Lastminute vows to break even as losses hit £43m

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The Independent Online
Lastminute.com, the internet retailer, said its UK and French operations were still on track to break even at an operational level in nine months time as losses swelled to almost £43m.

Lastminute.com, the internet retailer, said its UK and French operations were still on track to break even at an operational level in nine months time as losses swelled to almost £43m.

The company, which sells products ranging from flights to edible birthday cards, said its fourth quarter had started "extremely well" with total transaction value for July up 60 per cent on the previous four-week period.

It also said that its advertising and sponsorship revenue came in at a similar level to the second quarter despite the widely-reported downward trend in advertising revenues.

Allan Leighton, the chairman, said: "The company continues to improve on all of the retail basics. Costs, margins, conversion rates and cashflow continue to move ahead in a period traditionally quiet for sales."

He expected lastminute's total transaction value in the fourth quarter to exceed £45m and total transaction value for the year to be over £120m. Transaction value is the total order placed by a customer, irrespective of whether lastminute picks up just a small percentage of the fee.

Shares in lastminute, which floated on the stock market last year at 380p each, rose 0.25p to close at 34.5p last night.

In the third quarter ended 30 June, the company recorded a pre-tax loss of £12.9m compared with a loss of £14.3m in the second quarter of the year.

Sales were £4.4m, up from £4.1m in the second quarter of the year with the company selling 205,138 items in the period against 188,676 items in Q2. Total transaction value for the quarter was £29.3m, up from £27.8m in the previous quarter.

The company also said yesterday it planned to install five internet kiosks, four at Heathrow airport and one at the Bhs store in London's Oxford Street. Pienetworks, the UK arm of an Australian business, is supplying the kiosks pre-installed with software which will only allow users to surf the lastminute.com website.

Brent Hoberman, chief executive, said: "They're in great locations but we'll monitor them carefully and if they work well, we'd expect to expand that programme."

Lastminute also unveiled a joint venture with Sol Melia, a hotel chain in Spain, which sees that company take a 70 per cent stake in lastminute's Spanish operation. In addition, the company, which now operates in nine countries, announced it had been appointed as the exclusive travel provider to Fnac.com, a French internet site.

Lastminute, which ended the period with £53m of cash, spent £8.6m in the quarter, down from £9.1m in the previous quarter. Analysts expect the company to be profitable in early 2003.

Mr Hoberman said while lastminute was still mulling acquisitions, "we wouldn't go and spend a pile of cash on something that wouldn't help us to get to profitability quicker".

In the nine months of its financial year, lastminute recorded pre-tax losses of £42.6m from losses of £26.3m in the same period the year before.

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