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Aston Martin halves losses as super-rich splash out on new models

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Aston Martin halves losses as super-rich splash out on new models By Proactive Investors

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Published Feb 28, 2024 09:16

© Reuters. Aston Martin halves losses as super-rich splash out on new models

Proactive Investors – Aston Martin Lagonda (LON:AML) cut its losses slightly as average selling prices for its luxury supercars hit record levels.

Revenues at the car maker rose by 18% to £1.63 billion in 2023 with losses halved to £240 million from £495 million.

On an underlying, profits rose by 61% to £306 million, with margins improving and on track to hit its long-term target of 40% said executive chairman Lawrence Stroll.

“The rich mix of sales, driven by our ongoing commitment to product innovation, supported growth in average selling prices to record levels,” he added.

Revenues reflected the higher prices, with volumes over the year up by 3% and especially demand at the ultra-luxury, such as the new DB12.

Volumes in specials also rose with unit sales of the super fast and super expensive Valkyrie up to 87 from 80 while average prices in this division rose 15% to £231,000.

Net debt at the year-end was £814 million, up on the previous year.

For the current year, Aston Martin said wholesale volumes will be heavily weighted to the second half of the year due to the timings of new launches which will result in “significant H2’24 growth in gross profit and EBITDA [underlying profit] compared with the prior year period”.

Sophie Lund-Yates, lead equity analyst, Hargreaves Lansdown (LON:HRGV), commented: “Aston Martin is pumping reams of cash into marketing in a bid to help position itself at the ultra-luxury end of the spectrum.

“This pivot was never going to come cheap, and that’s led to some disappointing momentum on margins, even though there have been significant improvements.

Repositioning the brand is ultimately a good idea, as super-luxury is a more resilient corner of the market than where Aston Martin is currently parked.

“So-called Specials volumes are moving in the right direction, with these personalised, more lucrative vehicles a good indicator of demand for more expensive vehicles.

“Longer term, it’s the effectiveness of the group’s hybrid models that will drive sentiment. For all Aston Martin’s heritage brand strength, electric is the direction of travel and the roadmap for this part of the strategy remains a little unclear.”

Shares were 2.3% lower at 172.4p in early trades.

Read more on Proactive Investors UK

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Aston Martin halves losses as super-rich splash out on new models

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