AML - Stock Market Listing
Discussion
Dick Dastardly said:
Assuming most of you are correct, and AM does hit the skids, requiring some kind of a rescue, then any predictions what that’ll mean to owners?
I assume most dealers will still be in place and servicing existing owners, though struggling to find many new ones. So they’ll be finding it hard.
Used values to tank for a while?
I really doubt it will get that bad as long as the new models are not delayed. I assume most dealers will still be in place and servicing existing owners, though struggling to find many new ones. So they’ll be finding it hard.
Used values to tank for a while?
Worst case if it did go wrong the dealers would stay in place for servicing and used sales but there would be part supply issues until the OEM manufacturers get them to the market. Aston produced parts would be an unknown
I guess Rover and Saab are the examples from history with the factory backed warranty potentially being void and potential increased parts costs would increase the depreciation curve.
Jon39 said:
Cheib said:
I really don’t see any way out of this for Aston....borrowing your way out of it isn’t an option when there are debt repayment due in 2022 which would need an incredible turnaround to even contemplate repaying....
Don't lose heart, there is hope which might possibly be as follows;
The vibes now are that the limit with bond debt must have been reached. No more 15% 'Wonga' loans. Any new capital would therefore have to be equity, ie nil servicing cost and no repayment dates.
If the DBX does sell well and annual pre-tax profits can exceed £100 million, then the 'ship would be stabilised'.
In 2022, refinancing the debt will be the only option, but it would need fingers crossed that a) credit is available to AML and b) interest rate is far lower than 15%, otherwise all the profit is swallowed by interest.
If there happens to be a financial crash in 2022, then AML will face the same situation as Northern Rock, unable to refinance debt.
Probably many buyers would want AML without any debt though.
Edited by Jon39 on Monday 13th January 19:11
Interesting points about what happens is it did go into bankruptcy....I think that would be an impossible situation to manage as others have said with all the suppliers etc. They would really have to maintain continuity (i.e. a voice bankruptcy) to have any chance of keeping the business operating.
Administration used to be fairly simple to understand.
Administrator tries to sell assets to repay some money to the creditors.
More recently I have become confused, because the providers of debt sometimes seem to take control of everything.
Does that happen when it is secured debt, which I think some or all of AML bonds are?
Jon39 said:
Administration used to be fairly simple to understand.
Administrator tries to sell assets to repay some money to the creditors.
More recently I have become confused, because the providers of debt sometimes seem to take control of everything.
Does that happen when it is secured debt, which I think some or all of AML bonds are?
But broadly what will happen is their will be a debt for equity swap whereby bond holdlers will become the owners of the company and existing shareholders will get zero. This is why the current market cap of £1bil doesn’t really make sense to me....
The huge problem for Aston with going into administration would be keeping the company operational because of all the suppliers and the large working capital needs. Suppliers would probably demand immediate payment at the factory gate rather than 30 or 90 days etc.
I can’t remember what the likelihood of default if for Aston given current credit ratings but it’s probably over 50%
All this talk is unnecessarily gloomy IMHO
1. The business is profitable. And that's one reason why the equity markets still think its worth a GBP1bn. Yes hedge funds are shorting this, but that's because they're anticipating a dilutive rights issue, not because they expect the thing to go bust
2. The problems lie in short term cashflow (despite the EBITDA) - AML has spent GBP300m this year on developing the DBX at a time when the entire car market has gone south. If it hadn't of spent that money the balance sheet would look perfectly fine now (albeit you would question its long term future)
3. Once DBX sales start coming through (probably June), cashflow issues should be solved.
4. AML remains a great brand with great products (to be shortly enhanced by DBX). That's why there are buyers circling around it. It's a desirable asset. I'll leave the valuation of the shares to someone who's not me, but there's essentially zero chance of AML (as a business) ceasing to exist. After all, even if it went into administration (v unlikely) the administrator would have a list of buyers queuing up to take control
5. Keep in mind that the 2 majority shareholders are wealthy. They've taken GBP1bn out of their investment last year. They're not going to see their residual 70% stakes wiped out for the sake of AML needing GBP100m to get it through to DBX sales
6. Finally, and pure speculation on my part, have you ever wondered who bought the bonds that were issued late last year (with the 15% coupons)? I will not be at all surprised to find that the Kuwaitis/InvestIndustrial own a large chunk (and if they do they control all the pieces of the jigsaw). But as I say that's pure speculation on my front
1. The business is profitable. And that's one reason why the equity markets still think its worth a GBP1bn. Yes hedge funds are shorting this, but that's because they're anticipating a dilutive rights issue, not because they expect the thing to go bust
2. The problems lie in short term cashflow (despite the EBITDA) - AML has spent GBP300m this year on developing the DBX at a time when the entire car market has gone south. If it hadn't of spent that money the balance sheet would look perfectly fine now (albeit you would question its long term future)
3. Once DBX sales start coming through (probably June), cashflow issues should be solved.
4. AML remains a great brand with great products (to be shortly enhanced by DBX). That's why there are buyers circling around it. It's a desirable asset. I'll leave the valuation of the shares to someone who's not me, but there's essentially zero chance of AML (as a business) ceasing to exist. After all, even if it went into administration (v unlikely) the administrator would have a list of buyers queuing up to take control
5. Keep in mind that the 2 majority shareholders are wealthy. They've taken GBP1bn out of their investment last year. They're not going to see their residual 70% stakes wiped out for the sake of AML needing GBP100m to get it through to DBX sales
6. Finally, and pure speculation on my part, have you ever wondered who bought the bonds that were issued late last year (with the 15% coupons)? I will not be at all surprised to find that the Kuwaitis/InvestIndustrial own a large chunk (and if they do they control all the pieces of the jigsaw). But as I say that's pure speculation on my front
Dick Dastardly said:
I had a chat with AM Bristol today about this and they say they aren’t too worried, as current car sales have overall been quite decent but the DBX orders have been huge. Massive interest in China, the US and Middle East.
Does the franchised AM Bristol sell cars abroad in China, US and Middle East? As seems a odd thing to say otherwise.https://www.thetimes.co.uk/article/aston-martin-la...
I'm sure he'll get a few £M to ease the pain.
Next.......
I'm sure he'll get a few £M to ease the pain.
Next.......
rovcallum said:
https://www.thetimes.co.uk/article/aston-martin-la...
I'm sure he'll get a few £M to ease the pain.
Next.......
Did he leave leave or was it a "you aren't doing a great job and maybe you should leave" leave? I feel that marketing under him wasn't that great to begin with. There were a lot of missed opportunities for product placements especially here in the US. I'm sure he'll get a few £M to ease the pain.
Next.......
hyphen said:
Dick Dastardly said:
I had a chat with AM Bristol today about this and they say they aren’t too worried, as current car sales have overall been quite decent but the DBX orders have been huge. Massive interest in China, the US and Middle East.
Does the franchised AM Bristol sell cars abroad in China, US and Middle East? As seems a odd thing to say otherwise.While PistonHeads hasn't embraced the new era of cars, most dealers have found the percentage of customers for whom they're just entering the fold, has seen a sharp increase. That's a positive for the company, albeit with two caveats:
1) There's a small demographic of existing owners who preferred the brand to remain an elite, gentleman's club. That's probably controversial, but it's been my experience of ownership, and being on the younger end, liking the current range and the last gen cars. The trick has been to just nurture a good relationship with your dealer, and appreciate the cars and the engineering for what it is.
2) Overall new car sales have struggled, but each prestige car maker is feeling the pinch currently. New Vantage prices have settled somewhat, and it's worth remembering that the earliest cars are coming up to the end of their first owners 24 month leases in around May / June 2020, so used prices might dip again. A low miles, well specced example can be had for around £90-95k. Some will say that's where it should have been priced to start with, but to address the elephant in the room - some who dislike the grille and the headlights, have no issue with them when the car is available at sub £100k, so was the issue actually the design, or the price?
Note that currently, dealers appear to be selling new stock (and current gen timeless used cars) a lot easier than older cars. V12S, Vanquish II and old DBS sit there awaiting a new home a lot longer than they did just 12 months ago.
It's worth noting among all this, the embargo for driving impressions on the DBX was lifted overnight. Current views appear to praise it in every regard (especially considering it's a test mule), only nitpicking things like the use of a jog dial on the infotainment system. The car ought to be a winner.
rovcallum said:
https://www.thetimes.co.uk/article/aston-martin-la...
I'm sure he'll get a few £M to ease the pain.
Next.......
Shoot the messenger?I'm sure he'll get a few £M to ease the pain.
Next.......
Good post NFC 85.
Existing owners being slow to embrace the modernisation of a brand is nothing new, I mean people kick off in the Porsche forum even when a new 911 drops with tiny evolutionary tweaks to the styling! I think you're right about quibbles on the new grill being a bit of a cover for pricing concerns in some cases, although to be fair I also think it takes time for people to get used to new design - see Harry's Garage YT video on new Vantage where he talks about being unsure about the design initially, but has now firmly come around and loves it (& perhaps what has contributed to this is seeing how it works across the range since DBS superleggera & to a lesser extent DBX were revealed...remember when it was just new vantage, the only styling link was Vulcan).
Either way, let's be clear Aston needed to evolve the cars & the brand to survive, thank god they have recognised this and clearly the wheels are firmly in motion to, alongside traditional customers, bring in a wealthy younger demographic that are looking for edgier design features, prob not so enamored with Bond as an aspirational figure. Then of course DBX which based on the latest lux SUV sales figures from Rolls & Lambo I think will do very well, and also finally bring a larger female demographic into Aston ownership.
Existing owners being slow to embrace the modernisation of a brand is nothing new, I mean people kick off in the Porsche forum even when a new 911 drops with tiny evolutionary tweaks to the styling! I think you're right about quibbles on the new grill being a bit of a cover for pricing concerns in some cases, although to be fair I also think it takes time for people to get used to new design - see Harry's Garage YT video on new Vantage where he talks about being unsure about the design initially, but has now firmly come around and loves it (& perhaps what has contributed to this is seeing how it works across the range since DBS superleggera & to a lesser extent DBX were revealed...remember when it was just new vantage, the only styling link was Vulcan).
Either way, let's be clear Aston needed to evolve the cars & the brand to survive, thank god they have recognised this and clearly the wheels are firmly in motion to, alongside traditional customers, bring in a wealthy younger demographic that are looking for edgier design features, prob not so enamored with Bond as an aspirational figure. Then of course DBX which based on the latest lux SUV sales figures from Rolls & Lambo I think will do very well, and also finally bring a larger female demographic into Aston ownership.
NFC 85 Vette said:
2) Overall new car sales have struggled, but each prestige car maker is feeling the pinch currently. .......
.... some who dislike the grille and the headlights, have no issue with them when the car is available at sub £100k, so was the issue actually the design, or the price?
.... some who dislike the grille and the headlights, have no issue with them when the car is available at sub £100k, so was the issue actually the design, or the price?
Please take my two points as observations, not negativity.
I am keen for AML to be successful, and have been very pleased to see unanimous praise for the DBX on here. That in itself bodes well, because previous reactions to new models here, have generally not been too far off the mark as predictors.
Prestige car sales:- Like you, I also thought that the market had entered a downturn, but was surprised on the day AML gave another profit warning, that Rolls Royce announced a 25% increase in 2019 sales to a record 5,125 cars, and Bentley announced a 5% increase to 11,006 cars.
Perhaps those successes were boosted by their SUVs, if so, then that looks good for Aston Martin.
Vantage prices. I have no way of telling, but do you think it is possible, that many of those December special offer sales, were to buyers who perhaps could easily afford £1,000 per month, but maybe not the £100,000 ticket price? If so, it would not have made any difference, whether the price was £100,000 or £150,000. The cars were offered at such bargain monthly prices, perhaps the new Aston Martin customers will pay their £25,000 and then just leave the brand for whoever has a bargain monthly offer in 2 years time.
I think you are a loyal multple Aston Martin customer, NFC, as have been many 'previous gen.' buyers.
Usually much cheaper and easier, to sell another product to ones existing customers.
Edited by Jon39 on Wednesday 15th January 16:40
V12Vin said:
rovcallum said:
https://www.thetimes.co.uk/article/aston-martin-la...
I'm sure he'll get a few £M to ease the pain.
Next.......
Did he leave leave or was it a "you aren't doing a great job and maybe you should leave" leave? I feel that marketing under him wasn't that great to begin with. There were a lot of missed opportunities for product placements especially here in the US. I'm sure he'll get a few £M to ease the pain.
Next.......
cardigankid said:
Shoot the messenger?
If he was the one responsible to the naff branding slogans over the last year then its probably for the best...Power, beauty, soul was sailing close to the wind but the more recent slogans have been puke inducing..
Beautiful is relentless
The pursuit of beautiful
Beautiful won''t be tamed
Beautiful is a number
Pack of hunters
Tame the predator
Bobajobbob said:
Power, beauty, soul was sailing close to the wind .....
A little corny perhaps to show repeatedly on the dashboard, but I don't think many would argue against the wording.
Simon Sproule does not get your vote then, for memorable marketing lines written by car enthusiasts.
Think 'Brute in a suit' can be added to your list.
This must be one of the best ever from a REAL petrolhead, 'A Mars a Day Helps You Work, Rest and Play'.
Do you know who thought of that ?
(Mr. Sproule, held senior marketing roles at Ford when it owned Aston Martin, and then at Nissan where he met Andy Palmer.)
Edited by Jon39 on Wednesday 15th January 18:06
Jon39 said:
A little corny perhaps to show repeatedly on the dashboard, but I don't think many would argue against the wording.
Simon Sproule does not get your vote then, for memorable marketing lines written by car enthusiasts.
Think 'Brute in a suit' can be added to your list.
This must be one of the best ever from a REAL petrolhead, 'A Mars a Day Helps You Work, Rest and Play'.
Do you know who thought of that ?
(Mr. Sproule, held senior marketing roles at Ford when it owned Aston Martin, and then at Nissan where he met Andy Palmer.)
Edited by Jon39 on Wednesday 15th January 18:06
Re number three a quick google tells me it might be Murray Walker?
Bobajobbob said:
Agreed on first two comments
Re number three a quick google tells me it might be Murray Walker?
Re number three a quick google tells me it might be Murray Walker?
Yes, you are correct Bob.
Before he had everyones dream job, enjoying a hobby and getting paid for it, his career was in the world of marketing.
A wonderful gentleman, quite elderly now, living in the beautiful New Forest.
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