06/11/2023
JLR has continued its strong performance of recent quarters with another set of positive results for the second quarter of FY24, as supply constraints continue to ease, enabling more vehicles to be delivered to clients.
Revenue in Q2 FY24 was £6.9 billion, up 30% vs. Q2 FY23 and flat compared to Q1 FY24, impacted by the planned summer shutdowns. Revenues for the six months to 30 September 2024 were a record £13.8 billion, up 42% from £9.7 billion a year ago, due to increased volumes, improved mix and pricing. The higher revenue reflects higher wholesales of 96,817 in the quarter and of 190,070 in the first half, both up 29% year-on-year.
Profit before tax and exceptional items in the quarter was £442million, up from a loss a year ago and up slightly from the £435 million in the first quarter. EBIT margin was positive at 7.3%, up from 1.0% a year ago but slightly down from 8.6% in the first quarter. The higher profitability year-on-year reflects favourable volume, mix, pricing and foreign exchange revaluation, offset partially by higher fixed marketing and selling costs. Profit after tax in the quarter was £272 million, compared to a loss the same quarter a year ago and a profit of £323 million in Q1 FY24.
Free cash flow for the period was £300 million. At the end of the quarter, total cash was £4.3 billion and net debt was £2.2 billion, with gross debt of £6.5 billion. Total liquidity was £5.8 billion including the £1.52 billion undrawn revolving credit facility maturing in March 2026. In October 2023, JLR completed a buyback of c. $400 million equivalent of its outstanding bonds which will be included in the financial results reported for Q3 FY24. The buyback demonstrates the recent strong financial performance of the company and resulting liquidity.
The order book remains strong with over 168,000 client orders at quarter end, with Range Rover, Range Rover Sport and Defender continuing to make up a significant portion, accounting for 77% of the order book overall.
Looking ahead, production and wholesale volumes are expected to gradually increase in H2 FY24. The EBIT margin for FY24 is now expected to improve to around 8% compared to the 6% plus previously indicated. We continue to expect Free Cash Flow of over £2bn in FY24 with net debt reducing to less than c. £1bn by the end of FY24.
