On the Beach swings to interim loss as revenues slide

30 June 2020

(Sharecast News) - On the Beach said on Tuesday that it swung to an interim loss as revenue slumped due to cancelled bookings and reduced demand amid the Covid-19 outbreak, as it announced the departure of chief financial officer Paul Meehan.
The company said it had been trading "well" prior to the escalation of the coronavirus pandemic in Europe, with summer bookings up 29% as it benefited from the collapse of Thomas Cook.

However, revenue for the six months to the end of March fell 66% on the year to £21.4m and the company swung to a pre-tax loss of £34.1m from a profit of £11.9m due to cancellations related to the Covid outbreak and a "significant" reduction in demand from mid-February, when the virus began to spread to Europe.

Total exceptional costs during the period came in at £34.7m, mostly on the back of Covid-19 related cancellations or expected cancellations and associated administrative expenses.

The company said bookings in April were at around 10% of normal volumes as consumer appetite for booking holidays remained subdued. However, there has been a "significant" rise in demand for Summer 2020 holidays since mid-June, "albeit from a very low base".

OTB said booking volumes for Summer 2021 remain low but are "significantly ahead" of 2020, partly due to the early release of flights for next year by most major airlines.

Full-year guidance remains suspended, the company said, "until such time that the overall impact of Covid-19 on the group becomes clearer".

It also announced that Paul Meehan has resigned from his position as chief financial officer "to pursue other business interests". He will step down on 17 July and finance director Shaun Morton will be promoted to the role.

Chief executive Simon Cooper said: "The onset of the Covid-19 pandemic led to a rapid slowdown in demand for foreign travel followed by the total closure of airspace across Europe by mid-March.

"On the Beach continues to successfully build a leading position as more consumers discover the ease of use and wide 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."

At 1255 BST, the shares were down 2.5% at 294.50p.