Aston Martin Lagonda Global Holdings Plc shares rose after revenue surged in the second quarter on higher prices for its luxury cars, as the manufacturer continues work on returning to profit.
The company beat analyst expectations, but left its full-year guidance unchanged, saying it was on track to achieve its financial targets for 2024.
The carmaker’s sales climbed 23% to £381.5 million ($492 million) in the quarter ended June, driven by higher volumes and prices. It reported an operating loss of £42.3 million. The shares rose as much as 7.2% in early London trading.
Aston Martin, which is led by Canadian billionaire Lawrence Stroll, has been in the midst of a turnaround effort that’s resulted in multiple capital raises, the most recent of which made China’s Zhejiang Geely Holding Group Co. and Saudi Arabia’s Public Investment Fund major shareholders.
Stroll, who became executive chairman in 2020, praised the company’s turnaround, saying it completed in just three years what typically takes between five and seven.
He said the recent success of the Aston Martin Aramco Cognizant Formula One team, which he separately owns, had boosted sales of its road cars. More than 70% of Vantage F1 Edition owners had never previously bought an Aston Martin car, he said.
“Our relationship with Formula One is truly transformational,” Stroll said on a media call, adding that it was attracting an “entirely new generation of Aston Martin customers”.
The average selling price of its cars rose 14% to £212,000 in the first half of 2023.
What Bloomberg Intelligence says:
Aston Martin beat expectations on 2Q Ebitda at 13.2%. That momentum is set to continue in 2H with the first deliveries of the DB12 and £1.1 million limited edition Valour after all 111 units sold out within 2 weeks of launch. Full-year guidance was reiterated, given a full order book. The 2024-25 £2 billion revenue and 25% Ebitda margin ambition now has the potential to be exceeded in 2025.
—Michael Dean, BI automobile analyst
Aston Martin DB12, Valour Outlook Boost After 2Q Beats: React
Analysts at Jefferies said the results represented “small steps in the right direction,” but pointed out that improvements in the gross margin remained slow.
Last month, Aston Martin said it had agreed an electric vehicle technology tie-up with Lucid Group Inc., which is also backed by Saudi Arabia’s sovereign wealth fund. The UK manufacturer also extended a years-long cooperation with Mercedes-Benz Group AG, though it will no longer issue more stock to the German carmaker that already owns a roughly 9% stake.
Aston Martin’s longstanding financial woes have made it increasingly reliant on partners for technology that other automakers consider core to their products. Models including the DBX sport utility vehicle and DB12 sports car are powered by Mercedes engines.
(Updates with shares and media call in third paragraph.)