Williams’ financial health is improving
If Williams is experiencing a particularly difficult season on the track, its financial health is nonetheless improving compared to last year. In the first half of 2011, revenue increased by 5% and the group recorded a pre-tax profit of 1.7 million pounds sterling, an increase of 37% compared to the previous year.
Currently, Williams Grand Prix Holdings derives the vast majority of its revenue from its Formula One activities, through sponsorship and television rights. Frank Williams stated: “The first half of 2011 demonstrates our diversified growth, benefiting from the foundations we established in 2010. We have increased and extended our pre-existing partnerships with Randstad and Oris and have added Interbrand as a new partner.” It is relatively surprising that the founder of the team does not mention at all the massive arrival of PDVSA, linked to the appointment of Pastor Maldonado as a main driver. Yet, the Venezuelan oil company has a prime spot on the Grove race cars and has helped compensate for the departure of many other partners, notably AirAsia.
But beyond the F1 team, the group also includes Williams Hybrid Power and the technology center based in Qatar. These two entities aim to use technologies from F1 to apply them to other areas of the automotive industry or transportation in general. This is starting to pay off as the company accumulates announcements of new partnerships with a wide variety of companies. One of the most significant is the agreement reached with Jaguar around the development of the C-X75 supercar, for which Williams will handle part of the development. This will undoubtedly translate into cash.
The activity of Williams Hybrid Power has thus resulted in additional revenues and profits for the group, as stated by Adam Parr, its CEO: “The results as of June 2011 benefit from the full ownership of Williams Hybrid Power, which has generated its first significant revenues, while we are ramping up our flywheel production following our successes with spare parts manufacturers in motorsports.” However, the Doha center remains a cost center for the group as it has not yet been able to find its first client for an application outside the group: “We have also accelerated the development of the Williams Technology Centre in Qatar, where our efforts to acquire our first client are beginning to bear fruit.”
In order to strengthen its board of directors, the Holding has decided to appoint two new non-executive directors. Thus, Mike O’Driscoll has retired as CEO of Jaguar and now holds the position of Chairman of Jaguar Heritage, responsible for enhancing the immense history of the British manufacturer. He will undoubtedly serve as a liaison between the Jaguar and Williams teams regarding the development of the C-X75, which he initiated. As for Edward Charlton, an advisor at Citibank, his profile, heavily oriented towards investment banking, will attract investors and reassure the team’s minority shareholders.
Indeed, despite these strong economic performances and the prospect of revenue growth over the year estimated between 12% and 20% (despite a probable decline in television revenues due to a lower placement in the constructors’ championship compared to this year), Williams’ stock price is not doing well. Although it was introduced at a unit price of 25 euros on March 1st, it is now trading at around 15 euros, which represents a 40% discount in just six months.
With the participation of RacingBusiness.fr
