On the Beach swings to £46m loss; revenue falls 76%

Manchester-based online holiday retailer On the Beach Group plc (OTB) said on Thursday it made a GAAP pre-tax loss of £46.3 million for the year ended September 30, compared to a £19.3 million profit the year before.

OTB said it made an adjusted pretax profit of £600,000, down from £34.5 million.

On the Beach said GAAP revenue fell 76% to £33.7 million, down from £140.4 million in the prior year.

It said adjusted revenue was £71.2 million, a 52% decrease from £147.5 million in 2019.

On “current trading and outlook” On The Beach said: “Booking volumes in October and November 2020 were significantly below normal levels as consumer appetite for booking holidays remained subdued …

“Legislation passed by the Government on 4 November made leisure travel from England illegal during the period from 5 November to 1 December 2020 (inclusive) …

“A number of factors continue to supress demand such as regularly changing FCDO advice, onerous destination entry requirements and quarantine restrictions …

“Reduced consumer confidence over the summer and in recent months has resulted in the reduction and consolidation of airline flying schedules this winter …

“In a normal year, holiday bookings would peak in January for travel from March – September …

“Booking volumes and the timing of the peak in FY21 will be significantly influenced by the evolution of the COVID-19 pandemic and UK and European Government policy in response to it …

“Whilst the wider environment therefore remains uncertain, the board remains confident in the resilience and flexibility of the Group’s business model and believes there is an unprecedented opportunity to significantly increase market share over the medium to long term as demand returns …

“The board will continue to evaluate internal and external opportunities that will both increase scale and deliver value for shareholders …

“In light of the continued market uncertainties, the group is maintaining its suspension of full year guidance for FY21 until such time that there is more certainty over the timing of, and extent to which travel can return to normal.”

On the Beach CEO Simon Cooper said: “There is no doubt that 2020 has significantly impacted the entire global travel industry and that the effects of the pandemic will have lasting impacts on the way the industry conducts business for many years to come.

“I am pleased to have witnessed and experienced the professionalism and resilience of our team members in coping and dealing with the many challenges that COVID-19 has presented and I would like to thank them, on behalf of the board, for all of their hard work for our customers.

“On the Beach continues to successfully build a leading position as more consumers discover the ease of use and vast choice of beach holidays across our platforms.

“The flexibility and asset light nature of our business model together with our recently strengthened balance sheet and the actions we have taken since the middle of March means we are well placed to capitalise on the inevitable structural changes in the market post COVID-19.

“As a result, the board continues to look to the future with confidence.”

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