Aston Martin shares slump after pre-tax losses of £104m in 2019
The British luxury carmaker is in the midst of restructuring with its CFO Mark Wilson stepping down no later than April
London — Aston Martin shares slumped to a record low on Thursday after the British luxury carmaker said its losses ballooned last year and its CFO would leave by the end of April.
The firm, famed for being fictional agent James Bond’s car of choice, posted a pre-tax loss of £104m ($135m) last year, compared with £68m in 2018 after a 9% decline in sales to dealers.
Aston Martin is in the midst of restructuring after announcing last month that a consortium led by Canadian billionaire Lawrence Stroll would buy up to 20% of the company and existing shareholders would inject more cash.
Its shares, which were listed in October 2018, have been on a steady downward trajectory ever since, and hit a record low of 328p following the announcements on Thursday, more than 80% lower than their flotation price.
“The big difference between last year and this year is the strength of the balance sheet,” CEO Andy Palmer told Reuters. “We’re in a very different place and have, therefore, an ability to properly ... destock, and that means get the balance right between supply and demand.”
CFO Mark Wilson will step down from his role no later than April 30 but had not been fired, said Palmer.
China, Aston’s fastest growing market, was a rare bright spot last year with sales rising 28% but the company, as with the rest of the industry, has seen demand drop due to the coronavirus outbreak.
The virus has infected more than 80,000 people and killed more than 2,800, the majority in China, confining millions to their homes, disrupting businesses and delaying the re-opening of factories after the extended Lunar New Year holiday break.
Aston has seen disruption to the arrival of certain parts but said it had not had to stop production at its factories, with components secured until at least the end of March because it has no direct suppliers in China.
“Since almost the first weeks of the New Year we’ve had issues with those tier 2 and tier 3 [suppliers], which has meant that our supply chain guys have had to be on it constantly,” said Palmer.
“We’re ironically benefiting from the fact that we built up a Brexit stock,” he said, in a reference to extra components the firm held in case Britain’s departure from the EU led to additional delays in the movement of goods.
The firm said deliveries of its crucial first SUV, the DBX, are scheduled for the Northern Hemisphere summer, subject to any negative effect from the outbreak on the supply chain.
As part of several changes announced in the past few weeks, Aston Martin is delaying plans to electrify its range, taking a £39m charge, and focusing on hybrid vehicles for now, starting with the Valhalla model in 2022.