FTSE 250: 19,550.09, -0.37% at 1450 GMT.
Aston Martin was under the cosh after Jefferies downgraded the shares to ‘underperform’ from ‘hold’ and slashed the price target to 120p from 530p as it said that recapitalisation risks remain after the rights issue.
Jefferies said the majority of the change in the target price stems from higher share count post rights issue, lower discounted cash flow-based EV on reduced earnings and higher discount rate, and higher estimated YE22 net debt.
“Despite having just completed a major rights issue, AML still screens as candidate for future recapitalisation by the time the business achieves a viable operating structure, possibly 2024,” Jefferies said.
The bank argued that four years into listed life, AML has yet to achieve the sustainable operating structure that would lead to a stable capital structure.
“Trading conditions have certainly been challenging but the last few years have also been supportive for luxury sports car demand,” it said.
On the upside, it noted that progress on ASPs suggests the strategy pursued by Lawrence Stroll is right on the brand and product side, but AML is falling behind peers on industrial scale and still far from hitting the volume/ASP equation required to be a standalone business.
“It feels like AML investors must either be prepared to recapitalise the business again once operations reach viable metrics (positive FCF guidance for 2024) or believe that an OEM will step in and provide the scale AML is missing.
“We do not see how Geely, whose controlling shareholder acquired a circa 6-7% stake, fits that profile.”
Investment manager Ninety One fell after reporting a drop in interim profit and cut its dividend, as it struck a cautious note on the outlook.
In the six months to 30 September, pre-tax profit fell 16% to £110.6m and the company cut its dividend per share to 6.5p from 6.9p in the same period a year earlier.
Assets under management declined to £132.3m from £140m the year before, while net outflows stood at £3.2bn.
Ninety One said adjusted operating expenses rose 5% during the half to £223m.
Chief executive Hendrik du Toit said: “Rising inflation and interest rates, increased geopolitical uncertainty and sharply lower financial asset prices contributed to challenging operating conditions.
“The high levels of client engagement could not counter the impact of this environment on our results. We saw net outflows in the first half, caused by lower levels of new business volumes and portfolio de-risking by clients. We are anticipating that these tough conditions will persist for the foreseeable future.”
FTSE 250 – Risers
Fidelity China Special Situations (FCSS) 220.00p 3.77%
FDM Group (Holdings) (FDM) 695.00p 3.27%
Petrofac Ltd. (PFC) 125.20p 2.88%
Drax Group (DRX) 562.50p 2.74%
Man Group (EMG) 218.10p 2.73%
W.A.G Payment Solutions (WPS) 79.90p 2.70%
Carnival (CCL) 831.00p 2.67%
HGCapital Trust (HGT) 378.50p 2.57%
Allianz Technology Trust (ATT) 242.00p 2.54%
Schroder Asia Pacific Fund (SDP) 511.00p 2.20%
FTSE 250 – Fallers
Aston Martin Lagonda Global Holdings (AML) 129.95p -9.16%
Ninety One (N91) 208.20p -5.36%
Synthomer (SYNT) 148.40p -4.13%
Vietnam Enterprise Investments (DI) (VEIL) 504.00p -3.82%
Elementis (ELM) 102.50p -3.57%
Baltic Classifieds Group (BCG) 146.20p -3.56%
Mitchells & Butlers (MAB) 142.60p -3.52%
ASOS (ASC) 765.50p -3.47%
Moonpig Group (MOON) 174.30p -3.33%
Dunelm Group (DNLM) 979.00p -3.17%
