2021 Jaguar Land Rover profit on paper

2021 Jaguar Land Rover profit on paper

A strong performance during the first three months of 2021 saw Jaguar Land Rover turn a profit over the last financial year

In a year when Jaguar Land Rover sold 439,588 vehicles (123,483 being in the fourth quarter, down 13.6 percent on the previous year), and sales in China increased by 23.4 percent year-on-year, JLR’s pre-tax profit came to £662m for the 2020/21 fiscal year. Of that, £534mwas accrued in the last three months alone. Free cash flow (the money left over after a company pays for its operating expenses and capital expenditures) of £729 million was generated in Q4 to achieve a positive free cash flow of £185 million after investment spending of £2.3 billion for the full year. Also, the £1.8 billion cash flow for Q2 to Q4 more than offset the £1.6 billion cash outflow in Q1, when Jaguar Land Rover’s plants were closed for two months due to Covid-19.

The earnings before interest and taxes (EBIT) margin improved to 7.5 percent in the final quarter and was up by 2.6 percent for the full year, a rise of 10.7 and 2.5 points respectively year-on-year.

Said Thierry Bolloré, JLR’s new chief executive officer, “Despite the pandemic, this year has also seen significant positive change, culminating in February with the launch of our Reimagine strategy focused on reimagining our iconic British brands for a future of modern luxury by design.” He went on to say that the strategy is ambitious but will make JLR more agile, efficient and sustainable with the right product-plans to deliver against its targets. “Jaguar Land Rover is well placed to emerge from the pandemic as a stronger and more resilient company that is able to navigate and capitalise on the opportunities ahead.”

However, despite the positive turnaround in its fortunes, exceptional charges, which the company had already warned about, will mean a loss on paper: £1.5 billion of exceptional charges in the fourth quarter included £952 million of non-cash write-downs of prior investments and £534m of restructuring charges, which are expected to be paid in the 2021/22 financial year. Yet Bolloré was still positive about the results for the future of the company. “In my first set of full-year results as CEO of Jaguar Land Rover, I have been encouraged by the company’s resilience and strong recovery during a uniquely challenging year. “

No comments yet. Be the first to add a comment!
Drives TODAY use cookie