McLaren Racing Limited, the company charged with operating the group’s Formula 1 activities, posted a £13.2m loss last year, filed 2017 accounts show. The equivalent 2016 loss was £3.2m.
The company turned over £196.5m in 2017 versus £179.8 for the previous 12-month period, primarily from its F1 operation. Administrative expenses shot up from £54.9m to £70.7m, with headcount increasing from 675 to 706, although overall employee costs registered a negligible increase.
According to the filings, the employee split by department as at 31 December 2017 was: 354 heads in production, 260 responsible for design and engineering and 92 employees in administration.Although not reported separately, McLaren’s share of Formula 1’s 2017 revenues is estimated at £75m (including £25m in historic championship bonuses), indicating that revenues from other sources were £108m, including £90m in sponsorship income. Honda, with whom McLaren acrimoniously split after last season, is though to have contributed at least £60m.
During the course of 2017, McLaren earmarked an unspecified number of historic cars for sale to collectors, and thus transferred assets worth £22m from its heritage division to sales inventory. The company anticipates selling these cars over the next two to three years.
As revealed by RaceFans in May this year, McLaren raised £200m by selling 800,000 shares to Nidala, a British Virgin Islands-based company owned by Canadian billionaire Michael Latifi, father of F2 driver Nicolas. McLaren recently confirmed to investors that the deal will be completed in three tranches: £100m already received followed by £50m by the end of this year and a further £50m during 2019.
Having split from Honda and signed a subsequent three-year customer engine supply deal with Renault, McLaren’s Strategic Reports states, “The company’s objective is to build and strengthen our relationship with Renault and win races in the near future.
“In order to achieve these aims our focus is to ensure we continue to attract and retain the best drivers, engineers and support staff, and provide sufficient funding to the racing programme to build a car that can challenge at the top of the sport.
McLaren’s 2019 confirmed driver line-up consists of Carlos Sainz Jnr and rookie Lando Norris.
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2018 F1 season
- Honda’s jet division helped F1 engineers solve power unit problem
- McLaren Racing losses rise after Honda split
- Ricciardo: Baku “s***show” was Red Bull’s fault
- “Drive to Survive Episode 1: All to Play For” reviewed
- F1’s television and social media audiences rose last year
Dieter Rencken (@dieterrencken)
20th September 2018, 8:16
There’s an ironic twist in the financials, signed off by the board on 4 September 2018: The Introduction/Strategic Report states “Stoffel (Vandoorne) continues to develop into a hugely impressive Formula 1 driver, competing credibly alongside his vastly more experienced teammate [Fernando Alonso]…”
However, the previous day the Belgian had been advised that his services would not be required for 2019.
James
20th September 2018, 8:28
Just BS to keep everyone happy. You’re not going to say that anything is not going well, because that will reflect negatively on you as well. Almost as bad and pointless as driver interviews.
ColdFly (@)
20th September 2018, 8:28
This all leads to an expected bloodbath for the next accounts (2018 financials).
Does McLaren update half-year results, @dieterrencken?
– no more Honda subsidies (“at least £60m”);
– having to pay for the Renault engines;
– an even worse WCC (’17 vs ’16) position and lower FOM payouts overall;
– having to pay Alsono themselves (although this might be partly via KIMOA credits);
– some kind of ‘handshake’ for Boullier/others who were forced to leave;
– headcount increasing by 5% (will see full impact in 2018).
And no nett increase in sponsors; the 3 extra partners offset a similar amount leaving the ship.
Dieter Rencken (@dieterrencken)
20th September 2018, 8:32
I don’t believe McLaren file H1 results as they’re not (yet) a public company.
This provides more context, but remember the filings as reported refer to period ended 31/12:
https://www.racefans.net/2018/08/22/matrix-revolution-exclusive-interview-mclaren-zak-brown/
Peter Scandlyn
20th September 2018, 20:54
@coldfly and the loss of part of their crown-jewel collection in the sell off to aid settlement with Ron.
Way to go guys…..
Jimmi Cynic (@jimmi-cynic)
20th September 2018, 8:50
Wonder how Ron feels about his former team. He ousts Whitmarsh, brings in Honda and Alonso and the team performs worse. Ron is ousted, Honda is ousted and the team performs worse. The team’s pathetic performance ousts Alsonso and…
There’s a spectacular soap opera if not a what-not-to-do racing story waiting for Netflix to make into a 5 season series. Maybe McLaren could make some extra money there.
The current decade has not been kind to McLaren and Williams. Painful to watch their backmarker status season after season.
Todfod (@todfod)
20th September 2018, 10:38
@jimmi-cynic
It’s kind of sad and funny at the same time.
Although you can’t blame Ron for much. Whitmarsh dropped the ball big time in 2012. That was a championship that they should have won if it wasn’t for operational issues, lack of attention to detail and poor management of drivers. All of which points towards an extremely poor performance by Whitmarsh.
At the end of the day, the real disaster was partnering up with Honda. In hindsight we can say that Ron Dennis made a bad decision, but the importance of being a works team was paramount at that time. Mercedes was putting all their focus on their works team and it was the only option for Mclaren at the time. It was the new regulations more than anything that put McLaren in their dire situation.
Jere (@jerejj)
20th September 2018, 10:42
@todfod The loss of the chances for the title(s) In 2012 was primarily down to unreliability, though.
Todfod (@todfod)
20th September 2018, 11:02
@jerejj
I would put a decent amount of blame on whitmarsh for not handling reliability issues better as well. They were too reactive and not proactive enough in that season.
Plus, he actually managed to lose Hamilton to Mercedes..
anon
20th September 2018, 17:46
@todfod, mind you, it could be pointed out that Ron is often cited as being the one responsible for eventually poisoning the relationship with Mercedes and making them want to set up their works team in the first place – so the problem of not being a works team was one that he ultimately created in the first place.
The other question is whether Whitmarsh really did have quite as much of a free had to run the team in the first place, because there were suggestions that part of the reason for that slump was because there was internal fighting due to the fact that Ron was trying to push Whitmarsh out – it was more evident in 2013, and Perez has indicated that, when he was there, that the team was being badly split by internal fighting as Ron became more assertive, but it seems that those divisions were already present back in 2012.
socksolid (@socksolid)
20th September 2018, 10:41
Mclaren has already almost two times as many points this year compared to full last year. This year has been better for mclaren than last year. Sure it has been nowhere near perfect but the direction was upward. Getting rid of honda was excellent decisions for mclaren for all the reasons except financial.
Asanator (@asanator)
20th September 2018, 12:27
@socksolid
I’m not sure about that, the only reason they have more points is that Haas, Renault and Force India keep dropping the ball.
BMF66
20th September 2018, 12:46
That’s the point of F1! To not drop the ball.
McLaren are better without Honda. Honda are still the worst and will continue to be.
Jere (@jerejj)
20th September 2018, 13:42
@BMF66 ”Honda are still the worst and will continue to be.”
– Yes, that could very well still be the case although It’s been more difficult to judge this season due to the fact only a small team is using the Honda PU rather than a large(ish) manufacturer team such as Mclaren. Next season will be more telling since one of the biggest teams will be using it.
praero
20th September 2018, 12:53
Excactly, they pick up clearly left overs. Some points also on their all to loose strategi sometimes pays off, and when it fails and Alo is at the back on pure lacking speed, he drops out of race somehow, never ends deadlast…
Boy did they manage former racing knowledge bad..
KG
20th September 2018, 13:33
Can you also tell us the next Lotto winning combo with your crystal ball, please.
KG
20th September 2018, 13:41
I meant to reply to BMF66’s there, sorry.
KG
20th September 2018, 13:27
KG
20th September 2018, 13:30
Sorry I messed up with the blockquotes. A revise button would be nice!
socksolid (@socksolid)
20th September 2018, 19:21
You are incorrect about about red bull’s reliability. Last year red bull had 11 DNFs up to this point in the championship. This year red bull has had 9 DNFs. Fewer DNFs than last year. Renault has also had less DNFs this year (5 vs 7). Same with haas, 6 vs 7. Did you check the numbers before you wrote that?
This year mclaren has a worse chassis than last year (when everybody else made a step forward in downforce levels). The opposition has also been harder with haas having very good car, ferrari engine taking a big step forward and renault factory team being very good as well. Force india is still strong and williams still has merc engine which makes them a threat for mclaren on faster circuits. If anything it is tougher for mclaren to score points this year. And they have twice as many already. The renault engine is probably worth 2s per lap compared to honda. Meanwhile toro rosso has to get lucky to get as many points as they did in 2017.
When hamilton moved to mercedes nobody doubted that merc can make a great engine. It was whether they could make a great chassis and win races. Many people don’t want to remember but back when honda was coming in f1 people were saying honda will come and win everything. They have full year to develop their engines when others are racing, honda can look at different ways of making the engines and pick the best approaches and technically run unlimited simulations. In the end it was a pure disaster. And after 3 years it was still a pure disaster.
I have trouble taking people seriously who put so much blame on mclaren when it is just so blatantly obvious the honda engine had and still has massive issues. It feels like we live in different universes when I read some of the stuff…
David BR (@david-br)
20th September 2018, 20:55
@KG
Or a preview button at least. Sorts out formatting issues, plus it’s easier to catch other errors (albeit not content errors…)
socksolid (@socksolid)
20th September 2018, 19:02
Haas and renault are also a lot faster this year than they were last year.
KG
21st September 2018, 12:41
…to reply to your message up there. I just want to say we are just fans of the sport, there is really no need to get so worked up about something we can only see from the outside. (Unless you work for McLaren, of course.) The fact is though McLaren has now ran all 3 engines since the hybrid era started (Ferrari probably won’t ever supply them) and remains midfield though out. They have just sacked their team manager and planning more reshuffling. They obviously recognise the problem was not just Honda engines. I have no crystal ball to see what will happen next year with McLaren and Red Bull. And I look forward to it.
ps If there is an alternative F1 universe to live in then I would to live in one where Alonso is still at Ferrari and fighting with Lewis Hamilton in a Mercedes, maybe with Max also challenging.
Esploratore (@esploratore)
22nd September 2018, 1:11
@socksolid I agree with almost all you said, but I think you’re exagerating how bad honda is, I really don’t believe they’re 2 sec off renault now, only a couple of tenths if that, that’s why red bull decided to take the gamble, but we’ll see next year ofc, red bull is a great way of comparison for the honda engine.
dio
20th September 2018, 10:02
Is it true about the wrong gear ratios? and if they are wrong they can’t be fixed for a year? what kind of rules are that….
praero
20th September 2018, 12:56
Yep, only McL seems to have dropped all but the ball, having none it seems
V12Fan
20th September 2018, 13:49
Selling the seed corn, as it were.
I wonder how much they’ve paid Alonso over the same time period. Perhaps they could have just given him the keys to a couple of heritage cars, which he could have sold for cash…