Luxury car manufacturer Aston Martin has revealed that an accounting error means the sports car specialist understated its 2019 losses by £15.3m
Announcing its interim results for the six months to 30 June, Aston Martin said that during the first-half results preparation process, the company identified that its US region was deducting the majority of dealer and customer incentive support from revenue later than it should have been.
As a result, the balance sheets of the group as at 31 December 2018, 30 June 2019 and 31 December 2019 and the income statements for the six months ended 30 June 2019 and the year ended 31 December 2019 have been restated to correct this error.
Aston Martin said this is a non-cash adjustment and has no impact on historic or future cashflows. The impact of the adjustment is a reduction in earnings before interest and taxes of £15.3m in the full year to December 2019.
The carmaker’s revenues fell by 64% year on year to £146m, which Aston Martin said was largely the result of a drop in volume, as the onset of Covid-19 forced dealerships around the world to close.
It sold just one of its ‘specials’, a DB5 Goldfinger Continuation, compared with 36 specials in the first half of 2019. Based on the car made famous in the James Bond film, the DB5 Goldfinger Continuation comes with a smokescreen emitter and fake tyre slashers and machine guns, and a price tag of £2.75m.
In its update Aston Martin said: ‘2020 is the year in which the business is being reset to enable it to operate as a true luxury company.
‘This process, which involves reducing core wholesales to rebalance supply to demand and has a negative impact on results through the reset period, is necessary for the long-term performance of the company.
'The uncertainty surrounding the duration and impact of Covid-19 on the global economy continues. Trading remains challenging in many markets and the pace of emergence from lockdown and consumer recovery varies significantly.
‘This will impact the duration of the dealer de-stocking process for sports cars, currently expected to continue well into 2021.’
The company received £20m from the government’s coronavirus large business interruption loan scheme (CLBILS) in July.