By Yadarisa Shabong and Shashwat Awasthi
(Reuters) – Shares in Aston Martin fell as much as 9% to their lowest in more than two years on Wednesday after the British luxury car maker warned that annual profits could fall as much as 11% due to delivery delays and said it would attract new capital.
The share raise of about 111 million pounds ($139.77 million) marks the sixth time Aston has raised capital since Canadian billionaire Lawrence Stroll took over the carmaker by buying a more than 20% stake in 2020.
The offer, two-thirds of which would come from strategic shareholders, including a subscription of around £50.5 million to Stroll’s Yew Tree, was priced at 100 pence each, a discount of more than 7% to the last closing price of the share.
Aston Martin, whose other top shareholders include Geely and Saudi Arabia’s sovereign wealth fund, has issued several profit warnings in recent years, including one in September after Adrian Hallmark took over as CEO, the third boss under Stroll.
The company’s launch of its new range of core models over the past 18 months was expected to boost growth and cash flow. However, supply chain issues and weakness in China have hurt performance.
Aston said late on Tuesday it now expects adjusted profits for 2024 ranging from 270 million pounds to 280 million pounds. Analysts had expected adjusted core profit of between 267 million and 300 million pounds for the year, according to a poll compiled by the company.
It reported a profit of £305.9m a year earlier.
Several analysts had expected Aston Martin to increase shareholders’ equity after the earnings alarm in September. Analysts at Bernstein said last month that a capital increase raised questions about whether the company will ever be free cash flow positive without a capital injection.
Shares fell as much as 9% to 98 pence in morning trading.
Together with a £100 million senior secured notes debt issue, the company raised approximately £211 million to help fund its electrification strategy and future investments.
Aston Martin’s new Valiant model was expected to be delivered at the end of this year, but delivery of only half of them is now expected in late December and the rest in early 2025, the company said.
In February it said it would delay the launch of its first electric car until 2026.
($1 = 0.7942 pounds)
(Reporting by Shashwat Awasthi; Editing by Rashmi Aich and Bernadette Baum)
