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Aston Martin boosts IPO prospects on DB11 lift as Brexit weighs
[FRANKFURT] Aston Martin Holdings Ltd surged to its third consecutive quarterly profit on robust demand for the new DB11 sports car, putting the UK automaker in a better position for a potential share sale even as Brexit clouds its longer-term outlook.
The company, whose high-end sports cars featured in James Bond films, has been eliminating jobs and and expanding its model range to reverse six years of losses. In a bid to follow a trail blazed by Italian rival Ferrari NV, the Gaydon, England-based carmaker could consider an initial public offering on the London Stock Exchange as early as next year, people familiar with the matter said in May.
A stock sale is "a natural point of speculation" given Aston Martin's ownership structure, chief financial officer Mark Wilson said Friday in an interview. Any decision would have to be made by the closely held company's shareholders and not the management board, he said, reiterating earlier comments.
The carmaker's owners include Italian private equity company Investindustrial SpA and a Kuwaiti investment consortium, while Mercedes-Benz parent Daimler AG owns a small stake.
Aston Martin posted pretax earnings for the second quarter after delivering more autos and charging customers more for them, and "there's a possibility, an increasing possibility, that we might be able to report a profit on a full-year basis this year already," Mr Wilson said.
At the same time, government talks on the UK's exit from the European Union pose "a big unknown" for long-term trade issues such as tariffs the carmaker might face in EU countries.
Generating positive cash flow might take slightly longer than returning to profit, even though Aston Martin made substantial progress in the first half of the year, the CFO said.
Chief executive officer Andy Palmer, who took charge three years ago, is pushing to widen the brand's appeal. The company plans to start production of the family-friendly DBX crossover as well as an electric version of the Rapide coupe in 2019. Other models in the works include special editions of the Vanquish sports car line.
Second-quarter pretax profit totalled £15.2 million (S$26.49 million) compared with a £52.6 million loss a year earlier, as revenue almost doubled to 222 million euros (S$356.61 million), Aston Martin said in a statement. Full-year adjusted earnings before interest, taxes, depreciation and amortisation will amount to £175 million, it said, compared with an earlier £170 million forecast.
First-half profit on that basis surged almost fivefold, as deliveries jumped 67 per cent and its cars' average selling price rose 25 per cent to £149,000.