Investors Enthusiastic Despite Lastminute.com Loss

LONDON (05/04/2000) - Despite today's report that the high-profile U.K. online travel and retail company Lastminute.com PLC suffered hefty losses of 11 million pounds (US$17 million) in the second quarter, investors were in a mood to buy company stock, boosting the company's share price by over 5 percent.

Revenue losses for the second quarter, ending March 31, brought total pre-tax losses to 17 million pounds for the past six months, confirmed Alexandra Scrimgeour, a spokeswoman for Lastminute.com.

The bright spot was that the company reported 7.2 million pounds worth of transactions during quarter, adding that the site had seen the number of new customers double to 1.4 million registered subscribers across Europe.

The total transaction value for the first half of the year was 11.4 million pounds, compared with 300,000 pounds for the same period last year, Lastminute.com said.

Investors reacted positively to the financial report released this morning. As of noon, shares of Lastminute.com were 2.50 pounds per share on the London stock exchange (Symbol: LMC.LON), up 5 percent from the previous day's close of 2.37 pounds, according to the Web site EuropeanInvestor.com.

The U.K.-based Lastminute.com faces fierce competition from U.K. versions of U.S. travel bookers such as Expedia Inc. Earlier this week, the rival travel company announced U.K. sales of 12 million pounds for its third fiscal quarter, ending March 31, with 52,288 customers buying airline flights. [See "Expedia Posts Record Growth," May 2.]Furthermore, Atlanta-based LastMinuteTravel.com Inc. recently announced its European expansion.

Lastminute.com has been diversifying, offering other services and products along with its travel services. In the second quarter, 45 percent of items the company sold were non-travel related, Lastminute.com said.

And today, along with its financial report, Lastminute.com announced the launch of a commercial restaurant booking service over mobile telephones using WAP (Wireless Application Protocol) technology. The company said it is the first such service in the U.K.

Additionally, Lastminute.com also announced in a separate statement that it has entered an advertising and e-commerce relationship with Excite UK Ltd. to offer Lastminute.com products and services over Excite.co.uk and Excite Mobile. The company did not disclose financial details of the agreement.

Lastminute.com has been the subject of a large media push in London and throughout the U.K., spending 4.8 million pounds in the second quarter on marketing and advertising, according to the company. Bus and underground rail advertisements for the company cover London. In addition, the photogenic, twentysomething cofounder, Martha Lane Fox, has been widely featured in the U.K. technology and mainstream media.

But within London's financial and technology community, Lastminute.com may be most famous for its IPO (initial public offering) on the London stock exchange on March 14. Just before the IPO, Lastminute.com boosted its opening price to 3.80 pounds, only to see the stock suffer sharp declines to well below 2 pounds. A month after the IPO, the company's shares were being traded at 60 percent below the offer price.

There have been numerous reports in the media, including The Financial Times, quoting analysts and industry leaders who blamed Lastminute for undermining confidence in e-commerce companies in the U.K. and abroad.

Lastminute.com, located in London, can be contacted at +44-207-659-4900, or at http://www.lastminute.com/. Expedia, in Bellevue, Washington, can be contacted online at http://www.expedia.com/.

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