On The Beach Share News (OTB)

(Sharecast News) - On the Beach suspended its full-year guidance and cancelled its dividend on Wednesday due to the coronavirus outbreak, as it announced that its chief executive will forgo his salary.
The group's CEO, Simon Cooper, has agreed to forgo his salary, while the rest of the board have voluntarily agreed to a 20% reduction in salary and fees. No bonuses will be awarded for the year.

OTB also said it has renewed its existing revolving credit facility to provide up to ?50m to manage seasonal working capital requirements. In addition, it has reached an agreement with its bank to extend its ?50m RCF to December 2023.

After a stress test assuming that there would be no bookings taken between now and the end of September 2020, OTB said it would end H1 FY21 with only a limited drawdown of its facilities and "significant" headroom.

"This headroom would allow the group to take advantage of the multitude of opportunities that these market conditions would present. The aforementioned position, of course, does not include any customer funds received for untraveled holidays, as these would be held separately in the group's ringfenced trust account."

On the Beach said its marketing costs have reduced to almost nil and it has taken further actions to limit other non-essential costs, meaning that monthly cash costs are now less than ?2m.

Cooper said: "On the Beach was created with an asset light model to ensure its survival in the inconceivable market conditions in which we now find ourselves."

He pointed out that unlike the majority of larger tour operators, online travel agents and airlines, all of its customer funds are held in a ring-fenced trust account so that if all forward bookings were to seek a refund of their prepaid holiday monies, this could be facilitated "without impacting group cash".