Aston Martin’s losses almost treble after ‘intense and challenging’ half year

Losses at luxury car marker Aston Martin nearly trebled in the first half of 2020 after what its executive chairman called a “very intense and challenging” period.

The manufacturer posted a £227.2m loss for the six months to the end of June, as revenues plummeted from £406m to £146m.

Aston Martin has also revealed its Gaydon site is now due to resume manufacturing at the end of August, later than originally planned.

Executive chairman Lawrence Stroll said: “In January, I and my co-investors in the Yew Tree Consortium, committed to make a significant investment in Aston Martin and I took on the role of executive chairman from April to give clear leadership to the business, our partners and our dealers.

“Since then we have been fully engaged in executing the initial reset in order to achieve our ambition to build Aston Martin into one of the great global luxury car brands.”

Aston Martin revealed plans in June to cut around 500 jobs after announcing the firm needs a “fundamental reset” to turn it into a profitable company. It is targeting annual savings of £28m.

The announcement came days after the departure of chief executive Andy Palmer, who was unceremoniously dumped and replaced by Mercedes Benz executive Tobias Moers.

The carmaker has had a turbulent two years, after one of the most disastrous IPOs in recent years.

It has a market value of £4.3bn when it floated in October 2018, but went into almost immediate – and almost unstoppable – decline. Last night’s closing price valued the business at just £900m.

Its valuation is even more extraordinary given the £536m capital raise it completed earlier this year that saw Canadian billionaire Stroll take a significant stake and become executive chairman.

Stroll owns the Racing Point F1 Team – and his son Lance is one of its drivers – which will be renamed as Aston Martin next season.

Stroll said the DBX is “critical” to its successful future and that, after more than a month of closure, production restarted at its South Wales plant and initial deliveries have now been made.

He said: “Our ambition for the company is significant, clear and only matched by our determination to succeed, to transform Aston Martin and capture the huge and exciting opportunity ahead of us. We have already made great progress in the first 90 days I’ve been in the business.”

Total retail sales for the six months to June 30 were down 41% with 1,770 cars sold, while wholesales dropped 63% as Covid-19 impacted dealer operations.

However, Aston Martin said that early signs from China, where all dealerships were re-opened in June, are encouraging with retails up 11% year-on-year in the month.

Stroll added: “Obviously, it has been a challenging period with our dealers and factories closed due to Covid-19, in addition to aligning our sales with inventory with the associated impact on financial performance as we reposition for future success.

“However, I have been most impressed that through this most challenging of times we have been able to reduce our dealers’ sports car inventory by 869 units.”