Online travel shop has offered hope to beleaguered investors by predicting its core business would be profitable within a year.

The forecast came as lastminute, founded by Oxford graduates Martha Lane Fox and Brent Hoberman, reported a rise in subscriber numbers and a slight narrowing of net losses for the first three months of this year.

Thousands of investors will now be looking for further evidence of a turnaround.

Fuelled by the hype surrounding Internet firms, lastminute listed at 380p but began this week at just 60p. It slipped a further four per cent yesterday as investors secured profits following recent gains.

But chief executive Brent Hoberman predicted that the combined UK and French operations would now be profitable within the next 12 months.

Mr Hoberman also believed that lastminute was better positioned than its rivals to shake off the impact of the economic slowdown.

He added: "Our experience shows that during a downturn we will do better because customers are more focused on value."

Sales lifted 37 per cent during the second quarter to £27.8m, while subscriber numbers were up 9.6 per cent to 3.1m.

Net losses were £10.7m, compared with £11.7m in the three months to December 2000.

lastminute said its cash balances reduced to £61.8m from £70.9m in the previous quarter, although the company was encouraged by a significant reduction in the amount of cash it was spending.

During the first three months of the year, lastminute's cash outflow fell by around 20 per cent to £9.1m.

Sales and marketing costs were reduced to £7.1m, while administration costs were relatively unchanged at £4.7m.