24th Jul 2019 07:59
(Alliance News) - Luxury car maker Aston Martin Lagonda Global Holdings PLC on Wednesday cut annual guidance due to a worsening trading environment.
Aston Martin now sees 2019 wholesale sales at 6,300 to 6,500 vehicles, with the company describing this downgrade as "disappointing". Wholesale volumes in 2018 were 6,441, and it had previously guided for 2019 sales of 7,100 vehicles to 7,300 vehicles.
First half wholesale sales were 2,442 vehicles, up 6% on the year before, with second-quarter sales up 4% on the year prior. This, however, marked a slowdown from 10% growth in the first quarter.
Aston Martin's retail sales in the first half of 2019 have risen 26% year-on-year.
Aston Martin has also made a GBP19 million provision against consultancy income recognised in the second quarter of 2018.
"The commercial position on this contract has deteriorated with significant doubt remaining over the outstanding receivable," the company said.
For 2019, the company has guided for an adjusted earnings before interest, tax, depreciation, and amortisation margin of around 20%, and an adjusted operating margin of approximately 8%. Capital expenditure guidance for 2019 has also been revised to GBP300 million.
Before, the adjusted Ebitda margin was seen at 24%, the adjusted operating profit margin at 13%, and capex and research & development spend at between GBP320 million and GBP340 million.
Going into 2020, the firm is to take action to reduce fixed costs.
Chief Executive Andy Palmer said: "Whilst retails have grown by 26% year-to-date, our wholesale performance is adversely impacted by macro-economic uncertainty and enduring weakness in UK and European markets.
"We are disappointed short-term wholesales have fallen short of our original expectations, but we are committed to maintaining the quality of sales and protecting our brand position first and foremost. We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term. We remain focused on the successful execution of the Second Century Plan and on delivering sustainable long-term growth."
Aston Martin, a member of the FTSE 250 index, will release interim figures on July 31.
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