Can Aston Martin get back in the fast lane?
Aston Martin’s full-year results are in the spotlight next week as the supercar maker looks to get back in the fast lane following an end-of-year dip in form.
The FTSE-250 firm, led by billionaire chair Lawrence Stroll, enjoyed a stellar share price rally last year and was top of London’s mid-cap index coming into Autumn.
Renewed investment from its major stakeholder, the Chinese carmaker Geely, and a £182m deal with US group Lucid to make high performance electric vehicles (EVs) had markets excited.
The marque has never really recovered since, trimming its guidance for 2023 wholesale business to 6,700 units from 7,000. This will be the first number analysts look to on Wednesday, along with any guidance for unit shipments in 2024.
“Much of the optimism that reined a year ago has worn off and shares in Aston Martin Lagonda are languishing once more,” Russ Mould, investment director at AJ Bell, said.
The consensus is still solid though, considering the strong run of form in the first half. Analysts are looking for EBITDA of £289m on sales of £1.6bn, compared with £190m and £1.4bn in 2022.
For the year ahead, they want to see a further 17 per cent increase in sales to £1.9bn and a near-50 per cent jump in EBITDA to £430m.
Whether Aston Martin’s significant debt pile has been cut will also be at the forefront of investor’s minds on release. Stroll said in February the carmaker was in talks with bankers over the “most appropriate actions of how to deal with it.”
“A strong end to the year should also help to reduce the £750m net debt position, even if the company will have remained in the red in 2023 on the basis of statutory accounting measures such as pre-tax and net profit,” Mould said.
“If you wish to accentuate the negative, the firm is loss-making, still heavily indebted and prone to skidding when it comes to near-term financial targets. If you wish to accentuate the positive, sales are rising fast and the losses diminishing, while the presence of four cornerstone investors – chair Lawrence Stroll, Geely, the Saudi Public Investment Fund and Mercedes – provides firm backing as it seeks to meet its long-term financial targets.”