AML - Stock Market Listing
Discussion
I stroll-ed into a dealer here (US) a few days ago and they were bursting with stock, offered me $70k off a new DB11 or DBS without me asking, same no money down deals on a vantage of which they had lots. I came away a little saddened, and thinking that the Evora GT still seemed the Best Buy they had on offer.
AML did well to get Lance Stroll + consortium in to support the business. The alternative would undoubtedly have been a bankruptcy. Merely taking the business off the stock exchange doesn’t solve the cash issue that the business faces (now exacerbated by the delay incurred by the corona virus). Brokers today are speculating whether the cash injection by Stroll & Co is enough to keep the business going. These are anxious times indeed and Stroll has clearly been caught in a perfect storm given his timing.
hornbaek said:
AML did well to get Lance Stroll + consortium in to support the business. The alternative would undoubtedly have been a bankruptcy. Merely taking the business off the stock exchange doesn’t solve the cash issue that the business faces (now exacerbated by the delay incurred by the corona virus). Brokers today are speculating whether the cash injection by Stroll & Co is enough to keep the business going. These are anxious times indeed and Stroll has clearly been caught in a perfect storm given his timing.
I don't disagree with any of that however at least taking it off the stock exchange (which it should never have done in the first place at that stage in the business plan/cycle) takes away the pressure of the public scrutiny during these difficult times. I don't think it's likely, but it would make a lot of sensePublic scrutiny is what's needed if the business is to survive and build back trust and reputation. Stroll not a takeover but support funding to come in at 17 to 20% level in return for funding little Stroll's F1 career.
To take it private now at 1/6th of the price they received and then make more money if AML or AMLGH survives would be worst possible outcome.
To take it private now at 1/6th of the price they received and then make more money if AML or AMLGH survives would be worst possible outcome.
Taking AML private in current financial circumstances would be highly distracting for management and new investors, and inevitably would come at a heavy net cost to the business. In 2021 AM will have, for the first time in its history, a uniquely valuable marketing platform through its lead sponsorship of an F1 team which, with the Merc engine in the back, has a real chance of competing for podiums. Marketing-wise, they can at last go head to head with the red brand. But, this new direction was achieved more by luck than management judgement, with Stroll jumping in to rescue AML not based on solely business considerations - the latter clearly deterring several other formerly interested parties.
Which leads to my key observation that AML suffers more from senior management issues/failings, rather than ones related to brand, technology or manufacturing. There has to be serious questions asked as to the marketing wisdom of the DBX, as well as the cash flow planning related to both its design and manufacture - maybe, as a relatively small quasi-independent player, AML should not have committed to a project which would have challenged even some of the big manufacturers. And selling 5K+ of this type of SUV, in today's market, looks a real stretch...
If I were DrAP, I would be looking over my shoulder, and really taking a very close look at a new management and marketing strategy.
Which leads to my key observation that AML suffers more from senior management issues/failings, rather than ones related to brand, technology or manufacturing. There has to be serious questions asked as to the marketing wisdom of the DBX, as well as the cash flow planning related to both its design and manufacture - maybe, as a relatively small quasi-independent player, AML should not have committed to a project which would have challenged even some of the big manufacturers. And selling 5K+ of this type of SUV, in today's market, looks a real stretch...
If I were DrAP, I would be looking over my shoulder, and really taking a very close look at a new management and marketing strategy.
Toffee-V12VS said:
Taking AML private in current financial circumstances would be highly distracting for management and new investors, and inevitably would come at a heavy net cost to the business. In 2021 AM will have, for the first time in its history, a uniquely valuable marketing platform through its lead sponsorship of an F1 team which, with the Merc engine in the back, has a real chance of competing for podiums. Marketing-wise, they can at last go head to head with the red brand. But, this new direction was achieved more by luck than management judgement, with Stroll jumping in to rescue AML not based on solely business considerations - the latter clearly deterring several other formerly interested parties.
Which leads to my key observation that AML suffers more from senior management issues/failings, rather than ones related to brand, technology or manufacturing. There has to be serious questions asked as to the marketing wisdom of the DBX, as well as the cash flow planning related to both its design and manufacture - maybe, as a relatively small quasi-independent player, AML should not have committed to a project which would have challenged even some of the big manufacturers. And selling 5K+ of this type of SUV, in today's market, looks a real stretch...
If I were DrAP, I would be looking over my shoulder, and really taking a very close look at a new management and marketing strategy.
I don´t know a single person who would oppose taking AML private again. The only issue: It would make very visible that the IPO cost of £136M was wasted money as was the bonus payments to upper management like the £60M to A. Palmer. Basically this money was extracted out of the pockets of the employees participating in the share purchase program. And out of the pockets of PH enthusiast who bought shares. For a shop floor employee or an average salary employee it is really painful to see the share price dropping like it does. Will they ever believe in what management says?Which leads to my key observation that AML suffers more from senior management issues/failings, rather than ones related to brand, technology or manufacturing. There has to be serious questions asked as to the marketing wisdom of the DBX, as well as the cash flow planning related to both its design and manufacture - maybe, as a relatively small quasi-independent player, AML should not have committed to a project which would have challenged even some of the big manufacturers. And selling 5K+ of this type of SUV, in today's market, looks a real stretch...
If I were DrAP, I would be looking over my shoulder, and really taking a very close look at a new management and marketing strategy.
Now some serious cost cutting needs to be implemented. Net losses of £104M and 5,862 sold cars implies a loss of £17.800 per car. Given that the AML-F1 project is running with the prestigious Merc engine in the back, and that DB11 V8, the Vantage and the DBX are running with Merc engines, and given that new hybrid engine developments would need to be complex and difficult, AML should clearly lean on a strong partner. Clearly I would prefer the strongest partner available. A fresh CEO would help at this point of time.
Nbgring said:
Bonus payments to upper management like the £60M to A. Palmer.
The biggest joke of this whole charade. The current management team don't deserve a penny in payments for success. If any of them had any class they'd be paying those back and it would be used to start compensating the other employees of AML. To counter the Palmer-bashing, I’d counter that his original plan at least gives hope for a stronger long-term future. The DBX may yet be the company’s financial saviour.
Say they had installed a safe pair of hands who withdrew from every risky change (DBX development, multi car releases, IPO, etc.), and just tried to live off tweaks and facelifts for another 10 years, we’d be exactly where AM was before Ford wanted a status symbol in its collection. Tired, old fashioned, exceedingly niche dinosaurs. Character and charm need energy to maintain.
He probably didn’t do everything right in hindsight. But what were the realistic options?
I love the brand and want to see it live on as a genuine and unique manufacturer and not just a badge in a conglomerate’s portfolio (Bentley pre-VW, Lancia, erm... Lagonda!) for future generations. But even more so, I wanted to see them have a go and risk going out in a blaze of (attempted) glory rather than whither pitilessly for years.
Let’s stop being so British about piling onto somebody who at least gave it their best shot. We have a lot to learn from elements of the American business attitude where risk taking is acknowledged and encouraged.
But I’m weird like that
Say they had installed a safe pair of hands who withdrew from every risky change (DBX development, multi car releases, IPO, etc.), and just tried to live off tweaks and facelifts for another 10 years, we’d be exactly where AM was before Ford wanted a status symbol in its collection. Tired, old fashioned, exceedingly niche dinosaurs. Character and charm need energy to maintain.
He probably didn’t do everything right in hindsight. But what were the realistic options?
I love the brand and want to see it live on as a genuine and unique manufacturer and not just a badge in a conglomerate’s portfolio (Bentley pre-VW, Lancia, erm... Lagonda!) for future generations. But even more so, I wanted to see them have a go and risk going out in a blaze of (attempted) glory rather than whither pitilessly for years.
Let’s stop being so British about piling onto somebody who at least gave it their best shot. We have a lot to learn from elements of the American business attitude where risk taking is acknowledged and encouraged.
But I’m weird like that
I too love the brand and the beautiful cars, if only that love could be translated into cash-flow. I am no marketing expert, but I suspect salvation and a stable future lies somewhere between electric power-trains and maximising the leverage that can come through F1. If there are to be investment gambles, maybe gambling on the AML electric line-up in 2035, and a gamble on an F1 engine (perhaps in partnership with Merc), are the areas to put the chips. The DBX gamble is made now, and usually I would say, if you're in a hole stop digging. I hope that the DBX is a winner, but it has to generate a lot of cash in the next 5 years to be so.
Nbgring said:
Toffee-V12VS said:
Taking AML private in current financial circumstances would be highly distracting for management and new investors, and inevitably would come at a heavy net cost to the business. In 2021 AM will have, for the first time in its history, a uniquely valuable marketing platform through its lead sponsorship of an F1 team which, with the Merc engine in the back, has a real chance of competing for podiums. Marketing-wise, they can at last go head to head with the red brand. But, this new direction was achieved more by luck than management judgement, with Stroll jumping in to rescue AML not based on solely business considerations - the latter clearly deterring several other formerly interested parties.
Which leads to my key observation that AML suffers more from senior management issues/failings, rather than ones related to brand, technology or manufacturing. There has to be serious questions asked as to the marketing wisdom of the DBX, as well as the cash flow planning related to both its design and manufacture - maybe, as a relatively small quasi-independent player, AML should not have committed to a project which would have challenged even some of the big manufacturers. And selling 5K+ of this type of SUV, in today's market, looks a real stretch...
If I were DrAP, I would be looking over my shoulder, and really taking a very close look at a new management and marketing strategy.
I don´t know a single person who would oppose taking AML private again. The only issue: It would make very visible that the IPO cost of £136M was wasted money as was the bonus payments to upper management like the £60M to A. Palmer. Basically this money was extracted out of the pockets of the employees participating in the share purchase program. And out of the pockets of PH enthusiast who bought shares. For a shop floor employee or an average salary employee it is really painful to see the share price dropping like it does. Will they ever believe in what management says?Which leads to my key observation that AML suffers more from senior management issues/failings, rather than ones related to brand, technology or manufacturing. There has to be serious questions asked as to the marketing wisdom of the DBX, as well as the cash flow planning related to both its design and manufacture - maybe, as a relatively small quasi-independent player, AML should not have committed to a project which would have challenged even some of the big manufacturers. And selling 5K+ of this type of SUV, in today's market, looks a real stretch...
If I were DrAP, I would be looking over my shoulder, and really taking a very close look at a new management and marketing strategy.
Now some serious cost cutting needs to be implemented. Net losses of £104M and 5,862 sold cars implies a loss of £17.800 per car. Given that the AML-F1 project is running with the prestigious Merc engine in the back, and that DB11 V8, the Vantage and the DBX are running with Merc engines, and given that new hybrid engine developments would need to be complex and difficult, AML should clearly lean on a strong partner. Clearly I would prefer the strongest partner available. A fresh CEO would help at this point of time.
My attempt at applying logic.
The 'Second Century Plan' (SCP) so far has 3 core models.
That is exactly the same, as the period under Ford ownership.
Throughout the whole of the Company's history, sustained profitability has never been achieved.
The best financial period for the business was during the Ford era, when there were several profitable years, however that was the result of a big proviso.
Ford reimbursed all of the vehicle development costs, and being debt free there were no interest costs to pay.
Therefore, in comparison with the Ford era, how could the SCP possibly work financially, before the flow of additional revenue from the SUV ? An identical business model, but with huge additional costs. Enormous vehicle development expenduture including a new factory, considerable debt servicing costs and the extra cost of an increasing number of employees.
I think that explains the money out being more than money in, but to make things even worse, and this was probably not part of the SCP, unfortunately sales of the core models did not meet expectations. DB9 and gen 1 Vantage, outsold DB11 and gen 2 Vantage.
The continual need for more money resulted in increased debt, which possibly nearly became overwhelming.
Do you think this makes sense?
Playing the cynic, the SCP was window dressing for the IPO to get the highest valuation they could. If the IPO money had stayed in the business instead of stakeholders cashing out, it would have been a wise move (to raise more capital than they arguably should) in order to fund the SCP. However that was not the aim and predictably promises were broken, forecasts not met, which has led to trouble at mill (as they say up north).
It has been my opinion since DB11 launched that the new generation cars are nice, fine, but simply not desirable enough - especially obvious compared to the previous cars. Sales struggle, meanwhile the company doubles down on a drive for expansion, taking on more real estate, more staff, bigger scope vehicle programmes, targeting bigger volumes than ever before (with all the difficulties and risks higher volume brings - though huge rewards can be had).
It seems the stakes just get raised at every juncture - but the core issue of desirability remains. They’re good cars, certainly, but they don’t inspire the same lust of the 2000s era cars - that lust forgave all manner of shortfalls.
It seems the stakes just get raised at every juncture - but the core issue of desirability remains. They’re good cars, certainly, but they don’t inspire the same lust of the 2000s era cars - that lust forgave all manner of shortfalls.
jonby said:
Not quite sure how you deal with the issue of the employees who bought shares, as to avoid huge badwill they would need looking after but we are now in a situation where if the shares fall much more, the stated cost of the IPO (£136M) will be more than the value of the shares they released
I learnt a new German word today, Verschlimmbesserung. Very apt.Many people have made an absolute killing based on that costly IPO, much to the detriment of the company. In fact those that cashed in at so many people's expense have seriously prejudiced its future, yet again.
I took out my money weeks ago and made a £46 loss. Gutted
. They absolutely shafted people and the brand and i'm a bit surprised that they are getting away with it, risky commercial world or not. All a bit upmarket Norton :-(Venturist said:
It has been my opinion since DB11 launched that the new generation cars are nice, fine, but simply not desirable enough - especially obvious compared to the previous cars. Sales struggle, meanwhile the company doubles down on a drive for expansion, taking on more real estate, more staff, bigger scope vehicle programmes, targeting bigger volumes than ever before (with all the difficulties and risks higher volume brings - though huge rewards can be had).
It seems the stakes just get raised at every juncture - but the core issue of desirability remains. They’re good cars, certainly, but they don’t inspire the same lust of the 2000s era cars - that lust forgave all manner of shortfalls.
I do tend to agree. Astons have rarely been the best at anything on paper. But that doesn't matter so much, as, when you look at a last model gen DBS/DB9/Rapide/Vantage/Vanquish/GT8/GT12 etc and STILL go 'wow' you know they nailed it. If you then feel a further emotional connection to them as an owner all that Top Trumps goes out the window. A V12 v any 'better' boxer 6 loses, hands down. It seems the stakes just get raised at every juncture - but the core issue of desirability remains. They’re good cars, certainly, but they don’t inspire the same lust of the 2000s era cars - that lust forgave all manner of shortfalls.
To form an emotional connection is priceless and was SO Aston - I strive to do it my work, and when you do nail it, you are home and dry and clients are delighted. No marketing BS or spin can ever trump that.
Off Topic:
Neither explanation suggests AML was a status symbol. If Ford had thought that way, Hayes would have had a much easier time bringing out the DB7. £19M total development cost sounds like peanuts now but he had to work hard to get it agreed.
nickv8 said:
Say they had installed a safe pair of hands who withdrew from every risky change (DBX development, multi car releases, IPO, etc.), and just tried to live off tweaks and facelifts for another 10 years, we’d be exactly where AM was before Ford wanted a status symbol in its collection. Tired, old fashioned, exceedingly niche dinosaurs. Character and charm need energy to maintain.
Walter Hayes spoke about the big motor manufacturers having a duty to each own a 'boutique' of endangered car makers to preserve the marques. At the time Ford owned AC, Aston Martin and Jaguar. His PR man (whose name I regret I can't recall) told the story differently. A problem facing Ford had long been the introduction of new toys. By owning AML and Jaguar, they could try a new idea in the Aston and if it worked allow it to filter down to the Jaguar and then in time the executive Fords and so on until base model Fiesta owners expected it as a matter of course. Satnav was exercising them at the time. If they fitted it to a Ford range and it was a disaster they would have tens of thousands of irate customers. If they fitted it first to the Aston and it failed they would have a couple of hundred at worst.Neither explanation suggests AML was a status symbol. If Ford had thought that way, Hayes would have had a much easier time bringing out the DB7. £19M total development cost sounds like peanuts now but he had to work hard to get it agreed.
It is by now accepted consensus that the IPO was no more than a cynical exercise designed to win the shareholders their money back. The undoubtedly unique brand was used like fairy dust to attract enthusiasts, owners, employees and even institutional investors to put their money in, and by extension, it became their problem to make it work. AP was brought in because he had a senior role at Nissan or similar and could therefore be spun as the hard headed commercial guy with flair who could knock heads together and make success happen. In his own words ‘an engineer turned marketing guru with raw instincts’. All he was, in fact, was a fat prick, as many at Nissan could no doubt have told us for free. Nissan was successful before he got there and continued to be so after he left.
He was offered a bribe, in the form of £60m worth of shares, to pull off the IPO. All he did was what Dany Bahar did at Lotus, which was to try to spin a fantastical apparently emerging success story out of a large and unrealistic number of ambitious product launches. His Second Century Plan. A load of high falutin crap. This was intended to create the impression that here was a car company ready to take on the world. As I said at the time, they were going to take everyone on at everything and win. And before Marek Reichman is cast as the hard working but unfortunate genius, just remember all the disingenuous and arrogant bulls
t he spouted when his electric Lagonda was launched. Rolls-Royce were stuck in the mud idiots. Of course they were.
But Palmer is the paid bullstter par excellence, and he has let everyone down bar his employers. Knighthood? Give over. Why anyone would want a car signed off by him beats me.
The eternal problem Aston Martin has had, from the off, is to be owned by enthusiasts who ‘get’ the idea, but can’t make a commercial success of it. That includes Lionel Martin, AC Bertelli, David Brown, Company Developments, Victor Gauntlett, Ford and Kuwaiti DAR. It’s a brilliant basic idea. I know what it looks like but I don’t have the ability to capture it. It’s the English gentleman’s hand built stylish fast sports tourer. It never tries too hard.
It has done best with an owner who has been able to inject enormous amounts of money, like David Brown, and Ford. That shows you, in each case, how much trouble and effort have to go in to achieve brief moments of utter brilliance, DB4-5 / DBS & V8 Vantage, and profitability. Now it really needs to go beyond underfunded concept into the hands of a company who can really make it work in the long term. I’m not talking about opportunists or short term profiteers, visionaries or racing nuts. I’m talking about Daimler Benz AG.
AM has got a range which is good by any standard set by the company’s history. DB11 - as good as it gets. I’m going to get a Volante as soon as AP fks off. DBSS, impressive. Vantage, slightly misguided attempt to develop a distinct second line round the design brief ‘Great White Shark’. DBX, great car, if not the greatest thing ever to happen in the automotive industry since the discovery of the wheel. It’s a good start for a small specialist company.
He was offered a bribe, in the form of £60m worth of shares, to pull off the IPO. All he did was what Dany Bahar did at Lotus, which was to try to spin a fantastical apparently emerging success story out of a large and unrealistic number of ambitious product launches. His Second Century Plan. A load of high falutin crap. This was intended to create the impression that here was a car company ready to take on the world. As I said at the time, they were going to take everyone on at everything and win. And before Marek Reichman is cast as the hard working but unfortunate genius, just remember all the disingenuous and arrogant bulls
t he spouted when his electric Lagonda was launched. Rolls-Royce were stuck in the mud idiots. Of course they were. But Palmer is the paid bulls
tter par excellence, and he has let everyone down bar his employers. Knighthood? Give over. Why anyone would want a car signed off by him beats me. The eternal problem Aston Martin has had, from the off, is to be owned by enthusiasts who ‘get’ the idea, but can’t make a commercial success of it. That includes Lionel Martin, AC Bertelli, David Brown, Company Developments, Victor Gauntlett, Ford and Kuwaiti DAR. It’s a brilliant basic idea. I know what it looks like but I don’t have the ability to capture it. It’s the English gentleman’s hand built stylish fast sports tourer. It never tries too hard.
It has done best with an owner who has been able to inject enormous amounts of money, like David Brown, and Ford. That shows you, in each case, how much trouble and effort have to go in to achieve brief moments of utter brilliance, DB4-5 / DBS & V8 Vantage, and profitability. Now it really needs to go beyond underfunded concept into the hands of a company who can really make it work in the long term. I’m not talking about opportunists or short term profiteers, visionaries or racing nuts. I’m talking about Daimler Benz AG.
AM has got a range which is good by any standard set by the company’s history. DB11 - as good as it gets. I’m going to get a Volante as soon as AP f
ks off. DBSS, impressive. Vantage, slightly misguided attempt to develop a distinct second line round the design brief ‘Great White Shark’. DBX, great car, if not the greatest thing ever to happen in the automotive industry since the discovery of the wheel. It’s a good start for a small specialist company. Cheib said:
There may well be a Change of Control clause (CoC) in the debt that that would preclude taking the company private. It’s a pretty common clause in High Yield debt (although there are lots of variations) and may mean the debt would have to be repaid before taking the company private.
My information is not to hand now, but from memory, I think the largest (debt) bonds were issued before the IPO took place. Therefore AML was a private company at that time. Would there still likely be CoC restrictions?
Even so, the bonds all have the same repayment date, which is only about 25 months away, 15th April 2022. Ouch!.
Jon39 said:
Cheib said:
There may well be a Change of Control clause (CoC) in the debt that that would preclude taking the company private. It’s a pretty common clause in High Yield debt (although there are lots of variations) and may mean the debt would have to be repaid before taking the company private.
My information is not to hand now, but from memory, I think the largest (debt) bonds were issued before the IPO took place. Therefore AML was a private company at that time. Would there still likely be CoC restrictions?
Even so, the bonds all have the same repayment date, which is only about 25 months away, 15th April 2022. Ouch!.
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