Jaguar Land Rover Automotive plc today reported financial results for the three months ended 30 September 2020 (Fiscal Q2).

Jaguar Land Rover returned to profit with significant positive cash flow in Fiscal Q2 as sales and revenue recovered from the impact of Covid-19 in Fiscal Q1 but remain below pre-pandemic levels a year ago.

Retail sales of 113,569 units were up 53.3% from Fiscal Q1 with almost all retailers now open. However, retail sales in most markets continued to be impacted by Covid-19 and were down 11.9% in total year-on-year. Encouragingly, China retails were up 14.6% on the prior quarter and 3.7% year-on-year while global retails of the new Defender rose to 4,508 units in the month of September.

Revenue was £4.4 billion (on wholesales of 73,451 excluding the China Joint Venture), up 52.2% from Fiscal Q1, although down 28.5% from pre-covid levels a year ago.

Jaguar Land Rover generated a £65 million profit before tax (PBT) in the second quarter, up significantly from a loss of £413 million in the prior quarter but lower than the pre-covid PBT of £156 million a year ago. The improvement in the year reflects the recovery in sales, Project Charge+ cost efficiencies and favourable foreign exchange impact. Margins were also improved from Q1 with EBITDA at 11.1% and EBIT at 0.3%.

As expected, free cash flow was positive (£463 million), after £531 million of investment spending. The positive cash flow primarily reflects a £528 million recovery in working capital following the restart of production and the reopening of the global retailer network.

Cost and cash improvements from the Project Charge+ transformation programme in the quarter totalled £0.6 billion, including £0.3 billion of cost and £0.3 billion of investment savings. Total savings year-to-date are now £1.8 billion and the company is on track to achieve the £2.5 billion target for the full year ending 31 March 2021.

Jaguar Land Rover ended the second quarter of Fiscal 2020/21 with solid liquidity of £5 billion, comprising over £3 billion of cash and short-term investments and a £1.9 billion undrawn revolving credit facility. The company has since completed a $700 million five-year unsecured bond issued in October 2020, increasing pro forma September liquidity to £5.5 billion.

All of Jaguar Land Rover’s manufacturing facilities have now resumed production, with the plants at Solihull (UK), Halewood (UK), Nitra (Slovakia) and the Engine Manufacturing Centre at Wolverhampton (UK) now increased to two shifts as demand for the company’s vehicles has continued to recover.

A gradual improvement in sales is expected to continue and will be supported by new and refreshed products, including the short wheel-base Land Rover Defender 90, the refreshed Jaguar F-PACE, as well as 2021 model year Range Rover Velar, Jaguar XF and Jaguar XE. Furthermore, Jaguar Land Rover continues to expand its offering of electrification across its model range. Of the 13 nameplates in the company’s product portfolio, seven have now been revealed with plug-in hybrids and nine with mild-hybrids, in addition to the full battery electric Jaguar I-PACE. One more PHEV and two more MHEVs are expected to debut this fiscal year.