On The Beach 'cautious' on consumer but expects profitable second half trading

UK based travel retailer On The Beach moved back into the black during the first half of its financial year as travel restrictions were lifted and sales in the first eight weeks of the second half were running 33% on the comparable pre-Covid level in 2019.

Yet the company, which specialises in short and medium-haul flight and hotel holidays to Europe, remained "cautious" about the consumer environment.

"Visibility of the near term outlook for the UK outbound travel industry is limited and it is currently unclear to what extent the cost of living crisis will impact bookings."

"Customers are typically booking holidays with shorter lead times and we believe we are yet to see the full impact of the escalating costs of living on bookings," group chief Simon Copper added.

"Despite this, we remain confident that we have taken the right actions throughout the pandemic and we will continue to support our customers and staff as a priority. Our investments in brand and proposition will ensure profitable trading into the second half and has left us in a strong position to continue growing market share."

Booked sales in September and October of 2021 rose past their pre-pandemic levels of 2019, but the advent of the Omicron variant of Covid-19 hit sales heavily in November, December and January 2022.

Even so, on an adjusted basis, booked sales over the six months ending on 31 March were up 6% on the equivalent 2019 period to reach £385.8m.

And as of 22 May, 2022 summer sales were running 22% ahead of their pre-Covid level.

Monthly booked sales is the tally of total transaction values of holidays booked each month before cancellations and adjustments.

Revenues at the group jumped to £52.9m from £4.4m one year back.

Also on an adjusted basis, the company roughly broke even on a before tax basis, against -£9.5m of red ink one year back, for earnings per share of 0.1p versus -5.0p in the first half of 2021.

Growth over the period was based exclusively on new cash bookings, instead of the redemption of vouchers or refund credit notes, On the Beach noted in a statement.

The company described its liquidity position at period end as "strong" and highlighted its unleveraged balance sheet.

As of 31 March, On The Beach had £16.8m of cash on hand, plus an undrawn credit facility of £75m and customer prepayments in a ring-fenced trust account of £99m.

No dividend was declared for the period.

As of 0953 GMT, shares of On The Beach were off by 2.91% at 233.50p.