On The Beach Regulatory News (OTB)

25 October 2022

On the Beach Group plc  

("On the Beach," the "Company" or the "Group") 

2022 Full Year Trading Update and Notice of Results

On the Beach Group plc (LSE: OTB.L), today provides an update on trading for the 12 months to 30 September 2022 ("FY22").

Summary

Trading Update

The Omicron variant heavily impacted Group Sales in November and December 2021, and into the key booking period of early January 2022. Consumer demand remained materially below H1FY19 levels until restrictions were eased in mid-January.

In H2FY22, Group Sales were 25% ahead of H2FY19, despite the indirect consequences of the war in Ukraine and ongoing disruption across the travel supply chain as the sector continued to recover from the pandemic. Over the full year, FY22 Group Sales were 16% ahead of FY19.

All booked Sales over the year relate to new bookings. The sales of many other operators over the same period will be flattered by a proportion of their bookings rolled over from previous periods or booked using vouchers or refund credit notes ("RCNs").

The Group has never issued vouchers or RCNs in lieu of refunds. Where customers have been refunded using vouchers or RCNs from other operators, they are then captive to that operator, narrowing our addressable audience this year. The Group believes that our enhanced proposition and reputation will allow us to target these customers in FY23 when the playing field is levelled.

The Group has materially invested in its brand, technology, and customer proposition throughout the year. This includes offering a differentiated customer experience with premium lounges and fast track security, increasing headcount in technology and customer service areas, and investing in above the line media to drive awareness of the brand. These investments, combined with improved access to a broader hotel portfolio have resulted in FY22 growth in 5* holiday sales of 83% vs FY19, contributing to total FY22 ABV growth of 31% versus FY19.

On the Beach also continues to make good progress in B2B and Long Haul. B2B sales were 45% ahead of FY19. Long Haul sales were 257% up vs FY19. 

Partly due to continued rising costs of living, the lates market for value holidays has remained subdued in H2FY22 and as a result, sales of 3* holidays for FY22 were 18% below FY19. The Group is committed to maintaining its focus on this important segment and growing its share of value holidays.

Despite heavily disrupted trading throughout the financial year, and the Group continuing to strategically invest ahead of full market recovery, the Board expects underlying PBT performance for the period to be in line with market expectations. OTB exits the year with a strong cash position and balance sheet flexibility.

The Board is confident that the strategic actions taken during the pandemic, together with continued investment made in FY22, ensures the Group exits the year in the best possible position to grow market share across its core addressable market and expansion areas in FY23.

Notice of Results

The Group will announce its Preliminary Results on 8 December 2022.

Simon Cooper, Chief Executive of On the Beach Group plc, commented:

"I am pleased with the Group's performance in what was another disrupted and unpredictable year. Whilst Omicron significantly impacted Q1 and into Q2, the second half delivered a 25% sales improvement on H2FY19, contributing to a full year Group Sales performance 16% ahead of FY19.

"Both the Group's long haul segment and 5* holiday sales delivered substantial growth in the year and we will continue to grow these important revenue streams. I am also confident that we will take market share in the Group's core 3* holiday product in FY23.

"Despite the tougher trading conditions at the end of the year, the strength of the Group's balance sheet ensures we are well placed to deliver further strategic progress in FY23, and the Board will continue to appraise opportunities for growth."

* Total transaction value of holidays booked in the year before cancellations and amendments

For further information: 

About On the Beach 

On the Beach is a consumer-centric disruptor on a mission to continually democratise easy access, hassle free, excellent value holidays. Having invested in proposition, technology, brand and service, our asset light model is well positioned to continue to attract and retain the widest possible audience of beach holidaymakers. We are a leading online retailer in the UK short haul beach holiday market. By expanding into B2B and Long-Haul channels, we have doubled our UK addressable market, and have a long‐term vision to become Europe's leading online retailer of beach holidays.

Cautionary statement 

This announcement may contain certain forward-looking statements with respect to the financial condition, results, operations, and businesses of the Company. Forward looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates,' 'aims,' 'due,' 'will,' 'could,' 'may,' 'should,' 'expects,' 'believes,' 'intends,' 'plans,' 'targets,' 'goal' or 'estimates.' These forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are several factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements, including factors outside the Company's control. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement and will not be updated during the year. Nothing in this announcement should be construed as a profit forecast.