28th Feb 2019 16:14
LONDON (Alliance News) - Aston Martin Lagonda Holdings PLC on Thursday saw around GBP548 million wiped off its total market value after the luxury car maker swung to a loss in its maiden annual results as a listed company.
Aston Martin shares were down 17% at 1,134.40 pence, the worst performer in the FTSE 250 on Thursday, down 40% from its October initial public offering price of 1,900p. The company's current market capitalisation stands at about GBP3.13 billion, down 28% from GBP4.33 billion.
The company was founded in 1913 by Lionel Martin and Robert Bamford and is most known for its affiliation with Ian Flemming's fictional spy character James Bond. Aston Martin purchased British luxury car marque Lagonda in 1947.
The British firm's sports cars have appeared in 11 James Bond films over the course of almost 50 years, starting with the DB5, which appeared in Goldfinger in 1964.
Notably, the company turned to a GBP84.5 million profit in 2017 after years of enduring volatile financial performances. However, on Thursday Aston Martin posted a pretax loss of GBP73.1 million in 2018.
On an adjusted basis, Aston Martin's pretax profit was GBP68 million compared to GBP73 million in 2017. The company booked adjusting items of GBP136 million versus a GBP11.4 million gain a year prior.
The costs include staff incentives and fees related to its initial public offering, and a negative past service pension benefit. Spending on development costs for new car models and the construction of a new facility in St Athan, Wales, also dented earnings.
Aston Martin registered revenue of GBP1.10 billion in 2018, up 26% on the year prior, with wholesale volumes increasing 26% to 6,441.
"It may still be James Bond's favourite model but shares in luxury car maker Aston Martin Lagonda appear to have real engine trouble. And its first set of full year results as a quoted company don’t help matters, revealing it spent a weighty GBP136 million to list in London last year," said AJ Bell's Russ Mould.
In addition, Aston Martin said it was taking action to "mitigate the impact on the business from potential supply chain disruption should the UK withdraw from the EU without an agreement or in an unstructured manner".
Aston Martin set aside GBP30 million in a bid to withstand disruption caused by the UK's departure from the EU.
The company said: "Since our third quarter trading update in November 2018, geopolitical and economic uncertainties have increased."
"In response, we have put contingency plans in place to protect production and customer deliveries should the UK leave the EU without an agreement or in an unstructured manner."
Earlier this month, UK Business Secretary Greg Clark said a no-deal Brexit would be a "hammer blow" to the UK automotive industry and the delay in making a decision is "unconscionable".
In addition, car giant Honda last week confirmed plans to shut its factory in Swindon in 2021 with the loss of 3,500 jobs.
The Japanese firm told workers it proposed to close the vehicle manufacturing plant at the end of the current model's production lifecycle. The plant currently produces 150,000 cars a year.
Honda said under the proposed restructure, the current role of its UK manufacturing business as a global manufacturing hub may no longer be viable. There was no mention of Brexit in Honda's statement.
"The complications of Brexit loom for Aston Martin just as they do for other car manufacturers, reflected in the GBP30 million it has set aside to weather any disruption. Underlying earnings in the first half of 2019 are set to be lower," Mould added.
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