Aston Martin pares lofty IPO targets ahead of listing

An employee performs final inspection of an Aston Martin Vantage automobile on the production line at the Aston Martin Lagonda Ltd. manufacturing and assembly plant in Gaydon, U.K., on Tuesday, Sept. 4, 2018. Aston Martin is preparing to list its shares in London after the brand synonymous with U.K. spymaster James Bond pulled off a multi-year turnaround. Photographer: Chris Ratcliffe/Bloomberg

By BLOOMBERG

MILAN • Aston Martin pared back its supercharged stock-market ambitions ahead of a planned initial public offering (IPO) this week, lowering the top end of its targeted range by about 11%.

The new goal is £18.50 to £20 per share, the luxury carmaker said yesterday in an emailed term sheet.

Previously, the company had set a range of £17.50 to £22.50, as it seeks a valuation higher than its only listed rival, Ferrari NV.

Books are covered at the new range, the company said, with trading set to begin on Oct 3 on the London Stock Exchange.

Aston Martin, made famous in the James Bond movies, would still reap a market value of about £4.54 billion (RM24.52 billion) at the high end.

Analysts had previously shown scepticism the manufacturer, based in Graydon, England, would reach its previous goal of as much as £5.07 billion.

The new range brings it closer to parity with Ferrari, which has shown a history of strong profitability and cash generation, and has a more robust balance sheet.

Shareholders are cashing out months before the UK leaves the European Union. While the UK’s post- Brexit automotive industry is one of the sectors most exposed to potential trade hurdles, the company is “well insulated” in the case talks break down and Britain leaves the bloc without a trade deal, Palmer said last month.

Based on its first-half earnings, Aston Martin could be valued at 21.8 times adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) if it reaches the high end of the new range. The calculation doesn’t take into account Aston Martin’s debt, and research and development spending, which would push the multiple higher. Ferrari trades at about 20.9 times its expected adjusted Ebitda for 2018, based on Bloomberg data — a figure that is closer to luxury good companies than to carmakers.

Even at the lower figure, Aston Martin’s IPO marks a dramatic win for its shareholders who are set to reap a 10-fold increase in less than a decade.

When Andrea Bonomi’s Invest industrial bought a 37.5% stake in 2012, the carmaker was valued about £400 million, Palmer said in an interview last month. The Italian Bonomi, who owned motorbike maker Ducati before selling it to Volkswagen AG in 2012, will keep a stake in Aston Martin after the IPO.