REG - On the Beach Group - Interim Results
24/05/2022 07:16
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RNS Number : 5202M On the Beach Group PLC 24 May 2022
In 24 May 2022
On the Beach Group plc
("On the Beach", the "Company" or the "Group")
INTERIM RESULTS FOR SIX MONTHS ENDED 31 MARCH 2022
WELL-PLACED TO CAPITALISE ON THE STRUCTURAL CHANGES IN THE ONLINE TRAVEL
MARKET
Financial & Operational Highlights
H1 22 H1 21 H1 19
Unaudited unaudited unaudited
Adjusted ((1)) GAAP Adjusted ((1)) GAAP Adjusted ((1)) GAAP
Monthly booked sales((1)) £385.8m £91.5m £365.4m
Group revenue £52.9m £52.9m £12.0m £4.4m £63.5m £63.5m
Revenue as Agent((2)) £39.7m £39.7m £11.0m £3.4m £45.0m £45.0m
Revenue as Principal((3)) £13.2m £13.2m £1.0m £1.0m £18.5m £18.5m
Group gross profit £39.0m £39.0m £10.8m £3.7m £47.5m £47.5m
Gross profit as Agent £37.8m £37.8m £10.7m £3.6m £45.0m £45.0m
Gross profit as Principal £1.2m £1.2m £0.1m £0.1m £2.5m £2.5m
Group profit/(loss) before tax((4)) - (£7.0m) (£9.5m) (£21.6m) £15.7m £11.9m
Basic earnings/(loss) per share((5)) 0.1p (3.3p) (5.0p) (11.2p) 9.6p 7.3p
Interim dividend payable Nil Nil Nil Nil 1.3p 1.3p
(1) Monthly booked sales ('sales') is the total transaction value of
holidays booked every month before cancellations and adjustments.
(2) As an agent, revenue is accounted on a "booked" rather than
"travelled" basis (unlike tour operators and airlines) and the Group is
reporting H1 bookings taken between 1 October 2021 and 31 March 2022.
(3) As a principal, revenue is accounted on a "travelled" basis and
reported on a gross basis and the Group is reporting H1 bookings which
departed between 1 October 2021 and 31 March 2022.
(4) Group adjusted profit before tax is profit before tax, amortisation
of acquired intangibles of £2.8m (H1 21: £2.8m), share based payments cost
of £3.2m (H1 21: £1.7m) and exceptional items of £1.0m (H1 21: £7.6m). A
full explanation of the adjustments is included in the glossary.
(5) Adjusted earnings per share is Group adjusted profit after tax
divided by the average number of shares in issue during the period. Earnings
per share is Group profit after tax divided by the average number of shares in
issue during the period.
Financial headlines
● The Group achieved booked sales growth of 6% vs H1 19 (up 322% vs H1 21).
● Group revenue increased to £52.9m (H1 21: £4.4m) following the widespread
relaxation of restrictions for travel from the UK to most European holiday
destinations in January 2022.
● Group revenue increased to £52.9m (H1 21: £4.4m) following the widespread
relaxation of restrictions for travel from the UK to most European holiday
destinations in January 2022.
● Revenue as agent of £39.7m was £5.3m lower than H1 19. Consumer demand for
booking remained subdued until restrictions were eased and revenue is stated
net of £5.2m of brand investment relating to COVID tests, airport lounges and
airport security fast track.
● Growth over this period is exclusively based upon new cash bookings rather
than redemption of vouchers or refund credit notes ("RCNs").
● The Group loss before tax has reduced by £14.6m to £7.0m (H1 21: £21.6m).
Trading dynamics
● Group booked sales in September and October 2021 exceeded H1 19 levels.
However, the Omicron variant heavily impacted Group sales in November and
December 2021 and early January 2022.
● Following the gradual easing of travel restrictions in the UK and in key
destinations throughout January 2022, Group sales returned to H1 19 levels
mid-January.
● Beginning the financial year with a strong liquidity position and an
unleveraged balance sheet has enabled the Group to invest in the brand and
customer proposition.
● As at 31 March 2022 the Group had cash of £16.8m, an undrawn credit facility
of £75m and customer prepayments held in a ring-fenced trust account of £99m
(31 March 2019, net debt of £1m and Trust account cash of £57m).
● As a result of actions taken during the pandemic, the Group has successfully
targeted the premium end of its addressable market, which has recovered more
quickly than the value end.
Current trading and outlook
● Despite the disruption during the period, the value of holiday sales that
travelled over the Winter season was broadly flat versus H1 19 and as at 22
May 2022 Summer sales were 22% ahead of pre-COVID levels.
● Sales have remained resilient into H2 and are 33% ahead of FY19 in the 8 weeks
to 22 May 2022.
● The Group continues to remain cautious regarding the consumer environment.
Visibility of the near term outlook for the UK outbound travel industry is
limited and it is currently unclear to what extent the cost of living crisis
will impact bookings.
● However, we are excited about the progress we have made in attracting more
premium customers and the recent relaxation of restrictions for UK travel to
the Spanish mainland and islands should support a stronger lates market.
● The Group is confident that the upfront investment into the brand and
proposition will ensure the Group trades profitably in the second half and
will exit the year in the best possible position to grow market share.
Simon Cooper, Chief Executive of On the Beach Group plc, commented:
"During the first half of our financial year we have seen a set of unique
trading dynamics which were impacted, in part, by the Omicron variant in
December and January. Prior to Omicron, Group booked sales in September and
October 2021 exceeded H1 19 levels, being the last full financial year not
impacted by COVID, and while Group sales were heavily impacted in November and
December it was pleasing to see a significant uplift in traffic and booking
volumes following the easing of restrictions in the UK and key International
destinations during January.
"Throughout the pandemic, we continued with our strategy of investing in our
brand, technology and customer proposition. Our deliberate focus on capturing
share in the Premium, Long Haul and B2B segments, including accessing
previously unavailable premium hotel stock, has resulted in us taking market
share in this area.
"Whilst we have entered the second half with resilient sales, visibility of
the near term outlook for the UK outbound travel industry remains limited.
Customers are typically booking holidays with shorter lead times and we
believe we are yet to see the full impact of the escalating costs of living on
bookings. Despite this, we remain confident that we have taken the right
actions throughout the pandemic and we will continue to support our customers
and staff as a priority. Our investments in brand and proposition will ensure
profitable trading into the second half and has left us in a strong position
to continue growing market share."
Analyst & investor webinar
A webinar for sell-side equity analysts and investors will be held today at
8.00am, the details of which can be obtained through FTI Consulting via
onthebeach@fticonsulting.com.
For further information:
On the Beach Group plc via FTI Consulting
Simon Cooper, Chief Executive Officer
Shaun Morton, Chief Financial Officer
FTI Consulting Tel: +44 (0)20 3727 1000
Alex Beagley onthebeach@fticonsulting.com
Fiona Walker
Sam Macpherson
Rafaella de Freitas
About On the Beach
On the Beach is a consumer-centric disruptor on a mission to continually
democratise easy access, hassle free, great value holidays. Having invested in
proposition, technology, brand and service, our asset light model is well
positioned to continue to attract and retain the widest possible audience of
beach holidaymakers. We are a leading online retailer in the UK short haul
beach holiday market. By expanding into B2B and Long Haul channels, we have
doubled our UK addressable market, and have a long‐term vision to
become Europe's leading online retailer of beach holidays.
Cautionary statement
This announcement may contain certain forward-looking statements with respect
to the financial condition, results, operations and businesses of the Company.
Forward looking statements are sometimes, but not always, identified by their
use of a date in the future or such words as 'anticipates', 'aims', 'due',
'will', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans',
'targets', 'goal' or 'estimates'. These forward-looking statements involve
risk and uncertainty because they relate to events and depend on circumstances
that may or may not occur in the future. There are a number of factors that
could cause actual results or developments to differ materially from those
expressed or implied by these forward-looking statements, including factors
outside the Company's control. The forward-looking statements reflect the
knowledge and information available at the date of preparation of this
announcement and will not be updated during the year. Nothing in this
announcement should be construed as a profit forecast.
This statement together with the interim financial statements and investor
presentation is available on www.onthebeachgroupplc.com
(http://www.onthebeachgroupplc.com/) .
Chief Executive's Review
Summary of Performance
Group sales for the period are up 6% vs H1 19 (322% up vs H1 21), despite
heavily disrupted trading for the majority of the period.
Since the onset of the pandemic, the Group has consistently outlined its
strategic intention to capture market share as trading normalises and demand
for beach holidays recovers.
In line with its stated strategy, the Group has materially invested in its
brand, technology and customer proposition. This includes offering a
differentiated customer experience with premium lounges and security fast
track, increasing headcount in technology and customer service areas, and
investing in above the line media to drive awareness of the brand.
Average booking values have increased over this period, borne out of the
deliberate actions taken to capture share of Premium, Long Haul and B2B
segments, including accessing previously unavailable premium hotel stock and
launching our enhanced premium customer proposition.
As a result of these measures, the Group has delivered 34% sales growth since
restrictions were eased in the last 10 weeks of the period vs H1 19, despite a
softening in the demand environment following the outbreak of the war in
Ukraine.
The Group does not and has not issued vouchers or refund credit notes ("RCNs")
in lieu of refunds, therefore sales are from new cash bookings only. Where
customers have been refunded using vouchers or RCNs they are captive,
narrowing our addressable audience this year. The Group believes that our
enhanced proposition and reputation will allow us to target these customers in
FY23 when the playing field is levelled.
The Civil Aviation Authority ("CAA") reported that at 31 March 2022 there were
still £85m unredeemed RCNs in circulation, which lose ATOL protection on 30
September 2022. The Group believes it is critical that the CAA mandates travel
companies who issued RCNs to remind consumers of their rights to a cash refund
before the ATOL protection expires.
The Group is confident that its strong market share growth will continue into
H2 and that sales growth will also sustain relative to FY19. The Group is
monitoring closely the strength of the lates market and the impact of various
headwinds on booking appetite, particularly for value holidays.
Recent trends
Early bookings for Summer 2022 have been stronger into higher value, more
premium hotels, particularly for destinations in the Eastern Mediterranean and
thanks to the actions taken by the Group during the pandemic, resulting in
market share gains of these early bookings.
Sales for premium holidays with 5 star hotels vs H1 19 are up 95% and 151% in
the 10 weeks to 31 March.
By contrast, customers looking for value holidays to 3 star hotels, typically
to Western Mediterranean destinations have been booking with shorter lead
times compared to H1 19.
Sales for 3 star hotels vs H1 19 are 30% lower and 10% lower in the 10 weeks
to 31 March.
Despite ongoing restrictions for some destinations, the Group's Long Haul
offering, which has also benefitted from investment into improving the
proposition, continues to make good progress. Long Haul sales are up 352% vs
H1 19 and accounted for 8% of Group sales (H1 19: 2%).
The Group's B2B businesses, Classic Collection and Classic Package Holidays,
traded well prior to Omicron and, despite the lack of high street footfall
throughout December 2021 and January 2022, total B2B sales in the YTD are up
43% on FY19.
Strategy for growth
The Group's vision is to build Europe's leading beach holiday retailer via a
single platform multi-brand strategy. On the Beach continues to target
significant medium and long-term growth in its core and adjacent markets by
deploying a strategy based on the following strategic pillars:
1. Invest in talent and technology
2. Become a brilliant digital brand
3. Optimise our direct and differentiated supply
4. Grow our share of B2B beach
5. Diversify into adjacent beach holiday markets
6. Champion customer centric change
Current trading and outlook
● Despite the disruption during the period, the value of holiday sales that
travelled over the Winter season was broadly flat versus H1 19 and as at 22
May 2022 Summer sales were 22% ahead of pre-COVID levels.
● Sales have remained resilient into H2 and are 33% ahead of FY19 in the 8 weeks
to 22 May 2022.
● The Group continues to remain cautious regarding the consumer environment.
Visibility of the near term outlook for the UK outbound travel industry is
limited and it is currently unclear to what extent the cost of living crisis
will impact bookings.
● However, we are excited about the progress we have made in attracting more
premium customers and the recent relaxation of restrictions for UK travel to
the Spanish mainland and islands should support a stronger lates market.
● The Group is confident that the upfront investment into the brand and
proposition will ensure the Group trades profitably in the second half and
will exit the year in the best possible position to grow market share.
Explanation of adjustments
● Certain costs, including the exceptional impact of the COVID-19 pandemic in
the prior period, have been excluded from performance measures in this
statement as the Board consider this necessary to provide a fair, balanced and
understandable view of the performance of the Group. A full reconciliation of
all non-GAAP measures to the closest equivalent GAAP measure is included in
the glossary and see note 2.4 for details of the adjustments.
● The Group has not estimated the financial impact of, or made an adjustment
for, the significant reduction in booking volumes as a result of the COVID-19
pandemic in either the current or prior period.
● A summary of the adjustments between Adjusted and GAAP measures, split between
the COVID-19 impact and other costs, is shown below. These adjustments
represent the difference between the Adjusted and GAAP measures reported in
the financial highlights table above.
H1 2022 H1 2021
COVID-19 Other Total COVID-19 Other Total
Group revenue - - - (£7.6m) - (£7.6m)
Revenue as Agent - - - (£7.6m) - (£7.6m)
Cost of sales ((1)) - - - 0.5m - 0.5m
Group overheads - (£7.0m) (£7.0m) (£0.5m) (£4.5m) (£5.0m)
Share based payments - (£3.2m) (£3.2m) - (£1.7m) (£1.7m)
Acquired intangibles amortisation - (£2.8m) (£2.8m) - (£2.8m) (£2.8m)
Other exceptional operating costs ((2)) - (£1.0m) (£1.0m) (£0.5m) - (£0.5m)
Group profit before tax - (£7.0m) (£7.0m) (£7.6m) (£4.5m) (£12.1m)
(1) Agents' commission no longer due on cancelled holiday bookings
(2) Legal and professional fees £1.0m (H1 21: £0.5m)
A full explanation of all adjusted performance measures is included in the
Glossary.
Segmental performance
The Group organises its operations into four principal financial reporting
segments, being OTB (onthebeach.co.uk and sunshine.co.uk), International
(ebeach.se, ebeach.no and ebeach.dk), CCH (Classic Collection Holidays) and
CPH (Classic Package Holidays).
OTB Segment performance
H1 2022 H1 2021
Bookings '000s 207.6 52.7
Booked sales £'m 342.8 80.4
H1 2022 H1 2022 H1 2021 H1 2021
Adjusted £m GAAP £m Adjusted £m GAAP £m
Revenue 36.7 36.8 10.0 3.2
Online Marketing costs (11.1) (11.1) (2.3) (2.3)
Offline Marketing costs (8.3) (8.3) (4.3) (4.3)
Revenue after marketing costs 17.3 17.4 3.4 (3.4)
Overheads (11.7) (11.7) (7.3) (7.3)
Depreciation and amortisation (2.9) (2.9) (2.9) (2.9)
Exceptional operating costs - (1.0) - (0.5)
Share based payments - (3.2) - (1.7)
Amortisation of acquired intangibles - (2.3) - (2.3)
Operating profit/(loss) 2.7 (3.7) (6.8) (18.1)
EBITDA (*) 5.6 1.5 (3.9) (12.9)
EBITDA % 15.3% 3.9% (39%) -
*see glossary for reconciliation to nearest GAAP measure
Revenue increased to £36.8m (H1 21: £3.2m, £10.0m before COVID
cancellations). The increase in revenue is due to an increase in booking
volumes and is shown net of £5.2m (H1 21: £nil) invested in enhancing the
proposition (COVID tests, cancellation cover, airport lounge access, airport
security fast track).
As the leisure travel market has started to recover following two years of
disruption, material investments have been made in Offline marketing spend
which was £8.3m in the period (H1 21: £4.3m). The majority of spend during
the period relates to the 'Most wonderful time of the year' advertising
campaign, which went live on Christmas Day.
Online marketing costs, which flex with holiday search demand, were £11.1m
(H1 21: £2.3m) and 30% of revenue (H1 21: 72%). Revenue after all marketing
costs increased to £17.4m (H1 21: loss (£3.4m)).
Operating leverage and overheads
H1 2022 H1 2021
Overheads % adjusted revenue 32% 73%
Overheads % booked sales 3% 9%
Overheads have increased by £4.4m to £11.7m. The increase results from
material investments in talent and technology, increased variable costs, and
an increase in legal and regulatory costs including insurance, professional
services and IT security.
Due to the low cost base of the business, even in a disrupted environment,
total overheads represent only 3% of booked sales and 32% of revenue.
Adjusted EBITDA for the period was £5.6m (H1: 21 loss of (£3.9m)). The
closest GAAP equivalent measure to Adjusted EBITDA is operating loss of £3.7m
(H1 21: loss £18.1m). This reduction in losses is attributable to the
increase in revenue in the period.
Classic Collection Holidays segment performance
H1 2022 H1 2021
Bookings '000s (booked) 4.2 1.1
Bookings '000s (travelled) 1.9 0.1
Booked sales £'m 27.8 8.2
H1 2022 H1 2022 H1 2021 H1 2021
Adjusted £m GAAP £m Adjusted £m GAAP £m
Revenue 13.2 13.2 1.0 1.0
Gross profit 1.2 1.2 0.1 0.1
Gross Profit after marketing costs 0.9 0.9 - -
Overheads (2.6) (2.6) (1.3) (1.3)
Depreciation and amortisation (0.2) (0.2) (0.1) (0.1)
Amortisation of acquired intangibles - (0.5) - (0.5)
Operating loss (1.9) (2.4) (1.4) (1.9)
EBITDA* (1.7) (1.7) (1.3) (1.3)
*see glossary for reconciliation to nearest GAAP measure
As a principal (rather than an agent), Classic accounts for revenue on a
"travelled" basis and reports revenue on a gross basis. Winter travel was
heavily disrupted by COVID-19, therefore the H1 results are behind where they
would have been during a normal trading period.
However, despite the emergence of the Omicron variant in November 2021,
consumer ability and appetite to travel was significantly greater than in H1
21. As a result, Revenue increased to £13.2m (H1 21: £1.0m). Operating
losses were at similar levels to H1 21 as overheads returned to normal levels
to support an increasing demand for travel.
Bookings from High Street travel agents have recovered more slowly than
online, due to both a sluggish return to pre-COVID footfall and staff
shortages across the industry.
Over the last 12 months new luxury, tailor-made and long haul programmes have
been launched and these are making up a growing proportion of bookings and
revenues. During the period, long haul bookings represented 14% of total
bookings made (Pre COVID: 2%).
Classic Package Holidays segment performance
H1 2022 H1 2021
Bookings '000s 6.4 1.2
Booked sales £'m 13.7 2.6
H1 2022 H1 2022 H1 2021 H1 2021
Adjusted £m GAAP £m Adjusted £m GAAP £m
Revenue 2.8 2.7 0.9 0.2
Gross profit 0.8 0.7 0.6 0.4
Gross Profit after marketing costs 0.4 0.3 0.5 0.3
Overheads (0.7) (0.7) (1.1) (1.1)
Depreciation and amortisation (0.1) (0.1) (0.1) (0.1)
Operating loss (0.4) (0.5) (0.7) (0.9)
EBITDA* (0.3) (0.4) (0.6) (0.8)
*see glossary for reconciliation to nearest GAAP measure
CPH provides an online B2B platform that enables high street travel agents to
sell dynamically packaged holidays to their customers.
Revenue for the period was £2.7m (H1 21: £0.2m). Whilst the period has been
disrupted by COVID-19, there has been a better environment for both booking
holidays and travelling than in the prior period. As a result, CPH secured
6,400 package holiday bookings, which is more than five times H1 2021.
Adjusted EBITDA loss was (£0.3m) (H1 21: (£0.6m)). After accounting for
COVID-19 related cancellations, operating losses were (£0.4m) vs (£0.9m) in
H1 2021.
As with CCH, bookings from High Street travel agents have recovered more
slowly than online, due to both a sluggish return to pre-COVID footfall and
staff shortages across the industry.
CPH product is available in 2,500 high street locations and is well placed to
support the travel trade with product to sell as the country emerges from the
pandemic.
Financing
During the period the Group had in place a revolving credit facility of £75m
with Lloyds. The cash draw down at 31 March 2022 was nil (31 March 2021: nil;
30 September 2020: nil).
On 25 May 2021, covenants were reset up to and including September 2022 to
account for the prolonged impact COVID-19 is having on trading. Covenants will
return to normal for December 2022 and are as follows:
· LTM EBITDA 2:1
· LTM Interest cover 5:1
Details of the current facility limits and maturity dates are as follows:
Facilities £m Issued Expiry Cash drawn at 31 March 2022
Original RCF £50m Apr 2020 Dec 2023 £nil
New CLBILS facility £25m May 2020 May 2023 £nil
Total facility £75m £nil
Share based payments
The Group has an LTIP scheme in place which vests based on performance
criteria. In accordance with IFRS 2, the Group has recognised a non-cash
charge of £3.2m (H1 21: £1.7m). £1.9m of this cost relates to a
performance-related award that was issued to Senior Executives prior to
COVID-19. During the period, the Remuneration Committee (i) made an award (pro
rata) to a new Senior Executive based on the same terms as the rest of the
Senior Executives; and (ii) exercised discretion to provide a minimum level of
vesting (because the performance conditions could not be met as a result of
continued COVID disruption), such that the award vested in part. No such
discretion was exercised for Executive Directors.
Taxation
The Group tax credit of £1.5m (H1 21: £4.0m) represents an effective rate of
21% (H1 2021: 19%) which is higher than the standard UK rate of 19% (H1 21:
19%) due to differences between rates applied to current and deferred tax.
During the period, a Corporation Tax rebate of £0.6m was received and no
payments on account have been made due to the loss making position of the
Group.
Cash flow
£m H1 2022 H1 2021 FY21
Loss before tax (7.0) (21.6) (36.7)
Depreciation and amortisation 6.0 5.9 11.9
Net finance costs / (income) 0.5 0.4 0.9
Share based payments 3.2 1.7 2.8
Net loss on disposal of property, plant and equipment - - 0.1
Movement in working capital (36.8) 6.1 18.0
Corporation tax 0.6 3.9 4.2
Cash generated from operating activities (33.5) (3.6) 1.2
Other Cash Flows
Capital expenditure net of proceeds (0.6) - (0.5)
Capitalised development expenditure (4.3) (2.2) (4.6)
Net finance (costs) / income (0.5) (0.4) (0.9)
Payment of lease liabilities (0.3) (0.3) (0.6)
Net cash flows excl share proceeds (39.2) (6.5) (5.4)
Proceeds from issue of share capital - - 24.9
Total net cash flows (39.2) (6.5) 19.5
Opening cash balance 56.0 36.5 36.5
Closing cash at bank 16.8 30.0 56.0
Closing trust balance 99.1 24.1 39.0
The cash flow profile of the Group is seasonal with approximately 50% of
customers travelling in the period June to August and therefore in a normal
year the cash flows (excluding any cash held in the Trust) experience a trough
prior to June and a peak following this.
The net cash outflow during the period of £39.2m is in line with a more
typical trading period than has been the case for the last two years. This
cash outflow represents investments made by the Group in to online and offline
marketing as well as the working capital required to fund the customer
deposits scheme.
Customer payments made to OTB in advance of travel are deposited in the Trust
account. During the period, the Trust account balance has increased from £39m
to £99m, which will unwind as customers travel over the summer months.
The Group has not issued refund credit notes or vouchers to customers through
the pandemic for cancelled holidays and all suppliers have been paid within
normal terms.
At 23 May 2022, the RCF is undrawn and combined Trust account and unrestricted
cash balances were £164m (£142m in trust), (23 May 2019 £81m, £93m in
trust).
Dividend
The Board has not declared an interim dividend (H1 2021: nil).
Simon Cooper Shaun Morton
CEO
CFO
24 May 2022 24 May 2022
On the Beach Group Plc
INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2022
CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
For the 6 months ended 31 March 2022
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
Note £'m £'m £'m
unaudited unaudited audited
Revenue 3,4 52.9 4.4 21.2
Cost of sales (13.9) (0.7) (6.8)
Gross profit 39.0 3.7 14.4
Administrative expenses 5 (45.5) (24.9) (50.2)
Group operating loss (6.5) (21.2) (35.8)
Finance costs (0.5) (0.5) (1.0)
Finance income - 0.1 0.1
Net finance costs (0.5) (0.4) (0.9)
Loss before taxation (7.0) (21.6) (36.7)
Taxation 6 1.5 4.0 6.5
Loss for the period (5.5) (17.6) (30.2)
Other comprehensive income:
Net gain/(loss) on cash flow hedges - (0.4) (0.1)
Total comprehensive loss for the period (5.5) (18.0) (30.3)
Attributable to:
Equity holders of the parent (5.5) (18.0) (30.3)
Basic and diluted earnings per share attributable to the equity shareholders
of the Company:
Basic loss per share 7 (3.3p) (11.2p) (19.0p)
Diluted loss per share 7 (3.3p) (11.2p) (19.0p)
Adjusted basic profit/(loss) per share * 7 0.1p (5.0p) (9.7p)
Adjusted diluted profit/(loss) per share * 7 0.1p (5.0p) (9.7p)
Adjusted profit measure *
Adjusted profit/(loss) before tax (before amortisation of acquired 5 - (9.5) (18.4)
intangibles, share based payments and exceptional items) *
* This is a non GAAP measure, refer to notes.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
Restated
(note 2.6)
At 31 March 2022 At 31 March 2021 At 30 September 2021
£'m £'m £'m
Assets Note unaudited unaudited audited
Non-current assets
Intangible assets 8 73.3 76.8 74.1
Property, plant and equipment 9 9.5 9.0 8.3
Investment property - 0.6 -
Deferred tax 5.1 1.5 3.6
Total non-current assets 87.9 87.9 86.0
Current assets
Trade and other receivables 10 224.2 100.2 94.9
Corporation tax receivable 0.2 0.6 0.8
Trust account 12 99.1 24.1 39.0
Cash at bank 16.8 30.0 56.0
Total current assets 340.3 154.9 190.7
Total assets 428.2 242.8 276.7
Equity
Share capital 1.7 1.6 1.7
Share premium 89.6 64.8 89.6
Retained earnings 185.3 198.7 187.6
Capital contribution reserve 0.5 0.5 0.5
Merger reserve (129.5) (129.5) (129.5)
Total equity 147.6 136.1 149.9
Non-current liabilities
Trade and other payables 11 3.3 3.6 2.5
Total non-current liabilities 3.3 3.6 2.5
Current liabilities
Trade and other payables 11 273.8 88.8 119.4
Provisions 11 3.1 12.3 4.6
Derivative financial instruments 13 0.4 2.0 0.3
Total current liabilities 277.3 103.1 124.3
Total liabilities 280.6 106.7 126.8
Total equity and liabilities 428.2 242.8 276.7
Shaun Morton
Chief Financial Officer
24 May 2022
On the Beach Group plc. Reg no 09736592
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 6 months ended 31 March 2022
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
Note £'m £'m £'m
Loss before taxation (7.0) (21.6) (36.7)
Adjustments for:
Depreciation 5 0.9 0.9 1.8
Amortisation of intangible assets 5 5.1 5.0 10.1
Finance costs 0.5 0.5 1.0
Finance income - (0.1) (0.1)
Share based payments 3.2 1.7 2.8
Gain on termination of lease - - (0.1)
Loss on disposal of property, plant and equipment - - 0.2
2.7 (13.6) (21.0)
Changes in working capital:
(Increase)/decrease in trade and other receivables 10 (129.3) 5.0 9.9
Increase/(decrease) in trade and other payables 11 152.6 (0.6) 21.3
(Increase)/decrease in trust account (60.1) 1.7 (13.2)
(36.8) 6.1 18.0
Cash flows from operating activities
Cash used in operating activities (34.1) (7.5) (3.0)
Tax received 0.6 3.9 4.2
Net cash (outflow)/inflow from operating activities (33.5) (3.6) 1.2
Cash flows from investing activities
Purchase of property, plant and equipment 9 (0.6) - (0.5)
Purchase of intangible assets 8 (4.3) (2.2) (4.6)
Interest received - 0.1 0.1
Net cash outflow from investing activities (4.9) (2.1) (5.0)
Cash flows from financing activities
Proceeds from issue of share capital - - 26.0
Costs related to shares issued paid - - (1.1)
Interest paid on borrowings (0.4) (0.4) (0.9)
Interest paid on lease liabilities (0.1) (0.1) (0.1)
Payment of lease liabilities (0.3) (0.3) (0.6)
Net cash (outflow)/inflow from financing activities (0.8) (0.8) 23.3
Net (decrease)/increase in cash at bank and in hand (39.2) (6.5) 19.5
Cash at bank and in hand at beginning of period 56.0 36.5 36.5
Cash at bank and in hand at end of period 16.8 30.0 56.0
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months ended 31 March 2022
Share capital Share premium Merger reserve Capital contribution reserve Retained earnings Total
For the year ended 30 September 2021 £'m £'m £'m £'m £'m £'m
Balance at 30 September 2020 1.6 64.8 (129.5) 0.5 215.0 152.4
Share based payment charges including tax - - - - 2.9 2.9
Shares issued during the year 0.1 25.9 - - - 26.0
Costs related to shares issued - (1.1) - - - (1.1)
Total comprehensive loss for the year - - - - (30.3) (30.3)
Balance at 30 September 2021 (audited) 1.7 89.6 (129.5) 0.5 187.6 149.9
Share capital Share premium Merger reserve Capital contribution reserve Retained earnings Total
For the 6 months ended 31 March 2021 £'m £'m £'m £'m £'m £'m
Balance at 30 September 2020 1.6 64.8 (129.5) 0.5 215.0 152.4
Share based payment charges including tax - - - - 1.7 1.7
Total comprehensive loss for the period - - - - (18.0) (18.0)
Balance at 31 March 2021 (unaudited) 1.6 64.8 (129.5) 0.5 198.7 136.1
Share capital Share premium Merger reserve Capital contribution reserve Retained earnings Total
For the 6 months ended 31 March 2022 £'m £'m £'m £'m £'m £'m
Balance at 30 September 2021 1.7 89.6 (129.5) 0.5 187.6 149.9
Share based payment charges including tax - - - - 3.2 3.2
Total comprehensive loss for the period - - - - (5.5) (5.5)
Balance at 31 March 2022 (unaudited) 1.7 89.6 (129.5) 0.5 185.3 147.6
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the 6 months ended 31 March 2022
1 General Information
The interim condensed consolidated financial statements of On the Beach Group
plc and its subsidiaries (collectively, the Group) for the six months ended 31
March 2022 were authorised for issue in accordance with a resolution of the
directors on 24 May 2022.
On the Beach Group plc ('the Company') is a public limited company,
incorporated and domiciled in the United Kingdom, whose shares are listed on
the London Stock Exchange. The registered office is located at Aeroworks, 5
Adair Street, Manchester, M1 2NQ.
2 Basis of preparation and changes to the Group's accounting policies
2.1 Basis of preparation
The interim condensed consolidated financial statements for the six months
ended 31 March 2022 have been prepared in accordance with UK adopted IAS 34
Interim Financial Reporting. The interim condensed consolidated financial
statements do not constitute statutory financial statements as defined in
section 435 of the Companies Act 2006 and therefore do not include all the
information and disclosures required in the annual financial statements, and
should be read in conjunction with the Group's annual financial statements as
at 30 September 2021. No audit or review opinion has been provided by a
statutory auditor on these interim statements.
The financial information for the preceding year is based on the statutory
financial statements for the year ended 30 September 2021. These financial
statements, upon which the auditors issued an unqualified opinion, have been
delivered to the Registrar of Companies. These financial statements did not
require a statement under either section 498(2) or section 498(3) of the
Companies Act 2006.
2.2 Accounting policies
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual financial statements for the year ended 30
September 2021.
2.3 Going concern
The Group covers its daily working capital requirements by means of cash and a
£50m Revolving Credit Facility ("RCF") expiring December 2023. In addition,
the Group has a CLBILS facility of £25m.
As at 31 March 2022 cash (excluding cash held in trust which is ringfenced and
not factored into the going concern assessment) was £16.8m (31 March 2021
cash of £30.0m, 30 September 2021 cash of £56.0m).
Where holidays are cancelled the Group is committed to refunding customers in
cash rather than vouchers. Cash refunds are fully funded from the trust
account (where refunds are for hotel and transfer payments) or are a
pass-through from airlines.
Customer prepayments for bookings that have not yet travelled held in a
ringfenced trust account at 31 March 2022 was £99.1m.
The Directors have assessed a going concern period through to September 2023
and have modelled a number of scenarios considering factors such as airline
and hotelier resilience, employee absence and customer behaviour / demand. The
Directors have also considered the impact of climate risk in these scenarios
concluding that it is not expected to have a significant impact over the going
concern period. Further detail of the Group's assessment of the impact of
climate risk is provided within the 'Principal risks and Uncertainties'
section of the Annual Report and Accounts of the Group for the year ending 30
September 2021, at pages 31-40. The Directors have modelled a reasonably
possible downside scenario to sensitise the base case. In this scenario the
Directors have assessed the impact to cash and revenue in an environment where
bookings are 30% lower than historic levels. Even in this scenario, the Group
would have positive cash and no requirement to draw down on its current
facilities both during the going concern review period, and in the subsequent
period prior to expiry of facilities.
Given the assumptions above, the mitigating actions available and within the
Group's control and that in no scenario is there any requirement to access the
RCF or CLBILs facility, the Directors remain confident in their response to
the pandemic and will continue to operate in an agile way adapting to any
applicable government guidance. Therefore, it is considered appropriate to
continue to adopt the going concern basis in preparing these financial
statements.
2.4 Accounting estimates and judgements
In preparing these interim financial statements, management have made
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
COVID-19
During the period ending 31 March 2022 COVID-19 travel restrictions have
lessened with testing and entry requirements substantially reduced, management
have reviewed the assumptions used to estimate the provisions relating to the
disruption caused by the COVID-19 pandemic. These adjustments relate primarily
to lost revenue resulting from the cancellation of bookings in the financial
year and beyond. The estimation includes the loss of revenues caused by the
cancellation and refund of bookings, off-set by the extent to which related
holiday costs can be recovered. Key areas of estimation include:
COVID cancellation provision
The extent to which holidays will be impacted by the pandemic, either directly
due to travel restrictions or indirectly due to reductions in flying
schedules. Management have estimated that up to 6% (30 September 2021: up to
20%) of forward bookings as at the balance sheet date will be cancelled within
FY22, giving rise to an estimated refund liability of £2.8m, shown in note
11. In estimating this cancellation rate management have considered:
(i) season; as historically summer cancellations are
lower than the preceding winter;
(ii) flight supplier load factors; and
(iii) experience of summer FY21 during the pandemic but
taking into consideration the current levels of vaccination rate.
The level of forward bookings beyond summer 2022 is not significant and any
changes to this assumption would not have a material impact. If the Group were
to increase the percentage of cancellations by 5 percentage points ('ppts')
then the provision required would increase by 18% (30 September 2021: 23%).
Prepayments with suppliers
In the normal course of business the Group will advance payments to certain
hotel suppliers for holidays booked. A risk assessment is made based on a
review of each significant suppliers' financial stability with varying %
provisions applied to different risk levels. If the Group were to increase its
% provision applied by 5ppts across all specific risk categories not already
fully provided, this would have resulted in a decrease of £0.3m (30 September
2021: £0.1m) in the prepayments of £10.7m shown in Note 10.
Recoverability of airline debtor
In relation to flights cancelled during the financial year, the Group has
considered the impact of the pandemic on the recoverability of amounts paid to
all airlines in lieu of cancelled flights which as at 31 March 2022 is a
receivable balance of £1.4m - see note 10.
The Group has a legal right to a refund; the airline has an obligation to
refund in the event that the flight is cancelled. Where an airline is not
forthcoming with a refund owed, the Group exercises its chargeback rights as
governed by the card scheme rules. The Group has a right to make a chargeback
when:
(i) the merchant (airline) was unable or unwilling to
provide the purchased services; or
(ii) the cardholder is entitled to a refund under the
merchant's cancellation policy.
Where a flight has been cancelled, the Group has recognised a net receivable
for the expected recoverable amount in accordance with the considerations
above. Management have calculated the provision for airline refunds owed based
on factors such as age, flight supplier and payment method. If the Group were
to increase the provision by 5ppts this would have resulted in a decrease of
£0.2m in the airline receivable of £1.4m.
2.5 New standards, amendments and interpretations
The accounting policies adopted in the preparation of the interim condensed
consolidated financial statements are consistent with those followed in the
preparation of the Group's annual consolidated financial statements for the
year ended 30 September 2021, except for the adoption of new standards
effective as of 1 October 2021. The Group has not early adopted any other
standard, interpretation or amendment that has been issued but is not yet
effective.
Several amendments and interpretations apply for the first time in 2021, but
do not have an impact on the interim condensed consolidated financial
statements of the Group.
2.6 Reclassification of deferred tax assets
In April 2022, the Group received a letter from the Financial Reporting
Council (FRC) as part of its regular review and assessment of the quality of
corporate reporting in the UK. The letter included a request for further
information on the Group's Annual Report and Accounts for the year ended 30
September 2021. The review conducted by the FRC was performed solely on the
Group's published Annual Report and Accounts and does not provide any
assurance that the Annual Report and Accounts are correct in all material
respects. The review does not benefit from a detailed knowledge of the
business or an understanding of the underlying transactions entered into. FRC
letters are written on the basis that the FRC accepts no liability for
reliance on them by the Company or any third party.
Following completion of the correspondence with the FRC, the Directors have
concluded that the deferred tax asset of £3.6m reported in the balance sheet
as at 30 September 2021 should have been presented as a non-current asset in
line with the requirements of IAS 1.56, rather than as a current asset.
Therefore, the comparatives for the balance sheet as at 30 September 2021 have
been restated to correct the error identified. As a result, total current
assets reduced by £3.6m to £190.7m and total non-current assets increased by
£3.6m to £86.0m.
3 Revenue
Set out below is the disaggregation of the Group's revenue from contracts with
customers:
6 months ended 31 March 2022
unaudited
OTB Int'l CCH CPH Total
£'m £'m £'m £'m £'m
Booked sales* 342.8 1.5 27.8 13.7 385.8
Revenue
Revenue as agent 36.7 0.2 - 2.8 39.7
Revenue as principal - - 13.2 - 13.2
Total Revenue before exceptional cancellations 36.7 0.2 13.2 2.8 52.9
Exceptional cancellations** 0.1 - - (0.1) -
Total Revenue 36.8 0.2 13.2 2.7 52.9
6 months ended 31 March 2021
unaudited
OTB Int'l CCH CPH Total
£'m £'m £'m £'m £'m
Booked sales* 80.4 0.3 8.2 2.6 91.5
Revenue before exceptional cancellations
Revenue as agent 10.0 0.1 - 0.9 11.0
Revenue as principal - - 1.0 - 1.0
Total Revenue before exceptional cancellations 10.0 0.1 1.0 0.9 12.0
Exceptional cancellations** (6.8) (0.1) - (0.7) (7.6)
Total Revenue 3.2 - 1.0 0.2 4.4
Year ended 30 September 2021
audited
OTB Int'l CCH CPH Total
£'m £'m £'m £'m £'m
Booked sales* 204.2 0.7 23.5 10.2 238.6
Revenue before exceptional cancellations
Revenue as agent 22.1 0.1 - 1.8 24.0
Revenue as principal - - 6.5 - 6.5
Total Revenue before exceptional cancellations 22.1 0.1 6.5 1.8 30.5
Exceptional cancellations** (9.1) (0.1) - (0.1) (9.3)
Total Revenue 13.0 - 6.5 1.7 21.2
*Booked sales: the total transaction value of holidays booked during the
period, before cancellations and amendments.
**Exceptional cancellations relate to the impact of COVID-19.
Override income for both the current and prior periods is not material.
4 Segmental report
The management team considers the reportable segments to be ''OTB'',
"International", ''CCH'' and "CPH". All segment revenue, operating profit
assets and liabilities are attributable to the Group from its principal
activities.
OTB, International and CPH recognise revenue as agent on a net basis. CCH
recognises revenue as a principal on a gross basis.
6 months ended 31 March 2022
unaudited
OTB Int'l CCH CPH Total
£'m £'m £'m £'m £'m
Revenue before exceptional cancellations 36.7 0.2 13.2 2.8 52.9
Exceptional cancellations* 0.1 - - (0.1) -
Revenue 36.8 0.2 13.2 2.7 52.9
Adjusted EBITDA 5.6 0.1 (1.7) (0.3) 3.7
Share based payments (3.2) - - - (3.2)
Exceptional costs (note 5b) (0.9) - - (0.1) (1.0)
EBITDA 1.5 0.1 (1.7) (0.4) (0.5)
Depreciation and amortisation (5.2) - (0.7) (0.1) (6.0)
Group operating (loss)/profit (3.7) 0.1 (2.4) (0.5) (6.5)
Finance costs (0.5)
Finance income -
Loss before taxation (7.0)
Non-current assets
Goodwill 31.6 - 4.6 4.0 40.2
Other intangible assets 25.7 0.1 7.2 0.1 33.1
Property, plant and equipment 6.4 - 3.1 - 9.5
6 months ended 31 March 2021
unaudited
OTB Int'l CCH CPH Total
£'m £'m £'m £'m £'m
Revenue
Revenue before exceptional cancellations 10.0 0.1 1.0 0.9 12.0
Exceptional cancellations* (6.8) (0.1) - (0.7) (7.6)
Total Revenue 3.2 - 1.0 0.2 4.4
Adjusted EBITDA (3.9) (0.2) (1.3) (0.6) (6.0)
Share based payments (1.7) - - - (1.7)
Exceptional costs (7.3) (0.1) - (0.2) (7.6)
EBITDA (12.9) (0.3) (1.3) (0.8) (15.3)
Depreciation and amortisation (5.2) - (0.6) (0.1) (5.9)
Group operating loss (18.1) (0.3) (1.9) (0.9) (21.2)
Finance costs (0.5)
Finance income 0.1
Loss before taxation (21.6)
Non-current assets
Goodwill 31.6 - 4.6 4.0 40.2
Other intangible assets 26.8 0.1 9.4 0.4 36.6
Property, plant and equipment 6.7 - 2.3 - 9.0
Investment property - - 0.6 - 0.6
Year ended 30 September 2021
audited
OTB Int'l CCH CPH Total
£'m £'m £'m £'m £'m
Revenue
Revenue before exceptional cancellations 22.1 0.1 6.5 1.8 30.5
Exceptional cancellations* (9.1) (0.1) - (0.1) (9.3)
Total Revenue 13.0 - 6.5 1.7 21.2
Adjusted EBITDA (6.1) (0.2) (3.1) (1.7) (11.1)
Share based payments (2.8) - - - (2.8)
Impact of COVID-19 (9.8) (0.1) (0.4) 0.3 (10.0)
EBITDA (18.7) (0.3) (3.5) (1.4) (23.9)
Depreciation and amortisation (10.3) (0.1) (1.3) (0.2) (11.9)
Group operating loss (29.0) (0.4) (4.8) (1.6) (35.8)
Finance costs (1.0)
Finance income 0.1
Loss before taxation (36.7)
Non-current assets
Goodwill 31.6 - 4.6 4.0 40.2
Other intangible assets 26.0 0.1 7.7 0.1 33.9
Property, plant and equipment 5.8 - 2.5 - 8.3
Investment property - - - - -
*Exceptional cancellations relate to the impact of COVID-19.
5 Operating profit
a) Operating expenses
Expenses by nature including exceptional items and impairment charges:
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
£'m £'m £'m
Marketing 19.3 6.1 10.9
Depreciation 0.9 0.9 1.8
Staff costs (including share based payments) 11.9 7.9 18.5
IT hosting, licences & support 2.1 1.1 2.5
Office expenses 0.4 0.4 0.8
Credit / debit card charges 0.9 0.2 0.5
Insurance 0.5 0.6 1.6
Other 3.5 2.1 2.4
Administrative expenses before exceptional items & amortisation of 39.4 19.4 39.0
intangible assets
Exceptional costs 1.0 0.5 1.1
Amortisation of intangible assets 5.1 5.0 10.1
Exceptional items and amortisation of intangible assets 6.1 5.5 11.2
Administrative expenses 45.5 24.9 50.2
b) Exceptional items
Exceptional operating costs in the 6 months ended 31 March 2022 consist of
legal and professional fees of £1.0m.
The total exceptional items in the 6 months ended 31 March 2021 of £7.6m
represents the estimated cost of COVID-19 to trading in the period. This is
primarily the cost of COVID-19 related cancellations or expected cancellations
of £7.1m. Exceptional operating costs of £0.5m relates to the provision for
legal and professional fees.
The total exceptional items in the year ended 30 September 2021 of £10.0m
represents the estimated cost of COVID-19 to trading in the period. This is
primarily the cost of COVID-19 related cancellations or expected cancellations
of £8.9m. Exceptional operating costs of £1.1m includes legal and
professional fees and supplier provisions.
c) Adjusted profit/(loss) before tax
Management measures the overall performance of the Group by reference to
Adjusted profit/(loss) before tax, a non-GAAP measure as it gives a meaningful
year on year comparison of the Group's performance:
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
£'m £'m £'m
Loss before taxation (7.0) (21.6) (36.7)
Exceptional costs 1.0 7.6 10.0
Total exceptional items 1.0 7.6 10.0
Amortisation of acquired intangibles* 2.8 2.8 5.5
Share based payments charge** 3.2 1.7 2.8
Adjusted profit/(loss) before tax - (9.5) (18.4)
*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 a non-cash charge for the expected
cost of shares vesting under the Group's Long Term Incentive Plan. On 21
December 2021 the remuneration committee approved the introduction of an
underpin/minimum award for the nil cost awards originally granted 9 July 2019.
This removal of a non-marked based condition has resulted in a charge to the
income statement of £1.9m that reflects the scheme progress to date. These
charges are added back to provide comparability to prior periods due to
fluctuations in the charges.
6 Taxation
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
£m £m £m
Current tax on loss for the year - - (0.4)
Adjustments in respect of prior years - - (0.1)
Total current tax - - (0.5)
Deferred tax on losses for the period
Origination and reversal of temporary differences (1.5) (4.0) (6.1)
Adjustments in respect of prior years - - 0.1
Total deferred tax (1.5) (4.0) (6.0)
Total tax credit (1.5) (4.0) (6.5)
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.
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
£m £m £m
Loss on ordinary activities before tax (7.0) (21.6) (36.7)
Loss on ordinary activities multiplied by the rate of corporation tax in the (1.3) (4.1) (7.0)
UK of 19% (2021: 19%)
Effects of:
Impact of difference in current and deferred tax rates (0.2) - 0.2
Adjustments in respect of prior years - - -
Expenses not deductible - 0.1 0.3
Total tax credit (1.5) (4.0) (6.5)
The tax charge for the year is based on the effective rate of UK corporation
tax for the period of 21% (2021: 18%). An increase in the UK corporation rate
from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May
2021. The deferred tax assets and liabilities have been calculated based on
these rates.
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 probability that
sufficient taxable profit will be available to allow all or part of deferred
tax asset to be utilised. All available evidence was considered including
approved budgets, forecasts and analysis of historical operating results.
These forecasts are consistent with those prepared and used internally for
business planning and impairment purposes. 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.
7 Earnings/(loss) per share
Basic loss per share are calculated by dividing the loss attributable to
equity holders of On the Beach Group plc by the weighted average number of
ordinary shares issued during the year.
Diluted loss per share is calculated by dividing the loss 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 earnings/(loss) per share figures are calculated by dividing adjusted
earnings after tax for the year by the weighted average number of shares.
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
Basic loss per share
Loss after tax for the period (£'m) (5.5) (17.6) (30.2)
Weighted average number of Ordinary Shares (m) 165.7 157.4 159.3
Earnings per share (in pence per share) (3.3p) (11.2p) (19.0p)
Diluted loss per share
Loss after tax for the period (£'m) (5.5) (17.6) (30.2)
Weighted average number of Ordinary Shares (m) 165.7 157.4 159.3
Earnings per share (in pence per share) (3.3p) (11.2p) (19.0p)
There was no difference in the weighted average number of shares used for the
calculation of basic and diluted loss per share as the effect of all
potentially dilutive shares outstanding was anti-dilutive.
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
Adjusted basic earnings/(loss) per share
Adjusted earnings after tax (£'m) 0.1 (7.8) (15.4)
Weighted average number of Ordinary Shares (m) 165.7 157.4 159.3
Earnings per share (in pence per share) 0.1p (5.0p) (9.7p)
Adjusted diluted earnings/(loss) per share
Adjusted earnings after tax (£'m) 0.1 (7.8) (15.4)
Weighted average number of Ordinary Shares (m) 166.5 157.4 159.3
Earnings per share (in pence per share) 0.1p (5.0p) (9.7p)
Adjusted earnings after tax is calculated as follows:
6 months ended 31 March 2022 6 months ended 31 March 2021 Year ended 30 September 2021
unaudited unaudited audited
£'m £'m £'m
Loss for the year after taxation (5.5) (17.6) (30.2)
Exceptional costs 0.8 6.2 8.1
Amortisation of acquired intangibles 2.2 2.2 4.5
Share based payment charges* 2.6 1.4 2.2
Adjusted earnings after tax 0.1 (7.8) (15.4)
* The share based payment charges are in relation to options which are not yet
exercisable.
8 Intangible assets
Brand Goodwill Website & development Costs Website technology Customer relationships Total
£'m £'m £'m £'m £'m £'m
Cost
At 1 October 2021 35.9 40.2 20.2 22.8 6.5 125.6
Additions - - 4.3 - - 4.3
At 31 March 2022 35.9 40.2 24.5 22.8 6.5 129.9
Accumulated amortisation
At 1 October 2021 17.5 - 13.3 18.4 2.3 51.5
Charge for the year 1.2 - 2.4 1.2 0.3 5.1
At 31 March 2022 18.7 - 15.7 19.6 2.6 56.6
Net book amount
At 31 March 2022 (unaudited) 17.2 40.2 8.8 3.2 3.9 73.3
Brand Goodwill Website & development Costs Website technology Customer relationships Total
£'m £'m £'m £'m £'m £'m
Cost
At 1 October 2020 35.9 40.2 15.6 22.8 6.5 121.0
Additions - - 2.2 - - 2.2
At 31 March 2021 35.9 40.2 17.8 22.8 6.5 123.2
Accumulated amortisation
At 1 October 2020 15.1 - 8.7 16.0 1.6 41.4
Charge for the year 1.2 - 2.2 1.2 0.4 5.0
At 31 March 2021 16.3 - 10.9 17.2 2.0 46.4
Net book amount
At 31 March 2021 (unaudited) 19.6 40.2 6.9 5.6 4.5 76.8
Brand Goodwill Website & development Costs Website technology Customer relationships Total
£'m £'m £'m £'m £'m £'m
Cost
At 1 October 2020 35.9 40.2 15.6 22.8 6.5 121.0
Additions - - 4.6 - - 4.6
At 30 September 2021 35.9 40.2 20.2 22.8 6.5 125.6
Accumulated amortisation
At 1 October 2020 15.1 - 8.7 16.0 1.6 41.4
Charge for the year 2.4 - 4.6 2.4 0.7 10.1
At 30 September 2021 17.5 - 13.3 18.4 2.3 51.5
Net book amount
At 30 September 2021 (audited) 18.4 40.2 6.9 4.4 4.2 74.1
The Group capitalise development projects where they satisfy the requirements
for capitalisation in accordance with the accounting standard and expense
projects that relate to the operations and ongoing maintenance.
Brand
The brand intangible asset consists of three brands which were separately
identified as intangibles on the acquisition of the respective businesses. The
carrying amount of the brands are:
Brand Remaining amortisation period Acquisition At 31 March 2022 At 31 March 2021 At 30 September 2021
unaudited unaudited audited
£'m £'m £'m
On the Beach 4 years On the Beach Travel Limited 13.1 15.1 14.1
Sunshine.co.uk 5 years Sunshine.co.uk Limited 0.7 0.9 0.8
Classic Collection 6 years Classic Collection Holidays Limited 3.4 3.6 3.5
17.2 19.6 18.4
9 Tangible assets
Fixed asset additions for the 6 months ended 31 March 2022 amounted to £0.6m
(6 months ended 31 March 2021: £nil, year ended 30 September 2021: £1.1m).
Right-of-use assets recognised for the period amounted to £1.5m (6 months
ended 31 March 2021: £nil, year ended September 2021: £nil).
Disposals in the period amounted to £nil (6 months ended 31 March 2021:
£nil, year ended 30 September 2021: £2.2m).
Depreciation charge of the period amounted to £0.9m (6 months ended 31 March
2021: £0.9m, year ended 30 September 2021: £1.8m).
10 Trade and other receivables
At 31 March 2022 At 31 March 2021 At 30 September 2021
unaudited unaudited audited
Amounts falling due within one year: £'m £'m £'m
Trade receivables - net 200.8 78.3 79.5
Other receivables and prepayments 23.4 21.9 15.4
224.2 100.2 94.9
For the 6 months ending 31 March 2022, other receivables includes £1.4m
receivable in respect of amounts due from airlines as a result of exceptional
COVID-19 cancellations. Other receivables and prepayments includes £10.7m of
advanced payments to suppliers.
For the 6 months ending 31 March 2021, other receivables includes £11.8m
receivable in respect of amounts due from airlines as a result of exceptional
COVID-19 cancellations. Other receivables and prepayments includes £2.1m of
advanced payments to suppliers.
For the year ended 30 September 2021, other receivables includes £3.3m
receivable in respect of amounts due from airlines as a result of exceptional
COVID-19 cancellations. Other receivables and prepayments includes £5.3m of
advanced payments to suppliers.
11 Trade, other payables and provisions
At 31 March 2022 At 31 March 2021 At 30 September 2021
unaudited unaudited audited
£'m £'m £'m
Non-current liabilities
Lease liabilities 3.3 3.6 2.5
Current liabilities
Trade payables 242.7 78.3 104.3
Accruals 30.2 10.1 14.8
Lease liabilities 0.9 0.4 0.4
Provisions 3.1 12.3 4.6
280.2 104.7 126.6
Trade payables
For the 6 months ended 31 March 2022, trade payables includes £0.3m in
respect of refunds owed to customers (6 months ended 31 March 2021: £0.8m;
year ended 30 September 2021: £0.9m), with the related receivable from the
airlines recognised in trade receivables. Where the refunds are not received
from the airline the Group has a legally enforceable right to offset the
recognised amounts. The Group has opted to show the figures gross due to no
option to settle on a net basis or realise the asset and settle the liability
simultaneously.
Provisions
For the 6 months ended 31 March 2022, the provision of £3.1m consists of
£2.8m refund liability in respect of cancelled and disrupted holidays and
£0.3m recognised for specific suppliers.
For the 6 months ended 31 March 2021, the £12.3m provision is in respect of
the refund liability for expected future cancellations in relation to bookings
taken before 31 March 2021.
For the year ended 30 September 2021, the provision of £4.6m consists of
£4.1m refund liability in respect of expected future cancellations in
relation to bookings taken before 30 September 2021 and £0.5m recognised for
specific suppliers.
12 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.
13 Financial instruments
At the balance sheet date the Group held the following:
FV Level At 31 March 2022 At 31 March 2021 At 30 September 2021
unaudited unaudited audited
Financial assets £'m £'m £'m
Derivative financial assets designated as hedging instruments
Forward exchange contracts 2 - - -
Financial assets at amortised cost
Trade and other receivables 224.2 98.1 39.0
Trust account 99.1 24.1 56.0
Cash at bank 16.8 30.0 89.5
Total financial assets 340.1 152.2 184.5
Financial liabilities
Derivatives designated as hedging instruments
Forward exchange contracts 2 (0.4) (2.0) (0.3)
Financial liabilities at amortised cost
Trade and other payables (277.2) (92.4) (122.0)
Provisions (3.1) (12.3) (4.6)
Total financial liabilities (280.7) (94.4) (122.3)
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 (i.e., as prices)
or indirectly (i.e., derived from prices)
iii) Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
At 31 March 2022 At 31 March 2021 At 30 September 2021
£'m £'m £'m
Forward Contracts (0.4) (2.0) (0.3)
The forward contracts have been fair valued at 31 March 2022 with reference to
forward exchange rates that are quoted in an active market, with the resulting
value 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.
The Group's key financial market risks are in relation to foreign currency
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, Euro and Swedish
Krona). The Group places forward cover on the foreign currency exposure of its
purchases.
Derivatives 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.
Revolving credit facility
The Group has a revolving credit facility with Lloyds Bank plc. The purpose of
the facility is to meet the day to day working capital requirements of the
Group.
The total facility is £75m and has two elements as follows:
· Core facility of £50m expiring December 2023; and
· CLBILS facility of £25m expiring May 2023.
The interest rate payable on the core facility is equal to SONIA plus a
margin. The margin contained within the facility is dependent on net leverage
ratio and the rate per annum is 3.75% for the facility or any unpaid sum. The
interest rate payable on the CLBILS facility is equal to the base rate plus a
margin. The margin contained within the facility is 2.30% per annum for the
facility or any unpaid sum.
The terms of the facility prior to 1 October 2022 include the following key
financial covenants:
i) LTM minimum EBITDA: December 21 £20.4m loss; March 22 £1.2m loss
ii) EBITDA/Net debt ratio; June 22 2.5:1 ; September 22 2.25:1
The Group did not breach the covenants during the period.
The terms of the facility following 1 October 2022 include the following
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;
ii) that the ratio of total net debt to adjusted EBITDA shall not exceed
2:1
The RCF is available for other credit uses including currency hedging
liabilities and corporate credit cards. At 31 March 2022, the liabilities
recognised in trade and other payables for the other credit uses was £14.9m,
leaving £60.1m of the Lloyds facility available for use. Card facilities with
other providers remain available for use. The amount drawn down in cash at 31
March 2022 was £nil.
14 Related party transactions
No related party transactions have been entered into during the period.
PRINCIPAL RISKS AND UNCERTAINTIES
There are a number of potential risks and uncertainties which could have a
material impact on the Company's performance over the remaining six months of
the financial year and could cause actual results to differ materially from
expected and historical results.
The directors do not consider that the principal risks and uncertainties have
changed since the publication of the Annual Report for the year ended 30
September 2021. These risks and how the Company seeks to mitigate these risks
are set out on pages 31 to 40 of the 2021 Annual Report and Accounts which can
be found at www.onthebeachgroupplc.com.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the interim report in accordance
with applicable law and regulations. The Directors confirm that the condensed
consolidated interim financial information has been prepared in accordance
with International Accounting Standard 34 ('Interim Financial Reporting') as
adopted by the United Kingdom.
The interim management report includes a fair review of the information
required by the Disclosure and Transparency Rules paragraphs 4.2.7 R and 4.2.8
R, namely:
· an indication of important events that have occurred during the
six months ended 31 March 2022 and their impact on the condensed set of
financial information, and a description of the principal risks and
uncertainties for the remaining six months of the financial year; and
· material related-party transactions during the six months ended
31 March 2022 and any material changes in the related-party transactions
described in the Annual report and Accounts 2021. The Directors of the Company
are listed in the Annual Report and Accounts 2021.
A list of current Directors is also maintained on the Company's website:
(http://onthebeachgroupplc.com/) (http://onthebeachgroupplc.com/)
http://onthebeachgroupplc.com. (http://onthebeachgroupplc.com/)
The interim report was approved by the Board of Directors and authorised for
issue on 24 May 2022 and signed on its behalf by:
Shaun Morton - CFO
24 May 2022
GLOSSARY
APM Definition Reconciliation to closest GAAP measure
Adjusted CCH EBITDA Adjusted CCH EBITDA is based on CCH operating profit before depreciation, Adjusted CCH EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation and the impact of exceptional items.
Exceptional items consists of exceptional costs as result of COVID-19 in 2021.
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.
CCH operating loss (2.4) (1.9) (4.8)
Depreciation and amortisation 0.2 0.1 0.2
Amortisation of acquired intangibles 0.5 0.5 1.1
CCH EBITDA (1.7) (1.3) (3.5)
Exceptional items - - 0.4
Adjusted CCH EBITDA (1.7) (1.3) (3.1)
Adjusted CPH EBITDA Adjusted CPH EBITDA is based on CPH operating loss before depreciation, Adjusted CPH EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation and the impact of exceptional items.
Exceptional items consists of legal and professional fees for 2022 and
exceptional cancellations as result of COVID-19 for 2021. 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.
CPH operating loss (0.5) (0.9) (1.6)
Depreciation and amortisation 0.1 0.1 0.2
CPH EBITDA (0.4) (0.8) (1.4)
Exceptional items 0.1 0.2 (0.3)
Adjusted CPH EBITDA (0.3) (0.6) (1.7)
Adjusted EPS Adjusted EPS is calculated on the weighted average number of Ordinary share in Adjusted EPS 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
issue, using the adjusted earnings after tax.
Adjusted earnings after tax 0.1 (7.8) (15.4)
Basic weighted average number of ordinary shares (m) 165.7 157.4 159.3
Adjusted EPS (p) 0.1 (5.0) (9.7)
Adjusted International EBITDA Adjusted International EBITDA is based on International operating loss before Adjusted International EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
depreciation and amortisation.
International operating profit/(loss) 0.1 (0.3) (0.4)
Depreciation and amortisation - - 0.1
International EBITDA 0.1 (0.3) (0.3)
Impact of COVID-19 - 0.1 0.1
Adjusted International EBITDA 0.1 (0.2) (0.2)
Adjusted OTB operating loss Adjusted OTB EBIT is based on OTB operating loss before share based payments, Adjusted OTB operating loss (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation of acquired intangibles 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 consists of legal and professional fees for 2022 and
exceptional cancellations as result of COVID-19 for 2021.
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.
OTB operating loss (3.7) (18.1) (29.0)
Exceptional items 0.9 7.3 9.8
Share based payments 3.2 1.7 2.8
Amortisation of acquired intangibles 2.3 2.3 4.4
Adjusted OTB operating loss 2.7 (6.8) (12.0)
Adjusted OTB EBITDA Adjusted OTB EBITDA is based on OTB operating loss before depreciation, Adjusted OTB EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation, share based payments and exceptional items.
Share based payments represents the non-cash costs which fluctuates year on
year.
Exceptional items consists of legal and professional fees for 2022 and
exceptional cancellations as result of COVID-19 for 2021.
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.
OTB operating loss (3.7) (18.1) (29.0)
Depreciation and amortisation 2.9 2.9 5.9
Amortisation of acquired intangibles 2.3 2.3 4.4
OTB EBITDA 1.5 (12.9) (18.7)
Exceptional items 0.9 7.3 9.8
Share based payments 3.2 1.7 2.8
Adjusted OTB EBITDA 5.6 (3.9) (6.1)
Adjusted OTB revenue after marketing cost Adjusted OTB revenue after marketing cost is revenue, adjusted for the impact Adjusted OTB revenue after marketing cost (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
of COVID-19, after "OTB" online and offline marketing costs.
OTB revenue 36.8 3.2 13.0
Adjustment for COVID 19 (0.1) 6.8 9.1
Adjusted OTB revenue 36.7 10.0 22.1
OTB online marketing costs (11.1) (2.3) (5.5)
OTB off-line marketing costs (8.3) (4.3) (6.1)
Total OTB marketing (19.4) (6.6) (11.6)
Adjusted OTB revenue after marketing costs 17.3 3.4 10.5
Adjusted earnings after tax Adjusted earnings after tax is based on (loss)/profit after tax adjusted for Adjusted earnings after tax (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
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 consists of legal and professional fees for 2022 and
exceptional cancellations as result of COVID-19 for 2021.
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.
Loss for the period (5.5) (17.6) (30.2)
Share based payments (net of tax) 2.6 1.4 2.2
Exceptional costs (net of tax) 0.8 6.2 8.1
Amortisation of acquired intangibles (net of tax) 2.2 2.2 4.5
Adjusted earnings after tax 0.1 (7.8) (15.4)
Adjusted profit/(loss) before tax Adjusted profit/(loss) before tax is based on loss before tax adjusted for Adjusted profit/(loss) before tax (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
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 consists of legal and professional fees for 2022 and
exceptional cancellations as result of COVID-19 for 2021.
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.
Loss before tax (7.0) (21.6) (36.7)
Amortisation of acquired intangibles 2.8 2.8 5.5
Share based payments 3.2 1.7 2.8
Exceptional costs 1.0 7.6 10.0
Adjusted profit/(loss) before tax - (9.5) (18.4)
CCH EBITDA CCH EBITDA is based on CCH operating loss before depreciation and CCH EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation.
CCH operating loss (2.4) (1.9) (4.8)
Depreciation and amortisation 0.7 0.6 1.3
CCH EBITDA (1.7) (1.3) (3.5)
CPH EBITDA CPH EBITDA is based on CPH operating loss before depreciation and CPH EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation.
CPH operating loss (0.5) (0.9) (1.6)
Depreciation and amortisation 0.1 0.1 0.2
CPH EBITDA (0.4) (0.8) (1.4)
Exceptional items Exceptional items consists of legal and professional fees for 2022 and Exceptional items (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
exceptional cancellations as result of COVID-19 for 2021. 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.
Impact of COVID-19 7.6 10.0
Legal & Professional costs 1.0 - -
Exceptional items 1.0 7.6 10.0
International EBITDA International EBITDA is based on International operating loss before International EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
depreciation and amortisation.
International operating profit/(loss) 0.1 (0.3) (0.4)
Depreciation and amortisation - - 0.1
International EBITDA 0.1 (0.3) (0.3)
OTB EBITDA OTB EBITDA is based on OTB operating profit before depreciation and OTB EBITDA (£'m) 6 months ended 31 March 2022 6 months ended 31 March 2021 2021
amortisation.
OTB operating loss (3.7) (18.1) (29.0)
Depreciation and amortisation 5.2 5.2 10.3
OTB EBITDA 1.5 (12.9) (18.7)
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