turns a profit

22 Nov 2002

Travel site, announced its fourth quarter results today. The company has for the first time made a pre tax profit. The announcement is a rare piece of positive news for the beleaguered online retailing sector.

The UK company’s pre tax profit of £.3m sterling (€473.6) (pre exceptional items and goodwill amortisation) represents a significant turnaround from the corresponding quarter of last year, where the company made a loss before tax of £7.4m sterling (€11.6m).

Total transaction value for 2002 grew 98pc year-on-year to £246m sterling (€388.4m) from £124.2m sterling (€196m). Total transaction value for the quarter grew by 140pc year-on-year. Gross profits for 2002 grew by 93pc to £33.3m sterling (€52.5m), compared to £17.2m sterling (€27.15m) in 2001 and for Quarter 4 2002 by 129pc year-on-year. Group earnings before interest, tax depreciation and amortisation (EBITDA) of £2.8m sterling (€4.4m) was achieved in Quarter 4 for the first time, against an equivalent loss of £5.7 million sterling (€9m) for Quarter 4 2001.

Company chairman, Allan Leighton, said: “2002 has been a very successful year delivering strong organic growth strengthened by strategic acquisitions in core countries. The new financial year has started strongly and we are confident of another year of sustained and improving performance as we continue to rapidly increase our scale and presence in targeted markets and sectors.”

The announcement is positive news in the light of so many e-commerce operations going to the wall in recent years and may indicate that online retailing is finally beginning to mature. Bellwether retailer Amazon earlier this year reported positive Q3 results. Net sales were up a third to US$851m, compared with US$639m in the third quarter of 2001. While sales were up, losses were also down, falling sharply to US$35m compared with a deficit of US$170m in Q3 in 2001. At the time, Amazon was forecasting an increase in sales of 28pc in Q4.

By Dick O’Brien