Lastminute founders Brent Hoberman and Martha Lane Fox

The company said pre-tax profits for the three months to June came in at �1.6m ($2.5m), up from a �4m loss during the same period last year, and ahead of City forecasts.

Sales soared from �61m last year to �150.9m, boosted by a series of acquisitions.

The firm said its return to profitability reflected technological improvements which encouraged more visitors to its website to book holidays, and strong growth in advertising sales.

Lastminute has reported a profit only once before, for the three months to September 2002.

Resilience

"The lastminute.com business model continues to be resilient, and has proved that a strong and diverse product mix can drive significant year-on-year growth," said Lastminute.com chairman Allan Leighton.

The company's improved performance came despite a continued slump in the travel industry because of the war in Iraq and the deadly Sars outbreak in Asia.

Mr Leighton added that bookings for the summer period, during which Lastminute makes most of its money, had started "strongly," and said the firm was on track to hit its profit targets for the full year.

City analysts expect the firm to make profits for 2003 of between �6m and �8m.

The latest figures confirm that Lastminute, one of the best-known of the wave of internet firms launched during the late 1990s, is set to emerge from its loss-making start-up phase sooner than expected.

The company was not originally forecast to start making money until 2005.

Shares bounce

City investors welcomed its latest results, marking Lastminute shares 17% higher to 245p by the close of trading in London.

Lastminute's share price, which fell to a low of about 20p eighteen months ago, has nearly doubled in the last three months amid speculation that the firm is ripe for takeover by a US travel company seeking to expand its presence in Europe.

The company said it was happy to remain independent, but would consider any reasonable offer on behalf of its shareholders.