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Gloucestershire Business News

Aston Martin boss admits '2019 has been a very disappointing year' as shares flop

Shares in the luxury automotive manufacturer have fallen by more than 16 per cent amidst warnings of lower annual profits.

A trading statement published yesterday revealed challenging trading conditions in December for the firm, which has a dealership in Cheltenham.

The business, which floated in October 2018, said that tougher conditions resulted in lower sales, higher selling costs and lower margins throughout November and December.

Although core retail sales increased by 12 per cent year-on-year, wholesales declined by seven per cent (cars sold through dealers).

The report also specified that a weaker mix of sales favoured more towards the Vantage model, Aston Martin's cheapest vehicle.

Since floatation, the carmaker's shares have fallen by more than 75 per cent and are expected to publish full annual results next month.

The firm expects to report profits of between £130m and £140m, almost half that of the previous year.

Dr Andy Palmer, Group CEO said: "From a trading perspective, 2019 has been a very disappointing year.

"Whilst retails have grown by 12 per cent, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.

"We are taking a series of actions to manage the business through this difficult period. This will include a cost saving programme alongside a focus on returning dealer stock levels to those more normally associated with a luxury company; winning back our strong price positioning is a key focus."

Russ Mould, investment director at AJ Bell told This is Money: "It is remarkable that a company with such a strong brand can consistently issue bad news.

"It has been one of the biggest flops on the stock market in living memory and this does nothing to improve its tarnished reputation.

"The big question is why wealthy people aren't buying its luxury cars. Working for this company should be a marketeer's dream but the team responsible for attracting customers clearly hasn't got the formula right.

'There is plenty of competition for luxury cars and it seems that Aston Martin is being left behind."

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