Stock market plan for As­ton

The Weekly Advertiser Horsham - - Go Auto -

As­ton Martin has an­nounced plans to float on the Lon­don stock ex­change later this year af­ter be­ing buoyed by record prof­its and grow­ing de­mand for its new mod­els, es­pe­cially in Asia.

Iron­i­cally, the an­nounce­ment by the pri­vate­ly­owned Bri­tish lux­ury sportscar-maker came as the in­vest­ment rat­ing of its former owner, Ford Mo­tor Com­pany, was down­graded by Moody’s In­vestor Ser­vice to one step above junk bond sta­tus af­ter the credit agency took a neg­a­tive view to­wards Ford’s medium-term prospects.

In Jan­uary, Ford an­nounced plans to re­struc­ture, say­ing it would slash costs by more than $34-bil­lion, axe most of Ford’s sedans in North Amer­ica and in­vest $15-bil­lion in elec­tri­fied ve­hi­cles.

Ford – the only one of the United States’ Big Three mo­tor com­pa­nies to come through the global fi­nan­cial cri­sis with­out gov­ern­ment bailout – has pooh-poohed the down­grade, point­ing to its strong fi­nan­cial re­sults over the past decade.

Ford once owned As­ton Martin as part of its Premier Au­to­mo­tive Group, sell­ing it in 2007 to a con­sor­tium headed by Pro­drive chair­man David Richards and backed by sev­eral in­vestors, in­clud­ing Kuwaiti in­vest­ment fund In­vest­ment Dar.

In 2012, Italy’s pri­vate eq­uity firm In­vestin­dus­trial bought a 37.5 per­cent slice of As­ton, while Ger­many’s Daim­ler ac­quired a five per­cent stake as part of a tech­nol­ogy sup­ply deal a year later.

As­ton has suf­fered seven bank­rupt­cies since it was founded in 1913, but now un­der former Nis­san prod­uct de­vel­op­ment chief Andy Palmer – chief ex­ec­u­tive since 2014 – it has forged into the black.

When Ford owned the brand, it pro­duced about 900 cars a year, but As­ton ex­pects it to sell up to 6400 ve­hi­cles glob­ally this year, ris­ing to 9800 in 2020.

Ul­ti­mately, it wants to make 14,000 cars a year, with some of that vol­ume gen­er­ated by its planned Lagonda brand that will spear­head As­ton’s elec­tric ve­hi­cle thrust.

New mod­els in­clud­ing the DB11 Volante, the DB11 AMR and Van­tage are al­ready on stream, with the new high-end DBS en­ter­ing pro­duc­tion soon.

Mr Palmer said at least 25 per­cent of the com­pany would be of­fered in the IPO, with In­vestin­dus­trial and In­vest­ment Dar both sell­ing part of their hold­ings. Daim­ler is ex­pected to re­tain its chunk.

Bri­tain’s Fi­nan­cial Times spec­u­lates the IPO could value the com­pany at £5-bil­lion – $A8.9bil­lion.


Mean­while, across the At­lantic, Moody’s sent a chill through the United States au­to­mo­tive in­dus­try by down­grad­ing Ford stock from Baa3 to Baa2 with a neg­a­tive out­look, plac­ing it one step above junk sta­tus.

The credit agency cited the ero­sion in the com­pany’s global busi­ness po­si­tion and ‘the chal­lenges it will face im­ple­ment­ing its fit­ness re­design pro­gram’.

The fit­ness pro­gram is the re­struc­tur­ing regime in­tro­duced by Ford chief ex­ec­u­tive Jim Hack­ett to bring Amer­ica’s sec­ond-big­gest mo­tor com­pany up to speed against ri­vals that are rapidly rolling out ve­hi­cles with mod­ern tech­nolo­gies such as elec­tric mo­tors and au­tonomous driv­ing con­trols.

Moody’s said the re­struc­tur­ing was nec­es­sary, but it ques­tioned how long it would take to achieve, and how Ford could in­vest in re­struc­tur­ing its busi­ness while si­mul­ta­ne­ously spend­ing bil­lions of dol­lars on new tech­nolo­gies.

“Ford’s neg­a­tive out­look recog­nises the sig­nif­i­cant chal­lenges of ef­fec­tively ex­e­cut­ing the full scope of the fit­ness pro­gram, and the ex­tended time pe­riod over which ma­te­rial ben­e­fits might be achieved,” Moody’s said.

“In ad­di­tion, the con­sid­er­able fi­nan­cial and man­age­rial re­sources de­voted to the fit­ness pro­gram will re­duce Ford’s abil­ity to con­tend with any un­ex­pected cycli­cal down­turn.”

Ford said in a state­ment the com­pany had de­liv­ered strong fi­nan­cial re­sults for nearly a decade, and had a strong bal­ance sheet that pro­vided fi­nan­cial flex­i­bil­ity.

“We know we can cap­i­talise on our strengths, bol­ster un­der-per­form­ing prod­ucts and re­gions and dis­po­si­tion where we can­not make an ap­pro­pri­ate re­turn,” it said.

“We’re con­fi­dent that as we do, the market will recog­nise our progress.”

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