REG - On the Beach Group - Final Results
03/12/2024 07:00
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RNS Number : 5115O On the Beach Group PLC 03 December 2024
3 December 2024
On the Beach Group plc
("On the Beach", "OTB", the "Company" or the "Group")
FINAL RESULTS FOR YEAR ENDED 30 SEPTEMBER 2024 ('FY24')
ANOTHER RECORD-BREAKING YEAR OF TTV, WITH ADJUSTED PBT +25% YOY, ADDRESSABLE
MARKET EXPANSION AND ENHANCED CUSTOMER PROPOSITION
Financial overview
· Record TTV for the third consecutive year, up 15% to £1.2bn (FY23: £1.0bn).
· Revenue increased 14% to £128.2m (FY23: £112.1m).
· Further margin improvement with B2C Adjusted EBITDA margin at 31.7% (FY23:
30.0%).
· Adjusted profit before tax increased 25% to £31.0m(1) (FY23: £24.8m).
· Group profit before tax increased 84% to £26.5m (FY23: £14.4m).
· Group remains in a strong financial position with cash, excluding amounts held
in trust, of £96.2m (30 September 2023: £75.8m).
· FY24 final dividend of 2.1p per share, full year 3.0p per share, representing
25% of net earnings, in line with capital allocation policy.
· Buyback of up to £25m announced, reflecting Board's confidence in the
strategy and business model.
Strategic progress
· Delivered significant volume growth with Summer 24 passengers up 13% versus
Summer 23.
· Signed transformational partnership agreement with Ryanair, improving OTB's
customer experience, simplifying operations and enhancing scalability.
· Significant upgrades to technology, enabling expansion of addressable market
at pace.
· Enhanced perks proposition reaching more customers, maintaining high levels of
brand awareness and consideration, and increasing repeat bookings.
· Expansion into cities from Q4 FY24, fuelling the next stage of revenue growth
while increasing the efficiency of marketing spend.
· Commenced international expansion through the sale of package holidays from
the Republic of Ireland from Q4 FY24 with the launch of onthebeach.ie.
Current Trading and Outlook
· FY24 growth has continued into the new financial year with YTD TTV up 14% and
bookings growth of 15% versus the prior year.
· Our forward order book is at record levels, Group Winter '24 YTD bookings
currently +25%.
· We approach our key booking period in Q2 with significant momentum.
· Current trends and strategy give us confidence that Summer '25 will be
significantly ahead of Summer '24.
· The Board is confident in delivering FY25 Adjusted PBT in line with the
Company-compiled consensus estimate of £37.9m.
Medium term ambition
The Board is pleased to set out the Group's medium-term ambition to deliver:
· TTV of £2.5bn.
· EBITDA of £100m (40% of Revenue).
· Adjusted PBT of £85m.
Shaun Morton, Chief Executive Officer of On the Beach Group plc, commented:
"I am delighted to report yet another record-breaking performance this year,
achieving Group TTV of £1.2 billion, representing our third consecutive year
of revenue growth. With a 25% year on year increase in Group adjusted profit
before tax, and a strong balance sheet, we are entering FY25 in better shape
than ever.
"This performance was driven by a combination of initiatives, including the
successful integration with Ryanair, ongoing investment in our proprietary
technology platform and further enhancements to our differentiated customer
proposition. The partnership has facilitated an improved customer journey for
those booking Ryanair flights as part of an OTB package, whilst enabling
increased operational efficiency and a greater focus on areas of strategic
value. What's more, the agreement and significant upgrades to our technology
have supported a doubling of our addressable market, following the addition of
city breaks to our offering alongside planned investment in Ireland.
"The positive momentum in FY24 has continued into the new financial year, with
TTV 14% ahead of last year, indicating that customers continue to prioritise
their spending on holidays. Winter '24 volumes are currently at record levels,
up 25% year on year, as customers seek winter sun or a European city break,
and we anticipate Summer '25 to be significantly ahead of last year, with
bookings to date supporting this.
"Our strategy and positive booking trends, underpinned by our track record of
delivery, gives us every confidence in delivering on our medium-term ambition
to double TTV to £2.5 billion, achieve EBITDA of £100 million and Adjusted
PBT of £85m."
(1) Consensus FY24 Adjusted profit before tax, per the Group's Pre-Close
Trading Update and corporate website on 25 September 2024, of £31.0m.
Analyst & investor briefing
A briefing for sell-side equity analysts and investors will be held today at
10.30am at FTI Consulting, 200 Aldersgate, Aldersgate Street, London, EC1A
4HD. For those unable to attend in person, there will be a conference call
facility (no video), details of which can be obtained from FTI Consulting.
For further information:
On the Beach Group plc via FTI Consulting
Shaun Morton, Chief Executive Officer
Jon Wormald, Chief Financial Officer
FTI Consulting Tel: +44 (0)20 3727 1000
Alex Beagley onthebeach@fticonsulting.com (mailto:onthebeach@fticonsulting.com)
Harriet Jackson
Hannah Butler
Lia Bevan
About On the Beach
On the Beach Group plc is one of the UK's largest online package holiday
specialists, with significant opportunities for growth. Its innovative
technology, low-cost base and strong customer-value proposition provides a
structural challenge to legacy tour operators and online travel agents, as it
continues disrupting the online retail of beach holidays. Its model is
customer-centric, asset light, profitable and cash generative.
Cautionary statement
The purpose of this statement is to provide information to the members of the
Company. The Company and its Directors accept no liability to third parties in
respect of this statement save as would arise under English law.
This statement contains 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", "would", "might", "shall", "expects",
"believes", "intends", "plans", "targets", "goal", "estimates", "forecasts",
"projects", "predicts", "continues", "assumes", "budget", "risk" or, in each
case, their negative or other variations or words of similar meaning.
These forward-looking statements involve assumptions, known and unknown risks
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 statement and, except to the extent
required by law or regulation, will not be updated or revised, whether as a
result of new information, future events or otherwise. This statement shall
not, under any circumstances, create any implication that there has been no
change in the business or affairs of the Company or any member of its group
since its date or that the information contained in it is correct as at any
time subsequent to its date,
You should not place undue reliance on the forward-looking statements.
No statement contained in this document is intended as a profit forecast or a
profit estimate or should be interpreted to mean that earnings per share of
the Company for the current or future financial years would necessarily match
or exceed the historical published earnings per share of the Company. Past
business and financial performance cannot be relied on as an indication of
future performance.
This statement together with the financial statements and investor
presentation is available on www.onthebeachgroupplc.com
(http://www.onthebeachgroupplc.com/)
CEO review
Overview
On the Beach ('OTB') is a high growth business in a growing market,
underpinned by a scalable platform, a brand that resonates with customers and
a proposition that delivers value for money.
We operate in a sector where consumers are not only seeking value, but also
choice and flexibility, as well as peace of mind and financial protection. Our
proprietary technology, coupled with a low-cost, asset light and cash
generative operating model provides a structural challenge to tour operators.
This has been another record year for the Group, continuing the strong
momentum from the first half and achieving TTV for the full year of £1.2bn,
representing an increase of 15% on last year.
It also represents a year where the Group has delivered transformational
progress against our strategic priorities, which positions us well for
accelerated growth.
We firmly believe that being asset light and having the ability to access
seats from multiple airlines via our technology is a clear competitive
advantage for OTB over traditional tour operators.
The Group is not limited to the schedule of a single airline and does not bear
its high fixed costs. In 2024, there are estimated to be 48m seats across the
UK market flying to OTB's existing beach destinations alone. Such healthy seat
capacity provides significant headroom for further growth for OTB's current UK
customer base of c.2m passengers per annum.
Beach seat availability across the market also continues to grow, underpinned
by an additional 8% airline capacity to beach leisure destinations for Summer
24 versus Summer 23. OTB continues to grow ahead of this rate, supported in
part by our new partnership agreement with Ryanair signed in the year - a
milestone achievement - which ensures we have secure access to Europe's
largest airline.
Despite incurring one off costs of c.£3m retaining Ryanair flights on sale
prior to finalisation of the agreement and continuing to invest in expanding
the business in FY24, OTB significantly grew profit before tax year on year,
which is very encouraging.
The travel and wider consumer market has been impacted by increasing costs
over the past few years, including wage inflation, insurance and regulatory
costs. Notwithstanding these structural headwinds and an increasingly
competitive landscape, we have restored profitability to the business, with
FY24 reported Profit Before Tax ('PBT') of £26.5m, +84% year on year
surpassing our previous peak, achieved pre-pandemic.
During the year, we identified necessary changes to the Group's B2B
operations. As a result, we now operate with a single brand leveraging the
Group's technology platform and operations. These changes have been successful
in returning the channel to profitability in FY24 and have laid the
foundations for sustainable profitable growth.
We continue to improve operational leverage across the Group, and FY24
represents the third consecutive year that the business has increased Revenue,
EBITDA and EBITDA as a percentage of Revenue.
Critically the business has much stronger foundations and opportunities for
growth than it had pre-pandemic, with a secure supply position and much larger
addressable audience.
Following a strong second half and full year performance, the Group exits FY24
with the momentum of a record forward order book, with significant progress
against our strategic objectives and exciting prospects for FY25 and beyond.
People
I'm incredibly proud of what we've achieved this year and it's thanks to the
combined energy and efforts of our people - they remain the driving force
behind our continued growth and success.
We continue to focus on maintaining a diverse, collaborative, high-performance
culture, supporting our employees in all aspects of their lives and
encouraging them to reach their full potential.
In addition to our engagement surveys, we've launched three Employee Voice
forums focused on Equality, Diversity & Inclusion, Wellbeing, and
Community & Charity, to provide us with real-time insights around what
matters most to our employees and help us stay connected.
In our Annual Engagement survey, we achieved a strong Engagement Index score
of 7.3 with an impressive 87% completion rate.
Considering the organisational changes we've made this year to support the
successful delivery of our strategy, it's pleasing to see that our people
remain engaged and proud to work for our business.
We're committed to listening and acting on the feedback to continue making OTB
a great place to work.
I'm excited about what we can deliver together in the year ahead and we've
worked hard to ensure everyone is clear about the journey we're on and the
part they play in our strategy for growth.
To maintain momentum, we're further strengthening our Leadership teams with
long-term development programmes designed to support the continuous growth and
alignment of our leaders, ensuring they're equipped to support our people and
role model our behaviours and values as we continue to grow.
Strategic progress
As I mentioned, we have continued to make significant progress with our
strategic development this year. Ongoing investment into technology, brand,
proposition and supply powers growth in our core market and enables
penetration into our addressable expansion areas.
Investment in technology
We continue to develop the platform with the key objectives being to improve
our customers' booking experience, enhance operational efficiency and
significantly scale.
We are experiencing transformational change within our Technology and Product
teams. Since signing the Ryanair agreement, many of our software engineers can
focus on adding value rather than be distracted by operational issues, driving
greater efficiency.
This year we have delivered significant upgrades to our platform, meaning we
are limited only by the size of our ambition, rather than the scalability of
our technology. FY24 highlights include smart caching technology, enabling
billions of additional holiday combinations delivered at speed and live
pricing capability which significantly improves the pricing accuracy and
fulfilment success of our holiday offers.
During the year we re-platformed our native Android and iOS apps, unlocking
native functionality, and also introduced AI powered content, reducing hotel
onboarding time by 99%. The full potential of all of these upgrades enable us
to expand our addressable market significantly and at pace.
Investment in our brand and proposition
In line with previous years and with strategy, we invested significantly in
OTB's brand and proposition in FY24 to continue to gain share in all segments.
Our brand spend continues to punch above its weight, underpinning the stretch
into adjacent markets within our core, including 5* and long haul in recent
years, and we are excited about plans for new expansion markets in FY25.
We are making considerable progress developing our customer proposition. Being
known as the 'Home of Perks' and continually investing in the customer perks
offer, including lounge, fast-track and more recently mobile data,
significantly benefits OTB. It offers a key point of differentiation, makes
our offline marketing campaigns more effective, strengthens the brand,
attracts new customers, and improves our customers' overall holiday
experience, increasing the likelihood of repeat purchase. In FY24, our perks
spend now reaches more customers, is increasingly efficient, is used to
promote the app and is embedded in our proposition.
Finally, from a customer perspective we are investing in further automation
which - alongside a significantly reduced number of customer inbounds -
continues to improve our customer experience. I'd like to thank the service
teams for their tireless efforts in supporting our customers.
Investment in supply
Alongside investments in brand, proposition, and technology, the Group has
invested in supply to support growth.
The Group offers seats from a diversified group of low-cost carriers that fly
to short haul East and West Mediterranean locations and has developed
relationships with destination specific carriers that serve Turkey, which
experienced a significant increase in demand in recent years. As referenced,
signing the Ryanair agreement provides OTB secure access to all relevant
low-cost flight supply from Europe's largest airline.
We believe that by having our own relationships with hotel partners, we can
guarantee our customers the best prices and an enhanced hotel experience,
which combined with our platform development this year, unlocks European
cities, which represents a significant incremental addressable market in FY25.
We also maintain relationships with our key bedbank partners, which allows
access to competitive prices in core and expansion markets.
Our business model and strategy for growth
In last year's Annual Report, we stated that we would be developing our
strategic pillars to accelerate growth across our core and expansion areas. As
we continue to scale, we have four design principles to guide our mission; 'we
help people holiday better and more often'.
Our design principles
1 Stickiness
Consumers are shopping around as much as ever so we are designing for
stickiness, to make it easier to plan, book and finance your holiday year, to
increase value for money and frequency of purchase.
2 Choice
We are currently a small part of our customers' annual holiday repertoire, so
we are designing for choice, to increase the breadth of offering, and the
holiday wallet that we compete for.
3 Peace of mind
Consumers want both the peace of mind of a tour operator, and the choice,
value and flexibility of an online travel agent so we are designing for peace
of mind, for hiccup-free holidays to increase NPS and reduce churn.
4 Scale and automation
Compared to the UK, there are c.5x as many Europeans flying to beach
destinations so we are designing for scale, automation and to continue to
increase our addressable market.
Our addressable market
Since inception in 2004 and IPO in 2015, the Group has specialised in selling
beach package holidays online to UK customers, typically travelling to short
haul destinations in 'Value' (usually 3 and 4*) hotels. By investing in
technology, brand, proposition and supply, we have successfully extended our
core offering in recent years to include Long Haul and 'Premium' (usually 5*)
holidays, all of which are also available to book 'B2B' via third party travel
agents.
FY24 brought another step change in the strategic development of the Group,
through the expansion of the proposition to City packages and into a new
geography; selling package holidays to the Republic of Ireland, collectively
more than doubling our addressable market.
Importantly, our asset light business model and scalable platform enable us to
sell both short and long haul holidays, to 3, 4 and 5* hotels, across B2C and
B2B channels in each of our new expansion markets.
As we add more product, attract new customers in new markets and increase
existing customers' purchase frequency, we expect customer annual value to
increase. This will fuel the next stage of our revenue growth whilst also
increasing the efficiency of our marketing spend.
We will not stop there; our ambition is to roll out our asset light model and
technology into new international markets with healthy seat supply, and
ultimately become one of Europe's largest online package holiday specialists.
Core market overview
3 and 4* (short haul beach holidays)
In FY24, Group TTV of holidays to 3* and 4* properties increased by 13% and
represented 64% of the total (FY23: 65%).
Given strategic progress in recent years penetrating adjacent higher value
markets, exposure to the 3* end of the market is significantly lower today
than it has been in previous years.
In FY24, 3* hotels now contribute 19% of B2C TTV (FY23: 21%), providing a
layer of insulation from any macro-economic headwinds.
OTB continues to grow TTV across 3* and 4* product as a whole within its core
addressable market, by continuing to offer choice, flexibility, value, peace
of mind and financial protection.
5* (short haul beach holidays)
TTV mix of 5* holidays has increased from 32% in FY23 to 34% in FY24. In FY24,
Group 5* TTV was +21% versus FY23.
The 5* market has shown greater resilience to cost of living pressures,
recovering earlier, and the revenue margin opportunity on each individual
booking is significantly greater. Attracting these customers that typically
book earlier also gives the Group greater visibility of the season ahead.
In addition to the factors supporting growth across 3* and 4* markets, the
strategic actions OTB continues to take to enhance its proposition, brand and
supply, position it well to continue to outperform in the 5* market.
Long haul (beach holidays)
The Group continues to scale its long haul offering and there remains a
significant organic growth opportunity in long haul. Booked Long Haul TTV was
31% up vs a strong comparator in FY24 and long haul mix of Group TTV is now up
to 8%. Group Long Haul TTV has multiplied by c.7x since FY19 to £91m.
OTB is now a brand firmly associated with long haul as well as short haul
beach holidays and the market opportunity for further growth is significant
from existing and new destinations.
OTB still under-indexes in long haul package holidays versus the wider UK
market and the competitive landscape is more fragmented and offline than for
short haul trips.
B2B
The B2B channel operates in an increasingly competitive market however there
remains a significant opportunity to become the go-to B2B provider of Ryanair
packages, whilst having the ability to offer tailor-made packages for the
trade.
Changes made in the year have resulted in a single brand trading as Classic
Collection and operating using the Group's scalable technology platform.
These changes have been successful in returning the channel to profitability
in FY24, simplifying Group reporting and laying the foundations for
sustainable profitable growth in FY25 and beyond.
Additional expansion markets using the Group's existing technology
Cities
Alongside accessing a new source market, our platform development this year is
enabling expansion of the proposition to new city routes. We are attracting
new customers to the site and taking greater share of our existing customer
wallet, driving greater marketing efficiency.
OTB research indicates that 52% of those who have previously booked through
OTB are likely to consider us for city packages.
We have experienced strong growth to date from our initial Cities proposition.
Developments to the platform in FY24 give us the ability to scale more quickly
and add more short haul and long haul product. We are using AI to scale our
Cities expansion generating hotel copy, USPs and mapping facilities.
Ireland
FY24 marked another exciting milestone for OTB as we launched the sale of
package holidays for customers in the Republic of Ireland via onthebeach.ie.
There is significant demand for beach package holidays from the Republic of
Ireland, and significant seat capacity available to our core destinations.
We are using the same technology and brand as the UK market, with entry into
the Republic of Ireland. Tour operator competition is relatively limited.
We estimate the Irish market represents approximately 15% of the size of the
UK market. The website has been live since July 2024, and has made a promising
start with an increasing run rate of bookings, which gives us confidence that
we can capture meaningful incremental volume from this market in FY25.
Future
The acceleration in the Group's strategic progress in FY24 has enabled
expansion into the Republic of Ireland and a broadening of our offer to City
packages. Securing free and fair access to Europe's largest airline increases
the potential for the Group to add additional source markets beyond the UK and
the Republic of Ireland in the future. The Group continues to assess strategic
and commercial opportunities to expand into new markets either organically or
by acquisition.
We are excited about our strategy, what we can achieve across the Group and
look forward to updating on progress and delivery later in FY25.
Shaun Morton
Chief Executive Officer
2 December 2024
Chief Financial Officer report
The Group's financial performance for the year ended 30 September 2024
('FY24') is reported in accordance with UK adopted international accounting
standards and applicable law.
Following the discontinuation of activities in relation to the CCH (Classic
Collection Holidays) segment during the year, the Group is now streamlined
into two principal financial reporting segments, being OTB (onthebeach.co.uk
and sunshine.co.uk) and Classic Collection. Prior periods have been restated
accordingly.
The Group acts as agent across both segments as it is not the primary party
responsible for providing the components that make up the customers' booking.
As a result, revenue is accounted for on a booked rather than travelled basis.
Group overview
2024 2024 2023 2023
Adjusted¹ GAAP Adjusted¹ GAAP(5)
£m £m £m £m
Group TTV(2) 1,164.9 1,011.8 -
Group revenue 123.4 128.2 112.9 112.1
Group gross profit 116.9 121.7 107.2 106.4
Group profit before tax(3) 31.0 26.5 24.8 14.4
Basic earnings per share(4) 14.1p 12.1p 12.0p 7.2p
Group cash 96.2 75.8
Dividends per share 3.0p -
1. Adjusted measures are non-GAAP measures, a full explanation of the
adjustments is included in the glossary. The prior period is restated for the
effects of the discontinued operations.
2. Group TTV is a non-GAAP measure representing the cumulative total
transaction value of sales booked each month before cancellations and
amendments.
3. Group adjusted profit before tax excludes amortisation of acquired
intangibles of £2.8m (2023: £5.2m), share-based payments cost of £2.3m
(2023 restated: £1.1m) fair value losses on forward currency contracts of
£nil (2023: £0.8m) and exceptional income of £0.6m (2023 restated:
exceptional costs of £3.3m). A full explanation of the adjustments is
included in the glossary.
4. Adjusted earnings per share is Group adjusted profit after tax for
continuing operations divided by the average number of shares in issue during
the period. Earnings per share is Group profit after tax for continuing
operations divided by the average number of shares in issue during the period.
5. The prior period is restated for the effects of discontinued operations.
Overview of the year
Revenue of £128.2m was £16.1m (14.4%) higher than FY23.
The Group delivered record TTV for the third consecutive year despite
significant price deflation in the second half of the year as a result of
additional capacity in seat supply from the low cost carriers.
Summer '24 performance was particularly strong with passenger numbers for
those holidays departing between May and October up 13% on the prior year.
Revenue includes £4.8m of exceptional income following the settlement of
Ryanair refunds litigation, however is also stated after incurring £3m of one
off costs ensuring the continuation of Ryanair supply prior to finalising the
integration.
The Group continues to focus on improving the operational efficiency of its
cost base, with both marketing costs and admin expenses reducing as a % of
revenue vs the prior year. Group headcount was down by 14% at the year-end
reflecting the B2B changes and the reduced headcount in our contact centre
operations following the Ryanair partnership.
Group profit before tax was £26.5m, an increase of 84% (FY23: £14.4m).
Cash has increased to £96.2m (FY23: £75.8m), enabling the Board to determine
that sufficient surplus cash exists, alongside investment for continued
organic growth, to be able to recommend a final dividend of 2.1p alongside a
share buyback programme of up to £25m.
Overheads
2024 2024 2023 2023
Adjusted¹ GAAP Adjusted¹ GAAP¹
£m £m £m £m
Overheads % TTV 3.1% - 3.3% -
Overheads % revenue 29% 28% 30% 30%
Total marketing % revenue 35% 33% 37% 37%
1. Adjusted measures are non-GAAP measures, a full explanation of the
adjustments is included in the glossary. The prior period is restated for the
effects of discontinued operations.
Overheads as a % of revenue have reduced to 29% (FY23 restated: 30%) with
inflationary pressures in respect of wages and salaries offset by a reduction
in overall headcount following the B2B restructure and operational
efficiencies arising from the Ryanair partnership agreement.
Adjusted EBITDA has increased to £38.0m (FY23 restated: £32.2m). A full
explanation of adjusted measures is included in the glossary.
Exceptional items
Group exceptional items on a net basis are £0.6m in the year with £4.8m of
exceptional income following the settlement of refunds litigation with Ryanair
offset by £4.2m of exceptional costs incurred in the year. Costs related to
legal and professional fees in respect of litigation (£3.9m) and
restructuring costs (£0.3m).
Exceptional items in the prior year (restated) amounted to £3.3m, being legal
and professional fees (£2.0m) and restructuring costs (£1.3m).
Cash and liquidity
The Group remains in a strong financial position with combined cash balances
of £235.7m (2023: £184.4m):
· Group cash, excluding amounts held in trust, of £96.2m (30 September
2023: £75.8m).
· Customer prepayments held in a ringfenced trust account of £139.5m
(30 September 2023: £108.6m).
Net finance income in the year has increased to £5.3m (2023 restated: £2.4m)
due to the impact of higher base rates.
We remain frustrated by ongoing delays to ATOL reforms. We understand that
following the change in Government during the year there is now no definitive
timetable in place. We will continue to take proactive steps to ensure we are
able to compete fairly in the market whilst continuing to provide protection
to our customers.
OTB performance
2024 2024 2023 2023
Adjusted¹ GAAP Adjusted¹ GAAP¹
£m £m £m £m
TTV 1,124.2 - 983.8 -
Revenue 114.6 119.2 106.9 106.1
ECL (1.7) (1.7) (1.9) (1.9)
Gross profit 112.9 117.5 105.0 104.2
Online marketing costs (30.2) (30.2) (26.0) (26.0)
Offline marketing costs (12.2) (12.2) (14.6) (14.6)
Gross profit after marketing costs 70.5 75.1 64.4 63.6
Overheads (34.2) (34.2) (32.3) (32.3)
Depreciation and amortisation (12.2) (12.2) (9.9) (9.9)
Exceptional operating income/(costs) - (4.2) - (3.3)
Share-based payments - (2.2) - (1.1)
Amortisation of acquired intangibles - (2.2) - (4.2)
Operating profit 24.1 20.1 22.2 12.8
EBITDA 36.3 34.5 32.1 26.9
1. Adjusted measures are non-GAAP measures, a full explanation of the
adjustments is included in the glossary. The prior period is restated for the
effects of discontinued operations.
Revenue has increased to £119.2m (FY23: £106.1m). This is as a result of
strong bookings across both Winter and Summer seasons, with ABV increasing by
2% despite a significant deflationary environment in H2 as a result of excess
capacity across low-cost carriers.
Revenue includes the impact of additional one-off costs of £3m incurred
ensuring continuation of Ryanair supply prior to finalizing the integration.
Marketing and overhead costs are up 5% year on year despite a 14% increase in
TTV due to the focus on improved operating leverage as we continue to improve
EBITDA margin % back towards pre-pandemic levels.
Classic Collection performance
2024 2024 2023 2023
Adjusted¹ GAAP Adjusted¹ GAAP¹
£m £m £m £m
TTV 40.6 - 28.0 -
Revenue 8.8 9.0 6.0 6.0
Cost of sales (4.8) (4.8) (3.7) (3.7)
ECL - - (0.1) (0.1)
Gross profit 4.0 4.2 2.2 2.2
Gross profit after marketing costs 3.8 4.0 1.5 1.5
Overheads (2.1) (2.1) (1.4) (1.4)
Depreciation and amortization (0.1) (0.1) - -
Share-based payment charge - (0.1) - -
Amortisation of acquired intangibles - (0.6) - (0.9)
Operating profit/(loss) 1.6 1.1 0.1 (0.8)
EBITDA 1.7 1.8 0.1 0.1
1. Adjusted measures are non-GAAP measures, a full explanation of the
adjustments is included in the glossary. The prior period is restated for the
effects of discontinued operations.
Classic Collection provides an online B2B platform that enables high street
travel agents to sell dynamically packaged holidays to their customers.
Following the discontinuation of CCH in the year, the prior year results have
been restated and include only the results of the legacy Classic Package
Holidays segment.
Revenue for the year was £8.8m (FY23 restated: £6.0m), as a result of both
increased booking volumes and an increased ABV.
EBITDA was £1.7m (FY23 restated: £0.1m) following a significant reduction of
costs on the discontinuation of CCH in the year.
Financing
In December 2022, the Group refinanced its credit facilities with Lloyds Bank
and NatWest and entered into a new facility for £60m expiring in December
2025. The facility agreement included the option for two one-year extensions,
both of which have now been exercised. The revised expiry date is therefore
December 2027.
In January 2024, an option was exercised to extend the facility by £25m in
order to provide additional working capital headroom for continued growth.
This extension is effective until July 2025. Details of the current facility
limits and maturity dates are as follows:
Existing facilities £ Issued Expiry Drawn at
30 September 2024
RCF - Lloyds Bank £42.5m Dec 2022 Dec 2027 Nil
RCF - NatWest £42.5m Dec 2022 Dec 2027 Nil
Total facilities £85m
Share-based payments
The Group has a number of Long-Term Incentive Plan ('LTIP') schemes in place
which vest subject to continued employment and performance criteria. In
accordance with IFRS 2, the Group has recognised a non-cash charge of £2.3m
(FY23 restated: £1.1m).
The share-based payment charge represents a non-cash charge for the expected
cost of shares vesting under the Group's LTIP. The change in the year is a
result of a reduction in the number of awards in the year as well as the
change in expectations for non-market based performance conditions. Given the
volatility and size of these charges they are added back to provide
comparability to prior periods.
Taxation
The Group tax charge of £6.3m represents an effective rate of 24% (FY23:
22%). An increase in the UK corporation rate from 19% to 25% (effective from 1
April 2023) was substantively enacted on 24 May 2021.
Cash flow
FY24 FY23
£m £m
Profit before tax from continuing operations 26.5 14.4
Loss before tax from discontinued operations (7.2) (2.0)
Depreciation and amortisation 15.1 15.3
Net finance income (5.3) (2.6)
Share-based payments 2.3 1.2
Net loss on disposal of property plant and equipment 0.6 -
Net loss on disposal of intangible assets 0.2 -
Loss on discontinued operations 4.6 -
Movement in working capital (4.3) (4.1)
Corporation tax (3.9) (0.2)
Cash generated from operating activities 28.6 22.0
Other cash flows
Capitalised development expenditure (10.2) (12.0)
Capitalised intangible assets (0.1) -
Capital expenditure net of proceeds - -
Net finance income 5.4 2.8
Payment of lease liabilities (1.8) (1.5)
Dividends paid (1.5) -
Total net cash flows 20.4 11.3
Opening cash balance 75.8 64.5
Closing cash at bank 96.2 75.8
Closing trust balance 139.5 108.6
The cash flow profile of the Group has followed a similar pattern to the prior
year with the majority of customers travelling in the period June to September
and therefore the cash flows (excluding any cash held in the trust account)
experienced a trough prior to June and a peak following this. As a result the
available credit facilities are only utilised for a short period.
Net cash inflows were £20.4m (2023: £11.3m). This is due to increased
profitability in the period and increased interest income given the high base
rate environment. Not included in the Group's cash position is £139.5m (FY23:
£108.6m) of customer prepayments held in a trust account to be released once
the customer has travelled. The Group remains in a strong financial position
with sufficient cash reserves to continue to invest in its continuing success.
Discontinued operations
During the year we reviewed the performance of our B2B business, being the
Classic Collection Holidays ("CCH") and Classic Package Holidays ("CPH")
segments and identified necessary changes to improve performance. As a result
of these changes the Board believes that CCH should be presented as
discontinued operations due to a number of factors including the different
revenue expected to be recognised (on an agency basis) in the future.
As a result of these changes we will operate with a simpler operating model
for the benefit of suppliers, agents and customers, see note 10 for further
details.
As a result of these changes we have recognised a loss on discontinued
operations of £7.2m. This includes the write-off of £4.6m of goodwill
previously attributed to the CCH segment, as well as redundancy costs, onerous
contract provisions and the loss for the period.
The freehold premises from which CCH previously operated are shown as an asset
held for sale at the year-end. Following the sale of these premises, which is
expected to complete in early 2025, the discontinuation of CCH is expected to
be cash neutral.
The prior year also includes the discontinuation of our International
business. In FY23 this contributed revenue of £0.9m and an operating loss of
£0.5m.
Capital allocation
Following the introduction of a revised capital allocation policy in FY23, the
Board has continued to invest in organic growth whilst maintaining capital
discipline. The Board has previously signalled its intention to re-introduce a
dividend for FY24 given the return to normal market conditions and a
sustainable cash generative business model. Alongside this, the Board
considers the launch of an on-market share buyback programme of up to £25m as
being appropriate in light of the Group's cash generation and strong balance
sheet. The Company would intend to cancel those shares upon buyback providing
a positive enhancement to EPS.
Dividend
The Board is recommending a final dividend of 2.1p per share (2023: Nil). An
interim dividend of 0.9p per share was paid in May 2024. The Board is
comfortable that the Company has sufficient distributable reserves to
recommend the dividend and commence the share buyback programme.
Current trading and outlook
Our FY24 growth has continued into the new financial year with YTD TTV as at
2 Dec +11% Our forward book is at record levels and Group winter '24 YTD TTV
is +27%. We approach our key booking period in Q2 with significant momentum.
Our platform and proposition are stronger than ever and we are taking share in
adjacent markets. Current trends and strategy give us confidence that
summer '25 will be significantly ahead of summer '24.
Medium-term guidance
In the medium-term the Group's ambition is to deliver TTV of £2.5bn, EBITDA
of £100m (40% of Revenue) and Adjusted PBT of £85m. Delivery of the strategy
is underpinned by our asset light, cash generative model and strong balance
sheet. We have the opportunity to accelerate delivery of our ambition with
complementary targeted M&A, however we will retain a disciplined approach.
Jon Wormald
Chief Financial Officer
2 December 2024
Consolidated Income Statement and Statement of Comprehensive Income
YEAR ENDED 30 SEPTEMBER 2024
Year ended 30 September 2024 Note 2024 Restated**
£m 2023
£m
Revenue 4 128.2 112.1
Cost of sales (4.8) (3.7)
Expected credit losses 15 (1.7) (2.0)
Gross profit 121.7 106.4
Administrative expenses 6 (100.5) (94.4)
Group operating profit 21.2 12.0
Finance costs 8 (2.4) (1.5)
Finance income 8 7.7 3.9
Net finance income 5.3 2.4
Profit before taxation 26.5 14.4
Taxation 9 (6.3) (2.5)
Profit from continuing operations 20.2 11.9
Loss from discontinued operations 10 (7.2) (1.8)
Profit for the year 13.0 10.1
Other comprehensive income that may be reclassified to the P&L:
Net loss on cash flow hedges - (0.6)
Net gain on fair value hedges 0.4 0.7
Total comprehensive income for the year 13.4 10.2
Attributable to equity holders of the parent
Profit from continuing operations 20.2 11.9
Loss from discontinued operations 10 (7.2) (1.8)
Other comprehensive income 0.4 0.1
Total comprehensive income for the year 13.4 10.2
Basic and diluted earnings per share from continuing operations attributable
to the equity shareholders of the Company:
Basic earnings per share 11 12.1p 7.2p
Diluted earnings per share 11 11.9p 7.1p
Adjusted basic earnings per share* 11 14.1p 12.0p
Adjusted diluted earnings per share* 11 13.9p 12.0p
Basic and diluted earnings per share from total operations attributable to
the equity shareholders of the Company:
Basic earnings per share 11 7.8p 6.1p
Diluted earnings per share 11 7.7p 6.0p
Adjusted profit measure*
Adjusted PBT (before amortisation of acquired intangibles, exceptional items 6 31.0 24.8
and share-based payments)*
* This is a non-GAAP measure, refer to notes. This is a non-GAAP measure,
refer to notes listed above.
** The prior period is restated for the effects of discontinued operations
(see note 10).
Consolidated Balance Sheet
At 30 September 2024
Note 2024 2023
£m £m
Assets
Non-current assets
Intangible assets 12 66.2 73.7
Property, plant and equipment 13 3.6 8.3
Deferred tax 20 - 2.6
Trust account 16 0.4 -
Total non-current assets 70.2 84.6
Current assets
Trade and other receivables 15 188.4 165.3
Derivative financial instruments 23 - 0.9
Trust account 16 139.1 108.6
Cash at bank 96.2 75.8
Total current assets 423.7 350.6
Assets held for sale 10 2.0 -
Total assets 495.9 435.2
Equity
Share capital 21 1.7 1.7
Share premium 22 89.6 89.6
Retained earnings 22 220.2 205.9
Capital contribution reserve 22 0.5 0.5
Merger reserve 22 (129.5) (129.5)
Total equity 182.5 168.2
Non-current liabilities
Trade and other payables 17 2.1 2.6
Deferred tax 20 0.4 -
Total non-current liabilities 2.5 2.6
Current liabilities
Corporation tax payable 0.9 1.7
Trade and other payables 17 304.3 261.2
Provisions 17 0.4 0.4
Derivative financial instruments 23 5.3 1.1
Total current liabilities 310.9 264.4
Total liabilities 313.4 267.0
Total equity and liabilities 495.9 435.2
The financial statements were approved by the Board of Directors and
authorised for issue.
Jon Wormald
Chief Financial Officer
2 December 2024
Consolidated Statement of Cash Flows
At 30 September 2024
Note 2024 Restated*
£m 2023
£m
Profit/(loss) before taxation
From continuing operations 26.5 14.4
From discontinued operations 10 (7.2) (2.0)
Adjustments for:
Depreciation 13 2.1 2.7
Amortisation of intangible assets 12 13.0 12.6
Finance costs 8 2.4 1.5
Finance income 8 (7.7) (4.1)
Loss on goodwill for discontinued operations 10 4.6 -
Loss on disposal of intangible assets 12 0.2 -
Loss on disposal of property, plant and equipment 13 0.6 -
Share-based payments 24 2.3 1.2
Impact of unrealised foreign exchange differences (1.7) -
35.1 26.3
Changes in working capital:
Increase in trade and other receivables 15 (22.3) (39.9)
Increase in trade and other payables 17 48.9 75.0
Increase in trust account (30.9) (39.2)
(4.3) (4.1)
Cash flows from operating activities
Cash used in operating activities 30.8 22.2
Tax paid (3.9) (0.2)
Net cash inflow from operating activities 26.9 22.0
Cash flows from investing activities
Purchase of property, plant and equipment 13 - (0.1)
Proceeds from disposal of assets - 0.1
Purchase of intangible assets 12 (0.1) -
Development expenditure 12 (10.2) (12.0)
Interest received 8 7.7 4.1
Net cash outflow from investing activities (2.6) (7.9)
Cash flows from financing activities
Equity dividends paid (1.5) -
Interest paid on borrowings 8 (2.3) (1.3)
Payment of lease liabilities 18 (1.8) (1.5)
Net cash outflow from financing activities (5.6) (2.8)
Impact of unrealised foreign exchange differences 1.7 -
Net increase in cash at bank and in hand 18.7 11.3
Cash at bank and in hand at beginning of year 75.8 64.5
Cash at bank and in hand at end of year 96.2 75.8
* The prior period is restated for the effects of discontinued operations
(see note 10).
Consolidated Statement of Changes in Equity
Year ended 30 September 2024
Share capital Share premium Merger reserve Capital contribution reserve Retained earnings Total
£m £m £m £m £m £m
Balance at 30 September 2022 1.7 89.6 (129.5) 0.5 194.5 156.8
Share-based charge including tax - - - - 1.2 1.2
Total comprehensive income for the year - - - - 10.2 10.2
Balance at 30 September 2023 1.7 89.6 (129.5) 0.5 205.9 168.2
Share-based charge including tax - - - - 2.4 2.4
Dividends - - - - (1.5) (1.5)
Total comprehensive income for the year - - - - 13.4 13.4
Balance at 30 September 2024 1.7 89.6 (129.5) 0.5 220.2 182.5
Notes to the Consolidated Financial Statements
YEAR ENDED 30 SEPTEMBER 2024
1 General information
On the Beach Group plc is a public limited company which is listed on the
London Stock Exchange and is domiciled and incorporated in the United Kingdom
under the Companies Act 2006.
2 Accounting policies
a) Basis of preparation
The consolidated financial statements presented in this document have been
prepared in accordance with UK adopted International Accounting Standards in
conformity with the requirements of the Companies Act 2006.
The financial information set out herein does not constitute the Company's
statutory accounts for the years ended 30 September 2024 or 2023 but is
derived from those accounts. The financial information has been prepared using
accounting policies consistent with those set out in the annual report and
accounts for the year ended 30 September 2024. Statutory accounts for 2023
have been delivered to the Registrar of Companies, and those for 2024 will be
delivered in due course. The auditors have reported on those accounts; their
report was unqualified, did not include a reference to any matters to which
the auditors drew attention by way of emphasis without qualifying their
report, and did not contain any statements under Section 498(2) or (3) of the
Companies Act 2006.
These financial statements are presented in pounds sterling (£m) because that
is the currency of the primary economic environment in which the Group
operates.
b) Going concern
The Group covers its daily working capital requirements by means of cash and
Revolving Credit Facility ('RCF'). On 7 December 2023, the Group refinanced
its credit facilities with Lloyds Bank and NatWest. This included cancelling
its current facility of £50m and CLBILS facility of £25m and entering into a
new facility for £60m expiring in December 2025. The facility agreement
included the option for two one-year extensions, both of which have now been
exercised. The revised expiry date is therefore December 2027. In January
2024, the facility was increased by £25m until July 2025. The RCF has
financial covenants in place which are tested quarterly.
As at 30 September 2024 Group cash (excluding cash held in trust which is
ringfenced and not factored into the going concern assessment) was £96.2m (30
September 2023: £75.8m).
Cash received from customers for bookings that have not yet travelled is held
in a ring-fenced trust account and is not withdrawn until the customer returns
from their holiday, or the booking is cancelled and refunded. All withdrawals
from the Trust account are approved by our Trustees and the Civil Aviation
Authority. Cash held in trust at 30 September 2024 was £139.5m (30 September
2023: £108.6m).
The Directors have assessed a going concern period through to 31 March 2026
and have modelled a number of scenarios considering factors such as airline
resilience, cost of living, inflation, interest rates and customer behaviour/
demand. The Group has performed an assessment of the impact of climate risk,
as part of the Director's assessment of the Group's ability to continue as a
going concern. Detail of the Group's assessment of the impact of climate risk
is provided within the 'Here for the planet' section of this report.
The Directors have modelled a reasonably possible downside scenario to
sensitise the base case as a result of major airline failure (two airlines,
modelled separately). In both of these scenarios the Directors have assessed
the impact to cash and revenue in an environment where bookings are 100% lower
than forecasted for three months followed by a 50% reduction for the remaining
going concern period; although profitability would be affected, the Group
would be able to continue operating.
In addition, the Directors have modelled sensitivity analysis on both average
booking values and booking volumes separately, as well as a reverse stress
test, though the outcome is considered to be remote. Although in each of these
scenarios profitability would be affected, the Group would be able to continue
operating with sufficient liquidity and headroom on covenants.
Given the assumptions above, the mitigating actions available and within the
Group's control, the Directors remain confident that the Group continue to
operate in an agile way adapting to any continued travel disruption.
Therefore, it is considered appropriate to continue to adopt the going concern
basis in preparing these financial statements.
c) New standards, amendments and interpretations
A number of new standards and amendments to standards are effective for annual
periods beginning after 1 January 2023; the following amended standards have
been implemented, however, they have not had a significant impact on the
Group's consolidated financial statements:
· IFRS 17 Insurance Contracts
· Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS
Practice Statement 2
· Definition of Accounting Estimates - Amendments to IAS 8
· Deferred Tax related to Assets and Liabilities arising from a Single
Transaction - Amendments to IAS 12
· Interpretations of IFRS 8 Operating Segments - Paragraph 23
International Tax Reform - Pillar Two Model Rules - Amendments to IAS 12
introduced a mandatory temporary exception to the requirements of IAS 12 under
which a company does not recognise or disclose information about deferred tax
assets and liabilities related to the proposed OECD/G20 BEPS Pillar Two model
rules. The Group has applied the temporary exception in the Group's
consolidated financial statements, the impact of which is not material.
Standards issued but not yet effective
Certain new financial reporting standards, amendments and interpretations have
been published that are not mandatory for the 30 September 2024 reporting
period, and have not been early adopted by the Group. The Group is currently
assessing the impact of the following standards, amendments and
interpretations:
· Amendment to IFRS 16 - Leases on sale and leaseback
· Amendment to IAS 7 and IFRS 7 - Supplier finance
· Amendments to IAS 21 - Lack of Exchangeability
· Amendments to IAS 1 - Classification of Liabilities as Current or
Non-current and Non-current Liabilities with Covenants
· Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of
Financial Instruments
· Annual Improvements to IFRS Accounting Standards-Volume 11
· IFRS 18 - Presentation and Disclosure in Financial Statements
· IFRS 19 - Subsidiaries without Public Accountability: Disclosures
d) Climate-related matters
The Group considers climate-related matters in estimates and assumptions where
appropriate, which includes areas such as:
· Impairment of non-financial assets: The value in use may be impacted
by the changes in climate-related regulations or a change in the demand of
certain holiday destinations as a result of extreme weather or natural
disasters.
· Deferred tax asset recoverability: The forecasts used in assessing
whether the Group has sufficient future taxable income could be impacted by
climate-related regulation or change in consumer demand for travelling abroad.
· Going concern: When forecasting future expected cashflows, the primary
climate-related risk is extreme heat/ weather due to wildfires, flooding or
other extreme weather events in holiday destinations. While other risks have
not materialised in the short term, we will continue to monitor them closely.
The Group's business model allows for flexibility, through being asset light,
which means the Group can respond quickly to changes in customer demand for
certain locations. The Group is closely monitoring changes and developments in
both climate-related legislation and extreme weather events.
e) Discontinued operations
Discontinued operations are excluded from the results of continuing operations
and are presented as a single amount as profit or loss after tax from
discontinued operations in the statement of profit or loss. Additional
disclosures are provided in note 10. All other notes to the financial
statements include amounts for continuing operations, unless indicated
otherwise.
f) Basis of consolidation
The Group's consolidated financial statements consolidate the financial
statements of On the Beach Group plc and all of its subsidiary undertakings.
i. Subsidiaries are entities controlled by the Company
Control exists when the Company has power over the investee, the Company is
exposed, or has rights to variable returns from its involvement with the
subsidiary and the Company has the ability to use its power of the investee to
affect the amount of investor's returns.
ii. Transactions eliminated on consolidation
Intragroup balances, and any gains and losses or income and expenses arising
from intragroup transactions, are eliminated in preparing the consolidated
financial information. Gains arising from transactions with jointly controlled
entities are eliminated to the extent of the Group's interest in the entity.
Losses are eliminated in the same way as gains, but only to the extent that
there is no evidence of impairment.
g) Goodwill
Goodwill arising on the acquisition of subsidiary undertakings and trade and
assets represents the excess of the cost of acquisition over the fair value of
the identifiable assets and liabilities at the date of acquisition. Goodwill
is initially recognised as an asset at cost and is subsequently remeasured at
cost less any accumulated impairment losses. Goodwill which is recognised as
an asset is reviewed for impairment at least annually. Any impairment is
recognised immediately in the income statement and is not subsequently
reversed. On disposal of a subsidiary the attributable amount of goodwill is
included in the determination of the profit or loss on disposal.
For the purposes of impairment testing, goodwill is allocated to the cash
generating units expected to benefit from the combination. If the recoverable
amount is less than the carrying amount of the unit, the impairment loss is
allocated to first reduce the amount of goodwill allocated to the unit and
then the other assets in the unit. An impairment loss recognised for goodwill
is not reversed in a subsequent period.
Impairment losses recognised for other assets is reversed only if the reasons
for the impairment have ceased to apply.
h) Foreign currency
Transactions in foreign currencies are translated to the respective functional
currencies of Group entities at the foreign exchange rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign
currencies at the balance sheet date are retranslated to the functional
currency at the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are recognised in the
income statement.
i) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.
i. Financial assets
Financial assets are classified, at initial recognition, and subsequently
measured at amortised cost, fair value through other comprehensive income
('OCI'), and fair value through profit or loss. In order for a financial asset
to be classified and measured at amortised cost, the financial asset is under
a "hold to collect" business model and it needs to give rise to cash flows
that are "solely payments of principal and interest" ('SPPI') on the principal
amount outstanding. The Group considers financial asset in default when
contractual payments are 90 days past due.
Trade and other receivables
Trade and other receivables are recognised initially at fair value. Subsequent
to initial recognition, they are measured at amortised cost using the
effective interest method, less any impairment losses. Gains and losses are
recognised in profit or loss when the asset is derecognised, modified or
impaired. An expected credit loss is calculated using a provision matrix which
is initially based on the Group's historical observed default rates
that is calibrated for changes in the forward-looking estimates.
Cash at bank
Cash at bank comprises cash balances and call deposits. Bank overdrafts that
are repayable on demand and form an integral part of the Group's cash
management are included as a component of cash at bank.
Trust account
All ATOL protected customer monies are held in a trust account until after the
provision of the holiday service. The trust account is governed by a deed
between the Group, the Civil Aviation Authority Air Travel Trustees and
independent trustees (Travel Trust Services Limited), which determines the
inflows and outflows from the account.
All ATOL protected customer receipts are paid into the trust account in full
before the holiday departure date. These payments are held in the trust
account until the service is provided - for flights on payment to the supplier
and for hotels and ancillaries on the customer's return from holiday. The
Group therefore does not use customer prepayments to fund its business
operations. Due to the restrictions on accessing the funds in the trust
account, customer monies held in the trust account are presented separately to
cash at bank.
Cash flows in respect of the trust account are presented as operating cash
flows on the basis that they are linked to the Group's revenue-producing
activities as an online travel agent.
ii. Financial liabilities
Financial liabilities are classified, at initial recognition, as financial
liabilities at fair value through profit or loss, loans and borrowings,
payables, or as derivatives designated as hedging instruments in an effective
hedge, as appropriate.
Trade and other payables
Trade and other payables are recognised initially at fair value and net of
directly attributable transaction costs. Subsequent to initial recognition
they are measured at amortised cost using the effective interest method. Gains
and losses are recognised in profit or loss when the liabilities are
derecognised as well as through the Effective Interest Rate ('EIR')
amortisation process.
Revolving credit facility ('RCF')
Borrowings from the RCF are recognised initially at fair value and net of
directly attributable transaction costs. After initial recognition, the RCF is
subsequently measured at amortised cost using the EIR method.
iii. Derivative financial instruments, including hedge accounting
The Group enters into forward foreign exchange contracts to manage exposure to
foreign exchange rate risk of trade payables.
Additionally, the Group acquired interest rate swaps in order to hedge the
interest rate risk associated with the interest received on the Trust account.
The movement associated with this is recognised within finance income in the
income statement.
Further details of these derivative financial instruments are disclosed in
note 23 of these financial statements. Such derivative financial instruments
are initially recognised at fair value on the date on which a derivative
contract is entered into and are subsequently remeasured at fair value.
Fair value hedges
All derivative financial instruments are assessed against the hedge accounting
criteria set out in IFRS 9. On initial designation of the derivative as a
hedging instrument, the Group formally documents the relationship between the
hedging instrument and hedged item, the Group elects to identify the
spot-element of forward contracts as the hedging instrument. The
documentation also identifies the hedged item, the risk management objectives
and strategy in understanding the hedge transaction and the hedged risk,
together with the methods that will be used to assess the effectiveness of the
hedging relationship.
The Group makes an assessment, both at the inception of the hedge relationship
as well as on an ongoing basis, of whether the hedging instruments are
expected to be highly effective in offsetting the changes in the fair value of
the respective hedged items attributable to the hedged risk.
Derivatives are initially recognised at the fair value on the date a
derivative contract is entered into and are subsequently remeasured at each
reporting date at their fair value. The change in the fair value of the
hedging instrument is recognised in the statement of profit or loss as other
expense. The change in the fair value of the hedged item attributable to the
risk hedged is recorded as part of the carrying value of the hedged item and
is also recognised in the statement of profit or loss as other expense. The
change in the fair value of the forward element of the forward contracts is
recognised in other comprehensive income.
Cash flow hedges
For derivatives that are designated as cash flow hedges and where the hedge
accounting criteria are met, the effective portion of changes in the fair
value is recognised in other comprehensive income. For the Group the is the
interest rate swaps. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss as part of finance costs. Amounts
accumulated in equity are recognised in profit or loss when the income or
expense on the hedged item is recognised in profit or loss.
j) Segment reporting
IFRS 8 requires operating segments to be reported in a manner consistent with
the internal reporting provided to the chief operating decision maker. The
chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as
the management team, including the Chief Executive Officer and Chief Financial
Officer. For management purposes, the Group is organised into segments based
on the nature of products and services, and information is provided to the
management team on these segments for the purposes of resource allocation and
segment performance management and monitoring.
In the year, Classic Collection Holidays Limited discontinued its website,
vacated the property used for operations, and made a number of redundancies,
transferring all remaining assets to Classic Package Holidays Limited. Classic
Package Holidays Limited is still considered to be a single operating segment
following this transfer. Classic Package Holidays Limited has since been
renamed Classic Collection Holdings Limited, and is referred to throughout as
"Classic Collection". See note 10 for details of discontinued operations.
The management team considers there to be two reportable segments:
(i) "OTB" - activity via UK websites as a B2C trader (www.onthebeach.co.uk,
www.sunshine.co.uk and www.onthebeachtransfers.co.uk)
(ii) "Classic Collection" - activity via the Classic Collection online
business to business portal as a B2B trader (www.classic-collection.co.uk)
k) Revenue recognition
IFRS 15 Revenue from Contracts with Customers is a principle-based model of
recognising revenue from customer contracts. It has a five-step model that
requires revenue to be recognised when control over goods and services are
transferred to the customer. The standard requires the Group to exercise
judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts with their
customers.
The following paragraphs describes the types of contracts, when performance
obligations are satisfied, and the timing of revenue recognition. Further
details of the disaggregation of revenue are disclosed in note 4 of these
financial statements.
As agent:
The Group acts as agent when it is not the primary party responsible for
providing the components that make up the customer's booking and it does not
control the components before they are transferred to customers. Revenue
comprises the fair value of the consideration received or receivable in the
form of commission. Service fees/commissions are earned through purchases from
customers of travel products such as flight tickets or hotel accommodation
from third-party suppliers. Revenue in the form of commission or service fees
is recognised when the performance obligation of arranging and facilitating
the customer to enter into individual contracts with suppliers is satisfied,
usually on delivery of the booking confirmation.
Given the level of cancellations the Group has experienced, the commission is
considered to represent variable consideration and the transaction price of
commission income determined using the expected value method, such that
revenue is recognised only to the extent that it is highly probable that there
will not be a significant reversal of revenue recognised in future periods.
The sum of the range of probabilities of cancellations in different scenarios
based on historical trends and best estimate of future expectations is used to
calculate the extent to which the variable consideration is reduced and a
corresponding refund liability (presented as a cancellation provision)
recognised in provisions. See note 17 for more information.
Revenue earned from sales through the OTB segment are stated net. Revenue
earned from sales through Classic Collection are stated net, with the
commission payable to agents recognised in the cost of sales.
As principal:
The Group acts as principal when it is the primary party responsible for
providing the components that make up the customer's booking and it controls
the components before transferring to the customer.
Revenue represents amounts received or receivable for the sale of package
holidays and other services supplied to the customers. Revenue is recognised
when the performance obligation of delivering an integrated package holiday is
satisfied, usually over the duration of the holiday.
Revenue is stated net of discounts, rebates, refunds and value added tax.
Following the cessation of operations for Classic Collection Holidays on 30
September 2024, all principal revenue for the year is recognised within
discontinued operations, see note 10 for more details.
l) Override income
The Group has agreements with suppliers which give rise to rebate income. This
income relates to segments where revenue is accounted for on an agent basis,
therefore the income received from suppliers relates to reduction in cost of
sales (corresponding increase in commission received), and as such is
considered part of the Group's net revenue, for the year ended 30 September
2024 override income was £8.5m (FY23: £5.5m). The Group has some agreements
whereby receipt of the income is conditional on the Group achieving agreed
volume targets.
For agreements not linked to volume targets, override income is recognised
when earned by the Group, which occurs when all obligations conditional for
earning income have been discharged, and the income can be measured reliably
based on the terms of the contract, which is usually once the booking has been
confirmed with the supplier.
For agreements where volume targets are in place, income is recognised once
the target has been achieved. For volume targets which span the year end, the
Group is required to make estimates in determining the amount and timing of
recognition of override. In determining the amount of volume-related
allowances recognised in any period, management estimate the probability that
the Group will meet contractual target volumes, based on current and forecast
performance.
Amounts due but not yet recovered relating to override income are recognised
within trade and other receivables.
m) Business combinations
All business combinations are accounted for by applying the acquisition
method. Business combinations are accounted for using the acquisition method
as at the acquisition date, which is the date on which control is transferred
to the Group.
· For acquisitions, the Group measures goodwill at the acquisition date
as:
· the fair value of the consideration transferred; plus
· the recognised amount of any non-controlling interests in the
acquiree; plus
· the fair value of the existing equity interest in the acquiree; less
· the net recognised amount (generally fair value) of the identifiable
assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the issue
of debt or equity securities, are expensed as incurred. Any contingent
consideration payable is recognised at fair value at the acquisition date. If
the contingent consideration is classified as equity, it is not remeasured and
settlement is accounted for within equity. Otherwise, subsequent changes to
the fair value of the contingent consideration are recognised in the income
statement.
n) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation
and accumulated impairment losses.
Depreciation is charged to the income statement on a straight-line basis over
the estimated useful lives of each part of an item of property, plant and
equipment. Land is not depreciated. The estimated useful lives are as follows:
Fixtures, fittings and equipment 3-10 years
Buildings freehold 50 years
Depreciation methods, useful lives and residual values are reviewed at each
balance sheet date.
The gain or loss arising on the disposal or retirement of an asset is
determined as the difference between the sales proceeds and the carrying
amount of the asset and is recognised in administrative expenses.
o) Intangible assets
i. Research and development
Expenditure on research activities is recognised in the income statement as an
expense as incurred. Expenditure on development activities directly
attributable to the design and testing of identifiable and unique software
products are capitalised if the product or process meet the following
criteria:
· the completion of the development is technically and commercially
feasible to complete;
· adequate technical resources are sufficiently available to complete
development;
· it can be demonstrated that future economic benefits are probable; and
· the expenditure attributable to the development can be
measured reliably.
Development activities involve a plan or design for the production of new or
substantially improved products or processes. Directly attributable costs that
are capitalised as part of the software product, website or system include
employee costs. Other development expenditures that do not meet these criteria
as well as ongoing maintenance are recognised as an expense as incurred.
Development costs for software, websites and systems are carried at cost less
accumulated amortisation and are amortised over their useful lives (not
exceeding three years) at the point in which they come into use.
ii. Software licences and domain names
Acquired intangible assets are capitalised at the cost necessary to bring the
asset to its working condition. The Group has applied the guidance published
by the IFRS Interpretations Committee ('IFRIC') in respect of cloud computing
arrangements. The guidance requires that cloud computing arrangements are
reviewed to determine if they are within the scope of IAS 38 Intangible
Assets, IFRS 16 Leases, or a service contract. This is to determine if the
Group has control of the software intangible asset. Control is assumed if the
Group has the right to take possession of the software and run it on its own
or a third party's computer infrastructure or if the Group has exclusive
rights to use the software whereby the supplier cannot make the software
available to other customers.
Costs for software licences and domain names are carried at cost less
accumulated amortisation and are amortised over their useful lives at the
point in which they come into use.
iii. Brand
Upon acquisition of the Group, the On the Beach brand was identified as a
separately identifiable asset. Acquisitions of Sunshine.co.uk and Classic
Collection Holidays Limited resulted in the brand of each being identified and
recognised separately from goodwill at fair value.
iv. Amortisation
Amortisation is charged to the income statement on a straight-line basis over
the estimated useful lives of intangible assets unless such lives are
indefinite. Intangible assets with an indefinite useful life and goodwill are
systematically tested for impairment at each balance sheet date. Other
intangible assets are amortised from the date they are available for use. The
estimated useful lives are as follows:
Website technology: 10 years
Website & development costs: 3 years
Brand: 10-15 years
Agent relationships: 15 years
Customer relationships: 5 years
v. Customer and agent relationships
Upon the acquisition of Classic Collection Holidays Limited, customer
relationships were identified as a separately identifiable assets. Classic
Collection's revenue is driven by a very high volume of repeat customers due
to its bespoke holiday packages and the target market. Repeat customers are
from two broad segments - independent travel agents and direct customers and
individuals booking directly. There is a defined margin and attrition profile
differential between the two customer groups and as such two separate assets
were identified.
p) Impairment of non-financial assets
At each balance sheet date, the Group reviews the carrying amounts of its
tangible and intangible assets to determine whether there is any indication
that those assets have suffered an impairment loss. If any such indication
exists, the recoverable amount of the asset is estimated in order to determine
the extent of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs. The
recoverable amount of an asset or cash generating unit is the greater of its
value in use and its fair value less costs to sell.
Goodwill is required to be tested for impairment annually, or more frequently
where there is an indication that the goodwill may be impaired. The goodwill
acquired in a business combination, for the purpose of impairment testing, is
allocated to cash generating units, or ('CGU'). Subject to an operating
segment ceiling test, for the purposes of goodwill impairment testing, CGUs to
which goodwill has been allocated are aggregated so that the level at which
impairment is tested reflects the lowest level at which goodwill is monitored
for internal reporting purposes. Goodwill acquired in a business combination
is allocated to groups of CGUs that are expected to benefit from the synergies
of the combination.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset.
For the purpose of impairment testing, assets that cannot be tested
individually are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the "cash-generating unit").
An impairment loss is recognised if the carrying amount of an asset or its CGU
exceeds its estimated recoverable amount. Impairment losses are recognised in
profit or loss. Impairment losses recognised in respect of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to the units,
and then to reduce the carrying amounts of the other assets in the unit (group
of units) on a prorata basis.
q) Leases
The Group assesses at contract inception whether a contract is, or contains, a
lease. That is, if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all
leases, except for short-term leases and leases of low-value assets. The Group
recognises lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
i) Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease
(ie, the date the underlying asset is available for use). Right-of-use assets
are measured at cost, less any accumulated depreciation and impairment losses,
and adjusted for any remeasurement of lease liabilities. The cost of
right-of-use assets includes the amount of lease liabilities recognised,
initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. The recognised
right-of-use assets are depreciated on a straight-line basis over the shorter
of the lease term and the estimated useful lives of the assets, as follows:
Buildings 10 years
IT equipment 3-5 years
The right-of-use assets are also subject to impairment. The Group's
right-of-use assets are included as a separate category in property, plant
and equipment.
ii) Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities
measured at the present value of lease payments to be made over the lease
term. In calculating the present value of lease payments, the Group uses the
incremental borrowing rate at the lease commencement date where the interest
rate implicit in the lease is not readily determinable.
After the commencement date, the amount of lease liabilities is increased to
reflect the accretion of interest and reduced for the lease payments made. In
addition, the carrying amount of lease liabilities is remeasured if there is a
modification, a change in the lease term, a change in the lease payments (eg,
changes to future payments resulting from a change in an index or rate used to
determine such lease payments) or a change in the assessment of an option to
purchase the underlying asset.
The Group's lease liabilities are included in trade and other payables.
r) Employee benefits
i. Pension scheme
The Group operates a defined contribution pension scheme. A defined
contribution scheme is a post-employment benefit plan under which the Company
pays fixed contributions into a separate entity and will have no legal or
constructive obligation to pay further amounts. Obligations for contributions
to defined contribution pension plans are recognised as an expense in the
income statement in the years during which services are rendered by employees.
ii. Share-based payment transactions
Employees (including senior executives) of the Group receive remuneration in
the form of share-based payments, whereby employees render services as
consideration for equity instruments (equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the fair value at the
date when the grant is made using an appropriate valuation model, further
details of which are given in note 24.
That cost is recognised in employee benefits expense (note 7a), together with
a corresponding increase in equity (other capital reserves), over the period
in which the service and, where applicable, the performance conditions are
fulfilled (the vesting period). The cumulative expense recognised for
equity-settled transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired and the Group's
best estimate of the number of equity instruments that will ultimately vest.
The expense or credit in the statement of profit or loss for a period
represents the movement in cumulative expense recognised as at the beginning
and end of that period.
Service and non-market performance conditions are not taken into account when
determining the grant date fair value of awards, but the likelihood of the
conditions being met is assessed as part of the Group's best estimate of the
number of equity instruments that will ultimately vest. Market performance
conditions are reflected within the grant date fair value. Any other
conditions attached to an award, but without an associated service
requirement, are considered to be non-vesting conditions. Non-vesting
conditions are reflected in the fair value of an award and lead to an
immediate expensing of an award unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest because
non-market performance and/or service conditions have not been met. Where
awards include a market or non-vesting condition, the transactions are treated
as vested irrespective of whether the market or non-vesting condition is
satisfied, provided that all other performance and/or service conditions are
satisfied.
The dilutive effect of outstanding options is reflected as additional share
dilution in the computation of diluted earnings per share (further details are
given in note 11).
s) Financing income and expenses
Financing expenses comprises interest payable and interest on lease
liabilities recognised in profit or loss using the effective interest method,
unwinding of the discount on provisions, and net foreign exchange losses that
are recognised in the income statement (see foreign currency accounting
policy). Financing income comprises interest receivable on funds invested.
Finance income is shown net of movements in the interest rate swaps held.
Interest income and interest payable is recognised in profit or loss as it
accrues, using the effective interest method. Foreign currency gains and
losses are reported on a net basis.
t) Exceptional items
Exceptional items are material items of income and expense which, because of
the nature and expected infrequency of events giving rise to them, merit
separate presentation to allow shareholders to understand better the elements
of financial performance in the year, so as to facilitate comparison with
prior years and to assess better trends in financial performance.
u) Taxation
Tax on the profit or loss for the year comprises current and deferred tax. Tax
is recognised in the income statement except to the extent that it relates to
items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or
loss for the year, using tax rates enacted or substantively enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous
years.
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of goodwill; the initial recognition of
assets or liabilities that affect neither accounting nor taxable profit other
than in a business combination, and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in the
foreseeable future.
A deferred tax asset is recognised only to the extent that it is probable that
future taxable profits will be available against which the temporary
difference can be utilised.
v) Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares are shown in equity as a deduction
from the proceeds.
w) Share premium and other reserves
The amount subscribed for the Ordinary Shares in excess of the nominal value
of these new shares is recorded in "share premium". The amount subscribed for
the preference shares in excess of the nominal value of these new preference
shares is recorded in "other reserves".
Costs that directly relate to the issue of Ordinary Shares are deducted from
share premium net of corporation tax.
The merger reserve represents the amount subscribed for the Ordinary Shares in
excess of the nominal value of the shares issued in exchange for the
acquisition of subsidiaries.
x) Earnings per share
The Group presents basic and diluted earnings per share ('EPS') data for its
Ordinary Shares. Basic EPS is calculated by dividing the profit attributable
to Ordinary Shareholders by the weighted average number of Ordinary Shares
outstanding during the period. For diluted EPS, the weighted average number of
Ordinary Shares is adjusted to assume conversion of all dilutive potential
Ordinary Shares.
y) Capital management
The Group's objectives when managing capital are to safeguard the Group's
ability to continue as a going concern in order to provide returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital. In order to maintain or
adjust the capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new shares or sell
assets to reduce debt.
z) Provisions
A provision is recognised in the balance sheet when the Group has a present
legal or constructive obligation as a result of a past event, that can be
reliably measured and it is probable that an outflow of economic benefits will
be required to settle the obligation.
The Group recognises a refund liability (presented as a cancellation
provision) for the commission that is considered to represent variable
consideration due to the risk that a booking may be cancelled (see note 2k).
aa) Non-statutory measures
One of the Group's KPIs is adjusted profit before tax. When reviewing
profitability, the Directors use an adjusted profit before taxation ('PBT') in
order to give a meaningful year-on-year comparison. Whilst we recognise that
the measure is an alternative (non-Generally Accepted Accounting Principles
('non-GAAP')) performance measure which is also not defined within IFRS, this
measure is important and should be considered alongside the IFRS measures.
Adjusted PBT is calculated by adjusting for material items of income and
expenditure where because of the nature and expected infrequency of events
giving rise to them, merit separate presentation to allow shareholders a
better understanding of the financial performance in the period. These
adjustments include amortisation of acquired intangibles and exceptional
items. In addition, share-based payments charge is excluded in order to
provide comparability to prior periods due to fluctuations in the charge.
3 Critical accounting estimates and judgements
The Group's accounting policies have been set by management. The application
of these accounting policies to specific scenarios requires reasonable
estimates and assumptions to be made concerning the future. These are
continually evaluated based on historical experience and expectations of
future events. The resulting accounting estimates will, by definition, seldom
equal the related actual results. Under IFRS, estimates or judgements are
considered critical where they involve a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities from
period to period. This may be because the estimate or judgement involves
matters which are highly uncertain or because different estimation methods or
assumptions could reasonably have been used.
Critical accounting judgements
Revenue from contracts with customers
The Group applied the following key judgements on the agent vs principal
status of each segment as well as the number of performance objections
in each.
Agent vs principal
Determining whether an entity is acting as a principal or as an agent requires
judgement and has a significant effect on the timing and amount (gross or net
basis) of revenue by the Group. As an agent, revenue is recognised at the
point of booking on a net basis. As a principal, revenue is recognised on a
gross basis over the duration of the holiday.
In accordance with IFRS 15, revenue for the OTB and Classic Collection
segments is recognised as an agent on the basis that the performance
obligation is to arrange for another entity to provide the goods or services.
This assessment has given consideration that there is no inventory risk and
limited discretion in establishing prices.
Performance obligations
Revenue in the OTB and Classic Collection segments is recognised based on
there being a single performance obligation to at the point of booking. This
is to arrange and facilitate the customer entering into individual contracts
with principal suppliers providing holiday related services including flights,
hotels and transfers. For the OTB and Classic Collection segments, there is
not a significant integration service and responsibility for providing the
services remains with the principal suppliers.
The Group has concluded that under IFRS 15 for revenue in the former CCH
segment, a package holiday constitutes the delivery of one distinct
performance obligation which includes flights, accommodation, transfers and
other holiday-related services. In formulating this conclusion, management has
assessed that it provides a significant integration service to collate all of
the elements within a customer's specification to produce one integrated
package holiday. Management has further analysed the recognition profile and
concluded that under IFRS 15, revenue and corresponding cost of sales should
be recognised over the period a customer is on holiday.
Following the cessation of operations for Classic Collection Holidays on 30
September 2024, all principal revenue for the year is recognised within
discontinued operations, see note 10 for more details.
Capitalised website development costs
Determining the amounts to be capitalised involves judgement and is dependent
upon the nature of the related development; namely whether it is capital (as
relating to the enhancement of the website) or expenditure (as relating to the
ongoing maintenance of the website) in nature. In order to capitalise a
project, the key judgement management has made is in determining the project's
ability to produce future economic benefits. In the year ending 30 September
2024, the proportion of development costs that have been capitalised is in
line with prior year as the development team are focusing on key strategic
development objectives. Management has assessed each project to determine
whether the project is technically feasible, intended to be completed and
used, whether there is available resources to complete it and whether there is
probable economic benefits from each project.
Discontinued operations
On 11 March 2024, the Board made the decision to cease the Classic Collection
Holidays operation and to not attempt to sell the business. Management
determined that on abandonment of Classic Collection Holidays on 30 September
2024, the operation should be presented as a discontinued operation due to the
different nature of cash flows expected to arise and revenue expected to be
recognised from the cessation of the Classic Collection Holidays operation. By
presenting Classic Collection Holidays as a discontinued operation, Management
believes that the presentation of the Income Statement is more aligned to the
ongoing and anticipated recurring cash flows and revenue recognised by the
business in the restructured operating model.
The following factors were considered to classify the operation as
discontinued:
· Key dates of decisions and actions taken in relation to abandoning the
operation including the redundancy of staff, vacating the property from which
the operation was ran and subsequently putting the property up for sale.
· The distinction between the two Classic Package and Classic Collection
CGU's in terms of location, operating teams and expected cashflows.
As noted above Classic Collection Holidays has been classified as discontinued
operations, therefore as there is no future expected cashflows, the goodwill
of £4.6m has been written off.
Critical accounting estimates
Expected Credit Losses ('ECL')
The Group's estimation of credit risk relating to customer repayments of debt
is inherently uncertain and subject to degree of judgement. Further
information on the Group's credit risk management practices and risk exposures
are outlined in the risk management section.
The ECL provision is calculated using two years of historical default rates
following financial years impacted by COVID-19, which are compared to
forecasted revenue projections to calculate the expected liability. Two years
is considered to be a suitable period to use for estimation as this more
accurately reflects current events when compared to period prior to, or during
the effects of COVID-19. These results are adjusted for the expected effect of
cost of living, as well as inflation. The calculation is updated at each
reporting date. The origination, measurement and release of material
judgemental adjustments are subject to further analysis and challenge through
the Group's accounting judgement review process before ultimate being
presented to the Group's Audit Committee.
Estimation uncertainty arises on the forecasted bookings, effects of the cost
of living and inflation adjustments. These estimations are subject to
challenge by the Board of Directors, as well as the Audit Committee to ensure
that they most accurately reflect the available information.
4 Revenue
In line with IFRS 15, the Group is required to disaggregate its revenue to
show the main drivers of its revenue streams. Revenue is accounted for at the
point the Group has satisfied its performance obligations; details of the
revenue performance obligations are set out in note 2k of these financial
statements.
For the year ended 30 September 2024
OTB Classic Collection Total
£m £m £m
Total revenue before exceptional items 114.6 8.8 123.4
Exceptional recoveries** 4.6 0.2 4.8
Total revenue 119.2 9.0 128.2
For the year ended 30 September 2023*
OTB Classic Collection Total
£m £m £m
Total revenue before exceptional items 106.9 6.0 112.9
Fair value FX gains (0.8) - (0.8)
Total revenue 106.1 6.0 112.1
* Revenue for the year ended 30 September 2023 has been restated to
exclude the results of discontinued operation included in that period (note
10).
** Exceptional recoveries relate to refunds from airlines for cancelled
flights during COVID-19. Previously, exceptional cancellations related to
these flights were provided for against, which have now been released.
In the year, Classic Collection Holidays Limited discontinued its website,
vacated the property used for operations, and made a number of redundancies,
transferring all remaining assets to Classic Package Holidays Limited (see
note 10). Upon transfer, operations have been streamlined for Classic
Collection Holidays and Classic Package Holidays to operate under a single
CGU, "Classic Collection".
Details of receivables arising from contracts with customers are set out in
note 15.
5 Segmental report
As explained in note 2j, the management team considers the reportable segments
to be ''OTB'' and "Classic Collection". All segment revenue, operating profit
assets and liabilities are attributable to the Group from its principal
activities.
OTB and Classic Collection recognise revenue as agent on a net basis.
The Group's Chief Operating Decision Maker ('CODM') is its executive board and
it monitors the performance of these operating segments as well as deciding on
the allocation of resources to them based on divisional level financial
reports. Segmental performance is monitored using adjusted segment operating
results.
In the year, Classic Collection Holidays Limited discontinued its website,
vacated the property used for operations, and made a number of redundancies,
transferring all remaining assets to Classic Package Holidays Limited. Classic
Package Holidays Limited is still considered to be a single operating segment
following this transfer. Classic Package Holidays Limited has since been
renamed Classic Collection Holdings Limited, and is referred to throughout as
"Classic Collection". For further details on the discontinued operations see
note 10.
2024 2023*
OTB £m Classic Collection £m Total £m OTB £m Classic Collection £m Total £m
Revenue
Revenue 119.2 9.0 128.2 106.1 6.0 112.1
Exceptional recoveries** (4.6) (0.2) (4.8) - - -
Fair value FX losses - - - 0.8 - 0.8
Adjusted Revenue 114.6 8.8 123.4 106.9 6.0 112.9
Cost of sales - (4.8) (4.8) - (3.7) (3.7)
Expected credit losses (1.7) - (1.7) (1.9) (0.1) (2.0)
Adjusted Gross Profit 112.9 4.0 116.9 105.0 2.2 107.2
Marketing (40.0) (0.1) (40.1) (38.8) (0.5) (39.3)
Staff costs (excluding share based payments) (20.9) (0.7) (21.6) (20.6) (0.6) (21.2)
Other administrative expenses (15.7) (1.5) (17.2) (13.5) (1.0) (14.5)
Adjusted EBITDA 36.3 1.7 38.0 32.1 0.1 32.2
Share-based charge (2.2) (0.1) (2.3) (1.1) - (1.1)
Exceptional items 0.4 0.2 0.6 (3.3) - (3.3)
Fair value FX losses - - - (0.8) - (0.8)
EBITDA 34.5 1.8 36.3 26.9 0.1 27.0
Depreciation and amortisation (14.4) (0.7) (15.1) (14.1) (0.9) (15.0)
Group operating profit 20.1 1.1 21.2 12.8 (0.8) 12.0
Finance costs (2.4) (1.5)
Finance income 7.7 3.9
Profit before taxation 26.5 14.4
Non-current assets
Goodwill 31.6 4.0 35.6 31.6 4.0 35.6
Other intangible assets*** 25.5 5.1 30.6 27.9 5.8 33.7
Property, plant and equipment 3.6 - 3.6 5.5 - 5.5
* The results for the year ended 30 September 2023 has been restated to
exclude the results of discontinued operation included in that period (note
10).
** Exceptional recoveries relate to refunds from airlines for cancelled
flights during COVID-19. Previously, exceptional cancellations related to
these flights were provided for against, which have now been released.
*** Acquired intangibles previously recognised in under the
discontinued operations have been recognised in Classic Collection, as these
relate to continuing operations. Please see note 12 for details.
6 Operating profit
a) Operating expenses from continuing operations
Expenses by nature including exceptional items and amortisation of intangible
assets:
2024 £m 2023* £m
Marketing 40.1 39.3
Depreciation 2.1 2.4
Staff costs (including share-based payments) 23.9 22.4
IT hosting, licences & support 5.8 5.6
Office expenses 0.6 0.7
Credit/debit card charges 4.8 3.9
Insurance 1.9 1.7
Professional services 0.9 1.0
Other 3.2 1.5
Administrative expenses before exceptional items & amortisation of 83.3 78.5
intangible assets
Exceptional items 4.2 3.3
Amortisation of intangible assets 13.0 12.6
Exceptional items and amortisation of intangible assets 17.2 15.9
Administrative expenses 100.5 94.4
* The prior period is restated for the effects of discontinued operations
(see note 10).
Other expenses in the year ended 30 September 2024 include £0.4m of bonding
fees, £0.2m recruitment fees, £0.2m of staff training and £0.4m of staff
travel expenses.
b) Exceptional items
Exceptional items in the year ended 30 September 2024 of £4.2m represents
£3.9m of non-trade legal and professional fees relating to litigation and
£0.3m of restructuring costs which derive from events or transactions that
fall outside of the normal activities of the Group.
Exceptional items in the year ended 30 September 2023 of £3.3m represents
£2.0m of non-trade legal and professional fees relating to ongoing litigation
and £1.3m of restructuring costs as a result of the consolidation of certain
Group functions.
Exceptional recoveries of £4.8m relate to refunds from airlines for cancelled
flights during COVID-19. Previously, exceptional cancellations related to
these flights were provided for against, which have now been released.
c) Services provided by the Company auditor
During the year, the Group obtained the following services from the operating
company's auditor.
2024 £m 2023 £m
Audit of the Parent Company financial statements 0.1 0.1
Amounts receivable by the Company's auditor and its associated in respect of:
- Audit of financial statements of subsidiaries pursuant to legislation 0.4 0.4
0.5 0.5
d) Adjusted profit before tax
Management measures the overall performance of the Group by reference to
Adjusted profit before tax, a non-GAAP measure as it gives a meaningful
year-on-year comparison of the Group's performance:
2024 £m Restated*
2023 £m
Profit before taxation 26.5 14.4
Exceptional items (0.6) 3.3
Fair value FX losses/(gains) - 0.8
Amortisation of acquired intangibles** 2.8 5.2
Share-based payments charge*** 2.3 1.1
Adjusted profit before tax 31.0 24.8
* The prior period is restated for the effects of discontinued operations
(see note 10).
** These charges relate to amortisation of brand, website technology and
customer relationships recognised on the acquisition of subsidiaries and are
added back as they are inherently linked to historical acquisitions of
businesses.
*** The share-based payment charge represents the expected cost of shares
vesting under the Group's Long-Term Incentive Plan. The share-based payment
charge has increased to £2.3m (2023: £1.1m) as a result of a reduction in
the number of awards in the year and the change in the expectations for
non-market based performance conditions; the year ending 30 September 2023
also included a catch-up charge following the introduction of an
underpin/minimum award. These charges are added back to provide comparability
to prior periods due to fluctuations in the charges.
7 Employees and Directors
a) Payroll costs
The aggregate payroll costs of these persons were as follows:
2024 £m Restated*
2023 £m
Wages and salaries 26.6 26.5
Defined contribution pension cost 0.8 0.8
Social security costs 2.8 2.8
Share-based payment charge 2.3 1.1
32.5 31.2
* The prior period is restated for the effects of discontinued operations
(see note 10).
Staff costs above include £8.6m (2023: £8.8m) employee costs capitalised as
part of software development.
The share-based payment charge has increased to £2.3m (2023: £1.1m) as a
result of an increase in the number of options awarded.
b) Employee numbers
Average monthly number of people (including Executive Directors) employed:
2024 2023*No.
No.
By reportable segment:
UK 526 522
Classic Collection 57 11
Total number of employees 583 533
* The results for the year ended 30 September 2023 has been restated to
exclude the results of discontinued operation included in that period (note
10). Classic Collection Holidays employed an average number of 148 people in
the year ended 30 September 2023.
c) Directors' emoluments
The remuneration of Directors was as follows:
2024 £m 2023 £m
Aggregate emoluments 1.5 1.8
Defined contribution pension 0.1 0.1
Share-based payment charges 0.9 0.4
Total Director remuneration 2.5 2.3
Remuneration was paid by On the Beach Limited, a subsidiary company of the
Group.
The remuneration of the highest paid Director was as follows:
2024 £m 2023 £m
Aggregate emoluments 0.6 0.6
Share-based payment charges 0.3 0.3
Total remuneration 0.9 0.9
d) Key management compensation
Key management comprised the eight members of the Executive team (2023: nine).
Remuneration of all key management (including Directors) was as follows:
2024 £m 2023* £m
Wages and salaries 3.5 4.2
Short-term non-monetary benefits 0.1 0.2
Share-based payment charges 1.9 1.1
Total key management 5.5 5.5
* The prior period is restated for the effects of discontinued operations
(see note 10).
e) Retirement benefits
Included in pension contributions payable by the Group of £0.8m (2023:
£0.8m) is £16,200 (2023: £25,800) of contributions that the Group made to a
personal pension scheme in relation to one Executive Director.
8 Finance income and finance costs
a) Finance costs
2024 £m 2023 £m
Revolving credit facility interest/fees 2.3 1.3
Interest on lease liabilities 0.1 0.2
Finance costs 2.4 1.5
b) Finance income
2024 £m Restated
2023 £m
Bank interest receivable 7.8 3.9
Loss on interest rate swaps (0.1) -
Finance income 7.7 3.9
* The prior period is restated for the effects of discontinued operations
(see note 10), prior year included £0.2m of finance income related to
discontinued operations
9 Taxation
2024 £m 2023* £m
Current tax on profit for the year 3.3 1.8
Adjustments in respect of prior years (0.1) (0.1)
Total current tax 3.2 1.7
Deferred tax on profits for the year
Origination and reversal of temporary differences 3.3 1.0
Adjustments in respect of prior years (0.2) (0.2)
Total deferred tax 3.1 0.8
Total tax charge 6.3 2.5
The differences between the total taxation shown above and the amount
calculated by applying the standard UK corporation taxation rate to the profit
before taxation on continuing operating are as follows.
2024 2023* £m
£m
Profit on ordinary activities before tax 26.5 11.9
Profit on ordinary activities multiplied by the effective rate of corporation 6.6 2.8
tax of 25% (2023: 22%)
Effects of:
Impact of difference in current and deferred tax rates - (0.5)
Adjustments in respect of prior years (0.3) (0.3)
Expenses not deductible - 0.5
Total taxation charge 6.3 2.5
The tax charge for the year is based on the effective rate of corporation tax
for the period of 25% (2023: 22%). An increase in the UK corporation rate from
19% to 25% (effective from 1 April 2023) was substantively enacted on 24 May
2021. The deferred tax assets and liabilities at 30 September 2024 have been
calculated based on these rates.
* The prior period is restated for the effects of discontinued operations
(see note 10).
10 Loss from discontinued operations
Classic Collection Holidays Limited
On 11 March 2024, the Board made the decision to cease the Classic Collection
Holidays operation and to not attempt to sell the business. In the year,
Classic Collection Holidays Limited discontinued its website, vacated the
property used for operations, and made a number of redundancies, transferring
all remaining assets to Classic Package Holidays. Upon transfer, operations
have been streamlined for Classic Collection Holidays and Classic Package
Holidays to operate under a single CGU, "Classic Collection". The comparative
figures have been restated to show separately the results of the discontinued
operation included in that period. The "CCH" segment is no longer presented in
the segment note.
After a review of IFRS 5 (Non-current Assets Held for Sale and Discontinued
Operations) management believe that the discontinuation of Classic Collection
Holidays operations merits disclosure for the following reasons:
· The Classic Collection Holidays operation represented a separate major
line of business, treated by management as an operating segment and was
reported separately within the CFO report and segmental reporting. Classic
Collection Holidays provided personalised holiday packages on a principal
basis with dedicated teams responsible for the fulfilment, sales and
marketing. Classic Collection Holidays was treated by management as a separate
operating segment to Classic Package Holidays due to the terms that bookings
are made under and operational differences in fulfilling the bookings.
· The majority of the contact centre team were made redundant, and the
property used for the CGU's operation was vacated on 13 May 2024 and was put
up for sale on 22 July 2024. The remaining 57 members of staff transferred to
Classic Package from 1st July 2024. The property is available for immediate
sale and is expected to be sold by end of December 2024.
· The Classic Collection Holidays website was switched off on 11 June
2024, no new bookings were made under Classic Collection Holidays' terms or on
the Classic Collection Holidays booking system after this date, and the
Contact Centre responsible for fulfilling the bookings for the Classic
Collection Holidays CGU was closed on 30 June 2024.
· On sale to Classic Package Holidays, all forward order bookings were
transferred and followed a re-booking process under Classic Package Holidays'
terms, as such Classic Collection Holidays will no longer be an identifiable
CGU or operating segment and a single CGU will be in place for Classic Package
Holidays.
· Whilst the re-booking process commenced, any bookings that remained on
a principal basis were fulfilled by Classic Package Holidays and its contact
centre, due to the bookings being on a principal basis and originally booked
under the Classic Collection Holidays terms, these bookings have been included
within the discontinued operations. The re-book process was completed by the
30 September 2024 and at this point the Classic Collection Holidays operation
was classified as discontinued.
2024 £m 2023* £m
Loss for the year from discontinued operations
Revenue 46.6 58.1
Cost of sales (41.4) (50.5)
Gross profit 5.2 7.6
Administrative expenses (7.8) (9.1)
Impairment of goodwill (4.6) -
Loss before tax (7.2) (1.5)
Tax - 0.2
Loss from discontinued operations (7.2) (1.3)
Earnings per share
Basic EPS (4.3p) (0.8p)
Diluted EPS (4.3p) (0.8p)
Cash flows from discontinued operations
Net cash flows from operating activities (2.4) (1.4)
Net cash flows from investing activities 0.2 0.2
Net cash flows from discontinued operations (2.2) (1.2)
No impact on cash flows from financing activities.
Disposal of discontinued operations
There was a loss on disposal, the Group disposed of tangible assets with a
£0.3m net book value (2023: £nil) and did not receive proceeds for these.
Assets relating to discontinued operations held for sale at 30 September 2024
are valued at £2.0m (2023: £nil), see note 13 for more details.
Prior year discontinued operations - International
On 27 September 2023, the Group made the decision to cease its current
operations outside of the UK. The results of discontinued operations are
analysed below. The comparative figures have been restated to show separately
the results of the discontinued operation included in that period.
"International" segment is no longer presented in the segment note.
2024 £m 2023* £m
Loss for the year from discontinued operations
Revenue - 0.9
Administrative expenses - (1.4)
Loss before tax - (0.5)
Loss from discontinued operations - (0.5)
Earnings per share
Basic EPS 0.0p (0.3p)
Diluted EPS 0.0p (0.3p)
Cash flows from discontinued operations
Net cash flows from operating activities - (0.5)
Net cash flows from discontinued operations - (0.5)
No impact on cash flows from investing or financing activities.
Disposal of discontinued operations
There was no loss on disposal, the Group disposed of intangible assets with a
£nil net book value and did not receive proceeds for these. There are no
assets relating to discontinued operations held for sale at 30 September 2024.
11 Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to
equity holders of On the Beach Group plc by the weighted average number of
Ordinary Shares issued during the year.
Diluted earnings per share is calculated by dividing the profit attributable
to equity holders of On the Beach Group plc by the weighted average number of
Ordinary Shares issued during the period plus the weighted average number of
Ordinary Shares that would be issued on the conversion of all dilutive
potential Ordinary Shares into Ordinary Shares.
Adjusted basic earnings per share figures are calculated by dividing adjusted
earnings after tax for the year by the weighted average number of shares.
Adjusted diluted earnings per share figures are calculated by dividing
adjusted earnings after tax for the year by the weighted average number of
shares plus the weighted average number of Ordinary Shares that would be
issued on the conversion of all dilutive potential Ordinary Shares into
Ordinary Shares.
EPS for continuing operations Basic weighted average number of Ordinary Shares Total earnings Pence per share
(m) £m
Year ended 30 September 2024
Basic EPS 166.9 20.2 12.1p
Diluted EPS 169.8 20.2 11.9p
Adjusted basic EPS 166.9 23.6 14.1p
Adjusted diluted EPS 169.8 23.6 13.9p
Year ended 30 September 2023*
Basic EPS 166.5 11.9 7.2p
Diluted EPS 167.8 11.9 7.1p
Adjusted basic EPS 166.5 20.1 12.0p
Adjusted diluted EPS 167.8 20.1 12.0p
EPS for total operations
Year ended 30 September 2024
Basic EPS 166.9 13.0 7.8p
Diluted EPS 169.8 13.0 7.7p
Year ended 30 September 2023*
Basic EPS 166.5 10.1 6.1p
Diluted EPS 167.8 10.1 6.0p
* The prior period is restated for the effects of discontinued operations
(see note 10).
Adjusted earnings after tax is calculated using the Group's effective tax rate
as follows:
2024 £m Restated*
2023 £m
Profit for the year after taxation 20.2 11.9
Adjustments (net of tax at the effective rate)*
Exceptional recoveries (0.4) 2.6
Fair value FX losses - 0.6
Amortisation of acquired intangibles 2.1 4.1
Share-based payment charges* 1.7 0.9
Adjusted earnings after tax 23.6 20.1
* The effective tax rate for the year ending 30 September 2024 was 25%
(2023: 22%), see note 9 for details.
** The share-based payment charges are in relation to options which are not
yet exercisable.
2024 (m) 2023 (m)
Weighted average number of shares for basic earnings per share 166.9 166.5
Dilution from share options 2.9 1.3
Weighted average number of shares for diluted earnings per share 169.8 167.8
12 Intangible assets
Brand £m Goodwill £m Website & development costs £m Website technology £m Customer relationships £m Agent relationships £m Total £m
Cost
At 1 October 2022 35.9 40.2 31.2 22.8 2.1 4.4 136.6
Additions - - 12.0 - - - 12.0
Disposals - - (0.5) - - - (0.5)
At 30 September 2023 35.9 40.2 42.7 22.8 2.1 4.4 148.1
Additions - - 10.3 - - - 10.3
Disposals - - (0.4) - - - (0.4)
Impairment (note 10) - (4.6) - - - - (4.6)
At 30 September 2024 35.9 35.6 52.6 22.8 2.1 4.4 153.4
Accumulated amortisation
At 1 October 2022 19.9 - 18.6 20.8 1.7 1.3 62.3
Charge for the year 2.5 - 7.4 2.0 0.4 0.3 12.6
Disposals - - (0.5) - - - (0.5)
At 30 September 2023 22.4 - 25.5 22.8 2.1 1.6 74.4
Charge for the year 2.5 - 10.2 - - 0.3 13.0
Disposals - - (0.2) - - - (0.2)
At 30 September 2024 24.9 - 35.5 22.8 2.1 1.9 87.2
Net book amount
At 30 September 2024 11.0 35.6 17.1 - - 2.5 66.2
At 30 September 2023 13.5 40.2 17.2 - - 2.8 73.7
Brand
The brand intangibles assets consist of three brands which were separately
identified as intangibles on the acquisition of the respective businesses. The
carrying amount of the brand intangible assets:
Brand Remaining useful economic life Acquisitions At 30 September 2024 At 30 September 2023
£m £m
On the Beach 4 On the Beach Travel Limited 7.9 10.0
Sunshine.co.uk 4 Sunshine.co.uk Limited 0.5 0.6
Classic Collection 9 Classic Collection Holidays Limited 2.6 2.9
11.0 13.5
Goodwill
Goodwill acquired in a business combination is allocated on acquisition to the
CGUs that are expected to benefit from that business combination. The carrying
amount of goodwill has been allocated as follows:
Reportable segment CGU Acquisitions At 30 September 2024 At 30 September 2023
£m £m
OTB OTB On the Beach Travel Limited 21.5 21.5
OTB Sunshine Sunshine.co.uk Limited 10.1 10.1
Classic Collection Classic Collection* Classic Collection Holidays Limited 4.0 4.0
N/A CCH** Classic Collection Holidays Limited - 4.6
35.6 40.2
* Previously known as CPH CGU, following the rebrand of Classic Package, the
segment is shown throughout as Classic Collection
** Classic Collection Holidays (CCH) ceased operations on 30 September 2024,
and as a result the acquired goodwill was impaired. See note 10 for details.
Impairment of goodwill
On the Beach and Sunshine are considered to be one reportable segment, as they
are internally reported and managed as one entity. Goodwill acquired through
Sunshine.co.uk has been allocated to the "OTB" cash generating unit. Goodwill
acquired through the acquisition of Classic Collection Holidays Limited that
is associated with the continuing operations has been allocated to the
"Classic Collection" cash generating unit, the goodwill that arose and was
apportioned to the operations that have been discontinued in the year has been
considered to be impaired (see note 10 for further details on discontinued
operations). Management have determined that the brand, agent and customer
relationships remain in use following the rebrand of Classic Package Holidays
to "Classic Collection".
The Group has recognised an impairment to the goodwill for the discontinued
operations of £4.6m for the year ending 30 September 2024 (2023: £nil). The
group believes that the recoverable amount for the CGU has been estimated to
be £nil due to the cessation of operations.
"OTB" CGU
The Group performed its annual impairment test as at 30 September 2024 on the
"OTB" cash generating unit ("CGU"). The recoverable amount of the CGU has been
determined based on the value in use calculations using cash flow projections
derived from financial budgets and projections covering a five-year period.
The forecasts are then extrapolated in perpetuity based on an estimated growth
rate of 2 percent (2023: 2 percent), this being the Directors' best estimate
of the future prospects of the business. This is deemed appropriate because
the CGU is considered to be a long-term business. Management estimates
discount rates using pre-tax rates that reflect current market assessments of
the time value of money and the risks specific to this CGU. The discount rate
applied is 13.5 percent (2023: 14.6 percent).
"Classic Collection" CGU
The Group performed its annual impairment test as at 30 September 2024 on the
"Classic Collection" cash generating unit ("CGU"). The recoverable amount of
the CGU has been determined based on the value in use calculations using cash
flow projections derived from financial budgets and projections covering a
five-year period. The forecasts are then extrapolated in perpetuity based on
an estimated growth rate of 2 percent (2023: 2 percent). This is deemed
appropriate based on the Directors' best estimate of the future prospects of
the business. Management estimates discount rates using pre-tax rates that
reflect current market assessments of the time value of money and the risks
specific to the CGU. The discount rate applied is 13.5 percent (2023: 14.6
percent).
In the year, Classic Collection Holidays Limited discontinued its website,
vacated the property used for operations, and made a number of redundancies,
transferring all remaining assets to Classic Package Holidays (see note 10).
Upon transfer, operations have been streamlined for Classic Collection
Holidays and Classic Package Holidays to operate under a single CGU, "Classic
Collection". As a result of this, the goodwill on acquisition of Classic
Collection Holidays is now impaired, as there are no expected future
cashflows. However, Classic Collection will continue to utilise the brand and
relationships intangibles following the transfer, and these are not believed
to be impaired following management's review.
Administrative expenses are dependent upon the net costs to the business of
purchasing services. Expenses are based on the current cost base of the Group
adjusted for variable costs.
Key assumptions used in value in use calculations and sensitivity to changes
in assumptions
The main assumptions on which the forecast cash flows used for the CGUs were
based include:
Consumer demand - management considered historic performance both pre-pandemic
(year ending 30 September 2019) and during the pandemic (years ending 30
September 2020 and 2021) as well as the size of the market, current market
share, competitive pressure, consumer confidence and appetite under the cost
of living crisis. The Directors have used their past experience of the
business and its industry, together with their expectations of the market.
Impact of new marketing and planned improvements on booking conversion -
whilst the spend on incentives and improvements is within the Group's control,
the impact on increasing bookings requires assessment of consumer demand and
competitive pressures using industry and market knowledge.
The calculation of value in use for all CGUs is most sensitive to the
following assumptions:
Revenue: the level of sales is based on expected customer demand, average
booking values and booking conversion however a material deterioration in
consumers can lead to reduced demand for holidays as well as disruption to its
operations from unpredictable domestic and international events which can
significantly impact the level of sales. A decrease in bookings of 20% for
each CGU would not result in an impairment.
Discount rates: discount rates represent the current market assessment of the
risks specific to each CGU, taking into consideration the time value of money
and individual risks of the underlying assets that have not been incorporated
in the cash flow estimates. The discount rate calculation is based on the
specific circumstances of the Group and its operating segments and is derived
from its weighted average cost of capital (WACC). A rise in the discount rate
to 14.8% for all CGUs would not result in an impairment, and is considered to
be implausible.
Growth rates used to extrapolate cash flows beyond the forecast period: the
Group operates in a fast-moving marketplace so management recognises that the
speed of technological change and the possibility of new entrants can have a
significant impact on growth rate assumptions. A reduction in long-term growth
rates by 10ppts for each CGU would not result in an impairment and is not
considered plausible.
Sensitivity analysis has been completed in isolation and in combination.
Management considers that no reasonably possible changes in assumptions would
reduce a CGU's headroom to nil.
Impact of changes in customer behaviour
The Group does not consider that any CGU has been automatically impaired as a
result of either the rising cost of living or changes in customer behaviour in
respect of climate related matters, with booking volumes increasing for the
year ending 30 September in comparison to the prior year. All CGUs remain
viable long term trade and assets, which the Group expects to continue to
generate positive cashflows. Inherent in the impairment test and sensitivity
analysis is the impact of customer demand being affected by either of these
factors. The Group is satisfied that sufficient headroom exists to support the
asset value.
Website and development costs
The Group capitalises development projects where they satisfy the requirements
for capitalisation in accordance with the IAS 38 and expense projects that
relate to ongoing maintenance and support.
Capitalised development costs are not treated as a realised loss for the
purpose of determining the Company's distributable profits as the costs meet
the conditions requiring them to be treated as an asset in accordance with IAS
38.
Additions in the year relate to the development of software and the purchase
of domain names. The amortisation period for website and development costs is
three years straight line. Domain names are amortised over ten years.
Amortisation has been recognised within operating expenses.
Research and development costs that are not eligible for capitalisation have
been recognised in administrative expenses in the period incurred; in 2024
this was £1.0m (2023: £0.9m).
13 Property, plant and equipment
Freehold property* £m Fixtures, fittings and equipment £m Right-of-use asset (note 17) Total £m
Head office £m IT equipment £m
Cost
At 1 October 2022 2.3 7.4 3.6 1.5 14.8
Additions - 0.1 - 1.0 1.1
Disposals - (1.4) - - (1.4)
Modification of lease - - 0.9 - 0.9
At 1 October 2023 2.3 6.1 4.5 2.5 15.4
Additions - - - - -
Disposals - (0.8) - - (0.8)
Assets held for sale (2.3) - - - (2.3)
At 30 September 2024 - 5.3 4.5 2.5 12.3
Accumulated depreciation
At 1 October 2022 0.2 3.8 1.5 0.2 5.7
Charge for the year 0.1 1.2 0.5 0.9 2.7
Disposals - (1.3) - - (1.3)
At 1 October 2023 0.3 3.7 2.0 1.1 7.1
Charge for the year - 0.7 0.5 0.9 2.1
Disposals - (0.2) - - (0.2)
Assets held for sale (0.3) - - - (0.3)
At 30 September 2024 - 4.2 2.5 2.0 8.7
Net book amount
At 30 September 2024 - 1.1 2.0 0.5 3.6
At 30 September 2023 2.0 2.4 2.5 1.4 8.3
The depreciation expense of £2.1m for the year ended 30 September 2024 and
the depreciation expense of £2.7m for the year ended 30 September 2023 have
been recognised within administrative expenses.
* In the year, Classic Collection Holidays Limited discontinued its
website, vacated the property used for operations, and made a number of
redundancies, transferring all remaining assets to Classic Package Holidays
Limited. Included within this is the freehold property owned by CCH, which has
now been made available for sale following the transfer of assets. Any gains
or losses on sale will be recognised through the income statement. There is no
impairment recognised to date.
14 Investments
The Parent Company, On the Beach Group plc, is incorporated in the UK and
directly holds a number of subsidiaries. The registered address for each
subsidiary is Aeroworks, 5 Adair Street, Manchester, M1 2NQ.
The table below shows details of the wholly owned subsidiaries of the Group.
Subsidiary Nature of business Proportion of Ordinary Shares held by the Group
On the Beach Topco Limited* Holding Company 100%
On the Beach Limited Internet travel agent 100%
On the Beach Beds Limited In-house bedbank 100%
On the Beach Bid Co Limited* Holding Company 100%
On the Beach Travel Limited Holding Company 100%
On the Beach Trustees Limited Employee trust 100%
Sunshine.co.uk Limited Internet travel agent 100%
Sunshine Abroad Limited Dormant 100%
Classic Collection Holidays Limited** Tour Operator 100%
Classic Collection Aviation Limited Transport Broker 100%
Saxon House Properties Limited Property Management 100%
Classic Collection Holdings Limited** Travel agent 100%
* The Group undertook a project to simplify the Group structure; on 30
September 2022 On the Beach Topco Limited and On the Beach Bidco were placed
into Members Voluntary Liquidation. The Group chose to simply the Group
structure to reduce duplication of processes, reduce complexity of the
structure without affecting the control of the Group's assets and reduce
additional costs associated with the subsidiaries.
** In the year, Classic Collection Holidays Limited discontinued its
website, vacated the property used for operations, and made a number of
redundancies, transferring all remaining assets to Classic Package Holidays
Limited. Classic Package Holidays Limited is still considered to be a single
CGU following this transfer. Classic Package Holidays Limited was renamed as
Classic Collection Holdings Limited.
15 Trade and other receivables
2024 £m 2023 £m
Amounts falling due within one year:
Trade receivables - net 162.8 147.4
Other receivables and prepayments 23.1 15.5
Other taxes and social security 2.5 2.4
188.4 165.3
For the year ended 30 September 2024, other receivables and prepayments
includes £5.4m in respect of amounts due from airlines as a result of
cancellations, £4.2m of advanced payments to suppliers, £6.3m of overrides
commissions and £4.5m of rebates due from suppliers. The expected credit
losses in respect to these balances is not material.
For the year ended 30 September 2023 , other receivables includes £1.2m
receivable in respect of amounts due from airlines as a result of supplier
cancellations. Other receivables and prepayments includes £7.4m of advanced
payments to suppliers, and £6.0m of rebates due from suppliers. The expected
credit losses in respect to these balances is not material.
Expected credit losses for trade receivables
Set out below is the movement in the allowance for expected credit losses of
trade receivables:
2024 2023
£m £m
At 1 October 1.0 0.5
Provision for expected credit losses 1.7 2.0
Utilised in year (1.5) (1.5)
At 30 September 1.2 1.0
16 Trust account
Trust accounts are restricted cash held separately and only accessible once
the Trust rules are met as approved by our Trustees and the Civil Aviation
Authority, this is at the point the customer has travelled or the booking is
cancelled and refunded.
For the year ended 30 September 2024, the Trust account is split between
current and non-current assets. The split is achieved by recognising the
earliest point that the cash can be recognised, as either the point of the
customer travelling, or the cash is reclaimable under trust rules. Therefore,
the non-current assets include cash received relating to bookings not yet
travelled/not yet reclaimable, that are due to return from holiday beyond 30
September 2025.
17 Trade, other payables and provisions
2024 £m 2023 £m
Non-current
Lease liabilities (note 18) 2.1 2.6
Current
Trade payables 281.0 236.4
Accruals and other payables 22.3 17.0
Contract liabilities 0.3 5.9
Lease liabilities (note 18) 0.7 1.9
Provision 0.4 0.4
306.8 264.2
Accruals and other payables includes £13.2m (2023: £8.6m) for products or
services received but not yet invoiced at the year end date.
Contract balances
The Group acts as principal when it is the primary party responsible for
providing the components that make up the customer's booking and it controls
the components before transferring to the customer. Revenue represents amounts
received or receivable for the sale of package holidays and other services
supplied to the customers. Revenue is recognised when the performance
obligation of delivering an integrated package holiday is satisfied, usually
over the duration of the holiday. Revenue is stated net of discounts, rebates,
refunds and value added tax.
A contract liability is recognised if a payment is received from a customer
before the Group delivers its performance obligations. Contract liabilities
are recognised as revenue when the Group delivers its performance obligations.
Set below is the amount of revenue recognised from:
2024 £m 2023 £m
Amounts included in contract liabilities at the beginning of the year 5.8 6.6
Performance obligations satisfied during previous years 1.0 0.9
Provisions
2024 £m 2023 £m
At 1 October 2023 0.4 0.3
Arising during the year 0.4 0.4
Utilised (0.3) (0.3)
Unused amounts reversed (0.1) -
At 30 September 2024 0.4 0.4
Current 0.4 0.4
Non-current - -
Cancellations
A provision has been recognised in respect of expected future cancellations
for supplier and customer cancellations on the forward order book for future
departures. The Group expect this provision to be utilised over the next year.
The provision is based on historical trends and best estimate of future
expectation, there is inherent uncertainty in terms of the level and
timing of future cancellations, which will depend on various factors
including potential supplier disruption and customer requested cancellations.
18 Leases
The Group as a lessee
The Group has leases for its head office and IT equipment, the lease term for
the building is ten years and lease terms for the IT equipment are between
three and five years. For the year ending 30 September 2023, the Group was
subject to a rent review for the lease of the building, which resulted in the
revaluation of the lease liability and a corresponding increase in the
right-of-use asset. Each lease generally imposes a restriction that, unless
there is a contractual right for the Group to sublet the asset to another
party, the right-of-use asset can only be used by the Group.
With the exception of short-term leases and leases of low-value underlying
assets, each lease is reflected on the balance sheet as a right-of-use asset
and a lease liability. The Group classifies its right-of-use assets in a
consistent manner to its property, plant and equipment (see note 13).
Amounts recognised in profit or loss
The following lease-related expenses were recognised under IFRS 16 in the
profit or loss:
2024 £m 2023 £m
Depreciation expense of right-of-use assets 1.4 1.4
Interest expense on lease liabilities 0.1 0.2
Total amount recognised in profit or loss 1.5 1.6
Set out below are the carrying amounts of lease liabilities (included trade
and other payables) and the movements during the period:
2024 £m 2023 £m
As at 1 October 4.5 3.9
Additions - 1.0
Accretion of interest 0.1 0.2
Payments (1.8) (1.5)
Modification of lease - 0.9
As at 30 September 2.8 4.5
Current (note 17) 0.7 1.9
Non-current (note 17) 2.1 2.6
The Group had total cash outflows for leases of £1.8m in 2024 (£1.5m in
2023). The above table satisfies the requirements of IAS 7.44A to present a
net debt reconciliation.
19 Borrowings
Bank facility
On 7 December 2022, the Group refinanced its credit facilities with Lloyds
Bank PLC and National Westminster Bank PLC. This included cancelling its
previous facility of £50m and £25m CIBILS facility with Lloyds Bank and
entering into a new facility for £60m expiring in December 2025. The purpose
of the facility is to meet the day to day working capital requirements of the
Group. At the point of refinancing there was no cash balances drawn down.
The facility agreement included the option for two one-year extensions, both
of which have now been exercised. The revised expiry date is therefore
December 2027. In January 2024, the facility was increased by £25m until July
2025. The additional facility was required to fund higher than excepted
funding of our low deposit offering.
The total facility is £85m and has two elements as follows:
· £42.5m facility with Lloyds
· £42.5m facility with NatWest
The interest rate payable is equal to SONIA plus a margin. The margin
contained within the facility is dependent on net leverage ratio and the rate
per annum ranges from 2.00% to 2.75% for the facility or any unpaid sum.
The terms of the facility include the following key financial covenants:
(i) that the ratio of adjusted EBITDA to net finance charges in respect of
any relevant period shall not be less than 5:1; and
(ii) that the ratio of total net debt to adjusted EBITDA shall not exceed
2.5:1
The Group did not breach the covenants during the period.
The RCF is available for other credit uses including currency hedging
liabilities and corporate credit cards. At 30 September 2024, the liabilities
recognised in trade and other payables for the other credit uses was £11m,
leaving £74m of the Lloyds/Natwest facility available for use. Card
facilities with other providers remain available for use. The amount drawn
down in cash at 30 September 2024 was £nil (2023: £nil).
20 Deferred tax
Intangible assets Property, plant and equipment Share-based payments Losses and unused tax relief Tax assets/ (liabilities)
£m £m £m £m £m
2024
Assets - 0.2 0.8 1.9 2.9
Liabilities (3.3) - - - (3.3)
Total (3.3) 0.2 0.8 1.9 (0.4)
2023
Assets - - 0.4 6.3 6.7
Liabilities (4.0) (0.1) - - (4.1)
Total (4.0) (0.1) 0.4 6.3 2.6
Intangible assets £m Capital allowances £m Acquired property £m Share-based payments £m Losses and unused tax relief Total £m
£m
30 September 2022 (5.2) (0.1) (0.2) 0.7 8.2 3.4
Recognised in income 1.2 0.2 - (0.3) (1.9) (0.8)
Recognised in equity - - - - - -
30 September 2023 (4.0) 0.1 (0.2) 0.4 6.3 2.6
Recognised in income 0.7 0.1 0.2 0.3 (4.4) (3.1)
Recognised in equity - - - 0.1 - 0.1
30 September 2024 (3.3) 0.2 - 0.8 1.9 (0.4)
The deferred tax liability includes an amount of £1.9m (2023: £6.3m) which
relates to carried forward tax losses. Deferred tax assets are recognised for
tax losses carried forward only to the extent that realisation of the related
tax benefit is probable, deferred tax assets are reviewed at each reporting
date to assess the availability of sufficient taxable temporary differences
and the probability that sufficient taxable profit will be available to allow
all or part of deferred tax asset to be utilised. The Group determined that
there would be sufficient taxable income generated to realise the benefit of
the deferred tax assets and no reasonably possible change to key assumptions
would result in a material reduction in forecast headroom of tax profits.
In determining the recognition of deferred tax assets arising from the carry
forward of unused tax losses, the Group considered the following:
· The Group considered the location of the taxable entities, and the
loss making companies were all located in the United Kingdom; for a full list
of subsidiaries see note 14.
· The Group has considered the approved budgeted information covering a
five-year period that is consistent with the forecasts used for the Group's
review of impairment, going concern and viability assessments. For details of
the assumptions used and sensitivity analysis performed for the forecasts, see
note 2b. Whilst the forecasts include inherent estimation uncertainty, the
Group determined that there would be sufficient taxable income generated to
realise the benefit of the deferred tax assets and no reasonably possible
change to key assumptions would result in a material reduction in forecast
headroom of tax profits. On this basis the Group concluded that there is not a
significant risk of a material adjustment to the carrying amount of the
deferred tax asset.
· The Group has £0.2m that are available indefinitely for offsetting
against future taxable profits of the companies in which the losses arose.
Deferred tax assets have not been recognised in respect of these losses as
they may not be used to offset taxable profits elsewhere in the Group, they
have arisen in subsidiaries that have been loss-making for some time, and
there are no other tax planning opportunities or other evidence of
recoverability in the near future.
21 Share capital
2024 £m 2023 £m
Allotted, called up and fully paid
166,991,435 Ordinary Shares @ £0.01 each (2023: 166,640,480 1.7 1.7
Ordinary Shares @ £0.01 each)
The Group issued 350,995 with a nominal value of £0.01. The holders of
Ordinary Shares are entitled to receive dividends as declared from time to
time and are entitled to one vote per share at meetings of the Group.
22 Reserves
The analysis of movements in reserves is shown in the statement of changes in
equity.
Details of the amounts included in other reserves are set out below.
The merger reserve arose on the purchase of On the Beach TopCo Limited in the
year ended 30 September 2015.
During the year ended 30 September 2018, the Group issued 607,747 shares with
a nominal value of £0.01 each to form part of the acquisition of Classic
Collection Holidays Limited. The consideration value of the shares issued was
£2.6m. The excess above the nominal value of the shares was credited to the
merger reserve.
The capital contribution reserve arose as a result of the redemption of
preference shares in the year ended 30 September 2015.
23 Financial instruments
Details of significant accounting policies and methods adopted, including
criteria for recognition, the basis of measurement and the basis on which
income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in the
statement of accounting policies.
At the balance sheet date the Group held the following:
FV Level 2024 £m 2023 £m
Financial assets
Derivative financial assets designated as hedging instruments
Forward exchange contracts 2 - 0.9
Financial assets at amortised cost
Trust account 139.5 108.6
Cash at bank 96.2 75.8
Trade and other receivables (note 15) 184.3 157.9
Total financial assets 420.0 343.2
Financial liabilities
Derivatives designated as hedging instruments
Forward exchange contracts 2 (5.2) (1.1)
Interest rate swaps (0.1) -
Financial liabilities at amortised cost
Trade and other payables (note 17) (281.0) (236.4)
Accruals and other payables (note 17) (22.3) (17.0)
Contract liabilities (note 17) (0.3) (5.9)
Lease liabilities (note 18) (2.8) (4.5)
Provisions (0.4) (0.4)
Total financial liabilities (312.1) (265.3)
Derivative financial instruments
The Group enters into derivative financial instruments with various financial
institutions which are valued using present value calculations. The valuation
methods incorporate various inputs including the foreign exchange spot and
forward rates, yield curves of the respective currencies and currency basis
spreads between the respective currencies, as well as SONIA and other interest
rates.
Revolving credit facility
In order to fund seasonal working capital requirements the Group has a
revolving credit facility with Lloyds and NatWest Banks. The borrowing limits
under the facility is £85m in aggregate, subject to covenant compliance; at
year end the facility was £nil (2023: £nil). For details of the revolving
credit facility, see note 19.
The following table provides the fair values of the Group's financial assets
and liabilities:
FV Level 2024 2023
£m £m
Forward exchange contracts 2 (5.2) (0.2)
FV Level 2024 2023
£m £m
Interest rate swaps 2 (0.1) -
There is no difference between the carrying value and fair value of cash and
cash equivalents, trade and other receivables, trade and other payables and
the revolving credit facility.
a) Measurement of fair values
The table below analyses financial instruments carried at fair value, by
valuation method. The different levels have been defined as follows:
(i) Level 1: quoted prices (unadjusted) in active markets for identical
assets or liabilities
(ii) Level 2: inputs other than quoted prices included within Level 1 that
are observable for the asset or liability, either directly (ie, as prices) or
indirectly (ie, derived from prices)
(iii) Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs)
Level 1 Level 2 Level 3
£m £m £m
Forward Contracts
As at 30 September 2024 - (5.2) -
As at 30 September 2023 - (0.2) -
Interest Rate Swaps
As at 30 September 2024 - (0.1) -
As at 30 September 2023 - - -
The forward contracts have been fair valued at 30 September 2024 with
reference to forward exchange rates that are quoted in an active market, with
the resulting value discounted back to present value.
Interest rate swaps have been fair valued at 30 September 2024, being compared
to SONIA, quoted by the Bank of England. The resulting value is discounted
back to present value.
b) Financial risk management
The Group's principal financial liabilities, other than derivatives, comprise
revolving credit facility, and trade and other payables. The main purpose of
these financial liabilities is to finance the Group's operations. The Group's
principal financial assets include trade receivables, and cash at bank that
derive directly from its operations.
In the course of its business the Group is exposed to market risk (including
foreign exchange risk and interest rate risk), credit risk, liquidity risk and
technology risk. The Group's overall risk management strategy is to minimise
potential adverse effects on the financial performance and net assets of the
Group. These policies are set and reviewed by senior finance management and
all significant financing transactions are authorised by the Board of
Directors.
c) Market risk
Market risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market prices.
The Group's key financial market risks are in relation to foreign currency
rates. Foreign currency risk results from the substantial cross-border element
of the Group's trading and arises on sales and purchases that are denominated
in a currency other than the functional currency of the business. Group cash
resources are matched with the net funding requirements sourced from three
sources namely internally generated funds, loan facilities and bank funding
arrangements.
The foreign currency risk is managed at Group level by the purchase of foreign
currency contracts for use as a commercial hedge. During the course of the
period there have been no changes to the market risk or manner in which the
Group manages its exposure. The Group is exposed to interest rate risk that
arises principally through the Group's revolving credit facility.
Liquidity risk, credit risk and capital risk is considered below. The
Executive team is responsible for implementing the risk management strategy to
ensure that appropriate risk management framework is operating effectively,
embedding a risk mitigation culture throughout the Group. The Board are
provided with a consolidated view of the risk profile of the Group. All major
exposures are identified and mitigating controls identified and implemented.
Regular management reporting and assessment of the effectiveness of controls
provide a balanced assessment of the key risks and the effectiveness of
controls.
The Group does not speculate with derivatives or other financial instruments.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. The Group's exposure to the risk of changes in market interest rates is
through the revolving credit facility which is subject to fluctuations in
SONIA, and interest receivable namely on the ring-fenced Trust account due to
restrictions of funds. The interest rate swaps acquired are used to hedge this
interest receivable risk and reduce the overall interest rate risk of the
revolving credit facility.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of
an exposure will fluctuate because of changes in foreign exchange rates. The
majority of the Group's purchases are sourced from outside the United Kingdom
and as such the Group is exposed to the fluctuation in exchange rates
(currencies are principally sterling, US dollar and euro). The Group places
forward cover on the net foreign currency exposure of its purchases. The Group
foreign currency requirement is reviewed twice weekly and forward cover is
purchased to cover expected usage.
The carrying amount of the Group's foreign currency denominated monetary
assets and monetary liabilities at the reporting date is as follows:
Euro 2024 2023
€m €m
Cash 37.4 28.5
Trade payables (240.6) (195.6)
Trade receivables 0.6 2.8
Prepayments 1.3 -
Forward exchange contracts 193.9 163.4
Balance sheet exposure (7.4) (0.9)
US dollar 2024 2023
$m $m
Cash 3.4 2.0
Trade payables (32.3) (23.0)
Forward exchange contracts 27.3 21.4
Balance sheet exposure (1.6) 0.4
Swedish krona 2024 2023
Kr'm Kr'm
Cash 0.7 28.8
Trade payables (9.7) -
Trade receivables - 1.0
Balance sheet exposure (9.0) 29.8
Norwegian krona 2024 Kr'm 2023 Kr'm
Cash 0.2 2.1
Trade payables (1.0) -
Balance sheet exposure (0.8) 2.1
Moroccan dirham 2024 2023
MAD'm MAD'm
Cash 6.2 1.8
Trade payables (6.3) -
Forward exchange contracts 1.9 (3.5)
Balance sheet exposure 1.8 (1.7)
United Arab Emirates dirham 2024 2023
AED'm AED'm
Trade payables (1.0) (0.1)
Balance sheet exposure (1.0) (0.1)
Swiss franc 2024 2023
CHF'm CHF'm
Cash 0.1 0.1
Balance sheet exposure 0.1 0.1
Thai baht 2024 2023
THB'm THB'm
Trade payables (2.2) -
Balance sheet exposure (2.2) -
Malaysian ringgit 2024 2023
MYR'm MYR'm
Trade payables (1.1) -
Balance sheet exposure (1.1) -
South African rand 2024 2023
ZAR'm ZAR'm
Trade payables (0.7) -
Balance sheet exposure (0.7) -
Foreign currency sensitivity
The following table details the Group sensitivity to a percentage change in
pounds sterling against these currencies with regards to equity. The
sensitivity analysis of the Group's exposure to foreign currency risk at the
reporting date has been determined based on a 10% change taking place at the
beginning of the financial period and held constant throughout the reporting
period:
2024 £m 2023 £m
Euro
Weakening - 10% 10.0 0.9
Strengthening - 10% (10.0) (0.9)
US dollar
Weakening -10% 1.0 -
Strengthening - 10% (1.0) -
Swedish krona
Weakening -10% - 0.2
Strengthening - 10% - (0.2)
The Group uses forward exchange contracts to hedge its foreign currency risk
against sterling. The forward contracts have maturities of less than one year
after the balance sheet date. Hedge ineffectiveness can arise from differences
in timing of cash flows of the hedged item and hedging instrument, the
counterparties' credit risk differently impacting the fair value movements of
the hedging instrument and hedged item.
As a matter of policy the Group does not enter into derivative contracts for
speculative purposes. The details of such contracts at the year end, by
currency were:
EUR 2024 2023
Foreign currency Notional value Carrying amount Foreign currency Notional value Carrying amount
€m £m £m €m £m £m
30 September
Less than 3 months 97.4 83.7 (2.5) 79.2 69.3 (0.5)
3 to 6 months 19.7 17.0 (0.5) 16.8 14.7 (0.1)
6 to 12 months 72.6 62.4 (1.1) 68.4 59.9 0.1
12+ months 4.2 3.6 (0.1) 3.9 3.4 -
Total 193.9 166.7 (4.2) 168.3 147.3 (0.5)
USD 2024 2023
Foreign currency $m Notional value £m Carrying amount £m Foreign currency $m Notional value £m Carrying amount £m
30 September
Less than 3 months 14.3 11.2 (0.6) 8.9 7.1 0.1
3 to 6 months 5.3 4.1 (0.2) 6.6 5.3 0.1
6 to 12 months 7.5 5.8 (0.2) 5.9 4.7 0.2
12+ months 0.2 0.2 - 0.1 0.1 -
Total 27.3 21.3 (1.0) 21.5 17.2 0.4
MAD 2024 2023
Foreign currency MAD'm Notional value £m Carrying amount £m Foreign currency MAD'm Notional value £m Carrying amount £m
30 September
Less than 3 months 1.7 0.1 - 0.9 0.1 (0.1)
3 to 6 months 0.1 - - 0.2 - -
6 to 12 months 0.1 - - 0.1 - -
Total 1.9 0.1 - 1.2 0.1 (0.1)
The impact of the hedging instruments on the statement of financial position
is as follows:
Notional amount £m Carrying amount £m Line in the statement of financial position £m Change in fair value £m
As at 30 September 2024
Foreign exchange forward contracts 188.1 (5.2) Derivative financial instruments (5.0)
Interest Rate Swaps 60.0 (0.1) Derivative financial instruments (0.1)
As at 30 September 2023
Foreign exchange forward contracts 164.5 (0.2) Derivative financial instruments (2.0)
Interest Rate Swaps - - Derivative financial instruments -
Credit risk
Credit risk refers to the risk that counterparty will default on its
contractual obligations resulting in financial loss to the Group. Credit risk
arises from cash balances and derivative financial instruments, as well as
credit exposures to customers, including outstanding receivables, financial
guarantees and committed transactions. Credit risk is managed separately for
treasury and operating related credit exposures. Customer credit risk is
managed by the Group's business units which each have policies, procedures and
controls relating to customer credit risk management. Outstanding trade
receivables balances are regularly reviewed to monitor any changes in credit
risk with concentrations of credit risk considered to be limited given that
the Group's customer base is large and unrelated.
Trade receivables and other receivables
The ageing of trade receivables at the balance sheet date was:
Not past due £m Past due 0-90 days £m Past due >90 days £m Total £m
At 30 September 2024 162.4 0.3 0.1 162.8
At 30 September 2023 146.7 0.4 0.3 147.4
The ageing of other receivables at the balance sheet date was:
Not past due £m Past due 0-90 days £m Past due >90 days £m Total £m
At 30 September 2024 21.5 - - 21.5
At 30 September 2023 10.5 - - 10.5
In line with IFRS 9, the Group applies the simplified approach for the
impairment of trade and other receivables and therefore does not track changes
in credit risk, instead a loss allowance is recognised based on lifetime
expected credit losses at each reporting date. The Group uses a provision
matrix to measure expected credit losses based on historical cancellation and
recovery rates and considers forward-looking factors, including the impact of
rising cost of living and inflation rates.
Financial instruments and cash deposits
As part of credit risk, the Group is subject to counterparty risk in respect
of the cash and cash equivalents held on deposit with banks and foreign
currency financial instruments. The Group generally deposits cash and
undertakes currency transactions with highly rated banks, and considers that
its cash and cash equivalents have low credit risk based on the external
credit ratings of the counterparties.
No collateral or credit enhancements are held in respect of any financial
derivatives. The maximum exposure to credit risk at each reporting date is the
fair value of financial assets and trade receivables.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they fall due. It is Group policy to maintain a
balance of funds, borrowing, committed bank loans and other facilities
sufficient to meet anticipated short-term and long-term financial
requirements. In applying the policy the Group continuously monitors forecast
and actual cash flows against the maturity profiles of financial assets and
liabilities. It is Group policy to ensure that a specific level of committed
facilities is always available based on forecast working capital requirements.
Cash forecasts identifying the Group's liquidity requirements are produced and
are sensitised for different scenarios including, but not limited to,
decreases in profit margins and weakening of sterling against other
functional currencies.
The following are the contractual maturities of financial liabilities:
Financial liabilities at amortised cost Carrying amount £m Contractual cash flows £m Within 1 year £m 1 to 5 years £m > 5 years £m
At 30 September 2024
Trade payables 281.0 281.0 281.0 - -
Lease liabilities 2.8 2.9 1.1 1.8 -
Contract liabilities 0.3 0.3 0.3 - -
Other payables 22.3 22.3 22.3 - -
306.4 306.5 304.7 1.8 -
At 30 September 2023
Trade payables 236.4 236.4 236.4 - -
Lease liabilities 4.5 4.7 1.8 2.9 -
Contract liabilities 5.9 5.9 5.9 - -
Other payables 17.0 17.0 17.0 - -
263.8 264.0 261.1 2.9 -
Capital management
It is the Group's policy to maintain an appropriate equity capital base so as
to maintain investor, creditor and market confidence and to sustain the future
development of the business.
The capital structure of the Group consists of the net cash (borrowings
disclosed in note 19) and equity of the Group as disclosed in note 21.
The Group is not subject to any externally imposed capital requirements.
24 Share-based payments
The following table illustrates the number of, and movements in, share options
granted by the Group:
LTIP CSOP & RSA Total
No. of share options (thousands) No. of share options (thousands) No. of share options (thousands)
Outstanding at the beginning of the year 3,899 1,045 4,944
Granted during the year 3,536 - 3,536
Lapsed during the year - - -
Exercised during the year* (1) (350) (351)
Forfeited during the year (1,915) (103) (2,018)
Outstanding at the year end 5,519 592 6,111
Exercisable 259 592 851
* The weighted average share price at the date of exercise was £1.502
The weighted average remaining contractual life for the share options
outstanding as at 30 September 2024 was 4.09 years (2023: 4.21 years).
The exercise prices for options outstanding at the end of the year was £nil
(2023: £nil).
LTIP
During the current and prior year, the Group awarded nil-cost options to
certain key employees within the business. The vesting of these awards will be
subject to continued employment. The fair value of equity-settled share-based
payments has been estimated as at date of grant using the Black-Scholes model.
Award date No. of options awarded Share price at grant date Exercise price Expected volatility Option Life Risk free rate Dividend yield Non-vesting conditions Fair value at grant date (£)
(£) (£) (%) (years) (%) (%) (%)
24 Feb 2023 (no conditions) 2,221,629 1.610 Nil 0.00% 3.0 3.93% 0.00% 0.00 1.610
30 Jun 2023 (no conditions) 73,274 0.960 Nil 0.00% 0.5 4.93% 0.00% 0.00 0.960
3 Oct 2023 (no conditions) 3,536,050 1.004 Nil 0% 3.0 4.54% 0.00% 0.00 1.004
Expected volatility is estimated by considering historic average share price
volatility at the grant date.
Restricted Share Award (nil-cost option) and CSOP
There were no new RSA or CSOP awards in the current or prior year.
The following has been recognised in the income statement during the year:
2024 £m 2023* £m
LTIP 2.2 0.4
RSA 0.1 0.7
Total share scheme charge 2.3 1.1
* The prior period is restated for the effects of discontinued operations (see
note 10).
25 Commitments and contingencies
a) Capital commitments
No new capital commitments.
b) Contingencies
In September 2010, proceedings were initiated against On the Beach Limited by
Ryanair alleging infringement of, inter alia, its intellectual property
rights. The amount of the claim is unquantified. In February 2024, On the
Beach entered into a partnership with Ryanair and the legal proceedings in
Ireland were placed on hold. On the Beach and Ryanair are working together to
dispose of the proceedings permanently and an amicable resolution is expected
in early 2025.
26 Related party transactions
No related party transactions have been entered into during the year.
Transactions with key management personnel have been disclosed in note 7(d).
27 Dividends paid
2024 £m 2023 £m
Cash dividends on ordinary shares declared and paid
Interim dividend for FY24: 0.9p per share (FY23: nil) 1.5 -
2024 £m 2023 £m
Proposed dividends on ordinary shares
Final cash dividend for FY24: 2.1p per share (FY23: nil) 3.5 -
Principal risks and uncertainties
The Board has carried out a robust assessment of the principal risks facing
the company, including those that would threaten its business model, future
performance, solvency or liquidity. A summary of the nature of the risks
currently faced by the Group is set out below. A more detailed explanation of
the risks currently faced by the Group and how the Company seeks to mitigate
those risks can be found in the risk management section of the Group's Annual
Report and Accounts for the year ended 30 September 2024.
• Demand: Reduced economic growth or a recession can lead to
reduced job security and a reduction in consumer leisure spending.
Environmental and sustainability concerns could affect demand with consumers
choosing to travel less frequently.
• Customer health & safety: A health and safety incident or
security incident could cause significant injury/loss of life, litigation,
reputational damage, fines/regulatory sanctions and reduction in future
revenues. The Group can be held liable for death/personal injury or illness
suffered by customers that are the fault of any suppliers.
• Brand and consumer proposition: The Group relies on the
strength of its brand and reputation to set it apart from competitors and
attract customers to its website and apps to secure bookings. Events or
circumstances which give rise to adverse publicity could damage our
brand/reputation leading to a loss of goodwill and reduced customer demand,
reducing our competitiveness and market position.
• Operations: The Group has legal obligations to address
significant changes or disruptions to customers' holidays. They might be
caused by unpredictable events, both domestic and international, which could
also impact business continuity.
• Talent: The Group relies on attracting and retaining talent
in an area where there is a particularly high degree of competition.
• Supply - Major airline failure: In the event of a major
airline failure, the Group must replace the customer's flight arrangements, or
refund the customer in full for the holiday within 14 days. This leads to loss
of margin on cancelled bookings, incremental costs to arrange alternative
flights and greater than expected cash outflows.
• Flight supply: A lack of flight supply or limited capacity
affects the Group's ability to meet consumer demand for holidays. Some
airlines reserve capacity for their own packages or set higher prices for
indirect customers, limiting customer choice, reducing value, and challenging
the Group's ability to compete fairly.
• Data & security: A major security breach, whether stemming
from human error, deliberate action, a technology failure, or vulnerabilities
in AI systems, could lead to unauthorised access or to misuse of our
technology, customer data, employee data, and commercially sensitive
information. and disruption to core business operations. This could result
in significant financial loss, significant fines and reputational damage. The
rapid development and integration of artificial intelligence also presents new
challenges in data privacy, security, and regulatory compliance.
• Innovation, transformation and scalability: Failing to keep
up with growing demand, not innovating - especially not leveraging AI, or
inadequately adapting our technologies to changing customer attitudes and
needs could hinder our growth and the quality of service offered to our
customers.
• Laws and regulations: The Group's business is highly regulated and
is subject to a complex regime of laws, rules and regulations concerning
travel and aviation, online commerce, financial services, consumer rights,
data protection and ESG issues. A breach of these laws or unfavourable changes
to or interpretation of existing laws could adversely affect the Group's
business and financial performance.
• Financial risk and liquidity: The risk that the Group has
insufficient liquidity, does not have appropriate access to funds, there are
negative movements in the market, adverse FX and interest rates or we cannot
meet our obligations as they fall due.
Statement of Directors' Responsibilities
The responsibility statement below has been prepared in connection with the
Group's Annual Report & Accounts for the year ended 30 September 2024.
Certain parts thereof are not included within this announcement. The Directors
confirm, to the best of their knowledge and belief:
· That the consolidated financial statements, prepared in accordance
with international accounting standards in conformity with the requirements of
the Companies Act 2006, give a true and fair view of the assets, liabilities,
financial position and profit of the Parent Company and undertakings included
in the consolidation taken as a whole;
· That the Annual Report, including the strategic report, includes a
fair review of the development and performance of the business and the
position of the Company and undertakings included in the consolidation taken
as a whole, together with a description of the principal risks and
uncertainties that they face; and
· That they consider the Annual Report, taken as a whole, is fair,
balanced and understandable and provides the information necessary for
shareholders to assess the company's position, performance, business model and
strategy.
Jon Wormald
Chief Financial Officer
3 December 2024
Glossary of alternative performance measures
APM: Adjusted earnings per share ('EPS') for continuing operations
Definition: Adjusted basic EPS is calculated on the weighted average number of
Ordinary Shares in issue, using the adjusted profit after tax. Adjusted
earnings after tax is based on profit after tax adjusted for amortisation of
acquired intangibles, share-based payments and exceptional items. Amortisation
of acquired intangibles is linked to the historical acquisitions of
businesses. Share-based payments represents the non-cash costs, which
fluctuates year on year. Exceptional items for 2024 consists of restructuring,
legal and professional costs and recoveries from airlines which derive from
events or transactions that fall outside of the normal activities of the
Group. Exceptional items for 2023 consists of restructuring and legal and
professional costs. These costs/income are excluded by virtue of their size
and in order to reflect management's view of the performance of the Group and
allow comparability to prior years.
Reconciliation to closest GAAP measure
Adjusted profit after tax (£m) 2024 2023*
Profit for the year 20.2 11.9
Share-based payments (net of tax) 1.7 0.9
Exceptional items (net of tax) (0.4) 2.6
Fair value FX losses (net of tax) - 0.6
Amortisation of acquired intangibles (net of tax) 2.1 4.1
Adjusted profit after tax 23.6 20.1
Adjusted basic EPS 2024 2023
Adjusted profit after tax 23.6 20.1
Basic weighted average number of Ordinary Shares (m) 166.9 166.5
Adjusted basic EPS (p) 14.1p 12.0p
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Adjusted EBITDA
Definition: Adjusted EBITDA is based on Group operating profit adjusted for
depreciation, amortisation, share-based payments and exceptional items.
Share-based payments represents the non-cash costs, which fluctuates year on
year. Exceptional items for 2024 consists of restructuring, legal and
professional costs and recoveries from airlines which derive from events or
transactions that fall outside of the normal activities of the Group.
Exceptional items for 2023 consists of restructuring and legal and
professional costs. These costs/income are excluded by virtue of their size
and in order to reflect management's view of the performance of the Group and
allow comparability to prior years.
Reconciliation to closest GAAP measure
Adjusted EBITDA (£m) 2024 2023*
Operating profit 21.2 12.0
Depreciation and amortisation 15.1 15.0
Share-based payments 2.3 1.1
Exceptional items (0.6) 3.3
Fair value FX losses - 0.8
Adjusted EBITDA 38.0 32.2
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Adjusted profit before tax
Definition: Adjusted profit before tax is based on profit before tax adjusted
for amortisation of acquired intangibles, share-based payments and exceptional
items. Amortisation of acquired intangibles are linked to the historical
acquisitions of businesses. Share-based payments represents the non-cash
costs, which fluctuates year on year. Exceptional items for 2024 consists of
restructuring, legal and professional costs and recoveries from airlines which
derive from events or transactions that fall outside of the normal activities
of the Group. Exceptional items for 2023 consists of restructuring and legal
and professional costs. These costs/income are excluded by virtue of their
size and in order to reflect management's view of the performance of the Group
and allow comparability to prior years.
Reconciliation to closest GAAP measure
Adjusted profit before tax (£m) 2024 2023*
Profit before tax 26.5 14.4
Amortisation of acquired intangibles 2.8 5.2
Share-based payments 2.3 1.1
Exceptional items (0.6) 3.3
Fair value FX losses - 0.8
Adjusted profit before tax 31.0 24.8
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Classic Collection adjusted EBITDA
Definition: Classic Collection adjusted EBITDA is based on Classic Collection
operating profit/(loss) before depreciation, amortisation, share-based
payments charges and the impact of exceptional items. Exceptional items
consists of recoveries of refunds from airlines which derive from events or
transactions that fall outside of the normal activities of the segment. These
costs/income are excluded by virtue of their size and in order to reflect
management's view of the performance of the segment and allow comparability to
prior years.
Reconciliation to closest GAAP measure
Adjusted Classic Collection EBITDA (£m) 2024 2023*
Classic Collection operating profit/(loss) 1.1 (0.8)
Depreciation and amortisation 0.7 0.9
Exceptional items (0.2) -
Share-based payments 0.1 -
Adjusted Classic Collection EBITDA 1.7 0.1
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Classic Collection EBITDA
Definition: Classic Collection EBITDA is based on Classic Collection operating
profit/(loss) before depreciation and amortisation.
Reconciliation to closest GAAP measure
Classic Collection EBITDA (£m) 2024 2023*
Classic Collection operating profit/(loss) 1.1 (0.8)
Depreciation and amortisation 0.7 0.9
Classic Collection EBITDA 1.8 0.1
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Classic Collection adjusted gross profit
Definition: Classic Collection adjusted gross profit is based on Classic
Collection gross profit before the impact of exceptional items. Exceptional
items consists of restructuring and recoveries from airlines which derive from
events or transactions that fall outside of the normal activities of the
segment. These costs/income are excluded by virtue of their size and in order
to reflect management's view of the performance of the segment and allow
comparability to prior years.
Reconciliation to closest GAAP measure
Classic Collection adjusted gross profit (£m) 2024 2023
Revenue 9.0 6.0
Cost of sales (4.8) (3.7)
Expected credit losses - (0.1)
Classic Collection gross profit 4.2 2.2
Exceptional items (0.2) -
Classic Collection adjusted gross profit after marketing 4.0 2.2
APM: Classic Collection adjusted gross profit after marketing costs
Definition: Classic Collection adjusted gross profit after marketing costs is
based on Classic Collection gross profit before the impact of exceptional
items (reconciled above) and after marketing costs including marketing
salaries.
Reconciliation to closest GAAP measure
Classic Collection adjusted gross profit after marketing costs (£m) 2024 2023
Classic Collection adjusted gross profit 4.0 2.2
Marketing costs (0.2) (0.7)
Classic Collection adjusted gross profit after marketing costs 3.8 1.5
APM: Classic Collection adjusted operating profit/(loss)
Definition: Classic Collection adjusted operating profit/(loss) is based on
Classic Collection operating profit/(loss) before amortisation of acquired
intangibles, share based payments and the impact of exceptional items.
Exceptional items consists of recoveries of refunds from airlines which derive
from events or transactions that fall outside of the normal activities of the
segment. These costs/income are excluded by virtue of their size and in order
to reflect management's view of the performance of the segment and allow
comparability to prior years.
Reconciliation to closest GAAP measure
Classic Collection adjusted operating profit/(loss) (£m) 2024 2023
Classic Collection operating profit/(loss) 1.1 (0.8)
Amortisation of acquired intangibles 0.6 0.9
Exceptional items (0.2) -
Share-based payments 0.1 -
Classic Collection adjusted operating profit/(loss) 1.6 0.1
APM: Classic Collection TTV
Definition: Classic Collection TTV is a non-GAAP measure representing the
cumulative total transaction value of sales booked each month before
cancellations and adjustments.
Reconciliation to closest GAAP measure
Classic Collection TTV (£m) 2024 2023
Revenue 9.0 6.0
Costs* and amendments 31.6 22.0
Classic Collection TTV 40.6 28.0
*Costs relate to the gross costs for bookings made on an agent basis.
APM: Exceptional items
Definition: Exceptional items are certain costs/(income) that derive from
events or transactions that fall outside of the normal activities of the
Group. For 2024, exceptional items consists of restructuring, legal and
professional costs and recoveries from airlines which derive from events or
transactions that fall outside of the normal activities of the Group.
Exceptional items for 2023 consists of restructuring and legal and
professional costs. These costs/income are excluded by virtue of their size
and in order to reflect management's view of the performance of the Group and
allow comparability to prior years.
Reconciliation to closest GAAP measure
Exceptional items (£m) 2024 2023*
Exceptional costs 4.2 3.3
Exceptional recoveries (4.8) -
Exceptional items (0.6) 3.3
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Group TTV
Definition: Group TTV is a non-GAAP measure representing the cumulative total
transaction value of sales booked each month before cancellations and
adjustments.
Reconciliation to closest GAAP measure
Group TTV (£m) 2024 2023*
Group revenue 128.2 112.1
Costs** and amendments 1,036.7 899.7
Group TTV 1,164.9 1,011.8
* The results for the year ended 30 September 2023 has been restated to
exclude the results of discontinued operations included in that period (note
10).
** Costs relate to the gross costs for bookings made on an agent basis.
APM: Group adjusted revenue
Definition: Group adjusted revenue is revenue adjusted for the impact of
recoveries of refunds from airlines for 2024 and of fair value FX losses in
2023.
Reconciliation to closest GAAP measure
Group adjusted revenue (£m) 2024 2023*
Group revenue 128.2 112.1
Exceptional recoveries (4.8) -
Fair value FX loss - 0.8
Group adjusted revenue 123.4 112.9
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Group adjusted gross profit
Definition: Group adjusted gross profit is gross profit adjusted for the
impact of recoveries of refunds from airlines for 2024 and of fair value FX
losses in 2023.
Reconciliation to closest GAAP measure
Group adjusted gross profit (£m) 2024 2023*
Group gross profit 121.7 106.4
Exceptional items (4.8) -
Fair value FX loss - 0.8
Group adjusted gross profit 116.9 107.2
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
APM: Long Haul TTV
Definition: Long Haul TTV is a non-GAAP measure representing the cumulative
total transaction value of sales booked each month before cancellations and
adjustments.
Reconciliation to closest GAAP measure
Long Haul TTV (£m) 2024 2023*
Group revenue 128.2 112.1
Costs** and amendments 1,036.7 899.7
Short Haul TTV (1,073.9) (942.4)
Long Haul TTV 91.0 69.4
*The results for the year ended 30 September 2023 has been restated to exclude
the results of discontinued operations included in that period (note 10).
** Costs relate to the gross costs for bookings made on an agent basis.
APM: OTB adjusted EBITDA
Definition: OTB adjusted EBITDA is based on OTB operating loss before
depreciation, amortisation, impact of exceptional items and the non-cash cost
of the share-based payment schemes. Exceptional items consists of
restructuring, legal and professional costs and recoveries from airlines which
derive from events or transactions that fall outside of the normal activities
of the segment. Exceptional items for 2023 consists of restructuring and legal
and professional costs. These costs/income are excluded by virtue of their
size and in order to reflect management's view of the performance of the
segment and allow comparability to prior years.
Reconciliation to closest GAAP measure
OTB adjusted EBITDA (£m) 2024 2023
OTB operating profit 20.1 12.8
Exceptional items (0.4) 3.3
Fair value FX losses - 0.8
Share-based payments 2.2 1.1
Depreciation and amortisation 12.2 9.9
Amortisation of acquired intangibles 2.2 4.2
OTB adjusted EBITDA 36.3 32.1
APM: OTB adjusted EBITDA as a percentage of adjusted revenue
Definition: OTB adjusted EBITDA as a percentage of adjusted revenue is based
on the OTB adjusted EBITDA divided by the revenue generated in the OTB
business before the impact of exceptional cancellations. Exceptional items
consists of restructuring, legal and professional costs and recoveries from
airlines which derive from events or transactions that fall outside of the
normal activities of the segment. Exceptional items for 2023 consists of
restructuring and legal and professional costs. These costs/income are
excluded by virtue of their size and in order to reflect management's view of
the performance of the segment and allow comparability to prior years.
Reconciliation to closest GAAP measure
OTB adjusted EBITDA as a percentage of adjusted revenue 2024 2023
Revenue 119.2 106.1
Exceptional items (4.6) -
Exceptional FX losses/gains - 0.8
OTB adjusted revenue 114.6 106.9
OTB adjusted EBITDA 36.3 32.1
OTB adjusted EBITDA as a percentage of adjusted revenue 32% 30%
APM: OTB adjusted revenue
Definition: OTB adjusted revenue is revenue adjusted for the impact of
recoveries of refunds from airlines for 2024 and of fair value FX losses in
2023. These costs/income are excluded by virtue of their size and in order to
reflect management's view of the performance of the segment and allow
comparability to prior years by virtue of their size and in order to reflect
management's view of the performance of the segment.
Reconciliation to closest GAAP measure
OTB adjusted revenue (£m) 2024 2023
OTB revenue 119.2 106.1
Exceptional recoveries (4.6) -
Fair value FX losses - 0.8
OTB adjusted revenue 114.6 106.9
APM: OTB adjusted operating profit
Definition: OTB adjusted operating profit is based on OTB operating
profit/(loss) before the impact of exceptional items, amortisation of acquired
intangibles and the non-cash cost of the share-based payment schemes.
Amortisation of acquired intangibles are linked to the historical acquisitions
of businesses. Share-based payments represents the non-cash costs, which
fluctuates year on year. Exceptional items consists of restructuring, legal
and professional costs and recoveries from airlines which derive from events
or transactions that fall outside of the normal activities of the segment.
Exceptional items for 2023 consists of restructuring and legal and
professional costs. These costs/income are excluded by virtue of their size
and in order to reflect management's view of the performance of the segment
and allow comparability to prior years.
Reconciliation to closest GAAP measure
OTB adjusted operating profit (£m) 2024 2023
OTB operating profit 20.1 12.8
Exceptional items (0.4) 3.3
Fair value FX losses - 0.8
Share-based payments 2.2 1.1
Amortisation of acquired intangibles 2.2 4.2
OTB adjusted operating profit 24.1 22.2
APM: OTB EBITDA
Definition: OTB EBITDA is based on OTB operating profit before depreciation
and amortisation.
Reconciliation to closest GAAP measure
OTB EBITDA (£m) 2024 2023
OTB operating profit 20.1 12.8
Depreciation and amortisation 14.4 14.1
OTB EBITDA 34.5 26.9
APM: OTB revenue after marketing costs and marketing spend % revenue
Definition: OTB revenue after marketing cost is statutory revenue after 'OTB'
online and offline marketing costs (including marketing salaries).
Reconciliation to closest GAAP measure
OTB revenue after marketing costs (£m) 2024 2023
OTB Revenue 119.2 106.1
OTB online marketing costs (30.2) (26.0)
OTB offline marketing costs (12.2) (14.6)
OTB revenue after marketing costs 76.8 65.5
OTB marketing spend % revenue 36% 38%
APM: OTB TTV
Definition: OTB TTV is a non-GAAP measure representing the cumulative total
transaction value of sales booked each month before cancellations and
adjustments.
Reconciliation to closest GAAP measure
OTB TTV (£m) 2024 2023
OTB revenue 119.2 106.1
Costs* and amendments 1,005.0 877.7
OTB TTV 1,124.2 983.8
* Costs relate to the gross costs for bookings made on an agent basis.
APM: Overheads % adjusted revenue
Definition: Overheads as a percentage of revenue is based on the Group
adjusted revenue divided by the overheads. Overheads consists of the
administrative expenses excluding the depreciation and amortisation.
Reconciliation to closest GAAP measure
Overheads % revenue 2024 2023
Adjusted revenue (£m) 123.4 112.9
OTB overheads (£m) (34.2) (32.3)
Classic Collection overheads (£m) (2.1) (1.4)
Overheads % revenue 29% 30%
APM: Overheads % revenue
Definition: Overheads as a percentage of revenue is based on the Group revenue
divided by the overheads. Overheads consists of the administrative expenses
excluding the depreciation and amortisation.
Reconciliation to closest GAAP measure
Overheads % revenue 2024 2023
Revenue (£m) 128.2 112.1
OTB overheads (£m) (34.2) (32.3)
Classic Collection overheads (£m) (2.1) (1.4)
Overheads % revenue 28% 30%
APM: Overheads % TTV
Definition: Overheads as a percentage of TTV is based on the Group TTV divided
by the overheads. Overheads is the administrative expenses excluding marketing
costs, depreciation and amortisation.
Reconciliation to closest GAAP measure
Overheads % TTV 2024 2023
TTV (£m) 1,164.9 1,011.8
OTB overheads (£m) (34.2) (32.3)
Classic Collection overheads (£m) (2.1) (1.4)
Overheads % TTV 3.1% 3.3%
APM: Total marketing as % adjusted revenue
Definition: Marketing as a percentage of revenue is based on the Group
adjusted revenue divided by the Group marketing costs including marketing
salaries.
Reconciliation to closest GAAP measure
Revenue after marketing cost (£m) 2024 2023
Adjusted revenue 123.4 112.9
OTB marketing costs (42.4) (40.6)
Classic Collection marketing costs (0.2) (0.7)
Revenue after marketing costs 80.8 71.6
Marketing as % revenue 35% 37%
APM: Total marketing as % revenue
Definition: Marketing as a percentage of revenue is based on the Group revenue
divided by the Group marketing costs including marketing salaries.
Reconciliation to closest GAAP measure
Revenue after marketing cost (£m) 2024 2023
Revenue 128.2 112.1
OTB marketing costs (42.4) (40.6)
Classic Collection marketing costs (0.2) (0.7)
Revenue after marketing costs 85.6 70.8
Marketing as % revenue 33% 37%
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