Jaguar Land Rover blames Covid-19 for £422m annual loss, ramps up cost efficiency plans and cuts jobs
Jaguar Land Rover has blamed Covid-19 for posting a £422m loss in the year to March, and has fast-tracked cost efficiency plans which include job loses.
Britain’s biggest car maker lost £422m before tax in the year to March and, although JLR posted profits in quarters two and three, it finished quarter four with a £500m pre-tax loss.
Fourth quarter retail sales were 109,869 units, down 30.9 per cent year-on-year, while full-year sales totalled 508,659 vehicles, down 12.1 per cent year-on-year.
Earnings Before Interest and Tax were almost break-even for the year at £24m (EBIT margin of -0.1 per cent was up 0.6 percentage points) and the company achieved positive cash flow of £225m in Q4. The firm ended the quarter with solid liquidity of £5.6bn including £3.7bn of cash and a £1.9bn undrawn revolving credit facility.
JLR puts the losses down to the effects from the Covid-19 pandemic, and with factories in Austria, Slovakia and China along with its UK plants, factory shutdowns were across the globe.
Production is now resuming in China, Slovakia and Austria and the firm is slowing switching production back on at Solihull, Halewood and its engine plants. Castle Bromwich, however, remains shut.
In response, JLR has raised its cost cutting target by £1bn to £5bn by March 2021. Contract-agency employees are facing the axe – as many as 1,100 jobs are at risk, according to the Financial Times.
On publishing the results, JLR CEO Professor Sir Ralf Speth, said: ‘In such uncertain times, I remain convinced that Jaguar Land Rover’s focus on its people, its innovative products and its Destination Zero mission will remain the key to navigating out of this global crisis effectively.
‘In China, we are beginning to see recovery in vehicle sales and customers are returning to our showrooms. Our operational fitness gives me confidence that we can weather this storm’.
JLR is confident sales will pick up during the coming months, with around 89 per cent of dealers currently being full or partly open.
Sales of the Range Rover Evoque were up by 24.7 per cent year-on-year and up 40 per cent for the all-electric Jaguar I-Pace.
JLR is pinning its hopes on the success of the new Defender that’s currently being fully rolled out to dealerships, along with new plug-in hybrid variants of the Range Rover Evoque and Land Rover Discovery Sport, and the facelift F-Type sports car.