On The Beach Regulatory News (OTB)

THIS ANNOUNCEMENT, INCLUDING ANY ATTACHMENTS HERETO, ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN OR ANY JURISDICTION WHERE SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL

This announcement is an advertisement and not a prospectus and does not constitute an offer of securities for sale, subscription of, or solicitation of any offer to buy or subscribe for, in any jurisdiction, including the United States, nor shall it, or any part of it, or the fact of its distribution, form the basis of, or be relied on in connection with, any contract or investment decision whatsoever, in any jurisdiction. Investors should not purchase or subscribe for any securities referred to in this announcement except on the basis of information in the prospectus (the "Prospectus") expected to be published by On the Beach Group plc (the "Company") in due course in connection with the proposed admission of its ordinary shares (the "Shares") to the premium segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange plc (the "London Stock Exchange") (together, "Admission"). Copies of the Prospectus will, following publication, be available from the Company's registered office and made available for viewing at www.onthebeachgroupplc.com. This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in any jurisdiction.

Securities of the Company, including any offering of its Shares, may not be offered or sold in the United States absent registration under U.S. securities laws or unless exempt from registration under such laws. The offering of the Shares described in this announcement has not been and will not be registered under U.S. securities laws, and accordingly, any offer or sale of these securities may be made only in a transaction exempt from registration.

For immediate release

23 September 2015

On the Beach Group plc

Pricing of Initial Public Offering

Placing of 52,173,912 ordinary shares at 184 pence per share

Admission to the Official List and to trading on the Main Market of the London Stock Exchange

On the Beach Group plc ("OTB" or "the Company"), a leading online retailer of affordable short-haul beach holidays, announces the successful pricing of its placing (the "Offer") of 52,173,912 ordinary shares (the "Offer Shares") at a price of 184 pence per Share (the "Offer Price"), with its issued share capital of 130,434,763 ordinary shares to be admitted to the premium segment of the Official List of the Financial Conduct Authority and to trading on the main market for listed securities of the London Stock Exchange. Conditional dealings will commence at 8.00 am on 23 September 2015 under the ticker OTB. All dealings in the Shares prior to the commencement of unconditional dealings will be on a "when issued" basis and will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned.

Key Highlights

· The Offer Price has been set at 184 pence per Offer Share, which equates to a market capitalisation of approximately £240 million on Admission.

· The Offer is expected to raise £90.2 million of net proceeds, of which £6.4 million is for the Company and £83.8 million is for selling shareholders (comprising private equity firm Inflexion ("Inflexion"), the Company's Directors, members of the senior management team and other individuals).

· Immediately following Admission:

o Inflexion will hold approximately 37.1% of the Company's issued ordinary share capital; and

o Directors and members of the senior management team of the Group will hold approximately 21.7% of the Company's issued ordinary share capital.

· On Admission, the Company will have 130,434,763 ordinary shares in issue with a free float of approximately 37.8%.

· Admission to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities, and the commencement of unconditional dealings, are expected to take place at 8.00 am on 28 September 2015.

· Numis Securities Limited is acting as Sponsor, Global Co-ordinator, Bookrunner and broker in respect of the Offer. The Offer is being underwritten by Numis on the terms and, subject to the conditions of, an underwriting agreement between Numis, the Company, the Directors and the selling shareholders .

Full details of the Offer will be included in the Prospectus, which is expected to be published and available on the Company's website later today.

Simon Cooper, Chief Executive Officer of OTB commented:

"In a little less than eleven years, we have established On the Beach as one of the UK's leading online retailers of beach holidays. Our highly differentiated business model and superior technology platform has been core to the success of the business. The IPO of On the Beach marks an exciting milestone in the company's development and will support us in our ambition to become Europe's leading online retailer of beach holidays. We welcome our new shareholders and, with their support, look forward to delivering the next chapter of our growth story."

Enquiries:

On the Beach Group plc

Simon Cooper, Chief Executive Officer

Wendy Parry, Chief Financial Officer

Kirsteen Vickerstaff, General Counsel and Company Secretary

Alistair Daly, Chief Marketing Officer

Tel: +44 (0) 161 444 0910

Numis Securities Limited

Alex Ham / Michael Burke

Heraclis Economides / Andrew Holloway / Andrew Hackney

Tel: +44 (0) 20 7260 1000

Citigate Dewe Rogerson

Simon Rigby / Kevin Smith / Agnes Riousse

Tel: +44 (0) 20 7638 9571

Notes to Editors:

Except where the context otherwise requires, defined terms used in these notes to editors and this announcement have the meanings given to such terms in the Prospectus to be published by the Company and expected to be dated 23 September 2015. Following its publication, the Prospectus will (subject to certain access restrictions) be available online at www.OntheBeachGroupplc.com

Group Overview

The Group is a leading online retailer of affordable short-haul beach holidays, primarily targeting customers in the United Kingdom under the ''On the Beach'' brand. The Group currently has a market share of the UK online short-haul beach holiday market of approximately 17 per cent. Its two largest competitors are TUI Travel and Thomas Cook (source: CAA, UK Short Haul Beach Online Estimates). The Group entered the Swedish market in early 2015, and in the short term intends to expand into Norway and/or Denmark.

The Group's technology platform enables customers to package dynamically the constituent components of their holiday (including flights, hotels and transfers) to customise holidays from millions of flight and hotel combinations. The Group's search facility connects customers to suppliers of travel products. Each travel product is booked separately. The Group's dynamic packaging is different to the traditional package holidays offered by many tour operators, whose packages of flights, hotels and other products are fixed by operators at the outset.

The Group is completely independent from airlines and hotels, so that it can offer customers a full market range of flight and hotel products bookable through online channels (including by desktop, mobiles, tablets and apps) and over the phone.

Differentiated customer proposition and competitive advantage

The Group has a differentiated customer proposition focused on three key areas:

· Simplicity: the Group's online platform provides ease of navigation, clarity and transparency;

· Value: the Group offers choice, flexibility, competitive pricing and relevant products, combined with financial protection and high service standards; and

· Personalisation: the Group visually tailors and personalises the customer experience across each device that customers use to visit the Group's websites based on customer preference to maximise customer conversion rates.

The Group's competitive advantages are based on the strength of its customer proposition plus the following core strengths, which help it to increase scale and revenue:

· Focus: The Group's focus on offering customers short-haul beach holidays sets it apart from generalist OTAs. Approximately 93 per cent. of the Group's sales of holidays were booked via its online platform for the nine month period ended 30 June 2015. It has a lower fixed-cost base than traditional ''bricks and mortar'' tour operators. In addition, because the Group has no stock commitments with airlines or hotels, it can provide a more flexible range of beach holiday products to its customers, and does not need to factor in unsold stock into its sales prices. The Group's online business model means it is cash generative with favourable working capital dynamics, which allows it to invest into key areas such as brand, technology and customer service.

· Expertise: The Group has an effective and committed management team with over 50 years of travel and online experience in aggregate. The Group has operated exclusively in the beach holiday segment for 11 years and has built up considerable consumer and market know-how. By utilising site visitor profiling technology, the Group is able to personalise the customer experience by offering more relevant product options and targeted deals.

· Agility: A flat, entrepreneurial culture is engrained across the business to drive innovation of ideas and enable the Group to continually evolve by improving those elements of its business which will have the biggest effect on revenue and customer experience. This culture, coupled with the Group's technological platform, which was wholly developed and is maintained in-house, enables data to be aggregated, filtered and enriched with speed and efficiency which, in turn, allows the Group to improve its offering and create a seamless customer experience over multiple devices. From the financial year ended 30 September 2013 to the financial year ended 30 September 2014, the Group's customer conversion rates on smartphones, desktops and tablets increased by 20 per cent., 22 per cent. and 22 per cent., respectively.

· Brand: The Group's focus as a short-haul beach holiday provider allows it to direct its marketing efforts in creating a brand that specialises in a certain segment of the market. The strength of the ''On the Beach'' brand has helped the Group increase its share of traffic from branded, free and direct sources from 40 per cent. in the financial year ended 30 September 2012 to 55 per cent. in the nine month period ended 30 June 2015 (source: Google Analytics). The strength of the Group's brand is instrumental in minimising the Group's cost per acquisition.

Currently, there is a structural shift in the travel intermediaries market towards online channels and dynamically packaged holidays to give consumers flexibility and a broader product choice, both of which are core features of the Group's business model (source: Euromonitor, Online Sales by Market; Euromonitor Growth in Dynamic Packages). This shift provides the Group with added flexibility and breadth of product offering. The United Kingdom and Scandinavian online short-haul beach holiday market is continuing to grow, with the Group well positioned to take further market share from mainstream ''bricks and mortar'' competitors with extensive retail stores and a more limited customer proposition than the Group's current offering.

Key strengths

The Directors believe that the key strengths of the Group are its:

Objectives and strategy for the Group

The key objectives and strategy for the Group include:

Financial highlights

Key performance indicators summary

1) The revenue per booking value is revenue divided by the number of bookings.

2) The number of daily unique visitors to the websites.

3) Conversion rate: The total number of bookings divided by total daily unique visitors.

4) Revenue per daily unique visitor: The total pound revenue divided by the total daily unique visitors.

5) Marketing expenses excluding offline advertising expenses divided by revenue.

6) Variable costs include wages in the contact centre, card costs and communications divided by revenue.

7) Overhead costs excluding depreciation divided by revenue.

Dividend policy

Whilst the Group operates a highly cash generative business model, the Board intends for the significant majority of profits to be reinvested in the business to support further growth. The Board intends to declare its first dividend in respect of the year ended 30 September 2016. Thereafter, the Group will adopt a progressive dividend policy.

Board of Directors

Executive Directors

Simon Cooper (Chief Executive Officer)

Simon Cooper is founder of the Group and Chief Executive Officer of the Company. He began his career in the travel industry while attending university, when he founded a ski company called On the Piste. He focused the business towards groups of students wanting to go on budget-friendly ski holidays to the French Alps via coach. Simon Cooper operated On the Piste from 1996 to 2008. Meanwhile, in 2004, Simon began work on a new venture: On the Beach.

Wendy Parry (Chief Financial Officer)

Wendy Parry joined the Group in April 2010 as Chief Financial Officer. Wendy qualified as a chartered accountant at KPMG and, before joining the Group, she held a wide variety of senior commercial, financial and operational roles within large private and listed companies. She has held Managing Director, Commercial Director and Finance Director roles at divisions of Holidaybreak plc, she was Finance Director at Booker Foodservice Ltd and Liverpool John Moores University and she was Group Chief Accountant of Courtaulds Textiles plc.

Non-Executive Directors

Richard Segal (Chairman)

Richard Segal is currently a director of the Company and will be Chairman of the Company with effect from Admission. He is also Chairman of HostelWorld Group and Encore Tickets. Previously, Richard was Chairman for Esporta and Barratts PriceLess, a founding partner of 3i Quoted Private Equity, a non-executive director at The Kyte Group, Chief Executive Officer at PartyGaming Plc and Odeon Cinemas (where he led a management buy-out from the Rank Group) and Managing Director of Rank Group's entertainment sector. He holds a BA in economics from Manchester University and is a member of the Institute of Chartered Accountants of England and Wales.

Lee Ginsberg (Non-Executive Director)

Lee Ginsberg joined the Company in August 2015 as Senior Independent Non-Executive Director and Chairman of the Audit Committee. He is a Chartered Accountant by profession and was previously Chief Financial Officer of Domino's Pizza Group plc. Prior to his role at Dominos Pizza Group plc, Lee held the post of Group Finance Director at Health Club Holdings Limited, formerly Holmes Place plc, where he also served for 18 months as Deputy Chief Executive. Lee is a non-executive director and Chairman of the Audit and Risk Committee of Mothercare plc and is a non-executive director and Chairman of the Audit and Risk Committee of Trinity Mirror plc. Lee is also the non-executive Deputy Chairman, senior independent director and Chairman of the Audit Committee of Patisserie Valerie Holdings plc.

David Kelly (Non-Executive Director)

David Kelly joined the Company in August 2015 as a Non-Executive Director and Chairman of the Remuneration Committee. David was previously the Operations Director at Amazon from 1998 to 2000, the Chief Operating Officer at Lastminute.com from 2000 to 2003 the Vice President, Operations/Chief Operating Officer at eBay from 2003 to 2007 and Senior Vice President of International at Rackspace from 2010 to 2012. In 2007, David co-founded mydeco.com and, more recently, has built a wide portfolio of non-executive and advisory positions-including Chairman/Non-Executive Director of Love Home Swap, Pure 360 and Car Loan 4U.

Relationship agreement

On 23 September 2015, the Company and Inflexion entered into a relationship agreement to ensure that the Company will be capable of carrying on its business independently of Inflexion for so long as Inflexion (together with its concert parties) holds a controlling interest (being the ability to control or exercise 20 per cent. or more of the votes able to be cast on all or substantially all matters at any general meetings of the Company).

Selling Shareholders/Lock-up arrangements

Pursuant to the terms of the Underwriting Agreement, the Executive Directors and certain persons connected with them and Inflexion have agreed to certain lock-up restrictions in respect of the Shares that will be held by them following Admission. The Executive Directors and certain persons connected with them are subject to a 12 month lock-up period following Admission, subject to certain customary exceptions, and Inflexion is subject to a lock-up period ending the longer of six months from the date of Admission or the date of publication of the audited financial results of the Company for the year ended 30 September 2015, subject to certain customary exceptions, during which time they may not dispose of any interest in their Shares without the prior written consent of Numis.

Pursuant to their respective lock-up arrangements, the Executive Directors and certain persons connected with them and Inflexion have agreed that, for a further six month period following the expiry of their lock-up periods referred to above, they will not dispose of any Shares or interests in Shares other than through Numis with a view to maintaining an orderly market in the Company's securities. All lock-up arrangements and orderly market arrangements are subject to certain customary exceptions.

Forward looking statements

This announcement contains "forward-looking statements". These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company's control and all of which are based on the Directors' current beliefs and expectations about future events. You can identify forward-looking statements by the use of terms such as "expect", "believe", "anticipate", "estimate", "aim", "plan", "intend", "will", "could", "should", "may" or "might" or the negative of such terms, other variations thereon or comparable terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this announcement and include statements regarding the intentions, beliefs or current expectations of the Directors or the Company with respect to future events and are subject to risks relating to future events and other risks, uncertainties and assumptions relating to the Group's business concerning, amongst other things, the results of operations, financial condition, liquidity, prospects, growth and strategies of the Company and the industries in which it operates. The Company wishes to caution you that these statements are only predictions, and that actual events or results may and often do differ materially; no assurance can be given that such future results will be achieved. The forward-looking statements in this announcement speak only as of the date of this announcement. The Company disclaims any obligation or undertaking to publish any updates or any revisions to any forward-looking statements contained in this announcement to reflect any change in its expectations or any change in the events, conditions or circumstances on which such statements are based.

Important notices

The contents of this announcement, which have been prepared and issued by, and are the sole responsibility of the Company, have been approved solely for the purposes of section 21(2)(b) of the Financial Services and Markets Act 2000 by Numis Securities Limited ("Numis").

This announcement does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any Shares or other securities to any person in the United States or any other jurisdiction, nor shall it (or any part of it) or the fact of its distribution, form the basis of, or be relied on in connection with, or act as an inducement to enter into any contract or commitment whatsoever.

Neither this announcement nor any copy of it may be taken or transmitted, directly or indirectly, into the United States, Australia, Canada, Japan or South Africa or to any persons in any of those jurisdictions or any other jurisdictions where to do so would constitute a violation of the relevant securities laws of such jurisdiction. The distribution of this announcement and other information in connection with the listing and Offer in certain jurisdictions may be restricted by law, and persons into whose possession this announcement, or any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

The Company is not and will not be registered under the United States Investment Company Act of 1940, as amended. The Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "Securities Act"), or with any securities commission or regulatory authority or under the laws of any state or jurisdiction of the United States. Accordingly, the Shares will constitute ''restricted securities'' within the meaning of Rule 144(a)(3) of the Securities Act and may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in, into or from the United States except pursuant to a registration statement that has been declared effective under the Securities Act or in transactions exempt from, or not subject to, the registration requirements of the Securities Act or any applicable state or local securities laws of the United States. There will be no public offering of the Shares in the United States.

The securities have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered or sold, directly or indirectly, in Australia, Canada, Japan or South Africa.

This announcement is only addressed to, and directed at, persons in member states of the European Economic Area who are "qualified investors" within the meaning of Article 2(1)(e) of the Prospectus Directive ("Qualified Investors"). For the purposes of this provision, the expression "Prospectus Directive" means Directive 2003/71/EC, as amended, and includes any relevant implementing measure in each member state of the European Economic Area which has implemented the Prospectus Directive. Any investment or investment activity to which this announcement relates is available only to and will only be engaged in with such persons.

Any purchase or subscription of the Offer Shares in the proposed Offer should be made solely on the basis of the information contained in the Prospectus to be issued by the Company in connection with the Offer. No reliance may or should be placed by any person for any purpose whatsoever on the information contained in this announcement or on its completeness, accuracy or fairness. The information in this announcement is subject to change and does not purport to be full or complete. Neither the Company nor Numis undertakes to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of the Company to proceed with the Offer or any transaction or arrangement referred to herein. This announcement has not been approved by any competent regulatory authority.

Numis is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Offer, and will not regard any other person as its client in relation to the Offer and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for giving advice in relation to the Offer or the contents of this announcement or any transaction, arrangement or other matter referred to herein.

Apart from the responsibilities and liabilities, if any, which may be imposed on Numis by the Financial Services and Markets Act 2000 or the regulatory regime established thereunder, Numis does not accept any responsibility whatsoever, and makes no representation or warranty, express or implied, in relation to the contents of this announcement, including its accuracy, completeness or for any other statement made or purported to be made by it or on behalf of it, the Company, the Directors, the Selling Shareholders or any other person, in connection with the Company, the Group, the Shares, the Selling Shareholders or the Offer, and nothing in this announcement shall be relied upon as a promise or representation in this respect, whether as to the past or the future. Numis, accordingly, disclaims all and any liability whatsoever, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this announcement or any such statement.

The date of Admission may be influenced by factors such as market conditions. There is no guarantee that the Offer and Admission will occur and you not should base your financial decisions on the Company's intentions in relation to the Offer and Admission at this stage. Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing the entire amount invested. The value of shares can decrease as well as increase. This announcement does not constitute a recommendation concerning the Offer. Persons considering investment in such investments should consult an authorised person specialising in advising on such investments.

Certain figures in this announcement, including financial information, have been subject to rounding adjustments. Accordingly, in certain instances, the sum or percentage change of the numbers contained in this announcement may not conform exactly with the total figure given.