The Williams Formula One team made a loss of £42.5 million pounds in 2014 but said today 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.

The Lewis Hamilton contract saga has finally come to an end, with the reigning Formula One world champion agreeing a new three-year deal with Mercedes reportedly worth up to €130 million..

The protracted negotiations have been the subject of much speculation and debate this season, having been locked in talks since the turn of the year.

However, Hamilton and Mercedes have at last reached an agreement, with the British driver signing a new deal for the 2016 to 2018 Formula One seasons inclusive.

"Mercedes is my home and I couldn't be happier to be staying here for another three years," he said after the deal was announced in Monaco.

"This is a company filled with real passionate racers, from the boardroom to the factory floor, and an incredible hunger to win.

"Even after the success of last year, that hunger is greater than ever - and it's the same for me, too.

"The Mercedes car I am driving right now is the best I have ever had in my career; it's just so much fun to be out there every weekend, on the limit and fighting to win at every track.

"Mercedes-Benz began supporting me in 1998 so I am very proud that this contract means I will mark 20 years with Mercedes in 2018."

Hamilton joined Mercedes in 2013 having gone from junior racing to Formula One champion during his long association with McLaren, who used Mercedes engines until reverting to Honda this season.

The 30-year-old won his second world crown last year and has enjoyed a solid start to his title defence, winning three of the opening five races.

Mercedes team-mate Nico Rosberg pipped him to victory last time out in Spain and Hamilton arrives in Monaco looking to stop the German topping the podium here for a third successive year.

The Silver Arrows got Rosberg tied down to a new, multi-year contract last summer and Toto Wolff, head of Mercedes-Benz Motorsport, is pleased to have now sorted out Hamilton's future.

"Lewis' sporting track record speaks for itself and he is a great personality for the company" - Toto Wolff of Mercedes

"Continuity is one of the key factors for delivering success in Formula One and we now have that in place," he said of Hamilton, who leads Rosberg by 20 points.

"Lewis enjoyed a historic World Championship season with Mercedes-Benz last year and it was a priority for this season to renew his contract for the next term.

"We have taken the right amount of time with the process and not rushed ourselves.

"The result is a strong agreement that will enhance Lewis' association with the Mercedes-Benz brand and that recognises and respects the market value of Lewis and of Mercedes in Formula One.

"Lewis' sporting track record speaks for itself and he is a great personality for the company.

"Personally, I am looking forward to continuing to race with the strongest driver pairing in Formula One and to more historic achievements together."