Financial news from the United Kingdom has been bleak in recent months. As the government prepares for its complete withdrawal from the European Union, investors are starting to worry about what could be a hard Brexit, with no concessions from European lawmakers. The Pound (GBP) has performed poorly this year, hitting a record low against the United States Dollar (USD) in mid-August.
If you’ve tried to minimize your exposure to U.K. investments this year, then you are amongst most long-term investors. However, there is one IPO approaching that represents a unique opportunity.
Aston Martin Will List on the London Financial Stock Exchange
One of Britain’s most famous brands, Aston Martin, will list on the London Stock Exchange, possibly as soon as the end of this year. The company will release a detailed prospectus by September 20, detailing the IPO and the final offer price. 25% of stock is expected to be floated on the public market.
Aston Martin is 105 years old, making it one of the longest running car manufacturers in the industry. Known for producing high performance luxury cars, Aston Martin is an exclusive brand that competes directly with automakers like Ferrari, Jaguar, Mercedes Benz, and Lamborghini.
The company has gone through dramatic changes in the last four years, increasing profitability while also increasing production of its exclusive luxury vehicles. The company expects to complete 6,400 cars this year, which will be a record. By 2020, production is expected to increase to 10,000 cars. Low volume and high retail pricing mean that Aston Martin can generate impressive profits without relying on a large economy of scale.
When the company last released full financial details in 2017, profits were over $27 Million USD before taxes. This was a massive change to the $107 Million USD loss from the year before.
For the first two months of 2018, pre-tax profits were $54 Million USD, indicating that performance is trending upwards at a staggering rate.
New Board Members in Preparation for IPO
Aston Martin will be a unique buying opportunity once it is listed on the LSE. In preparation to become a public company, high level acquisitions have been made, with a focus on leaders with financial experience. New board directors will bring experience from companies like Deutsche Bank, Coca Cola, Royal Bank of Scotland, and Vodafone.
A cautious IPO investment could be an excellent opportunity to hold part of one of the most iconic luxury car companies. Wary investors may wish to wait some months after the initial offering, to determine the trajectory of stock in the short term.
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