Car crash at Aston Martin: Shares dive 21% as marque is hit by a £68m loss after market float cost it £136m
Aston Martin Lagonda shares crashed to an all-time low as it suffered annual losses of £68.2million.
The luxury car maker was hit by one-off costs of £136million relating to its much-hyped float on the London Stock Exchange in October last year – including a £61.2million pay-out in staff bonuses.
Shares fell 21.4 per cent, or 294.4p, to 1080p as investors made their displeasure known. The company has lost 43 per cent of its value – or £1.8billion – since the shares floated at 1900p in October.
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Analysts warned that bosses may even have to seek more money from shareholders to support the business.
Chief executive Andy Palmer struck a defiant note, claiming that the stock will rise again and that large shareholders are behind him.
He said: ‘We try and speak to our key investors a lot. In every case they will tell us, “We’re into this for the long term, and you keep doing what you’re doing”. In the long term, the share price will catch up.’
Aston sold 6,441 cars in 2018, up 26 per cent on a year earlier, with overall US sales outstripping those in the UK for the first time. The average selling price of its cars was £157,000, down by £2,000 on a year earlier.
Bosses are planning to unveil one car a year until 2023 and said its £140,000 SUV, the DBX, is on track to launch later in 2019.
It is also developing the Valkyrie, an ultra-high-end electric hybrid intended to be the fastest road-legal car in the world, of which only 150 will be made.
The 106-year-old firm is branching out beyond the cars that made it famous into other luxury markets. It has produced speedboats, last year signed a tie-up with Swiss firm TAG Heuer to produce watches and is also behind a luxury Miami apartment block.
More exotic projects considered by Aston have included a submarine and pilotless aircraft.
These grand ambitions helped drive huge excitement in the run-up to the float, but have so far failed to translate into huge profits.
Aston’s revenues rose by 25 per cent to £1.1billion last year. Its £68.2million loss came after an £84.5million profit in 2017.
The firm is also burning through cash as it seeks to grow rapidly, sparking fears it may have to tap up shareholders for more.
In 2018 Aston generated £223million from its day-to-day activities but invested £306million in new projects, giving it a shortfall of £83million.
Analysts at the broker Quest said if this does not improve then the car maker is likely to need more money, and urged shareholders to sell.
The Aston Martin results come amid a turbulent time for the car market, with major cutbacks at Ford, Honda and Jaguar Land Rover.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show an 18.2 per cent fall in UK production in January compared to a year earlier.
A global crackdown on trade by President Trump is damaging worldwide exports, while the European market is struggling because customers have turned away from diesel.
SMMT also found that a third of automotive firms had postponed or cancelled investment in the UK because of Brexit.
Palmer, whose firm has set aside £30million to cover costs related to Brexit, warned any delay to our departure from the EU will prolong uncertainty and push up costs for manufacturers.
He said a late Brexit will force firms to hold onto stockpiled parts for longer, and make it harder to invest.