Jaguar Land Rover (JLR) has said it’s made ‘significant progress’ so far on its audacious transformation plan, after reporting a pre-tax profit of £534m before exceptional charges in the first three months of 2021.
Results published yesterday (May 18) show the British car maker has begun the year strongly, but overall it will record an annual loss of £861m for the financial year ending March 31, and £952m for the quarter due to costs incurred through its transformation plan.
Announced in February 2021, the firm’s global strategy called ‘Reimagine’ will see the firm transition to an electric-focussed company and deliver double-digit EBIT margins by fiscal 2025/26.
It will entail £1.5bn of exceptional charges in the fourth quarter, including £952m of non-cash write downs of prior investments and £534m of restructuring charges expected to be paid in Fiscal 2021/22.
It’s these charges that have allowed JLR to slump to losses for the quarter and full year, it said.
During the first three months of this year, JLR shifted 123,483 vehicles – a 12.4 per cent rise year-on-year, supported by strong sales in China which grew 127 per cent over Q4 last year.
Full-year sales of 439,588 vehicles was still down 13.6 per cent, although sales in China increased 23.4 per cent year-on-year.
JLR said the Defender ‘contributed significantly’ to its sales tally, recording 16,963 units sold in Q4 and 45,244 units for the full year.
This has reaffirmed my confidence that we have the right strategy, the right people and the right product-plans to deliver against our targets
The British car maker also indicated £332m in profit and cash improvements relating to its Project Charge+ restructuring plan, including £155m of cost efficiencies and a £177m reduction in investment spending.
JLR said it brings Charge+ savings to £2.5bn in Fiscal 2020/21 and £6bn since the programme was launched in September 2018, ‘substantially exceeding the initial targets’.
JLR chief executive, Thierry Bollore, said: ‘In my first set of full-year results as CEO of Jaguar Land Rover, 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.
‘Jaguar Land Rover is well placed to emerge from the pandemic as a stronger and more resilient company that is able to navigate and capitalise on the opportunities ahead.’