Shares in Aston Martin slumped after the luxury carmaker issued the latest in a string of profit warnings after poor sales continued into December.
Shares plunged more than 16 per cent to 435.10p as investors reacted to more bad news coming out of the group.
The business said that “challenging trading conditions” it flagged up in November have not eased and, as a result, it has registered fewer sales, higher costs for selling each vehicle, and lower margins.
Shares down 76% since float
Andy Palmer, Aston Martin chief executive, said: “Our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.”
Earnings are now expected to be around £130m to £140m, the company said. Aston Martin’s shares are now worth 76 per cent less than they were when the luxury carmaker floated in London in October 2018.
On top of having to support customers to finance their buys more than expected, Aston Martin was also hit by a jump in the value of the pound after December’s general election and by deeper discounting that it had expected.
Dr Palmer added: “We are taking a series of actions to manage the business through this difficult period. This will include a cost-saving programme alongside a focus on returning dealer stock levels to those more normally associated with a luxury company; winning back our strong price positioning is a key focus.”
One of the biggest stock market ‘flops’
Russ Mould, investment director at AJ Bell, said: “Aston Martin has been one of the biggest flops on the stock market in living memory.”
Aston Martin’s troubles put it in stark contrast to fellow luxury brand Rolls-Royce, which sold more cars last year than at any point in its 116-year history. It exceeded 2018’s record of 4,107 cars, to sell 5,152, a 25 per cent jump.
Both brands launched new SUVs over the period, with Rolls-Royce’s Cullinan making a “major contribution” to growing sales. Aston Martin’s new DBX showed “very encouraging” signs after launching earlier in the year, according to Dr Palmer.
Rolls-Royce cars were sold at record rates in Australia, Korea, Japan, Qatar, Russia and Singapore. It has 135 dealerships worldwide. However, it warned that the growth may not last into 2020, as sales of the Cullinan stabilise.