ebookers finds new £8m profit centre

Sunday, 04 Aug, 2003 0

ebookers has posted better-than-expected results for the second quarter, and says it is now ready to launch a new profit centre based on servicing third party websites.

The online agent has posted a pre-tax loss of £0.9 million for the second quarter of 2003, compared to £1.7 million year-on-year. However, loss after tax is worse for the second quarter of 2003, at £7.4 million compared to the previous year, at £3.5 million – because of an increase in goodwill ammortisation to £2.3 million following the acquisition of Travelbag.

ebookers says it is pleased with the conversion of Travelbag, once a bricks-and-mortar longhaul agent, into an online sales channel. The percentage of sales made through the internet with Travelbag were up to 35% in July, from 16% in January. ebookers aims to push this to over 70% of sales being internet-generated within the next 12 months.

According to ebookers chief executive, Dinesh Dhamija (pictured), this will not necessarily result in the closure of any remaining Travelbag shops. He told TravelMole: “As long as the shops remain profitable they will stay open.”

ebookers claims it has made cost savings of £1.4 million by outsourcing its back office – what Mr Dhamija once described as ‘the donkey work’ – to India, rather than in Europe. The online agent says it is now ready to offer this service to third parties.

Mr Dhamija said the plan was to turn Technovate, the BPO (Business Process Outsourcing) facility, “from a cost centre into a profit centre”. He told TravelMole: “The extended BPO will be ready in November, and we hope to get two clients as big as ebookers, which will generate around £8.5 million annualised profit before tax. They [BPO facilities] are really profitable.”

ebookers is expanding its India staff from 600 to 2,000 and says it has already received interest from “several top-tier international organisations”.

As well as generating business from servicing third parties, Mr Dhamija said ebookers was looking for more acquisitions in the mid and longhaul market. “It is where the margins are” he added.