Lastminute founders Brent Hoberman and Martha Lane Fox

The online travel and bookings firm unveiled first quarter, pre-tax losses of �1.1m ($2.1m), down from �1.6m in the same quarter of the previous year.

Along with the wider travel industry, Lastminute has suffered from a fall in bookings following the war in Iraq.

However, the company said its gross margins were set to grow in the third and fourth quarters.

'New challenges'

Lastminute - which specialises in selling bargain air tickets, city breaks and travel deals - leapt into the FTSE 100 index when it was floated at the height of the dotcom boom in 2000.

We do remain vulnerable in all our markets to acts of terrorism Lastminute.com Market data

But the company's fortunes soured as the dotcom bubble burst and the stock market slumped.

In November, Lastminute joint-founder Martha Lane Fox said she was leaving the company to "explore other challenges".

In a generally upbeat statement on Thursday, the company said that its performance in the second quarter had started well.

However it warned: "We do remain vulnerable in all our markets to acts of terrorism."