Aston Martin chairman Lawrence Stroll’s turnaround of the luxury car marque has slid into reverse, after posting worse than expected first quarter losses of £138.8million.
Aside from Its pre-tax losses for the three months to the end of March accelerating 87 percent, Aston Martin’s revenues slowed 10 percent to £267.7million, while its net debt grew 20 percent to £138.8million. It also burned more cash than analysts had expected, up 86 percent to £61.5million.
Additionally, it said that its wholesale volumes had fallen 26 percent.
Aston Martin blamed its higher than forecast losses on the fact that it made fewer during the quarter cars and halted the production of a number of old models, ahead of new launches later this year, as well as higher manufacturing, logistics and other costs.
However, Stroll was upbeat and said Aston Martin will hit its targets this year. He said that with the new models launching later this year, such as a new Vantage, an upgraded DBX707 and its upcoming V12 flagship sports car, it should record high single digit wholesale volume growth for 2024, as well as increased profit margins.
“2024 is a year of immense product transformation at Aston Martin, with the introduction of four new models to the market before the end of the year. Our first quarter performance reflects this expected period of transition,” Stroll said.
“These 2024 launches will complete the newest core range in our segment, which along with the continuation of our specials, is expected to drive strong financial delivery and positive free cash flow generation in the second half of the year and beyond.”
Analysts however did not share Stroll’s optimism.
Mark Crouch, analyst at eToro said: “It will feel like a now-or-never moment for Aston Martin shareholders, who have suffered crippling losses since the 2018 IPO. It’s too early to tell whether these new editions will be enough to turn the company’s fortunes around, but by the looks of these results, the signs don’t look good.”
AJ Bell investment director Russ Mould agreed: “Despite a recent refinancing, Aston Martin is still burdened with a hefty debt pile and it’s likely in the last chance saloon at this point. If the new launches don’t go well it’s hard to see what road the business can take next.”
