Unusual tourism trends may have been the reason for the 5 per cent drop in On The Beach 's (OTB) shares as the business seems to be in good health. The online travel agent has, like others in the industry, had to deal with holidaymakers eschewing formerly popular beach destinations Turkey and Egypt for the western Mediterranean and also delaying bookings. Management cited a "sharp reduction in consumer confidence" in the immediate aftermath of terrorist atrocities, of which there have been a steady stream over the past year.
Group revenue rose by more than a fifth to £35.5m, which helped push adjusted operating profits up more than a third to £10.3m. The business recently floated, and so was able to use the proceeds to dramatically reduce net debt to £6.6m from £22.3m in the same period last year. Heavy advertising spend has also had a positive impact on sales, so chief executive Simon Cooper expects the company to spend a lower percentage of turnover on new campaigns this year.
Analysts at Numis have forecast pre-tax profits of £20.8m for the year to September 2016, up from £14.5m in FY2015.
| ON THE BEACH (OTB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 283p | MARKET VALUE: | £369m | |
| TOUCH: | 283-287p | 12-MONTH HIGH: | 312p | LOW: 166p |
| DIVIDEND YIELD: | NA | PE RATIO: | NA | |
| NET ASSET VALUE: | 57p* | NET DEBT: | 9% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2015 | 29.2 | 0.28 | -0.6 | nil |
| 2016 | 35.5 | 7.34 | 5.0 | nil |
| % change | +22 | +2,493 | -933 | - |
Ex-div: na Payment: na *Includes intangible assets of £66.5m, or 51p a share | ||||
