Is Aston Martin a car crash?
That was the common view until lately. In the last four years since it floated it drove up losses of well over £1 billion.
Investors who believed in the brand saw the value of their investment plunge from £5 billion to perhaps a fifth of that.
The view was that management had over priced the cars and bankers had over-priced the shares.
This seemed a shame for an iconic name, a brilliant British brand and the only carmaker on the London Stock Exchange.
James Bond must have been upset.
He still drove the cars. We don’t know if he owned the shares.
What were today’s figures?
Well, on the most obvious level it lost £495 million in 2022. It splashed out on new models, not least the Valkyrie, the fastest car on the road, which has had, erm, teething troubles.
But it surged into the black in the final quarter. For the year sales rose 26% to £1.38 billion. The shares rose a bit today, and have more than doubled in the last few months.
Who is to thanks for that?
Executive chairman Lawrence Stroll and his consortium invested in the business back in April. When they arrived the business seemed to be heading for bankruptcy.
What went wrong at the start?
They didn’t raise any new money when they floated, and just churned out cars for which there wasn’t obvious demand. Stroll cleared the backlog of cars and appointed former Mercedes executive Tobias Moers as CEO.
They then began a programme called Project Horizon to make the company more efficient and overhaul its operations, delivering significant savings.
In May of this year ex Ferrari CEO, Amedeo Felisa, replaced Tobias Moers as CEO. Analysts say that Felisa has focused on sorting the supply chain issues that had hampered the company’s production over the previous 6-12 months.
Stroll said: “As I have said before, I knew it would take multiple years to build Aston Martin into the world’s most desirable ultra-luxury British performance brand. With the heavy lifting behind us, we are now poised to see the results of this transformation, starting in 2023.”
What are the new cars?
The company launched the DBX, their first SUV, and a subsequent model the DBX 707, which is the world’s most powerful SUV. There have been a few issues with the launch of the 707 linked to supply chain issues, but it’s proved incredibly popular with customers.
Where did the money for this come from?
It raised £576 million from a rights issue in September that saw Saudi Arabia’s Public Investment Fund become a shareholder. Geely of China also took a stake last year.
Debts are still high, up from £766 million to £892 million. Even at higher rates of interest, this seems more manageable than it did.
Daniel Roeska at Bernstein said today: “The company’s cash should be sufficient, if they can avoid delivery delays. Overall, the company looks more in control of its destiny today than in a long time.”
Stroll added: “2022 saw Aston Martin continue to build on the strong foundations that have been established during my three years as Executive Chairman. While the last 12 months presented industry-wide challenges, we look to the future with renewed confidence in our ability to deliver on our vision, and the targets we have set.”
He added: “We have made the biggest investment in our iconic brand through the launch of a bold new creative strategy and brand position that aligns Aston Martin to our future ambitions.”
