- First quarter losses nearly double as volumes fall
- Net debt soars £230 million in three months to top £1 billion
- Shares down 36% year-to-date
Shares in Aston Martin Lagonda (AML) fell sharply in morning trading as the luxury car maker reported more quarterly losses, volumes and revenue declines, and soaring net debt that topped £1 billion.
Desperately scrabbling to offer investors a positive spin, executive chairman Lawrence Stroll talked up new vehicles models due for launch later this year, but it is hard to see why investors should think these will sell any better than past models.
‘The company has reported a doubling of losses in the first quarter and missed expectations across the board – including on volumes', said Russ Mould, investment director at AJ Bell.
MISSES ACROSS THE BOARD
Pre-tax losses hit £138.8 million for the three months to 31 March 2024, vehicle sales fell 26% from 1,169 to 945, while revenues tumbled 10% to £267.7 million.
To call the results ugly is no overstatement and it is not the first time results have sent disappointing shock waves through equity markets, but the real worry continues to be hefty debts. Net debt (debt minus cash on the balance sheet) soared in Q1, hitting £1.04 billion. That’s up £230 million in the past three months.
‘The company’s valuation is a fraction of what it was when it listed back in 2018, rendering initial comparisons with Ferrari as ridiculous as setting a park jogger up against an Olympic middle-distance runner’, said AJ Bell’s Mould.
‘Despite a recent refinancing, Aston Martin is still burdened with a hefty debt pile and it’s likely in the last chance saloon at this point. If the new launches don’t go well, it’s hard to see what road the business can take next.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Steven Frazer) own shares in AJ Bell.
