Yahoo Finance Aston Martin will miss profit target by £15m after Valkyrie delivery failings
Aston Martin warned it would miss its annual profit target by about £15m after failing to deliver as many of its limited edition Valkyrie hypercar models to customers as planned.
The British luxury car manufacturer said it had delivered 10 of the £2.5m vehicles in the fourth quarter, fewer than planned.
“The impact is timing only, all Aston Martin Valkyrie Coupes are sold and remain allocated to customers with significant deposits,” the company said in a full-year trading update.
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Lawrence Stroll, the executive chairman of Aston Martin Lagonda, said that the Valkyrie project had proved challenging since he inherited it when he led a consortium to buy the company in 2020.
“We inherited a challenging project with Valkyrie but we are now producing these fabulous hypercars,” he said.
The company said the profits from the delayed shipping of the vehicles, which had faced electrical problems, would be reflected in its profits over the next two years.
The company said sales of its DBX sports utility vehicle, which is targeted at wealthy female customers, have been strong. It sold 3,001 of the vehicles, on which the company is pinning its recovery, last year, taking an estimated 20% share of the luxury SUV market.
Overall, Aston Martin said wholesale sales grew 82% to 6,182 last year, as the company changed strategy to limit the amount of cars made available for sale to increase its prestige status.
“The evidence is there that our strategy is working, as retail sales are well ahead of wholesales supported by strong pricing and improving residual values,” Stroll said. “It is a very long time since the core business was in such good health as it is today.”
Stroll said that the return to Formula One, part of his £500m rescue deal, had “significantly increased our brand exposure, perception and desirability”.
He added that the completion of a first full year of DBX sales and new products, such as a “new generation of front-engine sports cars” coming in 2023, meant the company was on track to achieve its target of £2bn in revenues and £500m in adjusted profits by 2024-2025.
Tobias Moers, the chief executive of Aston Martin, said there was “tremendous demand” for its limited edition cars, with the Aston Martin Valkyrie Spider two times oversubscribed by buyers since its launch in August.
“Our core business delivered as planned while navigating a challenging external operating environment,” he said. “We have taken aggressive action on improving the efficiency and profitability of the business. Brand desirability is strong, with new customers being attracted to Aston Martin as we follow our demand-led, ultra-luxury business model.”
The company said its cash balance at the end of the year was a better-than-expected £420m.
Aston Martin reported a pre-tax loss of £98m in the three months to the end of September, as revenues jumped from £124m to £238m year on year for the quarter.
Shares rose 2.5% on Friday morning.
