Williams Grand Prix Holdings has reported a loss of £34.3m for 2014 – but the company insists that this year will see a much better financial performance.
Revenues were down from £130.4m to £90.2m, but the much better results achieved on track last year will be reflected in more money coming in this season from both sponsors and commercial rights income.
In 2013 the group made a profit of £11.9m – when results were boosted by a significant extra payment related to the departure of PDVSA and Pastor Maldonado to Lotus.
Better form, more costs
In a statement the company noted: “In 2013, following a number of years of deteriorating performance, Williams embarked on a turnaround strategy to reinvigorate the performance of the Formula 1 team and put in place the foundations for a profitable engineering business. Consequently, and as anticipated, 2014 was a year of transition and the financial results reflect a year of higher costs in a sport in which commercial rights revenue is earned a year in arrears.
“The loss was driven by lower revenue and higher costs in the Formula 1 operation. More than half the reduction in revenue is due to the recognition of a one-off sponsorship payment for 2014, which had to be recognized in the 2013 financial statements. It was also the result of lower commercial rights and partnership income due to our ninth place finish in the Constructors' Championship in 2013, and the impact of the sale of the Williams Hybrid Power business earlier last year. The higher costs were attributable to the introduction of the new hybrid power unit into Formula 1, and investment in the Group's operation to turnaround its performance.”
Poor results take their toll
Group CEO Mike O'Driscoll noted: “Mid-way through 2013 we set out on an ambitious turnaround strategy to reinvigorate the Formula 1 team, create a strong and profitable Advanced Engineering business, and divest non-core activities. In 2014 we made very good progress against those objectives, investing significantly in people, facilities, and technology which we believe will provide a solid foundation for the future.
“The financial performance of the Group in 2014 reflected the poor on-track results of the prior three years, which resulted in a marked deterioration in commercial rights and sponsorship income. Last year was also adversely impacted by the costs of relocating our Advanced Engineering activities.
“Our much improved performance in the 2014 Championship will be seen in higher commercial rights and sponsorship income in 2015, coupled with improved performance from our Advanced Engineering division. Our ambition in 2015 is to consolidate the progress we made last year, continue building the necessary foundations for future sporting and commercial success, and consequently to materially improve our financial results for the coming years.”