Aston Martin shares tank and could fall further after capital hike amid sales slump
Shares in the luxury car maker fell more than 18% on Friday after the company seeks £245 million in equity and debt to support the business after it suffers a major slump in sales.
Shares in Aston Martin Lagonda fell more than 18% on Friday after the company announced it is seeking £245 million in equity and debt to support the business after it suffered a major slump in sales.
The luxury car maker has suffered dearly at the hands of the novel coronavirus, but hopes sales will surge now that lockdown measures are finally being eased and 90% of car dealerships are set to reopen in July.
Aston Martin Lagonda closed at 50p per share on Friday, with the stock down 71% year-to-date.
Aston Martin suffers sales slump amid Covid-19 pandemic
The already beleaguered Aston Martin has had to contend with the coronavirus strangling its revenues this year, with the company losing £119 million in its first quarter (Q1), only for it to announce that sales will be lower than expected in its second quarter (Q2) of trading too.
However, the luxury car maker’s new executive chairman Lawrence Stroll remains confident in the company’s multi-year plan that looks to build on its unique brand.
Aston Martin has made good progress on its first priority, the rebalancing of supply and demand and reducing dealer stock as it resets the business and restore exclusivity, Stroll said.
The company has also successfully completed all test production trials for its DBX range and has scaled up to full production at its St Athan factory.
Aston Martin was also excited to confirm that production has now started on its new SUV which will be available in July as planned, the company said on Friday.
‘We have taken decisive action to improve the cost efficiency of the company, in alignment with reduced sports car production levels, and are focussed on cost and investment control consistent with restoring profitability,’ Stroll said in a statement on Friday.
‘Today we announce further steps to improve financial flexibility in a period of ongoing uncertainty with this additional funding to execute the business plan,’ he added.
Aston Martin Lagonda will unveil its Q2 financial results on 29 July.
Stroll shakes up Aston Martin management
Since acquiring a significant stake in the luxury car maker, billionaire owner Stroll has made some significant changes to its management team.
Former CEO Andy Palmer was shown the door back in May with Stroll favouring Mercedes boss Tobias Moers to take the helm at Aston Martin in August.
Earlier this week, Aston Martin said that it will bring in ex Jaguar Land Rover chief financial officer Kenneth Gregor as its new CFO.
‘Our energies and those of the whole Aston Martin team will be focused on building a stronger business for our customers, our employees, our strategic and other partners and our shareholders and enabling Aston Martin to return to being one of the preeminent luxury car brands in the world,’ Stroll said.
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