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POLARIS PROFITS PLUNGE

Full-year financial results for US motorcycle and ATV manufacturer Polaris Industries amply illustrated the company’s disaster-strewn performance in 2016.

Total annual revenue fell by 4.3% to £3.59bn. Operating profit slumped by 48.9% to £278.8m. Net income was more than halved, 53.2% down at £169.5m.

Core quadbike and side-by-side ATV sales had been ravaged throughout the year with repeated recalls, caused by overheating turbos on some models and defective fuel injection systems right across the range. Revenue from this sector dropped by 9.5% to £2.67bn.

Motorcycles, covering the Indian, Victory and Slingshot trike brands, managed a weak 1.5% revenue increase to £564m. But as fuel injector problems also emerged on Indian and Slingshot products — leading to further recalls — turnover from bikes shrank sharply by 35% during the final quarter. However, Polaris said that was due to production delays, Slingshot shortcomings and declining Victory input, and Indian sales had actually grown by more than 20% in the period.

Nine days into 2017, Polaris announced that it was killing off the Victory brand. One-off costs associated with the wind-down will be recorded in subsequent financial statements.

Putting the strongest spin on these lamentable figures as he could manage, Polaris chief executive Scott Wine said: “2016 was a difficult and challenging year. But our culture is geared to deal head-on with adversity and learn from it, and that’s what we did. In response to a series of recalls, we took the necessary steps to ensure that Polaris vehicles deliver the quality, safety and performance that our customers expect. We are relying on these enhanced improvements, consistent execution and aggressive innovation to regain our footing as the best in powersports.”

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