Saturday, 20 October, 2018

Aston Martin prices shares at £19, valuing company at $5.9bn | Leadership

Aston Martin shares tumble after London float Aston Martin debuts in London stock exchange at £19 per share
Nellie Chapman | 05 October, 2018, 18:43

Andy Palmer, the chief executive of Aston Martin, said: "Today's listing on the London Stock Exchange represents a historic milestone for Aston Martin Lagonda".

The company will trade on the London Stock Exchange under the ticker "AML".

"Aston Martin's brokers had originally been looking at as much as £22 per share, but extensive kicking of the tyres by analysts and fund managers in recent weeks had been drawing some big question marks over that valuation". As part of the IPO, Italian company Investindustrial's 37.5% stake will be locked for 180 days while Daimler's stake will be locked for 12 months.

Aston Martin can be buoyed by positive financial results of late, as well as an increasing customer base and production line-up.

The shares fell to as low as 17.75 pounds and were down 5 percent at 0935 GMT. In fact, just over 90 minutes after trading started, shares were already down five percent.

Gaydon, England-based Aston Martin, which is less profitable and carries a weaker balance sheet than its Italian peer, is attempting to build up its presence in the sports auto world with its Vanquish, Vantage and DB models, while reincarnating the Lagonda name to break into the segment now shared by British rivals Rolls-Royce Motors and Bentley. Beyond that, the brand plans to launch a new model every year until 2022, including an expansion into SUVs and a rekindled Lagonda. Each model will have a seven-year life cycle before being replaced.

It expects full-year sales for 2018 to rise to between 6,200 and 6,400 units, and in the medium-term it aims to build almost 10,000 in the 2020 calendar year. Aston spent years losing money, with the threat of bankruptcy recurring several times. That's about 20.7 times the company's first-half profit, according to data compiled by Bloomberg.

Brexit was thought of as a potential issue for Aston Martin, but Palmer insists that Britain's impending exit from the union wouldn't have too much of a bearing on the company, saying that it was "relatively well insulated" from the effects of Brexit.

"We are excited about the momentum across the company and are fully focused on continuing to deliver our exciting growth strategy".