Green shoots at Aston Martin despite sales and profits hitting reverse

The number of vehicles sold by Aston Martin almost halved in the first three months of the year, as the coronavirus outbreak took its toll on the iconic British sports car maker.

The famous marque produces luxury sports cars such as the DB11 model. Picture Ian Rutherford

The group, which has suffered a bumpy ride since its 2018 stock market listing, said it had sold 578 vehicles in the first quarter of 2020, down from 1,057 in the same period last year. It caused its losses after tax to accelerate to £118.9 million, compared with £17.3m the year before, on revenues of £78.6m, a decline of 60 per cent.

President and group chief executive Andy Palmer said: “Covid-19 and the resulting global economic shutdown has had a material impact on our performance this quarter but during this unprecedented time we completed a £536m capital raise and continued to implement our exciting strategy to reset and safeguard the long-term future of the business.

“Part of the reset includes reducing our global dealer inventory to a luxury norm to rebalance supply and demand, to build resilience and profitability for the future.”

All Aston’s manufacturing sites in the UK were closed from 25 March, and 93 per cent of its global network of dealers shut their doors at some point during the first quarter.

Sales in China dropped by 86 per cent, with the Europe, Middle East and Africa region reversing 30 per cent. Sales tumbled by 57 per cent in the Americas. The UK was more resilient, falling just 3 per cent.

However, the company revealed what could be the first shoots of recovery. All 18 of its dealerships in China have reopened, and more than 15 per cent of the global network are “fully open”.

On Monday it started producing bodies for its first luxury SUV – the DBX – at the Welsh St Athan factory, which opened last week.

Despite positive signs, most of Aston Martin’s staff are still furloughed. Its factories are only working to fulfil the orders they already have.

The firm had already been struggling before the crisis hit, and its share price is down 93 per cent compared to when it listed in October 2018.

Adam Vettese, an analyst at investment platform eToro, said: “The 18 months since Aston Martin floated on the stock market has been a living nightmare for the company.

“Already teetering on the brink before the coronavirus crisis hit, the last thing it wanted or needed was a production-halting global pandemic.

“Shareholders that have stuck with Aston during these incredibly difficult past few months must be asking whether it is time they cut their losses and get out.

“It’ll take some seriously good news in the coming weeks to reverse the dreadful performance of Aston’s shares in the past year.”

CMC Markets analyst David Madden noted: “It is worth noting the car manufacturer had problems before the health crisis, and that’s why Aston Martin’s share price was hit so hard amid the Covid-19-related sell-off. The group issued profit warnings in January 2020 and in July 2019.”

Palmer added: “On 5 May, we reopened our St Athan manufacturing facility, which started production of DBX bodies and remains on course to start full production in the next few weeks, with deliveries starting in the summer.”

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