Aston Martin’s losses accelerate over £100m
ASTON MARTIN’S losses accelerated to £128m last year as it pressed on with its restructuring plans.
Over the last five years the car manufacturer has aggregate pre-tax losses of nearly £300m while sales have failed to return to their 2008 levels.
However chief executive Dr Andy Palmer, who joined the Aston Martin board from Nissan in October 2014, is already seeing results from his turnaround plan.
Aston Martin, which was founded in 1913, last year launched its Second Century Plan that has the aim of creating a sustainable luxury business.
The first phase of the strategy, business stabilisation, was focused on stopping the dramatic sales fall of 2014, when revenues dropped by £50m. Sales rebounded to £510.2m, making up most of the fall from the previous year.
It also cut around 300 mostly administrative and managerial jobs in a “business rebalancing” which incurred a £7.5m cost.
More positively the group raised £200m through the issue of preference shares, which it drew down in two equal tranches in April 2015 and April 2016. The funding will be used to continue investing in new models.
Aston Martin currently has five core models – the DB9, V8 Vantage, V12 Vantage, Vanquish and Rapide – and it launched the DB11 at the Geneva Motor Show in March, with the first deliveries expected to customers in the final quarter of this year.
The car launch was the first outcome of the second phase of the turnaround plan, which is about strengthening the core offer.
The third phase will see its portfolio expanded, and in February the group chose a site in St Athan, south Wales, to manufacture its DBX car.
These investments contributed to the increased losses the group suffered. Its underlying operating loss had increased by one-quarter to £17.9m, which it described as “broadly in line with 2014”.
However it reviewed the value of its assets which resulted in a £30.2m writedown, while interest payments on its initial £100m tranche were £10.8m, taking its total finance expenses to £69.7m.
