1st May 2024 11:21
(Alliance News) - Aston Martin Lagonda Global Holdings PLC's hefty debt burden and disappointing trading update leave it in the "last chance saloon," an analyst said on Wednesday.
The Gaydon, England-based carmaker said revenue in the first-quarter fell 10% to GBP267.7 million from GBP295.9 million a year earlier.
The company reported 945 vehicle sales, down 26% from 1,269.
Adjusted operating costs increased 4.7% to GBP156.8 million from GBP149.7 million.
Pretax loss widened 87% to GBP138.8 million from GBP74.2 million.
Net debt as of March 31 stood at GBP1.04 billion, an increase of 20% from GBP868.1 million a year prior. Aston Martin however highlighted it completed GBP1.2 billion refinancing on new five-year terms.
Shares in Aston Martin fell 5.1% to 140.60 pence each in London on Wednesday. They have fallen 37% in the last 12 months.
Executive Chair Lawrence Stroll said the first quarter performance reflects "an expected period of transition, as we ceased production and delivery of our outgoing core models ahead of the ramp up in production of the new Vantage, upgraded DBX707 and our upcoming V12 flagship sports car."
Aston Martin expects a second-quarter performance to be "broadly similar" to the first, while wholesale volumes "will be heavily weighted towards the second half of the year."
AJ Bell investment director Russ Mould said the luxury car maker has been sent to the "stock market equivalent of the scrapyard after struggling to kick into gear."
"The company has reported a doubling of losses in the first quarter and missed expectations across the board – including on volumes."
"Aston Martin has stopped production on some of its core models ahead of the launch of a new range of vehicles which the company expects to power growth in the second half of this year and beyond, but there is little reason for investors to place any faith in this strategy," he said.
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," he quipped.
"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," Mould thinks.
"If the new launches don't go well it’s hard to see what road the business can take next," he remarked.
By Jeremy Cutler, Alliance News reporter
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