18 AUTOCAR.CO.UK 7 AUGUST 2019
A
ston Martin has released
its half-year results for
2019 and the red ink – a
£79 million loss – sent
the company’s share price
tumbling even lower.
Since Aston Martin
Lagonda Global Holdingsplc was floated on the stock
market in October 2018, the
share price has collapsed from
£19, closing at just £4.98 on
the day it revealed its losses.
With a significant risk of
a global downturn in the
automotive industry (see
p20), Aston Martin – a victim
of a number of previous
recessions – could once again
be left floundering.
On a call to journalists,
Aston Martin boss Andy
Palmer was at pains to
stress that the company wasprogressing with caution and
“determined not to repeat
historic mistakes”. One of
those was building too many
cars and having to discount
them, a short cut to burning
brand equity in exchange for
short-term cash flow.
H e s a i d th a t a l th o u g h r e t a i l
sales jumped 26% in the first
half of 2019, sales fell 17% in
the UK and 19% in Europe, the
Middle East and Africa.
Even though the company
s o l d 2 4 4 2 c a r s , u p o n th e
2299 in the first half of 2018,Aston Martin’s income was
£407m, down from £425m
in the same period last year.
The company detailed some
of what had gone wrong.
The average selling price
for its cars fell to £145k from
£167k in the same period in
- This was because more
people bought the entry-level
Vantage. Aston also improved
its leasing terms (reducing
profit from financing) and
s o l d fewe r of w h a t i t c a l l s
Aston defiant despite losses
Aston’s average selling
price is being brought
down by the Vantage
DBX is expected to
give Aston Martin’s
bottom line a boost
Shares fell to a new low after a six-month loss of £79 million. Its boss explains why
‘specials’ – high-priced
limited-run models.
These figures are
particularly revealing of how
tight business can be even for
a company selling as many
as 6000 expensive cars each
year. Aston even removedfrom its accounts the £19m
income it expected from
selling the old VH platform
to a start-up company, a
transaction that is now in
the balance.
For the whole of this year,
the car maker predicts
selling 6300-6500 cars at a
wholesale level, but it will still
be in the red, with a predicted
profit margin of -8%.
This is where City analysts
made the point that Aston
M a r ti n’s d e b t of £ 7 3 2 m a n d
its £1 billion valuation are
rapidly converging, possibly
making future borrowing
harder and more expensive.
However, for a company
preparing a new SUV andfactory as well as exotics
such as the Valhalla, a capital
expenditure bill of just
£300m this year is on the
frugal side. Although the £6m
DB4 GT Zagato continuation
models will go on sale later
this year, Aston’s future is allabout the DBX SUV.
The firm will start taking
DBX orders from selected
customers at the Monterey
Car Week in California on
18 August. The car will be
publicly revealed on 19
December and deliveries will
begin around June 2020.
Underlining the hope for
the DBX, Palmer revealed
some of the results of the
market research clinics, with
“6 4% of p e o p l e i n th e US
showing strong interest and
68% in China – some of the
best clinic results I’ve ever
seen”, he said.
Aston faces a choppy 12
months, but its medium and
longer-term future revolvesaround a premium-priced
SUV that, in theory, will both
attract more female interest
and provide the kind of steady
demand that the brand’s
highly cyclical supercars have
never managed.
HILTON HOLLOWAY
`
Aston Martin’s
debt of £732m
and its £1bn
valuation
are rapidly
converging
a
ASTON MARTIN: THE KEY FIGURES
2018 2019
Profit +£20.8 -£78.8m
Income £425m £407m
Cars shipped 2299 2442
Share price* £19 <£
- 2018 at float, 2019 was as of 31.07.