Online retailer lastminute.com raised expectations for a busy summer today after seeing booking levels move "materially ahead" of hopes.

The group said trading in the first three months of the year had beaten forecasts last month with bookings made for future trips and events much stronger than the £170 million previously expected.

The update - issued ahead of a meeting with investors and analysts - builds on a strong first quarter when transaction values rose 68.3% to £146.6 million.

Shares made further gains after yesterday rising 18.25p to 225p on the back of expectations of a strong trading statement from the company today.

During the second quarter to the end of March, lastminute said transaction values based on when the customer takes the trip or event would be "slightly ahead" of the £160 million indicated previously.

It added that the dominance of flight-only sales during the second quarter would leave gross margins in line with those generated in the first quarter.

The company added the significant growth in bookings would leave sales and marketing costs for the quarter higher than market expectations.

Lastminute has been on the expansion trail in recent months, most recently acquiring Online Travel for £54.9 million in its biggest ever deal.

The tie-up boosted lastminute's product range and offers a potential customer base of 15 million as Online has 20 sites of its own and runs 60 more for travel and consumer companies, including Thomas Cook, Lunn Poly and Freeserve.

Lastminute is forecast to report bottom-line profits of around £28 million in the current financial year, up from losses of £47.7 million last time. Prior to exceptionals, the company narrowly moved into profit last time.

The company floated at the height of the dotcom boom before becoming one of the few ventures to survive the subsequent crash. It now operates directly in 13 European countries and also has three international joint ventures.

Tuesday April 06, 2004