Fall in demand sees car maker hit £78.8m loss
SHARES in Aston Martin Lagonda have plummeted once again after the luxury car-maker revealed it swung to a £78.8m loss as demand from dealers fell across the UK and Europe.
The stock plunged another 14%, having been more than a fifth lower at one stage, after the group revealed the hefty loss for the six months to June 30, compared with a profit of £20.8m a year earlier.
The company saw sales volumes to dealers in the UK slump by 17% in the first half and fall 19% in the rest of the Europe, Middle East and Africa region.
The firm – which last week saw more than a quarter wiped off its stock market value after a shock profit warning – posted a 4% drop in total revenues to £407.1m and blamed the performance on a “more challenging” global economy.
The maker of cars favoured by fictional spy James Bond has suffered a dismal start to life as a listed company, having seen shares plunge from 1,900p on flotation last October to less than 454p at current prices.
There had also been heavy criticism over the cost of the float, after bosses revealed that it
cost £136m to list the business.
Its new factory in St Athan, in the Vale of Glamorgan, has started producing test vehicles ahead of going into full production next year.
There are currently 200 staff working at the site, but when the factory is fully operation it will be producing 5,000 of the luxury car maker’s first SUV, the DBX, a year. At that point there will be approximately 700 people employed at the site.
In its interim results, the group’s president and chief executive, Andy Palmer, said: “We are disappointed that our projections for wholesales have fallen short of our original targets, impacted by weakness in two of our key markets as well as continued macroeconomic uncertainty.
“Accordingly, we have taken action to reduce wholesale guidance for 2019.
“We are also improving efficiency across the business, whilst protecting the brand.”
A better performance across the Asia Pacific region and Americas helped overall wholesale sales increase by 6% to 2,442.
The company said dealers were taking action to manage supply after starting the year with high stock levels, which “particularly impacted the UK and Europe where deteriorating macroeconomic factors are also now starting to be felt”.
Retail sales rose 26% in the first half.
But the group has slashed its annual wholesale sales forecast from a range of 7,100 to 7,300 to between 6,300 and 6,500.
It also said it has put in place plans to “ensure operational readiness for the supply of parts and cars” after Brexit, but was “not immune” to any impact from a cliff-edge withdrawal.
Mr Palmer – who has previously described the Government’s Brexit strategy as “laughable” – said the group did not want a nodeal and insisted the industry needs certainty.
He said: “We do not want a nodeal Brexit because of the disruption that causes with issues at the border.
“Now we’ll live with it, if that’s what it is, and the car industry in general is pretty resilient once it knows what it’s dealing with.”