Aston Martin share price crashes 21 per cent as it slashes sales target
Aston Martin’s share price crashed 21 per cent this morning as it warned that macroeconomic challenges have “worsened” for the luxury car manufacturer.
Shares slipped to 820p from an open of 841p as Aston Martin slashed its sales expectations in the face of market “softness” for the rest of 2019.
Read more: Aston Martin’s biggest shareholder looks to up stake by £68m
“The challenging external environment highlighted in May has worsened, as have macro-economic uncertainties,” the company said.
“We anticipate that this softness will continue for the remainder of the year and are planning prudently for 2020.”
It now expects sales to be between 6,300-6,500 vehicles, compared to earlier predictions of 7,100 to 7,300 cars.
The firm plans to improve efficiency and cut fixed costs in preparation for 2020, and outlined a new earnings before interest, tax, depreciation and amortisation (Ebitda) margin of around 20 per cent for the current year.
“Whilst retails have grown by 26 per cent year-to-date, our wholesale performance is adversely impacted by macroeconomic uncertainty and enduring weakness in UK and European markets,” chief executive Andy Palmer said.
“We are disappointed that short-term wholesales have fallen short of our original expectations, but we are committed to maintaining quality of sales and protecting our brand position first and foremost.
“We are today taking decisive action to manage inventory and the Aston Martin Lagonda brands for the long-term.”
Neil Wilson, chief analyst of Markets.com, warned that investors will be angered that Aston Martin looked like a better investment prospect at its October IPO than it has turned out to be.
“Investors are never too happy when a prospectus looks to have been polished up a little too much,” he said.
“It’s delivering growth, just not at the speed at which management thought.”
Aston Martin made its Londo Stock Exchange debut late last year with a share price of 1,900p.
Read more: Aston Martin’s revenue beats expectations but loss knocks it off-road
Since then its share price has plunged by more than half – 57 per cent – to today’s low price.
The company is set to reveal first-half results on 31 July.
Main image credit: Getty