McLaren Financial Results 2022

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eMcL

Discussion Starter · 22 d ago

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https://investors.mclaren.com/sites/mclaren-ir/files/2023-05/mhl-audited-annual-report-and-financial-statements-2022.pdf

https://investors.mclaren.com/sites/mclaren-ir/files/2023-05/mhl-condensed-financial-statements-2022.pdf

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Iron5

· #41 · 21 d ago

McLaren needs to get the true Super Series successor on the road as soon as possible, otherwise it will be difficult to survive. The 750S is just a stopgap to prolong the life cycle of the 720S/765LT and is far from being seen as an independent and sustainable product.
The Artura is already dead in my eyes, this product will never get back into the profit zone, it is the wrong product in the wrong market segment for McLaren with so many shortcomings that can no longer be compensated.
Therefore, do damage control with the Artura and take the thing away from the market as soon as possible and concentrate 100% on the 720S successor and develop one or two more hyper cars.
And then, of course, a merger/acquisition would be very helpful...

Reactions: 2

mzivtins

· #42 · 21 d ago

Loss likely comes from the investment into the Artura platform and programme, a loss like that is not bad news or indicates a problem, like others have said, the company has a lot of equity and no shareholders to pay, it is a dream within the car world.

Lotus are now nothing but a Chinese shill company, 100% owned by China. Now Aston martin being nearly 1.3rd Chinese owned, we shouldn't be comparing a privately owned company like McLaren with Chinese filth like the modern Lotus company.

The British government needs to step up more and stop the aggressive expansion of the Chinese into market, it is a contradiction to allow this to happen yet simultaneously week in, week out say that China is the single biggest threat to this country.

Ban TikTok, then put Lotus back into the hands of western ownership 😆

As a parting gift, McLaren can make them a 725s like they did with the 625s 😆

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ZombiePhysicist

· #43 · 21 d ago

Iron5 said:
McLaren needs to get the true Super Series successor on the road as soon as possible, otherwise it will be difficult to survive. The 750S is just a stopgap to prolong the life cycle of the 720S/765LT and is far from being seen as an independent and sustainable product.
The Artura is already dead in my eyes, this product will never get back into the profit zone, it is the wrong product in the wrong market segment for McLaren with so many shortcomings that can no longer be compensated.
Therefore, do damage control with the Artura and take the thing away from the market as soon as possible and concentrate 100% on the 720S successor and develop one or two more hyper cars.
And then, of course, a merger/acquisition would be very helpful...

Wow that's pretty harsh on the Artura. I think it's way too early to put a fork in it. Expecting the car to launch with absolutely zero issues, when it's a complete 1.0 car, IMO, seems a bit unrealistic. Now that a bunch of cars are out, I don't expect the worst of the problems to be settled for around 6 months at best, to a year at worst. But somewhere around there, all the early teething problems should be fixed (hopefully most with software).

Anyway, you may be right, but I certainly hope youre wrong and folks are a touch more patient.

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ramoq

· #44 · 21 d ago

334.7M GBP = $415.22M USD

They report in british pounds.

If Aston Martin tuned it around (big time, even in F1!), McLaren has hope.

roundincircles

· #45 · 21 d ago

When Ron Dennis set up Automotive he said there had to be a 3 model strategy in order to justify the minimal organisational overhead required to sustain the business. In simple terms, the design, engineering and styling functions needed a 3 model strategy to be fully engaged and motivated.

He then said there were volume/price threshold realities to fund the overhead, development, investment and scale.......something like 3000 and 5000 units, iirc.

What subsequently happened when Ronny was thrown out was focus on volume with no acknowledgement that build integrity had an impact.....the Brand was destroyed by these goals and actions......and value was destroyed.

So now there is a management structure that understands the finance and operation of a niche car company. Recruitment has brought in that experience.

So the shareholder keeps increasing investment/equity as they have no choice (other than closing operations) until value is created and, thus options of sale or cash generation arrive.

Why would anybody buy Mclaren in it's current state?

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eMcL

Discussion Starter · #46 · 21 d ago

What makes you (@roundincircles) think McLaren is for sale - the current Bahraini owners have deep pockets and want to own a very visible (with an F1 presence) automotive company.
And the learning experience/cost for developing a completely new architecture vehicle introduction has been paid for twice - McLaren is now a ‘seasoned’ company.

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SSO

· #47 · 21 d ago

McLaren needs to get the recapitalization done asap.

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eMcL

Discussion Starter · #48 · 21 d ago

SSO said:
McLaren needs to get the recapitalization done asap.

Yes.
Part of the present value to current ownership appears to emanate from Bahraini regional pride…which thankfully is high

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SSO

· #49 · 21 d ago

eMcL said:
Yes.
Part of the present value to current ownership appears to emanate from Bahraini regional pride…which thankfully is high

Might also have something to do with they are in very deep and walking away right now would be financially disasterous.

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invisiblewave

· #50 · 21 d ago

SSO said:
Might also have something to do with they are in very deep and walking away right now would be financially disasterous.

You know we're all waiting for your brief analysis of these results, right??? 😁 As Alex pointed out, there's clearly a lot more to it than simple profit/loss, but those of us who suffered through double-entry book-keeping at college and then dropped it and never looked back are anxiously waiting on some erudite bean-counter analysis for a better understanding.

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eMcL

Discussion Starter · #51 · 21 d ago

SSO said:
Might also have something to do with they are in very deep and walking away right now would be financially disasterous.

Saudi Arabia in the wings ….

Reactions: 1

Iron5

· #52 · 21 d ago

mzivtins said:
Loss likely comes from the investment into the Artura platform and programme, a loss like that is not bad news or indicates a problem, like others have said, the company has a lot of equity and no shareholders to pay, it is a dream within the car world.

Lotus are now nothing but a Chinese shill company, 100% owned by China. Now Aston martin being nearly 1.3rd Chinese owned, we shouldn't be comparing a privately owned company like McLaren with Chinese filth like the modern Lotus company.

The British government needs to step up more and stop the aggressive expansion of the Chinese into market, it is a contradiction to allow this to happen yet simultaneously week in, week out say that China is the single biggest threat to this country.

Ban TikTok, then put Lotus back into the hands of western ownership 😆

As a parting gift, McLaren can make them a 725s like they did with the 625s 😆

The greatest threat to Britain are the Brits themselves. Because slowly the question arises, what are the Brits still capable of besides drinking beer and having big mouths? Land Rover, Jaguar, Rolls-Royce, Bentley all brands that are doing well since someone outside the island has taken over. And now they have outsourced the office of the prime minister to India, an act of enlightenment? (ok, maybe I'm not understanding something correctly here...)
Well then, with the German Michael Leiters, the first step in the right direction has finally been taken at McLaren as well...

Reactions: 1

Machiavelli

· #53 · 21 d ago

I hated reading Financial statements when I was getting paid for it, I certainly ain't going to read all 77 pages for free.😁

In a nutshell, the financials suck, most of the equity is intangible assets, ie capitalized development costs.

There is value in the company via the brand which has grown, it's called goodwill in accounting parlance and someone I suspect would be willing to pay well over book value, that premium being the goodwill value, to acquire the company should it need a rescue.

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unmac

· #54 · 21 d ago

What’s the need for the cars to be assembled in u.k. ? It’s probably the highest labor rate anywhere .

significant intangibles capitalized . Heavy lifting of research and development has already hit the cash flow for future cars.

Change in accounting policy with regards to how/when to amortize the intangibles . Before it was to amortize it with every car built and now it is to be amortized over the expected product run on a straight line basis . This change caused approximately 36 million pounds to be amortized in 2022 vs the old method.

new management sort of falling on the sword from an accounting point of view to get a clean slate and clean up financials from previous management .

on another note ; arturas to be built for the remainder of this decade …

Reactions: 3

eMcL

Discussion Starter · #55 · 21 d ago

unmac said:
What’s the need for the cars to be assembled in u.k. ? It’s probably the highest labor rate anywhere .
……….

This

www.dmarge.com

From The Factory To The Freeway: How Aston Martin Makes Automotive Perfection

We visited Aston Martin' factory in Gaydon, England and then drove the brand's most mental grand tourer to find out what makes Astons so special.

www.dmarge.com

Reactions: 1

GVIrish

· #56 · 21 d ago

Yeah I don't think there's any way in hell it makes sense to short cycle the Artura. That would sink the company. McLaren already sank a shitload of capital into the car and it's already here, now it's time to sell it.

JoeZaff said:
It seems to me, that instead of an SUV--which may or may not meaningfully help their bottom line (See Aston Martin) but would require heavy investment, they should do something simple. Take an existing platform, detune the motor, invest in a manual transmission, decontent and simplify the car to basics, and pump out a simple "raw", light sports car for "purists."

This is the best idea I've seen here in awhile. McLaren has the expertise and production facilities to build such a car as is. It's not a huge risk, and I think there's a real appetite for such a car. The Artura is about 33% more expensive than the 570S, so a lightweight purist car could fit in right at or below the price point the 570S had. Make it as light as possible, slap the V6TT in there and go for it.

I think a SUV could be very profitable, but it's also very risky. They must go with a partner for that platform because I don't think trying to go it alone is wise. Then there's the very real problem that the super SUV segment may be too saturated at this point. McLaren could still differentiate itself, but I wonder if there are enough customers there to make it worthwhile for the 6th or 7th entrant in that space. SUV's have far broader appeal than sports cars but to succeed McLaren needs to move some volume.

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unmac

· #57 · 21 d ago

eMcL said:
This

From The Factory To The Freeway: How Aston Martin Makes Automotive Perfection

We visited Aston Martin' factory in Gaydon, England and then drove the brand's most mental grand tourer to find out what makes Astons so special.

www.dmarge.com

That's just a fluff piece. No reason to build in a high labor rate area. More so, when they are hand built and take longer to assemble then a regular car. It's actually a good reason to not build it in the U.K.

U.K. government didn't bail them out during Covid.

Mclaren sold close to 1,000 cars to North America and 517 total to europe in 2022. That's what, maybe 150 cars in U.K. As previously stated by me; U.K. is an insiginficant market to Mclaren and all supercar makers. I don't see any compelling reason why these cars need to be assembled there.

Reactions: 2

invisiblewave

· #58 · 21 d ago

Iron5 said:
The greatest threat to Britain are the Brits themselves. Because slowly the question arises, what are the Brits still capable of besides drinking beer and having big mouths? Land Rover, Jaguar, Rolls-Royce, Bentley all brands that are doing well since someone outside the island has taken over. And now they have outsourced the office of the prime minister to India, an act of enlightenment? (ok, maybe I'm not understanding something correctly here...)
Well then, with the German Michael Leiters, the first step in the right direction has finally been taken at McLaren as well...

I agree with this without the racist comment.

Reactions: 1

herwawan

· #59 · 21 d ago

I really liked that Acura was building the NSX here in the US. I wouldn’t be opposed to see the Artura being built here as well.

Reactions: 1

eMcL

Discussion Starter · #60 · 21 d ago

unmac said:
That's just a fluff piece. No reason to build in a high labor rate area. More so, when they are hand built and take longer to assemble then a regular car. It's actually a good reason to not build it in the U.K.

U.K. government didn't bail them out during Covid.

Mclaren sold close to 1,000 cars to North America and 517 total to europe in 2022. That's what, maybe 150 cars in U.K. As previously stated by me; U.K. is an insiginficant market to Mclaren and all supercar makers. I don't see any compelling reason why these cars need to be assembled there.

Yes it is a small market; - as you are well aware the UK gave up on building cars many years ago In favor of banking and selling insurance …..

Reactions: 1

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