JLR sees out strong end to financial year

JLR made £534 million, with the profit figure for the full 2020-21 year at £662m from revenue of £19.7 billion, before exceptional charges.

In February the company, which has its engine manufacturing centre employing more than 1,000 at the i54 north of Wolverhampton, announced its new Reimagine strategy to deliver double-digit profit margins by 2025-2026.

This involves £1.5bn of exceptional charges in the three months to the end of March and £534m of restructuring charges expected to be paid in 2021/22. After these exceptional charges, the company reported a pre-tax loss of £952m for the quarter and £861m for the full year.

Revenue was up 20.5 per cent to £6.5bn led by strong sales in China and global sales of the new Land Rover Defender.

The business has continued to recover following the onset of the Covid-19 pandemic and sales in the fourth quarter were 123,483 vehicles, up 12.4 per cent year-on-year. In China sales grew 127 per cent over the same three months last year, when the impact of Covid-19 peaked in that market. Full year retails of 439,588 vehicles were still down 13.6 per cent, although sales in China increased 23.4 per cent.

Challenges

The Defender contributed significantly to retail sales, with 16,963 sold in the final quarter and 45,244 in the full year.

Adrian Mardell, JLR chief financial officer, said: “We are pleased to have been able to continue to generate improved cash flow and profitability in Q4, despite the ongoing challenges of Covid-19 on both retailers and the supply chain."

JLR is currently facing supply chain issues, in particular for semi-conductors, which are impacting production plans for the first quarter of the current financial year. The company is working closely with affected suppliers to resolve the issues and minimise the effect on customers.

For 2021/22, JLR expects sales to continue to recover.

Chief executive Thierry Bollore said: “In my first set of full-year results as CEO of Jaguar Land Rover, I have been encouraged by the company’s resilience and strong recovery during a uniquely challenging year.

"Despite the pandemic, this year has also seen significant positive change culminating in February with the launch of our Reimagine strategy focused on reimagining our iconic British brands for a future of modern luxury by design.

“Our strategy is ambitious and it will make us more agile, efficient and sustainable.

"Although it is still early days, we have made significant progress in implementing it. This has reaffirmed my confidence that we have the right strategy, the right people and the right product-plans to deliver against our targets. Jaguar Land Rover is well placed to emerge from the pandemic as a stronger and more resilient company that is able to navigate and capitalise on the opportunities ahead.”