Section Items

Clarification
The comments on this page are some of the thoughts that I had when considering this company and not a recommendation to take an action or to refrain from taking an action.

As you know we have no information about your circumstances, understanding of your investment goals or the level of risk that is acceptable to you. So it would be completely unreasonable to read these commentaries as recommendations.
Is This Just Pump And Dump?
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Commentaries tend to be created when I look at a share and decide if it is one that I want to buy either now or when I next have an unallocated pot.
Financials
As companies often report numbers in slightly different ways there are a number of entries to cover this and as these are rough notes there will usually be empty items.

The debt columns are shown as positive values if there is any debt, all other negative values are shown within parenthesis and without a sign.

Commentary On Aston Martin Lagonda

Title: Aston Martin – I Keep Wanting To Buy
Company: AML - Aston Martin Lagonda
Share Price Then: 462p
Author: Ian Smith
Date: Mon 13 Jan 2020
Comments: There is something about the Aston Martin share price that keeps drawing my attention, the price is down to 400p ish so surely it is time to buy?

After all there have been two 15% spikes when there was news that someone was about to invest heavily, a consortium involving Lawrence Stroll and then CATL the Chinese batter maker.

Then I hear that the marketing chief has gone and that Aston the latest trading update says

Year-end cash balance was £107m, giving expected net debt range of £875m-£885m and DBX order book has built rapidly to c.1,800 since it opened on 20 November 2019, ….. As a result, we have now exceeded the various conditions to be able to draw the additional $100m of April 2022 notes and currently anticipate drawing these down within the next four weeks

Put another way, “hurray we are incurring another $100m in debt”.

At the current price of 472p the market cap is just over £1billion or the amount of debt give or take a bit.

The DBX sales numbers do look promising at around 1,800 but it is not clear if these are confirmed sales or possibly and "....here is a small deposit."

In 2018 and 2017 Aston were reporting an operating margin of 13.4% & 14.2% but they seem to be saying that 2019 will see something like 13%.

The DBX has a starting price of around £160k and in the past Aston have been reporting 40% gross margins.

So the DBX Sales could mean an extra £115m in gross profit in 2020 which is roughly an extra 30% on my expected figure of £400m for 2019.

But it also seems to me that debt in 2020 will incur something like £80m-£100m in interest payments.

The net debt from 2105 to 2018 was £483m, £600m, £673m and £560m, with 2019 net debt expected to be £875 the increase in revenue from the DBX is merely helpful.

Surely anyone looking to invest is going to want to see debt down to £100m-£200m, meaning they need to inject about £600m-£700m.

This would seem to me to be something like a 4:1 share issue.
Financials:
ItemCurrent PeriodPrevious Period
Year20192018
Period6 Months6 Months
Revenue£407m£425m
Earnings
Adjusted Earnings
EBITDA
Adjusted EBITDA£22m£106m
Statutory Profit(£63m)£12m
Adjusted Profit(£70m)£21m
Total Debt£859m£704m
Net Debt£732m£560m
Read Count: 29