Aston Martin has announced it is hoping to raise £210m to help boost growth and drive its electrification strategy, shortly after issuing its second profit warning in two months.
The British luxury car manufacturer said it aimed to raise £110m through new shares and a further £100m by taking on new debt to “increase its financial resilience”.
The announcement came shortly after Aston Martin issued a profit warning, with the company now expecting to post profits of up to £280m for the 12 months to the end of December, down on last year’s £305.9m figure.
The company blamed delays in the delivery of half of its new Valiant supercars as the reason for the lower-than-expected profits.
It predicted that the delayed cars, which can cost up to £2m each, would be delivered in early 2025, rather than the end of this year.
Shares in Aston Martin dropped as low as 98.1p on Wednesday, the lowest they have been for two years, though they closed at 102p a share.
The company warned in September that it would make lower profits this year due to widespread production issues and falling demand in China. It also revealed it would be producing 1,000 fewer cars this year, due to components arriving late.
Speaking today, Adrian Hallmark, Aston Martin’s chief executive, said: “The financing we are undertaking supports our growth and provides the investment to continue with future product innovation.”
The former Bentley boss, who joined Aston Martin in September, added that some of the money would go towards capital investments linked to the company’s electrification strategy, which will involve £2bn of investment over the next five years.
The company confirmed it had already found strategic investors that had committed to buying £73.5m of the £110m in shares being offered.
This investment was underpinned by the Yew Tree Consortium, the investment team owned by the US billionaire Lawrence Stroll, who became Aston Martin chair in April 2020. Last year, Yew Tree increased its stake in Aston Martin to 26.3%.
Many of the largest automotive companies in Europe and the US face falling profits due to challenging economic conditions, the transition towards electrification and increased competition from Chinese manufacturers.
On Tuesday, Vauxhall’s owner, Stellantis, announced it was shutting down its Luton van factory, putting 1,100 jobs at risk, after blaming the UK’s economic conditions and the government’s zero-emission vehicle (ZEV) mandate.
Last week, Ford said it would cut 4,000 jobs in Europe, including 800 in the UK, amid slowing growth in electric car sales and competition from China.
Ford said Europe’s carmakers “face significant competitive and economic headwinds while also tackling a misalignment between CO2 regulations and consumer demand for electrified vehicles”.
Hallmark said: “We are already taking decisive actions to better position the group for the future including a more balanced production and delivery profile in the coming quarters.
“Coupled with a forensic approach to cost management and quality, these efforts will deliver enhanced operational and financial performance in 2025 and beyond.”
