Lotus bosses yet to decide on regional growth fund offer - as figures show scale of its losses last year
PUBLISHED: 06:30 18 January 2013 | UPDATED: 12:44 21 January 2013
Norfolk carmaker Group Lotus is still to confirm whether it intends to take up an offer of government cash to fund a proposed turnaround plan – as figures show that the Hethel-based firm racked up a staggering £115m in losses last year.
In October 2011 Lotus successfully secured £10m from the government’s Regional Growth Fund aimed at driving forward a plan by former chief executive Dany Bahar to build five new models and create 1,000 new jobs at Hethel.
But, the plan went into reverse last January when the company’s banks pulled its funding. However, the EDP understands that the department for business is still receptive to paying out the money to the EDP Top 100 firm following DRB’s pledge to continue backing the company, but are still waiting for an approach from Lotus to see whether it would meet the criteria for generating new jobs and growth.
Last week Proton chief executive Dato Mohd Khamil Jamil insisted that the “best was yet to come” for the carmaker, adding that one of DRB’s top priorities when it took over the firm was to find ways of reviving the Lotus brand.
Lotus, which employs about 1,400 staff, said that it produced 1,000 cars at Hethel in the last calendar year of which 95pc were for export to North America and Asia.
Under its revised plan, the car business will also focus maximising the sales of its current Evora, Exige and Elise models, while the engineering side will continue growing its third party consultancy business.
A Department for Business, Innovation & Skills spokeswoman said: “We are pleased that DRB-Hicom has restated its commitment to Lotus in Norfolk. The government is working with Lotus to assess the regional growth fund offer.”
But the scale of the issues facing Lotus were outlined in its accounts which covered the period to March last year. These showed that Lotus Group International Ltd made a loss of £118.8m – greater than its £118.1m turnover.
Separate accounts for Lotus Cars Ltd, which covers the Norfolk-based side of the business, showed that the company made a loss of £115.3m, with directors noting that rising operating costs combined “with investment into future product launches and brand enhancements” and falling sales in its car and engineering divisions adversely affecting the company.
It also revealed it had to write off £53.3m in ‘impairment’ charges.
“As the group continues on its journey of transformation and repositioning, it readies itself for challenging, yet exciting times ahead,” the directors’ report noted.
“The substantial investment needed to implement the strategies will impact the financial position of the group in the short term, but once the transformation has taken shape, the group will be in a much stronger footing operationally and financially, thus creating value for all its shareholders.”