- Full year losses better than expected
- Record average selling prices
- 2024 and medium-term targets reiterated
Luxury sportscar maker Aston Martin Lagonda (AML) raced off the start line gaining 6% in early trading as full year losses came in better than expected.
But by late morning those gains had reversed with the shares falling 2% to 173.2p. Since listing on the stock exchange in 2018 the shares have lost over 90% of their value.
HOW DID THE BUSINESS PERFORM?
Pre-tax losses for the year ended 31 December more than halved to £171.8 million, which was ahead of company-compiled consensus estimates for losses of £209 million.
Record average selling prices in the core portfolio helped to offset falling volumes while a favourable sales mix led to gross profit increasing by 42% to £639 million. Adjusted EBITDA (earnings before interest, tax, depreciation, and amortisation) increased by 61% to £306 million, representing a margin on sales of 18.9%.
Longer term, Aston Martin Lagonda is targeting an EBITDA margin of 40% on sales of circa £2.5 billion and aims to generate sustainable positive free cash flow.
An increase in capital expenditure related to new models and the company’s first electric car pushed cash outflows to £360 million from £299 million in 2022. Net debt increased to £814 million from £766 million.
The company said the business is expected to generate positive free cash flow in the second half of 2024.
WHAT DID THE COMPANY SAY?
Executive chairman Lawrence Stroll commented: ‘In 2023, Aston Martin delivered significant strategic milestones and further financial progress, driven by continued strong demand for our ultra-luxury, high-performance products.
‘Looking ahead to 2024, I'm excited by the future development of our product portfolio with the completion of our line-up of next generation, front-engine sports cars, including the recently unveiled Vantage, and the continuation of our Specials programmes.’
EXPERT VIEW
Julie Palmer, partner at Begbies Traynor (BEG:AIM) said: ‘Aston Martin will be looking to get back on track in 2024 after this morning’s announcement confirmed it had missed wholesale volume targets which had already been revised downwards thanks to supply chain issues.
‘It is hard to be too cautious on Aston Martin – since floating on the London Stock Exchange in 2018, the iconic British brand has had a complicated relationship with the markets, not helped by production issues and the reporting of some striking losses.
‘If the new models help to provide some financial stability and Mr Stroll can find a CEO to stick around, Aston Martin has all the potential to put its foot firmly on the accelerator.’
