Jaguar Land Rover returns to profit with release of latest quarterly figures
Luxury car maker Jaguar Land Rover (JLR) returned to profit in the three month period to September 30.
The group, which produces vehicles at its Halewood plant on Merseyside where it employs around 4,500 staff, and in the West Midlands, also saw revenues rise year-on-year.
JLR said revenues of £6.1bn were an 8% improvement on a year-by-year basis, driven by a sharp 24.3% boost in China sales, a region which had previously shown a decline.
Pre-tax profits of £156m showed a £246m turnround on the same period last year.
Merseyside’s new Range Rover Evoque model was a key factor in the turnround with sales soaring by 54.6%.
The Range Rover Sport model showed a 17.5% increase in sales, while Jaguar I-PACE retails were up by 2,593 units.
The group said the improvement reflects favourable wholesale volume and mix, operating costs, depreciation and amortisation, and foreign exchange.
Profit margins also significantly improved with an EBIT (earnings before interest and tax) margin of 4.8% and an EBITDA (earnings before interest, tax, depreciation and amortisation) margin of 13.8%.
Cost savings of £162m have been achieved and £2.2bn of efficiencies have also been achieved to date, putting the group on track to achieve the full targeted £2.5bn by March 31, 2020, and further improvements beyond then.
At quarter end, JLR had cash of £2.85bn and a £1.9bn undrawn credit facility.
Since then, the company has completed a £625m five-year amortising loan facility backed by a £500m guarantee from UK Export Finance (UKEF) and signed a new £100m working capital facility for fleet buybacks.
JLR chief executive Dr Ralf Speth said: “Jaguar Land Rover has returned to profitability and revenue growth.
“This is testament to the fundamental strength of our business, our award-winning products, new technologies and operating efficiencies.
“We were one of the first companies in our sector to address the challenges facing our industry.
“As such, it is encouraging to see the impact of our Project Charge transformation programme and our improvement initiatives in the China market start to come through in our results.”
The car giant is currently going through a restructuring strategy to reduce costs, including a reduction in staffing levels. Dr Speth added: “Our people have responded very positively to the challenging circumstances over the past year.
“The improved performance this quarter reflects their ongoing passion and determination.
“Looking forward, we will continue our product offensive, broadening our range of electrified vehicles on the journey towards our Destination Zero future.”