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Online travel agency – is it finally up with Lastminute.com? | News

Tuesday, September 5th, 2017 | Economy

It was in April 2014 when the online travel agency Lastminute.com, headquartered in Chiasso – then still under the exotic sounding name Bravofly Rumbo Group – went to the Swiss stock exchange. Originally issued for 48 francs, the stock fell to 44.50 Swiss francs on the first trading day.
And this failed start should only be a taste of what should come in the coming months and years. The stock fell subsequently to a fraction of the issue price and reached its lowest point of almost 9 francs in March 2016 – less than one Fifth of the original price. Meanwhile the title costs 12,60 francs.

Development of Lastminute.com stock since stock exchange in April 2014, source: cash.ch
Competition in the sector of travel portals turned out to be stronger than originally expected. Consequently, the price pressure was higher and the margins lower. The CS and UBS, which were responsible for the stock exchange, were also criticized, and at the same time (to) optimistic analyst recommendations for the share.
As a result, UBS, for example, used a 12-month target price of 52 Swiss francs for Lastminute.com at the end of May 2014. A massive misjudgment, as it turned out later: the price was 18 francs a year later. Currently, the Grossbank recommends the stock again to buy – with a price target at 15 francs.
Bad news, good news
This year, the stock moved close to these 15 Swiss francs, before (once again) the disillusion followed: At the beginning of May investors reacted disappointedly to the guidance for the current year. Lastminute.com's operating result at Ebitda, which "essentially" corresponds to that of the previous year. Isolated experts hoped for an Ebitda growth of more than 30 percent.
In July, even more bad news followed: Lastminute.com warned in a statement that the operating profit had halved in the first half year of the previous year period and the sales slightly declined. A week later Stefano Biffi, the finance chief, also threw up the begging, which had only been in office since February.
According to the motto "worse it can not be any more", the online travel agency has always had a glimpse of the light, which increased the course from 7 August to today by 9 percent. On the one hand, the half-year figures turned out to be not quite as bad as announced in the previous month. As the most successful brand within the Lastminute.com group, the meta-search engine Jetcost proves itself – a comparison portal for flights from different suppliers. "Jetcost is growing rapidly and we are increasingly assuming a key role in the group", can be read in a CS analyst commentary.
At the same time, Lastminute.com announced a massive share buyback program: A special committee examines the repurchase of one-third of the total share capital within 18 months, which still has to be approved at an extraordinary general meeting on September 21st. According to estimates by a Kepler-Chevreux analyst, this project will cost around CHF 65 million.
CEO compares Lastminute.com with Amazon
Lastminute.com continues to hold its own in a highly competitive industry. In order to survive, the company must be able to generate more traffic (ie visitors) for their pages. On the one hand, this can be achieved with further acquisitions; on the other hand, the existing offer must be aggressively advertised.
In fact, the marketing activities are huge: for the brands Volagratis.com, Rumbo.com and lastminute.com television programs are being broadcast in Italy, Spain and France. A lot is also invested in their own internet presence. The various online portals should ultimately be as customer-friendly as possible.
"We could deliver more, but we want to invest heavily in our business – like Amazon," said CEO Fabio Cannavale in February against finance and the economy. What is clear: Lastminute.com's success is still miles away. At the moment, there is hardly anything for an entry.


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