As an investor, it is not a success story, no matter how you look at it

Daniel Bieler, internet analust

On top of that, the company is to cut 50 jobs in Europe, reducing operational costs in Italy, Sweden, Spain, the Netherlands, Australia and South Africa.

Indeed, some analysts support Leighton's prediction of profit.

ABN Amro has said that the prediction of profits "underpins our projection for the group as a whole to reach profitability in the quarter to March 2003."

But it says the case for "sustained value creation remains shaky".

The right move

Even Lastminute sceptics admit that the company has made some wise moves.

For a start, it appointed experienced offline retailer Allan Leighton as a non-executive director.

Mr Leighton, who briefly became president and chief executive officer of Wal-Mart Europe after the US group bought Asda, is credited with having turned the UK retailer around.

Secondly, it bought Degriftour, the French online company.

Degriftour boasts a 50% share of the online market in France, organising more than one million flights since it was launched in 1991. Unlike Lastminute.com, Degriftour also operates at a profit.

Strategically, its move to start selling gifts as well as holidays on its website is also seen as broadening its base of potential profits.

Lastminute also seems to have mastered the logistics of its business - an area where other e-tailers have floundered.

"Designing a fancy website, with attractive colours and getting people to sign up is not the hard bit," says Kim Green, PriceWaterhouseCooper's partner in charge of retail. "The hard bit is getting the right goods to the right customers, within a reasonable time frame without going bust."

Money in the bank

Crucially, in Lastminute's favour is that it still has money in the bank from its flotation last year.

Its shares floated at 380 pence, having raised the indicated price range from 320 pence to 380 pence from 190 pence to 230 pence, following strong investor demand. It then peaked at 563 pence.

Nomura's internet analyst Daniel Bieler said:"They have a huge cash pile, which allows them to go through these relatively tough times....they can cut on the marketing side and hope that market conditions improve."

But even if Lastminute succeeds, it is unclear where their share price will finally settle.

"Their image within the financial industry has flopped totally. They started at the top. As an investor, it is not a success story, no matter how you look at it," Bieler said, adding "for them as a business, it was the right thing to do, it will probably save them."

Takeover time

The large cash pile and the falling share price conspire to make Lastminute an attractive takeover target.

Some analysts question whether the company can be a significant business in its own right.

Relative to the amount of media attention it attracts, Lastminute is a small business.

As such, it might fit better as part of a larger operation such as Thomson - though Lastminute founders are not thought to favour a takeover.