Yahoo Finance McLaren races to record sales and profits as expansion plan takes hold
Sports car company McLaren’s ambitious expansion plan is firmly on track after the Woking-based business doubled the number of cars it sold.
McLaren sold 3,286 of its high performance cars in 2016, a 99pc increase on the previous year and a figure which beat the company’s own expectations by 10pc.
In just its sixth year of selling road - as opposed to racing - cars, the company reported revenues of £649.8m, a 44pc rise, and operating profit of £65.8m, 180pc higher than achieved the previous year. Pre-tax profits were up 70pc at £9.2m.
Announcing its financial results at Goodwood as the Festival of Speed started, the company also launched the 570S Spider - the first convertible in its Sports Series range of cars.
This is McLaren’s fourth consecutive year of profitability - something seen as a major achievement in an industry littered with smaller manufacturers who have crashed after failing to turn a profit.
The strong results come as the company continues to expand its manufacturing base. In February it announced it was bringing work back to the UK by opening a £50m plant in Sheffield where it will develop and build the carbon-fibre “tubs” around which its cars are built.
The new plant will generate annual savings estimated at £10m when fully operational in 2020 and will create 200 jobs, boosting the company’s workforce which grew 8pc during the year to 1,606.
Producing parts in Sheffield will also increase the amount of UK-produced parts in each McLaren car by about 8pc, meaning that each vehicle rolling off the company’s production line comprises 50pc British-built parts.
The strong financial results bode well for McLaren “Track 22” business plan revealed at last year’s Geneva motor show. Under this scheme, privately owned McLaren vowed to develop 15 new models in six years while tripling sales, taking it to a £1bn a year business producing about 4,500 cars.
Launching Track 22, Mike Flewitt, chief executive, said the plan would require heavy investment in cutting-edge technology and the latest results show McLaren invested 20pc of its total revenues - some £129m - in R&D during the year.
The plan will include more hybrid-powered cars, and the company aims to have half of its cars using this technology by 2022.
Jolyon Nash, executive director of sales called the performance “extraordinary” but noted that McLaren “will never again see another jump in sales volumes of this magnitude”.
Part of the surge has been driven by McLaren introducing an entry level range of cars which start at about £126,000 - a bargain compared to the company’s now discontinued P1, which had a £1m price-tag.
