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Summary
- Luxury carmaker Aston Martin reported a sharp increase in losses of almost £466 million in FY 2020, from £119.6 million the previous year.
- It also reported a drop in retail sales of 32 per cent to 4,150 vehicles, while its wholesale revenues fell by 42 per cent to 3,394 vehicles in FY2020.
- Aston Martin shares jumped due to the company keeping its forecast of 6,000 wholesale unit sales for FY 2021.
Luxury automotive manufacturer Aston Martin (LON: AML) reported a sharp increase in losses almost four times more, touching £466 million (US $659 million) in FY 2020 due to low stock in car dealer showrooms amid the pandemic. Comparatively, its loss before tax was £119.6 million for the financial year ending 31 December 2019.
It reported a drop of 32 per cent to 4,150 vehicles in retail sales, while its wholesale fell by 42 per cent to 3,394 vehicles due to factory and showrooms remaining shut in 2020 amid the coronavirus crisis. In addition to pandemic-related woes, the company underwent senior management changes and capital raising in 2020.
Want to know more? Do read: Aston Martin Gets A Fresh Lease of Life With £1.3 Billion Of New Investment
Turnaround plan and outlook
The car manufacturer announced a turnaround plan called Project Horizon to drive growth and improve efficiency in the company and for improved profitability for FY 2021. The management forecast aggressive 6,000 sales to the dealer for the next fiscal.
The carmaker also maintained its 2025 target of reaching £2 billion in sales, adding current sales were in line with the forecast. Moreover, the company’s DBX model (first sports utility vehicle) launch met with robust demand, with its first variant planned for roll-out in the third quarter of FY 2021. The DBX model had reported strong sales of 1,516 units in 2020. Moreover, the carmaker feels the model will have strong growth in its first full year of sales, including in China which is a key market for the company.
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The company allotted approximated £250 million to £300 million for research and development and investment purposes. It has also accounted for its depreciation and amortisation costs valued roughly between £240 million to £250 million for its 2021 outlook.
Separately, the company had signed a deal with luxury car company Mercedes-Benz in October 2020, which is expected to help in Aston Martin developing its electric vehicle capabilities despite having lower levels of capital.
Want to know more? Do watch: Mercedes-Benz to increase its stake in Aston Martin upto 20%. | Kalkine Market Update UK |
Stock price
The carmaker’s (LON: AML) stock prices were trading at GBX 2,151.00, up by 7.50 per cent as of 25 February at 11:33 am GMT+1.
