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Aston drives into loss

There remain questions over Aston Martin's liquidity
July 31, 2019

Aston Martin Lagonda (AML) shares lost over a quarter of their value following the release of its half-year results, as the embattled luxury car manufacturer swung into a loss on the back of weak sales figures. The news follows a downgrade of its debt rating by agency Moody’s earlier this week.

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Last week, Aston Martin warned that it expected to sell between 6,300 and 6,500 cars this year, below a previous target of 7,100 to 7,300 vehicles, citing weakness in the UK and European markets. The company fell from a 2018 first-half pre-tax profit of £20.8m to a loss of £78.8m, selling 2,442 cars. Based on its last financial year, investors can expect a stronger second half, as Aston shifted 64 per cent of the 6,441 cars it sold last year during this period.

A first-half free cash outflow of £141m exceeded the expectations of broker Jefferies, who had expected an outflow of £89m. Around £90m of receivables linked to fourth-quarter supply chain delays have “substantially unwound”, with around £7m outstanding at the end of June. Meanwhile, first-half net debt averaged 4.7 times adjusted cash profits, up from 2.3 times last year.