- Shares tank 15% after 2022 guidance cut
- Pre-tax losses more than double to £225.9 million
- Rescue cash call in September may not be the last
Aston Martin Lagonda (AML) has cut full year 2022 vehicle deliveries and margin targets, sending the share price plunging again.
Shares in the UK luxury sports car maker fell as much as 15% in early trading, and investors will be left wondering if the company is heading towards financial collapse for the eighth time in its 109-year history.
The British marque was worth £4.3 billion when its shares started trading on the stock market in October 2018, yet at today’s rough 92p per share, it is worth barely a tenth of that valuation at £544 million.
FINANCIAL RECOVERY DELAY
In July, Aston had forecast an improvement in its finances in the second half of the year, predicting positive free cash flow after burning through tens of millions of pounds in cash.
In the three months to 30 September 2022, Aston sold 1,384 cars, 3% up on the same quarter last year, and generated £316 million revenue, a 33% increase but below the £387.4 million predicted by analysts.
Initial plans were to sell 6,600 cars this year and the firm now says a figure between 6,200 and 6,600 units is likely so it has downgraded its margin forecast.
Aston now expects margins to improve by about 100 to 300 basis points, compared with roughly 350 to 450 points previously.
The company's third-quarter operating loss widened to £58.5 million from £30.2 million a year earlier, while pre-tax losses for the quarter more than doubled to £225.9 million, compared with £97.9 million versus the same period last year.
SUPPLY CHAIN LOGJAM
Executive chairman Lawrence Stroll said supply chain problems had hit the planned delivery of more than 400 vehicles over the latest quarter. ‘On one hand, we have continued to see very impressive demand across our product range and the underlying fundamentals of Aston Martin are very strong,’ said Stoll.
‘On the other hand, and in the context of supply chain and logistics disruption as well as inflationary pressures impacting the broader automotive industry, over the last two quarters we have encountered specific supply chain challenges that have delayed our ability to meet customer demand.’
The sports car firm's latest results come in the wake of a £654 million fundraising round that included substantial cash contributions from the Saudi Public Investment Fund, existing shareholder Mercedes-Benz and Chinese automotive giant Geely Holdings.
Analysts were forecasting losses per share of 17.7p in the fourth quarter to 31 December 2022, on £491 million revenue.
