AML - Stock Market Listing

AML - Stock Market Listing

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SSO

1,414 posts

192 months

Monday 3rd April 2023
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Minglar said:
It certainly does feel a bit like that although I think the video Jon posted is from 2021 listening to the time lines. But perhaps LS should consider a career in politics if his AML project doesn’t work out. Funnily enough SSO has published a new article comparing APs tenure to LSs. I remember there was some (possibly well warranted) vitriol at times on here towards AP around, and particularly after, the IPO, but in a like to like business comparison he doesn’t seem to fare too badly. Worth a look if you get time.

Best Regards

Minglar
When I stated pulling together the numbers for the article I wasn't sure where it would all land but the numbers tell a pretty clear story.

Jon39

Original Poster:

12,894 posts

144 months

Monday 3rd April 2023
quotequote all

SSO said:
When I stated pulling together the numbers for the article I wasn't sure where it would all land but the numbers tell a pretty clear story.

Interesting, thank you.

You made reference to the isolated year, in which a pre-tax profit was reported.
I have always been rather suspicious about that, because would you believe it, the IPO was being readied in the following year.
However, I could not see in the accounting whether there was anything obvious, such as reduced spending, or perhaps delaying supplier payments to help produce that profit. It just seemed far too much of a coincidence.

I seem to recall around that time, AML sold some vehicle tooling and intellectual property rights, for the Vanquish (possibly the NP version).
Think the buyer, a startup, was later named. The sale proceeds were booked to the accounts as one full payment (think in the profitable year before the IPO). It might have been £25 million. However, as time went on, AML said they did not receive any of the agreed stage payments from the buyer, so a reversal of the original credit had to be made, which I think was then after the IPO.
It seemed strange to me, that the full revenue for that transaction was posted to the accounts, before any real money had been received, but perhaps if an IPO needs to fly, other 'rules' might be introduced.

Just wondered if you have found any reasons, for the very coincidental single year of profit ?


geresey

412 posts

124 months

Tuesday 4th April 2023
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Agent57 said:
I'm sure I had a copy of that exact book as a child. smile
I used to write interesting ones down in a notebook when I was 9 or 10!
More recently…seen on the way to pick mine up…

Beckson

371 posts

52 months

Tuesday 4th April 2023
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wouldn't accrual based accounting recognize that revenue essentially at the time the invoice was created? Not saying it's not a "rigged" number in the sense, but that many business recognize revenue well before the cash hits their bank account. IE cash vs accrual based.

Jon39

Original Poster:

12,894 posts

144 months

Tuesday 4th April 2023
quotequote all

geresey said:
I used to write interesting ones down in a notebook when I was 9 or 10!

The Wocky people probably have a name for that medical condition.
I hope the you have recovered, but do not worry about it. - smile

It was of course perfectly normal behaviour for every young boy, who now might be 'of a certain age'.
A much better use of time than todays youngsters, who spend hours staring at their smart phones, then subsequently requiring treatment for Droop Neck and Round Shoulders.

[ I have read that last comment is actually true! ]


SSO

1,414 posts

192 months

Tuesday 4th April 2023
quotequote all
Jon39 said:

SSO said:
When I stated pulling together the numbers for the article I wasn't sure where it would all land but the numbers tell a pretty clear story.

Interesting, thank you.

You made reference to the isolated year, in which a pre-tax profit was reported.
I have always been rather suspicious about that, because would you believe it, the IPO was being readied in the following year.
However, I could not see in the accounting whether there was anything obvious, such as reduced spending, or perhaps delaying supplier payments to help produce that profit. It just seemed far too much of a coincidence.

I seem to recall around that time, AML sold some vehicle tooling and intellectual property rights, for the Vanquish (possibly the NP version).
Think the buyer, a startup, was later named. The sale proceeds were booked to the accounts as one full payment (think in the profitable year before the IPO). It might have been £25 million. However, as time went on, AML said they did not receive any of the agreed stage payments from the buyer, so a reversal of the original credit had to be made, which I think was then after the IPO.
It seemed strange to me, that the full revenue for that transaction was posted to the accounts, before any real money had been received, but perhaps if an IPO needs to fly, other 'rules' might be introduced.

Just wondered if you have found any reasons, for the very coincidental single year of profit ?
There are quite a few potential creative entries that would have helped deliver the profit that year (you are right, the tool sale is a bit fishy, so is the "buy back" of AM Brands). For the sake of simplicity in this analysis I took the position that if the auditors accepted the entry I wouldn't pull or call it out. If I had started to go after everything across all the years for booth Stroll and Palmer, the article might have run into a few hundred pages and take a year to write. smile

Jon39

Original Poster:

12,894 posts

144 months

Tuesday 4th April 2023
quotequote all

SSO said:
There are quite a few potential creative entries that would have helped deliver the profit that year (you are right, the tool sale is a bit fishy, so is the "buy back" of AM Brands). For the sake of simplicity in this analysis I took the position that if the auditors accepted the entry I wouldn't pull or call it out. If I had started to go after everything across all the years for booth Stroll and Palmer, the article might have run into a few hundred pages and take a year to write. smile

Thank you SSO.

Ref. the tooling and IP 'sale'.
Out of interest, do accounting rules allow revenue to be counted, before it is known whether the buyer can/will pay?

I suppose it is probably based on the date of invoice.

In this instance, stage payments were agreed over quite a long period, so logically an invoice might have only been for the first payment (not yet due). If I remember, the entire revenue was counted as a single item when that 'sale' was announced .

Stretching my memory now. I think the financial period might have been 1st Q 2018 when the pre-tax profit was about £25 million, coincidentally a very similar amount to that tooling and IP revenue, which never existed.
However, what a perfectly timed turnaround story. At last, a full year profit in 2017, continuing into Q1 2018, so investors who had not studiied 100 years of AM history, or had spotted the hype, might have thought a glorious money making future had begun and the imminent IPO would provide a tremendous money making opportunity for them to be part of.

Oh dear, just eighteen months later, the tooling and IP transaction had been written off, effectively eliminating any Q1 2018 profit and it was 'window sill' time.


Edited by Jon39 on Thursday 6th April 07:15

oilit

2,637 posts

179 months

Thursday 6th April 2023
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In 2018 i did a factory tour after speccing my car and i saw all the stuff crated up and was told it was all sold off.

In my world such a deal couldn’t be recognised until it ‘shipped’ or deployed, and even then if its stage payments the revenue wouldnt be recognised until due or paid (i am no accountant but get involved in these discussions often with accountants - albeit usa based ones)

On a lighter note - this snippet about Mercedes made me smile:-

…….Maybach has also teased an ultra-luxury version of the latest SL.

Jon39

Original Poster:

12,894 posts

144 months

Thursday 6th April 2023
quotequote all

oilit said:
On a lighter note - this snippet about Mercedes made me smile:-

…….Maybach has also teased an ultra-luxury version of the latest SL.

'In future, Mercedes-Benz will concentrate on three product categories: Top-End Luxury, Core Luxury and Entry Luxury.'

Now, the big question;

How can we tell which is best, Ultra-Luxury, or Top-End Luxury ?

Then we could move even further up, into Luxury-Luxury, Hyper-Luxury and Mega-Luxury.

'Lawrence Stroll announces the new Mega-Luxury Aston Martin. "The seating is so wonderfully soft, that you feel as though you are floating on waffle."


pschlute

719 posts

160 months

Thursday 6th April 2023
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Jon39 said:

It seemed strange to me, that the full revenue for that transaction was posted to the accounts, before any real money had been received, but perhaps if an IPO needs to fly, other 'rules' might be introduced.
Pretty normal accounting procedures Jon. The income gets added to the revenue account (increasing profit), and is reflected in the balance sheet as an increase in assets...Debtors. The probity of the transaction would be down to AM's credit control procedures.

If you really want to see financial skulduggery, have a read up on Enron, who I had the misfortune to work for in the last two years before they went spectacularly bust in 2001



Calinours

1,145 posts

51 months

Thursday 6th April 2023
quotequote all
pschlute said:
Jon39 said:

It seemed strange to me, that the full revenue for that transaction was posted to the accounts, before any real money had been received, but perhaps if an IPO needs to fly, other 'rules' might be introduced.
Pretty normal accounting procedures Jon. The income gets added to the revenue account (increasing profit), and is reflected in the balance sheet as an increase in assets...Debtors. The probity of the transaction would be down to AM's credit control procedures.

If you really want to see financial skulduggery, have a read up on Enron, who I had the misfortune to work for in the last two years before they went spectacularly bust in 2001
you weren’t one of their accountants were you?? biggrin

pschlute

719 posts

160 months

Thursday 6th April 2023
quotequote all
Calinours said:
you weren’t one of their accountants were you?? biggrin
Certainly not !

Minglar

1,244 posts

124 months

Wednesday 3rd May 2023
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Q1 2023 Results released this morning. Just looks like more of the same to me.
frown

https://www.londonstockexchange.com/news-article/A...

Best Regards

Minglar

Jon39

Original Poster:

12,894 posts

144 months

Wednesday 3rd May 2023
quotequote all

Instead of all sold out, I notice now they say 90% sold out.
Could that mean 10% of Sports/GT buyers now know about the revised models and so are waiting.
LS has spoken many times about the forthcoming exciting new models (the first announcement later this month), so I am surprised that the present versions are selling. Car buyers usually prefer the latest.

Cash in December 2022 ........... £583m.
Cash in March 2023 .................. £408m.

Net debt in December 2022 ......£766m.
Net debt in March 2023 ............ £868m.

Pre-tax Loss 2023 Q1 ................£ 74.2m.
Pre-tax Loss 2022 Q1 ............... £111.6m.

The recent increased value of Pound vs Dollar, has been of benefit to AML this quarter.
The introduction of new models will hopefully boost sales numbers.

An interesting stock market reaction following the results announcement this morning (although it means nothing really).
Initially the share price was up about 2%, but now it is down 5%.
Two opposing opinions by share buyers/sellers.
You can never forecast short-term share price movements.

12TS

1,876 posts

211 months

Wednesday 3rd May 2023
quotequote all
The bubble back in March where the SP reached nearly 300p is interesting, I suppose it was just speculators and nothing to do with underlying company performance. I'm still up since I bought back in Feb, but it's a volatile stock.

Today's results don't look good.

Jon39

Original Poster:

12,894 posts

144 months

Wednesday 3rd May 2023
quotequote all

12TS said:
The bubble back in March where the SP reached nearly 300p is interesting, I suppose it was just speculators and nothing to do with underlying company performance. I'm still up since I bought back in Feb, but it's a volatile stock.

Today's results don't look good.

'Today's results don't look good.'
Don't worry Nigel, figures like that have been perfectly normal since 1913 and the Company is still going.

'it's a volatile stock.'
Have you been following the business since the stock market flotation ?
Andy Palmer, then President of Gaydon and CEO, said the firm might become eligible for inclusion in the FTSE 100 Index of the top UK companies. Membership requires a valuation of about £5 billion.
After leaving AML, he went on to have a brilliant career selling refrigerators to Eskimos.

' ... the SP reached nearly 300p is interesting, I suppose it was just speculators and nothing to do with underlying company performance.'
Correct.
After Fernando Alonso finished 3rd in the first 2023 F1 GP, share buyers immediately became very excited. They imagined that queues of eager buyers would be standing outside Aston Martin dealers throughout the world, waving debit cards and wanting a green F1 Vantage. Win on Sunday, sell on Monday used to be the saying. Doesn't seem to work like that these days, particularly when the product costs about £200,000.
The McLaren F1 advertising might be more effective, selling packets of Vuse.


SSO

1,414 posts

192 months

Wednesday 3rd May 2023
quotequote all
Jon39 said:

12TS said:
The bubble back in March where the SP reached nearly 300p is interesting, I suppose it was just speculators and nothing to do with underlying company performance. I'm still up since I bought back in Feb, but it's a volatile stock.

Today's results don't look good.

'Today's results don't look good.'
Don't worry Nigel, figures like that have been perfectly normal since 1913 and the Company is still going.

'it's a volatile stock.'
Have you been following the business since the stock market flotation ?
Andy Palmer, then President of Gaydon and CEO, said the firm might become eligible for inclusion in the FTSE 100 Index of the top UK companies. Membership requires a valuation of about £5 billion.
After leaving AML, he went on to have a brilliant career selling refrigerators to Eskimos.

' ... the SP reached nearly 300p is interesting, I suppose it was just speculators and nothing to do with underlying company performance.'
Correct.
After Fernando Alonso finished 3rd in the first 2023 F1 GP, share buyers immediately became very excited. They imagined that queues of eager buyers would be standing outside Aston Martin dealers throughout the world, waving debit cards and wanting a green F1 Vantage. Win on Sunday, sell on Monday used to be the saying. Doesn't seem to work like that these days, particularly when the product costs about £200,000.
The McLaren F1 advertising might be more effective, selling packets of Vuse.
Cash burn in Q1 was quite impressive

and vehicle wholesales were down 47% vs. last quarter.


Edited by SSO on Wednesday 3rd May 19:10

Jon39

Original Poster:

12,894 posts

144 months

Wednesday 3rd May 2023
quotequote all

There was a question in the Results Q & A this morning about purchases using credit.
In the UK car market as a whole, it seems to be suggested that about 80 or 90 percent of new car purchases involve credit.

The AML answer was about 30%, but it was added that whenever a new model is launched, there tends to be an increase in the number of cash purchases.
More credit purchases in the USA.


Piginapoke

4,815 posts

186 months

Wednesday 3rd May 2023
quotequote all
SSO said:
Cash burn in Q1 was quite impressive

and vehicle wholesales were down 47% vs. last quarter.
About 12 months until insolvency, current course and speed.

Beckson

371 posts

52 months

Wednesday 3rd May 2023
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A slowing global economy does not help the situation. In the US automakers, mostly non luxury I work with, are seeing increased inventory on the lots and manufacturers are starting to push out more discounts and finance incentives.