The company recorded a loss before one-off items of �4.2m, down from a loss of �5.3m in the same three month period last year.

The travel sector as a whole has been experiencing a rough time recently because of the war in Iraq and the spread of the Sars virus.

"Our model demonstrated its resilience in the last quarter which was tough for the travel industry," said chairman Allan Leighton.

"We remain confident that we will meet our expectations of continued growth and overall group profitability for the current quarter and the year as a whole."

Lastminute slipped back to a pre-tax loss in the final three months of last year - the first quarter of its financial year - having briefly made it into the black in the previous three months.

Encouraging trend

Lastminute's chief executive Brent Hoberman said the company stood to benefit from changes in the way people book their holidays.

"Industry trends are leading towards more last minute internet booking, more short breaks and more consumers building their own flexible packages," he said.

"These trends have ensured that demand for our products remained robust and delivered 60% organic growth in the quarter."

The number of registered subscribers rose to just over 7 million by the end of March, compared with just over 5 million a year earlier.

On an Ebitda basis (earnings before interest, tax, depreciation and amortisation) Lastminute reported a loss of �1.7m for the quarter, down from a �3.2m loss in the same period last year.

Total transaction value for the period more than doubled to �92.2m from �40.8m.

The company also reported forward bookings at the end of March of �56m, up from �13.8m, although this figure included �31m of advanced sales from the recently acquired car hire firm Holiday Autos.

For the six months to 31 March, Lastminute's pre-tax loss on ordinary activities rose to �26.2m from �19.8m last year because of higher goodwill charges.