AML - Stock Market Listing
Discussion
ferrisbueller said:
Are you just hoping that AML goes bust and disappears?
And Lucid, too, now?
And Lucid, too, now?
Aston Martin won't disappear.
They have survived for 110 years, even though rarely making any profit.
Their business model has been perfected.
I sometimes wonder whether any other commercial firm in the world, has achieved such longevity without profit.
Aston Martin might be the only business to have ever mastered that.
With regard to Lucid, I don't have any knowledge about the company, so have no idea what their future prospects might be.
It is of course normal for a stsrt-up business to initially make losses.
Should there be concerns though that their annual losses are in the $billions ?
Overall the world motor industry (many manufacturers) are spending billions to develop ranges of electric vehicles.
Not all of them will see their money back, but I doubt anyone knows who the winners will be.
I think (fear) China looks to be a possible significant player in the future EV market.
oilit said:
This doesnt make sense when LS talked about the power of Geely electrification in the new partnership and seat on the board.
Interesting info here https://www.ft.com/content/35b95284-a432-4418-8e7d...
Interesting info here https://www.ft.com/content/35b95284-a432-4418-8e7d...
The FT paywall seems to vary article to article.
Unfortunately cannot read this article, even after trying 12ft.io.
Of course there is a shared investor involved.
Ghini said:
Maybe Lucid can provide higher performance figures with their tech? Also, their tech is available right now. That Lotus EV is still a prototype after several years right? Not sure how that is going and where the Lotus tech comes from or what they really have. Geely can help on other areas? ...
Geely do appear to have experience of EV tech.
In 2022, they were the 5th largest producer of EVs in the world, having built 384,000.
Lucid built 7,180 vehicles in 2022 (stated 4,369 delivered) and their target for this year is 10,000 to 14,000.
Minglar said:
Now I’m really not sure if this is the right thread for this little snippet, but looking back to 2017/2018 there were comments on here about a certain AP and whether he should be knighted or not.
Arise Sir LS? Who am I to argue!
Arise Sir LS? Who am I to argue!
Yes, it is at the foot of page 1, which opens on occasions when I click in the wrong place.
For services to the hyping industry and pure coincidence.
Will long be remembered for selling £140,000 sports cars, at price £1000 down and 23x£1,000 (including free road tax and 5 years free servicing).
Easy to sell anything, if you 'give it away'.
Thankyou4calling said:
It's another method of distracting people from the reality that sales are shocking and missed every target set.
LS is fantastic at this.
The government is very good at it.
A big headline that masks a truly woeful underlying performance and it's been that way a loooooong time.
LS is fantastic at this.
The government is very good at it.
A big headline that masks a truly woeful underlying performance and it's been that way a loooooong time.
Company history shows that the AML business strategy has always been:- first raise money from new owners, more recently from willing shareholders, then have fun spending and launching exciting new models, until the money has nearly gone.
Repeat, repeat.
The figures lately have become much bigger.
"Aligned with this framework, the Company expects to invest c. £2 billion over the next five years (2023-2027) as it 'invests in its long-term growth' and the transition to electrification."
Immediately prior to one of the capital raises, the AML/M-B technical agreement was announced.
Yesterday a new technical partnership was announced, together with a plan to spend £2 billion.
Do you sense a capital raise is imminent?
Politicians have something referred to as a 'magic money tree' (increased taxation), but unfortunately not available to the world of business.
Company announcement.
2024 financial targets (originally provided in 2020);
- Revenue c. £2 billion.
- Adjusted EBITDA of c. £500 million.
'The Company expects to substantially achieve these financial targets in 2024 and,
with continued strong momentum, is likely to exceed them in 2025.'
New mid-term financial targets announced for 2027/28;
- Revenue of c. £2.5 billion
- Gross margin in the mid 40s%
- Adjusted EBITDA of c. £800 million
- Free cash flow to be sustainably positive.
- Net leverage ratio of c. 1.0x
https://www.londonstockexchange.com/news-article/A...
Mr Charlie Munger suggests replacing EBITDA with an alternative word, one that I could not possibly post here.
The figure is of course before many normal business costs are deducted, therefore meaningless.
The only suggestion that I can see, about AML making a pre-tax profit is, 'Free cash flow to be sustainably positive'.
Not sure why they state 2027/2028, because Aston Martin's financial year is the calendar year.
Revenue of c. £2.5 billion with a gross margin in the mid 40s% would be a fantastic achievement, so we wish them well.
Wonder if any other motor manufacturer has a 40% gross margin ?
Edited by Jon39 on Tuesday 27th June 12:46
M1AGM said:
So assuming that AM can make £50k profit on every car (I think that’s optimistic) that rolls out of the factory, how many cars do they need to shift at that margin to break even….
Difficult to even estimate. Interest payments on debt being just one variable.
I found an article relating to your question. Not up to date, but might be worth a read.
The numbers quoted are dubious though. Refer to the article Comments.
https://www.carscoops.com/2018/08/ferrari-makes-e6...
Edited by Jon39 on Tuesday 27th June 14:18
M1AGM said:
Thanks Jon, yes I appreciate this is hard to work out I was just wondering what the headline figure to hit would be for AML to break even and then get a rough idea of how many units they would need to shift at that margin to get there.
I think all we can do is try to follow the sales numbers.
Sales numbers and prices are of course loosely linked to revenue, but after that it gets tricky. The deductions from revenues are numerous and varied.
Debt interest can be estimated (huge), but the spending on development, writing down previous development costs, various operating costs, etc. are items only revealed with the accounts every quarter.
Here is an article that might be of interest.
Factual or not, who knows.
Touching on the importance of the German car industry; the low cost and sometimes poor quality Chinese EVs.
https://12ft.io/proxy?ref=&q=https://www.teleg...
Ghini said:
So no further news shared on capital markets day?
Who was at the AM meeting that day?
I was expecting a revised model plan for the next 5ish years with now EVs in that plan.
Nothing?
Who was at the AM meeting that day?
I was expecting a revised model plan for the next 5ish years with now EVs in that plan.
Nothing?
I recall there was a future model chart in the 2023 Q1 results announcement.
It might have been reproduced earlier on this topic.
On that diagram, it was SSO who noticed the absence of the mid-engine Vanquish.
That was before the Company announced the Vanquish project cancellation.
Judging by the EV Era topic, very few current Aston Martin owners seem interested in buying an AM EV sports car, even if it might have 1,200 bhp from Lucid.
Expect you have read the Stock Exchange Capital Markets release.
In that they stated, 'Presentation materials from the event will be made available afterwards on the Investor Relations section of our website.'
Don't hold your breath. They have said that before.
............................................................................
Lawrence Stroll, Executive Chairman on Aston Martin Lagonda, said:
"I am extremely proud of the major industrial turnaround we have completed in the last three years, which has completely rebuilt this iconic company. We are building an ultra-luxury brand, supercharged by our transformational partnership with the F1 team and with our portfolio of highly desirable and performance-driven cars.
"We have updated our EV strategy, working with world-class suppliers to complement our extraordinary in-house engineering and design teams. In addition, we are now driving new levels of operational excellence to support our growth and deliver on our targets which focus on increasing value for each car we sell, aligned with the characteristics of a true ultra-luxury company. With the heavy lifting now behind us, I have never been as confident in our future."
We read very similar words in 2020, but they were in a different order then.
'Major industrial turnaround' is a new phrase. The entire West Midlands motor industry is going flat out.
Supercharged is so 1930s Bentley. What is the betting that LS will change that to turbocharged in his 2023 H1 results statement ?
Edited by Jon39 on Wednesday 28th June 20:07
SSO said:
The Capital Markets Day presentation deck still isn't posted on the AML Investors website.
I just finished my piece on it though.
I just finished my piece on it though.
Presentation slides - judging by previous similar statements, I doubt we will ever see them.
Thanks for your report, SSO.
Why do AML keep referring to 2024/25 targets and 2027/28 targets ?
Their financial year is the calendar year, so which of the dual financial years are the talking about, for each of those targets ?
Perhaps they mean we are trying for the 31 Dec 2024 financial year, but don't hold us to it, because we can have another try for 31 Dec 2025 financial year.
All seems rather sloppy.
Do you ever look at the London and South East AML share chat ? It is really not worth wasting time there, but the only interesting point, is that many of the posters believe every one of LS's fine words. Now that the 'turnaround is complete', they talk about profitability begining in 2023 H2 and so are very keen to buy more shares. Further confirmation to them is something about the support level and momentum direction, probably being aligned with the stars. Reminds us about, 'beware of geeks bearing formulas'.
Of course the main thing to remember with Aston Martin, is they have begged and borrowed their way through 110 years, only very occasionally ever making a profit. Why should that suddenly change now after a century? Developing and building expensive cars with few customers is fun, but unless your name is Ferrari, continuous profitability is very unlikely.
Edited by Jon39 on Thursday 29th June 22:32
p102768 said:
Aston’s first EV will be a crossover based on new architecture
Aston’s EVs will employ four motors for power outputs of potentially up to 1500bhp
Aston Martin’s electric era will begin with a new SUV in late 2025, followed by a new GT by the end of the decade.
The new models will be built on a bespoke modular architecture that is able to underpin everything from sports cars lower than the current Vantage to SUVs the size of the DBX and beyond.
This does appear to be a sensible and logical plan.
SUVs are 'the fashion' at present, so certainly a safe bet to start with an SUV EV range. DB model X and DB model Y. -
Four electric motors, as in the NEVS (which uses combined wheel hubs and electric motors) provides scope for driving enhancement flexibility.
https://youtu.be/uI-gKCSNf7o
1,500 bhp should be 'just enough' for the recent posters, who demand more power, faster acceleration and greater speed. -
Interesting that the article seems to suggest AMLs confidence with a 'Super Touring' EV model, but hesitancy about a pure EV sports car. Perhaps AML have been studying our, 'Can Aston Martin Survive in the Electric Vehicle Era?' topic.
Obviously a huge amount of extra spending, as already announced (capital raise from shareholders perhaps), but it is said that EVs have less engineering complexity than has been traditional. Will that mean fewer development engineers employed?
It will be a big change, so interesting to watch progress.
I have noticed increasing competition between EV manufacturers recently.
Tesla price reductions, VW announced an EV production pause and VW are now advertising zero percent interest PCP deals in the UK.
Edited by Jon39 on Sunday 9th July 09:01
LooneyTunes said:
Perhaps the market doesn’t believe they’re all actually sold and/or will make much contribution to profit?
We have had a few 'digs' about 'all sold out' and 'capacity already taken into next year', but I have not noticed 'all sold' being mentioned for the Valour.
Did I miss the comment ?
LooneyTunes said:
It’d be interesting to know if those costs were known to prospective purchasers in advance, or are recently released (and, if so, how they align with expectations and what reaction there has been to them).
Is it a certainty that someone will be along saying, if the customers can afford a Valkyrie, then they will not notice expensive servicing costs ?
I am with you though. If customers were not informed before placing their order, irrespective of their wealth, they might quite rightly be annoyed on principle.
As already mentioned on this topic, an owner who wanted their Valkyrie to be a museum piece, would probably forfeit the warranty.
I remember a comment from a man on this forum, when help was being provided answering technical questions.
It was mentioned in passing that his company had manufactured some related parts for AML.
The gentleman was in utter disbelief, when he found out how much AML customers were being charged for his parts.
Perhaps felt sore at being paid so little compared to retail.
Here are the headlines.
All figures going in the right direction.
Sales up, revenue up, full order book (?), debt down to £846 million (ouch), pre-tax loss down (still in the hundreds of millions though).
MISC EDITS
Valour - 110 cars 'sold out with a growing waiting list'.
DBS 770 Ultimate - 'all 499 examples sold out'.
The second half of 2023, and especially Q4 2023, is expected to see the delivery of a number of new products across the Core and Specials ranges.
2023 guidance (unchanged):
· Wholesales: year-on-year growth to c. 7,000 units
· Adjusted EBITDA margin: year-on-year expansion, up to c. 20% adjusted EBITDA margin
· Capex and R&D: c. £370m
· Depreciation and amortisation: c. £350m-£370m
· Interest costs: c. £120m (cash), assuming current exchange rates prevail for 2023
Although demand for Specials remains strong, there was a £17m decrease in the deposit balance in the first half of 2023, as new deposits were more than offset by the unwind from Specials delivered in the period. We expect to see new deposits increase in the second half of the year, following the launch of Valour in July 2023, as well as higher deposits from Valhalla.
Edited by Jon39 on Wednesday 26th July 08:29
SSO said:
Just finished up my point of view on the 1st half and the declaration of "Turnaround Complete"
Thank you.
Yes, we both homed in on the same point.
The turnaround is complete.
"I’m very pleased to say, that we have completed this turnaround in a little over 3 years.”
What LS probably means is, every three months he announces how well everything is going and hints that profitability will soon occur.
Share buyers must believe that is certainly going to happen, which explains why the Company has trebled in value since October 2022. AML is now worth nearly £4 billion (including debt), but still losing hundreds of million of Pounds.
Perhaps LS interprets a trebling of value as, Turnaround Complete.
That present valuation might be justified though, if PIF or Geely do purchase AML.
The triangle of PIF, Lucid and AML is interesting. Lucid are producing fewer cars than AML and are not even selling all of those.
Their losses are eye watering.
PIF have majority ownership of Lucid, so presumably they will continue to finance the business (loose change to that country).
If they do want more trophy assets, perhaps they are a more likely to become the owner of AML, than anyone else.
This statement is interesting. 'GT/Sports sold out for 2023 ahead of new launches'
We now know about the desirable improvements on the DB12, so are they saying, there has been a rush of orders for the pre-facelift models, because buyers are not waiting for the improved versions?
That would seem unlikely.
12TS said:
That’s 16 I count. How do dealers cope with this? That’s about £3.2m of stock sat there.
Do they have to buy at a set price? Who takes the risk?
Do they have to buy at a set price? Who takes the risk?
Probably an even greater risk with used cars, watching them depreciate each month sitting on forecourts.
With new cars, the hope remains to hold the manufacturers list price, even if not sold for a few months.
Think dealers are invoiced by AML fairly promptly upon delivery.
Dealers usually operate using stocking finance. It costs of course.
In the UK, dealers don't openly advertise individual new cars they have in stock. Most customers want to choose their own specification, so many cars are built to order.
In the USA our understanding here, is that there is a different operation. It seems that many US customers like prompt delivery, so for that reason, dealers hold more stock. US new stock is openly advertised. The advertising aspect in various countries is presumably stipulated by AML.
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