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The BBC's Rory Cellan Jones
"Any profits are years away"
 real 28k

Martha Lane Fox, co-founder of Lastminute.com
"All the analysts agree that we will go through to profitability"
 real 28k

Brent Hoberman, co-founder Lastminute.com
"We don't see any major player at all going after our marketplace"
 real 28k

Thursday, 4 May, 2000, 15:47 GMT 16:47 UK
Lastminute.com losses mount
Lastminute: still growing
Lastminute: still growing
The travel website Lastminute.com has announced its first set of results since it was floated on the stock market.

The company said it had made an 11m loss in the last three months, bringing losses for the six months to 31 March to 17m.

But it said it was growing fast and following its business plan.

However, investors continue to shun the company as its share price continues to be well below the figure that investors paid in March when the company first came to the stock market.

After the price of shares was increased to 380 pence shortly before flotation, they plummeted from an early high of 563p to well below 200p.

At the close of trading on Thursday, one Lastminute.com share cost 245p, up 8p, as the stock failed to sustain a strong early 21p gain.

Growing fast

Lastminute said it had doubled the number of registered users to 1.4m, and sales had increased sharply as its advertising blitz appeared to have paid off.

The company spent 4.8m on advertising in the second quarter, almost four times its gross profits of 1.25m.

Chief executive Brent Hoberman told the BBC he was confident that the company could see off its rivals.

"We feel we're doing something very different and the vast majority of (travel companies) are working with us ... while we watch very carefully what others are doing ... we are doing something very different on a global scale," he said.

Lastminute said 45% of transactions were not travel-related. Sales of gifts and entertainment services generally have a higher profit margin than sales of airline tickets.

The company increased its sales to 11.4m for the half year compared with 300,000 for the same period a year ago.

However, just 68,000 people actually bought anything on the site, fewer than 6% of registered users.

More suppliers

Martha Lane Fox, co-founder of Lastminute, told the BBC that the business model was still valid, and that the number of companies who were supplying products to the site had increased dramatically.

The number of suppliers has grown to 2,466, including 55 national airlines.

"This is a very early stage but it does bode well for the medium term, in terms of growth in suppliers," one analyst said.

Lastminute attracted much negative publicity during its share flotation in March.

But Martha Lane Fox said that the shares had been priced fairly and the company had been a victim of a general crash in the value of technology stocks around the world.

The BBC's internet correspondent, Rory Cellan-Jones, says that the results were better than expected by many analysts.

But like many companies, it has yet to prove it can make a profit in an increasingly competitive field.

However, with 130m in cash from the float still left, it is not in danger of going bust.

On Tuesday, rival travel company Expedia announced UK sales of 12m in the most recent quarter, with 52,288 customers buying airline flights.

The company, which is backed by Microsoft, claimed it was the clear market leader in the UK, with a 25% share.

Europe's online travel market is forecast to rise from $250m (156m) in 1999 to $7bn (4.4bn) by 2005.

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See also:

09 Apr 00 | Business
Lastminute grabs travel spotlight
04 Apr 00 | Business
Apology for Lastminute bungles
15 Mar 00 | Business
Lastminute loss for investors
02 Mar 00 | Business
Martha my very dear
09 Mar 00 | Business
Lastminute ups its float price
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