Jaguar Land Rover sinks to £3.6bn loss while CFO announces departure

Car maker takes a hit from slowing sales in China and a costly turnaround plan

Jaguar Land Rover has sunk to a £3.6bn annual loss as it continued to face slowing sales in China and launched a costly turnaround plan while also announcing today that its chief financial officer is to step down next month.

The news that Ken Gregor is departing after 22 years with the business and will be replaced by Adrian Mardell, chief transformation officer, comes as the car manufacturer was hit by a £3.1bn write down in the third quarter, to cover falling demand for newer models and for diesel-powered cars.

However, in the last quarter of the financial year Jaguar Land Rover returned to profitability. In the three months to 31 March, the company generated pre-tax profits of £269m before exceptional items as its ‘Charge’ transformation programme delivered cost and cash improvements.

After £149m of redundancy costs, pre-tax profit was £120m while revenues of £7.1 bn were down £421m year-on-year as growing demand in key markets such as the UK and US helped offset weaker China market conditions.

In the 12-month period, the company made a pre-tax loss of £358m before exceptional items, primarily as a result of lower full-year unit sales against the backdrop of a weaker China market.

The previously-announced third quarter non-cash impairment charge of £3.1bn and the redundancy costs taken in the fourth quarter contributed to the full-year pre-tax loss of £3.6 bn on revenues that declined £1.6bn year-on-year to £24.2bn.

For the year, the Charge programme delivered £1.25bn of cash savings and cost efficiencies, JLR said.

CEO Dr. Ralf Speth siad: “Jaguar Land Rover has been one of the first companies in its sector to address the multiple headwinds simultaneously sweeping the automotive industry.

“We are taking concerted action to reduce complexity and to transform our business through cost and cash flow improvements. The company has returned to profitability in the fourth quarter and already delivered £1.25 billion of efficiencies and savings.”

On Gregor’s decision to leave the business, Speth said: “Ken joined Jaguar in 1997 and throughout his career at the company, and especially as CFO, he has made an enormous contribution to the growth and success of our business.

“On behalf of the board of management and all colleagues, I would like to thank Ken for this significant personal contribution throughout this period and we wish him every success in his future career.”

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