Challenges persist in difficult year for Aston Martin
Tough trading conditions have continued to impact luxury carmaker Aston Martin as it said wholesale volumes remain under pressure as it reported lower third quarter earnings.
In a trading update this morning, the company revealed revenue of £657.2m for the year to date, down from £707.3m and revenue of £250m for the third quarter, down from £282.4m.
The company recorded an operating loss of £27.2m from a profit of £89.7m while quarter three profits came in at £10.3m, down from £25.3m, but an improvement on the first six months of the year.
The company reported total wholesale volumes for Q3 of 1,497, down 16% from 1,776, and 3,939 for the year to date, down 3% from 4,075.
Dr Andy Palmer, Aston Martin Lagonda president and group CEO, said: “Tough trading conditions, particularly in the UK and Europe, persist and whilst retail sales have grown 13% year-to-date, wholesale volumes remain under pressure. We remain pleased with the performance of DB11 and DBS Superleggera, however, the segment of the market in which Vantage competes is declining, and notwithstanding a growing market-share, Vantage demand remains weaker than our original plans. As a consequence, total wholesale volumes are down year-on-year as we balance growth, brand positioning and dealer inventories. Additionally, we are taking actions to control our costs through an efficiency programme.
“DBX development is progressing well, with the global launch in Beijing on 20 November. The first production trial build has been completed, and St Athan commissioned, with start of production due in Q2 2020 as planned. We are delighted with the early reception the car has received from customers and initial orders are being placed at the confidential events. The launch of Vantage AMR and Roadster are also on track, and all 19 DB4 GT Zagato Continuations are planned to be delivered by the end of this year. We are working hard to deliver the year as we head into our peak trading season.”
On the outlook for the rest of the year, the company said: “As we head into the peak delivery period for both core and Specials, despite lower volumes and continuing macro uncertainties, we expect to meet market financial expectations for FY 2019 (reflecting the updated interest guidance below). We see pressure on volumes continuing into the end of the year and now expect total wholesales to be lower than previously guided, but within the range of market expectations. We are taking actions to control our costs through an efficiency programme. As we review our plans, we continue to plan prudently for FY 2020 and will provide a further update when we report our FY results in February 2020.
“Net interest expense guidance for 2019 is c.£83m reflecting the recently issued $150m of Senior Secured Notes in addition to the impact of unhedged USD interest expenses (prior guidance c.£70m). This interest guidance assumes current USD:Sterling rates prevail for the remainder of the year.
“Capital expenditure for 2019 is still expected to be c.£300m and for the full year 2020 is not expected to exceed £350m.”
