Aston Martin back in profit as IPO move is weighed

Aston Martin returned to profit, and nearly doubled revenue, in the second quarter. The British luxury car-maker was buoyed by cost cuts and robust demand for its new, DB11 sports car.

Pre-tax earnings totalled £15.2m (€16.5m), compared with a £52.6m loss a year earlier, marking the third consecutive quarter that Aston Martin reported a profit. Revenue surged to £222m, from £119.2m, lifted by higher deliveries and selling prices, on the back of the DB11.

“There’s a possibility, an increasing possibility, that we might be able to report a profit on a full-year basis this year, already,” chief financial officer, Mark Wilson, said. Longer-term, the ramifications of Brexit on trade, and possible tariffs, remain difficult to predict, since the outcome of government talks on the UK’s departure from the EU is a “big unknown,” he said.

Aston Martin, whose high-end sports cars featured in James Bond films, has been eliminating jobs, and expanding its model range, to reverse six years of losses. In a bid to follow a trail blazed by Italian rival, Ferrari, the UK manufacturer may consider an IPO on the London Stock Exchange, as early as next year. “It’s a natural point of speculation”, given the company’s ownership structure, Mr Wilson said. A decision on a share sale would have to be made by Aston Martin’s shareholders and not the management board, he said. The carmaker’s owners include Italian private equity company, Investindustrial, and a Kuwaiti investment consortium, while Mercedes-Benz parent, Daimler, owns a small stake.

Chief executive, Andy Palmer, who took charge three years ago, is pushing to widen the brand’s appeal. The company plans to start production of the family-friendly DBX crossover, as well as an electric version of its Rapide coupe, in 2019. Other models in the works include special editions of the Vanquish sports car line.

Aston Martin also, on the back of yesterday’s figures, lifted its full-year forecast for adjusted earnings, before interest, taxes, depreciation, and amortisation (EBITDA), to £175m, from an earlier prediction of £170m. First-half profit, on that basis, surged almost fivefold to £93m. The company has been considering an IPO since at least 2011, when former chief executive, Ulrich Bez, said a listing would be a natural exit for its investors.

In May, a spokesman said management “are 100% focused on the delivery of our seven-year business plan,” adding that “any matters pertaining to the future structure, or ownership, of the company are a matter for our shareholders,” and that Investindustrial is “not working on an IPO”.

Bloomberg


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