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Aston Martin shares plunge 24% on cut in vehicle sales forecast
ASTON Martin Lagonda fell the most since listing after reducing its full-year sales forecast because of intensifying weakness in key markets. The shares dropped as much as 24 per cent.
The luxury sports car manufacturer now expects wholesale deliveries to decline as much as 14 per cent to as low as 6,300, the Gaydon, England-based company said on Wednesday. That compares with a plan for 7,100 to 7,300 vehicle sales that the carmaker anticipated in May.
The reduction is another blow in Aston Martin's struggle to convince that it can make the transformation from niche player to successful listed company after an initial public offering (IPO) last year. Since listing in October, the shares have more than halved compared to its IPO price of £19 (S$32.35).
The carmaker joins a range of manufacturers dialling back expectations due to worsening demand. Mercedes- Benz maker Daimler AG most recently warned this month of lower-than-expected profits, followed this week by parts supplier Continental AG.
Aston Martin was down 20 per cent at 823.20 pence in early trading in London on Wednesday.
"We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term," chief executive officer Andy Palmer said in a statement.
Aston Martin also made a provision of £19 million that will be accounted for during the second quarter. Taken together with the reduced sales outlook, that will result in an expected operating return on sales of about 8 per cent for this year. The company said that it is taking actions to boost efficiency and reduce costs. BLOOMBERG