Aston Martin Lagonda (lon:aml)
Aston Martin – Tough For Those Who Bought In At The Float

Aston Martin Lagonda Financials

ItemCurrent PeriodPrevious Period
Period6 Months6 Months
Adjusted Earnings
Adjusted EBITDA£22m£106m
Statutory Profit(£63m)£12m
Adjusted Profit(£70m)£21m
Total Debt£859m£704m
Net Debt£732m£560m

Commentary History
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Aston Martin Lagonda Share Price
Grade:The Black Grade - Shares That I Think Could Collapse To Nothing Or Suffer A Massive Share Issue.
Title: Aston Martin – Tough For Those Who Bought In At The Float
Company: AML - Aston Martin Lagonda
Share Price Then: 504p
Author: Ian Smith
Date: Fri 31 Jan 2020
Comments: Today Aston Martin announced an investment led by Lawrence Stroll of 45.6m new shares at 400p each to raise £182m, 400p being a tiny discount to the open market price at the time.

Post this investment the number of shares in circulation goes up to 273m from 228m an increase of 19%

After publication of the accounts a further £318m will be raised by an underwritten rights issue but the price is not yet clear. The Stroll consortium will be taking its entitlement worth about £52m.

If the issue price is again 400p this would represent a further 33% of the number of pre Stroll shares.

This seems to suggest a £500m capital raise at the expense of an increase in the number of shares by 52% or a 1:2 rights issue.

There are also commitments to the Racing Point F1 team, this seems like a win for the F1 team but a terrible idea for Aston Martin, diverting scarce resources.

When Aston floated many people expected there to be some fundraising as well, but this did not happen. This fundraising has now been forced on existing share holders with a quite high level of dilution for a relatively small amount of capital in comparison with the 1,700p issue price.

So is £500m enough as it will still leave around £400m or debt to EBIDTA of around 3-3.5?

If the DBX really succeeds then probably, at least for the short term, DBX profits could be used to wipe out this debt.

However you would really like a successful model to provide funds for future development not fix issues from the past.

If the DBX only sells adequately or poorly then the debt levels seem to be too high.
Read Count: 385/10111

Buy/No Buy In A Nutshell
NegativesToo much debt and they have already done a share issue to fix that, very heavily reliant on sales of the DBX the new SUV, a worrying number of statements about how sponsoring the Stroll owned F1 team is great news.
PositivesNew management getting much more aggressive with people complaining that they asked for and were given loans but they can't afford them.
Initial Review Price51p
Last Review Price55.73p
Last Review Date02-Sep-2020
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