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Over the past few months a lot of column inches have been devoted to the financial woes of Group Lotus. The car manufacturer has racked up significant losses and last month sacked its chief executive Dany Bahar. However, Lotus isn't the only British motor marque whose fortunes are reversing.
An article in today's Daily Mail, by Pitpass' business editor Christian Sylt, reveals that Caterham has reported a 32.4% fall in pre-tax profits to £637,000 for the year ending 31 December 2011. It is by no means in the same boat as loss-making Lotus but that doesn't change the fact that its bottom line is not going in the right direction.
Caterham changed hands in March last year and is now ultimately owned by tycoon Tony Fernandes and his business partner Kamarudin Meranun. They also own stakes in the Air Asia airline and premier league squad Queens Park Rangers as well as the eponymous Caterham F1 team.
The Dartford-based car manufacturer was founded in 1973 and makes nine variants of its classic Caterham 7 car crowned by the 155 mph CSR which starts at £44,995. Last year Caterham's revenues fell by £205,000 to £19.4m whilst costs rose slightly to £18.7m as the business invested in developing new models to try and drive through the recession.
During the year Caterham completely burned up its cash reserves. The company had a net cash outflow of £500,000 and spent £815,000 on new investments which was covered by £300,000 from financing and £1m from cash it had in the bank. Its road ahead may not be any smoother as the accounts state that "the current economic conditions create uncertainty particularly over the level of demand of the company's products and the availability of bank finance in the foreseeable future."
Last month Caterham's chief executive Ansar Ali was replaced by Graham Macdonald, its former chief financial officer. Ali had been the boss of the company since forming part of a management buy-in to take it over from the founding Nearn family in 2005. It wasn't the only change in the board of the company during 2011 as Caterham also added two new non-executive directors: F1 journalists David Tremayne and Joe Saward.
The F1 team is run and owned separate to the road-car division but it too could do with a boost. It has failed to score a point since joining F1 in 2010 and its owners have invested over $100m in it. This means that they have spent more money, without success, than the owners of any team in the history of F1. In contrast, the team which bears the Lotus name is currently third in the championship.
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