February 28, 2019 / 8:19 AM / 7 months ago

Aston Martin boss: Brexit delay would prolong uncertainty

LONDON (Reuters) - A delay to Brexit would be a “further annoyance” which would prolong uncertainty, the boss of luxury carmaker Aston Martin said after Prime Minister Theresa May promised to give lawmakers a vote on extending the date for Britain to leave the EU.

Andy Palmer, CEO of Aston Martin poses for a photograph at their world headquarters in Gaydon, Britain, February 14, 2019. REUTERS/Andrew Yates

Many firms have been triggering contingency plans on the assumption Britain will leave the European Union on March 29, so a delay could scupper the timing of those preparations.

Aston Martin, which has authorized up to 30 million pounds ($40 million) worth of contingencies, is stocking more components and could fly in parts if ports are clogged up.

Lawmakers will vote on whether to delay Brexit on March 14, just over two weeks before the scheduled departure date.

“I would categorize it as a further annoyance,” Chief Executive Andy Palmer told Reuters. “You’re holding that contingency stock for longer which means that your working capital is tied up for longer.”

“More importantly, what you’re doing is you’re creating continued uncertainty,” he added.

Shares are down a third since the company’s October flotation, falling 12 percent to 12.05 pounds at 0843 GMT on Thursday.

Aston Martin, which is boosting volumes and building its first sport utility vehicle at a new factory, posted on Thursday a 26 percent rise in 2018 volumes and a 25 percent increase in revenues.

But adjusted pre-tax profits fell 7 percent to 68 million pounds ($90 million) before one-off costs related to its initial public offering, which totaled 136 million pounds.

The company said that if some one-time pension-related credits were stripped out of 2017’s figures, adjusted pre-tax profit would have risen in 2018.

Volumes rose in each of its regions with demand rising 31 percent in China, where other automakers, such as Jaguar Land Rover, have reported plunging demand.

Aston Martin said it was confident it would deliver another year of growth in 2019 but Brexit remained a major uncertainty for the industry.

Britain’s once-soaring car industry is now recording falling sales, investment and production. Honda delivered the most serious blow, with this month’s announcement it was closing its British factory.

Industry output fell 18 percent last month, according to data released on Thursday.

“That’s about consumer confidence,” said Palmer. “We know there are other factors there as well but, fundamentally, why would you buy a car in the current circumstances? We’re insulated from that but we’re not immune to it.”

Reporting by Costas Pitas; Editing by Guy Faulconbridge and Edmund Blair

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