Aston Martin Plans To Go Public As Turnaround Picks Up Speed

Luxury carmaker Aston Martin plans to float on the London Stock Exchange, completing a turnaround for the once perennially loss-making company that could now be valued at up to 5 billion pounds ($6.4 billion). The 105-year old firm, famed for making the sports car driven by fictional secret agent James Bond, would become the first British carmaker to list in London for years, following the sale of brands such as Jaguar and Bentley to foreign owners.

The initial public offering (IPO), which follows Italian rival Ferrari's New York flotation in 2015, could see Aston valued at up to 5 billion pounds, sources have told Reuters, after it expanded its model line-up and production.

The firm, which last year made its first profit since 2010, said the IPO would involve a sale of shares by its main owners, Kuwaiti and Italian private equity groups, with at least 25 percent of the stock to be floated.

It said it had filed a registration document with Britain's Financial Conduct Authority, a requirement for firms considering an IPO.

Pending a final decision, a prospectus will be published on or around Sept. 20 as the maker of sports cars that can cost hundreds of thousands of pounds hopes to tap into global demand from wealthy buyers who want a slice of the high-end brand.

The carmaker hopes to complete the flotation this year, the same target that British Prime Minister Theresa May is working towards to agree a deal for leaving the European Union.

Aston Martin sells roughly 25 percent of its cars to the EU and operates its only plant in Gaydon, central England, with a second one due to begin operations in Wales in 2019.

"We can demonstrate that Brexit is not a major effect for us," Chief Executive Andy Palmer told Reuters.

"If there is a tariff into Europe, it's countered by a tariff into the UK for our competitors so you might lose a little bit of market share in the EU but you pick it up in the UK," he said.

Niche carmakers such as Aston and McLaren are more concerned about customs checks than tariffs as they believe many of their buyers can absorb a price hike.

MORE GROWTH AHEAD

Aston intends to apply for a premium listing on the London Stock Exchange with employees and customers able to apply to purchase shares.

The company posted on Wednesday half-year adjusted pre-tax profit of 42 million pounds as revenue rose 8 percent to 445 million pounds due to strong demand for its DB11 coupe and Volante models.

It forecast full-year volumes to rise to between 6,200 and 6,400 vehicles, and aims to build nearly 10,000 in the 2020 calendar year.

Italian group Investindustrial, Kuwait's Investment Dar and five-percent shareholder Daimler, will retain stakes in the firm.

Aston has suggested for years it would eventually go public, but Palmer said now was the right time as the firm gears up for further growth with its first sport-utility vehicle.

"We've got a very solid balance sheet now, very solid results. As we move into the third phase, which is the portfolio expansion, it also means we've got plenty of runway in front of us," he told Reuters.