Lastminute.com parent sees ‘light at the end of the tunnel’

Signs of significant improvement reported in first three months of 2021

The parent of lastminute.com reported seeing “light at the end of the tunnel” in a first quarter trading update.

The comparison with the first quarter 2020 was skewed due to the site enjoying its best-ever January last year before the COVID-19 pandemic hit.

However, the firm said, correcting for this, for the first three months of 2021 “are showing signs of significant improvement”.

Andrea Bertoli, lm group deputy chief executive, said: “Market conditions are still very challenging but we are finally seeing the light at the end of the tunnel.

“We are ready to ride the recovery phase, thanks to our strong positioning in leisure travel across all core European markets.

“The actions put in place since March 2020 to navigate the crisis and implement an even more efficient business model are working well.

“Lm group’s diversified portfolio and geographical reach is helping address the growing demand for travel in different markets and for different products as they materialize.

“Our solid financial structure gives us the freedom to look at marketing investments to ride the recovery with no constraints, confident on the availability of sufficient funds to get potential rising opportunities.

“We expect to see positive effects throughout the year and even in the mid-to-long run, coming from a leaner cost structure and a very resilient organisation, giving further boost to the future results of the company.”

Lm Group reported revenues of € 11.6 million, down 83.5% versus on the first quarter of 2020, and EBITDA, a measure of profitability of minus € 5.3 million, compared to plus €9.2 million in Q1 2020.

The company said first quarter results were “in line with the company’s management expectations and aligned with a very challenging first quarter for the whole travel industry”.

In a trading statement it said: “The conservative approach in sales continued for the entire quarter, primarily on holiday packages, taking into account the potential risk of future cancellations in a still highly uncertain scenario.

“The comparison of Q1 2021 with Q1 2020 is distorted since the performance of January and February 2020 was not impacted by the COVID crisis.

“On the other hand, if compared to the previous quarter (Q4 2020), the numbers of the first three months of 2021 are showing signs of improvement.

“Despite the above-mentioned very conservative approach adopted in order to significantly reduce the risk of future cancellations, resulting in lower sales of high-profitable bookings (primarily holiday packages), net result improved by €4 million (+24%) from -€16.7 million to -€ 12.7 million.

Lm Group said this was due to reduced operational costs, a lower level of depreciation and amortization, and the deconsolidation of Destination Italia.

The firm said its gross cash position is still very solid with more than €120 million available and debt liabilities are sufficiently spread to be sustainable amid continuing disruption.

It said there is the “clear sign of recovery” in May 2021 for the travel industry, already evident in the US market, “is on the way also in Europe”.

“Vaccination campaigns across the EU are now progressing at a much faster pace and, starting in May, we are seeing a steep sales growth trajectory in all continental markets, while the UK one is still suffering due to the high restrictions to international travel imposed by the British Government.

“Particularly, holiday packages show a positive trend and potential for a strong return of demand for longer trips in summer, especially for sun and beach destinations.”

The Company reiterated the decision to not release any guidance for full year 2021.

Lm Group will confirm its new board at an AGM on June 22 at which Bertoli is expected to be confirmed as the company’s new chief executive.

Fabio Cannavale, chief executive of lm holding, said: “I’m very pleased with the proposal on the composition of the Board of Directors for the next mandate. I’m confident that the new members will bring the needed expertise to support the definition and execution of the company’s expansion plans going forward.”

The proposed new board of directors:

• Laurent Foata (confirmed) as independent non-executive director and Chairman of the Board of Directors
• Fabio Cannavale (confirmed) as executive Director and CEO of lm holding
• Andrea Bertoli (new) as executive Director and COO of lm holding, CEO of lm group
• Roberto Italia (confirmed) as independent non-executive director
• Paola Garzoni (new) as independent non-executive director, founder and CEO of LaSeven Inc., a real estate service company in New York City
• Massimo Pedrazzini (new) as independent non-executive director, Chairman of the Board of Directors of Sterling Strategic Value Fund SICAV-RAIF SA, the new investor entered into the capital of Freesailors as a result of the acquisition of the shares from Fedro
• Javier Perez Tenneza (new) as independent non-executive director, founder and former Chairman and CEO of eDreams ODIGEO (EDR)