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Aston Martin to make stock market debut next month

The first British carmaker to do so for decades
posted onSeptember 24, 2018
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British luxury carmaker Aston Martin is getting ready to make an Initial Public Offering on the London Stock Exchange in October. 

The company, whose cars are featured in James Bond movies, has set the price range for its IPO at £17.50 to £22.50 ($29.75) per ordinary share. This implies a market value of as much as £5.1 billion ($6.7 billion).

Aston Martin said that the final pricing of the share sale would be announced early next month, and shares would start trading on or around October 8. It also said the IPO would involve a sale of shares by its largest investors,  Italy's Investindustrial and Kuwait's Investment Dar. Mercedes-Benz parent Daimler  which owns a 4.9% stake will remain a shareholder. 

"By becoming the only automotive company listed on the London Stock Exchange, Aston Martin Lagonda will provide investors with a fitting opportunity to participate in our future success. Our Second Century Plan gives prospective investors deep insight into how we have executed our turnaround and how we are positioned for growth," Andy Palmer, President and Group CEO of Aston Martin said in a statement. 

Andy Palmer, President and Group CEO of Aston Martin
Andy Palmer, President and Group CEO of Aston Martin

In 2017,  Aston sold a total of 5,117 vehicles, a 58 percent jump from 2016. That yielded record revenue of £876 million ($1.1 billion). Last month, the company announced earnings for the first half of the year, reporting an 8% year-over-year increase in revenues to 445 million pounds while profit increased 14% to 106 million pounds.

For 2018, Aston expects to deliver between 6,200 and 6,400 vehicles, rising to 7,100 to 7,300 in 2019, climbing nearly to 10,000 in 2020 once a new production plant in Wales is completed as demand from super-rich car enthusiasts increases.  

The 105-year-old luxury carmaker has also lined up experienced FTSE executives to boost its board. Penny Hughes, who has previously worked at FTSE companies Vodafone and supermarket WM Morrison, will become Aston's non-executive chair of the board when the flotation takes place, the company said. Hughes will be the first female chair of a British car maker. 

Richard Solomons, who was chief executive of InterContinental Hotels from 2011 to 2017, will become a senior independent director and chair of the board's audit and risk committee.

Imelda Walsh, who is chair of the remuneration committee at transport firm FirstGroup, and Peter Espenhahn, who has audit and tax experience with accountancy firm Deloitte, will also join Aston. 

Aston Martin HQ, Gaydon, England Photo: Aston Martin
Aston Martin HQ, Gaydon, England Photo: Aston Martin

Palmer told Reuters the appointments would help avoid a repeat of some of the previous mistakes made by the firm, which has gone bankrupt seven times in its history.

But some analysts are sceptical arguing the Aston Martin brand is not as strong as that of Italian rival Ferrari and have raised questions about the valuation it is seeking. "We love the brand. We respect the management team," wrote analysts at Bernstein. "But we simply can't see how a Ferrari [valuation] looks realistic."

Aston Martin Lagonda was founded in 1913 in a small London workshop by Lionel Martin and Robert Bamford. The company's headquarters and the main production site are in Gaydon, central England. It employs more than 2,700 people, and sells its cars in 53 countries. 

In August 2017, a 1956 Aston Martin DBR1/1 was sold at a Sotheby's auction at the Pebble Beach, California Concours d'Elegance for $22,550,000. It was the most-expensive British car ever sold at auction, according to Sotheby's.