Aston Martin's £53m F1 Dilemma
Fernando Alonso and his Aston Martin team at work // Aston Martin Media
Aston Martin's venture into the world of Formula 1 racing has, once again, concluded in a considerable financial deficit.
The recent revelation from the team places its loss for the 2022 season at a staggering £53 million. This is an increase from the £44 million loss posted in the previous year.
While the increase in loss is distressing for enthusiasts and stakeholders, it’s intriguing to delve into the financial dynamics of this upswing. Aston Martin did achieve a commendable feat by raising its turnover by over £32 million in the 2022 season through sponsorships and prize money. However, this couldn't mask the escalating costs associated with the new regulations in the same year.
In light of recent developments, Aston Martin restructured its operations, which has resulted in the team currently functioning as AMR GP Limited. This is a subsidiary entity of AMR GP Holdings Limited. Notably, the overarching financial outcomes across both entities largely mirror each other.
According to the latest public domain figures:
AMR GP's turnover for 2022 was £188,728,000, up from the previous year's £150,438,000.
However, the actual expenses to race — termed as 'cost of sales' — surged to £152,046,000 from 2021's £107,735,000.
Taking into account administrative expenses, government grants, and other income, the year 2022 saw a deficit of £52,915,000. For context, 2021's loss was £43,332,000.
On the workforce front, the team’s ongoing expansion was evident. The group’s staff costs were £54,983,000, marking a 10% increase from the prior year. Aston Martin employed a total of 504 personnel, segmented into 81 administrative roles and 423 roles in design, production, and technical realms. This number has seen a rise from the 401 staff in 2021.
As a testament to Aston Martin's dedication to the sport and their belief in the long game, they have significantly invested in new facilities at Silverstone. As of the end of 2021, the group was poised to spend nearly $65 million on the development of the "Aston Martin F1 Campus".
Lawrence Stroll is the executive chairman and part-owner of Aston Martin
However, the financial landscape wasn't entirely grim. For instance, the Aston Martin Lagonda road car segment made a marketing contribution of £19,208,000 to the F1 team, although it witnessed a slight dip of £844,000 from the preceding year.
A notable detail that emerged was the payment made to Falcon Racing Services Inc for the racing prowess of Lance Stroll. Aston Martin paid $1,835,000 in 2022, which is a decrease of $225,000 from 2021. In an interesting twist, Falcon reciprocated with a sponsorship income of $1,125,000 in the same year.
Lastly, as with its counterparts in the F1 arena, Aston Martin is not placing all its bets on racing alone. The creation of the Aston Martin Performance Technologies division signifies their intent to expand horizons. This division is envisioned to transform insights from the racetrack into tangible solutions for real-world challenges. The newly formed entity bagged its first contract in 2022 and looks ahead with a strong pipeline of prospective opportunities.