Aston Martin - comment

The Q3 and updated FY25 numbers are a little above our recent model update. For now, we are not altering our model and still expect new cash will be required, but will be provided by the shareholders. Our recent analysis identified a funding gap; instead of raising cash now, Aston Martin (AML) is seeking to plug it with reduced capex and opex, which they expect can be done without damaging development. The company finished the quarter with £250m in liquidity (including RCF availability) against its own minimum of £200m to £300m. AML expects Q4 to be sequentially stronger (it usually is). If there are no inventory issues, then the cash call may be pushed into Q1 26, but we still expect it to come. The 5-year capex plan has been reduced from £2bn to £1.6bn to £1.7bn; pushing the electrification of the fleet out will help achieve this, but the money will need to be spent eventually.

The US market is tough, and the US shutdown may impact the delivery pace for Valhalla cars (homologation requirements). AML has also implemented another price rise in the US, 3% this time. The weakening $ (down 6% YTD vs GBP) will not help US sales. New luxury taxes in China are prompting further dealer support measures from AML and continued pressure on unit sales. The stronger € (+6% vs GBP) will be a driver of higher unit sales in Europe (ex UK).