Member Info for rob295

Some supporting press :

https://www.forbes.com/sites/kbrauer/2024/09/02/all-new-2025-aston-martin-vanquish-world-debut/

https://www.autoexpress.co.uk/aston-martin/vanquish/364221/new-aston-martin-vanquish-unveiled-roaring-823bhp-v12

https://www.topgear.com/car-news/first-look/new-extra-long-aston-martin-vanquish-most-powerful-production-am-ever

Feels like there will be a lot of positive press again.

Launch date looks to be 2nd September. https://x.com/astonmartin/status/1826529746039308773

Looks like we’re up again in early trading. Any thoughts on share price movements over the next weeks and 12 months? Feels almost as likely to fall to 50p or to climb to £1.50.

This share has dropped a lot on fairly small volumes so I think any movements are just exaggerated. Might see a big retrace but it feels like it would be hard to build a mega position without pushing the price unless buying into a fall. Might get bumpy for the next 12 months.

It’s vs EBITDA so you can buy a lot of room vs 3.5 limit just with revenue growth although obviously debt reduction still helps. EBITDA was up 10%, hopefully will stretch a bit more in H2 as margins improve.

For me it wasn’t going to be better than that and could have been worse, so happy so long as things continue to improve. Will have to keep an eye for progress in UK in H2 and 2025 as that should really do a lot better but ALSA is compensating. Can’t really ask much more than for revenue growth and restructuring focused adjustments but will need more going forward. Cash flow was down after higher capital spend and acquisition outflows not being offset by revenue climb. Seeing that consistent good cash flow will be for me the end of the tunnel.

Couldn't agree more. Net debt was flat 2022 to 2023 but the underlying business is being held back by adjusting items and debt and that's mostly the main issues. Without acquisitions and a dividend net debt could have been down £100m (£40m dividend + £60m acquisition costs) and without dividend, acquisitions and adjusting items it could have been down £170m (£71m of adjusting cash items were £7.1m re-measurement of contracts due to covid, £27.9m for re-measurement of Rhine-Ruhr, £9.8m re-measurements in North America, £26.2m restructuring). Although against that the year had a £53m gain for 'Other' you'd not expect in feature years (page 37 of the 2023 report).

Add a modest bit of growth, have no dividend and the expectation should really be £100m+ of drop in net debt each year. That would I think allow the gearing ratio to drop under 3.5x by late 2025 / early 2026 and then the business could focus on pushing down the interest costs which on debt plus hybrid saw another £82.3m exit the business in 2023.

So, if I were setting the plan for the business I'd hold off the dividends for an extended period, pray to any god out there for no more adjusting items, target a -£100m drop in net debt each year and be smart about the most efficient way to cut the interest costs - even if that means going after the hybrid first and pushing up the gearing ratio to a slightly uncomfortable point. Then long-term once you get a bit of growth and more manageable finance costs, I'd target £200m net cash change which will then allow you to resume dividends for maybe half that money and if that business was still worth £350m I'd be surprised.

Vanquish was set to launch in September with first deliveries in Q4 2024 according to the H1 results so sounds pretty on track to me.

Vanguish to launch in next few weeks:

“ Aston Martin has kicked-off the teaser campaign for the upcoming 2025 Vanquish. The new flagship grand tourer is expected to be launched in the coming weeks.

Aston Martin has cleared its social media handles and posted an image with the message, “All will be Vanquished”. You can also express your interest on the brand’s official website. Here, you can also enjoy the sound of the new V12 engine

Looking at the spy images, it’s clear that the new Vanquish will feature a large front grille and a rear inspired by the Aston Martin Valour. Reports suggest it will have the biggest front grille ever to feature on an Aston Martin and square quad exhausts at the rear.

The new Vanquish will be powered by a brand-new V12 engine. The twin-turbo unit features a beefier cylinder block and conrods, redesigned cylinder heads with reprofiled camshafts and new intake and exhaust ports; among other changes. The result is 824 hp and 738 lb-ft of torque. It is said that its top speed will be limited to 214 mph.“

https://www.thesupercarblog.com/2025-aston-martin-vanquish-officially-teased-launch-imminent/

Link https://www.thisismoney.co.uk/money/cars/article-13734661/Jaguar-wont-sell-cars-YEAR-ramps-EV-rebrand.html

Jaguar is doing an Aston Martin and apparently will for a period not sell any cars and then will go EV. Similar target of higher margins it seems though.

Personally I'm keen to see the H1 results. Will be okay with average performance, but do want to see the endless restatements and write downs come to an end as they're only exceptional items if they're not every year. Can't see why there should be any more restatements, but would be nice to see some clean results to feel a bit more confident about what they are doing.

Would agree that they are not good results but were at least as promised. The very big question that will define everything is whether H2 will be as promised or not.

There is a small NA update here : https://content.yudu.com/web/1qiu9/0A1rp8i/july24/html/index.html?page=58&origin=reader

“Our near-term goals involve positioning National Express School ideally for a sale that suits both us and a potential buyer. As we expand, strategic alignment with a suitor capable of providing capital to support our growth is crucial. Ongoing discussions are underway, and we’ll keep assessing our options.”

For me nothing big will come soon and it is a patience game waiting for things to improve. 2019 saw £2.7bn revenue and £242m profit. 2023 saw £3.2bn revenue and £21m loss. The restatements and adjustments have to end and margins have to be restored. For reference finance costs were £64m in 2019 vs £79m 2023.

Getting pricing, costs, margins and accounting right will take time but a £242m profit would certainly shift the share price. At least that’s my thoughts and I’m comfortable to hold a position and wait. Suspect margin restoration will rely on revenue growth though.

H2 results should be out on Wednesday. Expectations set in previous results were similar revenues to Q1 but not as bad cash flow. With financing and changes in deposits there were some exceptionals in Q1 so hopefully that is right. Should know soon enough though with some commentary about the all important H2. Will be happy myself if outcomes just match the promises in 2024.

Possibly should use a debt figure of £1.6bn actually to include the £400m as that debt technically isn't debt (not sure if it features in net debt or not). That shifts the figures to £1.15bn ALSA, £500m NA, £300m UK & Germany. Definitely there is a lot of debt but I'll accept that £600-700m might be doable. £1bn+ still feels high though. That could knock net debt down below the £1bn mark (including the hybrid instrument if not included in net debt - which I think is isn't, but as usual its messy accounts to figure out).

I am wrong as the net debt of £1.2bn means we are worth £1.53m in transaction terms (no debt). I would assign value based upon 60% ALSTA, 25% NA, 10% UK and 5% Germany (if that). So ignoring debt current listed value could be taken as £900m ALSA, £375m NA, £225m UK & Germany.

So yeah £100m I'm way out on if it is a no debt transaction. Those values are maybe fair on current performance, but on good performance I'd say x2-3 of that maybe is achievable. So it is dependent on how much you'll value for the right now and how much for the good times but yeah okay you could get £600m maybe in current for NA and £1.2bn maybe for ALSA (just on numbers out the air). I'm still not 100% sure you could sell that story as well now as if it were running slightly better. Two years of good performance is worth a lot of money to a buyer (unless they are already in the industry).

JG68 - The problem is that Mobico is valued at £330m. The ALSA side seems the strongest so proportionally NA can't be worth too more than £150m. I'll admit that you have the big revenues and even if we value NA at £50m annually at a multiplier of 7 plus £50m for the deferred tax liability we get £400m - but that is more than Mobico is worth. So just buy Mobico. I'd agree its a bit nuts to be worth £100m, but proportionally that's what it is worth right now. Hence I'd hold onto it, prove the value and get Mobico value back up, but maybe I'll be surprised and you can sell a part for more than the whole.

JG68 - I think it would be tight but probably possible if you ran with a reduced amount of cash and instead used the rolling facility as a fall back for short-term liquidity. That really does depend if the business performs as you won't have much headroom. It all gets a lot easier if the business performs well and generates a bit more surplus cash (an extra £50-100m makes a bit of difference)

Changeofpace - Looking at the North American business there is a lot of revenue but not a lot of profit. So its a hard one to sell at a good price as you are essentially saying give me money now in return for you then turning this around and making it more successful. The one positive is that there is a large tax loss. If there was a shell business with a $100m deferred tax liability you wouldn't pay $100m for it, but you might pay $50m if you were confident you would in the future save yourself on $100m of tax you would have otherwise paid. The tax liabilities are in the US and UK with the US being more stable in terms of long-term expectation of that value being useful in the future. TBH though I don't see much more than £100m for the North America business with the liability as the performance isn't great, which is okay vs the current market cap but its hardly going to transform the debt situation - maybe I'll be surprised but it seems more like an asset to hold and then use the deferred tax liability once you get it performing and you'd hope you could get some profit out of all those revenues.

Generally I don't see any get out of jail frees or short term big wins on the debt... the management have to manage well and make the business perform, but you can see if the upside if they can manage that. Key I suspect is selling tickets for sufficiently more than it costs in total to run the service :). Feels very much a long-term thing to get the value out though, with baby steps if the future financial results aren't plastered in restatements and have a clear decrease in net debt.