ASTON Martin shares crashed again today as it issued another profit warning that increases the pressure on the company’s finances and leaves it scrambling to raise fresh equity.
James Bond’s favourite carmaker has shaken investors brave enough to buy into its float in October 2018 at £19 a share. That float, run by 12 banks and led by Anthony Gutman of Goldman Sachs and Robert Constant of JPMorgan, valued the company at an astonishing £4.3 billion. After a further 14% skid today, the stock was trading at 450p, leaving the market cap at barely £1 billion.
That has left some in the City calling it among the worst floats in recent history. Chief executive Dr Andy Palmer admitted 2019 was “a very disappointing year” and that sales “will fail to deliver the profits we planned”.
It is cutting costs and reviewing its “funding requirements” while in talks with “potential strategic investors”. Profits even before the usual write-offs will be between £130 million and £140 million, far below already reduced City forecasts of £200 million. Car sales for the year fell 7% to 5809. Its debt is already attracting interest rates of 15%, a sign that banks, including those who led the float, are reluctant to lend it more money.
Sales were especially weak in Europe, with the Vantage two-seater vehicle failing to meet hopes. Aston Martin is pegging its hopes on the new DBX SUV model, for which it has received advance orders of 1800.
That helps it meet the terms on some of its debt. The company float alone cost an eye-watering £136 million, an early warning sign said some that the banks had hyped the float in return for fees. They sold the company to investors as a luxury brand rather than a mere carmaker, saying the cache of Aston justified the float price.
Palmer survived a revolt last year on his £1.2 million pay but remains under pressure.
