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Aston Martin warns of 50% drop in annual profit after grim Dec
ASTON Martin warned its annual profit would almost halve as tough trading conditions continued through its peak month of December, sending the luxury carmaker's shares down about 12 per cent.
Tuesday's warning is the latest from the British company, whose shares have plunged about three quarters in value since their 2018 listing. The 106-year-old firm, famed for being fictional agent James Bond's brand of choice, cut its forecast for wholesale volumes and profit margins in July, and reduced its volume forecast again in November, citing weak UK and European markets and subdued demand for its Vantage model.
Aston Martin said on Tuesday tough conditions continued through December, leading to a 7 per cent drop in wholesale volumes for the year, with Europe underperforming the rest of its markets. It expects 2019 adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) of between £130 million and £140 million, compared with £247.3 millions (S$439 million) a year earlier.
"From a trading perspective, 2019 has been a very disappointing year," chief executive officer Andy Palmer said, adding the company now expected an adjusted EBITDA margin of 12.5 per cent to 13.5 per cent in 2019, down from 22.6 per cent in 2018.
While the global car industry is suffering, some upmarket brands have bucked the trend. BMW's Rolls-Royce reported a 25 per cent jump in sales for last year, while Volkswagen's Bentley saw a 5 per cent rise.
Aston Martin said it was reviewing its planning for 2020, which includes a cost cutting programme, and added it was still in talks with investors for a potential equity investment. Its retail sales grew 12 per cent in 2019, helped by a reasonably good performance in the United Kingdom.
"Since the election, we have a great degree of certainty, which is certainly welcome," Mr Palmer said, referring to a sweeping victory by British Prime Minister Boris Johnson's Conservatives in a national election on Dec 12.
Aston Martin shares, which have lost nearly £3 billion in market value since their listing, were down 12.4 per cent at 456.3 pence by 0854 GMT on Tuesday. REUTERS