On The Beach’s (OTB) significant sales momentum fed right through to the bottom line, while Sunshine.co.uk, purchased in May for £12m, is now fully integrated and trading in line with expectations. And excluding the working capital movement stemming from this acquisition, underlying operating cash conversion remains healthy at 88 per cent. With a significant dividend uplift to boot, it was no surprise that shares recorded a double-digit increase.
In the UK, daily unique visitors rose by 13.6 per cent, while revenue per booking increased by 2.5 per cent. In total, UK revenues were up 17 per cent at £81.9m, achieved despite a decline in marketing spend (as a percentage of sales) from 44.7 per cent to 41.2 per cent. In the smaller international segment, revenue jumped by a whopping 48 per cent – albeit from a low base of £1.1m. However, near-term profitability is taking as back seat due to significant marketing investments. Having opened in Sweden, then Norway, Denmark is management’s next target market, as it seeks to build market share in the region.
Analysts at Numis forecast pre-tax profits of £35.7m and EPS of 22.1p for the year to September 2018, up from £28.5m and 17.7p in FY2017.
| ON THE BEACH (OTB) | ||||
| ORD PRICE: | 425p | MARKET VALUE: | £ 554m | |
| TOUCH: | 425-428p | 12-MONTH HIGH: | 483p | LOW: 245p |
| DIVIDEND YIELD: | 0.7% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 74p* | NET CASH: | £33m | |
| Year to | Turnover | Pre-tax | Earnings | Dividend |
| 30 Sep | (£m) | profit (£m) | per share (p) | per share (p) |
| 2013** | 37.5 | 5.8 | na | na |
| 2014 | 45.8 | -4.8 | -7.9 | nil |
| 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 |
| % change | +17 | +24 | +25 | +27 |
| Ex-div: | 11 Jan | |||
| Payment: | 15 Feb | |||
| *Includes intangible assets of £73m or 56p per share**Pre-IPO figures | ||||
