Williams’ financial health is improving
Even though Williams has just experienced its worst season on track with a ninth place in the Constructors' Championship, Sir Frank's team managed to increase its revenue as well as its profits.
The information highlighted by the team is, obviously, very positive. It shows that the Williams group (which includes, besides the F1 team, Williams Hybrid Power) recorded a 14.8% increase in revenue, reaching 104.5 million pounds sterling. This increase in revenue resulted in a 20.6% rise in profit before investment and taxes, reaching 7.6 million pounds. Thanks to a 30% increase in net profit, to 7.8 million pounds, Williams is able to present earnings per share up by 34.6%, reaching 81.10 pence.
Nevertheless, the situation is not as rosy as these flattering figures suggest. Indeed, while profits before investments and taxes have increased by £1.3 million, it is entirely due to the salary freeze and/or cuts accepted by the group’s executive committee. Thus, Frank Williams and Patrick Head waived all salaries from April to December 2011. As a result, Sir Frank’s remuneration dropped from £1,002,581 in 2011 to “only” £229,795. Similarly, his long-time associate saw his remuneration decrease from over £500,000 in 2010 to just over £100,000.
The decrease was less drastic for Alex Burns, the CEO of the holding company, and Adam Parr, the chairman of the team, who both accepted a 15% reduction in their 2011 remuneration, before seeing their original salary reinstated on January 1, 2012. They nonetheless benefited from their participation in the Williams Grand Prix Trust, which ensures, under certain conditions, 125,000 shares to Adam Parr and 100,000 to Alex Burns, which could result in substantial gains if the company’s value were to increase.
Furthermore, the company consumed a significant amount of cash during the last financial year, as it only had £4,410,023 available on December 31, 2011, compared to £27,249,978 a year earlier. At the same time, its debt level doubled from £2,423,420 to £4,860,346, resulting in a net debt of £450,323.
If the financial situation of the group remains relatively solid and sustainable to ensure its future, the predominant role of PDVSA in the sponsorship provided to the F1 team must certainly push its leaders to seek new significant financial partners. This is especially true since the team lost its title sponsor during the off-season, the American telecommunications operator AT&T.
With the participation of RacingBusiness.fr
