Lotus Confident Despite Losses

[Mark H]

http://business.edp24.co.uk/story.aspx?bra...3A41%3A20%3A280

 

 

Lotus confident despite losses

02 November 2005

 

STEVE COX

 

Postponement of two major contracts and the weak dollar put a severe dent in Group Lotus' financial performance, the sports car maker said yesterday.

 

The company, which employs 1300 people at Hethel, made a loss of £7.4m in the year to March 31 on sales of £162.6m.

 

Making about 350 redundancies cost the group £3.9m as it restructured its business - which provides consultancy services to car manufacturers - in line with the reduced workload.

 

Meanwhile, profit margins on strong sales of Lotus cars in the US were significantly reduced by the weak dollar.

 

On a more positive note, Lotus increased its spending on research and development by 50pc during the year to £3.9m.

 

In a statement, the directors said: “Although the results for 2004-5 are on paper disappointing, we take heed from the fact that the majority of the loss contributions were beyond the company's control.

 

“We have initiated two schemes for the whole of Group Lotus to reduce costs, increase sales and increase profitability and we have already seen improvements within the business.

 

“With new products on the horizon which will introduce the Lotus brand to new customers and new markets for Lotus Cars and Lotus Engineering, we are confident about the future.”

 

Those new products include a GT-type car based on the Elise and a Lotus circuit car. Production of both cars is due to start in the spring or summer of 2006.

 

A new mid-engined supercar is in development that is expected to enter production in Malaysia in late 2007. Lotus Engineering will be heavily involved in the engineering programme.

 

Group Lotus, which is owned by Malaysian car maker Proton, also said yesterday that production of Elise-based products reached its highest ever level in the last financial year, with 120 cars a week produced by the year end.

 

This was equivalent to 5500 cars a year, the highest volume of Lotus-badged products in the company's history, requiring a 50pc increase in manpower in the manufacturing division.

 

Looking ahead, sales volumes were expected to remain steady, with the introduction of the Lotus brand into new markets such as Canada and the Middle East.

 

The group is also upbeat about prospects in China, where it has had an engineering consultancy office for the last year.

[Snapper]

Well if they got this new Europa out in the dealerships then they may have sold some more cars in the UK. They are only planning to sell 35 of the new Europa in the first year to the UK markets. Hmm no wonder they arn't making money.

[AndyS]

Sad news again, my sympathies are with the workforce who yet again face an uncertain Christmas - been there done that, got out before they got me.

[Cowboy]

Yes sad news- it also mentions supercar to be built in Malaysis- this isn't the case now as all tooling back to uk.