Aston Martin revs up for IPO in London

Said to be targeting RM26b in valuation, carmaker will make final decision on IPO next month


LONDON • Aston Martin (picture) is preparing to list its shares in London after the brand synonymous with UK spymaster James Bond pulled off a multiyear turnaround.

The British maker of sports cars made famous in movies from “Goldfinger” to “Skyfall” is said to target a valuation of about £5 billion (RM26.29 billion) — approaching Ferrari NV’s multiples.

A final decision on moving forward will take place next month, parent Aston Martin Holdings (UK) Ltd said yesterday in a statement.

The initial public offering (IPO) will allow the carmaker’s shareholders to cash out with a potential 10-fold return — months before the UK leaves the European Union.

The carmaker itself won’t be raising any funds. Aston Martin will use its own earnings to pay for planned investments in electric cars and a doubling in output to around 14,000 cars a year. While the UK’s post- Brexit automotive industry is one of the sectors most exposed to potential trade hurdles, Brexit wasn’t a large factor in the IPO calculations, CFO Mark Wilson said.

“Brexit is simply a speed hump in the road,” Wilson said by phone. “Aston Martin has existed for 105 years, it has seen a hell of a lot of upheaval in that time.”

Aston Martin, controlled by London-based Investindustrial Advisors Ltd and Kuwaiti Investment Dar, said existing investors will sell at least 25% of the company’s stock on the London Stock Exchange. Ford Motor Co sold the manufacturer in 2007 for £480 million.

Neither investor plans to exit completely, while Mercedes- Benz maker Daimler AG, which has a 4.9% non-voting stake, plans to retain the holding.

Ferrari, Hermes
Like Ferrari, Gaydon, England- based Aston Martin sees itself as a luxury company, able to attract the higher valuations afforded to companies like Hermes International and Canada Goose Holdings Inc, Wilson said.

“Clearly, there’s a great comparator out there and it’s Ferrari,” the executive said. “We’re going for a premium listing.” Like its Italian rival, the British marque has broadened beyond cars, experimenting with Aston Martin-styled yachts and apartments, and opening a store in London’s Mayfair shopping district where it sells branded shirts and baby strollers to wealthy patrons.

Ferrari trades at about 36 times estimated 2018 earnings, compared to about 7.3 times for members of the Stoxx Europe 600 Automobiles & Parts index.

Hermes is valued at 49 times estimates, Canada Goose at 66 times. LVMH, another brand mentioned by Wilson, carries a 26 times multiple.

Lagonda Electric SUVs
CEO Andy Palmer, a former executive at Nissan Motor Co who took over the top job in 2014, has focused on introducing new models like the coming DBX SUV due next year and the popular US$200,000 (RM822,125) DB11 coupe.

He also plans to revive the Lagonda supercar brand with a range of electric vehicles (EVs) focusing on the ultra-luxury segment with SUVs and sedans. Production rates have lifted to the highest level since the 2008 financial crash, and will rise to as many as 7,300 cars next year before doubling in the medium term.

Aston Martin also said yesterday that earnings before interest, taxes, depreciation and amortisation (Ebitda) gained 14% in the first half (1H) to £106 million. It’ll rely on that earnings power to fund its expansion.

Aston Martin said it will file a registration document with the UK Financial Conduct Authority yesterday, a new requirement for companies considering an IPO, and will decide by about Sept 20 whether to proceed, it said.

The listing could raise up to £1.5 billion, according to people familiar with the matter. Aston Martin also reported 1H earnings.

Key points include revenue up 8% to £445 million; DB11 coupe and DB11 Volante demand helps boost results; adjusted Ebitda up 14% to £06 million; and 2018 deliveries are expected between 6,200 to 6,400 cars.