On The Beach (OTB) took a £7.7m hit to statutory pre-tax profit in 2019 after the collapse of Thomas Cook forced the group to pay for refunds and alternative flights to bring holidaymakers home. The travel operator’s absence is continuing to reverberate across the industry with the short-term lack of seat capacity leading to a significant increase in flight prices, especially for the winter season. But On The Beach spies an “unprecedented opportunity” to gain market share when seat supply levels return to normal levels. To this end, it is focusing on price competitiveness and increasing both online and offline marketing investment to boost brand visibility.
Thomas Cook’s demise occurred towards the end of the period and the short-haul beach holiday market was already experiencing challenges – demand was dampened by the uncertain domestic political environment, lower consumer confidence and sterling weakness. Tour operators are also engaged in aggressive discounting. Stripping out the impact of Thomas Cook, adjusted revenue from the core ‘On The Beach’ division only rose by 1 per cent to £90.3m. Package holiday bookings did increase by 10 per cent and now account for over four-fifths of online bookings. The group is looking to integrate more airlines and hotels to expand its long-haul offerings.
House broker Peel Hunt expects adjusted pre-tax profit of £43.1m and EPS of 26.6p in 2020, rising to £49.3m and 30.4p in 2021.
| ON THE BEACH (OTB) | ||||
| ORD PRICE: | 436p | MARKET VALUE: | £ 572m | |
| TOUCH: | 435-436p | 12-MONTH HIGH: | 495p | LOW: 326p |
| DIVIDEND YIELD: | 0.8% | PE RATIO: | 36 | |
| NET ASSET VALUE: | 99p* | NET CASH: | £54.8m** | |
| Year to 30 Sept | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2015 | 63.1 | -2.0 | -5.8 | nil |
| 2016 | 71.3 | 17.0 | 11.0 | 2.2 |
| 2017 | 83.6 | 21.1 | 13.8 | 2.8 |
| 2018 | 104 | 26.1 | 16.5 | 3.3 |
| 2019 | 140 | 19.4 | 12.0 | 3.3 |
| % change | +35 | -26 | -27 | - |
| Ex-div: | 09 Jan | |||
| Payment: | 13 Feb | |||
| *Includes intangible assets of £85.1m or 65p a share, **Excludes £44m trust account | ||||
