Bond’s car maker needs a big brother

Wairarapa News - - OUT & ABOUT - BEN­JAMIN KATZ

As­ton Martin Hold­ings Ltd. is look­ing for a ‘‘big brother’’ part­ner in or­der to sur­vive as a lowvol­ume, lux­ury car­maker, even af­ter it posted its first profit in eight years and pre­pares for a po­ten­tial ini­tial pub­lic of­fer­ing.

The man­u­fac­turer fa­mous for mak­ing film spy James Bond’s favourite car could use a com­bi­na­tion of cap­i­tal raised from an IPO and a tie-up with a big­ger player to en­sure it stays on top of the au­ton­o­mous driv­ing curve that’s push­ing car­mak­ers to in­vest bil­lions in the tech­nol­ogy, ac­cord­ing to Chief Ex­ec­u­tive Of­fi­cer Andy Palmer.

‘‘We are mak­ing a new kind of a com­pany, a com­pany that can sur­vive on 7,000 to 14,000 very highly priced, very prof­itable cars a year, but it can sur­vive be­cause of its part­ner­ships,’’ Palmer said in an in­ter­view with Bloomberg TV.

‘‘It can be very prof­itable on that 7,000 to 14,000 cars a year but only by having a big brother that can help it out.’’

The com­pany said pre­tax profit swung to £87 mil­lion (NZ$166 mil­lion) last year from a loss of £163 mil­lion in 2016.

The profit was the first since 2010, ac­cord­ing to a spokesman, spurred by sales of its lat­est sportscar model the DB11.

The re­sults help ce­ment Palmer’s turn­around of the iconic brand, while sales of its new­est mod­els will give the com­pany a boost ahead of any sale of shares.

Bloomberg re­ported last month that the car­maker is eye­ing a val­u­a­tion of as much as £5 billion in an IPO.

Mer­cedes-Benz owner Daim­ler AG al­ready owns a 5 per cent stake in As­ton Martin and the two com­pa­nies have a part­ner­ship to de­velop driver­less ca­pa­bil­i­ties, Palmer said.

He needs more in­dus­trial back­ing to stay ahead in the tech­nol­ogy, he said, with­out be­ing spe­cific.

Other niche lux­ury play­ers are al­ready al­lied with big­ger back­ers. Lam­borgh­ini is owned by Volk­swa­gen AG, and Fer­rari SpA shares own­er­ship with Fi­atChrysler Au­to­mo­biles NV. Li Shufu, who on re­cently ac­quired a 9.7 per cent stake in Daim­ler, owns Bri­tish sports car maker Lo­tus through the com­pany he founded, Zhe­jiang Geely Hold­ing Group Co.

OP­TI­MISTIC OUT­LOOK

As­ton Martin is fore­cast­ing another gain in earn­ings this year, which could raise its pro­jected val­u­a­tion, as it moves to­ward the in­tro­duc­tion of a new model in the lu­cra­tive sport util­ity ve­hi­cle seg­ment as well as a new elec­tric car both due in 2019.

The com­pany is also plan­ning another three new mod­els, in­clud­ing two lux­ury sedans, de­signed to re­vive the Lagonda brand.

Sales in 2017 surged nearly 50 per cent with de­liv­er­ies ris­ing above 5,000 for the first time since 2008.

Ad­justed earn­ings be­fore in­ter­est, taxes, de­pre­ci­a­tion and amor­ti­sa­tion came in 15 per cent ahead of the com­pany’s own fore­cast at £207 mil­lion.

As­ton Martin is wor­ried over how it will sur­vive the wave of au­ton­o­mous cars.

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