AGM Trading Update

On Beach group

06/02/2020 07:00

RNS Number : 1095C

On the Beach Group PLC

06 February 2020

 

6 February 2020

 

On the Beach Group plc

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

 

AGM Trading Update

 

On the Beach Group plc (LSE: OTB.L), the UK's leading online retailer for beach holidays, today issues the following trading update for the four months to 31 January 2020, in advance of its Annual General Meeting to be held today.

 

As outlined in the Group's Preliminary Results on 27 November 2019, there exists an unprecedented opportunity to take market share in the beach travel market following the failure of Thomas Cook Group ("TCG"). On the Beach has responded to this opportunity, more than doubling offline marketing spend to drive awareness of the On the Beach brand. Management expects that a proportion of this investment will payback in the second half of the financial year. Alongside this exceptional marketing spend, the Group has also focused on price competitiveness to continue to drive long term market share gains.

 

The reduction in overall capacity in the market following the TCG failure has led to significant year on year ("YOY") seat price increases for all departures. This seat capacity shortfall is further accentuated by continuing delays in Boeing's 737 Max aircraft returning to active service. As a result, seat pricing is not anticipated to fully normalise in the current financial year.

 

Despite the significant increase in the prices of holidays across the market and the seat capacity constraints, the immediate actions taken by the Group to capture market share are helping to drive strong sales growth for summer 2020 departures.

 

The Group's international sites have continued to deliver an efficient performance YOY and the Board continues to evaluate opportunities to enter new source markets.

 

The rollout of Classic Package Holidays continues and as at 31 January 2020, more than 2,300 agents were signed up to the portal.

 

The Group will report Interim Results for the six months to 31 March 2020 on 12 May 2020.

 

 

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

"The actions we have taken in the first four months of the new financial year have accelerated our market share gain and mean we are well prepared to take advantage of capacity returning into the market. Our incremental investment into offline marketing activity is helping to drive significant growth in awareness of the brand nationally and we are delighted with the performance of the Classic Package brand in its first year post launch. We look forward to providing a more detailed update on progress at the Group's Interim Results."

 

 

For further information:

 

On the Beach Group plc
Simon Cooper, Chief Executive Officer
Paul Meehan, Chief Financial Officer
via FTI Consulting
FTI Consulting
Jonathon Brill
Alex Beagley
Fiona Walker
Sam Macpherson
Tel: +44 (0)20 3727 1000

 

About On the Beach

With over 20% share of online sales in the short haul beach holiday market, we are one of the UK's largest online beach holiday retailers. We have significant opportunities for growth and a long-term mission to become Europe's leading online retailer of beach holidays. By using our innovative technology, low-cost base and strong customer-value proposition to provide a structural challenge to legacy tour operators, we continue our journey to disrupt the online retail of beach holidays. Our model is customer-centric, asset light, profitable and cash generative.

 

www.onthebeachgroupplc.com

 

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 a number of 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.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

 

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