Getting your name known in a busy market is crucial for consumer-facing businesses, especially when it comes to the online travel agent space. On The Beach (OTB) has spent a significant amount on advertising, but it's starting to pay off: revenue after marketing costs rose 18.4 per cent to £36m last year. Increasingly sophisticated customer communications are working, too, with efficiencies in online campaigns cutting marketing spend as a percentage of revenue to 44.7 per cent (equal to £31.4m), compared with 48.6 per cent in FY2015.
Last October, the company admitted annual revenue growth would be lower than expected, with chief executive Simon Cooper blaming an overly aggressive marketing strategy by rival Low Cost Travel - which now happens to be in administration. Mr Cooper is more optimistic about 2017. The plan is to go big with an offline marketing campaign, which will include a national Christmas Day advert to help boost bookings during the key trading period in late December.
Analysts at Numis expect pre-tax profit of £27m for the year to September 2017, leading to EPS of 16.6p, compared with £21.3m and 13p in FY2016.
| ON THE BEACH (OTB) | ||||
|---|---|---|---|---|
| ORD PRICE: | 264p | MARKET VALUE: | £344m | |
| TOUCH: | 261-265p | 12-MONTH HIGH: | 312p | LOW: 166p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 24 | |
| NET ASSET VALUE: | 63p** | NET CASH: | £26.1m | |
| Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012* | 31.0 | 4.1 | n/a | n/a |
| 2013* | 37.5 | 5.8 | n/a | n/a |
| 2014 | 45.8 | -4.8 | -7.9 | nil |
| 2015 | 63.1 | -2 | -5.8 | nil |
| 2016 | 71.3 | 17 | 11.0 | 2.20 |
| % change | +13 | - | - | - |
Ex-div: 5 Jan Payment: 7 Feb *Pre-IPO figures **Includes intangible assets of £64.6m, or 50p a share | ||||
