Crude Oil continues to experience volatility on tense US-Iran relations

Ishen Patel
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Crude Oil continues to experience volatility on tense US-Iran relations

The price of crude oil has continued to rise over the heightened tensions between Donald Trump and Iran.

Since the United States launched the attack a few days ago, which killed Iran’s top military commander could trigger a retaliation and massively disrupt oil supply.

The current price of Brent Crude is $68.23 per barrel, having been priced at $68.91 in the early hours of Tuesday morning.

The Brent Crude price did hit $70.73 which was its highest level since rebels attacked a major Saudi oil facility back in September.

The price of Brent Crude Oil has jumped more than 6% before leveling off since the killing of Qassem Soleimani on Friday.

Iran has made a public statement to retaliate against the US in the Middle East following the attack, as the White House issued the order to conduct a drone attack last week.

Over one fifth of global oil supply flows through the Strait of Hormuz, a shipping route between Oman and Iran.

If the price of oil continues to rise amid speculation over war and conflict, this could have dire consequences for the global economy and drivers have been seeing the price of petrol change over the last few days.

Market analysts at both Goldman Sachs (NYSE: GS) and UBS (SWX: UBSG) have casted doubts on the likelihood of oil prices to rise over $70 per barrel due to strong production outside the Middle East.

UBS said that there will be an expectation that the global oil market will be oversupplied due to production increasing from both the US and Norway, which could offset the price rises caused by US Iran tensions.

Paul Donovan, the chief economist at UBS Global Wealth Management, said the global market’s focus on the oil price after the attack is “a rather 1970s reaction” that is “perhaps not appropriate for 2020”.

“More serious economic damage may come if there is cyber-retaliation – which seems suited to this situation – or from general uncertainty,” Donovan said.

Drivers have already been feeling the effects of climbing oil prices, as the RAC speculated that they could be pushed higher.

“Prices at the pump have already increased by about a penny a litre,” said Simon Williams, who tracks fuel prices for the company.

Petrol is currently £1.27 per litre, with diesel costing £1.32, he said.

But Brian Madderson, the chairman of the Petrol Retailers Association, said: “Prices were due to rise anyway.”

Certainly, the global oil market will remain volatile as the threat of war and retaliation looms and traders look to remain cautious in uncertain times.

Kantar data shows rise of Lidl and Aldi in British supermarket industry

Ishen Patel
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Kantar data shows rise of Lidl and Aldi in British supermarket industry

Grocery sales in the UK rose to record numbers in the three month period to December 29, however this was the slowest rate of growth since 2015.

Data from Kantar showed that the big four grocery shops recorded fall in market shares.

This comes at no surprise, and evidently data shows that the German counterparts such as Lidl and Aldi have captivated the British market.

Notably, Ocado Group PLC (LON:OCDO) showed the fastest sales rise along with the German firms.

Ocado saw a rise of 13% in year on year sales from £345 million to £389 million, as it increased its market share to 1.3% compared to the 1.2% figure last year.

For the 12 weeks ending December 29, supermarket sales rose to £29.35 billion from £29.30 billion, representing 0.2% year-on-year growth, which Kantar says is the slowest rise in four years.

Fraser McKevitt, head of retail and consumer insight at Kantar, said: “There was no sign of the post-election rush many had hoped for in the final weeks before Christmas, with shoppers carefully watching their budgets.

“In fact, many of us cut back on traditional and indulgent festive classics. Sales of Christmas puddings were down by 16%, while seasonal biscuits were 11% lower. Turkey sales also fell by 1%, partly down to a shift from whole birds to smaller and cheaper joints such as crowns. Shoppers also popped fewer corks this year, as sparkling wine sales dipped by 8%. However, both beer, up 1%, and still wine, up 2%, were more popular than in 2018.”

Morrisons (LON:MRW) saw their market share slip 0.3% to 10.3%, as sales slumped by 2.9% to £3.01 billion compared to the £3.11 billion figure a year ago.

Asda also saw a similar slip, as the firm totaled its market share at 14.8% representing a 0.4% slip from the 15.2% figure a year ago.

Asda, who are owned by Walmart (NYSE: WMT) reported a sales decline of 2.2% year on year to £4.35 billion.

Tesco PLC (LON:TSCO) who are the biggest of the big four, also saw a slip in their market share.

The FTSE 100 listed firm saw its market share slip from 28.4% to 27.4% as sales fell 1.5% to £8.03 billion.

Sainsbury’s (LON:SBRY) did not see such a significant fall, as sales declined 0.7% year-on-year to £4.69 billion from £4.73 billion with market share at 16.0% compared to 16.1%.

Kantar said: “The slow market made it particularly difficult for the largest retailers to increase sales. The ‘big four’ grocers were especially impacted by customers choosing to make one fewer trip to stores in the latest period.”

Aldi saw their market share rise to 7.8% during the period, as Lidl also grew to 5.9% from their previous 5.3% showing significant gain for the German firms.

Kantar said grocery inflation stood at 0.9 for the 12 week period, with prices rising fastest in markets such as fresh sausages, fresh bacon and fresh lamb, while falling in instant coffee, fresh beef and butter.

Sajid Javid sets March date for new budget unveiling

Ishen Patel
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Sajid Javid sets March date for new budget unveiling

The current Chancellor Sajid Javid has set a date for the announcement of his first budget.

This comes at an important time where political tensions have heightened in Hong Kong and China, and the state of global affairs has never been so indecisive.

The ongoing tensions between the United States and Iran have potentially fulled the prospect of war, and legislators all across the globe are preparing themselves for what could be turmoil

Turning to UK politics, Mr Javid has said that billions of pounds will be invested “across the country”.

The Treasury will “prioritise the environment”, he said and reiterated a plan to make use of low borrowing rates to spend on public services.

Indeed, Javid’s comments did receive criticism as John McDonnell said that he questioned whether the Conservative party would be able to invest and match climate change goals.

Mr Javid will update his cabinet colleagues on the performance of the economy before facing MPs later on Tuesday.

He told the BBC: “There will be an infrastructure revolution in our great country.

“We set out in our manifesto during the election how we can afford to invest more and take advantage of the record low interest rates that we are seeing, but do it in a responsible way.

“There will be up to an extra £100bn of investment in infrastructure over the next few years that will be transformative for every part of our country,”

He added: “In the Budget, we will be setting out how we are going to take advantage of all the huge opportunities that Brexit will bring.

“Also, how we are going to help hard-working people in particular – especially with the cost of living – and how we are going to level up across the entire country.”

As PM Johnson continues to tackle issues such as Brexit, and tries to sort out domestic issues, this budget comes at a significant time being the first since the December election.

With such a landslide victory for the Conservatives, there will be big expectations for the government to deliver on its promises to lower income households and particularly the North of England where Labour’s red wall collapsed.

Sajid Javid said the budget would “unleash Britain’s potential, uniting our great country, opening a new chapter for our economy and ushering in a decade of renewal”.

In recent months, Javid has already promised billions of pounds of extra investment in the health service, schools and police, after 10 years of cuts imposed by the financial crisis.

The government announced that they would be increasing the minimum wage for individuals over the age of 25, which would be taking place from April 1.

This move shows a concerned effort by the Conservatives to tackle issues such as income and wealth inequality, but critics will say that this does not go far enough.

Many British operating businesses have citied both political and economic uncertainty as a hamper to business, and this budget revealed will go a long way in understanding the long term governmental plans of the UK economy.

In November, Asda who are owned by Walmart (NYSE:WMT) saw a slump in sales which was caused by political uncertainties and tough market conditions.

Asda said its gross profit rate fell, reflecting price markdowns in clothing following a slow summer season versus last year.

The fall in gross profit rate, plus increased operating expenses, meant operating income was also lower.

“This quarter has afforded consumers little respite from political or economic uncertainty and this has shown in their spending,” said Chief Executive Roger Burnley.

Certainly, many British businesses will be keen to see how the government can promote trading in a period where the British High street seems to be in decline and political uncertainty wraps consumers.

easyHotel appoint new Chief Executive Officer

Ishen Patel
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easyHotel appoint new Chief Executive Officer

Easyhotel PLC (LON:EZH) have announced a new chief executive officer in an update on Tuesday.

The firm said that they have appointed Francois Bacchetta as chief executive officer and he is expected to join the company in Spring.

Easyhotel said that Bacchetta is joining the company from easyJet PLC (LON:EZJ) and comes at a period of turbulence for the firm.

The hotel provider said that he has “significant experience” operating in the European travel market including easyHotel’s core growth countries in continental Europe.

Before joining Easyjet, Bacchetta held numerous senior roles including senior marketing positions at global cosmetics group L’Oreal SA (EPA: OR).

“Importantly, Francois has a strong understanding of the “easy” brand and was responsible for the country and growth strategies for his region, whilst bringing experience of managing online trading including digital marketing,” easyHotel said.

Harm Meijer, non-executive chair of easyHotel, said: “Following a comprehensive search, we are pleased that Francois is joining us to lead easyHotel in its aspiration to become a European leader in the super budget hotel segment.”

François Bacchetta added: “easyHotel is a business I greatly admire and I am thrilled to be appointed. With a strong hotel network established in the UK, I believe this is a very exciting time for the brand and I look forward to leading the expansion in Europe as the Group seeks to become a leader in the budget hotel space.”

Turbulent 2019 for easyHotel

In May, the firm said that it had swung to a half year loss.

The budget hotel operator revealed a loss before tax of £0.12 million for the six months to March-end, down from £0.09 million.

The company also said it had invested £14.2 million in new hotel development, alongside £30.3 million in cash.

easyHotel also confirmed £33.9 million of bank financing headroom at the end of the period.

“The hotel market outlook remains uncertain, particularly in the UK where the ongoing Brexit negotiations continue to dampen consumer confidence. We are by no means immune, but the maturing profile of our hotels and our strong development pipeline will support continued growth and enhance our earnings profile. Combined with the careful control of our central costs, these efforts give the Board confidence in meeting its expectations for the year ending 30 September 2019.”

Certainly, the new appointment will signal to shareholders that the firm are making an effort to turn business around in testing market conditions.

Shareholders will be keen to see how the firm responds in the medium and long term and should expect positive results across 2020.

Shares of easyHotel trade at 88p (+1.03%). 7/1/20 13:44BST.

Landore receive updated mineral resource estimate at BAM deposit

Ishen Patel
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0
Landore receive updated mineral resource estimate at BAM deposit

Landore Resources Ltd (LON:LND) have said that an updated mineral resource estimate has increased the gold resources at the BAM deposit.

Landore Canada is engaged in mineral exploration and development, with the present focus of its operations being mineral exploration on the Junior Lake property, located in the province of Ontario.

Landore’s objective is to become a successful mineral explorer and create capital growth for shareholders through the discovery of economic mineral deposits.

The updated estimate was provided by Cube Consulting, and confined that the resources increased at the deposit in Ontario to 31.1 million tonnes at 1.02 grammes per tonne for 1.0 million ounces of gold. This includes 21.9 million tonnes at 1.06 grammes per tonne for 747,000 ounces of gold.

Similar work carried out by Cube Consulting further extended the deposit by 3,700 meters with a recently completed soil programme by Landore identifying “widespread” gold mineralisation along strike to the west for a further 7 kilometres.

The firm said that the February 2019 Preliminary Economic Assessment (PEA) for the BAM Gold project provided a price sensitivity analysis of the ‘Extended case’ which, at a gold price of US$1,300, would produce a Post Tax, Net Present value (NPV) of US$123.71m.

At the current gold price of US$1,560 that Post tax NPV would be elevated to $227.37m, as mentioned in the Tuesday update,

The BAM gold deposit is located approximately mid-way along a highly protective Archean greenstone belt which traverses the Junior Lake Property from east to west for approximately 31 kilometres.

Chief Executive Officer of Landore Resources, Bill Humphries, said:

“Landore’s exploration effort for 2019 concentrated on establishing the potential growth of the BAM Gold Project along strike towards the existing Lamaune Gold project through the highly successful Soil Sampling campaign together with exploration drilling. Whilst the above infill drilling campaign continued to convert Inferred mineralisation into Indicated resource ounces.”

“The directors believe that the continued growth of the BAM Gold Deposit together with the possible future development of new discoveries along this highly prospective 31 kilometre long Archean greenstone belt has further enhanced the likelihood of the Junior Lake Property hosting a multi-million ounce gold deposit.”

Shares of Landore trade at 0.65p (-3.67%). 7/1/20 13:32BST.

888 remain confident for 2020 and report 2019 earnings in line with expectations

Ishen Patel
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888 remain confident for 2020 and report 2019 earnings in line with expectations

888 Holdings PLC (LON:888) have told shareholders that they can remain confident in the year ahead.

The betting firm said that it was confident of further progress in the year ahead, as it forecasted for 2019 earnings to be in line with expectations.

888 alluded to strong performance in the second half of the year, which has driven its full year expectations.

December revenue was particularly strong as this figure hit a new monthly high with progress supported by the success of the Orbit casino platform launched in May 2018.

In the first half of 2019, 888 reported pretax profit of $22.2 million, falling from $60.1 million a year before, on $277.3 million in revenue, down from $283.9 million.

In 2018, the company’s pretax profit was $108.7 million on revenue of $529.9 million.

888 said it was pleased by the first-phase rollout of its Poker 8 platform. The company will add “a number of exciting new product features” and will be rolling out the final-phase platform in 2020.

Revenue in the UK continue to increase, 888 said. Italy put in a continued good performance during the second half of the year aided by the success of Casino, it said.

Spanish revenue was bruised by the launch of competitors shared poker liquidity networks between Spain, Portugal and France.

However, the firm has remained confident to deliver shareholders growth and meet market expectations.

Itai Pazner, Chief Executive Officer of 888, said:

“The Group has delivered solid progress in the second half of the financial year underpinned by continued momentum in Casino and Sport. We are very encouraged by the growth in new customers during 2019 with a record of more than one million new customers signing up to 888’s brands during the year. In addition, we were very pleased to end the year with a record revenue month in December.

2019 saw a number of key strategic developments for the Group including the acquisition in March of a sports betting platform and an outstanding sports team based in Dublin. The Post-Merger Integration plan is progressing in line with expectations and 888 remains on track to launch its first proprietary sport product during the first half of 2020. New product development has remained a key focus and competitive advantage for 888 and the success of our Orbit platform across multiple regulated markets during 2019 has been a major achievement for the Group.

We have delivered a strong recovery in our UK business underpinned by a clear and unwavering focus on entertaining recreational customers in a safe and secure environment. Continuous investment in further enhancing responsible gaming processes and tools across all markets will remain a key focus for the Group.

888 has entered 2020 with good momentum across several regulated European markets and, underpinned by further investment in our team, marketing and product development, we remain focused on achieving further progress in the US. With 888’s core strengths as a responsible operator with outstanding technology and diversification across a number of regulated markets, the Board remains confident of further progress in the year ahead.”

888 and BetBright Deal

In March last year, 888 notified the market that they had acquired a rival in BetBright, which was valued in a £15 million deal.

Under the acquisition, BetBright’s Dublin office is set to be integrated into 888. Additionally, the company will receive complete ownership over its technology and product development across its four key betting verticals – Casino, Sport, Poker and Bingo.

“This acquisition of a high-quality and scalable sportsbook is an exciting milestone for 888. It gives the Group the missing piece in our proprietary product and technology portfolio and will enable 888 to own proprietary, end-to-end solutions across the four major online gaming verticals,” Itai Pazner, the Chief Executive commented in a company statement.

GVC vs 888

The move was to take market share away from leaders such as GVC Holdings (LON:GVC).

GVC who run stores such as Coral, saw their shares up in October as the firm lifted its full year guidance. The owner of the Ladbrokes brand increased its core profits forecast, predicting that they will now lie in the range of £670 million – £680 million for the full year.

In addition to the Ladbrokes brand, which is one of the most recognised in the UK, GVC also owns Coral and bwin.

The Coral brand has become synonymous with UK betting, whilst bwin is one of the leading online betting brands in Europe.

“Online momentum remains strong across all major territories, with NGR up 12% in the quarter despite the prior period containing part of the World Cup,” the CEO added.

“This performance continues to be driven by our industry-leading technology, products, brands, marketing capability, and people.”

Additionally, the firm appointed former Homeserve PLC (LON:HSV) chair as its new non-executive chair. This came at a time where GVC were looking to stimulate business and impose their foot holding in the UK market.

The new appointment, in the form of John Michael Barry Gibson has experience in the industry having held senior positions at firms such as William Hill (LON:WMH)

Certainly, 888 will take a bit longer to fully incorporate changes to make the merger a success.

Shareholders will remain optimistic as 888 have given much reassurance to deliver promising results at the start of 2020.

Shares of 888 trade at 157p (-2.60%). 7/1/20 13:17BST.

Itaconix confirms delivery of Zinador to Croda International

Ishen Patel
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Itaconix confirms delivery of Zinador to Croda International

Itaconix PLC (LON:ITX) have seen their shares green as the firm updated the market on a new delivery success.

Itaconix designs and manufactures high performance, cost effective and sustainable ingredients that are key components of products in the personal care, homecare and industrial sectors.

They are the world leader in developing and producing bio-based polymers from itaconic acid, combining the versatile chemistry of itaconic acid with breakthrough manufacturing economics.

The firm said today that it has delivered the initial order of polymeric zinc complex Zinador 35L to FTSE 100-listed chemicals firm Croda International PLC (LON:CRDA).

The agreement was initially agreed in 2017, for the supply of its polymer-based odour removal additive Zinador 22L to Croda, for home and industrial applications.

In October, both the firms agreed to expand the deal to include Zinador 35L, which is designed for use in detergent and industrial applications.

John R. Shaw, CEO of Itaconix, stated: “The launch of Zinador™ 35L through our collaboration with Croda is a significant commercial milestone for us. I believe the performance and cost advantages available with Zinador™ 35L can generate new and broader use of our odour control polymers.”

Pleasing results following a mixed period of Itaxonix

In October, the firm said hat they are set to miss annual revenue targets.

Delays in certain customer projects across the last few months have caused supply issues meant that figures will be below the comparative figure one year prior.

As a result of lower expected annual revenues, and one off costs for new product development, Itaconix expects to report loss before interest, taxes, depreciation and amortisation for second half of 2019 broadly in line with the £1.0 million loss recorded in the first half, meaning 2019 Ebitda loss will be roughly £2.0 million

Shareholders will be thoroughly pleased with the announcement made this morning, following a turbulent few months for Itaconix this will give shareholder reassurance that they can develop and grow.

With the backing of a FTSE 100 listed firm, Croda have also beaten competitors such as Victrex (LON:VCT) to partner with a firm in a deal which could have substantial benefits.

Shares in Itaconix jumped 4.92% on this morning’s announcement to 1p. 7/1/20 12:56BST.

Accrol narrow interim loss as shares jump

Ishen Patel
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Accrol narrow interim loss as shares jump

Accrol Group Holdings (LON:ACRL) have reported a narrowed interim loss in an update to shareholders on Tuesday.

This comes as part of the company’s turnaround plan and restructuring, which seems to have become a success.

In the six months to October 31, the toilet roll and kitchen roll producer saw its pretax loss narrow to £3.0 million from £9.0 million. Gross profit almost doubled to £12.8 million.

Accrol’s interim revenue grew 13% year-on-year to £65.1 million from £57.6 million.

Additionally, shareholders will be pleased that the company’s gross margin rose to 19.7% from the 12% a year before.

Blackburn-based Accrol attributed the improved performance to its recently completed turnaround plan, which began in February 2018.

The firm also lowered its admin costs by 10% to £9.5 million from the previous £10.6 million figure.

Exceptional costs for financial 2020 are expected to be about £1.0 million, down sharply from £7.9 million in financial 2019.

Customer revenue rose 20% year on year, which was miles ahead of market growth at 8% which will certainly stake shareholder appetite.

The company attributed this to its improved product mix. Accrol does not expect similar growth in the second half but does expects its margin to continue to improve.

Acrrol has not paid a dividend to its shareholders, but expects this to occur in the media term as long as performance remains steady and growth occurs.

The firm ended the update by saying that the firm is confident off of meeting market expectations in the second half. The company noted, however, it is “mindful” of the challenges that can arise following major changes to a business.

Comments

“The financial benefits of these changes are now flowing through to the bottom line at an accelerating rate and these first half results show the improving monthly run rate being achieved by the business. With the turnaround complete and a strong management team in place, the board is now focusing on further automation of the group’s operations and strategic opportunities to diversify, scale and grow the business,” the company explained.

Chair Dan Wright said: “Accrol has been completely transformed by the new leadership team and is now a very different organisation. I am proud to say that our talented and experienced people have proved that it is possible to make good returns from tissue conversion, which has historically been viewed as a low margin sector.

“Group margins are returning to pre-IPO levels, as more robust commercial management programmes and operational efficiencies offset substantially higher comparative input costs. What is particularly pleasing is seeing volume growth at over 20% during this transformational business period.”

Accrol shares jumped 5.08% to 33p. 7/1/20 12:44BST.

Rockrose remain confident for 2020 and expect to meet 2019 guidance

Ishen Patel
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Rockrose remain confident for 2020 and expect to meet 2019 guidance

Rockrose Energy (LON:RRE) have told shareholders that they are set to meet their 2019 production guidance in an optimistic update to shareholders.

RockRose Energy is an independent oil and gas production and infrastructure company.

A Rockrose is a plant that grows in harsh environments with minimal external support. Creating an energy company that is equipped to do business in the harsh environment of sub $50 oil with a minimal cost base was the strategy behind the establishment of Rockrose Energy in 2015.

The firm said that in 2019, a pro forma production was in line with guidance of roughly 19,200 barrels of oil equivalent per day.

Excluding shutdowns and other variables, annual pro forma production was about 20,500 boepd, with about 21,000 boepd produced in December.

Pro Forma production increased by 78%, the company noted as this included a contribution from Marathon Oil (NYSE:MRO).

Average production for 2020 is expected to be around 21,000 which shareholders will be thoroughly impressed with.

This figure reflects a 9.4% rise year on year, and this accounts for planned shutdowns including the Forties pipeline system in mid-June for three weeks.

The company has guided for a dividend of 25 pence per share, giving a total dividend of 85 pence across 2019.

Expenditure in 2019 was $80 million, which was below previous guidance. Another impressive stat for shareholders to be excited about.

For 2020, capital expenditure is guided at about $200 million – which the company said will lead to higher production.

At the year end, total cash was $370.7 million, of which $54.9 million is restricted. Cashflows have been underpinned by enhanced production following completion of the Marathon acquisition and the Company remains debt-free.

Comments

“RockRose is well placed to continue to offer substantial returns to shareholders. We delivered a strong increase in production in 2019, which resulted in significant cash generation. In turn, this enabled us to implement a regular dividend policy to return cash to investors while continuing to invest in projects designed to drive additional future returns,” Executive Chair Andrew Austin said.

Austin added: “We have a busy schedule in 2020, which will see organic growth in our production, and we continue to look at opportunities to deploy our balance sheet strength to make acquisitions that meet our criteria. We look forward to reporting on further progress as the year unfolds.”

North Sea Operations

Fellow operators in the North Sea have been busy as have Rockrose.

This morning, headlines hit that Premier Oil PLC (LON:PMO) have announced that they will be purchasing two North Sea assets from BP PLC (LON:BP).

Premier have said that they will be buying the Andrew Area and Shearwater assets from oil major BP for $625 million.

Andrew Area includes five fields which produce 18,000 barrels of oil equivalent per day. Shearwater in comparison accounts for 25 million barrels of oil equivalent of reserves.

Premier further updated shareholders by saying that it had taken a further 25% more of Tolmount off Dana Petroleum PLC (LON:DNX) for $191 million, and a potential $55 million more.

Although the North Sea exploration market is competitive, it seems that Rockrose are onto a winner here and the firm will hope that trading can continue to be strong across 2020

Shares in Rockrose trade at 1,920p. (+3.82%). 7/1/20 12:30BST.

Aston Martin issues profit warning as worries continue for shareholders

Ishen Patel
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Aston Martin issues profit warning as worries continue for shareholders

Aston Martin Lagonda Global Holdings PLC (LON:AML) have seen their shares crash as the firm issued another profit warning to shareholders.

The firm alluded to challenging trading conditions and as the firm continues to review its funding options, shares have crashed.

Aston Martin have seen a tough time of trading, in similar fashion too many global car manufacturers.

The challenging trading conditions disclosed in November continued through the peak delivery period of December, Aston Martin said, resulting in lower sales, higher selling costs and lower margins.

The firm has said that 2019 adjusted earnings before interest, taxes, depreciation and amortisation to come in at a range between £130 million and £140 million.

This would lead to a margin between 12.5% and 13.5%, where as in 2018 adjust EBITDA totaled £247 million.

The firm said that wholesales declined 7% from a year ago, and this figure was 5,809 units.

This was due to a weaker mix of vehicles and lower-than-expected wholesale sales. Americas, UK and Asia-Pacific region performed broadly in-line with volume expectations, while Europe underperformed, the company added.

Sales of its Vantage sports vehicle did improve across the fourth quarter, which is something for shareholders to take, and the orders for the DBX sports utility vehicle has “built rapidly” to 1,800 since it opened in November 2019, it added.

Chief Executive Officer Andy Palmer said: “From a trading perspective, 2019 has been a very disappointing year. Whilst retails have grown by 12%, our best result since 2007, our underlying performance will fail to deliver the profits we planned, despite a reduction in dealer stock levels.

“We are taking a series of actions to manage the business through this difficult period. This will include a cost saving programme alongside a focus on returning dealer stock levels to those more normally associated with a luxury company; winning back our strong price positioning is a key focus.”

A tough year for Aston Martin

At the end of July, the firm posted a half year loss as they saw their shares plunge.

In its half year results for the period ending 30 June, Aston Martin made a pre-tax loss of £78.8 million, swinging to red from the £20.8 million pre-tax profit it had made during the same period the year prior.

“As described in our trading statement on 24 July, both our retail and wholesale volumes have increased year-on-year,” Dr Andy Palmer, Aston Martin Lagonda President and Group CEO, said in a company statement.

Additionally, in November further worry was heightened when they posted a third quarter loss.

Aston Martin said that, for the three months to 30 September, loss before tax amounted to £13.5 million, compared to the £3.1 million profit generated during the same period a year prior.

“Tough trading conditions, particularly in the UK and Europe, persist and whilst retail sales have grown 13% year-to-date, wholesale volumes remain under pressure,” Dr Andy Palmer, Aston Martin Lagonda President and Group CEO, commented on the results.“

“We remain pleased with the performance of DB11 and DBS Superleggera, however, the segment of the market in which Vantage competes is declining, and notwithstanding a growing market-share, Vantage demand remains weaker than our original plans,” Dr Andy Palmer continued.

Aston Martin follows in rival footsteps

The global automotive industry has seen a tough period of trading caused by both political and economic uncertainties.

Suzuki Motor Corp (TYO:7269) slashed its full year sales outlook due to testing overseas sales.

Suzuki, which accounts for roughly half of India’s passenger vehicles through its majority stake in Maruti Suzuki India Ltd (NSE:MARUTI) sold just 305,000 vehicles in India in the quarter, down 32% and its lowest quarterly sales since the December 2014.

Globally, Suzuki posted quarterly sales of 670,000 vehicles, seeing a 20% fall from the year prior.

Additionally, Renault (EPA:RNO) joined the slump when they cut their annual guidance following testing waters.

Renault said it now expects its group revenue to decline between 3% to 4%, “due to an economic environment less favourable than expected and in a regulatory context requiring ever-increasing costs”.

Renault added that its revenue for the third quarter amounted to €11.3 billion, down by 1.6% from the €11.5 billion figure recorded in the third quarter of 2018.

Certainly shareholders of Aston Martin will be worried about this morning’s update, and there will be strong emphasis to turn fortunes around in a market still slumbered with political and economic uncertainty.

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