Aston Martin Lagonda fell into the red in 2018 after being hit by “eyewatering” costs relating to its disappointing stock market debut last October.
Shares in the luxury carmaker crashed 17.6% to £11.32 after it slumped to a £68m loss for 2018, following an £84.5m profit in 2017, and said it was setting aside £30m in preparation for any Brexit-related disruption. At one point, shares hit a record low of £11.
The 106-year-old company and James Bond’s favourite car marque said the flotation on the London Stock Exchange had cost £136m, including £61m in long-term share incentives for management and other staff. Other costs included money to pay off shareholders and payment for those firms advising on the listing.
Without those one-off costs, Aston Martin made an adjusted pre-tax profit of £68m, down from £73m.
Shares were priced at £19 when the company floated five months ago, valuing the company at more than £4bn, but fell immediately in what turned out to be a disappointing debut. The firm’s market value shrank to £2.6bn after the results on Thursday.
Jordan Hiscott, the chief trader at Ayondo Markets, said: “From an investor perspective, having IPO’d at £19 … it’s been an abject failure. This has been even more eye-watering for the company itself with the cost of £136m to gain its public listing.” But he said the share price fall was overdone, in light of strong car sales and revenues.
Revenues rose 25% to £1.096bn in 2018, while car sales were better than expected, up 26% to 6,441. Aston Martin said its special editions were in high demand.
The company said it was setting aside £30m in readiness for no deal or a disorderly Brexit, including £2m for revised supply chain routes. It has hired a new supply chain chief, stockpiled five days’ worth of components as well as pallets to carry engines, and has made plans to bring in parts through naval ports if the Calais-Dover route gets clogged up, or fly in components as a last resort.
Andy Palmer, the chief executive, said a delay to Brexit would be a “further annoyance”. MPs could potentially vote on whether to delay Brexit on 14 March, a fortnight before the scheduled departure date of 29 March.
He added: “You’re holding that contingency stock for longer, which means that your working capital is tied up for longer. And continued uncertainty around Brexit means there is a propensity for EU and UK customers to delay purchases. I don’t think you’ll find a carmaker who wants this to go on any longer … I just want to get it over with.”
Laith Khalaf, a senior analyst at Hargreaves Lansdown, said:
“Brexit casts a shadow, as it does for the rest of the UK car industry, and that may present some big road bumps in the immediate future if some sort of deal isn’t reached between the UK and the EU.”
The carmaker produced five new models last year: the Vantage and DBS Superleggera, along with special editions of the Vanquish Zagato sports cars and a remake of the DB4 GT Continuation, which won on its race debut at Silverstone in 1959 when driven by Stirling Moss. The average selling price per vehicle was £141,000, excluding specials, and £157,000, including specials.
Aston Martin will start the first production trial of the crossover model DBX, its first sports utility vehicle, at its new St Athan factory in south Wales between April and June, with full production starting early next year.
The site will also be the centre for battery electric vehicle production and the home of Lagonda and the Rapide E – Aston Martin’s first all-electric production car – which is on track to start production this year.