AML - Stock Market Listing

[RobDown]

That rule of thumb still stands Jon

[tigerkoi]

Didn’t AML issue £55m of senior debt, also due for 2022, back in 2017?

[Jon39]

tigerkoi said:

Didn’t AML issue £55m of senior debt, also due for 2022, back in 2017?

Extract from page 186 of the 2018 Annual Report.
Bed time reading for you (although I know it is not yet bed time in Canada).

---

Non-Current Borrowings

In June 2011, the Group issued £304m 9.25% Senior Secured Notes repayable in July 2018. These notes were repaid in April 2017 when the Group issued $400m 6.5% Senior Secured Notes and £230m 5.75% Senior Secured Noted, both of which mature in April 2022. In December 2017 the Group issued a further £55m of 5.75% Senior Secured Notes which also mature in April 2022.

The movement in carrying value of the Senior Secured Notes from 2017 to 2018 includes £2.3m (2017: £2.0m) amortisation of previously capitalised professional fees.

The combined sterling equivalent value of the Senior Secured Notes at 31 December 2018 is £590.9m (2017: £570.2m).

As described in accounting policies (see note 2), borrowings are initially recognised at fair value less attributable transaction costs. Subject to initial recognition, borrowings are stated at amortised cost with any difference between cost and redemption value being
recognised in the Statement of Comprehensive Income over the period of the borrowings on an effective interest basis.

The Senior Secured Notes above are secured by fixed and floating charges over certain assets of the Group.

In March 2014 the Group issued $165m of 10.25% Senior Subordinated PIK Notes which were repayable in July 2018. These notes were repaid in April 2017.

In 2018 the Group entered into a fixed rate loan to finance the construction of the paint shop at the new St Athan manufacturing facility. The loan matures on 31 March 2022. The quarterly repayments on the loan include an element of capital repayment and interest charge. The final payment on 31 March 2022 includes an increased capital repayment of £6.3m. At 31 December 2018 the amount included in non-current borrowings is £12.4m.

In February 2017 the Group obtained a 5% unsecured loan of Yen 200m which is repayable in January 2020 to finance the construction of a brand centre in Tokyo. At the closing exchange rate the loan is valued at £1.4m (31 December 2017: £1.3m).

In both April 2015 and April 2016, the Group issued £100.0m of Preference Shares which were redeemable in April 2025. As part of the listing of the Company’s ordinary shares on the London Stock Exchange, on 3 October 2018, the preference shares, together with the share warrants attached to them, were converted into ordinary shares of 0.00904p each. See note 28 for details of the capital reorganisation completed in 2018.

No borrowing costs have been capitalised during the year ended 31 December 2018 (31 December 2017: £12.1m). The borrowing costs capitalised in 2017 relate to the $400m of 6.5% Senior Secured Notes and £285m of 5.75% Senior Secured Notes raised in 2017.

---

[hornbaek]

Jon39 said:

I assume that any concerns amongst investors about an equity rights issue will have now diminished, because an additional $190m debt has been taken on.

1st April 2019
'Aston Martin Lagonda Global Holdings plc ("Aston Martin Lagonda" and together with its affiliates, the "Group") today announced that its subsidiary Aston Martin Capital Holdings Limited has privately placed $190,000,000 aggregate principal amount of 6.50% senior secured notes due 2022.'


It was years ago that I was involved with company flotations, but the phrase 'leaving something on the table', then meant trying to price an IPO, so that the new shares would begin trading perhaps up around 10% on the first day. When that happened, it was considered by all participants to be an encouraging start and the further initial share trading tended to be more likely to stay above the float price. Obviously the sellers had to make a sacrifice, but if they had only part sold, there was the possibility of benefit later.

Exactly. That is also the right strategy if you want to feed shares back info the market at a later stage after the lock-up has expired.
The bond issue takes away the threat of a highly dilutive share offering - but it comes at a price - 6.5%.

[RL17]

Apologies for misunderstanding left on the table but:

Big banks (incl DB I think) were well paid for advising on the float. Initial range announcement was £17.50 to £22.50 range (£4bn to £5.1bn) before prospectus issued.

Range later narrowed to £18.50 to £20.00 and set at £19.00. So price was set in lower third of range and value below FTSE 100 levels.

Banks and city institutions make money on advice and buying and selling (and then more advice and more buying and selling) and paying for holding/doing nothing.

So really if goes up they win, goes down they win or stays flat they win - but really share price movements up and down make the world go round. Is latest reports covering arses for previous reports:

November Buy Target 2000p (when shares in 1600-1400p range mostly) &

February Reiterates buy (when shares bouncing around 1200 to 1300 to 1100 levels before heading to 1000p levels until latest
report)

[RobDown]

RL17 said:

Apologies for misunderstanding left on the table but:

Big banks (incl DB I think) were well paid for advising on the float. Initial range announcement was £17.50 to £22.50 range (£4bn to £5.1bn) before prospectus issued.

Range later narrowed to £18.50 to £20.00 and set at £19.00. So price was set in lower third of range and value below FTSE 100 levels.

Banks and city institutions make money on advice and buying and selling (and then more advice and more buying and selling) and paying for holding/doing nothing.

So really if goes up they win, goes down they win or stays flat they win - but really share price movements up and down make the world go round. Is latest reports covering arses for previous reports:

November Buy Target 2000p (when shares in 1600-1400p range mostly) &

February Reiterates buy (when shares bouncing around 1200 to 1300 to 1100 levels before heading to 1000p levels until latest
report)

Yes and no

No broker wants to see the stock going down on an IPO. It sours relationships with the corporate, leaves a bad feeling amongst investors and makes them less likely to put money into the next IPO. So you price in the hope of a modest day 1 gain - enough to leave investors happy but not so much that the seller thinks they got ripped off. The Lyft IPO collapse in the US is causing a great deal of nervousness at the moment as everyone is worried it stalls the pipeline of deals in the next few months

With equities, you're right as a general rule the most profitable client would be one who changed his mind every day about what they wanted to own (and so traded a lot). Hence the love-in with hedge funds. But the market has evolved a lot with Mifid 2. The actual cost of executing a trade has dropped to peanuts and more and more clients are paying directly for "advice" rather than for transactions. But having said that, seeing a stock yo-yo up and down isn't great; it just puts investors off trading and can make the cost of running equity derivative franchises difficult to deal with (hence recent profit warnings from the likes of Socgen).

I can't speak for the DBK analyst. But I have a suspicion that things went like this; his firm were involved in the IPO. And while he wasn't under any pressure from the investment bankers to be positive on the stock after the float (that would not be allowed under compliance rules, and they are strictly enforced now) he may have felt some almost moral obligation (loyalty?) to be positive initially. After all, he's been out marketing the AML story to investors in the run up to the IPO (albeit he should not at that point have had a valuation on the company under current rules). Now the reality of the tough market conditions has hit home and he's panicked...

I've seen that often enough. If I were an institutional investor I would never follow the initial recommendation or forecasts of an analyst that's been connected to the IPO, technically they're independent, but in practical terms they may not be. Far better to look for the thoughts of the analysts who were un-connected and therefore don't feel any obligations to be positive.

[PantsFire]

After Snapchat anyone who didn't see Lyft stting the bed or have a good laugh at Uber's $111b valuation deserves to lose their money

I think AML will come good for investors in the long term, the SUV and the new mid engine range look like money makers, I think AML need to be brave and refresh the Vantage, it's not selling as well as expected and everyone knows it.

[RobDown]

PantsFire said:

After Snapchat anyone who didn't see Lyft stting the bed or have a good laugh at Uber's $111b valuation deserves to lose their money

I think AML will come good for investors in the long term, the SUV and the new mid engine range look like money makers, I think AML need to be brave and refresh the Vantage, it's not selling as well as expected and everyone knows it.

Fingers crossed!

[Jon39]

Yes I agree (RL17), the world of equity analysts seems very strange on occasions.

I often wonder whether clients do act upon the equity recommendations. I can remember an instance where Goldman Sachs, being the only analyst out of a dozen, gave a Sell recommendation. The other eleven were all Strong Buy. After about nine months and a 30% share price increase, Goldman then issued a Buy rating. It would have been costly for their clients who followed that advice.

Obviously not all of our investment decisions can turn out to be correct, hence diversification to spread the overall risk, but when an analyst publishes a recommendation to their clients, and then after a short time completely changes it, you would think they would begin with an apology. Oh no, they just list supposed reasons why the future business profitability is going to be affected.

In the instance which you have outlined, others have already pointed out here, that all the reasons given were nonsense, because the information had already been publicly known months earlier.

Perhaps we have an Aston Martin owning analyst here, who can explain their profession to us.

This morning at one point, AML was trading at 911p. You would think there would be some courtesy shown, and do those trades at 910p or 912p. That reminds me, Porsche now sell far more SUVs than sports cars. If Aston Martin can achieve that with large profits, then we might see a remarkable share price increase.

Edited by Jon39 on Thursday 11th April 13:31

[RL17]

Thanks Rob

Fingers crossed too

Market adjustment in October certainly didn't help. Some of financial press also concerned about average vehicle sales price dropping 7% q£ update etc seems pretty uninformed.

So when's the manual Vantage/facelift? coming?

[AstonZagato]

PantsFire said:

After Snapchat anyone who didn't see Lyft stting the bed or have a good laugh at Uber's $111b valuation deserves to lose their money

I think AML will come good for investors in the long term, the SUV and the new mid engine range look like money makers, I think AML need to be brave and refresh the Vantage, it's not selling as well as expected and everyone knows it.

What's the main issue with the Vantage. Personally, I only dislike the front. The grille is too low and lights are too small - it just doesn't work (in my opinion). I like the side and rear aspects. I don't have a problem with the engine or interior (I prefer the interior to the DB11's, which really is dreadful). A facelift at the front that made it more DBSS-like would make it my current favourite Aston, I think.

[tigerkoi]

AstonZagato said:

PantsFire said:

After Snapchat anyone who didn't see Lyft stting the bed or have a good laugh at Uber's $111b valuation deserves to lose their money

I think AML will come good for investors in the long term, the SUV and the new mid engine range look like money makers, I think AML need to be brave and refresh the Vantage, it's not selling as well as expected and everyone knows it.

What's the main issue with the Vantage. Personally, I only dislike the front. The grille is too low and lights are too small - it just doesn't work (in my opinion). I like the side and rear aspects. I don't have a problem with the engine or interior (I prefer the interior to the DB11's, which really is dreadful). A facelift at the front that made it more DBSS-like would make it my current favourite Aston, I think.

Yes Snap was a bellwether that seems to have been disregarded, to the detriment of many bulge brackets...

On the Vantage: I don’t think the DB11 interior is fantastic either and it’s easily the weakest part of the package. The challenge with the Vantage though is that at the price point, and considering the predicted volumes, the interior - for many North American premium buyers - really suffers by comparison. Maybe compared to the U.K. it’s a bit of a headscratcher (“why not take in the glorious shape; who cares about air vents”), comments can get disparaging when your average guy feels he gets a better interior in a Buick Regal! On top of that, the layout of the buttons looks like an infant is trying to get everything geometric rather than using a normal cluster formula.

In Europe where pedigree might mean more, in NA, if people pay six figures for something they want it to be better in every way to something that cost five figures. In every way.

Jon, thanks for the bedtime reading recommendation: usually I prefer nursery rhymes not thrillers to help me get some shuteye

[PantsFire]

AstonZagato said:

What's the main issue with the Vantage. Personally, I only dislike the front. The grille is too low and lights are too small - it just doesn't work (in my opinion). I like the side and rear aspects. I don't have a problem with the engine or interior (I prefer the interior to the DB11's, which really is dreadful). A facelift at the front that made it more DBSS-like would make it my current favourite Aston, I think.

Basically what you said, the front doesn't look good, I spend too much time on Instagram and it's near universally regarded as the Vantage's weakest feature, the DBS front looks amazing, a middle ground between the two would probably suit the Vantage to a tee. I've suggested before, have them bring out a Vantage S/AMR whatever you want to call it, with an updated front end, then offer an 'exterior upgrade package' to current customers, so as not to piss them off. It'd also give Aston another excuse to get the car reviewed and re-energise sales.

[jonby]

PantsFire said:

AstonZagato said:

What's the main issue with the Vantage. Personally, I only dislike the front. The grille is too low and lights are too small - it just doesn't work (in my opinion). I like the side and rear aspects. I don't have a problem with the engine or interior (I prefer the interior to the DB11's, which really is dreadful). A facelift at the front that made it more DBSS-like would make it my current favourite Aston, I think.

Basically what you said, the front doesn't look good, I spend too much time on Instagram and it's near universally regarded as the Vantage's weakest feature, the DBS front looks amazing, a middle ground between the two would probably suit the Vantage to a tee. I've suggested before, have them bring out a Vantage S/AMR whatever you want to call it, with an updated front end, then offer an 'exterior upgrade package' to current customers, so as not to piss them off. It'd also give Aston another excuse to get the car reviewed and re-energise sales.

Personally, especially in person, I think new vantage looks stunning, front included. Obviously that's personal and subjective

I suspect one issue is that it's gone up a big notch in pricing from the old model, over and above the 'theoretical price rise', because of the difference in discounts and extras

Outgoing vantage in v8 form, by and large, was a car that tended to sell new for significantly less than £100k - it listed at mid 90s, was mostly available with chunky discounts and came pretty well loaded to start with. There weren't that many costly extras you could put on compared to the new one. Even the AMR one listed at less than 100k before extras. You could get a seriously well loaded V8 coupe, dealer spec, unregistered or delivery miles, for less than 100k

Meanwhile new vantage has a list price of 120k so 25k more than outgoing model and has loads more you can put on so typical car will list I assume at 135-140k.

Whilst it's a lot quicker than the V8 its replaced, that is a fairly hefty price jump and means in price it's rivalling a 911 turbo, rather than a carrera s.

In turn, that surely means a big hike again in price for an S/AMR version that will inevitably follow

When DB11 AMR launched, I was staggered at the price jump over DB11 - most of the improvements were either an artificial power boost (artificial in that it appears to be less restricted rather than materially improved or changed), or taking on handling upgrades that were brought out first with V8 DB11 so cost nothing, plus some cosmetic extras.

If they do the same with vantage, I can't see it going well for sales. But based on past history, Aston will impose a big price jump and will a V8 Vantage, with a suffix, a small power bump and bit of extra kit, sell well at what, a list price before extras of 140k+ ?

Where it will get interesting is when/if they put a variation of the new, aston power train, debuting in RB003 and the mid engined car, into vantage

[PantsFire]

jonby said:

Personally, especially in person, I think new vantage looks stunning, front included. Obviously that's personal and subjective

I suspect one issue is that it's gone up a big notch in pricing from the old model, over and above the 'theoretical price rise', because of the difference in discounts and extras

Outgoing vantage in v8 form, by and large, was a car that tended to sell new for significantly less than £100k - it listed at mid 90s, was mostly available with chunky discounts and came pretty well loaded to start with. There weren't that many costly extras you could put on compared to the new one. Even the AMR one listed at less than 100k before extras. You could get a seriously well loaded V8 coupe, dealer spec, unregistered or delivery miles, for less than 100k

Meanwhile new vantage has a list price of 120k so 25k more than outgoing model and has loads more you can put on so typical car will list I assume at 135-140k.

Whilst it's a lot quicker than the V8 its replaced, that is a fairly hefty price jump and means in price it's rivalling a 911 turbo, rather than a carrera s.

In turn, that surely means a big hike again in price for an S/AMR version that will inevitably follow

When DB11 AMR launched, I was staggered at the price jump over DB11 - most of the improvements were either an artificial power boost (artificial in that it appears to be less restricted rather than materially improved or changed), or taking on handling upgrades that were brought out first with V8 DB11 so cost nothing, plus some cosmetic extras.

If they do the same with vantage, I can't see it going well for sales. But based on past history, Aston will impose a big price jump and will a V8 Vantage, with a suffix, a small power bump and bit of extra kit, sell well at what, a list price before extras of 140k+ ?

Where it will get interesting is when/if they put a variation of the new, aston power train, debuting in RB003 and the mid engined car, into vantage

In the US, where there's a lot of unsold dealer stock, you can get a new Vantage on lease with zero down-payment for $1800 a month, that's a grand less than a 911 turbo S, they are aggressively discounting the Vantage because it is not shifting. They need to do something about that.

As for the new V6 being put in the Vantage, for sure it's the future, but the V6 is going to have to be amazing not to be instantly discounted by many fans, hopefully it rev's stupidly high

[Jon39]

After a long wait, the DVLA have now published their new registration figures for the 4th quarter of 2018.
Remember this is UK only.

DB11 AMR V12 Auto = 6
DB11 V12 Auto = 15
DB11 V8 Auto = 28
DB11 V8 Volante Auto = 43
DB11 total = 92

DB9 = 4

DBS Superleggera V12 Auto = 46

Vantage V8 Auto = 107


( Perhaps the DB9s have been brought to the UK from other countries. It must be unlikely that they remained in stock for such a long time. )

Edited by Jon39 on Thursday 11th April 19:31

[tigerkoi]

Jon39 said:

After a long wait, the DVLA have now published their new registration figures for the 4th quarter of 2018.
Remember this is UK only.

DB11 AMR V12 Auto = 6
DB11 V12 Auto = 15
DB11 V8 Auto = 28
DB11 V8 Volante Auto = 43
DB11 total = 92

DB9 = 4

DBS Superleggera V12 Auto = 46

Vantage V8 Auto = 107


( Perhaps the DB9s have been brought to the UK from other countries. It must be unlikely that they remained in stock for such a long time. )

Edited by Jon39 on Thursday 11th April 19:31

I welcome a different point of view but after extrapolating those numbers out I find it hard to see there’s a £5bn valued company behind them. Let alone a £2bn one.

[Jon39]

Total figures for the other quarters could be combined with these, but 2018 was probably not really representative.
Customer deliveries of two new models only began part of the way though the year, and prior to their release, I think there was an interval following the end of the previous models production.

Although the UK is still the biggest market, 70% is about the proportion of cars exported.

Edited by Jon39 on Thursday 11th April 19:50

[tigerkoi]

That’s fair enough, and 2019 is certainly likely to prove more accurate in terms of outlook.

The challenge for AP as a CEO is that he doesn’t sound like everything is mañana.

DBX needs to hit the ground running on release and analysts have to feel that Vantage will get some momentum, soon.

[hornbaek]

Its UK only, but we have to assume that it is AML’s largest market but you are spot on regarding valuation - it simply doesn’t add up.

In a way I am less concerned now after the bond issue got away, because before that I really could not see how they would fund the development plan. The fact that bond has been issued tells me, that somebody (externally) has scrutinised the figures and got it placed among investors.