Luxury car maker has blamed weak UK and European markets as one reason for its revised 2019 outlook

Shares in Aston Martin have dived as the Gaydon-based car maker cut its sales and profit forecasts, attributing the fall to weak markets in the UK and Europe and economic uncertainty. 

The luxury marque said it was “taking immediate actions to improve efficiency and reduce the costs base as [it] heads into 2020”. 

Shares fell 22% in early trading, taking them down to around £8, a 55% fall over the £19 price which valued the company at £4.3bn when it first floated in October 2018.

Aston Martin’s revised wholesale volumes are now 6300 to 6500 vehicles for the full year, down from the 7100 to 7300 units forecast at the time of its annual results in February.

Wholesale car sales fell 22% in the UK and by 28% in Europe, the Middle East and Africa, while it was a rosier picture elsewhere: in America, now Aston Martin’s biggest market, volumes rose by 20% in the first half of the year.

Aston Martin said retail sales grew by 26% in the first six months of 2019 but the poor performance in wholesale - which grew by only 6% globally - prompted a downgrading of full-year financial expectations.

Along with a revised outlook on volumes, Aston Martin is expecting full-year figures to see an adjusted EBITDA [earnings before interest, tax, depreciation and amortization] margin down 20% and profit margin down 8%.

Aston Martin said: “We anticipate that this softness will continue for the remainder of the year and are planning prudently for 2020."

Chief executive Andy Palmer has previously warned of the potential impact a no-deal Brexit could have on the car industry.

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The marque said that production of its DBX SUV and Valkyrie hypercar “remain on plan”. 

It added: “During the first half, we have been disciplined, as appropriate for our luxury positioning in maintaining the quality of sales with core wholesales up 9% supporting a continued reduction in dealer inventory as we prepare the network for DBX.”

Palmer commented: “Whilst retails have grown by 26% year-to-date, our wholesale performance is adversely impacted by macro-economic uncertainty and enduring weakness in UK and European markets. We are disappointed that short-term wholesales have fallen short of our original expectations, but we are committed to maintaining quality of sales and protecting our brand position first and foremost. 

“We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term. We remain focused on the successful execution of the Second Century Plan and on delivering sustainable long-term growth.”

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Comments
19

24 July 2019

Blimey what a fall from grace from the IPO earlier this year let’s home the DBX SUV can turn it around for them 

24 July 2019

If you look on the LSE website it has it listed that someone is trying to buy Aston Martin.

 

You heard it here first - Aston to change owners!

D-B

24 July 2019
CharlieBrown wrote:

Blimey what a fall from grace from the IPO earlier this year let’s home the DBX SUV can turn it around for them 

You imply the IPO was some sort of high point. It wasn't. Anyone that knew what they were talking about was saying don't touch it with a bargepole. And to think, some employees bought in to this - lost almost 60% of their investment, seen their CEO hugely overpaid for this failure and now perhaps feeling a bit uncertain about their job prospects too.

24 July 2019
D-B wrote:

CharlieBrown wrote:

Blimey what a fall from grace from the IPO earlier this year let’s home the DBX SUV can turn it around for them 

You imply the IPO was some sort of high point. It wasn't. Anyone that knew what they were talking about was saying don't touch it with a bargepole. And to think, some employees bought in to this - lost almost 60% of their investment, seen their CEO hugely overpaid for this failure and now perhaps feeling a bit uncertain about their job prospects too.

Of course the IPO was a high point and plenty of people did touch it with a barge pole hence the high price of £19 but like I said a fall from grace

D-B

24 July 2019
CharlieBrown wrote:

Of course the IPO was a high point and plenty of people did touch it with a barge pole hence the high price of £19 but like I said a fall from grace

Yes, fools did. It was a dog, it's even more of a dog now. That's not a fall from grace, it's plumbing new depths.

24 July 2019

Their sales are actually up, just they're not as up as much as they had projected. Investors might not like it, but it's not the end of the world.

25 July 2019

++I've made $64,000 so far this year w0rking 0nline and I'm a full time student. I'm using an 0nline business opportunity I heard about and I've made such great m0ney. It's really user friendly and I'm just so happy that I found out about it. Here’s what I've been doing......   www.online-3.com     

24 July 2019

Aston producing their own vehicle platforms, massive outlay especially when selling to a niche market - one that will dissappear rapidly upon shocks to the stock market (when the affluent loose a wadge of their fortunes).

Did they learn nothing from 2008/2009?

Sounds like a larger automaker will be buying them before long. The Chinese?

24 July 2019
CarNut170 wrote:

Aston producing their own vehicle platforms, massive outlay especially when selling to a niche market - one that will dissappear rapidly upon shocks to the stock market (when the affluent loose a wadge of their fortunes).

Did they learn nothing from 2008/2009?

Sounds like a larger automaker will be buying them before long. The Chinese?

An "Aston" that uses a shared or someone else's platform is not an Aston Martin. Aston's own platforms is absolutely vital to the marque's credibility. Same issue for engines, which is a problem at the moment...

24 July 2019

Just ask Elon Musk. From where they were, Andy Palmer has done a brilliant job of reivigorating AM and I think they'll continue to grow. 

Would I buy shares now, no. But will I regret that in a couple of years - probably yes.

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