Aston Martin revs up for £5 billion float despite City scepticism

Aston Martin on thursday drove ahead with a stock market float that could value the business at more than £5 billion - but admitted it could go for £1 billion less.

The company set a wide price range of between £17.50 and £22.50 for the shares, which means the car maker would have a market value of between £4.02 billion and £5.07 billion.

At the top of that range, the float would value the business even more highly than prestigious Ferrari and on a par with Marks & Spencer.

One fund manager said: “For me the valuation they are aspiring to is pretty rich. It’s highly unlikely I’ll be getting involved.”

Another added: “It’s very high for a company that’s only just started making money. They want you to think it’s a luxury brand. Instead it’s a car company whose markets can go against it very quickly.”

Aston insists that business and investment is strong, even though its cars sell for much less than Ferrari’s. The company, famed for producing James Bond cars in the 007 movies, sold 5,117 luxury sports vehicles last year, making revenues of £876 million and an £87 million underlyingprofit.

Aston is majority-owned by Italy’s Investindustrial and Kuwait’s Adeem Investment and Primewagon, which have agreed not to sell their stakes for 180 days.

Germany’s Daimler, which received a stake in Aston Martin in 2013 in exchange for supplying engines and other parts, has agreed not to sell its 4.9% stake for 12 months.

The float, of 25% of the business, will lead to the first stock market listing of a UK car company since Jaguar in 1984. Jaguar was bought by Ford in 1990.

Final pricing of the float should be on October 3, with unconditional trading to start on October 8.

Aston Martin’s chief executive Andy Palmer said: “Aston Martin Lagonda will provide investors with a fitting opportunity to participate in our future success. Over the past four years the benefits of the Aston Martin turnaround to the UK economy have been profound. We have secured and created thousands of jobs, boosted our investments and increased our spend with local suppliers.”

Aston builds all its cars in Britain and is due to open a second facility in the country next year.

A company spokesman denied the £1 billion range in the potential price was “anything unusual.”