Aston Martin Swings to Profit as Sales Double on DB11 Sports Car
(Bloomberg) -- Aston Martin Holdings Ltd. swung to a profit in the first quarter as the British luxury-auto maker benefits from cost cuts and demand for its new DB11 sports car.
Pretax earnings were 5.9 million pounds ($7.6 million) in the first quarter after a 29.7 million-pound loss a year earlier, the Gaydon, England-based manufacturer said. It was the first profit in that period since 2007, as an aggressive restructuring takes hold and a revamp of the DB flagship model propelled a doubling of deliveries.
“Management has been myopically focused on the operational delivery of our plans, and we haven’t been distracted by anything else,” Chief Financial Officer Mark Wilson said in an interview.
Aston Martin, whose opulent sports cars were popularized by James Bond films, has been cutting jobs and and expanding its range to reverse years of losses. In a bid to follow a trail blazed by rival Ferrari NV, the U.K. manufacturer may consider an IPO on the London Stock Exchange as early as next year, people familiar with the matter said last week.
While there are no plans for a share sale “I get banks coming to me all the time pitching great ideas about IPOs,” Wilson said.
Chief Executive Andy Palmer, who took over three years ago with a mission to widen the brand’s appeal, plans to release the family-friendly crossover DBX in 2020 and start production of an electric version of the Rapide coupe next year.
The company aims to introduce a new or refreshed model every nine months, and its recent rollout of the DB11 helped revenue in the first quarter more than double to 188.3 million pounds. Upcoming models include the special edition Vantage and Vanquish. Aston Martin has also been lending its marque and aesthetics to makers of yachts, condominiums and baby strollers.
Aston Martin forecast full-year earnings before interest, taxes, depreciation and amortization of as much as 170 million pounds on Wednesday, compared with previous guidance of as much as 165 million pounds. Profit on that basis jumped sevenfold in the first quarter to 43 million pounds, the company said.
It’s “possible” the company could meet a target of posting a net profit at the end of this year -- its first since 2010 -- a year earlier than planned, Wilson said.
Aston Martin’s owners include Italy’s Investindustrial SpA, Daimler AG and a Kuwaiti investment consortium.