On The Beach tumbles as reinstated FY guidance disappoints

(Sharecast News) - On The Beach tumbled on Tuesday as the company's reinstated full-year guidance fell short of expectations.

In results for the six months to the end of March, the company said adjusted pre-tax profit fell to £2.3m from £8.4m in the same period a year earlier, with revenue down to £52.2m from £59.4m.

OTB swung to a pre-tax loss of £3.2m from a profit of £4.5m a year earlier, while adjusted earnings before interest, tax, depreciation and amortisation halved to £6.4m form £12.8m.

The company said that although demand remains more subdued due to the Iran war, booking activity has stabilised to a more consistent trading pattern since the half year.

Having suspended its full-year guidance in March, OTB reinstated it on Tuesday. It now expects to deliver adjusted pre-tax profit of between £18m and £25m, down significantly from previous guidance of £39m to £43m.

Broker Peel Hunt said the new guidance was below consensus expectations of £36.4m and its own original expectation of £40.5m.

"Whilst there remains a significant level of external volatility, OTB continues to trade profitably and is cash generative," the company said.

"Although demand remains more subdued as a result of the direct impact of the conflict in the Middle East and the indirect second order effects (e.g. impact on consumer confidence, destination mix and media coverage of potential disruption over summer), booking activity has stabilised to a more consistent trading pattern since the half year."

It noted that booking volumes over the last six weeks have risen 9% as we approach the key Summer departure months.

At 1020 BST, the shares were down 17% at 140.60p.

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On The Beach