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Good times in Woking as McLaren revenue is up 19.1%

NEWS STORY
18/12/2019

Like a relationship that went wrong, McLaren has slowly but surely sought to put its bad times behind it, while rebuilding for the future.

At the end of a season in which the Woking team claimed a decisive fourth in the Constructors' Championship, business appears to be booming, both for the F1 team and its Automotive division.

According to City A.M., Recent filings from McLaren reveal that car sales revenue is up 19.1%, while new sponsors and prize money have seen the F1 team's revenue rise 23.6%.

The Woking company currently has four products in its supercar range, priced between 125,000 and 750,000.

Top of the range is the Senna, one of the company's 'Ultimate' series, and according to the filings three-times as many were sold in the first nine months of this year than in the corresponding period in 2018.

"There were just 99 Ultimate Series vehicles delivered YTD Q3 2018," the filings reveal, "whereas there were 278 delivered in the same period in 2019."

That said, sales in Europe, traditionally the company's second biggest market, were down 29.9%, while in the United States sales were up 20.8%.

Overall, though the total number of cars sold was down 4.5% on 2018, the fact that it was the higher-priced cars that were in demand meant that McLaren's pre-tax loss was down from 104.4m to 68.2m.

"The mix difference is the key driver behind the improved financial performance versus 2018 in the Automotive division as Ultimate Series products are higher margin," state the filings. "This trend is expected to continue to the full year where, despite the guidance on volume being to deliver a similar number to 2018, it is expected that the mix will contribute to an improved financial performance over 2018. This is a story that will continue for the foreseeable future, with the focus of the division being on margin gains rather than volume growth."

Indeed, the Woking company expects that underlying profit for 2019 will be between 165m and 180m on as much as 1.45bn of revenue, which is up from 1.3bn in 2018.

Over the first nine months of the year, the company invested 222.9m, mostly in new road car projects, and with new models scheduled the company aims to increase production to 6,000 units by 2025.

Among those new models is the 1.8m Speedtail and the two-seater 1.4m Elva, which was unveiled last month. While the Speedtail is already sold out, sales of the Elva are "solid", according to McLaren.

Still basking in the warm glow of finishing fourth in the team standings, including its first trip to the podium since Melbourne 2014, the F1 team saw its revenue increase by 26.3%, courtesy of prize money and sponsors such as British American Tobacco and Coca-Cola.

A keen supporter of the budget cap due to be introduced in 2021 - at which time it will revert to Mercedes power units - this too should help balance the books.

In total however, the F1 team now represents just 12% of McLaren's overall revenue, with 84% coming from automotive and the rest from the applied technologies division.

Indeed, much like Ferrari, a company that Ron Dennis sought to emulate, McLaren is now effectively a car manufacturer that goes racing, as opposed to a racing team that builds road car.

Bahrain's sovereign wealth fund, Mumtalakat, holds 57.7% of the company, while the Saudi TAG Group has 14.7%, Michael Latifi 10% and the remainder held by minority investors.

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