Aston Martin targets big sales in 2017 despite £163m loss
James Bond's favourite luxury sportscar maker, Aston Martin, has racked up pre-tax losses of £162.8 million for 2016 but says its turnaround plan puts it on track for record sales and earnings this year.
Despite surging sales on the back of its new £115,000 DB11, the West Midlands carmaker took a hefty hit from the slump in sterling in the wake of the Brexit vote last summer.
As well as exceptional items including depreciation and amortisation charges relating to asset writedowns of legacy tooling, IT equipment and capital investment as the West Midlands-based company modernises production, it was hit by financing costs including mark-to-market losses on a currency hedging programme, which was put in place before the recent slump in sterling.
As the pound depreciated by 17% year-on-year to $1.23 at the end of 2016, Aston Martin was forced to book a loss against its currency hedges.
Aston Martin's chief financial officer, Mark Wilson, said: "We have taken significant steps to strengthen our balance sheet and to write off non-cash items.
"Nevertheless, our operating performance has been very strong. We have generated record revenues and EBITDA (earnings), delivered an underlying operating profit, and successfully launched the first model of our new product offensive."
Boosted by strong demand for its new DB11, Aston Martin said earnings rose 90% to £69 million in the last three months of 2016 as revenue rose 54% to £285m. Over the year as a whole revenue was up £80m to £593.5m and revenue rose almost £30m to £101m, pushing it back into the black with operating profits of £16m.
Chief executive Andy Palmer said: "These results demonstrate the benefits of our Second Century plan, in which we have stabilised the company, strengthened the balance sheet and transformed our profitability. We have seen extremely strong demand for the DB11 in the fourth quarter and, together with our continued financial discipline and growth plans, this has enabled us to increase our 2017 forecasts meaningfully."
Revenues are expected to rise to £785m-£815m this year, with earnings up to £160m-£165m on the back of demand for its new V12 DB11. As it went on sale in the last quarter of 2016 it helped push up sales over the three months up 48% to 1,668 units.
Meanwhile the Gaydon-based company says its new factory at St Athan in Wales is due to be fully operational in 2019. Aston Martin aims to launch a new car every nine months including a crossover, which will be the first to be made at St Athan.