The new boss of Aston Martin Lagonda has insisted that his turnaround plan is making progress despite the company falling deeper into the red after sales tumbled in the first quarter of this year.
The carmaker said yesterday that the global economic dislocation had allowed it to begin to clear the backlog of stock in its dealerships — the build-up of unsold vehicles depressed prices last year — and that its new factory in south Wales was ready to start building out its new DBX model.
The DBX, priced at about £150,000, is Aston Martin’s first 4×4 and its success or failure is regarded as make or break for the luxury sports carmaker. The company gave no update on how many orders it has received for the DBX, nor the expected production rate at the new plant at St Athan.
Aston Martin, based at the Gaydon car plant in Warwickshire, is the London Stock Exchange’s sole quoted automotive manufacturer. It floated in October 2018 and has been one of the worst performing IPOs in history.
Its shares were floated at £19, valuing the company at more than £4 billion. They opened yesterday at 38p, their lowest level yet, and closed down a further 4¾p, or 12.8 per cent, at 33¼p. The company, which has gone bust seven times, was rescued in a series of fundraisings this year which injected £536 million into the business before City fees.
The rescue package effectively handed control of Aston Martin to Lawrence Stroll, a Canadian tycoon with interests in Formula One motor racing. A consortium led by Mr Stroll and including Lord Bamford, the JCB diggers billionaire, holds 25 per cent of the company and Mr Stroll has become its executive chairman, above Andy Palmer, the chief executive carmaking veteran who floated the business.
Aston Martin reported that 578 cars were sold in the first quarter of this year, down from 1,057 in the same period last year. That sent revenues crashing by 60 per cent to £78.6 million. Pre-tax losses were £119 million, compared with £17 million a year earlier.
Even after the fundraisings the group remains in debt to the tune of £614 million.
Mr Stroll, 60, nonetheless struck an upbeat note, when speaking exclusively to us at Business Matters, pointing to the production of the DBX and the launch of a new mid-engined sportscar based on its Valkyrie hypercar and designed to take on Ferrari.
“While in the short term we will have some difficulties due to the onset of Covid-19, having been in the business for a few weeks now I am even more enthusiastic and confident in the multi-year plan that we have set out to bring new and exciting products to market to drive demand and build the Aston Martin brand,” Mr Stroll said
Work on the first DBX for customer delivery started yesterday.
The company declined to reveal the size of its order book for the vehicle other than to say that it had enough work to take St Athan into next year.
