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.

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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 – Tough For Those Who Bought In At The Float
Company: AML - Aston Martin Lagonda
Share Price Then: 504p
Author: Ian Smith
Date: Fri 31 Jan 2020
Comments: Today Aston Martin announced an investment led by Lawrence Stroll of 45.6m new shares at 400p each to raise £182m, 400p being a tiny discount to the open market price at the time.

Post this investment the number of shares in circulation goes up to 273m from 228m an increase of 19%

After publication of the accounts a further £318m will be raised by an underwritten rights issue but the price is not yet clear. The Stroll consortium will be taking its entitlement worth about £52m.

If the issue price is again 400p this would represent a further 33% of the number of pre Stroll shares.

This seems to suggest a £500m capital raise at the expense of an increase in the number of shares by 52% or a 1:2 rights issue.

There are also commitments to the Racing Point F1 team, this seems like a win for the F1 team but a terrible idea for Aston Martin, diverting scarce resources.

When Aston floated many people expected there to be some fundraising as well, but this did not happen. This fundraising has now been forced on existing share holders with a quite high level of dilution for a relatively small amount of capital in comparison with the 1,700p issue price.

So is £500m enough as it will still leave around £400m or debt to EBIDTA of around 3-3.5?

If the DBX really succeeds then probably, at least for the short term, DBX profits could be used to wipe out this debt.

However you would really like a successful model to provide funds for future development not fix issues from the past.

If the DBX only sells adequately or poorly then the debt levels seem to be too high.
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: 155