McLaren Group records £175million revenue drop

The McLaren Group has posted a revenue loss of £175million for the first quarter of this year compared to the same period in 2019.

The figures obviously provide the backdrop to the company's announcement earlier this week that 1,200 staff are to be made redundant, representing a 30% reduction from its current 4,000-strong workforce across its three divisions of Racing, Automotive and Applied.

Overall revenues have fallen from £284m in the first quarter of 2019 to £109m this year, while EBITDA [earnings before interest, taxes, depreciation, and amortisation] have dropped from £22m to £-80.5m.

The main shortfall comes from Automotive as vehicle sales, naturally affected by the start of the Covid-19 pandemic, fell from 953 to 307.

In terms of the Racing division, revenues were down by £4.4m, driven by a lower Formula 1 prize fund and the sale of three heritage cars in 2019, and partially offset by £4.1m of increased sponsorship.

Earlier this year McLaren was forced to furlough around 3,000 staff to aid its financial situation, with the remaining 1,000 taking a 20% pay cut.

In addition, there was a £300m equity contribution from shareholders designed to support the execution of a strategic plan initiated prior to the pandemic.

Aside from the job losses, the Group has confirmed it is "currently looking at a number of potential financing alternatives, secured and unsecured, of up to £275m equivalent to strengthen its liquidity position".

On the plus side, the Group has been active in helping fight Covid-19, working as part of the Ventilator UK consortium in producing ventilator components.

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