► Aston Martin raises £200m in funding
► Will pay for new SUV, other models
► Pre-tax profit of £66m too
A rosier day for the accountants of Aston Martin, as Britain’s sports car company announced a slew of extra funding to pay for the DBX sports crossover due in 2019 and other new models.
It has issued £200 million of preference shares to raise the capital – designed to pump back into the research and development costs of the next generation of Astons its dealers so desperately need to sustain interest in the 102-year-old brand.
It’s an expensive business developing new cars and, unlike rivals such as Porsche, Ferrari and Maserati, it no longer has a deep-pocketed car manufacturing parent post-Ford. But the Middle Eastern and Italian funds which own Aston have overseen the capital injection and have approved its investment programme, according to chief exec Andy Palmer who’s masterminding the six-year turnaround plan.
Why Aston must spend its way out of a hole
‘This additional long-term funding will enable us to add extra model lines and broaden our presence in the luxury market segment by the end of the decade,’ said the new Aston chief exec. ‘The DBX concept has generated interest far beyond our expectations. The additional investment announced today will allow us to realise the DBX and other new luxury vehicles that will form the strongest and most diverse portfolio in our history.’
The capital will be raised in two phases; the first £100m of preference shares were issued on 29 April 2015, while the same amount will be issued over the next 12 months.
Palmer’s first six months in the job have been focused on firming up the funding to pay for this turnaround plan, according to senior insiders. Now the money is in place, his focus will shift to executing the plan to deliver scintillating sports cars, saloons and – controversially – genre-bending crossovers and other hitherto untapped niches.
Two new platforms are being developed: one for the sports cars and another for the more practical Aston Martins and Lagondas on the drawing board at Gaydon.
Financial results: a modest profit
Aston Martin today also announced its financial results for the 2014 calendar year. Total revenues topped £468m and it made a pre-tax profit of £66m, reversing the £36m loss a year earlier. It sold around 4000 sports cars (down from 2007’s high of 7300). Palmer’s plan is to make sure Aston is propelled onto a more secure financial footing – don’t forget this is a brand which went bankrupt seven times in its first century of business.
Gaydon seemingly knows which side its bread is buttered; the company said it had hiked R&D spend by 45% in 2014 to make sure it can realise its new-model plans. Which explains why our spy photographers have been so busy spotting the DB9-replacing ‘DB11’ seemingly at every street corner recently.