Aston Martin Lagonda Ltd posted a pre-tax loss of £104.3 million last year, with revenues hit by declining sales to dealers – but company bosses insist the recent investment and turnaround plan means it can still deliver profitable growth in the long term.
While the British firm’s retail sales rose 12% in 2019, wholesale volume – sales of cars to dealers – dipped by 9%. In total, it sold 5862 cars to dealers, compared with 6441 in 2018. Higher selling costs and lower profit margins on each car also hit the firm, leading to revenue declining by 9%, to £997 million. The firm also sold fewer specials.
Aston’s sold 1429 cars wholesale in the UK last year, down 21%, with sales in the rest of Europe and the Middle East falling 28% to 1074. But there were some bright spots: sales in the US rose 16% to 2050, with sales in China up 6%.
Alongside the publication of the results, Aston Martin also announced that board member and chief financial officer Mark Wilson would step down from his role by the end of this April.
Aston Martin recently announced a ‘reset plan’ following a major investment from a consortium led by billionaire Lawrence Stroll that will lead to £500 million of equity being invested in the company. The firm has also ‘rephrased’ its product launch plan and says actions in 2020 will allow it to “start to operate as a true luxury car brand”.
Aston boss Andy Palmer called 2019 an “extremely challenging period” for the firm, but added: “We have revised our business plan to reset, stabilise and de-risk the business, positioning it for controlled, long-term profitable growth.”
He continued: “With our revised plan and appropriate funding in place, I believe we will have the building blocks in place to secure the necessary financial turnaround of the business consistent with our position as a luxury automotive company."
The firm is hoping to receive a boost when the DBX, the firm’s first SUV, goes on sale later this year. It says orders for the DBX have already exceeded the total goal for the whole of 2020.
Aston Martin's other key launch this year will be the long-awaited Valkyrie hypercar. Beyond that, the firm says growing its portfolio of mid-engined cars will be a key focus, with the Valhalla due in 2022.
Aston Martin did sound a note of caution for 2020, warning that disruption to the supply chain due to the spread of the Covid-19 virus had the potential to delay production of the DBX.