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Aston Martin: accelerating under new strategy

Full year revenue rose 79% to £1.1bn as the number of wholesale vehicles nearly doubled as conditions normalised following Covid restrictions. Average selling price was also higher, reflecting increased demand and a favourable product mix. On a two-year basis, revenue rose 12%.

Underlying cash profits (EBITDA) were £137.9m, up from a loss of £70.1m from 2020.  This was driven by a higher number of Specials sales and improved manufacturing efficiency.

In 2022 the group’s expecting the number of wholesales to rise above 6,600 and underlying cash profit growth of around 50%.

The shares rose 2.8% following the announcement.

Laura Hoy, Equity Analyst at Hargreaves Lansdown:

“Aston Martin’s efforts to reposition itself on the upper end of luxury cars appears to be working—not only is James Bond rolling around in one in his latest film, but the cars seem to be picking up speed with consumers as well. The number of cars sold to dealers almost doubled, and now that inventory levels have been balanced, demand outpaced supply and helped average selling prices increase. This is a huge step in the right direction for Aston—who painstakingly suffered through the pandemic while also undergoing a major strategy shift.

It’s encouraging to see AML pushing forward with its electrification strategy, which was slow off the mark. There’s a long way to go, though, with the first fully electrified Sport and SUV models expected in 2030. This puts the group well behind many competitors, but brand appeal may insulate it somewhat from the shift toward electric.  Still, electric is the direction of travel for automakers, so the reception of these cars is a key future growth driver.

So far, it seems Aston Martin is doing everything right to get itself back on track. But the year ahead looks bumpier by the day as inflation and oil prices weigh on the entire industry. The group looks in a solid position to continue chipping away at its goal to deliver 10,000 vehicles, but a huge part of that number will rest on the group’s yet unproven electric strategy.”

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