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Luxury-car maker Aston Martin on Wednesday insisted it had reached a “pivotal moment” in its turnaround plans when it announced lower than expected second-quarter losses.
Executive chair Lawrence Stroll also reiterated guidance pointing to a strong sales revival in the second quarter following new product launches, including a new version of the brand’s flagship Vanquish sports car.
Shares in the company, based in the English county of Warwickshire, had risen 7.6 per cent by early afternoon on Wednesday, to 161p.
Stroll said the company was entering the second half of 2024 “on track” with its plans.
“We remain confident in delivering our product transformation, which will support volume growth and sustainable positive free cash flow generation later this year,” Stroll said.
Stroll was speaking after the company announced pre-tax losses for the three months to June 30 that deepened 15 per cent to £77.9mn compared with the same quarter last year, on revenue down 12 per cent, to £335mn. Total vehicles sold in the quarter declined 38 per cent, to 1,053.
However, the company insisted the losses reflected a planned wind-down of sales of older models and reiterated its previous guidance that performance in the second half of the year would show a significant improvement. It said a new version of the flagship Vanquish sports car would launch in September. It would also start deliveries of a limited-edition version of its Valiant supercar during the fourth quarter, with most deliveries completed by the end of the year.
Challenged about whether the results marked a true turnaround for the company, which has been wrestling with high debt levels and an ageing set of products, Stroll said: “This is the pivotal moment.”
He added that he had always said the turnaround process would be complete when the company had an all-new product portfolio — a moment that would be reached with the launch of the new Vanquish.
The outlook for the second half of the year included projections for enhanced profitability and earnings before interest, tax, depreciation and amortisation driven by “high single-digit percentage wholesale volume growth”.
Net debt at the end of the quarter was £1.19bn, only marginally higher than the £1.15bn at the end of the first quarter.
The company also reiterated its medium-term outlook for the period up to the 2027 and 2028 financial years, including a target for annual revenues of £2.5bn.
The projection included plans to make £2bn in investments over the 2023 to 2027 period, including in converting the portfolio to electric vehicles. However, the company insisted that the figure included all investments, not just in electric vehicles.
Aston Martin has yet to launch its first electric vehicle and on Wednesday told reporters that it expected to benefit from a derogation from the UK’s planned ban on sales of new internal combustion engine cars from 2030. That would allow the company to continue selling new petrol-engine vehicles until 2035.
The company also announced that Adrian Hallmark, the new chief executive whose appointment was announced earlier in the year, would begin work on September 1.