Ebookers out of the red
Ebookers has announced its first adjusted pre-tax profit in what COO, Nigel Addison Smith, called the toughest year for the industry in 20 years. The online agent posted an adjusted pre-tax profit of £1.3 million for 2003, up from a loss of £5.2 million the previous year. Mr Addison Smith told TravelMole that the adjusted figure is broadly calculated in a similar way to EBITDA after depreciation of interest. He says that city analysts have agreed that it is the best way to judge the profitability of the company. Mr Addison Smith also told TravelMole that it is unlikely the company would have survived had it not cut costs by outsourcing some technical and administrative work to a company it set up in India called Technovate. He said: “In the aftermath of 9/11 if we hadn’t set up Technovate, which we’d done the month before, I think it is unlikely we would have survived.” In announcing its results, ebookers echoed the sentiments of others in the industry by stating what a tough year it had been. In addition to highlighting the Iraq War and Sars epidemic as crippling to the travel industry, ebookers said it was particularly hampered by a hotter-than-average summer in Europe. The company derived over 80% of its turnover from longhaul sales in 2003, but claims that many of its would-be long and midhaul customers decided to stay in Europe because of the weather. Despite this, ebookers says it will retain a longhaul focus. Mr Addison Smith told TravelMole: “People have got bored of lying on a beach in Europe, so there is an underlying trend to book a holiday to somewhere more exotic.” The company has also announced some management changes in line with its restructuring programme. Peter Linney, currently UK managing director, will become group commercial director and Dhruv Shringi has taken the role of group operations director, after joining the company ahs a non-executive director in November 2003. In addition, wife of ebookers chairman, Dinesh Dhamija, has announced her retirement. Tania Dhamija, who founded Flightbookers alongside her husband in 1983, says she will not accept the bonus of £993,000 which has been offered to her, in light of her announcement to retire. The decision by the company to offer Mrs Dhamija the bonus was reported by News From Abroad in November 2003. On the back of the announcement at 10am this morning, ebookers shares had dipped 29.5 pence to 368 pence, a drop of nearly 7.5%. Report by Ginny McGrath
Ginny McGrath
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