Aston Martin Lagonda’s losses surged to £227m in the first half of 2020 as the coronavirus pandemic closed the embattled UK luxury carmaker’s dealerships and prompted an executive clear-out.
The carmaker was also forced to restate its income statements over two years after detecting an accounting error that led it to overstate profitability in 2018 and 2019.
Aston Martin has endured a torrid 12 months, as heavy spending on a new factory for a new car, the DBX SUV, followed by the pandemic pushed it close to bankruptcy. Its main plant, at Gaydon, Warwickshire, is only due to resume manufacturing at the end of August, later than originally planned.
In January the billionaire fashion mogul Lawrence Stroll led a consortium that in effect took control of Aston Martin in a bailout shortly before the pandemic forced a deep drop in sales. Stroll has focused on restoring profitability at the carmaker, as well as firing Andy Palmer as chief executive and in his place installing Tobias Moers, the former boss of Mercedes-Benz’s performance division, AMG.
The pandemic meant that Aston Martin sold only 1,770 cars in the first six months of 2020, down 41% compared with 2019. It sold only one of its highly lucrative “special” cars, such as the £2.7m DB5 Goldfinger Continuation, which comes with a smokescreen emitter and fake tyre slashers and machine guns to mirror the car made famous by the James Bond film. Last year it sold 36.
The carmaker’s revenues plunged by 64% year on year to only £146m as dealerships around the world were forced to close.
Aston Martin was also forced to restate its income statements for 2018 and 2019 after overstating profits by £15.3m in 2019.
The new management found an error in the way the US region was recognising revenues that meant it counted payments to dealers and discounts for retail customers later than it should have done.
Stroll, who took the role of executive chairman, said it had been “a very intense and challenging six months” and the company pointed to more difficulties ahead. Reducing the number of cars at dealerships, a key aim of Stroll as he tries to restore Aston Martin’s air of exclusivity, will continue until 2021.
In its statement to the stock market, Aston Martin said: “Trading remains challenging in many markets and the pace of emergence from lockdown and consumer recovery varies significantly.”