost base, our costs are up 4% year-over-year. Below the rate of growth in revenue, which you can see in our Adjusted EBITDA margin penultimate line at the bottom of 47%, up 1 percentage point on prior year. We don't really anticipate any big changes in our cost base in the second half of the year relative to the first. That 47% we achieved in the first half is broadly consistent with where we expect the full year outturn to be. Just moving back up the P&L a little bit to net finance costs. You can see GBP 9.1 million.
That includes $3.7 million of a non-cash FX movement on our intercompany balances. If you strip that out to get to the underlying cost, our rate of interest that we paid in the period was $5.4 million. This is the first period we've had sort of new elevated interest rates. We pay our debt is in dollars. We pay interest rates based on US SOFR or US LIBOR. That charge will come down as debt comes down, also come down as and when or if and when the interest rates are reduced. All of that translates to right at the bottom, Adjusted diluted EPS of GBP 0.16, up 19% year-over-year, largely in line with Adjusted EBITDA. Finally, look, I've mentioned FX a couple of times here.
As I've said, over 80% of our revenue is in dollars. That's up from 60% at the time of the IPO. Given the dominance of dollar in our P&L, we think it's appropriate now to start reporting in dollars and move to a presentation of currency in dollars. We plan to do that from FY 2024 onwards. So not this year, but next year. In the second half of this year, we'll sort of republish all our numbers on a dollar basis. That should remove quite a lot of the noise that we currently experience in our reported numbers from FX. If we move over the page with our adjusted net debt.
We opened the period with GBP 131.4 million of adjusted net debt. We had adjusted free cash flow of GBP 21.8 million in the period. That's 69% conversion from EBITDA, slightly lower than we've had before. A couple of things going on there. In working capital, we did have a very strong March for revenue. Some of that is stuck in working capital at the period end. No change in the rate people are paying us for all that money is now in the bank. At period end, that did result in a step-up in our debtors. Also with regards to bonuses. FY 2022 was the first sort of new annual bonus scheme post becoming a public company. Prior to that, we had a sort of pay-as-you-go bonus scheme.
As with any bonus scheme, it tends to pay out post year end. In FY 22 we had a year of no cash payments to bonuses. We had the accrual for that. The cash bonus was paid in the first half of FY 23, which results in a working capital outflow about GBP 2 million, which is impacting that number. That comes back in the second half of the year when there will be no bonus payment. Finally, CapEx of GBP 4.1 million, higher than prior year. That reflects the previously talked about investment that we're making in the single tech platform, which John- Paul will talk about in a bit. Interest and tax costs, GBP 9.3 million. Acquisition of ESN, GBP 24.9 million.
Cash outflow, and then you get this FX, another GBP 11.4 million. That's mainly FX. As I said, we have dollar debt. Across this period, the pound has actually strengthened, which has given you an accounting gain in the books. This is a very good example of the sort of FX movement that won't occur once we move to reporting in dollars. That's left us at the end of the period with GBP 132.4 million of net debt, about the same as we opened the period. That's leverage ratio of 2.3, slightly inflated by the timing of the acquisition Estate Sales. The net debt number includes the cost or paying for Estate Sales. We've only got two months' worth of EBITDA from that.
If you created a pro forma leverage number, it's 2.1, and by the time we get to the end of the year, that should be safely below two. With that, I will hand back to John-Paul.
You can go to slide 16. As it says, we continue to execute against each of our six strategic growth drivers. For those of you familiar with us, you'll know that the reason we always put this slide up is that it's the simplest way to see that symbiotic, mutually reinforcing nature of the growth levers that we have. It's not that they operate independently, they're all mutually reinforcing. If we grow TAM and conversion rate, there's a compound benefit that flows through. That's something we benefited from repeatedly over these years.
The other thing I wanted to do before going to the next slide is just to say that, while it's easy to focus on some of the things that we talk about, like looking at the numbers, and of course, that's all important to input into your models and everything else. I also think it's really important as we look at this next section, at the strategic piece, to think about what ATG is doing. Because what I'm particularly excited by as you look at some of these things that we'll share with you, is that we're investing in the things that create real value for our customers. It's not just about raising prices. That's not the only way we're making money. It's not about just rolling out a new product because we can.
It's the fact that we're doing things that we know our customers really value. For instance, on the auctioneer side, what do they care about most? They care about getting the highest asset value possible on the assets that they're selling, and they care about increasing operational efficiency, and they basically want to ensure that they are future-proofed. Meaning, as the world moves online, can they have a partner that they can rely on? I think what we are really pleased with in this last period is we've invested in some really core things that they value. Whether it be the cross-listing that I'll talk about, or you look at payments, which takes away a big pain point for them and speeds up their collection cycles.
You look at the fact that we've invested in EstateSales.NET, which brings a lot more bidders that we can then cross list and offer their goods to. Lots of things that auctioneers care about. For the bidders, similarly, what do they care about? They care about selection, convenience and trust. I think what we've done again, is continue to invest in things. Payments are proven to be a way that increases confidence in a business when it has an integrated payment solution. We've invested in our SEO to enable people to find what's on our sites easier. Again, that cross listing gives them an exposure to an ever wider pool of specialized and unique items. All of these things are really key.
On top of that, the great thing is that, yes, it's great for our customers, yes, we make more money off of it, but all of these things also make it that much harder for someone to come in and compete with us. We've raised that competitive wall higher and deepened the competitive moat, and that's something we're really pleased with. If you go to the next slide. What were some of the things we said? We said that we addressed those three key questions, and one of them is this. Yes, we are a resilient business, even against the backdrop of macroeconomic uncertainty. Basically, we talked about it. Tom already referred to that. Looking at the I&C side, the big question was, will we volume offset lower asset prices?
That is something that we see very much coming through. Looking at our total hammer value, showing again that it's up 11% on a year-over-year basis, we think really addresses that. As Tom alluded to earlier, we saw the number of auctions increase and the number of lots listed increase. Again, we feel that the business is really responding and showing that we are very resilient. If you go to the next slide. THV is important, and part of the reason that we see that volume increasing is because our customers still see value in what we're doing. These are the auctioneers and the bidders. Bidders are coming to us to find those assets, and auctioneers come to us because we continue to bring more bidders.
As you can see, we continue to grow the number of accounts created, the number of bidder sessions, and the number of auction registrations. I should say the bidding sessions excludes anything associated with EstateSales.NET. The chart that we showed over on the right is just to give you a sense for the number of lots where we are bringing an ever-increasing number of bidders. It's not that we're just bringing one bidder, we're often bringing five or more than five bidders. The reason why we just say five is because often in the auction industry, people will say each bidder represents 20% of the target asset price that an auctioneer has. If an auctioneer is bringing five bidders, they're very confident they're gonna get the estimated value of that item.
The more that we do that, the better. Clearly, we're not the only people bringing bidders. They have people in the room and sometimes they're white label. From our perspective, just us, we like to see the number of times we're bringing five or more bidders because it gives us confidence that even for the auctioneers who rely entirely on us, we are helping them achieve that estimated value on critical lots. If you go to the next slide. The second big question that we had posed to us was can the art antiques division how pro-cyclical is it? Will people return to the room or will they, you know, once COVID was over, will they stay online? I think what we think this chart shows is the gains in COVID.
On the left-hand side, you can see that there is that small drop, but that's again due to the mix that we have with greater THV coming on board, new auction houses. There's a lot of muddle in that number on the left that makes it hard for you to really see whether we're actually growing post-COVID. When you look at same-store sales, we actually unequivocally are growing that conversion rate again. We picked a division that people had many questions about, which was LiveAuctioneers, just to show the exact dynamic for how that's happening. As you can see, 2019, 17%, you know, huge growth throughout COVID. A bit of a drop in 2022 as we saw some people again move back offline.
The key thing that we're seeing now is again, growth in the first half in the conversion rate on the same-store sales within LiveAuctioneers. That's a really encouraging sign because that's a reflection of all the investment we're making. It's a reflection also the continuation of the curve that we saw pre-COVID, because pre-COVID, we're adding 1 to 2 percentage points of conversion per year on the different marketplaces. What we feel this is showing is that we're now getting back to that pattern, demonstrating that we've retained the vast majority of those COVID gains, and now we're back on the growth path. Tom repeated a bit of that earlier. If you go to the next slide, this is just a quick one.
We drove our conversion rate and partly grew those numbers through the improvements that we're making. If you recall our three investment horizons, wave one was the foundation of an aggregator marketplace, which we are. Wave two, which we're focused on, is creating a true e-commerce standard level end-to-end buying experience in the auction industry. For people less familiar with it, in the auction industry today, when you're buying online, everything is functional. It works, but it can be a lot of effort. What we're trying to do is really raise that standard to something that people are familiar with. Maybe not Amazon level, but significantly above where it is today. Whether it be SMS, where we're seeing positive early signs or the 12% increase in email alerts, which is presenting people with more relevant items.
One of the things we began doing just several months ago, we've always, for two years now, we've been doing browser-based retargeting, but it was for people who registered for the auction. What we hadn't been targeting previously were people who browsed but didn't register. Now we're retargeting people who browsed but didn't register, we're seeing engagement from that as well. Finally, a big part of what people look for is just, "Can I find what I'm looking for?" While we have a long way to go on that still, a big part of the investment we've been making in the last few months has been in SEO around categories, subcategories, looking at the event schema. Basically, the way it was worked, it was set up differently than we would have liked.
In the past, we had it set up based on an auctioneer's event versus the product, we're moving towards much more of a product-level schema instead of event-level schema. All of these things, again, should drive more visits and make it easier for people to find what they're looking for. If you go to the next slide. Again, growing the conversion rate. One of the big things that we benefit from is the fact that we can focus on the bidder, which is that traditional way of driving engagement with an e-commerce experience. We can also, at ATG, focus on the seller and really drive that in a meaningful way. The biggest way that we can do that is by getting auctioneers to adopt timed auctions, where they go all in with ATG.
Well, I guess with this, first of all, with the price incentive that we gave them, this is the first part, and I'll cover cross-listing a little bit later. With this price incentive, the big thing that we did is we said, "Okay, live auctions, you can keep running live auctions, but it's gonna cost you more if you wanna do that." Tom talked about the price rise we put through. We said, "If you run timed auctions, then your fees stay the same or even get a little bit lower, and that's because we get 100% of the auction. We don't have to share it with anybody else. We make a lot more money. We can share a bit of that with the auctioneer.
The third gold standard that you see over on the right there that we pushed was we said, "If you take our payments product, then we will eliminate your fixed fees." Therefore, we were making the money off payments and off the volume, and it's increasing that competitive moat and making us even more important to the auctioneers. We were really pleased with that. The reason why we can feel good about moving auctioneers to Timed and not just feeling we're doing it for our own self-interest is because there is a higher registrant-to-bidder conversion on Timed.
As you can imagine, if there are many more bidders who are out there, whether it be on an art and antiques auction or an industrial one, where if you know that you're gonna have to show up and compete against somebody in the room, as a bidder, you may say, "You know what? I'm not gonna be able to attend that, you know, lot number 475 on Tuesday at 4:00 P.M., so I'm not gonna bother bidding on this." If you know it's timed, and you're only competing against other people online and that you're gonna be notified in that eBay-like style when you've been outbid and be able to put a max bid in, well, then that's something that you can do that increases number of bidders to registrants. That's a big one.
The other thing that we're able to show auctioneers is that, again, a huge amount of the activity that takes place in an auction is happening after the original end time with a timed auction, which means those auto extensions that we have drive incremental value. Unlike eBay, where, you know, people can snipe and come in at the last second and try and get an item that they hope nobody saw, for us, auctioneers are allowed to have auto extensions which means if you're bidding and there's another bid, well, then they can extend it for another two minutes or another 30 minutes if they want because there's no reason for the auction to end as long as people are ready to keep bidding. If you move to the next slide.
This looks at what we've done to make it easier for auctioneers beyond the price incentives. From a product perspective, as auctioneers move increasingly online, many of them, especially the larger ones, like to retain their own brand, but they also want to list on a marketplace. Historically, there is nobody out there that enabled an auctioneer to run on their white label and on a marketplace a timed auction at the same time. Now that we're offering this, first between AuctionMobility and LiveAuctioneers, this is something that's going and live now. In the early days, what's been exciting for us to see is that for auctioneers who historically were listing only on their white label with AuctionMobility, when they now cross list on LiveAuctioneers, they're seeing an average of 26% higher hammer value.
That's a really meaningful number. Therefore, even if it's early days, we're very encouraged, and we think this is gonna encourage lots of the Auction Mobility auctioneers who don't use LiveAuctioneers to take it. Okay. You can move to the next slide. We've also driven operational leverage. As you saw, our margins grew to 47% in the period. That's partly through the fixed fee increases, but it's also through additional self-serve features that we've introduced, whether it be on digital marketing. We've also improved overall site stability and then raised to global security standards.
All of these things and that progress against the common platform, which has us sharing more and more resources, enables us to deliver all the value for each of our marketplaces without the same level of incremental costs you'd expect if we were doing it individually for every single marketplace. Next slide. Payments is the next big one. Payments was the three big question mark around ATG back in December, and we feel that we've really addressed that. First of all, if you look at LiveAuctioneers, which is where we launched it previously, as you can see, adoption has grown to 83%. The key thing that we are demonstrating with the chart on the right is that the adoption and interest on Proxibid is very, very strong. 21% as of the end of March.
The key thing to keep in mind when you think about payments is that there are three phases to it. There's an onboarding phase, so getting them set up in Payrix and ready to go. There's an activation phase, which is where you get them to actually set up their auction and use it. There's a reuse phase, which is making sure they want to reuse it, making sure buyers want to reuse it. For us, one of the things we realized in the beta was that there were a couple of things that we needed to build to ensure that that first-time user experience was really good. What we had built, we actually delivered exactly what we thought we were going to build, which was exactly what LiveAuctioneers launched with.
In that beta, we found that the I&C customers needed a few more things. Our team is delivering those, and therefore, we're gonna be activating more of those customers in the 3rd quarter, meaning in the quarter that we're in right now, as opposed to activating them in the March period that we had expected to do. That is a 3-month delay, but it's a 3-month delay in a product that we think is a 5-10-year runway and huge impact for ATG. To ensure that we provided the best user experience from the get-go and created a real desire for reuse, that was the decision that we made. As we'll talk about in a little bit, it will not affect fiscal year 2024.
Beyond payments, we also saw really strong adoption in digital marketing, which is our other value-added service. As you can see on the left here, we saw increased number of auctioneers using it and an increase in the number of auctions on which our digital marketing was being used. One of the biggest reasons that we're doing that is that we created more assets that auctioneers could buy, particularly in high-performing areas. We enhance the reporting and analytics to help them see the ROI that they're getting on the investment that they place with us. We think that, again, there's a long way to go on this, but we're pleased with the adoption that we've seen to date. Next slide. EstateSales.NET. Again, we spoke about this back in February.
It's a really attractive bolt-on acquisition, the thing that we really like about it is that it's really attractive as a standalone business. If you look at the fact that they've delivered huge value, but they haven't ever really pushed the marketing that they sell, nor have they really looked at optimizing the pricing. In fact, they hadn't raised pricing in six years. We think those are some easy wins for that business. As Tom said, even without this, it's already performing ahead of our expectations, we're really pleased with that. Beyond its value as an independent business, what we're even more excited by are the synergies that it creates with the rest of ATG. One of the things I talked about before is how much sellers value us for the buyers we bring.
On the legacy ATG sites, we generate 180 million web sessions for the auctioneers per year. EstateSales.NET brings 96 million additional web sessions, and there's only 13% overlap of unique visitors between the ATG base and theirs. That's a really exciting group. As we build out that cross-listing capability, it means those buyers will see more assets, and the auctioneers will have millions more sessions coming in that we think, again, not only helps them drive higher asset values, but it facilitates the rest of our strategy as well, which is to move people towards time because they realize they can go all in with ATG and achieve the right number of bidders to get the right asset value.
As you can see on the far right side, it's a sizable market and one that we understand because like the auction industry, it's in the early days of moving from offline to online, and we know how to facilitate that transition. If you go to the next slide. What we focused on here is just three places where we are getting more involved in social and pushing our green credentials. I think it's something that is really important to recognize because it's not just window dressing for us. We know that people want unique and specialized items. We know that people are more and more conscious about buying sustainably. There are more and more items, in fact, that are being required to be built so that they can be reused.
We know that there will be more inventory coming to us, more THV, more GMV. That rising consciousness, we think, is going to play into the people's demand for more and more of these used and secondary items. It's going to be a core part of our value proposition and a core part of our brand going forward, and it's something that we're excited by. Just wanted to share a bit more about where you can see some of the things we're doing. The next slide is about our employee engagement, and I think a big part of ATG is we are trying to build a very engaged and collaborative culture, and it's a critical enabler of our success. Every company talks about how important its people are. I think this is something that we take really seriously.
We put a lot of time into it, whether it be employee engagement programs internally or how we're developing our people, how we talk. A big part also, though, is just about the culture that we're trying to create. The reason for that is I think in this post-COVID world, where people can work anywhere, that culture is going to be even more important as a way to retain employees and attract them because the pool that you're shopping from is bigger, but at the same time, their pool of options is also bigger. I think culture is gonna be playing an ever bigger role. It's also an important part to look at when you're thinking about the fact that people are either remote, you know, they're in a hybrid environment, or they may never if or rarely be seeing their colleagues.
What we've been putting a lot of time into is looking at ways that you can build connection between employees even when they never come into the office. I think that's why we highlighted these results because we're really pleased with how that's been panning out from our employee survey. Again, we use, not just a personal survey with tailored questions, you know, that would favor us. We use a global company that asks the same questions to something like 20,000 different businesses. These results are being benchmarked against those, and we know that we're far-faring very well. People I work with treat me with respect, 93%. People on my team collaborate and help each other at 93%. I enjoy working with the people on my team 95%.
The reason that we're really pleased with this is also one of the old adages that I've heard is that they say that people stay at a company because they like their colleagues, and they leave because they don't like their manager. At least on one of these, we feel like we're doing really well. I think we're doing pretty well on the other two. Now on to the key slide of guidance. I'm just gonna read this out for you. As expected, we have an improving rate of growth across the first half as well as at the start of the second half, and Tom took you through that. Auction markets have remained robust despite an uncertain macroeconomic backdrop.
The art and antique marketplaces, which were a big question mark, have seen positive GMV growth for the 3 months to the end of April. Therefore, we are reaffirming our guidance for organic revenue growth, although at the lower to mid end of the range, reflecting the timing of auction activations within ATGPay for Proxibid. Given the strong demand from Proxibid auctioneers on ATG so far, we do not expect there to be any negative impact to the revenue in fiscal year 2024. We're confident in delivering our full year fiscal year 2023 Adjusted EBITDA and Adjusted EPS in line with current market expectations. We're confident in achieving our medium-term targets of mid-teens%+ organic revenue growth and mid to high 40% Adjusted EBITDA margin. That's kind of the last slide.
Just as we wrap up here, I guess what I wanted to reiterate is that we feel really good about these first half results. We feel we've addressed those three big questions, and that we're seeing that very positive momentum that's accelerating as we begin Q3 now. We feel like we've lapped those tough COVID comparators that make forecasting difficult. The core business is very strong. We're able to augment that growth now with our payments product, which is rolling out and which, you know, we feel very good about based on that early response.
As I mentioned during the strategic section, you know, we feel like we're doing this while really creating value for the auctioneers who work with us and the consigners who depend on them, as well as for the bidders who are coming to us for unique and specialized items or for practical items or for whatever it may be. While all of this is going on, the fact that we are also able to improve our financial profile is a great result. I think, for me, you know, we talked about the people we've been hiring and the results of that, and I think as I look out, I'm very happy with the way that our team has performed in this period and how the new executives have performed in each of their roles.
As we look out to the next six months and year for ATG, I'm excited, and I think the whole team is about, how we can continue to transform, the auction industry. With that, we will stop and take, Q&A.
Thank you, sir. We will shortly begin the question and answer session. If you would like to ask a question, please press star and then one now. If you would like to remove yourself from the question queue, please press star and then two. Again, if you would like to ask a question, please press star and then one now. The first question we have is from Lara Simpson from J.P. Morgan. Please go ahead.
Yes, good morning, thank you for taking my questions. My first question is just on Take Rates. I think you've called out an improved rate for I&C in the second half of the year on both pricing and payments. It looks like there's quite good momentum on the ANA side. How do you see group Take Rates trending in the second half of the year, obviously taking into account mix effects, which I think should ease? Then interested more generally on how you're looking to drive these forward in 2024, and particularly at a time when payments are becoming a bit more relevant. Then I just wanted to come back to ESN, if I may. You've obviously said integration is on track and performance is ahead of expectations.
How is the business growing from an organic growth perspective or sort of standalone, maybe sort of for the last three months? I think you said previously it was growing around 9% pre-acquisition, so interested to hear how that's going, and any insight on demand trends I think would be helpful. Just to pick up on pricing, that's clearly been a focus for you in that business. Have you put through any headline price increases yet? If so, interested to hear if there have been any pushbacks on that, because clearly prices have not really moved in a long time. Thank you.
Sure. Tom, I think all of those are for you.
Yes. On, on Take Rate in the second half of the year, you're, I mean, you're quite right. The first half of the year Take Rate at an overall level hasn't been a driver of growth. It, it's really about GMV or BIT when you look at the segment level. Slightly different story, but we would expect it to start to be an important contributor to growth in the second half of the year. Implicit within our guidance, the second half of the year growth is a step up where we were in the first half of the year. I would assume that a significant part of that is due to improved Take Rates.
We don't guide specifically on Take Rate versus GMV, but I say there should be a step change in the contribution of Take Rate in the second half of the year. With regard to ESN growth, as you say, it was growing about a sort of high single digit. It's been above that in the last couple of months, so it's now growing in the teens. I wouldn't read too much into that because like all of our businesses, if you look at any narrow periods, you get movements in movements in the growth rate. Ultimately, as I said before, it's performing well and ahead of our expectations. Price increases that you talked about there are very much part of our plan on estate sales. That will happen in the last part of the year.
We're not really assuming a big contribution of that in this year. It will be more a feature of next year. Still, nothing we've seen to date has changed, our view on that opportunity. I think there was a question in the middle there that I might have missed. What? No?
No. I mean, I think it was just around the demand trends on ESN. I think you've just said, yeah.
Yeah.
High teens growth. That's fine. That's helpful. Thank you.
Okay.
Thank you. Thank you. Ladies and gentlemen, just a reminder, if you would like to ask a question, please press star and then one now. The next question we have is from Gareth Davies, from Numis. Please go ahead.
Hi. Morning, guys. A couple from me as well. The first one, in terms of the additional functionality on payments that I&C customers have asked for, I wonder if you can elaborate a little bit on what that was, what you've developed there, and is that going to be relevant also on the LiveAuctioneers side? Is it something you will kind of roll out there? Then sort of relating to that, in terms of activation of Proxibid customers, is it a sort of big bang event end of June into early July, or is there a sort of steady timeline of putting people onto activation. Then the second question, again, relating to payments is on estate sales. Is payments a relevant product there?
It sort of feels at face value, if it is, you can do it relatively efficiently and quickly, given that you've now got the LiveAuctioneers product and the Proxibid product. Interested in your thoughts around how relevant payments is for estate sales. Thank you.
I'll take those. First of all, in terms of the additional functionality, it was things like tax exemption. In the Industrial & Commercial space, you have more B2B buyers. As a result, they have tax-exempt status. In the current setup, they would have to submit that every single time that they bought an item, which would be burdensome for the auctioneer and for the buyer. Therefore, what we're doing is creating again, it's done, an automated way where when the person uploads it once, they don't have to repeat it. That's just, you know, creating a better buying experience. There are different categories that we had to create certain codes around for the payment provider that we needed to address.
The last one was just enhanced reporting on certain features. Those were really the 3 big things we looked at. As I said, you know, the team is delivering on that. In terms of your 2nd question, about the rollout, whether it's a big bang, it's ready, and then it's a case of getting the auctioneers. You know, we feel good about that just based on what we've seen in the LiveAuctioneers and the interest from the auctioneers of turning it on. There'll be a bit of a bump, yeah, imagine, say, in June, as we go forward. You know, it will be a gradual build after that.
Because it's one, getting the auctioneers, and then it's gradually getting buyers more and more familiar with the fact that this is the method by which auctioneers want them to pay. There'll be a build. There'll be a bump, then a build, and then as we continue to add auction houses, you know, we'd expect to see that continue to build. For payments on ESN, absolutely. You know, the way that we talk about it in terms of that single platform is we built payments as a shared service, which means that whether it be LiveAuctioneers initially and then BidSpotter and then our European marketplaces as well, clearly, as estate sales, you know, we'd hope that we can roll that out. Right now we are focused on Proxibid.
It's a massive opportunity just on Proxibid. You know, I wouldn't say you should expect, you know, in the next six, eight months to see anything on Estate Sales, but absolutely it's something that we will be able to integrate there, and that will be another big opportunity.
Just one quick follow-up. In terms of getting buyers comfortable, when you went through that experience on LiveAuctioneers, how straightforward is that? I mean, I suppose B2B buyers are gonna be ideally a little more sophisticated, so it could be more straightforward for Proxibid, but just be interested in sort of how quickly you could get people comfortable.
First of all, on LiveAuctioneers, often it's simply a payment method. If you can imagine every other website that you use, it's simply an integrated payment method, and the expectation is that a bidder will use it. Sometimes a bidder who, let's say, is familiar with the auction house may say, "No, I wanna pay you directly," and that's the only time that you'd expect people to be going around. Unless the auctioneer also happens to be offering another gateway on the side. What we expect, again, is that as auctioneers roll this out, early on, they may end up still offering somebody the ability to send a check in or do something like that.
Over time, it's just a case of seeing it on the website, realizing it works, realizing it's easier. Then for the auctioneers, the reason why we have a double benefit here is, for the auctioneers, one of the things. It usually takes them a minimum of two weeks to collect all the payments at the end of a given auction, sometimes considerably longer. When you implement best practice with our payment solution, which includes auto-pay, just as you see on eBay or other marketplaces, it just means that when you own the auction, your card that you have on file gets automatically debited. That increases the payment collection cycle, you know, by a huge amount of time, allows you to pay your consignor faster. There's big incentives for auctioneers to be pushing our solution as well.
Again, we think they will. You know, we'll give you an update in the next six months.
Fantastic. Thank you.
Thank you. The next question we have is from Bridie Barrett from Stifel. Please go ahead.
Thank you. It's Bridie from Stifel. Two questions, if that's all right. I'm just thinking about your chart on conversion rates, which showed that sort of nice upward trend. Are you able to just provide a little bit of context about how you benchmark against industry standard conversion rates or competitor marketplaces? That's the first question. The second question, I'm just thinking about the estate sale model, which, if my understanding is correct, it's quite a U.S. model, and there's obviously a lot to go for in the U.S. market. I'm just wondering how exportable that would be perhaps to other markets around Europe. Thank you.
I'll take the estate sales one first, and I'd say I don't think it's exportable right now. You never know what happens. In the U.S., you know, the estate sales market is really kind of the equivalent, it's a step above garage sales, but it's basically, you know, someone's died, and it's just people coming in, and often all the items at the house are put out and on display. You know, it's not the same level of thing that you see happening in the U.K. or Germany. I don't think it's something that's going to grow. In the U.S., it is a $5 billion market already.
That's the portion that's formally run. What we really believe is going to happen is that there is a lot more in the estate sales sector that can flow and grow that THV or that, you know, that TAM meaningfully, because, one, there are people who do it themselves, where if you do it professionally and run online, you're gonna get more value. Number 2, there's lots and lots of things that people just don't think of selling because they think nobody's going to want to buy it. We think as we demonstrate the value of secondary goods and through estate sales showing that can be really done easily at a local level, that there's, you know, $billions more that is up in people's attics and elsewhere that can be pulled out and put out to sale.
I think that there's a lot of room in that TAM. It just is unlikely to be international. In terms of your conversion rate comment, the way that we benchmark other competitors is really just by looking at auctions where we are and where they are, or just our overall share from discussions with auctioneers. That's one. In terms of benchmarking our conversion rate versus other marketplaces that are non-competitors out there, it's a pretty tricky one to do because the auction industry isn't like normal e-commerce. It's an industry that has, again, millions of unique SKUs. The 20 million plus items on our site, every single one is unique. There's different ways of buying. We don't really benchmark it against other e-commerce marketplaces today.
That being said, you know, we definitely see no reason why we shouldn't be at 50% plus conversion at some point in the next 4 to 5 years. I think we believe that that's possible. Payments will help it. The timed auctions that we're looking at will help it. Anybody who's bought on our sites will know it's functional, but it is not a smooth traditional e-commerce standard experience. Just raising buying to a basic e-commerce standard is going to be worth meaningful conversion rate points. We feel very good about our progress and our competitive positioning. In terms of benchmarking other marketplaces or competitors, it's, we know we're ahead of everybody in terms of conversion rate, but we don't do a formal benchmarking of that.
Wonderful. Thank you.
Thank you. The final question we have comes from Emily Johnson of Barclays. Please go ahead.
Morning. I've got a couple of questions. The first one is just on your net debt. Can you kind of run us through your position there? Where do you expect to finish the year at? How much headroom do you have on your covenants? Can you also run us through your liquidity, given the cash at the bank on your balance sheet has been restated downwards, excluding the employee trust? Just kind of running us through what your liquidity looks like. The second question is just checking, are there any more exceptionals to come in the second half, or have we got all of the ESN kind of one-offs in the first half numbers? The third question is, can you just run us through the FX benefit on Adjusted EBITDA in the first half, please? Thanks.
Sounds like they're all mine. In terms of net debt position at the end of the year, I think I said in the presentation, we would expect that leverage ratio to be below two by the time we get to the year. 1.8-ish wouldn't be a guess, but it would depend exactly how things land down from where we are at 2.3 now. In terms of liquidity, look, we have a cash balance, but we also have a drawn RCF. That RCF is $49 million, and basically we're keeping the cash balance as low as we possibly can so we can keep the drawdown on the RCF as low as we can to minimize our interest costs. I wouldn't read too much into what our cash balance is.
At the moment, if you look at that undrawn RCF plus the cash balance available, we have in excess of $30 million of liquidity. Sure it'll be familiar. As a business, we are day in, day out cash generative. We have no real need for liquidity. There aren't many peaks and flows, that's an extremely comfortable position for us to be in. In terms of covenant headroom, I won't give you the exact numbers, we have very significant covenant headroom against our debt. It's not really a significant issue in the business at all. With regard to exceptionals, most of the costs are in this time.
The one bit that will dribble through in terms of accounting, which is part of the acquisition, we agreed to make a $2 million payment to staff, which is contingent on them staying for a year. The way you do accounting for that, rather than being accounted for all up, all up front, sort of amortizes over the one-year period. We've got a bit of that in the first half of the year. There'll be some of that in the second half of the year too. That cash payment won't actually happen till next fiscal year, but we'll charge the P&L over this year. In terms of FX, remind me. The FX benefit, I forgot what the detail of the question was.
Just the FX benefit on Adjusted EBITDA in the first half.
Sorry, yes. As I said in the presentation, our cost base largely mirrors our revenue mix, it's not an unreasonable thing to assume that the benefit of FX in EBITDA is not dissimilar to the benefit in revenue. Does that make sense?
Thank you.
Thank you, sir. There are no further questions on the conference line. I will now hand it over to John-Paul Savant for closing remarks. Please go ahead, sir.
Okay. Well, thank you again for taking the time and listening in to these half-year results. As I said, you know, we're excited by where we are and what we've done in this period and having lapped COVID where we stand. Again, we're looking forward to speaking over these next weeks in a bit more detail in some of the one-on-one sessions. We're really excited by the next six months for ATG. Thanks again, and we'll talk soon. Bye.