Silverstone hits the gas in profit transformation

Losses reversed at Grand Prix circuit that has been threatened with axe from Formula One
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The fortunes of Silverstone, the beleaguered home of the Formula One British Grand Prix, have enjoyed a dramatic uplift according to its latest accounts.

In 2006 the Northamptonshire-based Silverstone Circuits, which operates the racetrack, made a £13.6m in gross profits and earnings after-tax of £1.3m – up from a £2.6m loss the previous year.

This comes despite F1 chief executive Bernie Ecclestone pushing for state funding of the British Grand Prix. Earlier this month, he said: "Really and truly, what we want in Britain is government support. Most F1 events are now supported by governments and it (Silverstone) needs that support."

Silverstone is a former World War Two airfield and Mr Ecclestone has repeatedly threatened it with the axe from F1 unless it upgrades its facilities and pays a higher race-hosting fee. Silverstone's F1 contract runs out after next year's race and countries such as India and South Korea have muscled in on the act. They are believed to be paying up to £20m to stage a race, while Silverstone's fee is reportedly just £8.5m.

Many F1 circuits struggle to break even on hosting one Grand Prix. Silverstone's feat is all the more impressive since its accounts are for the 18-month period to the end of 2006, which covers two races. Its turnover hit £52.6m and, after the race- hosting fee, its next biggest cost is likely to be the £5m spent on paying 110 staff. Despite this, the circuit's owner, the British Racing Drivers' Club, has built up cash reserves of £12m.

The BRDC is a private company limited by guarantee and has around 300 members. These include former F1 world champions Nigel Mansell and Damon Hill, the club's new president, as well as F1's newest superstar, Lewis Hamilton.

Silverstone's profit is a milestone in the history of the British Grand Prix. For the 2005 event, the BRDC took over promotion from advertising giant Interpublic, which had racked up such large losses on the race that it broke its contract and paid the BRDC a £22m severance fee.

The circuit has a book value of £61m and is the biggest single asset of the BRDC. It recently received local authority backing for a £25m redevelopment plan to add new paddock and pit facilities as well as a test centre and two hotels.

Silverstone's next accounts could be even better. Interest in Hamilton has led to an unprecedented demand for tickets, with the 2007 race drawing record spectator numbers for Friday and Saturday practice and a capacity crowd for the Sunday race.