On the Beach shares fall on ‘challenging value market’

Shares of Manchester-based holiday retailer On the Beach Group plc (OTB) fell as much as 14% after it said its “value market remains more challenging, reflecting ongoing cost of living pressures” despite its overall market remaining “strong.”

Reporting results for the six months to March 31, 2024, On the Beach said group booked total transaction value (TTV) was up 22% at £597.8 million, resulting in group revenue of £80.8 million, up 11%.

“This was driven by increased passenger bookings during the period (+15%) as well as an increase in the average value of holidays sold,” said the company.

First-half group adjusted profit before tax was £4.3 million (H1 23: £0.0m), and statutory profit before tax was £600,000 (H1 23: (£5.9m)).

“In view of the current full year outlook and the board’s continued confidence in the group’s prospects, it has decided to pay an interim dividend of 0.9p per share (2023: nil),” said On the Beach.

The company added: “Overall market remains strong, underpinned by an additional 7% airline capacity to beach leisure destinations for Summer 24.

“OTB continues to grow at ahead of this rate, supported in part by our new partnership agreement with Ryanair which ensures we have secure access to this increase in capacity.

“The premium market continues to perform strongly with TTV growth in 5* holidays within the B2C segment of +41% YOY, and now represents 34% of B2C TTV mix (H1 23: 30%).

“The value market remains more challenging, reflecting ongoing cost of living pressures, with 1% TTV growth YOY.

“Long Haul (LH) continues to outperform as we continue to add new destinations. B2C LH TTV is up 61% vs prior year, and now represents 9% of B2C TTV mix (H1 23: 7%).”

On current trading and outlook, the firm said trading momentum has continued since the half year date and it expects to deliver another record summer.

“Board is confident in delivering FY24 profit in line with current consensus expectations,” added the Manchester firm.

On the Beach Group CEO Shaun Morton said: “I am pleased to report another strong set of results, marking our ninth consecutive quarter of record performance.

“TTV was up 22% as we saw strong growth across both volume of bookings and the average value of holidays sold.

“Our customers are favouring our premium and Long Haul beach holidays, whilst making the most of our enhanced customer perks.

“The signing of our long-term distribution agreement with Ryanair was a milestone achievement in the period.

“Through this partnership, our customers can now secure free and fair access to Ryanair’s seat supply, and we hope this industry-leading collaboration can be used as a blueprint for how the industry can better work together.

“In the two weeks since the partnership went live, demand for Ryanair seats has been encouraging and supports the growth of our value proposition that is enjoyed by families across the UK.

“Looking ahead, the summer ’24 forward order TTV is currently 22% ahead of last year which, coupled with our continued trading momentum since the half year, means we are confident of delivering our biggest summer ever.”