McLaren bleeding millions due to F1 losses (Update)
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| McLaren is bleeding money because Ron Dennis dropped superior Mercedes engines in favor of Honda |
British engineering and technology firm McLaren "revealed that it reversed" from a $19M net profit to a $24.6M net loss last year on revenue "which was down slightly" at $412.3M, according to Christian Sylt for FORBES.
The fall in profits was driven by a downturn in the performance of its Formula 1 team "after it lost British superstar Lewis Hamilton to rival Mercedes."
The McLaren Technology Group, which changed its name from McLaren Group earlier this year, "owns stakes in 18 companies." They include "a motorsport electronics firm, catering company Absolute Taste, an applied technology business and 3.7% of supercar manufacturer McLaren Automotive."
The group "is 25% owned by the Saudi TAG Group with 25% in the hands of its CEO Ron Dennis and the remainder held by Bahrain’s Mumtalakat sovereign wealth fund."
Costs accelerated 22.8% to $332.9M as McLaren had to pay a one-off severance and restructuring fee of $54M to Daimler for "switching from its Mercedes engines to rival Honda this year."
So far it "hasn’t paid off as McLaren is currently experiencing the worst season in its 49-year history." Revenue at the F1 team declined 6.8% to $277.6M and, according to its CEO Jonathan Neale, this was "predominantly due to decreased prize monies and sponsorship." Forbes
11/08/15 The McLaren Technology Group just filed its accounts for the year ending December 31, and reported a pre-tax loss of $34.0 million.
The company, which encompasses McLaren's production, engineering and racing activities, said it had slipped into the red as a result of a material revenue shortfall of approximately $19.6 million associated with a loss of sponsorship and prize money following a disappointing 2014 race season, together with restructuring and development costs.
It its statement, McLaren Chairman Ron Dennis said: "Formula 1 is and always will be a core area of activity for us."
He also added that he aimed to make the firm about more than Formula 1, with the ambition of applying its motor racing technology and expertise to sectors such as energy, pharmaceuticals, and financial services.
With McLaren sinking to new lows this year in F1 as it endues the worst campaign in its history, more losses by the company must be expected. Dennis insists however that the F1 division would return to 'race-winning performance' in 2016.
McLaren is 50 per cent owned by Bahrain’s sovereign wealth fund, with Dennis and luxury goods group TAG each owning 25 per cent.