Ebookers breaks into profit
A European first
The on-line travel agency Ebookers said it recorded its first ever pre-tax profit during the first quarter, despite reduced revenues following the Iraq war.
The company admitted that the war had cut its first quarter profit by as much as £4 million, and it said that the SARS virus also impacted sales. But it said its cost controls still helped the company turn in an adjusted, pre-tax profit totalling £106,000.
The figure excludes a number of hefty exceptional items, including more than £3.8 million in one-time costs related to its acquisition of rival travel company Travelbag in February. Including these costs and other exceptional items, the company recorded a pre-tax loss of £4.9 million, significantly more than the firm's £3.5 million loss in the first three months of 2002.
The underlying modest profit is still notable for the company, however, and Ebookers CEO Dinesh Dhamija said Ebookers was the first company in the pan-European on-line travel industry to reach this milestone.
During the quarter, gross sales rose 79 per cent to £109 million, but a large part of this was due to Travelbag business. Organic growth accounted for 29 per cent of the rise in sales.
The company, which made headlines earlier in the year with its £55 million purchase of Travelbag, said on Wednesday that it would cut 80 jobs in the combined UK business following the acquisition. Ebookers also continues to migrate some of its Travelbag back-office functions to its 400-person business process outsourcing centre in India, which handles administrative as well as call centre functions.
Dhamija said the low-cost Indian operation played a key part in slashing costs and delivering the company's first profit, and that Ebookers was considering offering the Indian centre's services to third party companies.