Aston Martin considers London IPO as profits hit record levels

Aston Martin has announced it potentially plans to float on the London Stock Exchange later this year after a set of half-year results that saw sales and profits for the luxury British car maker hit record levels.

Revenues climbed 14 per cent to £449.9 million, while pre-tax profits rose from £20.1 million to £20.8 million, buoyed by the launch of three new sports cars and growing demand in Asia.

Once the cost of preference shares and other measures were stripped out, pre-tax profits rose to £42 million, and the company booked a profit margin of 24 per cent.

At least 25 per cent of its shares will float in the listing, which will happen later this year, in a move that would allow it to enter the FTSE 100 if the company’s valuation is high enough.

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The company is expected to be valued at around £5 billion at the IPO, according to sources.

The move to list, which comes after seven consecutive quarters of profitability, marks the completion of the turnaround for a historic business that has been bankrupt seven times.

"This is a monumental moment," chief executive Andy Palmer said.

“When I started in 1979 there were lots of British car companies. Over the course of my career those have disappeared.

“Car making in the UK is in a healthy state, but companies are foreign owned.

“Now we will have an independent British car company again.”

Current backers

Aston's current backers, Italian group Invest Industrial and the Kuwaiti investment fund Investment Dar, will sell down some shares, while Daimler, which owns 4.9 per cent of Aston and has a technology sharing agreement with the company, will remain a shareholder.

The number of cars sold in the first half slipped to 2,299 from 2,439 in the same six months last year, because of the launch of three new models: The DB11 Volante, the DB11 AMR and the Vantage.

It will also begin production of its highest-end regular model, the DBS, in the next quarter.

It expects to sell 6,200 to 6,400 this year, climbing to 7,100 to 7,300 next year and up to 9,800 in 2020 when its new plant in Wales comes on stream. In the long run, the business expects to make up to 14,000 cars a year, across both its Aston Martin nameplate and its new Lagonda brand, which the company will relaunch as a luxury electric marque.

The group will also rebalance its global sales, with less reliance on the UK, which accounts for 30 per cent of sales, and increased presence in Asia, which it believes will rise from 16 per cent of sales to more than a quarter, pushed by its sports utility vehicle that will come to market in 2020. – Copyright The Financial Times Limited 2018