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Https://www.cityam.com/on-the-beach-labelled-cash-machine-following-ryanair-partnership/
Big boy institutions will snap up everything from the small traders stopped out. They will be desperate for shares.
Seen it too many times now
Super one to tuck away at the 130p levels
Analyst & Investor call at 10am
Agreed. Strong and stable platform/balancesheet/business model/management team. Cheap as chips at these levels
It is always stop losses triggered, market manipulation, tree shakes. Never the numbers.
Confirmation Bias.
Buy the dips sell the rockets
Will not stay here for much longer.
@ Plutus - any link?
Allessandro, whenever I see your posts on here you have a negative bias regardless of results or news flow. You stated recently that it is not good value here because traveler numbers would dwindle given inflation and the post covid boom fizzling out, and looking at the numbers and outlook released today you are clearly wrong with another record year expected. The number released today are very good, and the fall today has little to do with that. It's because there was a fairly ridiculous 15% spike yesterday so it was always going to happen unless the results were absolutely mega. Had yesterdays gain not happened and we were up 4-5% today nobody would blink an eye at the fall today. I can't see this going any way but up personally, but that's the game I guess, we can all have different opinions.
JMU I am not negative, I like OTB but I also look at the numbers. Look at statutory figures (at the bottom of the RNS doc) and tell me how impressed you are. Due to seasonality a large part of the earnings will be realized in H2. Administrative expenses need to come under control. Competition in the travel industry can be fierce. It is premature to be greedy.
Funny how, again, a line is given for gross profits before and after marketing... usual embellishment of figures!
Weak argument Alessandro, I've gone in depth on the financials and OTB is indeed a cash machine.
- It's operating and free cash flows are significantly higher than it's profits every year.
- pre-2020 this was generating £15m-£20m in FCF every year. That's why analysts are calling it a cash machine.
- Admin expenses are up cause of inflation, once inflation/rates keeps going down then operating leverage will come back (as it already is in the results).
- OTB is not embellishing figures, it's not difficult to look at the numbers.. They are trying to show improving operating leverage (although it's obviously much worse than 2019 still due to inflation).
Competition is the only valid thing, if you believe competition from easyjet2, jet2, tui package holidays will become more fierce and take market share then OTB is valued roughly correct due to lower margins, if not (and imo it won't) then OTB is way undervalued. OTB provides a great service to customers.
Also, the new RyanAir partnership is being WAY undervalued by the market. This now means no more legal costs, customers are MUCH happier because ryanair allows OTB to scrape data and provide more add-ons, less customer service calls etc. So this alone will result in a larger revenue growth and margin expansion due to repeat bookings and less costs that wouldn't happen otherwise.
Bought more at this price. People on these boards are always so bearish when stock prices are down and bullish when they are all time highs, just lemmings.
This is a good post and just wanted to pick up on the Ryanair distribution agreement you pointed out. This is probably the single biggest positive news from the company in the past year or two and the market doesn’t seem to be factoring it in.
Ryanair account for c40-45% of OTB airline share with easyJet second at c25%. There is probably an interim solution being worked at atm and once technology like API feeds is sorted out there should be full access to Ryanair seat capacity and significant cost efficiencies and a much smoother customer proposition. This disagreement and litigation has been weighing on the shares for years and finally a great outcome.
I’ve read all the latest broker notes from shore, investec, numis etc and you can clearly see they are all focusing on this driving the growth story and derisking the company massively.
Also, another thing from the presentation they gave.
Premium market is a big opportunity. If they can execute here as well then margins will be much higher than historical.
That’s where the real profit it
Low cost needs high volume
High end needs lower volume
High end has the money and travel many times a year
Always a known fact that economy seats are not what make a flight profitable to fly; it’s the premium, business & first seats
The volume low cost just adds a small amount to profit
Interestingly the H1 accounts make reference to Ryanair as the biggest Company risk... So with that out of the way should be plain sailing and all down to execution now.
Also as researching further - good to see positive Trustpilot reviews in the main and a good constant flow of reviews that back robust customer #.
Does seem quite undervalued and not sure why the SP has fallen so much in this week alone. While I hear the opinions that may be better to wait as SP could go to 120s... but I'd be surprised if any lower considering future value. Bought in a first tranche and will see.
And I also agree that premium market and long haul (more expensive trips) will always be better to the bottom line and improved profit margins for company model like OTB vs 3* low cost bookings. That's not a negative but a positive for On The Beach.