Aston Martin losses deepen to £100m in turbulent 2019

Via Financial Times

Aston Martin’s losses deepened to more than £100m in 2019, the group said on Thursday as it announced plans to part ways with its financial chief following a turbulent year which culminated in a £500m rescue deal last month.

The carmaker on Thursday reported a pre-tax loss of £104m for 2019, up from £68m the previous year. The loss was accentuated by a £49m impairment charge as it pushes back its electric vehicle plans as part an arrangement with Formula 1 billionaire Lawrence Stroll, who led the equity injection.

It also said chief financial officer Mark Wilson would be leaving by mutual agreement.

Shares fell 12 per cent in early London trade.

The group — whose cars are a staple of the James Bond film franchise — hopes the equity injection will allow it to move forward following a turbulent year which ultimately forced it to seek new money less than 18 months after an initial public offering.

“Having significant strength in our balance sheet we find puts us in a very different position — almost a different position than we have ever been in our history,” said Andy Palmer, chief executive. “I would say there is not only relief but also optimism in our ability to do the right thing.”

The group has shelved plans to launch the Rapide E, the first all electric Aston Martin vehicle. The relaunch of the Lagonda brand, which it plans to make the world’s first zero emission luxury car, has been pushed to 2025 from 2022 previously.

Mr Stroll’s consortium will inject £182m for a 16.7 per cent stake in Aston at a price of £4 per share. Aston will raise a further £317m through a rights issue backed by two of its largest shareholders, Italian group Investindustrial and the Kuwaiti investment fund.

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Mr Wilson is expected to leave by the end of April. Mr Palmer said he had not been fired and that the decision had been mutual to allow him to “detox” after a tough year.

Aston on Thursday reported that 2019 revenues had fallen 9 per cent to £997m as sales to dealers tumbled. Adjusted earnings before interest, tax, depreciation and amortisation were down 46 per cent at £134m, in line with the profit warning the company issued in January — its second in a year.

Looking ahead to 2020 Aston expects sales to dealers to be “materially lower” again as it focuses on cutting down dealer inventories. “I’m not expecting 2020 to be an easy ride,” said Mr Palmer. “We’re going to be taking some heavy medicine.”

Mr Stroll, who takes on the role of executive chairman told the Financial Times last month that Aston was a “gem that needs love” and that he wanted to return “lustre” to the brand.

He said the business would take “one step back before taking five steps forwards” as its sales efforts were refocused on the level of customer demand rather than on sending more cars to dealerships.