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Ebookers shares slump on profit warning
Ebookers shares plummeted by more than 35% after the online travel company forecast that demand and margins are likely to be lower than expected this year.
The company said profits for the year will be “significantly below” analysts expectations of between £10.3 million and £15 million.
Ebookers predicted that the profit figure would represent an improvement on the £1.3 million achieved last year. This was interpreted as coming in at about £2 million.
Reduction in demand and increased investment were blamed for the anticipated lowering of profit forecasts. Ebookers shares dropped by 80p to 140p as a result.
The profits warning came despite the company revealing that total online sales for the second quarter of the year had risen by 62%, with “web-enabled “ sales up 16% and offline sales down by 14% in the quarter.
Total gross sales are expected to hit £135 million against £118 million despite this being the company’s weakest quarter.
Chief executive Dinesh Dhamija said: “We are reinforcing the continuing high growth of the online business with significant incremental investment in technology and other support, and managing a phased transition from our less profitable low growth offline businesses.
“This represents a further consolidation of our position as one of Europe’s leading online travel companies.”
The company is due to announce its results for the second quarter on 16 August plus an update on current trading for the first half of the third quarter.
Report by Phil Davies
Phil Davies
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