Aston Martin Replaces CEO, Gears Up For DBX Launch.
“Aston Martin’s position has improved from critical to merely hazardous”
Financially troubled British luxury sports car maker Aston Martin shares jumped more 30%, admittedly from an extremely low base, after news Tuesday new owner Lawrence Stroll had replaced CEO Andy Palmer with Mercedes-AMG’s Tobias Moers.
Aston Martin has been reeling from the pressure of launching its first SUV, the DBX, now due to go sale in the summer, after missing the spring target.
Aston Martin lost 120 million pounds ($147 million) in the first quarter compared with a loss of 17 million pounds in the same period last year. Sales fell 60% to 78.6 million pounds ($96 million).
Executive chairman Lawrence Stroll led a 540 million pound ($660 million) rescue package in January.
The launch of the DBX is crucial to the company’s future. Reuters’ Breaking Views column put it this way a couple of weeks ago, commenting on Stroll’s rights issue and share placement package.
“(Aston Martin’s) position has improved from critical to merely hazardous: cratering sales mean net debt stands at over 10 times trailing 12 months earnings before interest, tax, depreciation and amortisation (EBITDA). If Aston can deliver its feted first sport utility vehicle in the second half, as currently forecast, that dire ratio will improve as earnings bounce upwards. If not, Stroll may have to open his pockets again,” said Breaking Views columnist Christopher Thompson.
Aston Martin was floated on the stock market in October 2018, at a price of 19 pounds a share. But after profit warnings and weak sales, the shares have lost much of that value. On Tuesday the shares jumped more than 30% but to still only just under 0.5 pounds.
Mercedes currently supplies engines and other technology to Aston Martin, and owns a small stake in the company.
Stroll’s F1 team will become the Aston Martin F1 works team from the 2021 season.
Andy Palmer joined Aston Martin from Nissan in 2014.