From the pits to profit at the McLaren F1 team

By selling race-car expertise to other industries, Ron Dennis says he’s generating the money to get his Formula One team back to pole position

The McLaren Formula One team may not have had much success on the track lately, but its finances have rarely been better.

McLaren Group yesterday reported a dramatic swing back into the black last year thanks to the rising revenues from the increasingly lucrative sport’s appearance fees and sponsorship deals. From a loss of about £3m in 2012 due to increased research expenditure, it raced to an £18.8m pre-tax profit last year. Turnover increased from £249m to £268m.

McLaren fans may be hoping that the extra cash could hasten the arrival of new drivers for the team to replace the current pairing of Jenson Button and Kevin Magnussen. Speculation has had it that world champions Sebastian Vettel and Fernando Alonso could be on the wish list.

McLaren’s famed boss Ron Dennis said: “Sadly, strong financial performance during 2013 was not matched by on-track success. However, McLaren has a proud and victorious record at the pinnacle of Formula One and I am confident the actions we are taking will enable the team to regain competitiveness in time.”

A large part of that hope revolves around McLaren being reunited with the Japanese car giant Honda in a double act last seen during the glory days of Ayrton Senna and Alain Prost. Then, the five-year collaboration between the companies won an unprecedented clean sweep of first and second place titles between 1988 and 1992.

After a brief time with Ford, McLaren switched to Mercedes-Benz engines. The German company bought a 40 per cent stake in McLaren. Together, they built supercars for the road including the Mercedes-Benz SLR McLaren two-seater – beloved of Arab princes and City bankers.

But the relationship became less easy as Mercedes wanted to push its own F1 team and supercars, while McLaren was planning its own new road models too, with the 12C supercar hitting the streets in 2011.  This marked a return to the highway for the British company, whose last road car was that petrolhead’s favourite, the 1998 three-seater F1. Built with a BMW engine, it is still one of the fastest production cars ever made. The actor and comedian Rowan Atkinson famously lost control of his, wrapping it stylishly around a tree and a lamp-post. Those of a less Clarksonesque persuasion might be interested in the F1’s fuel consumption: at 15.2 miles per gallon, it’s unlikely to be popular among Toyota Prius drivers.

McLaren Group profit figures do not include revenues from the road cars arm, McLaren Automotive, which is a separate company. But it too has been in the pink, making a profit for the first time last year – just three years into its life. Furthermore, it has just released a couple of new models with a third slated for launch next year.

But back to the racetrack. Mercedes’ owner, Daimler, sold its McLaren stake and now has its own F1 team. The two companies will cease their partnership in 2015 when the new Honda venture begins.

Mr Dennis said yesterday: “Our growing revenues and robust financial position will ensure that McLaren Racing has the resources it requires to win races, while enabling us to develop and expand the entire McLaren Group as an internationally recognised technology company.”

He was referring to how the company has increasingly been looking to diversify its revenue base into other areas where its engineering and data-management expertise can be applied.

McLaren has for years employed highly advanced technology to monitor its cars during races, with millions of bits of information from the track and the cars’ on-board electronics being fed back to its so-called “mission control” centre in the UK for super-fast analysis and instructions for the pit team.

Those skills can be put to use in other businesses, from the Nats air-traffic control service, where McLaren helps analyse data on managing flights in and out of Heathrow, to medicines manufacture, where clients include GlaxoSmithKline. You might not believe it, but McLaren has helped GSK fill an extra  6.7 million tubes of toothpaste in its factory in Maidenhead.

It also helped design and monitor the training schedules for the Team GB cycling, sailing, rowing and canoeing teams, while its team was involved in creating the British skeleton bob that won gold in the Winter Olympics.

With all that going on, McLaren is hoping to become a widely based engineering and consultancy business, less prone to its successes and failures on the track.

The speculation was that, with the finances improving, Honda may now want to buy its old partner outright. Mr Dennis has denied that rumour, in this most gossipy of sports. For now, at least, the company will continue to be owned by him, the Bahrain sovereign wealth fund and the Swiss engineer TAG (formerly owner of the motorsport fan’s favourite watch brand, TAG Heuer.)

It may not come as much comfort to McLaren team fans watching its poor performance on the track, but the company also makes the on-board electronic systems for other teams.

So, whatever the result in the Monza Grand Prix this weekend, a bit of McLaren will be in the winning car.

All about the engine: McLaren’s alliances

1995-now: Mercedes

Champion once (Mika  Hakkinen driving), 2nd place seven times, 3rd place five times

1994: Peugeot

4th place

1993: Ford

2nd place

1988-1992: Honda

Champion four times (Ayrton Senna winning three, Alain Prost one), 2nd place once

1984-1987: TAG (Porsche)

Champion twice (Niki Lauda, Alain Prost), 2nd place twice

1977-1983: Cosworth

2nd once, 3rd once

PROMOTED VIDEO
News
peopleStella McCartney apologises over controversial Instagram picture
Voices
voices
Arts and Entertainment
Hayley Williams performs with Paramore in New York
musicParamore singer says 'Steal Your Girl' is itself stolen from a New Found Glory hit
Sport
Ronaldinho signs the t-shirt of a pitch invader
footballProof they are getting bolder
News
William Hague
people... when he called Hague the county's greatest
Extras
indybestKeep extra warm this year with our 10 best bedspreads
News
ebooksAn unforgettable anthology of contemporary reportage
News
More than 90 years of car history are coming to an end with the abolition of the paper car-tax disc
newsThis and other facts you never knew about the paper circle - completely obsolete today
Voices
voicesBy the man who has
Arts and Entertainment
Ed Sheeran performs at his Amazon Front Row event on Tuesday 30 September
musicHe spotted PM at private gig
Sport
Arsene Wenger tried to sign Eden Hazard
footballAfter 18 years with Arsenal, here are 18 things he has still never done as the Gunners' manager
News
people'I’d rather have Fred and Rose West quote my characters on childcare'
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Graduate Recruitment Consultant - 2013/14 Grads - No Exp Needed

£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...

Law Costs

Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...

Day In a Page

Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence
The magic of roundabouts

Lords of the rings

Just who are the Roundabout Appreciation Society?
Why do we like making lists?

Notes to self: Why do we like making lists?

Well it was good enough for Ancient Egyptians and Picasso...
Hong Kong protests: A good time to open a new restaurant?

A good time to open a new restaurant in Hong Kong?

As pro-democracy demonstrators hold firm, chef Rowley Leigh, who's in the city to open a new restaurant, says you couldn't hope to meet a nicer bunch
Paris Fashion Week: Karl Lagerfeld leads a feminist riot on 'Boulevard Chanel'

Paris Fashion Week

Lagerfeld leads a feminist riot on 'Boulevard Chanel'
Bruce Chatwin's Wales: One of the finest one-day walks in Britain

Simon Calder discovers Bruce Chatwin's Wales

One of the finest one-day walks you could hope for - in Britain
10 best children's nightwear

10 best children's nightwear

Make sure the kids stay cosy on cooler autumn nights in this selection of pjs, onesies and nighties
Manchester City vs Roma: Five things we learnt from City’s draw at the Etihad

Manchester City vs Roma

Five things we learnt from City’s Champions League draw at the Etihad
Martin Hardy: Mike Ashley must act now and end the Alan Pardew reign

Trouble on the Tyne

Ashley must act now and end Pardew's reign at Newcastle, says Martin Hardy
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?