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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
Welcome, and thank you for joining us on ATG's Second Annual Earnings Call. We're really excited to share with you ATG's results for fiscal year '22. And in short, we had a great year. We met expectations despite the macroeconomic backdrop and we maintained our margins while increasing investment in the business, both in technology and people. We diversified our business as well with new revenue streams. And in short, we believe that we exited the year in a much stronger position than we exited the last year. So with that, we believe we will also have a very solid fiscal year '23.
So if you go to the next slide, as a reminder for people who maybe knew, what does ATG do. At the most basic level, we connect auction houses from around the world with bidders from around the world. And in so doing, we are unlocking the value of the curated secondary goods market. What do we do for auction houses? We make small companies big and big companies more effective. And for bidders, we connect them to fantastic, unique and specialized inventory.
So specifically for auction houses, what do we do? We give them technology that they couldn't afford to invest in themselves. We bring them bidders from around the world, and we create cost efficiencies. And the reason for that is the vast majority of the auction houses we work with are small and medium-sized businesses. There are some very large ones, but the vast majority of the 3,800 auction houses we work with are small and medium-sized businesses. And therefore, what we provide them is unique and very hard for them to obtain themselves.
And for bidders, what we do? We provide them selection, trust and convenience. And so these are things, selection, millions and millions of unique and specialized items, trust because when you're buying online, you already have 1 level of, let's say, distressed or concern relative to buying in person. But then when you're buying a secondary used item -- the level of concern goes up dramatically. And so in our world, it's curated secondary goods sold by expert auctioneers and that reduces the mistrust significantly.
And finally, there's a convenience where for bidders who historically may have attended an auction, and they would have to drive to the country and spend 2 or 3 days potentially waiting to bid on 1 or a handful of lots. On our site, they can bid on dozens or even hundreds of auctions in any given day, all from the convenience of their home. So with this, we are creating real value for both sides, and it's something that's worked very well and creates that virtuous circle as we bring more bidders, we attract more auction houses. As we attract more auction houses and more inventory, we bring more bidders, and that allows that virtuous circle to kick in, which allows us to acquire new bidders very cost effectively.
If you go to the next slide. By doing what we do, it's something that some people don't think about a lot, but which is very important to us. We also are very much promoting the circular economy and accelerating that economy at a scale that many companies cannot match. And the reason for that is that when people are buying a secondhand item, it means it's 1 less item new that needs to be made each year. And so for us, we had a third-party consulting firm that specializes in looking at CO2 emissions, look at what we help facilitate and sell, facilitate the sale of. And in fiscal year '22, among the top 15 most popular items sold in our marketplaces, we saved approximately 3 million tons of CO2 emissions versus if someone had bought those same line items new.
And just to give you, again, a sense for that, every 1 million tons of CO2 emissions saved is the equivalent of approximately 50 million mature trees or the carbon capture of 50 million mature trees not small saplings, but actual mature trees. So this year, we believe that ATG helped in the sense that we contributed to approximately 150 million trees worth of carbon capture. And so you see the study on the right that where it shows that the 44% of respondents are more likely to buy a secondhand than they were 3 years ago. 47% of these respondent to site being more aware of the impact of sustainable buying and 42% of respondents still don't realize that secondhand is greener than buying new. So there's a huge role for ATG to play in spreading the word about the sustainable impact of buying secondhand and specifically buying at auction.
If you go to the next slide. So this is 1 that I'm sure everybody is most keen on. We feel we concluded a fantastic year. And as you can see, that's despite the macroeconomic backdrop. So in the year, we expanded our THV to GBP 10.1 billion, which is 22% up over the year, year-over-year. And again, THV is the value of all items listed on our marketplaces by the auctioneers who work with us.
We maintained our conversion rate at 33% and -- and the reason why that's so important is that often when you grow THV as fast as we're growing it, you can see conversion rate actually decline a little bit because new segments we enter or new auction houses, we'll often have a slightly lower conversion rate for a period of time before they build momentum in the marketplace. The fact that we're able to retain our marketplaces flat, conversion rate, while growing 22% is a huge achievement. And that resulted in our GMV growing 20% year-over-year to $3.3 billion. Part of the way that we are able to retain -- grow our revenues this year as well as by retaining the take rate at 3.3%. And a key part of that has been the rollout of our value-added services. And we'll talk a little bit more about that later. But the key -- the component of that is payments and digital marketing, which are also coming out.
Double-digit revenue growth for the year brought us to almost GBP 120 million of revenue, which is 11% up on a pro forma basis, and our adjusted EBITDA is now GBP 54 million, which is 70% up. So results like these are great to achieve. But when companies move through those different stages, sorry, can you go back to the previous slide. But when companies move through different stages of growth, something I really wanted to call out here, is the big question that often comes up is whether a team can scale to the new opportunity, whether you're going from a private to a public company or from a small public company to a medium-sized one.
And so when you achieve the results that we had this year with that economic backdrop and the confusion that was there for many companies, I think it's a real credit to the team, both the executive team and ATG, but also to all of our 375 employees and the contractors who work with us because to achieve these results required everybody adapting and growing in this past year. And I think it's a real mark of success for the business that we were able to grow our business and have our team scale as they did that.
If you go to the next slide. So our numbers how we reflect during the year, but a lot of what we did as well was to position ourselves for sustained growth into the future, and I know that's what you care about most. So one of the things we will go through here are some of the highlights from that.
So first of all, we delivered growth across all divisions. And that's against very challenging comparisons and the economic environment that we are in. So again, we talked last year about the fact that we delivered growth on growth coming out of COVID and now coming out of COVID yet again, even further distance from it, we were able to deliver growth on growth in all divisions yet again.
Key here is that we added new growth levers as well through the successful rollout of payments and digital marketing, which now accounts for 16% of our revenue. And so again, historically, we've been a business that relied mostly on fixed fees, which the auction nears pay us to list on our marketplaces, and the commissions that we take from the transactions. We've now added 2 significant growth levers in payments and digital marketing, and they're 16% to date, but can grow to a significantly larger amount of our overall revenue in the next year and 2 years.
Specifically, what I also wanted to call out with that is that payments we had talked about last year when we bought LiveAuctioneers, our plan had been to roll payments out in January of 2023. And I'm pleased to say that in addition to integrating LiveAuctioneers and doing everything else we've done this year, we actually have rolled out payments 2 months earlier than planned.
So we began rolling it out in November. And as of now, we have 49 auction houses who have signed contracts with us to use the payments. We have 16 auction houses who've actually used it and transacted in an auction. We processed about $1.2 million with payments now. And if you took just the auctioneers who have signed with us so far, and you kind of ramp that up and assume that they did the same number of auctions this year as last year and roughly the same volume. That represents about $300,000 to $400,000 of revenue on a run rate basis by the end of the year. And so again, very early days, only a handful of auction houses so far, but we're excited by the result, and we'll begin rolling this out more aggressively in the new year.
The third point I have here is, we increased the diversification of our business significantly by bringing on LiveAuctioneers. And that brings our revenue to be 50% Arts and Antiques and 50% industrial and commercial, but equally critical, particularly in the current environment, is that we are now over 80% of our revenues in U.S. dollars.
The fourth point, we enhanced our end-to-end experience, and I'll show you a few pictures of that coming up by upgrading the auctioneer and lot content. We improved our taxonomy, which results in better findability within Google algorithms and we improved our search functionality to help people find what they're looking for more easily in the site. And we were to do this a while, and I think this is something we were very proud of was maintaining our margins at the 45% level.
And we took the excess performance that we have this year and basically invested it into high-quality talent, bringing on new executives, new people, particularly in technology and in specialist roles, which we think is really important because in a year when many companies are either cutting back or letting those stuff, we're still investing. And I think this is going to set us even further apart from the competition in the months and years to come.
And then finally, we were able to do this and really drive real value and impact for both sides of our marketplace. So we generated over 172 million bidding sessions for auction houses this year, and we sold 7 million lots out of approximately 20 million lots that were listed with us, and we drove asset prices well and provided great selection to bidders.
So now I'm going to turn it over to Tom, and he will take you through some of the financials.
Good morning, everybody, right. So here are some of the headlines, John-Paul has already given you a couple of them. So our revenue for last year FY '22 was GBP 119.8 million on a pro forma constant currency basis, that's 11% year-over-year growth. Adjusted EBITDA of GBP 54 million, that's 70% growth year-on-year, and that's flat margins in FY '21 of 45%. Our adjusted diluted EPS of GBP 29.5 up to 121% year-over-year. Now adjusted free cash flow of GBP 49.9 million as 93% of our adjusted EBITDA. And then finally, our adjusted net debt at the end of the year was GBP 129 million on an FX adjusted basis, that's a leverage of 2.2x. . We move over. Just to give you a sort of idea of how revenues evolve from last year. So last year, we reported revenue of GBP 70.1 million. We acquired LiveAuctioneers on the first of October 2021. So there's a full year contribution of LiveAuctioneers our FY '22 numbers but none in FY '21. So to create a pro forma prior year set of numbers, we bring in over GBP 30 million of LiveAuctioneers revenue from FY '22. And for FX, John-Paul already said, we get 80% of our revenue in U.S. dollars. The average dollar-sterling rate in FY '21 was $1.37 to the pound. The rate in FY '22 has been $1.27. So a 7% strengthening of the dollar, which boosted our revenue adjustment to GBP 6 million there. That creates a prior year constant currency pro forma revenue number of just shy of GBP 108 million. We had organic revenue growth of GBP 12 million year-over-year, taking us to GBP 119.8 million to 11% growth year-over-year. That growth has come across all segments and all product lines, but a particular notice the increasing contribution from VAS, which we'll come to in a moment.
So here some of our marketplace KPIs. On the top left-hand corner, you can see our GMV and say all the numbers for FY '21 have been interested to include LiveAuctioneers for the full year, so more comparable. So our GMV increased 20% year-over-year constant currency to GBP 3.3 billion. That growth has been achieved on what was already an exceptional year in the prior year, you see there a growth rate of 48% year-on-year. So we've achieved that growth despite the fact we had some very strong comparatives in the prior year.
Look at what's driving that? Because at the far right-hand side, you can see our THV GBP 10.1 billion, up 22% year-over-year. That growth has come across the board from both new auctioneers that we've added from new verticals, particularly real estate in I&C. But also the lion's share of growth has come from our core auctioneers and our core verticals, which also have seen strong growth in THV.
Conversion rate flat at 33% year-over-year and take rate slightly down 3.5% to 3.3%. 3 factors behind that. This is a slight mix effect. A&A, I&C has grown faster GMV than A&A, I&C has a below average take rate which drags the overall group average down a bit. We also have the impact of some of those new verticals, particularly real estate, which has a below average take rate, but they're not partially offsetting that is the benefit of that, which boost the take rate. But overall, 3.3% and when you multiply those through together, you can see our marketplace revenues of GBP 108 million, up 11% year-over-year on a constant currency basis.
Move to the next slide. So we've shown this before, just how a half yearly numbers have evolved over the last 3 years in particular you see how we've moved into COVID, the numbers changed. Now we've moved down COVID, you can see where we settle that -- so in GMV on the top right, our half year to GMV was GBP 1.6 billion. We've seen how that's steadily grown over the last 3 years -- 3 years ago in the first half of the year was GBP 0.7 billion, very similar shape. THV growth was GBP 5.2 billion in the second half of FY '22. Again, that number was around GBP 3 billion, 3 years ago. And unsurprisingly, market place revenue on the bottom left, has followed a similar pattern to GBP 56 million in the second half of the year from GBP 52 million in the first half of the year, going all the way back 3 years ago or a bit GBP 31 million in half year FY '20.
Move to the next page. The chart on the left-hand side shows our mix of revenue by product line or work from top to bottom, it's a content 3% of our revenue. And you've got auction services of auction services, the revenue would get from our white label products and our back-office product, and then other marketplace as the revenue we get from hosting auctions on behalf of auctioneers. We take these 2 together in a good as 22% of our revenue. Those 2 revenue streams have very similar characteristics, largely subscription fee based, not transactional, very sticky revenue lines, a lot of recurring revenue in nature. Both of those revenue lines have grown well over the course of the last year, in line with total revenue growth about 11%, hence the constant share in our overall mix.
And then you see value-added services has grown from 12% to 16% of our mix. That's where the auctioneer marketing program is and payments, both of those revenue lines have grown strongly. In aggregate, that growth has been 40% year-over-year revenue contribution from those 2 product lines, predominantly in A&A, as John-Paul just said, as the launch of payments kicks in, I&C that will accelerate growth into FY '23.
And then you see commission there, we split it out between A&A and I&C for the first time, not previously shown that number, but in aggregate, 60% of our revenue, slightly down from last year. Commission has grown, it's just not growing at quite the same pace, particularly as VAS reducing the overall show in the mix. And you can see there, particularly with the growth of VAS, you get an increasing diversification of our revenue mix, which underpins the overall resilience we have in our revenue model.
On the right-hand side, you can see our revenue by geography, as we've already said, 82% of our revenue comes from North America. That's got from last year because the U.S. business has been growing faster than our European businesses. We moved over the page again. Slide to get into some segmental detail. So you can see on the left-hand side, I&C, THV, GBP 5.7 billion, up 28% year-over-year, 8 percentage points of that growth has come from new verticals, particularly real estate. But if you strip out that still the growth in our core verticals has been very strong at 20% year-over-year.
If you compare that to the wider market growth for used equipment of about 5 percentage points, you can see with outperform the market. That market growth has been a function of 2 factors, firstly, we've got your reduced volumes. The supply chain issues have reduced the volume of assets that have been coming from resale being offset by strong price inflation. That price inflation was concentrated in the first part of the year, the second part of the year, price inflation is lower.
We haven't seen prices go backwards, but they're not increasing the same rate as the first half of the year. And we've seen the overall same macro trends in our numbers, the difference between us and the overall market is the volume drop-off wasn't as large for us as it has been in the overall market. That strong THV growth has been accompanied by conversion rate being maintained at 45%, which has meant that GMV has grown in line with THV to GBP 2.6 billion year-over-year as to GBP 2.6 billion. Take rate down a little bit by 0.3 percentage points to 2%, and that's the effect of real estate coming through, which carries a lower take rate than the average. But then when you move by that altogether, you get marketplace revenue for I&C 52.7%, 13% growth year-over-year.
Arts and Antiques. Going back to the top, GBP 4.3 billion of THV, again, strong growth in THV in Arts and Antiques plus 15% year-over-year. About 2/3 of that growth, 10 percentage points has come from new auctioneers we've added over the last couple of years. Those auctioneers have had a profile slightly different to a typical Arts and Antiques auctioneers they've included bottoms due to a couple of large international auctioneers. Those auction houses carry a below-average conversion rate, probably about 1/3 of the average conversion rate we see on the rest of the estate. If you look at our like-for-like core auctioneer community in Arts and Antiques, that THV growth year-over-year has been about 5%, so lower than the headline growth rate. And that growth was concentrated in the first half of the year. THV growth for those core auctioneers options in the second half of the year has been stable. Conversion rate down 3% to 16%, 2 factors there.
Firstly, you've got the contribution of those new auction houses with a below average conversion rate. But also if you look at the like-for-like sort of core auctioneers and also characterize that as midsized U.S. domestical or U.K. domestical auction houses, over the first half of FY '22, we did see some normalization in the conversion rate as that sort of world we opened. That's been relatively stable in the second half of the year. We seem to have settled just a level of conversion on those auction houses that's sort of midway between pre-COVID levels and the peak levels that achieved at the height of COVID.
And so overall, when you take those together, GMV, a small decline in A&A of 5%. But then when you see below the take rate has increased by 1.2 percentage points to 8% predominantly due to the growth of VAS that's what we've been talked about out auctioneer marketing programs and payments, particularly in LiveAuctioneers, which was launched in 2021 has more than offset that reduction in GMV, such that A&A in revenues grew 10% year-over-year.
See the table on the right-hand side, you can see how that fits into the segmental performance fits into the overall revenue picture. You've got total marketplace revenue of 108, roughly 50-50 Arts and Antiques, and Industrial & Commercial grew 11%, Auction Services grew 9% year-over-year. That's increased adoption of white labels a number of auction houses signed up the white label products. And then content, slight growth of 3% above the sort of historic norm just as advertising levels have returned post COVID to normal levels. Going forward, we expect that content to resume its normal path of mild decline going forward.
Move to the next page is our total P&L. If you look at the table on the right, I see our revenue at the top GBP 19.8 million, 11% pro forma growth. 2 lines down, you can see our gross profit GBP 79.7 million, that's a margin of 67%, and that compares to 65% in the prior year. That is the natural operating leverage that we have in the business showing through, partially offset by payments. So payments is nicely profitable, but does carry a lower margin than the rest of the business, but still gross margins increased from 67% to 65%, but if you look down to the bottom of the page, adjusted EBITDA of GBP 54 million. That's adjusted EBITDA margin of 45%, flat on prior year. The reason that is flat, it's because of the investments that John-Paul has already talked about, particularly in strengthening the senior leadership team and the technology and product groups, also some impact from the full year effect of TLC costs coming through there.
Look, our net finance costs, just up there, you can see GBP 7.5 million charge in the year. We took a $204 million loan now to finance the acquisition of LiveAuctioneers, that loan attracts interest based on U.S. LIBOR. So as U.S. LIBOR has gone up over the course of the year. Our finance costs have been growing. We've all seen the full year effect of that next year and also if interest rates continue to increase, which they will do that will also have an effect. Just move to the bottom, the adjusted diluted EPS of 29.5p versus 9.2p last year, it's growth of 221%. And the final comment to say here, we have no exceptional costs in FY '22 is quite a bit of activity in '21 with the cost of the IPO and the cost of LiveAuctioneers acquisition, but a very clean year in FY '22.
If we move to the next page, about cash flow. So we had EBITDA of GBP 54 million, a small working capital inflow of GBP 400,000 and then CapEx of GBP 4.9 million coming our free cash flow of GBP 49.9 million. On our CapEx, that level of spend is about equal to the aggregates of the pre-acquisition LiveAuctioneers and the preacquisition ATG Group figure. So it's fairly flat year-on-year. We were expecting that to go up in FY '22 as we saw to incur spend on the signal technology platform.
And as it turned out because we're in the relatively early stages of that project. It wasn't appropriate to capitalize that spend. So it hasn't impacted CapEx in FY '22. However, as we now move into FY 2023, that spend will start to impact our CapEx level. We expect for the next couple of years when that project is going on CapEx to be roughly double the normal run rate for that 2-year period.
And look, interest and tax, we paid GBP 17 million across those 2 categories, GBP 5 million of payments that related to the LA acquisition, those are payments that were triggered on completion. Completion happened on the 1st of October. So whilst all the accounting happen last year, the actual cash outflow until FY '22. And then we had other movement there is poly FX gains on our dollar cash holdings at the end of the year, we had around over GBP 50 million of cash on the balance sheet. We've chosen early in October to use $44 million of that to repay the senior term facility or some of the senior term facility early, which has reduced the borrowing from GBP 204 million to about GBP 160 million, we will continue to pay -- make payments on that loan as they forge you over the course of FY '23.
And with that, I will hand back to John-Paul.
Okay. Great. So we'll look now at the strategic update and where we're headed. So next slide. This is a slide that I've said you'll probably always see from us and the reason for that is I think it sums up very cleanly the number of growth levers we have, and it allows us to group the different initiatives that we have in a way that I think is quite easy to understand.
And the other reason I like putting this 1 in here is because it really shows you the compound impact of the different things we do because if you move even 2 of these, the benefit is more than just their individual benefit. And so in some years, you have 1 of these levers making more of a difference than another. And in the past, we've pulled all of these different levers.
In this year, the 2 that I really wanted to highlight were the investments we made in value-added services, which Tom talked about, and then the investments we made over the course of this year that will pay benefits, we believe, in the coming year, around conversion rate. So if you go specifically around the take rate, the big investments, as you've heard us say, a few times payments and digital marketing, and then on the conversion rate side, it's around the integrated bidding widget, combined with some of the conversion rate optimization things that we've invested in.
So if you go to the next slide, there's a little bit more detail on that. So we talked about the fact that we invested to improve our product and to expand our team. And there are a few highlights that I'll look at right here. So first of all, in the top left there, we developed an integrated bidding solution to make it easier to cross list. One of the biggest opportunities we believe we have is enabling an auctioneer to use us, whether they're on the white label and they want to have our marketplace. This widget now allows them to run auctions on both of those simultaneously, which creates cost efficiencies and gives them a really good reason if they're going to have a white label, which most auctioneers don't want, but if they do want one, it allows them to pick our white label because there's real operational advantages to them when they do that.
The bottom left one, we facilitated the shift to timed auction. So again, we're doing this with a combination of that integrated bidding widget, which will make it easier for auctioneers to adopt that, but also through better ROI reports and basically, those ROI reports and educating our sales teams on how to sell the time to auction capability more effectively.
On the top right, we improved the bidder experience, including upgrading auctioneer lot content. We improved the taxonomy and the better search functionality. And I mentioned that a little bit before. But 1 of the key things we did around the taxonomy is it's things that you won't actually see initially, but it's behind the scenes. But what it makes it easier to do is for Google's search algorithms to find the lots that we're selling and to make sure that they get more prominence in the Google search results, and then within our own search tool on the site, 1 of the key things we did was to add auction alerts, which again just makes it that much easier for people to sign up and get the lots that they wanted presented to them as quickly as possible.
And then finally, as we've mentioned, we expanded and strengthened the ATG team at the leadership level and across key specialist roles, we added a group Chief Technology Officer. We added technology executives underneath him with deep experience. We added a Chief Product Officer. We added a Chief People Officer, and the combination of those things, we believe, are really critical because as you take a company like ours that's grown and acquired, you want to see that team adding depth all the time so that you can continue to execute and continue to grow and do what we've done well in these past few years. And I think the fact that we're able to invest even amidst everything that's gone on this year while delivering the results we have is something we're really proud of.
Go to the next slide. We talked a little bit about value-added services, and we talked about payments, which I'll look at next. But the auctioneer marketing program is something that we wanted to really call attention to. So what is it, first of all, this is where auctioneers pay us to market to the group, the global bidder base that we have. And the key reason why this is exciting for us is that if you look at some of the benchmarks that are out there, like an Etsy, the Etsy equivalent of GMV, they monetize at 3.8%, meaning they make 3.8% revenue off of that GMV. ATG is below 0.5% today. So just a fraction of Etsy.
Now maybe we'll never reach 3.8%, but we know we can be doing a lot more with that than we historically have. So there's a real effort being focused on that. And the reason why we're very confident around it is that, number one, live auctioneers has already done it and done it quite well. And number two, on proxy goods specifically, when we do have options that are supported by paid marketing by auctioneers on our site, it results in a 72% increase in registered bidders and a 38% increase in winning bidders. So we know it makes a difference, and we're very confident we can sell it.
The second part is that we've upgraded the on-site advertising as well. So by adding SEO rich content to make it easier and more discoverable by Google, rotating banner space, which Auctioneers pay for to get their lots highlighted, new features and then at the bottom, new ad units and the way that our marketing team did that was to look at the highest performing ad units, the ones that delivered the biggest result to the auctioneers and we basically created more of that inventory.
And then on the right-hand side, what we just launched, just in October is the new marketing feature, which we believe will drive adoption. Again, we're behind the curve on this, but SMS, many of you would have expected that to be there already. It is on LiveAuctioneers, but now it's launching gradually onto the rest of ATG. And again, why we're so excited by this is that 30% of registered bidders who don't appear say that they forgot to bid. And so with SMS, we believe that we can drive more bidders and more engagement and hopefully, again, drive more online conversion.
So if you go to the next slide. On to payments. So payments is something we've talked about. And what I'm most excited about, as I said, is that this is something where if we get this right, payments can actually be bigger than all of ATG is today. And so it's an exciting thing to be able to launch into. But when you buy a business like we bought LiveAuctioneers last year, part of the reason we bought them, we said this for expansion into the North American market, part of it is for a diversification of our revenue. But the other part of it was to accelerate our entry of payments into the industrial and commercial market of North America and then into Europe. And we believe that by buying LiveAuctioneers we accelerated our entry by about 2 years.
The big question, of course, becomes when you think you're going to do that is whether you really can do it. And so we communicated to you that we were going to be launching payments in January of 2023, and we thought that was quite ambitious to be able to do all the work that needed to be done in that year. But in fact, we launched it 2 months earlier. And as I mentioned, we now have roughly 2/3 we've signed on for our payments contract. We have 16 who've actually done auctions using payments, and we processed about $1.2 million of payment revenue so far.
And what's exciting about our payment solution versus many others that are out there is that, first of all, most payment solutions and maybe other will be a simple gateway. This is not just a -- 1 of the big concerns for auctioneers is whether they are able to comply with interstate commerce laws and taxes. And this payment solution actually handles all of that for them so that they never have to worry about getting hit with a late tax bill and something that they didn't understand the rules for. The other big thing is key with this is that it greatly accelerates the payment cycle for auction houses when implemented in a best practice way. And so getting payment quickly to auction houses means they can pay their consignors faster. When you pay consignors faster, then they come back to you again because those consignors want the money fast.
So those are just 2 of the differences as to our payment solution versus others, and it's something that we believe is going to result in solid adoption over the course of the year. The other thing that's exciting is that the advantage we have of having 7 marketplaces is that we can launch different things on individual marketplaces, which creates lower risk. And then we can see how that penetrates and extrapolate on that for how we can do it to another marketplace.
And so while we would be ecstatic if we have solve the adoption of payments on Proxibid that we've seen on live auctioneers, we don't know whether that will happen, but there's some really good indications that it can be a good solid adoption. So today, LiveAuctioneers, as you see, has roughly 75% of the auction volume that they have is processed with their payments and the amount that they sell their GTV, it's about 42% today. So 75% of the auction houses, and then 42% of their GTV is using their payment solution after just roughly 20 months of a product launch, which we think is pretty exceptional. And we're excited by the fact that, again, if we get even a fraction of that onto the Proxibid side, it would be a big win.
So move to the next slide. So one of the things you saw in Tom's part of the presentation was the increased investment that we're putting into our single platform. And so the key reason we're doing that is, you can see, is today, we have 3 platforms. We have the Gap platform, which has 5 of our marketplaces, then we have Proxibid, and LiveAuctioneers, and the goal is to move everything onto a single platform. And the key reason for that is that it will enable greater innovation, more efficient build, lower maintenance cost. But the key thing is around the faster pace of innovation and the fact that we can roll out 1 shared service and it benefits all the different marketplaces faster than when you have 3 stacks.
The great thing, I think, about the way that we're able to do it is that we don't have to ask you to believe that we're going to invest this money. And then in 3 years, we flip a switch and everything works perfectly. It's more that we've broken the different components of our site into what we did see as commercializable chunks so that each piece will move over and then that will become a shared service. So for instance, payments is the big first one. We have payments. It's useful by all the different marketplaces. That's 1 big component. This year, we're working on shipping with the goal of rolling it out in LiveAuctioneers, early in 2023.
It's been in test mode so far, and we hope that by May, we'll have some early results for you. But again, that will just be the beginning of the ramping. We also have investment going into a common back office so that again, all the future investment that, that back office provides will benefit all the marketplace simultaneously. So we're happy with our architecture and our plan, and we're happy that we'll be able to show you each and every year commercial benefit from each component that goes over. So I think that's it.
Move on to the next slide. So on this horizon slide, we talked previously about the fact that we have 3 horizons. You have the foundation of an aggregator marketplace. You have then the enhancement of the end-to-end experience and then you have the expansion and transformational elements. And so the thing that's exciting, I think, for us is that keeping in mind we are not just seeking to build a profitable growth business. We are trying to build a company that's transforming the entire global auction industry, and that's an industry that has huge benefits for the world in terms of the planet lease, but it also is the shared success model. So we're trying to do it in a different company than many transformational efforts have taken place in the past.
And so what we're really doing is a reminder is we're enabling every auctioneer small, medium or large to compete with the behemoths that are out there. And we think that is going to have real value. And what's great is that we can do it in these 3 different horizons. But the first horizon, it's not that you ever completely complete your foundation because with the foundation, it's about building the critical mass on the inventory side and on the bidder side that allows you to create that flywheel effect.
But the reason why I say you're never completely done with the foundation. It's not just that we're investing in that single platform. It's also because every acquisition we make strengthens that foundation and makes it even harder for someone to beat us because we get more inventory, we get more bidders and because of the technology that we're investing in, we allow those people to cross-list and cross bid strengthens that foundation for ATG and allows us to get, we believe, again, even bigger and more able to transform the industry.
But then we also have the end-to-end experience elements, which I'll walk you through. So all the well trodden path that you've seen every other marketplace out there do, adding payments, adding shipping, improving the image quality, improving the cookie trail that bidders follow the registration experience, the way that they can use their identity. So many different things that we can do there. And 90% of it having been done by other companies before. So we're not asking you to believe that we're doing something like reinventing the wheel. It's simply getting out there and doing that well-trodden path of experience development that drives increased conversion.
And then you have the expansion opportunities, which is what we see as expanding into that auction ecosystem. So everything that surrounds an auction is where we believe we can influence and add value. And that's everything from financing, insurance, restoration repair. And then looking at that dynamic marketplace where you can actually start to be proactive and as opposed to just being reactive in getting bidders to list with auctioneers through our site based on all the information we have around what's been sold and what could be sold. So again, a really exciting path for us. And we think we are just in the early stages of our growth still.
Next slide. So this is a question that we get asked a lot. And we think in the past, we probably didn't do a very good job of explaining the different layers of our addressable market. And so you will be able to tell us whether we've done a better job this time. If you take a look at the right-hand side of the page, just for the industrial, I'll just focus on 1 for now in the interest of time. The estimate is roughly GBP 64 billion in the North American and U.K. used equipment market. When you then come down to the next level, which is the core I&C market in which we operate, it's about GBP 41 billion. Now we operate in probably a little bit in every segment of the GBP 64 billion, but what focus is in these the segments that generate GBP 41 billion.
You go down another level and when you say, well, there are 3 different ways you can sell those -- that core GBP 41 billion it can either be through private treaty through dealers or through auction. And we focus, as you know, on the section, which is sold at auction. But again, what's great about this is that this core segment at auction is growing. And the reason for that is we believe that it provides much more transparency to the seller on the fact that they've achieved the maximum price possible.
In the old world, when options were very local, you can see where a seller may trust a dealer or a private treaty person who come along and say, "I know if you're selling your beverage plant, I know exactly the 5 people in the world who want to buy it this year". But in the Internet, we can bring thousands of bidders or at least hundreds for, let's say, a beverage plant. And I think more and more consignors are recognizing that that's the best way to sell their assets because more eyeballs is much more likely to result in a good high asset price than just going to an expert who says that they know the right people or a handful of people. And so what that brings us to is then the THV, which is the amount that of the amount sold at auction of that GBP 13 billion, the roughly GBP 6 billion is the amount that gets listed by the auction houses who work with us.
And then ATG GMV of GBP 2.6 billion is the amount that we actually sell of the GBP 5.7 billion. And so what you can see, whether you look at the I&C side or the A&A side, is that for ATG, the reason we get so excited about our growth is that even if we didn't sign up 1 more auction house, and we never raised our take rate again. We can more than double the business just by growing our online share with the exact same volume that we have today. But the reality is that our auctioneers are growing. So the THV is growing. And the fact is that the I&C segment, the auction market is growing, and we're signing on new auction houses. And on top of that, we are taking additional share, but then with the introduction of value-added services, we're also growing our take rate. But without that take rate costing the auctioneers any more money. So it's a huge opportunity and 1 that we think we're executing against well so far.
If you go to the next slide. So I'll go through this fairly quickly. I think the key message on this slide, which I think we've heard enough is just despite that macroeconomic backdrop, what's very unique about ATG is that unlike many companies, the levers of growth for us to sustain our growth are within our control. And whether that be investing in that well-trodden path and simply shifting share, expanding payments beyond LiveAuctioneers to our industrial side. We're taking the digital marketing and ramping that. All of those are well within our control to execute against, and that's what gives us a lot of confidence as we head into this new year.
Go to the next slide. So I guess this is after the financial results for '22, probably the most interesting slide for everybody. So in our second year as a PLC, I think the team at ATG is very pleased by the results we delivered and that we are stronger for the future. We remain very confident in our ability to lead the transformation of this industry. And in the medium term, we remain confident in achieving our target of mid-teens plus revenue growth in mid- to high 40s adjusted EBITDA margin as value-added services ramp alongside those core levers that we've already demonstrated we can grow. For fiscal year '23, we remain confident in our growth levers. And as I said, those are within our control. So we will be executing against those steadily. ATG has a blend of revenue, as we said before, which should provide protection and upside opportunities across both our divisions.
You can see what we say here about I&C and A&A. One of the things that I think though, is 1 of the easiest ways to look at ATG is when -- if you have 2 columns, I&C and A&A. And on the left-hand side, you see that we have 4 growth levers for each 1 of those. You have fixed fees, commission revenue payments and now digital marketing. And so when you look across that, that essentially creates 8 revenue levers for the business when you look at the 2 divisions. And the fixed fee revenue that we have, which is the amount the auctioneers paid a list in our system, the subscription revenue, you can look at that and realize that's only going up. If you look at the digital marketing and how low our penetration is relative to other marketplaces. Those 2 lines should only be going up.
And then you look at the launch of payments, which is new. That should only be going up. And then finally, just come to our commission revenue. And whatever your view is on the pro cyclicality or counter cyclicality of our business for COVID, again, we have confidence that both of those numbers are also going up. But what you can see is that you're able to look at the 37% of our revenue that comes from the I&C commission or the 22% that comes from the A&A, and that helps you isolate whatever areas of question mark you may have. But I think there's other 6 areas are indisputable going up.
And again, we have a lot of confidence that the 2 commission lines will also continue to be rising. So as we said, trading in the first 2 months of fiscal year '23 has remained broadly in line with performance in second half of '22. And for '23, we expect high single-digit to low double-digit constant currency revenue growth. with a higher rate of growth in the second half of the year. And the reason for that is while we're launching our value-added services, specifically payments and the big effort around digital marketing, on the industrial side this year. We expect that, that will take a while to ramp. And again, in light of the fact that there is a recession happening we're just being cautious around the fact that it could take auctioneers years a little bit longer to make that decision to pull the trigger to move to some of our new services. And that's why we have it ramping more in the back half of the year.
So we expect broadly flat adjusted EBITDA margin, reflecting ongoing investments to support the business. And again, we believe that, that is going to deliver a very solid year. So there's a bit more detail in the appendix, which you can look at afterwards, around everything from interest rates and other things, a number of shares outstanding, but we won't go through that right now.
So on to my last slide. Again, same slide as last year because I think the situation really has not changed. We have demonstrated strong performance. We believe we've demonstrated the resilience and attractiveness of our model in fairly difficult situations for the macroeconomic -- macro economy. We have a very compelling investment case we believe. And the key things I would step back and look at is does anyone believe that in the future, there will be more auctions happening offline? Or does the future hold more promise for the online move, more people bidding in the room and on the phone or are they going to be bidding online? And if you say, well, maybe there'll be some more white label adoption, we have the best white label in the market, and we have the ability to cross list on our marketplace. So we think if there is any white label adoption, that will be coming our way.
The second part is that if you look out and see that landscape, is there anybody that has better competitive positioning than us, we believe the answer is no. But we're always out there looking to see ways that we can strengthen that competitive positioning further. We think what we've added now is that we've diversified our revenue, both in terms of geography in terms of industry. And now in terms of growth levers by adding payments and digital marketing as legitimate levers 16% of our revenue this year, and we believe it can be more going into the future.
We have 6 proven growth drivers that we've pulled multiple times over these last 3 years, and we believe we can pull them into the future. And we think that we've had the right team to execute, but we've strengthened that team while delivering our results. So we're very confident in this coming year of improving our execution even over what we've done so far.
So in conclusion, ATG is exiting stronger than we were before and excited about this coming year, and we hope you agree. I think now we're going to pause and go to any Q&A that you may have for me or for Tom.
[Operator Instructions] We'll take our first question from Gareth Davies from Numis.
First question from me is around THV growth on the A&A side of the business. Can you split that into U.K. and U.S. in terms of sort of current run rate you'll see in THV growth and what the kind of puts and calls are as we look into '23 when we're thinking about modeling out for that THV growth? And then relating to that, we saw a conversion rate come down a little bit. Can you give a little color around that? And what kind of elements of self-help there are to see that move back up as we look forward?
And then the second question great that Proxibid launched early in terms of the rollout. Just to be clear, that payments functionality is the whole focus is going to be on proxy bid this year, and we should think of international A&A as a sort of 24 type project. Just wondered if you can update on that time line and similarly around digital marketing, when should we expect that to sort of roll into the broader operation beyond U.S.
So Tom, do you want to do the first THV.
I'll talk to the first bit. So A&A and THV, as I said before, if you look at our core auctioneers where we generate the majority of our revenue over the course of last year, their THV grew 5% in the second half year. It was flat. I'd say at the moment, we're still seeing that, and I don't think there's a great difference between the U.S. and the U.K. in any 1 month, there's be some bouncing around of that number, say can't read too much into any 1 particular months of activity, but broadly the 2 are behaving the same. And I say at the moment, they're flat.
With regard to conversion rates in A&A, I think as we said before, the key driver there, the underlying driver there is in that normalization that occurred across the first half of last year, just as the world we opened and most auction has reopened their rooms versus where they've been in FY '21. That has been relatively stable across the second half of the year. So as we go into next year, I'd expect in the first half of the year, that will also be stable.
And then it should move back to its normal path of reasonably steady growth as online continues to gain traction, but there will be a period where we're in the first half of the year where we're lapping some of those higher conversion rates that we saw in the first half of the year was it normalized down across the first half of '22.
Yes. And I think the second part of your question, Gareth, was around what are the things that we can do to help grow that conversion rate. And I think there are several things. So one, you see us launching SMS, which again, alerts people to the fact that they've registered for an auction and therefore, are better able to remember to bid, and that should grow it. There are basic things like the search results that I talked about. So the taxonomy changes and category and subcategory changes we're making to make it easier for Google algorithm to search our site should result again in more bidders finding the lots there for sale and then bidding through us, which drive further.
And then we have the work that we're doing on CRM. So 1.5 years ago, we implemented the recommendation engine. We're still getting better and better at using that, but our marketing team, I think leveraging that CRM capability to present lots that are more relevant can drive it. And finally, 1 of our biggest channels for driving new growth is around people who sign up for auction alerts, and we are creating more opportunities for people to create an auction alert at different points in the site.
So those are just a handful of the things that we can do, but there are dozens and dozens of things that we can do to drive conversion, and we will be focusing on a select number of those over the course of the year. But again, we believe that we will definitely be able to drive that conversion further. In terms of Proxibid, yes, you're right. You should count on Proxibid as being the focus for payments for this year and then international launch of payments, we would hope would be in 2024. But again, if the revenue is in North America for payments for LiveAuctioneers and the industrial side, we'll be making a decision along the way as to whether it makes more sense to internationalize or whether it makes more sense to create additional features or functionality that can enhance the revenue and penetration of payments in North America. So I won't commit to 2024 as payments in Europe, but that likely would be the plan.
Our second question comes from James Lockyer from Peel Hunt.
Firstly, on the take rate and VAS. So A&A has always been higher than I&C. And so if we assume those differences remain, as I&C takes on more levels of VAS over time, let's imagine to get to the same level that A&A are today in terms of VAS pickup. What might the I&C take rate be on that basis? And then I guess a subsection on A&A. Not every -- 8% was -- what was listed, but now everyone's taking VAS yet for those auctioneers that are taking both, can we talk about their average take rate.
And then just on the second question, just around the new features. So -- and then there's sort of implications on conversion. The SMS, which you mentioned 30% Proxibid. How might that translate to increased conversion rates we were to look at it that way. And then similarly, on the Proxibid 38% more winning bidders, how should we think about that as an increase in commercial rate?
So in terms of the take rate growing, I'm not sure we're going to be able to answer all the questions you had at the end there. But in terms of the first one, the take rate for I&C, if you look at our commission take rate on the I&C side, it's a little below and then you have with the fixed fees, it's a little bit above that. But when you add payments, I think the way that we view it is you can -- depending on the percentage of adoption, payments could add up to 2% of additional take rate but at lower margin. I think we should have kind of quoted 20% to 25%.
And then you have the digital marketing, which, again, not instantly or in this first year, but over, let's say, the next several years, we believe we can get that up to potentially 1%. And then you have the other value-added services we're adding and that could be anywhere from 50 basis points to, let's say, another percent. So over time, that's where we could see it moving. But we're not saying that it's going to get there in the next 12 to 24 months. In terms of Tom, do you want to comment any more on that?
Yes. I was going to say that, the 1 thing you could say the differential on commission rates between the 2 segments is about 3%. If you look at the moment, the take rate between I&C and A&A differs by 6%. So there is a differential there essentially because of VAS, predominantly because of VAS between the 2 of about 3%, which is sort of the gap that you could -- might expect to be made up. That's where it is adopted.
And in terms of the -- you asked about the new features rolling out like SMS and the 38% more likely to be, et cetera. I don't think we're able to give you a specific answer around how that translates exactly because, first of all, it's rolling out in 1 marketplace initially. We're going to see how that goes and then it will gradually expand. But we -- I don't think we've modeled it on a specific -- we launched this feature in conversion growth by a specific amount. But Tom, if I'm wrong on that, chime in.
No. That's correct. I think 1 of your questions was what's the difference in take rate when someone who does adopt a VAS. So perhaps a way of thinking about that is the VAS take rate might be about 3% overall, particularly with payments when someone adopts payments, about 75% of their transactions go through payments. So there's about 2%, 2.5% step-up in take rate for auctioneers that have adopted VAS versus those that haven't.
Yes. Tom, but I think he was asking about the conversion rate impact of some of the new features, but I think we don't...
So it's hard to say at the moment, what that is. And so James, I'm not sure if there was another question in there that we haven't answered.
No, no, those 2 are fine. I want to separate those from just my third question. Just if you could talk a bit about route recruitment and how that's gone and whether you're up to your run rate where you need to be your FY '23 plan?
So recruitment is something that we're definitely focused on. And I think what we're excited about in this year -- so are we fully staffed now. You always have some open headcount. I think we have maybe 30 or something right now in the business out of our 375, and then we have contractors as well. But around the recruiting, I think, we feel very good about recruiting that we've been able to do this year. If you look, we've added as we talked about, our Chief Technology Officer, President of Industrial and Commercial, we've added the Chief Product Officer, we've added people below them. And so we think we've done a really good job of recruiting good senior leaders this year. We've also brought in a lot of new technology and product people, which, again, that's gone very well.
And I think what we're looking to do is enhance that even further because when you look out into the future, the way that we talk about with our HR department and with the leaders is there's a typical amount of churn in the business, plus we're growing, which means we're going to have to be recruiting 50 to 100 people a year. How do you create a machine that can actually do that effectively. But the reason why, again, we're excited by the year is, you see the big tech companies laying people off, we're growing.
We think we have a unique value proposition for people out there where -- you can go to a venture capital back start-up. We have maybe a 1 in 20% chance or 1 in 20 chance of even surviving and maybe a 1-in-100 chance of hitting it big or you could join a big tech company, but where you may be put in a box and has to do something very specific for a long time, and I wonder about the impact that you personally have or you can come to a mid-cap tech company that's public and where you can see it growing, has a massive TAM, great competitive position, you get equity.
And to me, if I were somebody out there, I'd be thinking this is the exact place I'd want to be in my career because you can make an impact you're part of a profitable company that clearly is winning and where you can actually do well as well because you're going to get some equity. So we feel very confident in our ability to get out there and recruit. I like doing it. I like convincing people to come and join ATG because I think it's a fantastic opportunity. And I think the rest of our executives feel the same way. So yes, we're going to be out there recruiting. And yes, we feel like we have a great chance to hit the goals we have for the people we want to bring in. Does that answer your question?
Yes. No, that's perfect. Thanks guys.
Our next question comes from Otto Sieber from Barclays.
Otto speaking from Barclays. I have a few I'd like to take them 1 by 1 if that's possible. First is, I'm cognizant that a recession is happening and you mentioned that you are very, as you kind of reflected this more cautious take-up in the payment in Proxibid, in your guidance? Because obviously, it might pull the trigger a little bit later because of the uncertainty. How did you think about the macroeconomic impact on the GMV growth, more specifically guiding for say 10% revenue growth at the midpoint for next year, how much of that comes from GMV growth and how much of that comes from the take rate.
I'll let you take that one.
Yes, the 10% midpoint, probably 2/3 would say, come from GMV growth, 1/3 from take rates. As you rightly pointed out, that macro environment is interesting at the moment. We've talked many times before about the split in our business, the A&A side probably is more exposed or pro cyclical, but the I&C segment is more countercyclical. We get quite a lot of inventory from recessions. So overall, we're reasonably confident that as we go into an uncertain macroeconomic times, we should weather it well. But we're also mindful of the fact that we do need a degree of caution. And so we haven't been -- we haven't -- overall, we don't think the contribution to GMV growth next year. I think there's potential for upside from that if particularly I&C does see the benefit of perhaps more insolvencies coming through as the year progresses.
All right. That's very helpful. Is 6% or 7% out of those 10x are coming from GMV growth. I presume there's a very small contribution only on shipping or payment and Proxibid in your guidance that's helpful. Further on the take rate. Currently, 42% of GTV is under payment in LiveAuctioneers, where do you see a more mature level? And how high do you think could that go?
Well, I think the question is over what time period because we believe that at some point, we will be covering all of the THV of the auction houses who work with us because as we continue to develop our payment solution, there's no reason that if an auctioneer is choosing to use us for its GMV that they shouldn't at some point, choose to use us for their THV. But we just need to prove that we're worth thinking and that it's the most effective and efficient solution. And so that's why I say that if we get payments right, it could be bigger than all of ATG.
And so I'm not saying we're going to do that in the next 2 years, but when you look out, say, 3 to 5 years, I'd say on LiveAuctioneers, I hope we would be, let's say, somewhere between 75% and 90% and on the industrial side, maybe we're getting up to 50% or 60% by that point. So again, these are all what we would aspire to. But I don't see any reason why, over time, we should not be covering all of the THV that goes through ATG.
Final question on capital allocation. How do you think about the use of cash in and '23 and '24. You mentioned M&A as 1 potential lever of growth. Would you prioritize that or rather paying down debt as you've done most recently? And maybe 1 quick follow-up. Any thoughts on the execution on the LiveAuctioneers or the performance of the LiveAuctioneers assets since the acquisition take rate improvement has been very strong and the payments growth has been very strong, but also any color on the GMV dynamic will be brought up?
So Tom over to you.
I'll take the first one. In terms of capital allocation. So we have paid down debt use some of our service cash. I should say we still have an RCF of nearly $50 million, and we also have the ability to recover the cash we've early repaid by not making future payments on the debt. So we haven't actually lost the debt capacity. The reason for repayment debt early is simply because we had such a large surplus cash and we're paying increasingly high interest rates. It just made no sense to keep that cash sitting around. We don't believe that curtails our ability to do M&A very much remains an option for us as and when opportunities come up. If it's a small acquisition. So in the low tens of millions, then we would have the capacity to that on our balance sheet. If it was anything bigger than that, clearly, we'd probably have to look for an equity raise, but those will be decided as and when opportunities crystallize.
And what was your other question?
Yes. Sorry for the compound questions. The other question was just any color on the performance of the LiveAuctioneers as you said the acquisition. What are you happy about what are you not telling about and where you think you -- the performance has not been as strong as expected, basically?
So I think Tom referred to that a little bit already. I don't know, Tom, if you want to repeat that around the mix of the auction houses, et cetera.
Yes. So I mean the A&A commentary we gave earlier is very analogous very close to LiveAuctioneers commentary. So LiveAuctioneers, say, performing in line with our expectations from when we acquired the business, but that is a mix of strong fast growth offsetting some of the impact of normalization of post-COVID conversion rates amongst the auctioneer base. But overall, it's pretty much in line with where we thought it was going to be at this stage in its life cycle.
The following question comes from Lara Simpson from JPMorgan.
I just wanted to come back to the outlook for 2023 and the guide for broadly flat EBITDA margin, which I understand is driven by the continued investments to support growth. And my first question just if you could talk a bit more a bump in nature of these investments, and you've mentioned the tech platform leadership investments, but I think a bit more insight on the spend would be helpful and sort of any key costs that you can call out there. And then my second question is on the outlook period and really how we should think about the phasing of these investments into 2024, and particularly in the context of sort of your midterm margin target of mid- to high 40s and just the road map towards that?
So in terms of where the investment is going, it's going predominantly into technology and product. And again, into the leadership and the layers beneath the CTO that we brought in. And so that's the vast majority of it. And some in the other areas, we've talked about the fact that we brought in a President of the Industrial and Commercial group, so that's an expensive hire, and there are some people coming in underneath him as well. And so those are the primary areas that we are. And then obviously, we have some of the investment in the platform in the future as well, but that falls into that technology bucket, and some of that hits differently and doesn't impact our margins directly. But Tom, do you want to talk any more about that?
Yes. I should also add, most of the margin impact that you see in FY '23 is actually the full year effect of things that we've done in FY '22. So particularly, those seen leadership roles, you can only hire those role wants. And so as you get into FY '24, there won't be the equivalent drag going forward. It's very much a one-off effect.
Apparently our final question comes from Bharath Nagaraj from Berenberg.
I have 3. I'll go one by one, if that's all right. Correct me if I'm wrong here, but the I&C is mainly countercyclical because in a downturn, you would get higher volumes. But given that you are not yet offering payments and other value-added services materially so in I&C, what gives you the confidence in the counter cyclicality at this point in time? I do appreciate it's going to grow up over the year. Just wanted to get your thoughts on that.
So I think we feel good about it for several reasons. So first of all, when you look at the fact that we -- when you say the counter cyclicality, I guess, what I'm interpreting that is what gives us confidence that we're going to continue to grow in that area. And so I look at it in 2 different ways. So one, you look at the time to adoption mix and the fact that we have about 50% of our auctions now on the I&C side that are timed. And so when we have that, we get higher conversion, and therefore, that helps us grow.
If you then look at the fact that auctions again are becoming a more transparent way to sell, I think particularly in an uncertain market, if you're a consignor, you're going to be likely to consign those assets to auction, which is the most transparent way to get full price. Then you also look at the fact that in a recessionary environment. There are a lot more insolvencies, and the U.S. has been at an 8-year low of insolvencies, and we've still been growing. So if the recession kicks in and government supports that were there during COVID continue to disappear, you'd expect to see more insolvencies appearing and that would then drive the counter cyclicality of what we do. So those are 3 of the big components.
And then the other part here is that, I think what Tom talked about is even amidst all the uncertainty that's going on, the asset prices that have grown during COVID have remained very high. They're not increasing at the same rate, but they're still remaining high. And as we bring more bidders and as the supply chain shortages remain because even in a recession, there's no sign that chip shortages are disappearing. There are so many different factors that are going into both our ability to control through bidder acquisition and the other factors, convincing auctioneers to put assets on to keep our volumes up, bidders who are keeping the prices high and then the other external factors also giving us a lot of tailwind there. So regardless of what we can do with value-added services, which we feel really good about. Those are, I think, the key elements that are going into why we feel confident around continuing to grow and be countercyclical regardless of the recession.
I don't know, Tom, if you want to add to that?
Yes. I'll just say if you look at the behavior of the used equipment market, industrial and commercial used equipment market through the last recession, I mean it was countercyclical, it grew it in times of recession. And I think key point to that is the auction market is very important for insolvencies. That's the way assets that solve when they're being realized to insolvency goes through auction, it tends not to go through other routes, which is why you get a disproportionate benefit in the auction market.
Sure. But sorry, but just to follow up on that, like you're right. Currently, the supply chain is helping the prices remain elevated. And when you get higher volumes because of insolvencies in a recessionary environment, it's certainly good. But going forward, the price may not stay elevated, and that was kind of like the basis of my question. Volumes may still remain high, but the prices might kind of dip down. I know you're not seeing that yet, but over the course of next year. And given that you're not yet significantly penetrated in value-added services, you could potentially have lower revenues than you expected?
Yes. So I just said generally, volumes and prices move in tandem. So it is possible that prices go down. I mean that's -- we can't discount that we haven't seen but could do. But that should be and historically been the case, that will be accompanied by an increase in volume of assets. So overall, net revenues are unaffected by that some net difference. And typically, that net difference has been positive. But it's a bit -- you can't look in isolation, it's the prices and the volumes because both of those are correlated to negatively correlated to each other.
All right. The second question I have is on A&A growth, which was helped along by value-added services, as you've said, which is growing significantly year-on-year. Can you speak about the pricing and volume-related movements affecting the growth in H2 and maybe going into next year as well.
Do you want to take that, Tom.
Yes. So the volume-related effects were -- as I described earlier. So -- we saw over the course of the first half sort of the impact of the opening up of sell rooms again and the sort of normalization of conversion rates. That's relatively stable in the second half of the year. So month-on-month, quarter-on-quarter, that's been stable. But if you compare second half of the year to the first half of the year where we were prior year, that stable rate would be lower. If you look at THV growth, underlying activity was growing in the first half of the year, it was stable in the second half of the year. But overall growth rates in GMV were lower in the second half of the year -- in first half of the year in A&A.
In terms of pricing, I mean, core underlying pricing is unchanged. The thing that's changing is the adoption of VAS and that increased as we move through the year, just as more and more people adopting you build on that base, and we'd expect that to continue as we go forward.
Sure. Sorry. On the pricing, I meant more the pricing of the assets rather than your commission take rate?
Yes. So sorry, I get you. So the pricing as we haven't seen the same fluctuations as we've seen in I&C I mean the THV movements are a good indication of that. So the pricing has been relatively stable in A&A in line with THV.
And in terms of your guidance for next year, what kind of pricing and volume declines are you incorporating for both A&A and I&C? I'm talking about assets again, sorry, just to clarify.
Yes. So we don't -- because of that sort of correlation between the 2 numbers, we don't make explicit assumptions about pricing and volume effect because the 2 largely work in tandem against each other. So as I said before, about 2/3 of that growth is going to come from GMV. It could be that prices are softer and volumes are higher in there. Similarly, it could be that prices hold up and volumes aren't quite so high. But overall, the level of GMV, we'd predict is not necessarily directly impacted by that.
Okay, clear. Just if I can squeeze in 1 last small one. The 50 auction houses that you mentioned, which have signed up for payments, are that the ones including LiveAuctioneers as well? Or is that just from the stand-alone ATG?
That's just on the Proxibid side. So LiveAuctioneers has roughly 75% of their 1200 auctioneers signed up to it. And then we have on the Proxibid side, just those first 50.
There are no further questions on the conference line. I will now hand over to John-Paul Savant for closing remarks.
Okay. Well, thank you again for coming to this earnings announcement, and we're looking forward to speaking with many of you in the one-on-one meetings coming up. But overall, as I said, we're really pleased with our fiscal year '22 results. And what we're excited about as we head into fiscal year '23 is that we feel that regardless of the macroeconomic backdrop we have levers under our control to drive value-added services, drive and payments, drive digital marketing and to grow that GMV through conversion rate improvements with all the different things that we're doing this year that are going to play out in the coming year.
So Tom, and on top of that, as I think Tom alluded to, we still have some firepower for selective M&A, and we still remain active on that front as well, and we think there's multiple interesting opportunities. So thank you for your time today, and we're looking forward to 2023. Thank you.