- Aston Martin’s first-quarter revenue rose by 16% to £270.4mn.
- Underlying operating losses improved by 12% to £56.9mn
- Full-year guidance maintained, with free cash outflows expected to materially improve.
Aarin Chiekrie, equity analyst, Hargreaves Lansdown:
“Aston Martin’s first-quarter results showed it’s not completely out of the race to return to profitability. While the total number of cars sold was down marginally, the mix has shifted to include more specials like the Valhalla. These specials carry much higher average selling prices, which helped revenue jump by double-digit rates and have had a major positive impact on gross margins. But that’s just part of the story. Free cash outflows have continued, and the hefty net debt pile has grown as the group built up inventories to prepare for a ramp up in production this year. The group’s confident that this will help free cash outflows turn a corner and improve materially by the end of the year as more of its high-priced specials roll off the production line.
The bigger picture for the auto industry remains challenging. While Aston Martin hasn’t seen any direct impact from the Middle East conflict in the first quarter, a prolonged period of higher oil prices could lead to higher costs as supply chains come under pressure. The US tariff system also remains a thorn in the group’s side. The current regime allows the first 25,000 UK cars exported to the US each quarter to be subject to a basic tariff of 10% on a first-come, first-served basis. Anything over that in each quarter will be subject to a much higher tariff of 27.5%. Given the lack of control and the fact that around a third of Aston Martin’s revenue comes from the US, it remains a difficult risk to manage. So while full-year guidance remains on track and points to a much-improved financial performance, there are plenty of obstacles on the road for Aston Martin to navigate.”
