McLaren’s Ron Dennis sees profits leap but will Vettel and Alonso join the once legendary F1 team?
Turnover increased from £249m to £268m
Jim Armitage is the City editor of The Independent and London Evening Standard group of newspapers. He has been a reporter and editor for more than 20 years and was recently shortlisted for the Press Gazette financial journalist of the year and The Society of Editors financial journalist of the year awards. He contributes news, investigative reports and comment to the Independent titles plus a daily column in the Evening Standard.
Thursday 04 September 2014
McLaren boss Ron Dennis today declared his Formula 1 team may not be having much successes on the track, but its finances have rarely been stronger.
The company reported a dramatic swing back into profit last year thanks to the rising revenues from the sport and sponsorship. From a loss of about £3m in 2012 due to increased research and development spend, McLaren Group raced to an £18.8m pre-tax profit last year. Turnover increased from £249m to £268m.
McLaren fans may be hoping that 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 Sebastian Vettel and Fernando Alonso could be on the wish list.
Mr 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 1 and I am confident the actions we are taking will enable the team to regain competitiveness in time."
A large part of that revolves around McLaren being reunited with Japanese car giant Honda in a double act last seen during the glory days of Ayrton Senna and Alain Prost, when the five-year collaboration between the two companies made for an unprecedented clean sweep of titles between 1988 and 1992.
Since 1995, McLaren has used Mercedes Benz engines and the German company even bought a 40 per cent stake in McLaren. The pair also built supercars for the road including the Mercedes-Benz SLR McLaren two-seater.
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 again too, with the 12C supercar hitting the streets in 2011. McLaren Group profit figures out today do not include revenues from the roadcars arm, McLaren Automotive, which is a separate company.
Mercedes’ owner Daimler sold its stake and now has its own F1 team to compete with McLaren. The two companies will cease their partnership in 2015 when the new Honda venture begins.
Mr Dennis added: "Our growing revenue 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."
The company has increasingly been looking to diversify its revenues into other areas where its engineering and data management expertise can be applied. McLaren has for years employed highly advanced technology to monitor its race cars during races, with millions of bits of information 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 National Air Traffic Service, where McLaren helps analyse data on managing flights in and out of Heathrow to medicines manufacture, where clients include GlaxoSmithKline. It also helped design and monitor the training schedules for the Team GB cycling, sailing, rowing and canoeing teams, while its designers were involved in creating the British skeleton bob that won gold in the Winter Olympics.
It may not come as much comfort for McLaren team fans watching its poor performance on the track in recent years, but the company also makes the on-board electronic systems for other teams. So, whatever the result at Monza this weekend, a bit of McLaren will be in the winning car.
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