Aston Martin losses widen and debts soar amid £2bn long-term growth investment

Aston Martin reported a bigger loss for the first half of the year as the luxury carmaker produced fewer vehicles and its debts continued to rise.

The group, which has launched several new cars over the past year including its next-generation DB12 and Vantage sports cars, has stopped making older models before ramping up production of new models this year.

The Gaydon-based company reported a pre-tax loss of £216.7m for the six months ended June 30, compared with a loss of £142.2m reported a year earlier.

The group said it plans to invest £2bn in its “long-term growth and transition to electrification” by 2027.

Revenue fell 11 per cent year-on-year to £603m, while net debt rose 41 per cent to just under £1.2bn.

However, group profits in the second quarter hit £42m, well above forecasts of around £24m.

Aston Martin said the results were in line with expectations and reflected the transition of its core portfolio. It maintained its full-year outlook, which forecasts strong growth in the second half.

Aston Martin The shares rose 8.81 percent or 13.22 pence to 163.22 pence on Wednesday morning.

Mark Crouch, an analyst at eToro, said: ‘Despite constant failures, mounting debt and dismal financial performance, Aston Martin still boasts a brand that is the envy of its competitors, and is the reason the company has managed to avoid bankruptcy on numerous occasions.

‘Aston says the emphasis will now be on quality over quantity, concentrating on pricing power for newer models in what is becoming a desperate effort to get the company back on track.’

In the six months to June 30, Aston Martin sold 1,998 vehicles, a 32 percent drop compared with the same period last year.

Wholesale volumes fell by a third, which the company said “reflected, as expected, our planned transition to the new Vantage and enhanced DBX707 models”.

At the end of the first half, the group’s core average selling price was £180,000, down 2 per cent from £184,000 a year earlier.

Looking ahead, Aston Martin said it is confident of meeting its 2024 targets while executing “another year of significant strategic and financial progress (and) completing the transformation of the product portfolio that will drive future growth.”

Lawrence Stroll, Aston Martin Executive Chairman, added: ‘As we enter an exciting second half of 2024, Aston Martin is at a pivotal point in its journey, with our immense product transformation supporting volume growth and sustainable positive free cash flow generation later this year, which we have every confidence in achieving.

‘In line with prior guidance, our execution in the first half of the year focused on the successful delivery of our new Vantage and the updated DBX707 and we remain on track to deliver strong performance in the second half.

‘This will be supported by a significant increase in wholesale sales volumes, including the new V12 flagship Vanquish and the ultra-exclusive Valiant Special, which we recently unveiled at Goodwood with Fernando Alonso.’

Aston Martin has confirmed that the appointment of Adrian Hallmark as CEO will take effect on 1 September. Amedeo Felisa, current CEO, will step down from the board on the same date.

Orwa Mohamad, analyst at Third Bridge, said: “2024 is shaping up to be a challenging year for Aston Martin in terms of sales volumes, due to low demand for the DBX SUV and a lack of new product launches.”

He added: “Aston Martin is falling behind in the race for electrification and could face significant challenges in the medium term. They need to invest now to see the results in three to four years.”