Iconic online retailer Lastminute.com has announced its first pre-tax profit, and said it is confident of "sustained growth" in 2003.

The firm said it made a pre-tax profit of �300,000 for the July to September quarter.

While the firm has earlier reported profits as appraised by less stringent tests, this is the first time it has broken into the black on the most widely accepted measure.

However, the headline pre-tax figure nonetheless excluded one-off costs such as a �3m charge for a "fundamental reorganisation".

Including the charges, the firm made a loss of �9.55m during the quarter.

Takeover benefits

The firm said its performance had been boosted by a takeover spree which saw it acquire three companies - including the already profitable Destination Group - in four months.

The takeovers, which have fuelled the firm's drive into 12 countries, have allowed the firm to introduce significant synergy costs.

Besides Travelprice.com, bought in April, the firm has scrapped existing computer systems at takeover targets to be replaced by the Lastminute.com network.

"The sites now run on a single system, enabling us to further reduce technology spend and achieve greater return on investment," chief executive Brent Hoberman and managing director Martha Lane Fox said in a joint statement.

The growing size of the firm, which claimed 6.4 million subscribers to its newsletter and 14,500 suppliers, meant it "now benefits from economies of scale", the duo added.

City reaction

Chairman Allan Leighton added that the firm's prospects were continuing to improve.

"The new financial year has started strongly and we are confident of another year of sustained and improving performance," Mr Leighton, also head of Royal Mail, said.

In the City, Lastminute shares stood 1.5p higher at 118p in early trade on Friday.

The stock, worth more than 480p before the dot.com bubble exploded, has been one of London's best performers in 2002, starting the year at 30.25p.