Aston Martin recorded a pre-tax loss of £78.8 million in the first half of this year, due to lower-than-expected sales in Europe and expansion costs – but company boss Andy Palmer insists the firm’s ambitious growth plan remains on track.
The publication of Aston Martin Lagonda latest results came a week after the firm issued a profit warning in which it cut its wholesale forecasts. That caused shares in the company to dive: they are currently worth less than £6 per share, compared to £19 when the firm first floated in October 2018.
Aston’s retails sales in the first half of 2019 were up 26% year-on-year, with growth in the USA and China off-setting a steep decline in the UK and Europe. Wholesale volumes – cars being distributed to dealers – were up 6% year-on-year.
Aston boss Palmer admitted that “this has been a difficult period and we’ve clearly seen the market reaction”. But he noted that the firm’s sales were up year-on-year, and added: “I’m confident we are taking the right actions and that we can successfully deliver our strategy.”
While sales were up, driven largely by demand for the Vantage and DBS Superleggera, Aston’s revenues dipped in part because it sold fewer high-price Special models, reducing the average selling price of its cars. The firm anticipates sales of its Specials will increase later this year, particularly with the ultra-limited run DB4 GT Zagato Continuation due in the fourth quarter.
In its profit warning last week, Aston Martin revised planned wholesale volumes for the full year. From 7100 to 7300 units originally forecast when it published its annual results in February, the target has now dropped to 6300 to 6500 units.
Palmer said that reduction was a result of the firm being “responsible and disciplined in the approach to our balance sheet”, and was designed to ensure that supply of the firm’s cars did not exceed demand, which could force dealers to offer discounts.