MG Rover, the British car business bought for £10 last year, yesterday confounded its critics by announcing losses of £254m for last year - half the level lost under BMW ownership.
The group, widely expected to collapse soon after it was taken over by a Birmingham consortium on May 9 last year, said it was on track to break even by 2002 and make profits thereafter.
Strict cost controls, a £200m dowry from BMW and relatively buoyant sales at fixed margins helped Rover end the year with net cash of £329m.
Kevin Howe, the chief executive, said: "When we bought the company you would have to regard the situation as Rover's darkest hour. Trading circumstances were difficult but even with that backdrop we're encouraged we've outperformed our business plan."
The eight-month losses equate to full-year losses of around £375m, compared with the £780m Rover lost in 1999, the last full year of ownership as "the English patient" under BMW.
Mr Howe said the cash performance was even more critical. "A lot of experts and critics said we would run out of cash very quickly, even by September last year, but they were wrong."
The first £200m tranche of BMW's £500m dowry, repayable interest-free over 50 years, was paid on May 9 2000, with a second of £150m paid this year and an equal amount due in May next year.
Rover inherited 65,000 cars from BMW and sold on 24,000, while overall sales for its first eight months under renewed British ownership were 111,800. It expects to sell 180,000 units this year and 200,000 in 2002, with 50% destined for export.
The group, in the throes of restructuring under a new holding company, is pinning sales hopes on the launch this month of substantially revamped MG-badged versions of its Rover model range.
MG should represent 25% of group sales. Long-term prospects rest heavily on a new medium-sized car, due to be launched in early 2004.
A decision to go ahead, probably with the help of one or more partners to increase output beyond current plans, is due within the next few weeks.
The group employs 6,800, following the acquisition of the engine plant at its Longbridge site near Birmingham, and is recruiting staff.
Tony Woodley, chief car industry negotiator for the Transport and General Workers' Union , said: "The value of having a clear vision to take the company forward, a strongly committed workforce and a belief by everybody involved that there was life after BMW is clearly demonstrated by these [financial] figures."
