Around 3,700 people work at Jaguar Land Rover at Halewood in Merseyside assembling the Range Rover Evoque and Land Rover Discovery Sport – two of its best selling models. Tony McDonough reports
Carmaker Jaguar Land Rover (JLR) is reporting pre-tax profits of £662m for the year to March 31 with a big chunk of the total coming in the final quarter.
JLR, which employs around 3,700 people at its plant at Halewood in Merseyside, said pre-tax profits for the final quarter of its fiscal year came in at £534m. The company was hit badly by the COVID-19 pandemic both in terms of sales and production.
The business continued to recover following the onset of the pandemic and retail sales in the fourth quarter were 123,483 vehicles, up 12.4% year-on-year. This was supported by a strong recovery in China, where sales grew 127% over Q4 last year.
Full year retails of 439,588 vehicles were still down 13.6%, although sales in China increased 23.4% year-on-year. Two of JLR’s best-selling vehicles over the past 12 months were its Merseyside-produced Range Rover Evoque and Land Rover Discovery Sport.
In 2021 the company announced its new global strategy to “Reimagine” the future of modern luxury by design and deliver double-digit EBIT margins by fiscal year 2025/26. This will entail £1.5bn of exceptional charges in the fourth quarter.
This includes £952m of non-cash write downs of prior investments and £534m of restructuring charges expected to be paid in the fiscal year 2021/22. After these exceptional charges, the company reported a pre-tax loss of £952m for the quarter and £861m for the full year.
JLR ended the year with total cash and short-term investments of £4.8bn, resulting in total liquidity of £6.7bn including a £1.9bn undrawn revolving credit facility (RCF), which runs to July 2022. Jaguar Land Rover has also completed an extension for £1.31bn of the RCF to March 2024.
For the fiscal year 2021/22, the business expects sales to continue to recover. The company is still targeting an EBIT margin of at least 4% and break-even free cash flow after £2.5bn of investment and £500m of restructuring costs that have already been accrued.
Earlier this year, as part of the Reimagine strategy, the company announced Halewood and all its other factories would be converted to produce electric-only cars, over the next few years. This follows a £22.5bn investment, as the company drives forward with the complete electrification of its Jaguar and Land Rover brands, by 2039.
More than £750m has been invested in infrastructure at Halewood in recent years, including: £250m for its Range Rover Evoque, the fastest selling Land Rover model of all time and £200m for the Discovery Sport.
During this time, Jaguar Land Rover Halewood has also seen the installation of two £60m state-of-the-art servo press lines, more than 300 new robots and over an acre of new building space, car parks and employee facilities.
Trevor Leeks, plant director at Halewood, told LBN: “We are proud to have our Merseyside manufacturing roots in Knowsley and of the contributions our business makes, not only to the local economy but also to the wider UK economy through our UK supplier contracts.
“We are passionate about investing in home grown talent and approximately a third of the workforce – around 1,200-employees- live in Knowsley.”
Commenting on the full-year results, Thierry Bolloré, JLR’s chief executive, said: “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.”