13th May 2020 11:36
(Alliance News) - Aston Martin Lagonda Global Holdings PLC on Wednesday posted a far wider loss in its first quarter as Covid-19 stifled dealer demand.
Shares in Aston Martin were down 9.7% at 34.34 pence in London in late morning trading. Its shares are down more than 80% year-to-date, having started January at 175.80p.
The car maker reported a GBP118.9 million pretax loss for the three months ended March 31, many times wider than the prior year's GBP17.3 million loss.
Revenue plunged to GBP78.6 million from GBP196.0 million as the pandemic dragged down dealer demand. Aston Martin said this amplified the impact of its "strategic decision to lower wholesales to reduce dealer inventory towards a luxury norm".
The revenue decline also reflected a lower average selling price. With no specials in the first quarter, the total and core average selling price amounted to GBP98,000. The previous year saw a total ASP of GBP160,000 and a core ASP of GBP149,000 with 32 specials.
"The most significant factor weighing on ASP was the continuation of customer and retail financing support to drive retail sales in pursuit of lowering dealer stock to luxury norm levels. Negative geographic mix, with lower China weighting and a shift towards Vantage caused a further headwind to core ASP," said Aston Martin.
The auto maker temporarily suspended production at its manufacturing facilities in the UK starting March 25. Its St Athan site in Wales has reopened while its Gaydon operations in Warwickshire are to resume later. The company also has developed and manufactured personal protective equipment and is now delivering scrubs and gowns to the UK National Health Service.
While as much as 93% of the dealer network was closed or at limited capacity during the quarter, all 18 dealers in China have now re-opened and more than 15% are open globally.
Going forward, all Aston martin cars will be built only to fulfil order demand. It is still on track to deliver the DBX, its first ever SUV, for summer 2020, while Aston Martin Valkyrie deliveries are now set to start late in the second half due to test facility closures.
Aston Martin withdrew its annual guidance stating that "uncertainty surrounding the duration and impact of the Covid-19 pandemic on the global economy, makes it not possible to provide a clear view on the full year outlook".
Executive Chair Lawrence Stroll said: "While in the short-term, as anticipated, we will have some difficulties due to the onset of Covid-19, having been in the business for a few weeks now I am even more enthusiastic and confident in the multi-year plan that we have set out to bring new and exciting products to market to drive demand and build the Aston Martin brand.
"My immediate priority is to rebalance supply and demand, reducing dealer stock. Although nearly all our dealers are compromised and our factories were closed, we are focused on achieving results and delivering our plan. We have made very good progress very quickly, with dealer inventory down 428 units in just one quarter, more than double the level achieved in the whole of 2019."
By Anna Farley; [email protected]
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