Proactive Investors - Aston Martin Lagonda Global Holdings PLC (LON:AML) warned that profits this year will be lower than expected and cash flow will not turn positive as fewer cars are likely to be delivered due to issues within its supply chain.
The supercar manufacturer, just nine weeks after reiterating previous guidance in its interim results, said disruption at suppliers had led to the late arrival of components, hitting its plans to ramp up production of a series of new models that were launched earlier in the year.
Coupled with continued weak demand in China, Aston Martin said in a statement on Monday that the result would be that wholesale volumes and profit would be weaker than expected for the full year.
“Near perfect execution was required to meet the company's ambitious 2024 plan,” said chief executive Adrian Hallmark.
“However, it has become clear that we need to take decisive action to adjust our production volumes for 2024.”
Wholesale volumes were said to be on course to decline by a high single-digit percentage, against previous guidance for growth on last year’s 6,620 deliveries.
Full-year gross margins are now set to be below the 40% target, with adjusted pre-tax earnings margins set to be in the high teens rather than above 20% as previously anticipated.
The supply issues both delayed production and hit efficiency, Aston Martin said, leaving it taking decisions to “strategically re-align planned volumes, in line with [a] demand-led strategy”.
Cash flow is now also likely to remain negative over the second half of 2024, with the board's original guidance being that the figure would turn positive.