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Last Updated: Thursday, 25 November, 2004, 17:49 GMT
Lastminute losses almost double
Lastminute.com
Lastminute sells cut-price tickets and package holidays
Online travel and leisure firm Lastminute has seen its losses almost double.

The company has posted a pre-tax loss for the 12 months to the end of September of 77.2m ($143.5m), having lost 47.7m in 2003.

Lastminute founder and chief executive Brent Hoberman said the company's Europe-side expansion had "come at the expense of a higher cost base".

Lastminute shares fell 13.5%, ending the day down 16.25p at 103.50p.

Acquisitions

With its young co-founder Martha Lane Fox (who has now quit the firm) and entrepreneurial vision, Lastminute epitomised the dotcom boom of the 1990s.

But Lastminute is now one of the dotcom boom's last survivors and struggling, forcing the company to admit earnings for the crucial summer quarter would be below expectations.

"The final quarter of the 2004 financial year has been difficult for the travel industry as a whole," the company said in a statement.

Lastminute's expansion
January 2004 - First Option, a reseller of hotel rooms
March - Edinburgh-based hotel reservation website All-Hotels.com and Gemstone Travel, a reseller of package holidays and charter flights and Online Travel
June - German travel firms, formerly trading under the name lastminute.de

Part of Lastminute's problem is the arrival onto the European stage of US competition Expedia.

Its rapid, and some analysts say rash, expansion over the last year has also been costly.

Lastminute's recent purchases have included Med Hotels, First Option and Gemstone Travel.

It also took over its German namesake lastminute.de.

But the firm said on Thursday that these acquisitions would allow it to compete across Europe.

Job cuts

It also says it will make substantial savings by consolidating its services. For example, ten offices instead of 25 are planned for Europe.

In 2005, the firm estimates it will save 13m by integration and 16m annually thereafter.

The only support factor near-term (and probably long-term) for the stock is the likely takeout of ebookers before the end of 2004
Bridgewell Securities

Lastminute also said it expects to achieve cost savings as it reduces its staff by 350 to just over 2,000.

It has announced that chief financial officer, David Howell, would leave next year.

"We're are now at a phase of lastminute's evolution where it needs somebody who can come in and help with the integration and the cost-cutting and that is somebody different to me," Mr Howell said.

Analysts say Lastminute may be helped if rival ebookers.com agrees to be taken over, which e-bookers has confirmed is a distinct possibility.

"[This] would leave lastminute.com as the last man standing in the European online travel market," Bridgewell Securities analysts said.





SEE ALSO:
Leighton steps down at Lastminute
26 Oct 04 |  Business
Lastminute axes 14% of workforce
05 Aug 04 |  Business
Lastminute.com sees losses narrow
12 Feb 04 |  Business
Lane Fox leaves Lastminute
20 Nov 03 |  Business
The making of Martha
25 Jul 02 |  Business


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