Aston Martin shares drop after profit warning and investor cash call

Aston Martin, the carmaker of choice for James Bond, has issued a profit warning for the second time in less than two months as it battles a difficult market and asked investors for more cash

Luxury car manufacturer Aston Martin has faced further share price pressure after issuing its second profit warning in two months and seeking additional funding from investors.

Following the market close on Tuesday, the company announced plans for a fundraise and warned that underlying earnings for the year would be lower than expected, ranging from £270m to £280m, having already reduced its outlook in September.

On Wednesday, Aston Martin's shares plummeted by as much as 9% before stabilizing at a 5% decline after the latest update. This comes during a challenging period for European car manufacturers, who are dealing with declining sales, international competition, and pressure to meet new electric vehicle targets in the UK.

Stellantis, the owner of Vauxhall, announced plans to close the carmaker's Luton factory on Tuesday, partly attributing the decision to the UK's "stringent" zero-emission vehicle mandate. Aston Martin, renowned for producing James Bond's fictional spy cars, has seen its stock plummet by 56% this year due to supply chain issues, production delays, and decreased demand from the crucial Chinese market.

The company announced on Wednesday that it had successfully raised approximately £211mthrough a share placing and secured an additional £100m through debt raising from bondholders to support future growth. Adrian Hallmark, the boss at Aston Martin, said; "We thank our investors, including our strategic investors who continue to show strong support for the company, for their commitments and confidence in Aston Martin. With this financing successfully secured, we are now well positioned for growth."

Aston Martin's executive chairman Lawrence Stroll, said: "With the strong backing of Aston Martin’s strategic shareholders and the board, Adrian now leads the company into an exciting 2025 with a stronger and more resilient balance sheet."

The group has revised its delivery forecast, expecting to ship out about half of the new 38 Valiant models by year-end after predicting a majority delivery earlier. The slowdown was chalked up to "a minor delay in the timing of a small number of deliveries."

Warnings had surfaced back in September concerning supply chain snags affecting yearly production estimates by around 1,000 vehicles. The luxury car maker has also been navigating through choppy sales in China, where demand has plunged, showcased by the stark 54% drop in Chinese sales volumes over the first nine months compared to the same period in 2023.

Since Aston Martin was bought by Canadian billionaire Mr Stroll in 2020, it has pushed on with a swathe of new model launches in a bid to turn its ailing fortunes around. Mr Hallmark took over as chief executive just last September whilst launches of the Vantage and DBX707 models accelerated, which helped to increase production volumes.

Aston Martin managed to deliver 1,998 cars in the first half of 2024, marking a nearly one-third decrease compared to the same period last year. The company also reported in July that its pre-tax losses had ballooned to £216.7m, a significant increase from £142.2m.

The firm is currently undergoing a multi-year turnaround effort initiated by Mr Stroll. He has already had to introduce new shareholders like Saudi Arabia’s Public Investment Fund in recent years to financially support the carmaker.