British online travel store Lastminute.com missed its own forecasts for fourth-quarter core earnings yesterday and said the cost of integrating recent acquisitions drove it to an annual loss.

The poor set of results caused a sharp fall in the value of its shares, which plunged as much as 22 per cent after analysts were surprised that earnings lagged a forecast given only a month ago.

Lastminute also announced that chief financial officer Mr David Howell would leave the firm early next year.

Chief executive Mr Brent Hoberman said Lastminute's acquisition strategy had given it the scale to compete in its core European market but this has come at the expense of higher integration costs. He ruled out any more acquisitions in the year ahead.

"Whilst demonstrating continued improvements in most key metrics, our financial performance has fallen short of expectations," he said.

Lastminute, which sells holidays and flights over the internet at short notice, has spent around £260 million (€371 million) over the past four years buying 14 online companies in Britain, Germany, France and southern Europe. Four of those occurred this year.

Shares in Lastminute were down 13.6 per cent at 103.5p, after falling to 94p in early trading.

Lastminute posted a year pre-tax loss of £77.2 million, compared with a £47.7 million loss a year ago.

Pre-exceptional earnings before interest, tax, depreciation and amortisation (EBITDA) rose 57 per cent to £22.3 million in the fourth quarter to end-September.

This fell shy of its forecast in October when Lastminute said earnings for its crucial summer quarter would come in towards the lower end of expectations with EBITDA of £25-£30 million.

Bridgewell Securities analysts said in a research note that missing the forecast "will probably eradicate the comfort factor" Lastminute had since August when it sought to reassure investors by giving its first-time profit guidance, which it then gently nudged down at the time of the October update.

"The only support factor near-term (and probably long-term) for the stock is the likely takeout of Ebookers before the end of 2004, which would leave Lastminute.com as the last man standing in the European online travel market, and therefore will heighten its attractiveness as a takeout play," they said.

The company said full-year pre-tax profit before exceptional charges and goodwill amortisation was £4.6 million, compared with £200,000 a year ago. Total transaction value (TTV) - gross value of products and services sold on the internet - was £992.3 million, against £552.4 million last year.

Mr Hoberman declined to give a first-quarter EBITDA forecast when talking to reporters in a conference call. Trading at the start of the first quarter was in line with current expectations for TTV of £245-£255 million, he said.

Lastminute said it expects to achieve "significant" cost savings as it reduces staff by 350 to just over 2,000 while integrating acquisitions. The company said it expects to reduce its cost base by £13 million in the 2005 financial year and £16 million annually after that.

Mr Howell said he was leaving because he wanted to face fresh challenges. "We are now at a phase of Lastminute's evolution where it needs somebody who can come in and help with the integration and the cost cutting, and that is somebody different to me," he said.

His departure comes a month after Lastminute said chairman Mr Allan Leighton was leaving at the year-end. Mr Brian Collie, who joined the company's board in February 2000, becomes Lastminute's new non-executive chairman when Mr Leighton retires.

Earlier this year Lastminute said it would set up a dedicated Irish website. But these plans are on hold. - (Reuters)