Yahoo Finance Aston Martin heads off flotation talks as revenues roar ahead
Aston Martin has moved to head off speculation it is revving up for a listing as the legendary sports car company reported a strong acceleration in sales.
The Warwickshire-based business said revenues from sales of its high-performance cars doubled in the first quarter, as a turnaround programme takes hold.
Aston’s “Second Century” plan helped drive vehicles sales to 1,200 in the three months, with the bulk of them made up of the new DB11, delivering revenues of £188.3m in the quarter.
The company also drove into the black over the period, with pre-tax profits of £5.9m reversing the £29.7m loss it made last time around.
But Mark Wilson, finance director, dismissed talk that the new financial health of Aston - which reported annual loss of £162.8m - means it is gearing up for a flotation.
“I don’t know when and if we will float,” he said, adding it was a “matter for the owners”, referring to the Kuwaiti and Italian private equity funds who control the business.
“A flotation is an entirely understandable proposition given that we are owned by private equity funds but it is not something that we have had recent discussions about, what we’ve been talking about is the long-term business as usual.”
The final part of the turnaround to get Aston prepared for the future was a £550m refinancing, which cut the long-term loss-making business’s borrowing costs by a third.
“We had planned to raise £530m but demand for it was so strong we raised it, giving us an extra £20m of liquidity,” Mr Wilson said.
The better performance also helped reduce Aston’s debt load from almost seven times earnings to closer to three. “The debt is still there but we are growing into a company of a size that matches it,” Mr Wilson said.
Aston Martin boss Andy Palmer has previously said the aim is to produce about 7,000 cars a year - on a par with Italian rival Ferrari. In 2016 Aston produced 3,687 cars.
While much of the recent demand has been for the DB11, he said the rest of the range was performing well, with strong sales of the Vanquish and resurgent interest in the Vantage.
“The Vantage is in its last year year before the new model comes and it’s going to be the end of an era,” he said, adding that environmental restrictions mean cars with large, un-turbocharged engines have little future.
The Second Century plan also means an extensive refreshing of Aston’s range of cars, culminating with the production of the DBX “cross-over” car in 2020. A crossover is defined as where a car meets SUV, and is a fast growing part of the market and a first foray into the sector for Aston.
