Wednesday 31 July 2019 8:35 am

In a spin: Aston Martin suffers £78m first half loss as shares hit record low

Aston Martin shares plumbed new depths this morning as the firm reported a first half loss of £78.8m, blaming a slowing global market and tumbling UK and European sales.

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The troubled car maker is still reeling from a profit warning last week which slashed its market value in half. But in early morning trading today shares fell a further 16 per cent to hit a record low of 478p.

The figures

Aston Martin’s pre-tax loss of £78.8m for the first six months of the year follows a £20.8m profit this time in 2018. Revenue slumped four per cent to £407m.

Sales from dealerships to customers rose 26 per cent, but wholesale business only rose six per cent. 

While sales to the Americas grew 54 per cent and Chinese business increased 39 per cent, Aston’s core market in the UK dried up, with a sales decline of 17 per cent. Europe and the Middle East also suffered a 19 per cent drop.

Aston Martin boss Andy Palmer
Aston Martin boss Andy Palmer (Carl Court/Getty Images)

Why it’s interesting

Chief executive Andy Palmer this morning repeated last week’s statement that the company was taking steps to “improve efficiency”. However, he still has not given details of how Aston Martin will do this, raising question marks for its 850 manufacturing employees in Britain.

He also told investors the firm had braced for Britain’s October exit from the European Union. This morning, the Society of Motor Manufacturers and Traders reiterated guidance that a no-deal Brexit would be catastrophic for the UK car manufacturing industry.

But Aston Martin’s problems also lie in a lack of demand in its key British and European markets, which Palmer today said he was “disappointed” about.

Aston Martin’s stock market value has plunged since its float last year. Shares hit the market in October at 1,900p, but have since collapsed to less than one-third of that price.

Aston Martin’s plunging market value has led many to question whether its initial public offering (IPO) was ill-advised.

CMC Markets analyst Michael Hewson said: “The pre-IPO optimism of late last year has become a distant memory, with investors undergoing a significant reality check”.

What Aston Martin said

Palmer said: “We are disappointed that our projections for wholesales have fallen short or our original targets impacted by weakness in two of our key markets as well as continued macro-economic uncertainty. 

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“Accordingly, we have taken action to reduce wholesale guidance for 2019. We are also improving efficiency across the business, whilst protecting the brand.”