Section:GDN 1N PaGe:29 Edition Date:190801 Edition:01 Zone: Sent at 31/7/2019 20:16 cYanmaGentaYellowb
Thursday 1 August 2019 The Guardian •
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FTSE 100 All share Dow Indl Nikkei 225 £/€ £/$
1.2245+0.0088 +0.0092Aston Martin warning of drop
in demand sparks share slide
Mark Sweney and Sean FarrellAston Martin yesterday warned of a
drop in demand for its cars, prompt-
ing a further sell-off of the 106-year-old
business’s shares.
The company, which only last
week issued a shock profi t warning
that sparked a share price fall of more
than a quarter , reported a pre-tax lossof £78.8m in the six months to the end
of June. That compares with a £20.8m
profi t in the same period a year earlier.
Its shares, which fl oated at £19 in Octo-
ber, fell 12% to a new closing low of £5.
The 106-year-old company behind
James Bond’s favourite car marque has
lost almost three-quarters of its stock
market value since fl otation – falling
from £4.3bn to £1.1bn.
Sales to dealers in the UK slumped
by 17% in the fi rst six months , and by19% in the rest of the Europe, the Mid-
dle East and Africa.
Aston Martin slashed its annual
sales forecast from an expectation of
7,100-7,300 to 6,500, refl ecting low
orders from car dealers concerned
that they may not be able to sell them.
However, sales by dealers to custom-
ers rose by 26%.
“We are disappointed that our pro-
jections for wholesales have fallen
short or our original targets, impactedby weakness in two of our key markets
as well as continued macroeconomic
uncertainty,” said Andy Palmer, Aston
Martin’s chief executive.
“We are keeping a profi le where
demand exceeds supply, which is
key for a luxury company. In order
to protect the position of the brand
we thought it right and proper to cut
wholesale [forecasts] and don’t end
up making the mistakes of history and
discounting cars to get them away.”
Aston Martin DB11 V8 prices start
at £144,900. Its new hybrid hypercar,
called the Valkyrie, costs £2.4m.
Michael Hewson, chief marketanalyst at CMC Markets, said Aston
Martin’s fi gures were “nothing short
of a disaster”.
“The fi rst half as the pre-IPO opti-
mism of late last year, has become a
distant memory, with investors under-
going a significant reality check,”
Hewson said. “The share price has
lost over 75% of its IPO valuation, and
while we knew that this week’s results
would be bad, the loss of confi dence in
the management of the business from
investors has been startling.”
Palmer, who survived a revolt
against his £1.2m pay, said that the
company has so far only had to spend
a “negligible” amount on Brexit
preparations.
Palmer, who has previously
described the government’s Brexit
strategy as “laughable”, insisted the
industry needs certainty. “We do not
want a no-deal Brexit because of the
disruption that causes with issues at
the border,” he said. “We will live with
it if that is what it is. The car industry
is pretty resilient once it knows what
it is dealing with. We need certainty.”
The UK’s car industry body, the
Society of Motor Manufacturers and
Traders, yesterday said investment
in Britain’s car industry slumped to a
“pitiful” £90m in the fi rst half because
of fears about Brexit. Over the last
seven years the average annual invest-
ment in research and development has
been £2.5bn to £2.7bn.
Palmer joined Aston Martin in 2014
and took it from a loss-making busi-
ness on the edge of bankruptcy to a
stock market listing last October. After
disappointing investors, he is hop-
ing the launch of the company’s fi rst
sports utility vehicle – the DBX – later
this year will revive sales.Rush before PPI claims deadline
pushes Lloyds’ bill past £20bn
Kalyeena Makortoff
Banking correspondentLloyds Banking Group has put aside
more cash to cover a late rush in
customers claiming they were mis-sold
payment protection insurance,
bringing its total bill for the scandal
to more than £20bn.
The lender took another £550m in
PPI charges in the second quarter after
a “signifi cant increase” in customers
requesting information from the bankin the run-up to the 29 August claims
deadline. Lloyds said the queries
would lead to a rise in the number of
complaints and administrative costs.
The provision pushed down pre-
tax profi ts by 7% to £2.9bn for the six
months to the end of June, disappoint-
ing analysts, who had been expecting
more than £3bn. PPI provisions for the
fi rst half were £650m.
Lloyds said the total number of
complaints it could receive was still
unclear. However, it has about £1.1bn
in reserve to deal with a further rise.and the rise in real wages. “The group
has continued to make strong strate-
gic progress during the fi rst half of
2019 and delivered a good fi nancial
performance with market-leading
effi ciency and returns,” he said.
The bank put aside an additional
£143m to cover legal disputes and
other regulatory issues in the fi rst half.
George Culmer , chief fi nancial offi cer ,
said it had already allocated funds for
a settlement with Noel Edmonds. The
TV presenter has said his company,
Unique Group, was pushed into failure
by a scam at the Reading branch of
HBOS, which Lloyds acquired during
the financial crisis. The Guardian
understands that Edmonds received
about £5m in damages. He could not
be reached for comment.▲ Prices for the Aston Martin
DB11, standard bearer for the new
generation, start just shy of £145,000
PHOTOGRAPH: ROGER DONOVAN/ALAMYSource: RefinitivAston Martin shares closed at
a new low of £5
Pence4006008001,0001,2001,4001,6001,800Oct 2018Jan 2019 Apr 2019 Jul 2019Cost of PPI to banks
Lloyds £20bn
Barclays £9.6bn
Royal Bank of Scotland £5.3bn
HSBC £4bn
Santander UK £2bnTotal £40.9bnWhile Lloyds has historically fi elded
about 70,000 PPI information requests
per week, that number more than dou-
bled to 150,000 throughout the second
quarter and reached 190,000 in recent
weeks. It expects queries to stay at that
level until the end of this month.
The lender, which started taking
claims in 2011, has racked up by far
the largest PPI compensation bill for
the UK’s biggest mis-selling scandal.
Its £20bn bill is more than double the
second-highest total, at Barclays,
which has put aside £9.6bn so far.
Lloyds also accounts for half of the
£40.9bn put aside by the fi ve big high
street banks to date.
The Lloyds chief executive, António
Horta-Osório , said the rising PPI bill
was disappointing. Markets alsoreacted poorly to the news, which sent
the shares down about 3%.
Horta-Osório said Lloyds was also
keeping an eye on the impact of Brexit.
He noted a drop in business investment
and hiring plans in the second quar-
ter but said he was optimistic, given
Britain’s high levels of employmentРЕЛИЗ ПОДГОТОВИЛА ГРУППА "What's News" VK.COM/WSNWS