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Aston Martin shares slump again after near-?80m half-year loss

By Caoimhe Toman

Date: Wednesday 31 Jul 2019

Aston Martin shares slump again after near-?80m half-year loss

(Sharecast News) - Aston Martin posted a pretax loss of £78.8m ($96m) for the six months through June after a £20.8m profit in the first half of 2018.
As a result, its shares finished Wednesday's session 17% lower at 4.71 p.

The carmaker has been undergoing a turnaround plan since Chief Executive Andy Palmer took over in 2014, designed to renew and boost its model line-up and move into new segments.

As part of those plans, the carmaker pursued a stockmarket flotation in autumn 2018, but its shares have since fallen by around three quarters from their 1,900p debut price to below 500p on the back of the group's weak performance in Europe, the Middle East and Africa, with demand at the half-year stage down by nearly a fifth.

In parallel, its stock market value had plummeted from £4.3bn to roughly £1.0bn.

Aston's retails sales in the first half of 2019 were up 26% year-on-year, with growth in the USA and China offsetting steep declines in the UK and Europe.

In a profit warning issued during the week before, Aston Martin slashed its annual sales forecast from a range of 7,100 to 7,300 units, saying it now expected to sell just 6,500.

Its chief executive, Andy Palmer said: "The trading environment worsened in the first half, although retail and wholesale [overall] increased. We are keeping a profile where demand exceeds supply, which is key for a luxury company. In order to protect the position of the brand we thought it right and proper to cut wholesale [forecasts] and don't end up making the mistakes of history and discounting cars to get them away."

"We are disappointed that our projections for wholesales have fallen short or our original targets, impacted by weakness in two of our key markets as well as continued macroeconomic uncertainty," Palmer said.

Palmer also spoke about the effects of no-deal Brexit and admitted the company had not yet had to spend a large amount of money on contingency plans.

"In the case of a deal we are prepared and relatively well insulated but not immune," he said. "Obviously, we do not want a no-deal Brexit because of the disruption that causes with issues at the border. We will live with it if that is what it is. The car industry is pretty resilient once it knows what it is dealing with. We need certainty."

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