Struggling car manufacturer’s shares hit record low after revealing £100m loss

Aston Martin's Gaydon site

Shares in Aston Martin have slumped to a record low after the struggling car maker announced it fell to a loss of over £100m in 2019 and that its chief financial officer would leave by the end of April.

The company’s shares have been on a downward trajectory since being listed in 2018 but hit a record low of 328p this morning following the announcements –  more than 80% lower than their flotation price.

By mid-morning, (10.24am) shares were trading at 340.10p, down 13%.

The company said that by “mutual agreement”, Mark Wilson will step down no later than 30 April as the company announced a £104.3m loss before tax, widening from last year’s £68.2m fall.

Revenue fell 9% to £997.3m, down from £1.1bn in 2018, which the firm said was due to a decline in sales to dealers, which also fell 9%.

The company’s net debt also grew from £559.5m in 2018 to £876.2m.

On the back of the results, the manufacturer said it is to ‘reset’ its business plan with its proposed £500m equity raise to improve liquidity, finance the ramp up in production of DBX and start to turnaround the company’s performance.

It landed a £182m investment Formula One team boss Lawrence Stroll and has launched a shares issue to raise the remaining amount of around £317m.

Dr Andy Palmer, Aston Martin Lagonda president and group CEO, said 2019 was “an extremely challenging period” for the company.

“While retail sales grew, we were unable to generate the revenue and profits we had originally planned and today report a 9% year-on-year revenue decline alongside an operating loss of £37m.

“This performance led to severe liquidity pressures, higher year-end net debt of £876m and significantly increased adjusted leverage to 7.3x.”

Palmer said the equity fundraising of £500m would help to stabilise the balance sheet and provide a “platform for the future”.

He said: “The equity raise includes a proposed investment of £182m from a consortium led by Lawrence Stroll. Further, we have revised our business plan to reset, stabilise and de-risk the business, positioning it for controlled, long-term profitable growth. We are focused on turning around performance, restoring price positioning by operating a pull vs push model, reducing dealer inventories to a luxury norm and delivering a more efficient operational footprint.”

He added: “With our revised plan and appropriate funding in place, I believe we will have the building blocks in place to secure the necessary financial turnaround of the business consistent with our position as a luxury automotive company.”

The Gaydon-based car manufacturer has endured a series of problems after it listed on the London Stock Exchange.

It made its stock market debut at 1900p per share which valued it at £4.3bn but the company has lost more than three-quarters of its value since then.

In November, it unveiled the first SUV in the company’s 106-year history, pinning its hopes on the vehicle reviving its fortunes.