Aston Martin Lagonda Global Holdings PLC on Wednesday said it is on track to hit a key margin target after posting a narrowed annual loss and a modest fourth-quarter profit.

The Gaydon, England-based luxury sports car manufacturer reported a much narrowed pretax loss of £239.8 million in the twelve months ended December 31. This compared to a loss of £495.0 million in 2022.

Revenue increased 18% to £1.63 billion from £1.38 billion.

Aston Martin said this reflected the continued execution of its growth strategy, rising volumes and record average selling prices.

Strong pricing dynamics in the core portfolio and a favourable mix from DBS 770 Ultimate, DBX707, V12 Vantage Roadster and new DB12 helped drive 2023 core average selling price 6.2% higher to £188,000 from £177,000, the year prior.

In the fourth quarter, core average selling price rose 6.5% to £196,000 from £184,000.

Gross margin for the year improved to 39.1% from 32.6%, lifting gross profit by 42% to £639.2 million from £450.7 million.

Aston Martin said it remained ‘on track to achieve our longstanding target of around 40% gross margin in 2024’.

In the fourth quarter, Aston Martin reported a modest pretax profit of £20.0 million, up 23% from £16.3 million a year ago. Revenue climbed 13% to £593.3 million from £524.3 million.

Aston Martin disclosed a year-end cash position of £392 million, lower than £583 million in 2022. Net debt rose to £814 million from £766 million in 2022.

Looking ahead, Aston Martin said: ‘We remain on track to substantially achieve our 2024-25 financial targets in FY 2024. This is driven by continued strong demand for our products underpinned by the exciting new next generation launches in 2024 of Vantage and our final front-engine sports car later in the year’.

‘Enhanced profitability and [earnings before interest, tax, depreciation and amortisation] will be driven by high single-digit percentage wholesale volume growth, gross margin further improving to achieve our longstanding target of about 40% and Ebitda margin expansion continuing into the low 20s’ percent.

Adjusted Ebitda was £305.9 million in 2023, up 61% from £190.2 million in 2022. This meant an adjusted Ebitda margin of 18.7%. In the fourth quarter alone, adjusted Ebitda was £174.8 million, up 58% from £110.4 million a year before.

Given the launch timings of its two next generation sports cars in 2024, Aston predicted wholesale volumes will be heavily weighted to the second half of the year, resulting in significant second half growth in gross profit and Ebitda compared with the prior-year period.

Medium-term targets remained unchanged.

Shares in Aston Martin were down 2.0% to 173.00 pence in London on Wednesday morning.

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