Aston Martin confirms its intention to go public
Gaydon's prospective IPO has been long in the making, and comes off the back of record profits
The prospect of Aston Martin going public has been a point of discussion for some time, but the manufacturer has now firmly set the ball rolling by filing a registration document with the Financial Conduct Authority - the prerequisite first step for any company considering an initial public offering.
Why now? Well, it certainly helps that last year the firm made its first profit since 2010, and expects to do even better this year (driven, in part, by sales of special edition models like the Vanquish Zagato and DB4 GT Continuation cars, according to the announcement). Aston can also justly claim to have its immediate future on a solid footing: its new plant in St Athan will open next year, and from it will emerge the Porsche Cayenne-rivalling DBX - widely expected to further boost sales in the medium term.
The launch of an SUV was at the cornerstone of Andy Palmer's plans for the brand when he took over as CEO in 2014. Flotation was probably high among his list of objectives, too - especially after Ferrari showed how splendidly it could work for a prestige car maker a year later. The IPO could see Aston valued at £5bn off the back of its expanded lineup and future prospects.
Why go public at all? The standard reason: money. Emerging from its reputation as a perennial loss-maker is all well and good, but Aston still requires significant cash flow to continue investment in its three-pillar product strategy - the famous Second Century Plan. The IPO would see a free float of at least 25 per cent of its shares, most from the Kuwaiti and Italian private equity groups that are the firm's majority owners.
Should it be valued in line with Aston's expectations, the company ought to find itself listed on the FTSE 100. Daimler will retain its 5 per cent stake. "We've got a very solid balance sheet now, very solid results. As we move into the third phase, which is the portfolio expansion, it also means we've got plenty of runway in front of us," Palmer explained to Reuters.
With a prospectus due to be published on September 20th, and pending a final decision, the manufacturer will hope to complete its flotation before the end of the year - handily ahead of Brexit. That's not a major hurdle for Aston, claims Palmer (only 25 per cent of its cars are sold in the EU) but provides further evidence nonetheless that the timing is nigh on perfect for Gaydon.
Profits last half year were £20.8M, only rising very slowly from £20.1M, so no great growth story.
The new range has not been that well received ( just look at the price drop on secondhand DB11's and/or Vantage reviews )
They are pinning a lot of their hopes on the DBX but the competition here has increased massively, with Bentley, Lamborghini, RR and soon Ferrari coming into the field.
They suffer from dis-economies of scale compared to all of the above.
And this is probably as good a time as ever to sell luxury cars - if you can't make money now, you never will ( and let's face it, their sales and nearly the company collapsed in 2008 )
Good luck to them....
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