British luxury supercar maker McLaren sees profits accelerate as sales double to hit new record high
British luxury supercar maker McLaren Automotive has accelerated to its fourth consecutive year of profitability boosted by record global sales.
The Woking-based car maker spun out of the legendary racing marque sold a record 3,286 cars last year, almost double the number it sold in 2015.
And selling British-made supercars is proving a profitable business. Pre-tax profits at McLaren moved up a few gears to £9.2million in 2016 – 41 per cent higher than the £5.4million reported the previous year.
McLaren’s 570S Spider is its latest supercar, debuting at the Goodwood Festival of Speed
Profits were still behind the record £14.9million announced in 2014.
However, McLaren, which is investing heavily in new cars and technology, posted record revenues of £649.8million, a 30 per cent increase from £450.6million.
This pushed operating profit to a record £65.8million – a near trebling of the £23.5million recorded in 2015.
The rise was underpinned by selling 3,286 cars to wealthy buyers around the world, almost 10 per cent above the company’s own expectations.
The firm said its £129.1million investment in research, development and future vehicles represents 20 per cent of turnover and is a key part of its ‘Track22’ business plan to produce 15 new models or variants by the end of 2022 – the first two of which are now in production.
McLaren Automotive, which has been the subject of take-over speculation from China and computer giant Apple, says it is well on track to meet its target of building 4,500 cars by the end of 2022.
Bosses insist shareholders have not been tempted by the prospect of buy-outs or take-overs and say a better option would be a public flotation in three to five years.
In demand: The McLaren 720S is already sold out sold for this year with 1,500 orders taken
The company says its focus is on ‘sustainable and profitable growth’ with production capped at 5,000 cars annually. So despite an ‘extraordinary year’ McLaren Automotive says it will ‘never again see another jump in sales volume of this magnitude’.
McLaren Automotive, which was spun out of its F1 namesake six years ago, declared it ‘another record-breaking year for vehicle sales and financial performance’. The results mark the group’s fourth consecutive year of profitability in the six years since it started selling luxury sportscars and supercars.
To cope with the rapid expansion, its workforce has grown over the year by 8 per cent to 1,606 employees – with more jobs likely in the pipeline – and a second shift introduced at its hi-tech boutique plant in Woking.
It is also working on a fully-electric powertrain for a prototype car to evaluate its possible use in a future Ultimate Series.
Turnover at its bespoke sales division McLaren Special Operations is up by 147 per cent, with ‘Aftersales’ revenue 37 per cent higher.
The McLaren 570S Spider has a price tag that starts at a shade under £165,000
McLaren announced its results at the Goodwood Festival of Speed, near Chichester, in West Sussex, where it also held the world debut of its latest model, the 204mph 570S Spider.
This is the first convertible in the McLaren Sports Series and has a price tag starting £164,750 and can accelerate from rest to 62mph in 3.2 seconds.
It follows the first car launched under the ‘Track22’ plan in March, the McLaren 720S, which is already sold out sold for this year with 1,500 orders taken.
McLaren Automotive chief executive officer, Mike Flewitt said: ‘The positive financial performance in 2016 was underpinned by a 44 per cent increase in sales revenues and is further proof that McLaren Automotive’s growth plans are both achievable and sustainable.’
In its first full year of production, the Sports Series family accounted for 2,031 deliveries, mainly the McLaren 570GT and 570S models. The first generation Super Series, including the McLaren 675LT Coupé and Spider models which ‘sold out in a matter of weeks’, accounted for 1,255 sales.
The McLaren 570S is one of the high tech sports cars with which the firm is taking on Ferrari, Porsche and other rivals
McLaren Automotive chief financial officer Paul Buddin welcomed their ‘highest-ever operating profit’, noting: ‘The McLaren Automotive business continues to perform strongly, with 2016 returning a fourth consecutive year of positive financial results.’
North America remains McLaren Automotive’s biggest market with 1,139 sales – double the 2015 figure.
Sales in Europe at 996 cars are up 153 per cent with the ‘rapidly-developing’ Chinese market taking 228 cars.
The Asia Pacific region grew by 90 per cent while the newly combined Middle East, Africa and Central and South America region grew by a notable 69 per cent.
McLaren added to its 80-strong dealership network with new outlets in Bristol in the UK, Boston and Palm Beach in the USA, Australia’s Gold Coast, and Fukuoka in Japan.
McLaren Automotive’s global sales and marketing director Jolyon Nash said: ‘2016 was an extraordinary year for McLaren Automotive, with a near-doubling of sales and the completion of our 10,000th car.’
But he noted: ‘While we will never again see another jump in sales volume of this magnitude, the reception to the new 720S and the new 570S Spider has been incredibly positive and initial orders for both are beyond our expectations.’
McLaren Automotive was launched in in 2010 and its first car, the 12C, was unveiled in 2011
In May, McLaren appointed Dr Jens Ludmann as the company’s new chief operating officer to oversee the launch of the remaining 13 new models or derivatives over the next five years.
In January McLaren added a second shift at its Woking McLaren Production Centre factory – including 250 new jobs – to meet demand for its hand-assembled Sports Series models, boosting capacity at the plant from 10 cars a day to 20 and up to 5,000 vehicles annually.
In February it announced construction of a new £50million technology centre in Sheffield to develop and manufacture super-light but super-strong Monocell and Monocage carbon fibre chassis for future McLaren models, creating more than 200 new jobs.
McLaren Automotive was launched in in 2010 with its first car, the 12C, revealed in 2011.