Luxury carmaker Aston Martin expects to see improved profitability this year and turn free cash flow positive in the second half as it begins deliveries of its new sports cars in the third quarter. The company is forecasting wholesale volumes of around 7,000 units for 2023, slightly below market expectations, but an adjusted core profit margin of approximately 20% ahead of analysts’ average view. Last year, Aston Martin brought on former Ferrari CEO Amedeo Felisa to help emulate the Italian carmaker’s success, as it struggles with supply chain issues and higher costs.
Despite the challenges, Aston Martin is seeking to become sustainably free cash flow positive from 2024, helped by a capital raising last year that saw Saudi Arabia’s Public Investment Fund become its second-largest shareholder. The Gaydon-based company reported revenue growth of 26% to £1.38 billion ($1.67 billion) in 2022, driven primarily by higher prices. Its core average selling price rose 18% to £177,000.
While Aston Martin did report a larger adjusted operating loss of £118 million for the year ended Dec. 31, 2022, compared to £74.3 million for the same period a year earlier, the loss was better than analysts’ average expectations of £135 million. The company’s shares jumped 7% to their highest level since July 2021 following the announcement.
Aston Martin’s new sports cars are expected to drive growth for the company as it seeks to recover from the supply chain issues that have plagued it in recent years. The company’s iconic models have long been associated with British spy James Bond, but it has struggled to maintain profitability due to a combination of factors, including Brexit uncertainty and rising costs.
The appointment of Felisa as CEO in 2021 was seen as a major step forward for the company, as he brought with him a wealth of experience from his time at Ferrari. Felisa is expected to lead Aston Martin through a period of growth and transformation, as it seeks to regain its position as a leading luxury carmaker.
Despite the challenges ahead, Aston Martin remains optimistic about its future prospects. With the help of its new CEO and a renewed focus on delivering high-quality, high-performance sports cars, the company is well-positioned to regain its position as a leader in the luxury car market. As it begins deliveries of its next-generation sports cars in the third quarter, investors will be watching closely to see whether Aston Martin can deliver on its promises of improved profitability and sustained growth.