Equipment Type

Ritchie Bros. Posts 11% Gain in Annual Sales

Ritchie Bros. Auctioneers announced 2011 auction revenues grew 11 percent to $396.1 million compared to $357.4 million for the same period in 2010.

February 28, 2012

Ritchie Bros. Auctioneers announced 2011 net earnings of $76.6 million and adjusted net earnings of $73.6 million. This compares to net earnings of $65.7 million and adjusted net earnings of $64.9 million for 2010, a 13-percent increase in adjusted net earnings. Auction revenues for 2011 grew 11 percent to $396.1 million compared to $357.4 million for the same period in 2010.

Ritchie Bros. gross auction revenues

For the year ended December 31, 2011, gross auction proceeds were $3.7 billion, up 13 percent over 2010 and the highest gross auction proceeds in the Company's history. The Company's auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 10.66 percent during the year ended December 31, 2011 compared to 10.90 percent in the year ended December 31, 2010. The Company's revised fee structure, which came into effect on July 1, 2011, contributed $21.9 million to auction revenues for 2011. The Company's at risk business, comprised of guarantee and purchase contracts, represented 36 percent of gross auction proceeds in 2011 (2010 - 24 percent).

The Company achieved gross auction proceeds of $1.0 billion for the fourth quarter of 2011, representing a 30 percent increase compared to the fourth quarter of 2010. Auction revenues were $113.4 million for the fourth quarter of 2011, compared to $88.3 million for the fourth quarter of 2010, an increase of 28 percent. The Company's auction revenue rate was 10.91 percent for the fourth quarter of 2011 and 11.06 percent for the fourth quarter of 2010. The Company's revised fee structure contributed $12.9 million to auction revenues during the most recent quarter.

Summary comments

"2011 was a successful year for Ritchie Bros. in the face of a challenging used equipment supply environment, and we achieved the targets that we set for the year" said Peter Blake, Ritchie Bros. CEO. "During 2011 we accomplished a number of significant milestones, including the highest gross auction proceeds and auction revenues in the Company's history and the successful launch of our new services, thanks to the tremendous team we have in place. 2011 was characterized by the ongoing tight supply of good quality late model used equipment, which resulted in a strong pricing environment and intense competition for this equipment. Our consignors reacted to this competition by increasing their preference for guarantee and purchase deals, contributing to an increase in our at risk business to 36% of gross auction proceeds for 2011".

Mr. Blake continued: "We have begun 2012 with a number of very successful auctions, and the strong pricing and competitive environments we saw in 2011 have so far continued into 2012. We remain confident in our ability to grow our business in 2012 and believe we are well positioned to capitalize on improving used equipment transaction velocity, which is driven in part by recent increases in the production of new equipment."

New Ritchie Bros. services

As previously announced, the Company launched a range of value-added services on July 1, 2011, including equipment financing and powertrain service warranties (in the U.S. and Canada) and insurance services (in Canada, the U.S. and Europe).

In addition, Ritchie Bros.' revised administrative fee structure took effect on July 1, 2011. The new fee structure eliminated certain fees and expanded the scope of the Company's administrative fee charged to buyers to address the cost of providing the new and significantly enhanced buyer services offered at Company auctions, as well as other high value buyer-focused initiatives launched in recent years.

Source: Ritchie Bros.

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