Ebookers reported its first adjusted profit yesterday. But the online travel group's shares lost nearly a quarter of their value on concerns about its margins and the prospects of the travel industry as a whole.

Comments from offline rival MyTravel on a challenging UK market, which helped send its shares plummeting, appeared to affect Ebookers as well, along with renewed fears of terrorism following the killing of the founder of the militant Hamas group by the Israelis.

The company also reported full-year adjusted pre-tax profits of £1.3million (€1.9 million), below market expectations of £2.4 million, as margins came in lower than expected.

Mr Dinesh Dhamija, chairman, said the company had entered 2004 "with tremendous organic internet growth of 69 per cent" up to March 18th.

Mr Robin Chabhra, analyst at the company's broker Evolution Beeson Gregory, reduced his 2004 profit forecasts by 39 per cent, from £16.5 million in adjusted profits to £10 million and earnings per share from 24p to 14.6p. "The online growth has been related to flights only, where margins are about 10 per cent, and there has been a lack of ability to cross-sell higher margin business such as hotels and car rentals," he said.

Its shares closed 24.5 per cent lower at 300p.