Lotus on track for turnaround despite £12m losses
Sports car brand and engineering consultancy Lotus has reported a £12m loss last year despite an uplift in sales.
By SAM WILLIAMS, Senior business writer
Wednesday, 19 January, 2011
Latest accounts show Lotus Group International saw turnover rise 26pc to £139.3m in the year to 31 March 2010, lifted by orders of the firm’s latest model, the Evora.
But the company was hit by rising operating costs and currency fluctuations, resulting in £12m losses for the year.
Lotus has today confirmed it remains “on target” for a return to profit under a five-year turnaround plan.
The results also represent a 17pc improvement on the previous year in which the firm, owned by Malaysian car maker Proton, recorded losses of £14.6m.
Under the leadership of chief executive Dany Bahar, appointed in September 2009, the plan will involve increasing production from 2,700 to between 6,000 and 8,000 cars per year, including five new sports cars unveiled at the Paris Auto Show in October.
But it is unclear where the new models will be built.
The company is expected to submit a bid for £40m from the government’s Regional Growth Fund (RGF) by Friday, which would be used to expand its facilities at Hethel, which the company says would result in 1,000 new jobs.
But if the bid is turned down Mr Bahar has said he intends to shift production to existing European plants.
A spokesman for the company said: “Group Lotus’ five-year plan is on target, and we are on track to submit the RGF bid by the deadline on Friday.”
A directors’ report in the accounts said: “The financial year ended March 31 2010 was a challenging year for the group.
“Whilst an improvement on the past year, the growth of the group was restricted by the continuing weak market conditions, fragile consumer confidence, increased competition, cost pressures leading to increased operation cost and the volatility of the pound sterling.”
The Lotus Cars arm saw revenues increase by 35.3pc to £99.7m, it added, mainly down to Evora sales, selling 2,715 cars across 32 countries.
Hethel-based Lotus Engineering - the firm’s engineering consultancy operation - also recorded 7pc growth to £39.1m, resulting from a “sustained market-driven strategy” and efforts to “retain and enlarge its client base”.
The statement added: “Looking ahead to the new financial year, the primary focus is to ensure that the business continues to grow using the resources available while introducing additional measures to control operational costs.”
The company is also offering a $1m “Exos Experience” to wealthy Lotus enthusiasts, offering a Lotus Type 125 for sale along with the opportunity to drive the Formula One-inspired car on a racing track.
Three have already been sold, with 15 potential further customers due to test the car in Abu Dhabi at the weekend.
Last week, police in the West Midlands began using a Lotus Evora as the UK’s fastest patrol car under a two week loan.