Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Monday, November 15, 1999 Published at 05:59 GMT


Business: The Company File

Ebookers shares soar on debut

Sunseekers are expected to head online to paradise

The UK-based online travel service, ebookers, saw its shares rise nearly 50% on the first day's trading in New York.

The continuing enthusiasm for internet-related companies meant the London-based operation finished the day's trade with a market value of £276m.

The founder of ebookers, Dinesh Dhamija, and his family, own about two thirds of the company, a stake now worth £184m.

Ebookers is the online spin-off of the long established Flightbookers travel chain in central London.

The value of the online business now outstrips Mr Dhamija's original bricks and mortar business which has annual sales of about $50m.

Ebookers, by contrast, has sales of about £10m a year, and reported a loss of £2m in the first six months of 1999.

But as with so many internet companies, the traditional relationship between profit performance and valuation is brushed aside by investors' beliefs of vast profits to come.

The take-up of the shares was greater than had been expected with the placing price set at $18, up from the range of $13-$15 set just over two weeks ago.

Prospects of European growth

Even that placing price seemed low once trading started, with them more than doubling to hit $43 at one point before ending the first day's trading at $26.50.

Part of the reason for the enthusiastic buying of the shares - which are also being placed on the Neuer Markt in Germany - was the belief that the European online travel market is set to grow rapidly.

It also gained from the 282% rise recorded by Microsoft affiliate Expedia - a US online travel agency - when it floated on Tuesday.

"The firm is on the leading edge of European e-commerce," said one analyst.

"Europe is regarded as a few years behind the US and is expected to be the next hot growth area, but barriers are low and the firm faces competition from traditional and larger Internet sites," the analyst added.

Ebookers offers travel products and services online including negotiated discount airfares and hotel and car rental bookings.

When the listing was announced last month Mr Dhamija said he wanted to use the money raised by the listing for a European expansion.

"Over the next three years, we plan to capitalise on our first-mover advantage in Europe and become one of the leading pan-European internet-based travel companies," he said.

In September the rival UK online travel agency, Lastminute.com, announced it was considering a flotation.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©


The Company File Contents


Relevant Stories

28 Oct 99 | The Company File
Online travel site floats

17 Sep 99 | The Company File
Online travel firm may float





Internet Links


ebookers


The BBC is not responsible for the content of external internet sites.




In this section

Microsoft trial mediator welcomed

Vodafone takeover battle heats up

Christmas turkey strike vote

NatWest bid timetable frozen

France faces EU action over electricity

Pace enters US cable heartland

Mannesmann fights back

Storehouse splits up Mothercare and Bhs

The rapid rise of Vodafone

The hidden shopping bills

Europe's top net stock

Safeway faces cash demand probe

Mitchell intervenes to help shipyard

New factory creates 500 jobs

Drugs company announces 300 jobs

BT speeds internet access

ICL creates 1,000 UK jobs

National Power splits in two

NTT to slash workforce

Scoot links up with Vivendi

New freedom for Post Office

Insolvent firms to get breathing space

Airtours profits jump 12%

Freeserve shares surge

LVMH buys UK auction house

Rover - a car firm's troubles