lastminute.com sees share price fall

Investors in British dotcom boom survivor lastminute.com were hit by a spectacular slide in the travel and leisure company’s share price today.

Worries over the outcome for the summer season sent the stock as much as 18% lower, despite initially rising 7% on the back of strong quarterly results.

The slump, which took shares to their lowest level in more than a year, came as lastminute said it was cutting 350 jobs as part of a drive to reduce costs by 10% in the 2005 financial year.

The business overhaul – following a string of acquisitions by the company – is likely to result in the consolidation of 25 offices into 15, including the loss of six offices in the UK.

Announcing third quarter figures, lastminute said total transaction values in the three months to June 30 increased 78.2% to £268.9m (€407.2m) with underlying earnings up to £4.3m (€6.5m) from £4.1m (€6.2m) a year earlier.

But it also described the period as a “challenging” one for the travel industry, adding that customers were booking holidays and trips much later.

The fact that this will make it more difficult to predict the outcome for the full year caused concern in the City, even though lastminute said July trading suggested transaction values would reach £400m (€605.5m) in the fourth quarter.

Chairman Allan Leighton said: “The move by the consumer to be even more last-minute makes our unique model more relevant than ever. However, the summer quarter as always remains both key and difficult to predict.

Shares closed 15% lower at 107p – way off the peak during the dotcom boom of 560p and the 313.75p seen last year. Around £63m (€95.4m) was wiped off the value of the group, which is now worth £360m (€545.1m).

Martin Dobson, senior broker at Hoodless Brennan, said: “The fear is that they will have to spend more on their marketing to hit the targets they have set.”

The company provides travel and leisure offers directly in 13 European countries and also has three international joint ventures. It currently employs around 2,400 people.