Aston Martin losses race to £119 million

ASTON Martin losses ballooned to £119m in the first quarter of the year as the coronavirus hammered sales.

The luxury marque sold just 578 cars between January and March – down from 1,057 in the same period of 2019 – in what one analyst described as a ‘horror show’.

Some of the slide was a deliberate strategy to reduce the number of cars dealers had in stock.

But the pandemic meant nine in ten of its dealerships worldwide had to close at some point during the quarter. Revenues sank by 60pc to £79m, pushing the James Bond favourite deeper into the red, and leading it to hint that it may need to raise more cash. It made losses of £17m in the same period last year.

Aston said: ‘Given the ongoing uncertainties, as is prudent, the company continues to review all future funding and refinancing options to increase liquidity.’

Shares fell 16pc, or 6.08p, to 31.96p. The numbers were the first to be released since Canadian billionaire and Formula One tycoon Lawrence Stroll swooped in to save Aston last month.

A group of investors headed by Stroll, who is now executive chairman, led a £536m fundraising to bail out the car maker.

The results laid bare how much trouble the company had been in before Stroll stepped in. Net debt had risen by £254m to £956m.

Once the cash from Stroll’s funding round was taken into account, this was down to £614m. CMC Markets’ Michael Hewson said: ‘Having only recently been bailed out, Aston Martin’s firstquarter results were always likely to be a bit of a horror show.’

Aston has struggled since it floated in 2018, issuing multiple profit and sales warnings, posting big losses and having to tap the market for emergency funding. It was worth £4.3bn when it listed but this has sunk to just £505m now. Its future now hinges on the success of its first SUV, the DBX, which costs £158,000.

Staff at the DBX factory in Wales restart work next week and will get back to full production soon. Stroll said the pandemic had created ‘short-term difficulties’. It has scaled back plans for new models and rolling out electric cars to save cash.

It is also going to start making cars to order rather than on spec. Stroll said: ‘My immediate priority is to rebalance supply and demand, reducing dealer stock.

‘Although nearly all our dealers are compromised and our factories were closed, we are focused on achieving results and delivering our plan.’

The executive chairman added that he was ‘enthusiastic and confident’ about his multi-year plan to reset the business.

His rescue package means Aston will enter Formula One racing from next year.

But it scrapped its financial guidance for the rest of this year, saying the outlook was too uncertain.

Sales in China fell 86pc in the first quarter, 57pc in the US, 30pc in Europe and by 3pc in the UK.

But outside China this will almost certainly be worse in the second quarter, with new UK car sales falling 97pc in April.