TravelMole Interview: David Howell, Lastminute.com

Lastminute.com chief financial officer David Howell has told TravelMole that the fall in the company’s share price last Thursday was an “over-reaction” caused by a number of contributory factors, and insisted that the online retailer had in fact had a “bloody good year.” Mr Howell said that the combination of the announcement of Martha Lane Fox’s departure, together with lower than expected annual pre-tax profits, a negative Watchdog programme and explosions in Istanbul had led the company’s share price to fall sharply. By the end of Thursday they were down 51.5pence to 248.5pence, following on from previous falls the day before. Further falls followed on Friday, however on Monday the shares had slowly started to recover ground and by 1pm were up 2.5%, standing at 243pence. Mr Howell told TravelMole: “Personally I think it was a bit overdone, but traders see an opportunity to make money whichever way things go.” Commenting on last week’s negative Watchdog programme, he commented: “No disrespect to Watchdog but I think they are trying to create sensationalism. We have had 2 million people book on the website in the last 12 months and Watchdog received 400 complaints -which is a tiny percentage.” He added that while the company took customer complaints “very seriously”, Lastminute “could not crystal ball gaze” and know when airlines were about to cancel flights. He added that customers could not be refunded until Lastminute itself had received the money back from the airline. Asked why he thought the departure of 30 year old co-founder Martha Lane Fox as managing director should have had such a big impact in the City, Mr Howell said: “Martha is a character. She has been great in the business and has pushed it forward. But there was always going to be a time when she wanted to do something else.” He pointed out that while there had been a number of key senior appointments at the company in recent months, this did not mean the company’s approach was going to become more austere. He explained: “Lastminute as a brand has always attracted a high level of interest because of its brand name. Brent [Hoberman] will pick that [PR element] up, he has always been capable of doing it but hasn’t really needed to before because Martha was there.” Lastminute reported an annual pre-tax profit of £200,000 – while analyst’s predictions had ranged from £4million to £10million. Never the less Mr Howell insisted that the company had had “a bloody good year.” He said that the company had a larger than expected forward order book of £43.6m which it hadn’t been able to record in its Q4 figures because its accounting system meant sales could only be recognised when people had departed on their trips. He pointed out that total transaction value (TTV) had also increased significantly from £246million last year to £552 million. However this was still below City estimates of £561million to £584million. Commenting on the future prospects for the company, Mr Howell gave an “absolute and categorical yes” when asked if there were likely to be further acquisitions. The company raised £71m raised in a convertible bond offering in September so has money available for purchases. Mr Howell said that following the acquisition of the remainder of its Spanish business from Sol Melia, the company would continue to be looking at its businesses in Spain and Italy and would also be looking in the “lifestyle arena.” And asked if the acquisition of Lastminute itself could happen in the near future, Mr Howell replied: “Of course it could, we are a public limited company.’

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