The boss of Aston Martin made millions selling stock in the ailing car maker that would be worth just a fraction of that sum now.
Dr Andy Palmer cashed in £35.6million worth of shares in the firm – whose cars feature in a string of James Bond films – when it listed at 1,900p last October.
But the company’s share price plunged to a third of that value since then amid a slew of disappointing updates, including a shock warning earlier this month that it will sell fewer cars this year than it first thought.
And on Wednesday, the stock fell another 74.25p, or 13 per cent, to a post-flotation low of 493.75p after the luxury British carmaker revealed it had slumped to a half-year loss.
The boss of Aston Martin, Dr Andy Palmer, pictured above, made millions selling stock in the ailing car maker that would be worth just a fraction of that sum now
A revenue alert last week sent the share price tumbling by a further 26 per cent in one day after it said it only expects to sell 6,300 to 6,500 cars this year, down from 7,100 to 7,300 it forecast in February.
Palmer banked £6.6 million worth of the proceeds he made during the float last October, while the remaining £29 million went towards paying his tax and national insurance.
With the tumble in Aston Martin’s share price, his £6.6million would be worth just £2million today. The company’s market value has plunged from £4.3billion when it went public to £1.3billion as of yesterday’s close – meaning it has lost £14million every working day during its lifetime as a listed firm.
Palmer faces scrutiny when the 106-year-old firm reports its first-half results today. Investors will want to know whether his ‘Second Century Plan’ to release seven new cars over seven years is still tenable.
Palmer, 56, was awarded 1.4 per cent of the shares when the firm went public as a reward for turning it around after he joined 2014. This was worth £62million at the 1,900p listing price.
Palmer owns around 0.6% of the iconic British car maker, a stake which is now valued at £8.2 million
Aston Martin has gone bust a number of times, and though Palmer was praised for revitalising the brand before the float, the performance has fallen far below the City’s expectations since
Under the float arrangements the remaining £26 million of stock – 1.39 million shares – will be released in equal chunks over a four-year period. But these are worth just £8 million at today’s prices.
Palmer will still receive an extra £2 million a year between now and 2023 on top of his pay packet, which was £3 million last year.
He can bag yearly pay of £6 million if he meets performance conditions – though this would entail the share price rising by 50 per cent, which is unlikely this year.
Palmer owns around 0.6 per cent of Aston, a stake which is now valued at £8.2 million.
Aston Martin has gone bust a number of times, and though Palmer was praised for revitalising the brand before the float, the performance has fallen far below the City’s expectations since. It swung to a £68.2 million loss in 2018, partly because of £136 million of costs related to the float.
And it has been hamstrung by falling demand in Europe, as well as production delays that meant many retailers received too many cars at the end of last year.
Aston Martin confirms half-year loss
The car manufacturer confirmed on Wednesday a pretax loss of £78.8 million ($96 million) in the six months through June from a £20.8 million profit in the first half of 2018.
Its shares were down 20 per cent at £4.56 by 9am following the announcement.
In Wednesday’s statement, Palmer said: ‘We are disappointed that our projections for wholesales have fallen short or our original targets, impacted by weakness in two of our key markets as well as continued macro-economic uncertainty.’
Aston Martin confirmed on Wednesday a pretax loss of £78.8 million in the 6 months through June
Overall wholesale demand grew by six per cent in the first six months as the group posted strong increases in the Americas and Asia, but a decline in Britain and the rest of the continent prompted the carmaker to cut its full-year forecast.
Aston has also been hit by expansion costs as it builds a new factory in Wales to make its first sport utility vehicle, and a lower average selling price.
The company said that if it requires some additional financing it would pursue the funds from sources such as the debt markets.
The global car industry has been hit by weakening demand in China and a drop in demand for diesel vehicles in Europe, as well as the cost of electrification.
Nissan reported plunging profits last week and said it would undertake its biggest restructuring plan in a decade, axing nearly a tenth of its workforce.
But 106-year old Aston also faces the risk of a disorderly Brexit disrupting its wholly British production, as delays at ports due to new bureaucracy could slow down the movement of vehicles and components.
‘We do not want a no-deal Brexit because of the disruption that that causes to issues at the border,’ said Palmer.