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Well said Jack. I am certainly not a ramper, I just happen to be positive about the future of AML and if I wasnt I'd be out. C26 changes his allegiance like the wind, one minute he's up, the next he's down. Chat - I think you are right to be excited about the potential for expansion of service and distribution with Mercedes. That article from Night demonstrates the potential and could well be just the start of a massive expansion for us. Thank you Night for posting it.
Hi carpymick, thanks for pointing me towards this article - extremely impressive! Drop off & collect through the Mercedes dealer, can be done now. They talk about synergies in After-Sales Service due to use of powertrain and MBUX. What does that mean for AML's future distribution?
If cars are serviced in the same location with AMG/Mercedes, are we logically thinking, going to see AML cars in the same showroom with AMG vehicles, to continue with synergies or is this a no go? Share the service workshop but you'd keep the showrooms rather strictly separate?
Those considerations is one of the most interesting subjects in my mind, because there is huge cost in distribution at retail level where you can become much more competitive and profitable, if you can cut the cost and play this right. Time will tell.
Peter, you've got to be right though in my case I just haven't found any other what you said is "few high conviction speculative shares". If you've got them, hats off to you! Therefore, I kind of have no chance but to stay in here with 3/4 of all my holdings at all cost so to say. I thought hydrogen but luckily I kept my fingers out there. Cheers
Thanks for your concern Peter but I'm certainly not selling any time soon. I trust in stroll and his 5 year plan. Only time will tell if it works out or not. But so far stroll and his team and doing all the right things for me.
Chat and Tiny, please consider the risks before going all in with any stock. AML is not paying 12% interest on borrowings because the lenders consider them low risk, and they are first in line to recover if things go terribly wrong. Myself, I invest mostly on boring dividend stocks and only a few high conviction speculative shares like AML.
Hi Chat. Re your distribution question - @ 21.06 on Friday Nite 25 included a link which he said was 'interesting' and it certainly was. It was an article about a Mercedes-Benz a and Hyundai partnership in Germany that is expanding to include an aston martin showroom at each of its dealerships. They currently have 15 mercedes dealerships in Hamberg with another opening on 1st July and 7 Hyundai dealerships in Brandenburg so 23 new dealerships coming on board for AM. So this could just be the start of a massive increase in distribution opportunities for us. 23 dealerships in Germany is brilliant news anyway as sales are going really well over there this year.
Hi jimjim, I didn't really miss I feel because I bought most shares last year and I'm up by 60% and it's a whopping 3/4 of all my holdings. This is a peace-of-mind investment for me over the next few years, hopefully, because I think
Factory&Production: efficiency much improving thanks to Moers Product Pipeline: full and exciting by 2023 with Mercedes involvement Branding&Marketing: promising and taken care of by Stroll Distribution&Service network: advantages from the alignment with Mercedes and AMG - on this point, I'm seeking any opinion how this could play out in the medium term, at dealership level for example as the cars will share quite the same powertrains
Correct, "sell my house" is just an expression for my strong confidence the sp will do well from here. The upside potential to me is a multiple vs the downside risk so haven't invested in any other stock for 10 months. Again, too much substance being grown and a constant dose of positivity following thereafter.
I'd never advise anyone to sell their house...I know you may be joking but never invest what you can't afford to lose however safe you may think it is. I've got a sizable investment in AML and I'm confident I'll do well, but if I lose it all my life won't change. I WOULD be very upset though lol.
Hi Carpymick, yeah got your points and agree with all of it. Sounds good on the financial outlook and love it Mercedes is in with us. The substance and positivity is kind of overwhelming, so do hope the sp does not drop a penny further else I'd sell my house for more...
Hi Chat. I wouldn't like to see another capital raise either but I can't see it. We've got £575million cash, with more coming later in the year from valkyrie. Stroll has made it clear that H2 is going to see an upturn in revenue especially Q4 and with valkyrie costing a baseline figure of £3.4mn and all going through Q I think that upturn is going to be pretty substantial! As for refinancing our debt, I'm sure that once we get into consistent profit that will become possible. With regards to Mercedes charges for the new technology, we are already purchasing their engines so we must be satisfied with those prices, and I am sure Stroll said at the time the merger was announced, that the prices would be fair (words to that effect). I am sure Mercedes wouldn't rip us off, after all they will be 20% share holders WEF early next year and it's in their interests for us to do well, that's why they are letting us advertise our cars by driving them round half the Grand Prix circuits!! Now stop worrying...IMO LTHs have nothing to fear. Enjoy the F1 this afternoon everyone :-))
Peter yes, good points you make. If the Gaydon break-even is at 2.500 cars p.a. then the St. Athan's one will be at 1.000-1.500 cars and the total one for AML at 3.500-4.000 units (speculation) though I believe those numbers will be financially accounted for Gaydon and St. Athan's as being cost centers, only. Means, with the other, administration cost on top, you get closer to 6.000 cars break-even p.a. for the whole of AML which is the number for their sales guidance for this year. Anyway, a number much lower than 6.000 units break-even just has got to reflect in much better EBIT results quarter by quarter very, very soon, as the savings under project horizon become more effective in parallel. Well, is that going to be enough to refinance or reduce debt - I'm not keen at all on a capital raise though this is exactly what's needed to do from purely a financial management point of view in my opinion. Hope it's not coming. What I'm not looking forward to either is, when in a few years to come and AML has just turned profitable, when will the bill come from Mercedes and how much, for their technology which got to be billed at commercial terms, market rate, as it is stated in the contract. Cheers, Chad
I guess the reason you get no replies to the question is that management has not given an opinion and not released data that would give you a reasonable guess. Stroll was quoted last November saying "Gaydon was set up to make 6,000-7,000 cars a year, he says, but he has dropped its break-even point to 2,500 vehicles, helped by 500-plus job cuts." No word on St Athens however. I would recommend listening to the q&a with analysts from last week. Moers went into some detail on efforts to reduce inventories of work-in-process and spare service parts and this is all good at reducing debt which I suspect is the biggest drag on overall profitability (though not break even). Likewise management was clear that they are done with the reduction of dealer inventory and that all sales are on an order flow basis thus wholesale numbers reported should be the same as retail. We'll see how all of this plays out next quarter when we get our next look at inventories and debt.
It's becoming increasingly obvious the DBX order intake from last year is poor against expectations. DBX wholesale number in Q1 at 746 units is not much in my opinion and it looks AML need some 5.000 units p.a. to break even at an operating level, disregarding the 150m or so to service the debt. Is there any further opinion where's the break even sales point for AML, with and without debt. Cheers