The Aston Martin Lagonda (LSE: AML) share price has leapt on Thursday following the release of full-year results. Up around 10% on the day, the luxury carmaker has broken through the £22 per share barrier once again. It’s now trading at its most expensive since the beginning of February.
Unsurprisingly, Aston Martin’s trading in 2020 was something of a horror show. Total revenues collapsed 38% year-on-year to £611.8m as Covid-19 smashed demand for its premium vehicles. Retail sales plummeted almost a third, to 4,150 vehicles, it said. And wholesale sales (sales to dealerships) tanked 42% to 3,394.
As a consequence, Aston Martin’s pre-tax losses ballooned from 2019 levels. This came in at £466m versus the £119.6m loss it racked up in 2019. But poor sales weren’t the only reason why the carmaker’s bottom line took a battering last year.
Aston Martin also had to write off a whopping £98m which was primarily due to “the impairment of capitalised R&D due to technology and cycle plan changes,” it said. This reflects, in large part, the scrapping of the company’s planned Rapide E electric vehicle.
Aston Martin’s sales improve
In better news, Aston Martin explained that trading has picked up significantly in recent months. This accounts for the positive reception to today’s trading statement and the subsequent share price explosion.
The sportscar maker said revenues were up 3% in the final three months of 2020. This is even though sales volumes continued to contract on an annualised basis. Retail sales sunk 15% to 1,398 cars while wholesale sales dropped 4% to 1,839 vehicles.
Aston Martin said fourth quarter turnover benefitted from a full quarter of deliveries of its best-selling DBX sports utility vehicle. It also saw the number of Special vehicle sales more than treble between October and December from the previous quarter.
A bold outlook
Aston Martin struck an optimistic tone for the year ahead too. It expects to make wholesale sales of 6,000 this year, up around three-quarters from last year’s levels. It also expects to report an adjusted EBITDA margin in the “mid-teens”, it said.
The car manufacturer announced ambitious plans to supercharge sales by the middle of the decade too. It intends to increase wholesale sales to 10,000 units by 2024/2025, it said. And it has its sights set on making £2bn worth of revenue, and around £500m in adjusted EBITDA by then.
As for this year, Aston Martin said “the uncertainty surrounding the duration and impact of the pandemic on the global economy continues, with the pace of emergence from lockdown and recovery in consumer demand varying significantly across geographies.” But it also said trading to date has been in line with expectations.
City analysts reckon Aston Martin will remain loss-making in 2021. But they expect pre-tax losses to narrow to £194m. More losses are anticipated for 2022 too, although they’re predicted to narrow again, to £159m.
