Aston Martin announces a plunge in profits after a disappointing December

Aston Martin announces a plunge in profits after a disappointing December

The luxury carmaker was forced to re-evaluate and cut its profit outlook after experiencing a “very disappointing” year of slow sales and increased costs.

Aston Martin´s shares have plummeted by 12 per cent after the company warned that its annual profits would be slashed by almost half due to the difficult trading conditions experienced throughout its peak month of December.

The British manufacturer informed investors that annual earnings before interest, tax and depreciation will reach lows of £130m and £140m: a considerable decrease of 47 per cent when compared to the previous year´s £247.3m earnings.

Since the announcement, analysts have estimated the revised profits to be £196m.

The 106-year-old company´s popularity was vastly increased by James Bond consistently choosing the brand as his favoured supplier. However, the firm´s heightened fame could not compete with the weak demand for its Vantage model in the UK and Europe.

These struggles come after Aston Martin experienced a slump in sales across Europe last July. Now, the company is valued at just over £1bn, a huge drop since the previous stock market valuation of £4.3bn in October 2018 when Aston Martin´s shares were priced at £19 apiece.

Andy Palmer, the Chief Executive Officer, said: “From a trading perspective, 2019 has been a very disappointing year,”

He continued: “Whilst retails have grown by 12 per cent, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.”

The business is considering its plans for the new year including the development of a cost-cutting programme and the potential injection of equity investment from investors.

Although the global auto industry us facing many struggles overall, some upmarket brands have managed to thrive. BMW´s Rolls-Royce reported growth of 25 per cent in sales for last year while Volkswagen´s Bentley experienced a 5 per cent increase.

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