AML - NEW UK SALES
Discussion
Bamford and Martin subsequently Aston Martin, have been making sports cars for 108 years.
We know some of the ups and downs, there are mentions of going bust seven times, but delving into the history reveals more than seven financial crises.
Appointed CEO in 2014, Andy Palmer announced his Second Century Plan in 2015. It was intended to be a way of ending the long sequence of boom and bust. Although successfully steering the company to a valuation in October 2018 of £4.3 billion (Ford sold the business in 2007 for £479 million) the plan was abruptly abandoned after the company almost ran out of cash late in 2019. The rescuer following those circumstances, was the Lawrence Stroll consortium. Will Mr Stroll become a successful saviour of Aston Martin?
It has been suggested on this topic, that comparing recent AML sales numbers with those of 15 years ago tells us nothing and has no relevance, because there are now so many more sports cars available from rival manufacturers.
Competition has become much tougher, so certainly this aspect must be making the sports car business more difficult for Aston Martin.
The Historical Profits table shows figures from year 2000. Losses have again been incurred since the Ford era ended, but it should be noted, that Ford were reimbursing Aston Martin's development costs during their period of ownership, so the reported profits at that time might be considered generous.
HISTORICAL PROFITS
| Year | Pre-tax Profit | Notes | ||
|---|---|---|---|---|
| 2000 | £7.5m | |||
| 2001 | £7.6m | |||
| 2002 | £2.9m | |||
| 2003 | £12.5m | |||
| 2004 | loss £8.5m | |||
| 2005 | £23.3m | |||
| 2006 | £57.0m | |||
| 2007 | £6.5m | Ford sells Aston Martin | ||
| 2008 | £8.7m | |||
| 2009 | £6.9m | |||
| 2010 | £6.9m | |||
| 2011 | loss £33.1m | |||
| 2012 | loss £34.1m | |||
| 2013 | loss £25.4m | |||
| 2014 | loss £71.8m | |||
| 2015 | loss £128.0m | |||
| 2016 | loss £162.8m | |||
| 2017 | £86.7m | Year before the Stock Market flotation | ||
| 2018 | loss £68.2m | |||
| 2019 | loss £104.3m | |||
| 2020 | loss £466.0m | |||
| 2021 |
The operating expenses have been steadily increasing, one example being employees costs.
| Year | Number of Employees | Total Cars Sold | Number of Cars per Employee | Notes | ||||
|---|---|---|---|---|---|---|---|---|
| 2008 | 1,415 | 7,281 | 5.15 | Historic production record | ||||
| 2019 | 2,450 | 5,862 | 2.39 |
Presumably the AML sales volume now needs to be higher than those in the VH era, if sports car manufacturing is to be profitable.
If you agree with that logic, then a comparison of the core models between the two periods, might have some relevance.
The comparison also appears to emphasise just how crucial the DBX is to AMLs future, a new model authorised by Andy Palmer..
Frustratingly the more detailed worldwide (wholesale) figures have only been available from AML since their flotation (split by categories and not models) so to make the comparison, we have to make do with new registrations UK only.
CORE GT MODEL COMPARISON (UK only)
| Production Year | Year | DB9 | DB11 | Year | Notes | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| 1 | 2004 | 330 | 109 | 2016 (part) | ||||||
| 2 | 2005 | 1255 | 496 | 2017 | ||||||
| 3 | 2006 | 790 | 594 | 2018 | ||||||
| 4 | 2007 | 844 | 528 | 2019 | ||||||
| 5 | 2008 | 567 | 260 | 2020 | 2020 - COVID-19 pandemic | |||||
| 6 | 2009 | 200 | 2009 - world financial crisis | |||||||
| 7 | 2010 | 175 | ||||||||
| 8 | 2011 | 101 | ||||||||
| 9 | 2012 | 67 | ||||||||
| 10 | 2013 | 139 |
CORE SPORTS MODEL COMPARISON (UK only)
| Production Year | Year | Vantage | Vantage | Year | Notes | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| (Gaydon gen 1) | (Gaydon gen 2) | |||||||||
| 1 | 2005 (part) | 170 | 329 | 2018 (part) | ||||||
| 2 | 2006 | 1500 | 704 | 2019 | Nov & Dec 2019 subsidised PCP marketing | |||||
| 3 | 2007 | 1187 | 161 | 2020 | 2020 - COVID-19 pandemic | |||||
| 4 | 2008 | 829 | 2021 | |||||||
| 5 | 2009 | 640 | 2009 - world financial crisis | |||||||
| 6 | 2010 | 420 | ||||||||
| 7 | 2011 | 355 | ||||||||
| 8 | 2012 | 395 | ||||||||
| 9 | 2013 | 356 | ||||||||
| 10 | 2014 | 385 |
Data sources:-
Historical profits; Companies House.
Model numbers; DVLA new vehicle registrations quarterly data.
Sales and Employees; AML.
Interesting numbers Jon. Only one word of caution; AML have a history of using contract labour that is effectively "off books" (for example, the whole manufacturing logistics operation is outsourced to the likes of DHL), plus they used to have an incredibly high percentage of contractors in the engineering departments (with the associated risks of retention and knowledge loss) before AP joined as the previous management under Bez liked to make the operations look more manpower efficient.
Not saying this is unusual in the modern automotive world (it isn't) but it skews the numbers, especially as the contractor percentages and outsourcing change. On the other hand, Aston still has a labour-intensive trimshop (even though the percentage of JIT/JIS trim items has increased on the post VH models) whereas other manufacturers have outsourced that as well, making their assembly operations just screwdriver plants assembling large modules made by Tier 1's
Not saying this is unusual in the modern automotive world (it isn't) but it skews the numbers, especially as the contractor percentages and outsourcing change. On the other hand, Aston still has a labour-intensive trimshop (even though the percentage of JIT/JIS trim items has increased on the post VH models) whereas other manufacturers have outsourced that as well, making their assembly operations just screwdriver plants assembling large modules made by Tier 1's
AML are in a rough spot at the moment. Even if they start making money per sold car, generating free cash flow to pay off/down their debt makes this look like a business on a life support machine. I have long predicted that L. Stroll (if interested to save the business) will make a deeply discounted rights issue to shore up the balance sheet and take out all the minority investors as it is unlikely that he would want them to come along for the ride is he puts more money into AML.
Jon39 said:
Presumably the AML sales volume now needs to be higher than those in the VH era, if sports car manufacturing is to be profitable.
If you agree with that logic, then a comparison of the core models between the two periods, might have some relevance.
The comparison also appears to emphasise just how crucial the DBX is to AMLs future, a new model authorised by Andy Palmer..
All things considered, the reorganization of the business means there's no longer the pressure to sell as many cars. It's heading in the right direction, but that wont be enough for those for whom Project Horizon was expected to apply a course correction and fix everything overnight. I don't believe the work Moers and his team have done to make sure the underpinnings of the business are sound, gets the credit it deserves - perhaps because enthusiasts are only interested in what the cars look like. But to get the business in good health, takes more than 'just' restyling a front end and centre console of a car.
Perhaps this is the first time that comparisons to 2007 are seen as an apples vs pears comparison and not really relevant, but to be blunt - between all the sarcasm and facetious comments, we all know how much joy some individuals find in painting as bad a picture of AML as possible (be it the state of the company, the attire and tailoring of the chairman, or the development of the Valkyrie).
As the other thread showed, DBX is proving to be a good bread winner in regard to total number sold, despite the somewhat unscientific method of PH being to view the success of a new model solely based on how many you physically eyeball. They might never be a common sight on UK roads, but it doesn't mean the model is failing.
AP's always been seen as the villain on this forum, and the idea of the DBX was shunned, the St Athan facility was shunned, and folk were overjoyed when he was dismissed. More recently, there's been the misogynistic comments regarding the appointment of Natalie Massenet - I wasn't surprised, because it's what I'd expect from this forum, but it was still disappointing to read. Who's next on the witch hunt list?
It's shame it's like this, but it's unlikely to change.
I think you are being slightly unfair. AMLs demise is 100% of its own making. Settling the company with debt to embark on an overoptimistic growth plan whilst fleecing off thousands of independent shareholders (employees amongst them) in the process has no place in corporate Britain and for that alone the (selling) shareholders, (past) management and their advisers deserve the mistrust of the buying public. The negative comments on here are just reflecting this.
I think there is a middle ground:
The dbx appears to have been the saviour - if covid hadn't happened along with brexit would AP reaped the rewards?
MB aren't stupid - for opening the kimono to AM helps them sell more end of life petrol engines, and helps spread the cost of the newer hybrid and BEV - and I am sure they took those 6000 units rather than Tesla or BYC taking them.
The current lineup have certainly won new customers over - just not as many as predicted, and probably fewer existing have traded than were expected.
The listing price was met by demand - thats the cold hard truth - nobody forced anyone to buy the stock…….
The dbx appears to have been the saviour - if covid hadn't happened along with brexit would AP reaped the rewards?
MB aren't stupid - for opening the kimono to AM helps them sell more end of life petrol engines, and helps spread the cost of the newer hybrid and BEV - and I am sure they took those 6000 units rather than Tesla or BYC taking them.
The current lineup have certainly won new customers over - just not as many as predicted, and probably fewer existing have traded than were expected.
The listing price was met by demand - thats the cold hard truth - nobody forced anyone to buy the stock…….
oilit said:
The listing price was met by demand - that's the cold hard truth - nobody forced anyone to buy the stock…….
Certainly that is how it should be oilit, but experience of IPOs can sometimes reveal that all is not quite as fantastic as it appears. There is an expression for that, but I cannot think of it now. Ramping the price is one stock market phrase though.
There would have been many people who spotted what was going on in advance of the IPO (some expressed opinions at the time on this forum) but perhaps if fees are involved, why 'rock the boat'?
Attempting to associate the business with the luxury goods business sector (a much higher price multiple than car manufacturing) and pretending that AML would consequently be protected from future economic slumps (even though clearly it was not in 2008).
Luxury apartments, submarines, aircraft, watches etc.
Profitability has now been achieved, so there should be a prosperous future for shareholders.
One year of profit reported immediately prior to the flotation. Red ink on the accounts for years before that and as it later turned out, even greater losses in the following years.
Creating excitement about future prospects.
There were 15 new model announcements during the 18 months before the IPO, far more than usual and some of those have never been seen on a production line.
I have only mentioned what happened, not putting forward an opinion.
Direct stock market investment is a fairly minority activity in the UK, so I do feel sorry for the AML employees, many of whom might not have had previous experience of owning shares. 'Nobody forced anyone to buy the stock', but the employees were possibly encouraged to put their own money, into what became one of the worst IPOs ever seen on the London Stock Exchange.
Jon39 said:
Certainly that is how it should be oilit, but experience of IPOs can sometimes reveal that all is not quite as fantastic as it appears. There is an expression for that, but I cannot think of it now. Ramping the price is one stock market phrase though.
There would have been many people who spotted what was going on in advance of the IPO (some expressed opinions at the time on this forum) but perhaps if fees are involved, why 'rock the boat'?
Attempting to associate the business with the luxury goods business sector (a much higher price multiple than car manufacturing) and pretending that AML would consequently be protected from future economic slumps (even though clearly it was not in 2008).
Luxury apartments, submarines, aircraft, watches etc.
Profitability has now been achieved, so there should be a prosperous future for shareholders.
One year of profit reported immediately prior to the flotation. Red ink on the accounts for years before that and as it later turned out, even greater losses in the following years.
Creating excitement about future prospects.
There were 15 new model announcements during the 18 months before the IPO, far more than usual and some of those have never been seen on a production line.
I have only mentioned what happened, not putting forward an opinion.
Direct stock market investment is a fairly minority activity in the UK, so I do feel sorry for the AML employees, many of whom might not have had previous experience of owning shares. 'Nobody forced anyone to buy the stock', but the employees were possibly encouraged to put their own money, into what became one of the worst IPOs ever seen on the London Stock Exchange.
oilit said:
I always think the stock market needs to be viewed a bit like gambling- if you aren't prepared to lose all your money - don't do it.
Wise words oilit, the first lesson of investing.
Most people paying into pensions are stock market investors, even though they might not know it.
Over the past 30 years though (including many recessions and stock market crashes and now a pandemic) long-term holdings in big solid (gives less risk) companies have been very rewarding, with dividend payments contributing a significant portion of the total return. At present, the dividend income is at a rate of around 6% annual. What is the interest rate now on a savings account? Hardly worth following during recent years, but I guess it must be far less than price inflation.
Having holdings in enough businesses is the way to avoid losing all your money. I have never experienced it, but if one or two businesses go bust, then it is not of such major significance.
There are not many major opportunities (March 2020 was the last one) but buying when the whole stock market is 'on its knees' works well. Remember March 2020, when we thought the world population might be wiped out, and everyone was selling shares?
Contrarian investment.
New UK car sales in August are always slow, because many buyers wait a month, to show off the latest September registration marks.
This year, sales are lower than August last year, with the total of all manufacturers August sales being 17.36% down.
Aston Martin
August 2020 = 33
August 2021 = 19
Year to date 2020 = 493
Year to date 2021 = 664
In the UK, March and September usually have the highest monthly car sales, simply because buyers like displaying the latest registration marks. Much cheaper to buy and keep a dateless mark, but hey ho, the age dates are good for the motor industry.
Aston Martin - New registrations September.
2017 = 144
2018 = 272
2019 = 200
2020 = 149
2021 = 158
Jon39 said:
In the UK, March and September usually have the highest monthly car sales, simply because buyers like displaying the latest registration marks. Much cheaper to buy and keep a dateless mark, but hey ho, the age dates are good for the motor industry.
Aston Martin - New registrations September.
2017 = 144
2018 = 272
2019 = 200
2020 = 149
2021 = 158
Jon39 said:
M1AGM said:
Remind me when the IPO was?
3rd October 2018
Flotation price .............. 1900p
First day close .............. 1810p
End of year close
31st December 2018 .....1223½p
(Not comparable to current level of share prices)
M1AGM said:
Thanks jon, so shortly after the highest registered figure. What a coincidence. Lol.
Yes, very briefly at the begining of the IPO first trading day, the Company had a market value of £4.3 billion.
The value now is £2.06 billion.
Investors normally have expectations, that their businesses can make progress in the opposite direction.
Anyway, lets hope Lawrence Stroll and Tobias Moers can achieve future success for Aston Martin.
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