STEPS TO CUT COSTS: Aston Martin Lagonda Global Holdings Plc said it may raise more funds and will take further steps to cut costs and control cash as the coronavirus pandemic weighs on business. The British manufacturer reported a wider first-quarter loss and a 60% drop in revenue. The carmaker recently got a 536 million-pound ($663 million) capital injection from investors including its new chairman, billionaire Lawrence Stroll.
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REVIEWING FUTURE FUNDING: "The company is proceeding on the assumption that trading remains challenging," it said in a statement. "Given the ongoing uncertainties, as is prudent, the company continues to review all future funding and refinancing options to increase liquidity."
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STOCKS PLUNGE: The shares fell as much as 15% to a record low, and were down 6.4% at 35.62 pence by 10:56 a.m. in London trading. The stock has plunged 79% this year.
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DBX MODEL: Aston Martin initially rose after the manufacturer said orders for its pivotal DBX model have continued to grow even with most of its showrooms closed because of the coronavirus. Deliveries of the DBX, a $189,000 sport-utility vehicle at the heart of Aston Martin's comeback strategy, are on track to begin in summer, the company said Wednesday.
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SUV MOMENTUM: Retail orders for the SUV continued to increase during the first quarter, even with most dealerships closed in April and May. That's given the James Bond carmaker some momentum at a time when the automotive market faces big challenges.
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CHINA TRAFFIC: "We haven't seen any evidence of cancellations, only one of growth," Chief Executive Officer Andy Palmer said in an interview. "As we come out the other side we're starting to see significant showroom traffic back to pre-Covid levels in China." Palmer said the company needs to invest in new products so Aston Martin can come out of the coronavirus crisis in a position of strength. The company plans to launch derivative models to the DBX in 2021, he said.
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FIRST QUARTER LOSS: Aston Martin reported a 76.6 million-pound operating loss in the three months ended in March, and said it's not possible to give a clear view on the full-year outlook.
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INVENTORY LEVELS: The company, which has struggled with cash flow and dealer-inventory pile ups since going public in 2018, had hoped that the fundraising approved by shareholders in March would eliminate the need to seek additional money. But the coronavirus crisis has added a level of difficulty to the turnaround plan put in place with Stroll's arrival. Despite the drop in revenue, Palmer said Aston Martin is making progress working down its dealer inventory.
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BRINGING CASH: "You can see from everywhere else people are considering what other cash is available, including, for example, debt underwritten by the government," Palmer said. "You can imagine that we're not taking off the table any opportunity that would allow us to bring cash onto the balance sheet if we think it's necessary."
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