Welsh Government’s investment strategy has come into question after Aston Martin Lagonda revealed widening losses and slipping sales.
The luxury carmaker was enticed to St Athan in the Vale of Glamorgan by the Labour Welsh Government with nearly £20m worth of taxpayer grants in the hope of boosting the South Wales economy.
However, today’s financial report shows the struggling car maker’s pre-tax losses grew by 53% last year to £104.3m. The business also slipped to an operating loss of £36.7m, compared to an operating profit of £72.8m in 2018.
Revenue and sales both fell by 9%. The car maker sold 5,862 vehicles last year, which brought in £997.3m. Aston Martin’s debt rose by 53% to £876.2m last year and the business now has leverage of 7.3 times earnings.
Upon the news, shares were down 12% by mid-morning in London. The stock has fallen over 70% since Aston Martin went public in October 2018 and received public funding from the Welsh Government.
South Wales Central AM, Andrew RT Davies, has today written to the National Assembly’s Public Accounts Committee Chairman, Nick Ramsay, asking his committee to investigate the Welsh Government’s investment.
He said, “This is a very troubling set of finances and behind the excitement of what seems a good brand and project, it once again poses serious questions for the Labour Welsh Government’s judgement and investment strategy.
“Millions and millions of pounds of Welsh taxpayers cash has been thrown at Aston Martin, yet it appears to have been in significant financial difficulty for quite some time, which is very concerning.
“There is always an element of risk when investing in business, but where taxpayers’ money is concerned the public has a right to question whether value for money is achieved and it’s now paramount the Welsh Government does all it can to ensure both taxpayers cash and jobs are protected.
“Labour’s Welsh Government has a chequered past with such investments and their actions during this process must be fully investigated and taxpayers will expect robust evidence that due diligence was followed.
“As such, I have therefore written to the Chairman of the Assembly’s Public Accounts Committee, Nick Ramsay, to ask whether his committee would be inclined to initiate an inquiry into the investment and partnership between Welsh Government and Aston Martin.”