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The Aston Martin Lagonda (LSE:AML) share price plunged in early trading today (26 February) after the FTSE 250 icon published its 2024 results.
These revealed an 8.9% fall in the number of vehicles sold. As a result, revenue was 3% lower, at £1.58bn. The post-tax loss increased to £323.5m from £226.8m. Even allowing for one-off items of £33.6m, the result is worse than in 2023.
The gross profit margin also fell by 2.2 percentage points.
At 31 December 2024, net debt had widened to £1.16bn from £814m.
Personally, I think the result is disappointing. And investors appear to agree with me.
When the company released its 2023 results, it said: “2024 is expected to deliver another year of significant strategic and financial progress as we continue the ongoing product portfolio transformation.”
Oh dear. As they say, it’s difficult to make predictions, especially about the future.
Looking in the rear view mirror
In November 2024, the company had to raise £210m through a combination of debt and equity.
New shares were issued at a price of 100p. Those who subscribed at the time have done well. Prior to today, the share price had increased 10%. However, long-standing investors have had little to cheer about.
But I don’t think this poor performance should come as a surprise to anyone. Since its formation, the company’s survived seven bankruptcies. At IPO, it was valued at £4.3bn. Today, its market cap is around £1bn.
The company made its stock market debut in October 2018. Since then, it’s sold 40,937 cars at a combined loss after tax of £1.85bn, or £45,289 per vehicle. Think about this. It would have been cheaper to give each of these customers £40,000 to go and buy a car from someone else!
| Year | Profit/(loss) after tax (£m) | Cars sold |
| 2018 | (57) | 6,441 |
| 2019 | (118) | 5,862 |
| 2020 | (411) | 3,394 |
| 2021 | (189) | 6,178 |
| 2022 | (528) | 6,412 |
| 2023 | (227) | 6,620 |
| 2024 | (324) | 6,030 |
| Totals | (1,854) | 40,937 |
Further down the road
Despite this doom and gloom, the directors appear to remain positive.
They expect a “material improvement” in 2025, including positive adjusted earnings before interest and tax after 2024’s negative £82.8m.
And despite falling in all other regions, revenue in the US increased by 39%, in 2024. Taking the group as a whole, during the second half of the year, sales volumes were higher than 12 months earlier.
The company’s also managed to raise its average selling price to £245,000.
I wonder if a takeover could be on the cards. Its current stock market valuation certainly makes it vulnerable to an approach.
Ironically, last week, Amazon MGM Studios took “creative control” of the James Bond franchise, Aston Martin’s most famous customer. It wouldn’t surprise me if the car maker faced a similar fate. With its cool reputation, exciting vehicles and exposure to Formula One, I’m sure there are plenty of rich business people who’d like a go at running the company. However, this isn’t a sensible basis on which to buy shares.
Call me old-fashioned, but I like the companies I invest in to be profitable. Unless there’s a clear path to profitability, I don’t want to buy stocks that are losing money. And given Aston Martin’s recent dismal financial performance, I don’t see how it’s going to consistently deliver a post-tax profit. For this reason, I don’t want to buy the luxury car maker’s shares.
