On Wednesday, luxury car giant Aston Martin saw a 8.3% rise in shares, despite revealing a 50% widening of losses to £217 million (€258m). Share rose on company reports that it remained on track to deliver a good performance.
Investment Analyst Dan Coatsworth said: "Luxury car maker Aston Martin might finally be kicking into gear despite remaining heavily in the red.
The carmaker's revenue saw an 11% decline in the first half of 2024. The brand reported generating an income of £677.4 million (€806.13m) in 2023, which fell to £603.0m (€718m) in the first half of 2024.
Coatsworth said: Investors were able to look past news of lower sales and higher losses as the company reiterated its second-half guidance. The company says it remains on track for a substantial uplift in production in the remainder of 2024. It is also delivering product innovation with new models proving to be well-received."
In the company's recent interim results report, the company said its prior guidance in the first half of this year was aimed towards the success of its new Vantage and upgraded DBX707. The company intends to ramp up wholesale volumes significantly, including new models such as the V12 flagship Vanquish and ultra-exclusive Valiant Special.
"Focus now shifts to the company's ability to hit a target of positive free cash flow for the second half. Failure to hit this target will leave Aston Martin's credibility in tatters again and lead to renewed concern about its borrowing pile," said Coatsworth.
As the firm looks ahead, it expects its third-quarter volume performance to "materially improve sequentially".
The final quarter is set to be the "most material" for its volumes and financial performance. In the first half of 2024, wholesale volumes were down by 1,998 vehicles, falling 32% from the previous year's production of 2,954 cars.
The company said it continues to strive in line with guidance ahead of a significant 2024 H2 ramp-up in wholesale volumes.
"Through disciplined strategic delivery, executing on our portfolio transformation which will drive volume ramp up in H2 '24, we expect to deleverage towards our net leverage ratio target of c. 1.5x in FY 2024/25. Following our refinancing in Q1 '24, we expect net cash interest of c. £120m in FY 20242. Depreciation and amortisation forecast remains at c. £400m in FY 2024," it explained in a statement.
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