lm holdings likely to play key role in consolidation of travel intermediaries

Following the announcement of lm holdings’ (previously known as Lastminute.com) Q1 financial results;

Johanna Bonhill-Smith, Travel & Tourism Analyst at GlobalData, a leading data and analytics company, offers her view:

“Consolidation is likely among larger travel players such as Expedia and Booking Holdings post-pandemic, but lm holdings is a key online retailer across many markets. The company is significantly smaller than other leading online travel agents (OTAs), but if it survives this crisis it is likely that it will seize a greater market share in the online travel space. 

“The company has felt the impact of COVID-19, but the results are not disastrous. Core business revenue was €70.3m (US$70.6m) down -12.9% compared to 2019. Cash available decreased by 15%. Net financial position also decreased substantially by 63% to €18.6m (US$20.1m) from €50.2m (US$54.2m). EBITDA profit margin was still down but remains positive at 13.1%.

“A steady financial performance last year and at the beginning of 2020 no doubt puts lm holdings in a strong position to weather this storm. Management is now pursuing an additional CHF100m (US$102.83) in additional equity capital; due to previous performance this will likely be found and interest rates will likely be reduced due to less risk for financial creditors. 

“High cash reserves in 2019 ensured the company could be flexible in seeking new opportunity. lm holdings acquired MadFish and Small Fish, TripMyDream and Qixxir – all differing digital platforms that will help to streamline operations. February 2020 also saw the online travel group buy an Indian review site HolidayIQ for an undisclosed sum.

“Management has declared that additional cash is required to stay afloat but to also remain flexible – granting the company the ability to capture business opportunities when they emerge. If it can weather this storm, lm holdings will likely be a player gaining greater traction in the future market place.”

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