7th Jan 2020 08:42
(Alliance News) - Luxury car maker Aston Martin Lagonda Global Holdings PLC on Tuesday issued another profit warning due to continuation of challenging trading conditions and said that it continues to review funding options, including a potential equity capital raise.
Shares in Aston Martin were down 11% at 462.32 pence each in London on Tuesday morning - the worst performer in the FTSE 250 index - valuing the company at GBP1.07 billion, far lower than its initial public offering valuation of around GBP4.33 billion in October 2018.
The challenging trading conditions disclosed in November continued through the peak delivery period of December, Aston Martin said, resulting in lower sales, higher selling costs and lower margins.
Aston Martin now sees 2019 adjusted earnings before interest, taxes, depreciation and amortisation to come in at a range between GBP130 million and GBP140 million and margin between 12.5% to 13.5%. In 2018, adjusted Ebitda came in at GBP247 million.
In July, Aston Martin cut its annual guidance due to a worsening trading environment. It predicted 2019 wholesale sales at 6,300 to 6,500 vehicles and adjusted earnings before interest, tax, depreciation, and amortisation margin of around 20%.
The Gaydon, Warwickshire-based company on Tuesday said core car wholesales declined 7% year-on-year to 5,809 units due to a weaker mix of vehicles and lower-than-expected wholesale sales. Americas, UK and Asia-Pacific region performed broadly in-line with volume expectations, while Europe underperformed, the company added.
The carmaker said sales of its lowest priced Vantage sportscar improved in the fourth quarter, supported by retail financing particularly in the UK and the US. Moreover, the order book for the new DBX sports utility vehicle has "built rapidly" to 1,800 since it opened in November 2019, it added.
Chief Executive Officer Andy Palmer said: "From a trading perspective, 2019 has been a very disappointing year. Whilst retails have grown by 12%, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.
"We are taking a series of actions to manage the business through this difficult period. This will include a cost saving programme alongside a focus on returning dealer stock levels to those more normally associated with a luxury company; winning back our strong price positioning is a key focus."
Aston Martin said it has now exceeded conditions to draw the additional USD100 million of April 2022 notes and currently expects drawing the funds within the next four weeks. The company also said it continuing to review its funding options and remains in discussions with potential strategic investors which may or may not involve an equity investment into the company.
Aston Martin is slated to release its 2019 results on February 27.
By Tapan Panchal; tapanpanchal@alliancenews.com
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