Luxury car manufacturer Aston Martin Lagonda has announced plans to ‘reset’ the business, after posting a £104.3m pre-tax loss, with its CFO asked to leave and other board changes
Announcing preliminary results for the 12 months to 31 December 2019 Dr Andy Palmer, Aston Martin Lagonda president and group CEO described 2019 as ‘an extremely challenging period for the company’. Revenues dropped to £997.3m, around £100m less than the previous year.
‘While retail sales grew, we were unable to generate the revenue and profits we had originally planned and today report a 9% year-on-year revenue decline alongside an operating loss of £37m. This performance led to severe liquidity pressures, higher year-end net debt of £876m and significantly increased adjusted leverage to 7.3m,’ Palmer said.
Operating profit declined primarily due to the revenue decay, higher depreciation and amortisation and increased marketing costs; in addition to a £19m provision for doubtful debt relating to the sale of legacy Intellectual Property in the prior year.
Palmer said the car maker had plans for a ‘reset’ of the business plan to manage medium-term investment, improve cash generation and rephase product cadence to deliver long term profitable growth. It is also launching a bid to raise around £500m of equity.
The company announced that CFO Mark Wilson is to step down ‘by mutual agreement’ no later than 30 April, but will remain available to the group to assist with transition in the period through to 30 June.
Palmer said: ‘On behalf of the board, I would like to thank Mark for his hard work, personal commitment and dedication to Aston Martin Lagonda in the past five years.
‘I have personally enjoyed working with him and he has been a valued member of my senior team. Mark leaves with my personal thanks and the board's very best wishes for success in whatever he chooses to do next.’
Some of the new fundraising will come via a consortium headed by Lawrence Stroll who will become executive chairman as a condition of the investment.
Penny Hughes will step down as a director and the chair on 7 April, following the completion of the rights issue and three other board members (Richard Solomons, Imelda Walsh and Tensie Whelan) have said they do not intend to stand for re-election at the Annual General Meeting, currently planned for 3 June.