Jaguar World Magazine XJR – Super-chargers. Nov 08 Back Issue

The credit crunch and the perilous state
of the world’s financial markets have
made for all too depressing reading in
the press of late, but that general tale of
quite justifiable woe seems to have led to a few
wrong conclusions as far as Jaguar Land Rover’s
financial health is concerned.
When, on 18 September, Tata issued a letter of
offer to its shareholders (see news, page seven),
it provided a chance to see Jaguar Land Rover
accounting figures for the first time in many years.
Previously, under Ford ownership and as part of
the Premier Automotive Group along with Volvo
and, until March 2007, Aston Martin, ‘standalone’
Jaguar Land Rover figures were never published.
Unsurprisingly, then, when Tata produced its letter
many journalists were keen to take a look. Sadly,
some also reported on a figure that showed an
overall JLR loss for the first six months of 2008,
without choosing to delve a little deeper.
Split into the final period under Ford ownership
(1 January – 1 June 2008) and the first month
of Tata’s ownership (2 June – 30 June 2008),
the figures show overall earnings before interest
and tax (EBIT, or operating profit) of US$688m –
approximately £372m. However, within the Ford
figures until 1 June is a provision for tax of some
US$912m, hence an indicated overall loss for that
period of US$383m (£207m). It is that figure that
many chose to seize upon, without asking any
further questions. Had they done so, they would
have discovered that as part of the sale process
Ford wrote off a number of assets and taxes against
Jaguar Land Rover, hence the disproportionately
high provision for tax figure, and the apparent loss.
The adverse headlines clearly took Tata by
surprise, as it issued a statement to clarify that
it believed the EBIT figure prior to adjustments
represented the true performance of Jaguar Land
Rover.