Record results hasten possible flotation for Aston Martin

Warwickshire sports car manufacturer Aston Martin has announced record full year results in a move likely to accelerate plans for a potential flotation of the business.

The company is currently on a high with global sales very strong, along with expansion plans in areas such as China and Japan.

The Gaydon-based company said the record full year financial performance had been driven by continued strong demand for its DB11 and special models.

For the 12 months to December 31, 2017, Aston Martin Holdings (UK) delivered its highest-ever revenues of £876m, up 48% versus the prior year. Adjusted EBITDA more than doubled to £207m, while pre-tax profit rose by a quarter of a billion pounds to £87m, reversing a pre-tax loss of £163m in 2016.

Wholesale volumes increased to 5,098 units, Aston Martin’s highest full-year sales volumes in nine years, driven principally by rising demand in North America, the UK and China. Global retail sales increased 58% to 5,117 units up from 3,229 units in 2016.

Dr Andy Palmer, Aston Martin President and CEO, said: “In 2017, we delivered record revenue, full-year profitability and positive free cash flow. The financial turnaround of Aston Martin is now complete, which enables us to drive further improvements across the business as we maintain our new launch schedule and continue delivering on the Second Century Plan.

“The outstandingly positive reaction to our new models gives us confidence that we will deliver further performance improvement in 2018.”

In the fourth quarter, Aston Martin recorded the strongest three-month performance in its history. The group reported quarterly revenues of £309.2m, with adjusted EBITDA up 24% to £85.4m. Pre-tax profit of £64.8m was recorded in the three months to 31 December 2017, in contrast to a quarterly pre-tax loss of £38.4m in the prior year period.

The strong fourth quarter and full-year performance resulted in operating cash generation of £343.8m, more than double the level achieved in the previous year.

The group also became free cash flow positive one year ahead of plan. Now, with a closing cash position of £167.9m, the group is well placed to sustain new product investment as part of its ongoing Second Century Plan.

Under the Second Century Plan, the company is expanding its manufacturing footprint with the construction of a new plant at St Athan in Wales, due to open in 2019, and has resumed production of specialist models at Newport Pagnell for the first time in 10 years.

It is also continuing the extension of its product range with the launch of new models including the DB11 Volante and new Vantage, and has begun deliveries of its limited-production DB4 GT Continuation model.

The product roll-out coincides with a 9% increase in the group’s average selling price in 2017, reflecting an improving product and market mix – including the benefits of a full year of DB11 sales – and uptake of higher-specification options.

Mark Wilson, Executive Vice President and Chief Financial Officer, concluded: “This has been another landmark financial year for Aston Martin, creating a solid foundation for future growth. As part of our ongoing development strategy, we continue to consider a range of strategic options for the future of the group, including the potential for an IPO. We remain focused on delivering our plans for 2018 and beyond.”