Aston Martin stunned investors Tuesday by warning that its profit for 2019 would drop by about 45% despite healthy orders for its first ever SUV.
The British luxury carmaker’s stock plunged as much as 16% in London as CEO Andy Palmer pledged to take steps to get the business back on track after a “very disappointing year.”
The favorite automaker of fictional British secret service agent James Bond, Aston Martin has suffered from weak demand for some of its models, a global auto slowdown and uncertainty over Brexit following its IPO in 2018.
Investors have punished the stock: Shares have dropped more than 75% in the 15 months since their market debut in London.
Aston Martin said in a statement that market conditions were challenging in November and December — the peak period for deliveries — resulting in lower sales and higher selling costs, especially in Europe.
The 106-year old company was also hit by currency fluctuations, increased marketing costs and weaker average prices for its luxury vehicles.
Earnings before interest, taxes, depreciation and amortization for 2019 could fall to as little as £130 million ($171 million), Aston Martin said, down from £247 million ($326 million) in 2018.
Palmer said that he would seek to reduce costs and improve the company’s price positioning. He said orders for the automaker’s first SUV, the DBX, were coming in faster than for any previous model.
Aston Martin has in recent years sought to capitalize on its high end brand.
But investors balked at an IPO that put the company, which has a history of uneven profits and bankruptcy filings, in the same league as Italian rival Ferrari.
Aston Martin’s owners include Mercedes-Benz parent Daimler (DDAIF), private equity firm Investindustrial and investors based in Kuwait.
On Tuesday, the company said it was reviewing its plans for 2020 and confirmed it was still taking to potential investors about raising new funding.
Aston Marin raised $150 million last year by selling high-interest bonds. It now plans to tap an additional $100 million in notes that were conditional on the company receiving 1,400 orders for the DBX.