ebookers plc and lastminute com Bench Marking Performance Measurement
Bench Marking & Performance Measurement Introduction The aim of this report is to make a comparative analysis of ebookers plc and lastminute.com. ... The analysis focuses on both financial and non-finacial aspects of both the groups’ performance. ... The sheer size of the European leisure market means that agencies like ebookers and lastminute.com play a critical role in helping suppliers to manage it. ... Company Names Company Name: ebookers plc (Registered in England. ... ebookers.com Company Name: Last Minute Network Limited (UK Trading Company): Company No: 03538456 Registered address: 4 Buckingham Gate London SW1E 6JP Website: http://www.lastminute.com 2. Types of Business activities ebookers plc ebookers plc is a leading European online travel agency with its headquarteres in London. ... ebookers specialises in the sale of discount travel products secured through its strong relationship with the world’s leading travel suppliers - including airlines, hotels, car hire companies, travel insurance providers, and cruise lines. ebookers has a low-cost Business Process Outsourcing facility in New Delhi, India with a staff of over 600, which carries out 14 separate functions from email sales to software development. ... Its brands include ebookers.com, Flightbookers, Travelbag, Bridge the World, MrJet. ... Formed as a separate company in 1999, ebookers began as the internet arm of UK-based Flightbookers plc in 1996. ... ebookers plc is listed on the London Stock Exchange (symbol: EBR) and quoted on Nasdaq (symbol: EBKR) in the United States of America. Services offered by ebookers plc Air tickets (medium & long haul), Hotel reservations, Insurance, Holidays, Cruises, Ski Trips and Business Travel, sightseeing, Train tickets and ferry tickets are the main services offered by ebookers plc. ... The concept of Merchant fares ebookers specialises in merchant (negotiated) fares, which typically offers customers a discount of between 15% and 65% off published prices (that is, the fare at which the airline offers the ticket to the public). ... The benefit for ebookers is that these “merchant fares” are attractive to customers, yet have high margins and carry no inventory risk. ebookers has managed to secure this range of merchant fares through its roots in Flightbookers, and through its unique acquisition strategy. Ebookers can offer customers these fares, because the group has negotiated fare deals individually with travel suppliers. ... Suppliers give ebookers merchant rates because they are a means of selling their excess capacity in a way that does not damage the higher prices of their published inventory. ... Lastminute.com Founded by Brent Hoberman and Martha Lane Fox in 1998, lastminute.com was launched as an online marketplace for customers in search of travel & leisure “inspiration and solutions” at the last minute. lastminute.com has established itself as a major international lifestyle e-commerce retailer with a formidable brand, varied product offering and strong relationships with key suppliers. ... Customers can access lastminute.com from any device – PC, PDA or mobile. Lastminute.com’s customers are people who buy goods and services at the last minute from any location – this fits in with the groups strategy and vision perfectly. Lastminute.com is listed on the London Stock Exchange (symbol:LMC) and quoted on Nasdaq (symbol: LMIN) Services offered by lastminute.com Lastminute.com sells Holidays, Ski holidays, Air tickets, Hotel reservations, Car Hire, Train tickets, Cruises and Travel Insurance in the travel category. ... The lastminute.com model lastminute.com aims to be the global marketplace for all last minute services and transactions. Using the Internet to match suppliers and consumers at short notice, lastminute.com works with a range of suppliers in the travel, entertainment and gift industries Except for the sale of a very small number of products (such as, for some entertainment tickets) lastminute.com’s website and other channels operate to an agency model. This means that lastminute.com acts as a disclosed agent for third party suppliers, such as tour operators, hotels or restaurants. lastminute.com carries almost no inventory risk, selling perishable inventory for its suppliers, and, where appropriate, protects suppliers brand names until after purchase. ... Financial Analysis The financial analysis of ebooker plc and lastminute.com largely takes into consideration the year 2001 and 2002. ... Horizontal Analysis Gross sales & Total Transaction Value Considering the fact that the Gross Sales of ebookers and Total transaction value of Lastminute.com is calculated in a similar manner, an attempt has been made to compare the two. ebookers plc– Gross Sales Gross sales represents the total transaction value of all ebookers’ services and hence includes the total amount paid by customers for the services provided by ebookers. Lastminute.com - Total Transaction Value In the majority of transactions, where lastminute.com acts as agent or cash collector, total transaction value represents the price at which goods or services have been sold across the website. ... 2001 (£’000s) 2002 (£’000s) Actual Change (£’000s) Percentage Change ebookers plc– Gross Sales 179,753 273,491 93,738 52.14% Lastminute.com- Total Transaction Value 124,210 245,971 121,761 98. ... Despit despite 3 weeks of the effect of the September 11, The gross Sales of ebookers plc was quite high in 2001 this may have been due to its 70:30 online offline mix that stands us apart from many other online travel companies. It seems to have given ebookers a competitive advantage. Though the Gross Sales of ebookers plc is higher than Lastminute.com in both years 2000 and 2001, the percentage change inn total transaction value between the years in the case of lastminute.com is phenomenal at 98. ... In comparison the percentage change in Gross Sales in the case of ebookers plc is lower at 52. ... Lastminute.com’s phenomenal increase in Total transaction value, may be due to its strategic acquisition of Travelselect.com in the year 2002. Turnover Ebookers plc - Turnover During the year 2002, the presentation of negotiated (merchant) fare turnover by ebookers changed from a gross to a net basis. ... Lastminute.com - Turnover In a majority of cases Lastminute.com does not take ownership of the products and services being sold and acts as an agent, receiving a commission from the supplier of the products or services being sold. ... Where the Group acts as principal, turnover represents the price at which the products or services have been sold across the website 2001 (£’000s) 2002 (£’000s) Actual Change (£’000s) Percentage Change ebookers plc 20,303 31,430 11,127 54.80% Lastminute.com 18,369 34,890 16,521 89.94% The turnover of ebookers plc is higher than that of lastminute.com in the year 2001. However in the year 2002, the turnover of lastminute.com is higher than ebookers plc. And therefore while considering the actual change in turnover between the 2 years for both companies, the actual change in turnover of lastminute.com is higher. Similarly the percentage change of lastminute.com is exceptionally high at 89.94% when compared to ebookers’ 54. ... Lastminute.com’s increase in turnover maybe due to the 3 strategic acquisitions that the company made in the year 2002. Gross Profit Ebookers plc has considered the group’s turnover as the group’s Gross Profit. On the other hand Lastminute.com has also taken into consideration Cost of sales (in the case of tangible products). Lastminute.com’s ‘Cost of Sales’ were £1,165,000 and £1,626,000 for the years 2001 and 2002 respectively. 2001 (£’000s) 2002 (£’000s) Actual Change (£’000s) Percentage Change ebookers plc 20,303 31,430 11,127 54.80% Lastminute.com 17,204 33,264 16,060 93.35% Though the Gross Profit of Ebookers plc was higher than that of Lastminute.com in the 2001, however the Gross Profit of Lastminute.com was higher than that of ebookers plc in the year 2002. Lastminute.com has nearly doubled its gross profit in a span of a year. The percentage change in Lastminute.com’s Gross Profit between the two years is an impressive 93.35% Operating Expenses 2001 (£’000s) 2002 (£’000s) Actual Change (£’000s) Percentage Change ebookers plc 46,606 44,624 -1982 -4.25% Lastminute.com 74,198 69,037 -5161 -6.95% The Operating Expenses of Ebookers is notably lower than that of Lastminute.com, over both the years. Ebookers’ Business Process Outsourcing facility in India gives the group a distinct cost-advantage when compared to last-minute.com. Ebookers’ BPO manpower costs are upto 70% less than Europe. It must be mentioned that Lastminute.com has made attempts to reduce Sales & Marketing costs considerably, and General & Administration costs marginally. This effect is reflected in the reduction Lastminute.com’s total operating costs, in the year 2002. Lastminute.com has reduced its operating costs by 6. ... Operating Loss 2001 (£’000s) 2002 (£’000s) Actual Change (£’000s) Percentage Change ebookers plc 26,303 13,194 -13,109 -49.84% Lastminute.com 56,994 35,773 -21,221 -37.23% Over both the years ebookers’ operating loss is considerably less than the operating loss suffered by lastminute.com. The effect of ebookers’ lower operating costs is reflected here. ... However ebookers has considerably reduced operating loss by 49. ... Lastminute.com has reduced its operating loss by 37. ... Trend Analysis Gross Sales & Total Transaction Value Ebookers – Gross Sales 2002 2001 2000 (£’000) 273,491 179,753 102,203 Percentage 268% 176% 100% Lastminute.com -Total transaction value 2002 2001 2000 (£’000) 254,971 124,210 34,189 Percentage 746% 363% 100% The acquisition of Travelselect.com by lastminute.com in April 2002 tripled the UK’s flights volume and facilitated access to a further 27 key airline relationships. This has been the key reason for lastminute.com’s extraordinary increase in TTV in the year 2002. Gross Profit ebookers Gross Profit 2002 2001 2000 (£’000) 31,430 20,303 9,654 Percentage 326% 210% 100% Lastminute.com - Gross Profit 2002 2001 2000 (£’000) 33,264 17,204 3,339 Percentage 996% 515% 100% The percentage change of Lastminute.com’s gross profit over the years is also exceptional. ... The acquisitions helped lastminute.com benefit from businesses that were immediately earnings enhancing and generating positive operating cash flow. Total Operating Expenses Ebookers - Total Operating Expenses 2002 2001 2000 (£’000) 44,624 46,606 48,599 Percentage 92% 96% 100% Lastminute.