Aston Martin shares traded higher on hopes of a stronger finish to 2024

Aston Martin (LSE:AML) shares traded higher, up 967% at Wednesday’s close, as the sports car brand stuck with its full-year guidance despite reporting a drop in sales and a bigger loss for the first half.

To borrow a phrase from motor racing, management is expecting to accelerate out of the corner.

It told investors to expect a strong recovery in the second half due to the introduction of new models such as Valkyrie and Valour, plus the launch of its the DB12, Vantage, and Vanquish models in China.

“Aston Martin is at a pivotal moment in its journey, with our immense product transformation supporting volume growth and sustainable positive free cash flow generation later this year, of which we have full confidence in achieving,” executive chair Lawrence Stroll said in a statement.

He added: “Our high performance products and ultra-luxury brand positioning strategies are creating strong demand amongst a new audience and existing loyal customers.”

The actual results, meanwhile, saw the car brand report a profit of an operating loss of £106.1 million, compared to a £93.2 million loss a year ago, with earnings (adjusted EBITDA) reported at £62.2 million, down from £80.6 million last year.

Net debt, meanwhile, rose to £1.19 billion which is a 41% increase over the intervening twelve month period.

"Aston Martin's spiralling debt is more than just a bump in the road for the luxury car maker,” said Mark Crouch, analyst at e-Toro.

“Despite the constant misfires, rising debt and woeful financial performance, Aston Martin still boasts a brand that is the envy of their competitors, and it’s the reason the company has managed to avoid bankruptcy on numerous occasions.

“Aston says the emphasis will now be on quality over quantity, focusing on pricing power for newer models in what’s becoming a desperate drive to get the company back on track.”

In truth, the first half results were “better than feared” for some in the London stock market.

At one stage, in earlier deals today, the share price was some 11% higher for the session.

Closing at 164.5p, the price was up 14.5p or 9.67%. At this level, the market values the business at just over £1.3 billion.