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11 November 2008

Lotus – Year End Financial Results to 31 March 2008

Improvements in efficiency, careful cost cutting, together with steady sportscar sales and increased 3rd party engineering consultancy sales, contribute to a £2 million profit for Lotus Group International Ltd, (LGIL). Investment into R&D and new products rises by 95%.

Lotus Group International Ltd, which includes Group Lotus plc, the global sports car manufacturer and engineering consultancy, has filed and had published its financial results for the year ended 31st March 2008:

Commenting on the latest financial figures, Mike Kimberley, Chief Executive for Lotus Group International Ltd and Group Lotus plc said, “These results are a tremendous turnaround achievement for Lotus. I would like to thank all Lotus staff for their exceptional dedication and hard work to ensure the effective turn-round of the business. We are also tracking our strategic five year plan which enables Lotus to deliver an exciting new range of vehicles, develop and sell new advanced technologies through our extensive global operations and engineering client base and ultimately put Lotus on a greener and firmer footing and a consistently profitable commercial basis for the future.”

Key commentary for the above figures:

  • LGIL increased its cash reserves from 2006-7 by over 1200% from £640,000 to £8,223,000, thanks to the shareholders’ support of the new management.

  • By achieving the £2.023 million profit, LGIL has exceeded the first year target of its strategic Five Year Plan.

  • Investment in Research and Development and new products has risen by 95%. This investment includes advanced engineering research and development into future technologies and capitalised R&D into new product development including the new Lotus Evora and updates to the current Lotus line up of the Elise, Exige, Europa and 2-Eleven.

  • Over the last financial year, Lotus Cars introduced three new market derivatives to its small vehicle platform: the Elise SC, Exige S, with 240 hp Performance Pack and the Exige Cup 260. These three versions of the award winning Elise and Exige are selling well in the global market.

  • The exceptional success of the 2-Eleven track car required production to be increased and transferred from Lotus Sport to the main Lotus assembly facility at Hethel.

  • New markets were opened successfully during the year in South Korea, Thailand and Estonia.

  • Lotus Engineering, the company’s high technology engineering consultancy business, grew its global third party customer base and was awarded with new and valuable contracts worldwide – 340 projects with over 140 clients. Lotus Engineering Inc. in the US made record profits and Lotus Engineering Malaysia returned to profitability. Further expansion overseas took place including the opening of a sales office in Japan and setting up a subsidiary in China.

  • Customer demand has lead to the creation of new departments within Engineering, especially focused on biofuels, electric and hybrid electric vehicles. Over the next year, six different electric and hybrid demonstration cars, using different technology, will be delivered to different global customers.

  • In January 2008 the first product from Lotus’s relationship with Youngman in China, the Europestar, was launched in Beijing. Lotus’s collaboration with Youngman and Proton continues with various other projects.

  • A major strategic alliance was initiated and formally signed with King Abdullah Centre for Science and Technology (‘KACST’) in Saudi Arabia and is progressing very positively with Lotus and Proton Joint teams.

Looking to the future:

  • The new financial year has seen the acquisition of a key strategic supplier, Holden Aluminium (Worcester) Limited, which has become Lotus Lightweight Structures Limited. This additional facility, which complements the facilities and IPR at the Hethel Headquarters, supplies the Lotus lightweight, high technology chassis for Elise, Exige, Europa and for the new Lotus Evora which was unveiled at the British Motorshow in July 2008.
  • The Lotus Evora, the first all new Lotus in 13 years is a 2+2 mid-engine V6 sportscar and first deliveries to customers are expected to commence in Spring 2009.
  • New markets are being developed in China and the Gulf States for Lotus Cars.
  • In the forthcoming year, a sales and technology alliance venture will be set up in India to deal with the increasing level of work and enquiries from our automotive industry customers.

In summing up, Mike Kimberley said, “Clearly we are very closely watching the state of the global economy, and it is obvious that the world is changing very rapidly. Lotus, by being small and flexible, is set to deal with the new demands from our global consumer and business customers and over the last few months, the demand for our green and environmentally sustainable technologies has increased, with many of the world’s car companies working with us on alternative fuel vehicles, electric and hybrid vehicle solutions and lightweight structures. “Lotus is now recognised as a world leader in research and development in these exciting areas of high technology, green and sustainable driving and we have a duty to share our advancements with the rest of the automotive industry for the sake of the future of personal transport and the car. We are proving that it is possible to have a guilt-free car in the future with desirable and enjoyable levels of performance, economy and sustainability and Lotus is one step closer to this utopian solution. Lotus has taken the necessary steps to reduce the impact of the global financial crisis and will continue to do so.”