Aston Martin has unveiled plans to raise £210 million to fuel its growth ambitions and accelerate its shift towards electrification, shortly after issuing its second profit warning in as many months.
The British luxury carmaker aims to secure £110 million through new share offerings, supplemented by £100 million in fresh debt, to bolster its financial position.
The move follows a downward revision of its profit forecast for 2023, now expected to reach up to £280 million, a drop from last year’s £305.9 million.
Aston Martin attributed the lowered forecast to delays in delivering its highly anticipated Valiant supercars, some of which command price tags of up to £2 million. Originally slated for delivery by year-end, these vehicles will now be shipped in early 2025.
The profit warning sent Aston Martin’s share price tumbling to 98.1p on Wednesday, its lowest level in two years.
In September, the company had already cautioned investors about production challenges and waning demand in China, leading to a projected shortfall of 1,000 vehicles this year due to supply chain issues.
Adrian Hallmark, Aston Martin’s Chief Executive, emphasised the importance of the financing initiative.
“The funding supports our growth and ensures continued investment in product innovation,” he said. Some of the capital will be allocated to the company’s electrification strategy, which includes a £2 billion investment over the next five years.
The company disclosed that it had secured commitments for £73.5 million of the £110 million in new shares, with significant backing from the Yew Tree Consortium, led by US billionaire Lawrence Stroll. Stroll, who became Aston Martin’s chair in 2020, has steadily increased Yew Tree’s stake to 26.3%.
Aston Martin’s challenges are emblematic of broader struggles in the automotive sector, with European and US carmakers grappling with economic headwinds, the transition to electric vehicles, and intensifying competition from Chinese manufacturers.
Earlier this week, Stellantis, owner of Vauxhall, announced the closure of its Luton van factory, putting 1,100 jobs at risk. The decision was attributed to the UK’s economic climate and the looming Zero Emission Vehicle (ZEV) mandate.
Meanwhile, Ford revealed plans to slash 4,000 jobs across Europe, including 800 in the UK, as it contends with slowing electric vehicle sales and competitive pressures from China.
Hallmark remains optimistic about Aston Martin’s future. “We’re implementing decisive measures to align production and deliveries, coupled with rigorous cost and quality management. These steps will strengthen our operational and financial performance in 2025 and beyond,” he said.
Aston Martin’s strategy signals its commitment to navigating the industry’s transformative period while remaining a formidable player in the luxury automotive market.
