McLaren Racing declares £50m profit for 2009

McLaren Racing, the company name behind the F1 team, declared a profit of £50.1m in 2009, up from just £5.9m in 2008.

In addition to the leap in profits, turnover – which includes sponsorship and ‘Bernie money’ related to the Concorde Agreement – rose from £139m to £175m.

The team also paid a dividend of £15m to its parent company, the McLaren Group.

The numbers emerged last week when the team’s accounts finally reached the public domain, several weeks later than scheduled.

As is often the case with F1 team accounts all is not what it seems, and the profit figure was impacted by some changes within the McLaren Group, mainly relating to the Automotive division being moved out.

“Firstly it was not a bad year,” team principal Martin Whitmarsh told this writer in Brazil. “But the fact is it was enhanced by an artificial situation, which was the transfer or sale of Automotive by Group. So Group had an income from the sale of Automotive. It was more of an accounting issue. Overall it was a good and profitable year, but enhanced by some artificial organisational changes within the Group.

“It’s an unusual year because of what’s been going on. Racing has been the cash cow in our portfolio, Group has been loaning money to Automotive, we separated Automotive out, and Automotive had to pay money back into the group to balance that, so it was an accounting process. The fact is on our racing operation we are profitable, and all the other companies in the group have been making a profit.

“Inevitably any income helps – looking back at the last 20 years, if you look at it from an F1 perspective, we’ve generally had an operating profit. As a group we have been investing in diversifying, and that has influenced the shape of the accounts.”

One intriguing aspect is the payment from Mercedes. That fell from £44.2m in 2008 to £34.8m last year, presumably reflecting the fact that from the autumn onwards the manufacturer was in the process of backing out of the team to do its own thing.

That figure does not represent pure cash flow, but also takes into account the supply of ‘free’ engines. However Whitmarsh did not elaborate on the fall in 2009.

“I can’t comment on it because we have a confidential contract with Mercedes. We have an obligation within our accounts to disclose certain information, but our contract with Mercedes requires both them and us to treat it as confidential. So I can’t add to anything that it says in the accounts.”

The number of employees rose from 611 to 643, although the wage bill went down, presumably reflecting success bonuses paid out in the light of Lewis Hamilton’s 2008 title win.

The accounts also confirm that as of January 1 this year the shareholding in McLaren Racing was split between Bahrain’s Mumtalakat group (42%), Ron Dennis (21%), TAG Holdings (21%) and Daimler (16%).

Those figures have not changed since, but will do for next year, when the first three are expected to take control of Daimler’s stake.

“At the moment it is the Group that is buying back the equity from Daimler,” Whitmarsh confirmed, “unless there’s another interested investor.”

One intriguing number is the value of £5.4m accounting number placed on McLaren’s large collection of historic cars, including many driven by the likes of Senna and Prost. One assumes that their insurance and sale value is rather more than that…

2 Comments

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2 responses to “McLaren Racing declares £50m profit for 2009

  1. Mon Pen

    My O level accounting and the shameless geek in me tells me that 5.4m would be the lower of book cost and market value as required by International Accounting Standards…

  2. CTP

    i like these articles, adam, as we don’t see them elsewhere.

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