It is fair to say luxury car maker Aston Martin Lagonda (AML) is enduring a bumpy start to life as a public company since its IPO in October 2018.
The shares have lost more than 40% of their value on the £19 IPO (initial public offer) price, slumping more than 17% alone today to £11.32. This after maiden full year results show weakening earnings, more Brexit disruption and hefty costs from the flotation.
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Regular Shares readers may not be surprised, we flagged the ongoing concerns regarding the marque car maker's growth prospects in November at £14.01. The stock is down another 17% since then.
Today's results reveal headline operating profits halved to £72.8m, and pre-tax losses of £68.2m despite over revenues rising 25% to more than £1bn for the first time (£1.1bn approximately).
HEFTY ONE-OFF COSTS
This includes £136m of one-off costs associated with the IPO, plus various balance sheet and share register tidying up (some preference shares were cancelled, for example). There's also another £30m of cash set aside to deal with Brexit, which stubbornly continues to rumble on, to management's frustration.
Yet even stripping these expenses out investors are still left with underlying earnings down 16%, from 32.9p per share to 27.5p. Cash flow also came in below capital expenditure for the period.
On a more positive note volumes did beat guidance in 2018, but for chief executive Andy Palmer to call the performance 'outstanding' appears to somewhat rose-tinted.
'REAL ENGINE TROUBLE'
‘It may still be James Bond’s favourite model but shares in luxury car maker Aston Martin Lagonda appear to have real engine trouble,’ says AJ Bell investment director Russ Mould.
He also takes a dim view of Palmer's upbeat self-assessment and believes that the car maker ‘has a lot more to do to win over the sceptics.’
Given the company has gone bust seven times in its 100-year-plus history its perhaps no surprise it has little credit in the bank with the market. It will need to execute on its growth ambitions, which the float was intended to help fund, if the shares are to regain their footing.
