A steep fall in demand amid turbulence in the global sports car market and efforts to reduce stock at its dealers pushed Aston Martin to a quarterly loss.
The London-listed luxury carmaker swung to a pre-tax loss in the third quarter of £13.5m, compared with a profit of £3.1m a year earlier, on revenues that were 11 per cent down at £250m following a 16 per cent drop in car deliveries.
Over the first nine months of the year it has recorded pre-tax losses of £92.3m, compared with a profit of £23.9m in the same period a year earlier.
The results will put more pressure on Aston Martin’s shares, which have fallen from £19 at its initial public offering last year to £4.17 at Wednesday’s close.
The company blamed weak demand for its entry level Vantage sports car, as well as falling sales in Britain and Europe for the quarterly results, and said it was planning to cut costs.
“Notwithstanding a growing market share, Vantage demand remains weaker than our original plans,” said chief executive Andy Palmer. “As a consequence, total wholesale volumes are down year-on-year as we balance growth, brand positioning and dealer inventories.”
He added: “We see pressure on volumes continuing into the end of the year and now expect total wholesales to be lower than previously guided, but within the range of market expectations.”
The company issued a profit warning earlier in the year, after saying it had too many cars piling up unsold at dealerships.
Sales in the latest quarter in the UK fell 22 per cent, with Europe down by 17 per cent, and Asia Pacific dropping by 34 per cent. The Americas grew 2 per cent.
The group’s hopes rest on the launch of its all-important sport utility vehicle, the DBX, which will be built in a new facility in Wales. The car will be revealed on November 20, and sales will begin in the second quarter of next year.
In September the company was forced to raise $150m in fresh debt, paying steep borrowing costs in order to secure the bond, with a rate of 12 per cent and half of the repayment in debt. Following the issue rating agency S&P downgraded the company to CCC+, one of the lowest tiers on the junk bond investment ladder.
