Aston Martin share price: 4 things to watch out for in its Q1 results

The British luxury carmaker is bullish about the next 12 months of trading after exceeding its car sales target in 2018, but Brexit continues to loom over the sector and could hinder its performance.

Aston Martin Source: Bloomberg

Aston Martin Lagonda will release its Q1 trading update on May 15, with the investors excited to get an update on its performance in 2019 after the British carmaker set itself some ambitious targets after exceeding its car sales goals last year.

Aston Martin aims higher in 2019

Aston Martin managed to exceed its 2018 car-sales goal, with the carmaker extremely upbeat about its growth forecast this year after rebounding from a wobbly listing after its initial public offering (IPO) initially disappointed investors.

Over the course 2018, the British luxury carmaker sold 6,411 vehicles, representing a 26% increase compared with the previous year and above the top end of its forecasted range. Looking ahead, the carmaker is targeting car sales of between 7,100 to 7,300 in 2019.

Demand for new cars

In late-February, Aston Martin said that its adjusted operating profit had risen by 18% in 2018 to £146.9 million, while revenue rose 25% to £1.1 billion, with sales driven by a high demand for its cars, particularly its new DBS Superleggera.

The carmaker is also working hard on the release of its all-new SUV, the Aston Martin DBX, which the company believes will help drive sales growth in 2019.

‘Given our progress on the Second Century plan - including completion of our new manufacturing plant at St Athan and our preparations for the DBX, we are confident that Aston Martin Lagonda will deliver another year of growth,’ Aston Martin Lagonda President and Group CEO Andy Palmer said.

Brexit looms large over Aston Martin

Despite the company being bullish about the year ahead, it has been vocal about its concerns surrounding Brexit and the potential impact that Britain's exit from the EU will have on its business and the wider automotive industry.

‘Whilst we are mindful of the uncertain and more challenging external environment, particularly in the UK and Europe, we remain disciplined in our execution and maintain our guidance for financial year 2019, whilst also reconfirming our medium-term objectives,’ Palmer said.

Aston Martin plans for Brexit

The eventual impact of Brexit depends greatly on the type of exit that Britain opts for with it still unclear how, when or even if the UK will leave the EU.

However, like many members of the automotive industry, Aston Martin has prepared for all eventualities. In a no-deal scenario the company said that it plans to cope by importing parts via a variety of ports and even have components flown in in a bid to offset custom delays.

In this worst-case scenario, the company stands to lose around £30 million in additional capital expenditure, which would hurt its earnings significantly.

Investors are eager for an update on how the company plans to navigate the year ahead when it delivers its Q1 trading update on May 15, with the luxury carmaker setting itself some ambitious goals in such a challenging automotive environment.


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