Aston Martin set to float on stock market

West Midlands-based luxury sports car maker Aston Martin has announced plans to float on the stock market at the same time as revealing accelerating sales performance.

The 105-year old manufacturer – best known for appearing in the James Bond films – said it was "announcing its potential intention to undertake an initial public offering (IPO)", ending months of speculation about its plans to go public.

Aston Martin will float at least 25% of its shares in the listing if its plans go ahead, and could join the blue chip FTSE 100 if the company's valuation is adequate.

The company could be valued as high as £5 billion once it goes public, according to reports.

The announcement was made alongside the company's half year financial results, which showed pre-tax profits edging higher to £20.8 million over the six months to June 30, from £20.3 million during the same period last year.

On an underlying basis, adjusted earnings rose 14% to £106 million.

That was against an 8% jump in revenues from £410.3 million to £444.9 million.

It said the performance was driven by its consulting business and increased revenue from sales of its special edition vehicles, including the Vanquish Zagato family and DB4 GT Continuation models.

But the company logged a slight drop in wholesale volumes, from 2,439 in the first half of 2017 to 2,299 units in the first six months of 2018, which Aston Martin said was due to new models hitting the production line.

Aston Martin said it began producing models including the DB11 Volante, DB11 AMR and Vantage in recent months, with volumes ramping up in the second quarter to 1,336 from 963 in the first three months of the year.

Chief executive Andy Palmer said: "Today's announcement represents a key milestone in the history of the company, which is reporting strong financial results and increased global demand for its award-winning sports cars.

"As we continue to execute our Second Century Plan, combining a product offensive and expanding manufacturing footprint, we have the resources and balance sheet strength to continue delivering on our growth strategy.

"Today's results show that we have continued to deliver sustainable growth, margins and value for our shareholders whilst launching three new models and variants in the first half of the year."

The iconic car maker was founded in London in 1913, and is headquartered in Gaydon.

The company has additional facilitates in Wellesbourne, where it also produces its special edition models, as well as Newport Pagnell, where its heritage models are manufactured. A new factory at St Athan in Wales is due to launch next year.

Aston Martin is targeting sales this year of between 6,200 and 6,400 cars, rising to 7,100-7,300 in 2019 and up to 9,800 in 2020.

With St Athan in full production the company aims to make around 14,000 cars a year in the medium term.

Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: "There are few people who wouldn't want an Aston Martin on their drive, and even fewer who can afford one.

"However, this stock market float allows investors to buy into a little of the glamour of Aston Martin, without getting a second mortgage.

"It's important for potential investors to concentrate on the company's financial prospects and not to get carried away by the brand, however, and that means having a thorough read of the forthcoming prospectus.

"Aston Martin could be valued at between £4 to £5 billion, which would put it at the top end of the FTSE 250 ahead of companies like Travis Perkins and William Hill, and nipping at the heels of FTSE 100 stalwarts like M&S and Royal Mail."