|Bid||453.40 x 0|
|Ask||456.80 x 0|
|Day's Range||430.00 - 468.00|
|52 Week Range||371.10 - 1,915.00|
|Beta (3Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||1,849.11|
Four cars were made for the early James Bond movies -- and one of them will be up for auction next week. "CBS This Morning" co-host Anthony Mason got to fulfill a lifelong fantasy and take the Aston Martin for a spin before it hits the auction block, where it's estimated to net $4 to 6 million.
It's considered one of the most famous cars in the world; the James Bond's Aston Martin DB5, that is. And it's up for auction and could sell for $6 million dollars. Barney Ruprecht who is RM Sotheby's Senior Car Specialist, joins 'On the Move' to discuss more.
(Bloomberg Opinion) -- The company behind Aston Martin should take the plunge and raise some equity while it can. Aston Martin Lagonda Global Holdings Plc doesn’t need the money immediately. But the historic sportscar maker may in the future, and it would be better to secure the cushion now before its window of opportunity shuts entirely. Thursday’s brief 21% share price fall should focus minds.When Aston went public in October, it had a goal to produce about 7,200 cars this year, doubling to 14,000 in the “medium term” (understood as 2022). Last month it revised that first target down to 6,400 vehicles. Analysts are less optimistic about the future, with some now expecting Aston to deliver only 11,000-12,000 three years out.The shortfall matters. Aston’s business model is to use cash from car sales to fund development of its next models. Its yearly capital spending budget is roughly 300 million pounds ($362 million). Ongoing cash interest charges are estimated at about 65 million pounds. Operating cash flow is expected to be only 234 million pounds this year, according to Bank of America Merrill Lynch analysts. So Aston will have to dip into its 127 million pounds of cash reserves.Can the company pay its own way from 2020? Opinions diverge. The group is due to launch its DBX sports utility vehicle in the second quarter, aiding cash generation. Some analysts expect operating cash flow to pick up and capex to fall, facilitating a reduction in net debt. Others sees the cash equation remaining slightly out of balance, and net debt rising next year and in 2021 but falling sharply thereafter. Aston can fund itself without recourse to new money in both scenarios.But what if sales and cash generation fall sharply? There are three predictable risks: A badly managed Brexit could disrupt Aston’s supply chain more than it’s prepared for; the DBX might flop because of production snags or poor demand; a global economic slowdown would see Aston’s Asian and U.S. markets suffer from the same weakness that’s held Europe back this year.In any of these scenarios, Aston’s cash could run dry unless the group slammed the brakes on the business and slashed capex. That might be a solution if Aston didn’t also face a looming refinancing in 2022. In reality, it will not want to go into that leaking cash and with the business on hold.True, the carmaker could raise some new long-term debt now. This seems to be management’s preferred option. But it’s strange to be borrowing more when Aston is stretching to service its current debts. A 250-500 million pound rights offer would alleviate the strain, as BAML notes. With Aston’s market value now just 1 billion pounds, the chance to grab the top of that range may already have passed.The weak share price, having already fallen so far, may make underwriters more willing to support a capital raise. James Bond is careful to drive a bulletproof Aston. This balance sheet needs the same armor.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Aston Martin Lagonda Chief Executive Officer Andy Palmer said the company’s first sport utility vehicle arriving later this year will be crucial for the British luxury-car maker, which is trying to revive sales growth and rebuild investor trust.The DBX will add about 4,000 units to annual deliveries after its launch in late 2019, Palmer told reporters in Tokyo. The automaker cut its overall sales target for this year by 11% last month to a minimum of 6,300 cars.The DBX will be the biggest step yet in Palmer’s campaign to win over buyers and regain investor confidence in the Gaydon, England-based carmaker. Waning demand in the U.K. and Europe have left Aston Martin’s stock valued at a quarter of its initial public offering price just 10 months ago -- the worst-performing new listing on London’s main market in more than two years.“The key, of course, is DBX,” Palmer told reporters at the brand’s dealership in central Tokyo. “When you see DBX, when you hear DBX and when you drive DBX, it should shout Aston Martin at you.”Palmer didn’t rule out raising more funding should Aston Martin need to replenish its declining cash pool. The company generated about 900,000 pounds ($1.1 million) of cash from operations in the first half, the lowest since it started to disclose earnings, according to data compiled by Bloomberg.“In a public market in the U.K, probably the investors would prefer that you had more cash,” Palmer said. “If we felt that we needed more money, then we would step to an instrument which we understood, which will be to go to the debt markets and raise more debt.”The DBX will compete with the Porsche Cayenne and Macan, the Bentley Bentayga, and the Lamborghini Urus. Adding an SUV is a tactic that’s worked for Bentley, which has doubled production numbers with the Bentayga, and for Porsche, whose $50,000 Macan is the company’s best-selling vehicle.While Palmer said the stock-market reaction doesn’t change Aston Martin’s plan of introducing seven new models in seven years since 2016, analysts are downbeat. They lowered the average one-year target price for the stock by 43% in the past three months, with Credit Suisse’s Daniel Schwarz recently slashing his estimate by more than two-thirds.Meanwhile hedge funds have taken record short positions in both Aston Martin’s debt and equity, the Financial Times reported, citing data from IHS Markit. The cost of borrowing the company’s sterling-denominated bonds has risen to the highest of any U.K. corporate debt, according to the report.“Short-sellers are taking the opportunity of 2019 being an increasingly difficult year -- wholesale not quite enough, difficult market in the U.K. and Europe,” Palmer said. “And because Brexit moved -- used to be end of March and now it’s end of October -- it’s not reasonable to assume that somehow the market is going to come back.”To contact the reporter on this story: Ma Jie in Tokyo at email@example.comTo contact the editors responsible for this story: Young-Sam Cho at firstname.lastname@example.org, Ville Heiskanen, Anthony PalazzoFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Buying auto stocks in a downturn seems counterintuitive, but it works if it’s Ferrari. The stock is up big year to date and Goldman Sachs sees additional gains for the maker of iconic sports cars.
The career of an Aston Martin Lagonda is beginning to resemble the latter. Aston Martin’s capital expenditure is expected to exceed £300m annually for the next few years. Last month Moody’s noted an unexpected half-year cash outflow of more than £17m due to rising inventories in preparation for higher sales in the second half.
Hedge funds have taken record short positions in the debt and equity of Aston Martin, betting that the luxury carmaker will continue to struggle after one of the most disastrous stock market debuts of recent years. Sterling-denominated bonds that back the group have become the most expensive among any UK corporate debt for new borrowers, according to data from IHS Markit, with an annualised borrowing fee of up to 550 basis points. In comparison, it costs hedge fund investors about 50bp for an average sterling issue.
(Bloomberg Opinion) -- Any investor worth their salt knows that a company’s profit is only an opinion, while cash is a fact. A peculiar contractual dispute involving the beleaguered luxury carmaker Aston Martin Lagonda Global Holdings Plc illustrates this point rather well.Ahead of its initial public offering last October, the British firm published a prospectus detailing its recent financial track record. The perennially loss-making company had achieved a small 20.8 million pound ($25.1 million) pretax profit for the first six months of 2018. Good news.Yet that result benefited from 20 million pounds of unexpected income booked on the sale of intellectual property to a third-party carmaker during the period. The unidentified buyer had approached Aston Martin about acquiring tooling and design drawings for the previous generation Vanquish sportscar, as well as ongoing consultancy support.With contracts inked, Aston Martin said it expected the cash to arrive in 5 million pound twice-yearly installments. In hindsight, it wasn’t a good sign that the first of these payments was already overdue at the time the prospectus was published. More than a year after the contract was agreed, Aston Martin has acknowledged that it may never recover the bulk of the money. A disappointing set of results published last month included a one-off 19 million pound provision for doubtful debt.The identity of the recalcitrant counter-party had always been kept a secret, despite plenty of speculation in the automotive trade press about who would want the old Vanquish designs, and to what end. But during a call with analysts, Aston Martin’s management inadvertently spilled the beans. A China-based electric sportscar startup called Detroit Electric had sought the company’s help in developing a vehicle chassis system, but then failed to make the required payments.Detroit Electric is the brainchild of Albert Lam, a former director at the British carmaker Lotus. The headquarters of this aspiring Tesla Inc. are in Hong Kong, but its website boasts there’s also a “state-of-the-art vehicle development and manufacturing base” in Leamington Spa, England, which is roughly 15 miles from Aston Martin’s HQ. My various attempts to reach the company for comment were unsuccessful. The latest available accounts of Detroit Electric’s U.K. subsidiary show a loss and net liabilities for the 2017 financial year, while indicating that financial support from group companies remained available. Aston Martin appears to be the disadvantaged party here but its management credibility has taken another knock. The shares have collapsed by almost 75% since October as it’s dawned on investors that the company might not be as resilient as it made out at the time of the listing.A slowdown in sales volumes in its wholesale business has put a dent in any aspirations to take on Ferrari and to be valued like a luxury goods company rather than a petrol-fueled metal-basher. It also makes the decision not to bolster the balance sheet with new money at the time of the listing seem reckless.The carmaker generates little cash but has almost 850 million pounds of net debt and lease liabilities. Thus 20 million pounds is a lot of money to simply go astray. Its flattering accounting – the company capitalizes almost all of its development costs, instead of expensing them in its profit statement – can’t paper over these flaws.As with those R&D costs, Aston Martin was perfectly within its rights to book the income from Detroit Electric when it did. But it took a while to admit the contract was a bust. Next time a company tells you it’s had an unexpected windfall, be sure to check the money’s in the bank.To contact the author of this story: Chris Bryant at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Bryant is a Bloomberg Opinion columnist covering industrial companies. He previously worked for the Financial Times.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Can the company behind Aston Martin avoid tapping its shareholders? Yes, if everything goes to plan. The snag is that Aston Martin Lagonda Global Holdings Plc is proving increasingly accident prone.Shares in the sports car maker fell as much as 22% on Wednesday. That’s all too familiar. The stock dropped 26% and 18% on consecutive days last week. The group is suffering from weak orders in Europe even as sales rise in the U.S. and Asia. A partner has defaulted on an intellectual property deal, costing 19 million pounds ($23.1 million). As a result, Aston has become even more burdened by borrowings, with net debt ending the first half at some 4.7 times the company’s own measure of Ebitda.Equity investors are naturally worried about a possible share issue. Aston skipped the chance to cut debt by raising new money during last year’s initial public offering. As the share price has fallen, the awkwardness of selling new shares below the IPO price has risen. That said, one of the core shareholders, Italian investment group Investindustrial Advisors SpA, moved to increase its holding by 3% earlier this month at a price of 10 pounds a share. A cash call is not yet inevitable. Aston’s story to shareholders is all about delivering the first sales of its new DBX sports utility vehicle in the second quarter of 2020, with further sports cars beyond. To get there, more capital spending is needed. The investment bill will probably be about 140 million pounds in the second half of this year. In addition, Aston needs to service its gross debts – 859 million pounds – at a likely cost of between 30 and 40 million pounds over the next six months.The company isn’t selling enough cars yet to fund these burdens. Operating cash flow was just 21 million pounds in the first half. That is unusually weak, being affected by rising inventory as well as the defaulting partner. The guidance is for some recovery in the second six months of 2019 – deliveries should pick up and costs are being cut. There’s an overtime ban and a hiring freeze. But Aston is still likely to be chomping into its cash reserves to keep the show on the road. These stand at 127 million pounds.The question is what happens if this cash pile starts being badly eroded. CEO Andy Palmer’s last internal lever to pull would be to cut capex more aggressively. That would in turn slow the introduction of new models, undermining the investment case. After that, he will have to look outside for cash. The group was at pains to say that its first source would be yet more debt.In this scenario – an Aston Martin that has suffered perhaps more operational hiccups, is cutting capex and raising debt – who knows where the share price would be? Perhaps not much higher than if it just did a rights issue today and fixed its balance sheet.Shareholders may be spared a cash call, but a recovery in the share price will need a bid or Aston’s run of mishaps to end.To contact the author of this story: Chris Hughes at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Shares in Aston Martin plunged 17% to a post-flotation low on Wednesday after the luxury British carmaker slumped to a half-year loss, the latest automotive firm to be hit by falling demand in Europe. Aston Martin, best known as James Bond's favorite marque, has been undergoing a turnaround plan since Chief Executive Andy Palmer took over in 2014, designed to renew and boost its model line-up and move into new segments. The group posted a pretax loss of 78.8 million pounds ($96 million) in the six months through June from a 20.8 million pound profit in the first half of 2018.
(Bloomberg) -- Aston Martin Lagonda shares plunged the most since they were listed less than a year ago after the British luxury carmaker lowered its full-year sales forecast in response to a deepening auto industry slump in Europe.The sports-car manufacturer based in Gaydon, England said Wednesday that deliveries to dealers will decline to as low as 6,300. That compares with a plan unveiled in May for the sale of as few as 7,100 vehicles.Aston Martin has already blamed sluggish sales on uncertainty about Brexit and Wednesday’s warning shows a wider market slump in Europe is also starting to bite. In the second quarter, demand fell by 22% in the U.K., its biggest market, and 28% in Europe. By contrast, Asia-Pacific and the Americas region showed double-digit gains.The lower volume forecast was “more concerning” than supply issues detailed earlier this year, Credit Suisse analyst Daniel Schwarz said. “Dealers are ordering fewer cars. It is not yet retail, according to the company, but it’s wholesale which might reflect that dealers are more cautious going into the second half.”The cut to the outlook is another blow in Aston Martin’s struggle to convince investors that it can make the transformation from niche player to successful listed company, and keep a promise to take on supercar maker Ferrari NV. Since an initial public offering in October at 19 pounds a share, the stock has more than halved. It was down 23% on the day at 799.60 pence at 10:08 a.m. in London.The company’s sterling-denominated bonds due April 2022 also declined, falling as much as 2 pence to 97.4 pence on Wednesday, the biggest drop since they were issued in April 2017, according to data compiled by Bloomberg.Most automakers and their suppliers are reeling from a significant slowdown in China and Europe that began last year. Mercedes-Benz maker Daimler AG warned this month of lower-than-expected profits while parts supplier Continental AG also slashed its earnings outlook. French carmaker Peugeot-maker PSA Group, while posting improved profit on Wednesday, painted a gloomier picture of demand in Europe and China.“We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term,” Chief Executive Officer Andy Palmer said in a statement.Aston Martin also made a provision of 19 million pounds ($24 million) that’ll be accounted for during the second quarter. Taken together with the reduced sales outlook, that will result in an expected operating return on sales of about 8% for this year. The company said it’s working to boost efficiency and reduce costs.New PlantThe company, known for sports cars used in James Bond movies, plans to double volumes by 2023, which will depend on the successful launch of the DBX, its first sport utility vehicles. The car will be made at a new plant in St Athan in Wales, where first pre-production vehicles are moving down the line. First orders will be taken from August with a planned output start during the second quarter of next year.“Aston Martin is a medium-term story and its future is unlikely to be defined by 2019’s performance,” Goldman Sachs analysts led by George Galliers wrote in a note. “Nevertheless, concerns around operating risk as well as questions on Aston’s ability to sustain volumes on vehicles that are more than 12 months old are all areas of concern for investors.”(Updates with detail on market performance in third paragraph.)\--With assistance from Irene García Pérez.To contact the reporters on this story: Elisabeth Behrmann in Munich at email@example.com;Simon Foy in London at firstname.lastname@example.orgTo contact the editors responsible for this story: Tara Patel at email@example.com, John BowkerFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
European shares closed at a two-week high on Wednesday as a slide in commodity stocks offset gains for chip and car makers ahead of a hotly-anticipated European Central Bank meeting. Britain's FTSE 100 underperformed with a 0.7% loss as miners slid on the back of falling iron ore prices in China. Euro zone stocks, however, added 0.2% as optimism over U.S.-China talks helped trade-sensitive sectors including autos and technology, adding to upbeat results from chip bellwether Texas Instruments overnight.
Aston Martin, which has seen costs rise due to aggressive investment and Brexit provisions, said it now expects annual wholesale volumes to be between 6,300 to 6,500 vehicles, compared with an earlier forecast of 7,100 to 7,300 vehicles. The European auto sector is struggling with worsening consumer sentiment as well as concerns over the potential fallout for demand and manufacturing of Britain's exit from the European Union. Stricter regulations and a move to electric vehicles are also hitting demand globally.