Car maker creates a £30m Brexit ‘war chest’

WARWICKSHIRE car maker Aston Martin is saving for a rainy day when it comes to Brexit.

As car makers in the UK continue to warn about the problems that could be caused by a no-deal or bad deal Brexit, the Gaydon-based firm has revealed plans to put £30million aside.

The war chest is being created to help it weather Brexit and some of the issues that might arise in the wake of the UK’s departure from the EU.

The news came as the prestige car maker revealed a £68.2million annual loss.

However the main reason for the loss was the cost of the company’s historic flotation on the London Stock Exchange in October last year.

Aston Martin said its board had given the go-ahead for the emergency £30million fund as it steps up contingency planning for a possible no-deal.

In its first set of annual results since floating last October, the firm added it was taking action to “mitigate the impact on the business from potential supply chain disruption should the UK withdraw from the European Union without an agreement or in an unstructured manner”.

The comments came as Aston Martin reported its £68.2m loss for 2018, against profits of £85million in 2017, due to £136million of costs for its stock market debut.

Shares fell nine per cent in morning trading as Aston also warned that underlying earnings are set to be lower in the first half of 2019.

In its annual report Aston Martin said: “Since our third quarter trading update in November 2018, geopolitical and economic uncertainties have increased.

“In response, we have put contingency plans in place to protect production and customer deliveries should the UK leave the European Union without an agreement or in an unstructured manner.”

The company said it had so far spent only a “minimal” amount on contingency plans and had committed but not spent around £2million on revised supply chain routes.

The results showed a 26 per cent rise in wholesale car sales by volume in 2018 to 6,441, while revenues lifted 25 per centto £1.1billion.

Aston Martin said it aims to increase wholesale volumes to between 7,100 and 7,300 in 2019.

With costs of its initial public offering stripped out, the group saw underlying operating profits rise 18 per cent to £146.9million.

Andy Palmer, Aston Martin Lagonda president and group chief executive, said: “2018 was an outstanding year for Aston Martin Lagonda, delivering strong growth, with improving revenues, unit sales and adjusted profits.”

He added the group was navigating “uncertainties and disruption impacting the wider auto industry”.

Since our third quarter trading update in November 2018, geopolitical and economic uncertainties have increased Annual report