JLR accelerates revenues and reduces full year losses
Luxury car marque Jaguar Land Rover reported increased revenues and reduced losses for the year to March 31, 2023.
The motor manufacturer employs thousands of staff at its plants in Halewood, Merseyside, and Solihull and Castle Bromwich in the West Midlands.
It published its annual figures this afternoon (May 12) which showed a 25% increase in revenues of £22.8bn, as micro chip supply improved further, together with the production ramp up of the New Range Rover and New Range Rover Sport.
A £64m pre-tax loss for the full year was a £348m improvement compared with a year ago, reflecting increased wholesale volumes with favourable mix, pricing and foreign exchange revaluation offset partially by higher inflation and supplier claims, largely related to volume constraints in the year.
For the full year, free cash flow was £521m with a positive EBIT margin of 2.4%, compared with negative cash flow and EBIT margin in fiscal year 2022.
As a result of the strong cashflow, net debt reduced to £3bn with cash of £3.8bn, even after repaying about £900m of debt in the fourth quarter. Total liquidity was at £5.3bn, including the £1.52bn undrawn revolving credit facility.
Jaguar Land Rover said its order book remained strong with about 200,000 client orders at quarter end, down from a peak of about 215,000 in the third quarter, as anticipated, reflecting higher retails and fulfilled orders this quarter.
Range Rover, Range Rover Sport and Defender demand remains particularly strong with about 152,000 client orders, which is 76% of the order book.
The Refocus transformation programme delivered £250m of value in the fourth quarter and exceeded the target of £1bn improvements in the year with £1.1bn delivered to help mitigate the impact of inflation.
The business said it expects the gradual improvements in chip supply to continue during the next fiscal year.
While supply challenges and macro risks remain, JLR is targeting to grow wholesales through the year and achieve EBIT margins of more than six per cent in financial year 2024.
Investment spending is expected to increase to about £3bn in the fiscal year, but free cash flow is expected to be more than £2bn and net debt is expected to reduce to below £1bn by FY24.
Adrian Mardell, interim chief executive, said: “JLR delivered a strong set of results for the fourth quarter. We increased production and delivered revenue, profit, free cash flow and wholesales growth as chip supply continued to improve.
“For the fiscal year ahead, while we are mindful of the headwinds that remain, our target is to increase EBIT margins to over six per cent and deliver significantly positive free cash flow to reduce our net debt further, while increasing investment to £3bn.
“With the collective strength of our people, we will continue to deliver our Reimagine strategy. Demand for our exceptional modern luxury vehicles remains strong and with a pipeline of ultra-desirable electrified models on the horizon, I am excited and confident for our future.”
