LONDON, April 27 (Reuters) - The Williams Formula One team made a loss of 42.5 million pounds ($64.34 million) in 2014 but said on Monday they expected a significant improvement next year once they are over the lingering 'hangover' of past failure.
"What we are reporting today is essentially a hangover," Chief Executive Mike O'Driscoll told reporters.
The team loss, with turnover of 71.2 million, compared to a profit of 11.9 million and turnover of 106.0 million in 2013.
Frankfurt-listed Williams Grand Prix Holdings said the group as a whole reported turnover of 90.2 million in 2014 with a loss of 34.3 million, compared to 130.4 million and profit of 11.9 million in 2013.
However, O'Driscoll said the 2013 figures had been inflated by a 20 million pound settlement from departing Venezuelan sponsor PDVSA that covered 2014 but had to be recognised in the previous year's accounts.
The 2014 figures also included bonus payments of 3,000 pounds for each of the group's 660 employees as a result of the team finishing third overall last season, while engine costs doubled with the debut of a new hybrid power unit.
Former champions Williams, currently third after four races this year, reversed a "decade of decline" in 2014 after the nadir of ninth overall in 2013.
Revenues from the commercial rights holder are paid a year in arrears, however, meaning that the 2014 figures reflect the previous year's dismal showing and reduced sponsorship income.
O'Driscoll said Williams had pressed the reset button in 2013, with a change of key personnel as well as a decision to divest the company of non-core businesses and develop advanced engineering.
"While 2014 at first glance was disappointing, it really was exactly what we anticipated. We're on track," he added. "We expect 2015 to be materially, significantly, better than 2014.
"We're going to see higher commercial rights revenue flow through, in fact we are starting to see that flow through now... and we are starting to see higher revenue flow through from increased sponsorship deals."
Williams can also expect a 60 percent increase in revenues from F1's commercial rights holder to boost their 2015 figures.
Champions Mercedes, who provide Williams's engines, Ferrari and Red Bull operate on significantly greater budgets -- at least double -- than the Grove-based team but deputy principal Claire Williams said they could hold their own.
"We have to work harder and smarter," she said.
$1 = 0.6605 pounds Editing by Sudipto Ganguly