A hot summer caused chaos for travel companies as Brits decided against last-minute getaways. And while On The Beach (OTB) wasn't completely immune to this issue, the structure of its business helped insulate it from the problem. The company operates a holiday booking platform – rather than owning the large, physical assets such as airplanes – so there's little need to discount or write off unsold trips. And even though chief executive Simon Cooper admits the heatwave "suppressed demand", the group still managed to deliver a 24 per cent increase in annual operating profit to £26.1m.
Following the acquisition of Classic Collection Holidays, which completed in August, the group now has access to a "business to business" channel whereby "thousands" of travel agents can use its booking platform. It’s estimated that 5m beach holidays are booked via this offline channel each year, although a new booking portal platform tailored specifically to travel agents will be launched in early 2019.
Analysts at Numis expect pre-tax profits of £39.3m during the year to September, giving EPS of 24.1p, compared with £33.6m and 21.2p in FY2019.
ON THE BEACH (OTB) | ||||
ORD PRICE: | 412p | MARKET VALUE: | £540m | |
TOUCH: | 412-412.5p | 12-MONTH HIGH: | 650p | LOW: 384p |
DIVIDEND YIELD: | 0.8% | PE RATIO: | 25 | |
NET ASSET VALUE: | 90p* | NET CASH: | £47.3m† |
Year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
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 |
2018 | 104 | 26.1 | 16.5 | 3.3 |
% change | +25 | +24 | +20 | +18 |
Ex-div: | 10 Jan | |||
Payment: | 14 Feb | |||
*Includes intangible assets of £88.1m, or 67p a share †Excludes £38.4m trust account |