Ritchie Bros. Auctioneers' 2011 gross auction proceeds were $3.7 billion, 13% higher than in 2010 and the highest gross auction proceeds in the company's history. The company's auction revenues for 2011 grew 11% to $396.1 million on 228 unreserved industrial auctions in 13 countries throughout North America, Europe, the Middle East, Central America and Australia. (Dollar amounts in this release are presented in U.S. dollars.)
The company's auction revenue rate (auction revenues as a percentage of gross auction proceeds) was 10.66% during the year, down slightly from 10.90% in 2010. A 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% of gross auction proceeds in 2011 (in 2010 it was 24%).
Ritchie Bros. reported 2011 net earnings grew 17% to $76.6 million ($0.72 per diluted share) compared to 2010. Adjusted net earnings increased 13% to $73.6 million ($0.69 per diluted share).
The company achieved gross auction proceeds of $1.0 billion for the fourth quarter of 2011, representing a 30% increase compared to the fourth quarter of 2010. Auction revenues were $113.4 million for the fourth quarter, compared to $88.3 million for the Q4 2010, an increase of 28%. The company's auction revenue rate was 10.91% for the fourth quarter of 2011 and 11.06% for the fourth quarter of 2010. The revised fee structure contributed $12.9 million to auction revenues.
Ritchie Bros. posted a lower-than-expected Q4 2011 profit. The auctioneer attributed the shortfall to stiff competition and falling prices for used equipment as a result of a weak construction market.
"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," Blake continued. "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.
"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."
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 valuable buyer-focused initiatives launched in recent years.
The company declared a quarterly cash dividend of $0.1125 per common share payable on March 9, 2012 to shareholders of record on February 17, 2012. In 2011, the company paid approximately $46.2 million in regular cash dividends, a 7% increase over 2010.
Ritchie Bros. sold over $1.1 billion of equipment, trucks and other assets to online bidders during 2011, representing a 29% increase compared to 2010 and a record for the company. Internet bidders made up more than half of the total bidder registrations at Ritchie Bros. industrial auctions during 2011. Since launching its real-time online bidding service in 2002, the company has now sold over $5.3 billion worth of trucks, equipment, and other assets to online bidders, confirming Ritchie Bros.' position as the world's largest seller of used equipment and trucks to online buyers.
The Ritchie Bros. website (rbauction.com) attracted almost 4 million unique visitors in 2011, a 25% increase compared to last year, and they made over 10 million visits to the website, 25% more than in 2010. Visits from non-English speakers increased by 22% compared to 2010.
The launch of the company's detailed equipment information program on July 1, 2011 has increased time-on-site significantly. Website users are spending on average 29% more time on the company's website than before the launch of detailed equipment information. Additionally, the company launched a mobile version of rbauction.com in November 2011 to facilitate easier mobile internet usage for customers.