Williams Grand Prix Holdings PLC today announced the Group's financial results for the year ended 31 December 2014. WGPH is the holding company of the Williams group of companies, which includes Williams Grand Prix Engineering Limited.
In 2013, following a number of years of deteriorating performance, Williams embarked on a turnaround strategy to reinvigorate the performance of the Formula One team and put in place the foundations for a profitable engineering business. Consequently, and as anticipated, 2014 was a year of transition and the financial results reflect a year of higher costs in a sport in which commercial rights revenue is earned a year in arrears.
The Group has reported a revenue of £90.2m (2013: £130.4m), with an EBIT of -£34.3m (2013: £11.9m). The loss was driven by lower revenue and higher costs in the Formula One operation.
More than half the reduction in revenue is due to the recognition of a one-off sponsorship payment for 2014, which had to be recognized in the 2013 financial statements. It was also the result of lower commercial rights and partnership income due to our ninth place finish in the Constructors' Championship in 2013, and the impact of the sale of the Williams Hybrid Power business earlier last year. The higher costs were attributable to the introduction of the new hybrid power unit into Formula One, and investment in the Group's operation to turnaround its performance.
The Formula One operation made a major step forward on the track in 2014, and that success will be reflected in increased commercial rights and sponsorship income this year. Therefore, the financial results for 2015 will be materially more favourable than 2014.
Williams Advanced Engineering, the division of the Group that commercialises Formula One derived technology and knowhow, generated revenue in line with the previous year at £17.8m (2013: £17.3m). EBIT was £3.5m (2013: £5.5m), down on the prior year, primarily due to relocation costs into a new purpose-built facility, and investment to increase capability and enter new markets.
"The decision to invest in the team has been more than validated," said Mike O'Driscoll, Group Chief Executive Officer, "with a third place finish in the 2014 Constructors' Championship, up from ninth in 2013. Mid-way through 2013 we set out on an ambitious turnaround strategy to reinvigorate the Formula One team, create a strong and profitable Advanced Engineering business, and divest non-core activities. In 2014 we made very good progress against those objectives, investing significantly in people, facilities, and technology which we believe will provide a solid foundation for the future.
"The Formula One team's leadership and structure was thoroughly overhauled, with the singular objective of reversing a decade of deteriorating performance. As a consequence of our actions we made a significant improvement in our on-track performance in 2014, which has been sustained into 2015. Our Advanced Engineering activities were also consolidated as we relocated operations into a new facility at our Grove HQ. We have put a new and experienced leadership team in place across the organization, and are now well placed to grow in the years ahead.
"The financial performance of the Group in 2014 reflected the poor on-track results of the prior three years, which resulted in a marked deterioration in commercial rights and sponsorship income. Last year was also adversely impacted by the costs of relocating our Advanced Engineering activities. Our much improved performance in the 2014 Championship will be seen in higher commercial rights and sponsorship income in 2015, coupled with improved performance from our Advanced Engineering division. Our ambition in 2015 is to consolidate the progress we made last year, continue building the necessary foundations for future sporting and commercial success, and consequently to materially improve our financial results for the coming years."