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OTB On Beach group News Story

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REG - On the Beach Group - INTERIM RESULTS




 



RNS Number : 8642B
On the Beach Group PLC
15 June 2021
 

15 June 2021

 

On the Beach Group plc

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

 

INTERIM RESULTS FOR SIX MONTHS ENDED 31 MARCH 2021

WELL-PLACED TO CAPITALISE ON STRUCTURAL CHANGES IN THE ONLINE TRAVEL MARKET POST COVID-19

 

     Financial Overview

 

Financial Highlights & Operational Highlights

 

 

6 months to
31 March 2021

6 months to
31 March 2020

Change

 

Adjusted (1)

GAAP

Adjusted (1)

GAAP

Adjusted (1)

GAAP

Group revenue

£12.0m

£4.4m

£52.8m

£21.4m

(77%)

(79%)

Revenue as Agent*

£11.0m

£3.4m

£37.3m

£5.9m

(71%)

(42%)

Revenue as Principal**

£1.0m

£1.0m

£15.5m

£15.5m

(94%)

(94%)

Group gross profit

£10.8m

£3.7m

£37.5m

£7.6m

(71%)

(51%)

Gross profit as Agent

£10.7m

£3.6m

£35.3m

£5.4m

(70%)

(33%)

Gross profit as Principal

£0.1m

£0.1m

£2.2m

£2.2m

(95%)

(95%)

Group (loss)/profit before tax

(£9.5m)

(£21.6m)

£2.3m

(£34.1m)

-

-

Basic  (loss)/earnings per share(2)

(5.0)p

(11.2)p

1.4p

(21.1)p

-

-

 

(1)   Group adjusted profit before tax is profit before tax, amortisation of acquired intangibles of £2.8m (2020: £2.7m), share based payments cost of £1.7m (2020: credit of £1.0m) and exceptional items of £7.6m (2020: £34.7m). A full explanation of the adjustments is included in the glossary.

(2)   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.

 

*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 2020 and 31 March 2021.

 

** 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 2020 and 31 March 2021.

 

H1 revenue of £4.4m was down 79% due to suppressed consumer demand for booking holidays in the period. Whilst the UK Government's roadmap out of lockdown, announced on 22 February 2021, had a theoretical restart date for international leisure travel of 17 May 2021, there has remained significant uncertainty around:

the extent to which European destinations would be in a position to accept UK tourists; and

o  how onerous any restrictions or requirements for travel may be.

The Group continues to adjust for COVID-19 related cancellations and expected cancellations. After making an adjustment to add back the impact of cancellations, H1 adjusted revenue was £12.0m (H1 20: £52.8m).

H1 adjusted loss before tax of (£9.5m) was down £11.8m on prior year, impacted by the reduction in revenue.

Total exceptional costs in the period of £7.6m (H1 20: £34.7m) represents the estimated cost of COVID-19 to trading in H1. This is primarily the cost of COVID-19 related cancellations, expected cancellations and associated administrative expenses.

Cash at 31 March 2021 was £30.0m excluding customer monies held in a ring-fenced trust account ("Trust") of £24.1m. The Group continues to refund customers in advance of receiving refunds from airlines for cancelled flights, it does not issue Refund Credit Notes. At 31 March 2021, the amount due from airlines was £11.8m. In addition, the Group continues to operate a compelling deposit scheme for customers. At 31 March 2021 the amount owed by customers on this scheme was £6.1m.

The Group also has access to a £75m Revolving Credit Facility ("RCF") which has not been drawn since 22 May 2020.

Response to COVID-19

 

During FY20, OTB undertook a number of actions to increase liquidity and conserve cash. This included raising £65.1m (net of fees) through a share placing and increasing the total available bank facility from £50m to £75m.

Whilst FY21 was not expected to be a normal year for travel, the industry and the UK population did not foresee an extended lockdown and travel ban for the first six months of calendar 2021. This has had a material impact on OTB's trading performance due to low levels of consumer demand and a significant number of cancellations.

Whilst the vaccine rollout in the UK has been successful, with over 75% of the adult population having received a first dose, the Government remains cautious about reopening borders for leisure travel.

In consultation with the Global Travel Task Force (GTTF) a traffic light system has been developed that determines the different requirements and restrictions to be imposed by destination. However, there remains a significant amount of uncertainty for consumers, including:

Which destinations will be in each category, and whether they are likely to change;

The cost of testing prior to departure in the UK and in resort;

The ability of the local infrastructure to cope with the requirements and the resulting potential delays;

What requirements there may be if people test positive for COVID-19 whilst in resort and the cost of this; and

Local rules and restrictions in resort, such as curfews and masks.

Once this traffic light system was revealed in early May, OTB made the decision to stop selling holidays for departure before 1 September 2021, and has focused on supporting customers with bookings due to travel this summer and taking bookings for winter 2021 and summer 2022.

The Group remains focused on growing its market share in the long term rather than being concerned about summer 2021 volumes, and we believe that any potential upside from incremental bookings over this period would be marginal and would be offset by disruption and loss of goodwill for holidays that would need to be cancelled or re-arranged.

Booking volumes for summer 2022 remain low, but are significantly ahead of normal trading patterns, partially due to the early release of flights for next year by most major airlines.

The Board believes the business is well-positioned to grow market share as demand for holidays recovers. Whilst this recovery is likely to take some time and the consumer environment will continue to be challenging, the Group remains confident in the resilience and flexibility of the business model and believe there is an exciting opportunity to increase market share over the short to medium term.

In light of the continued market uncertainties, the Group is maintaining its suspension of full year guidance until such time that the overall impact of COVID-19 on the Group becomes clearer.

 

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

 

"The Group has experienced continued disruption through the first half and this has remained as we head into the summer. As announced on 12 May 2021, the Board took the decision to extend the Group's off-sale period from 30 June to 31 August 2021. Given the recent change in status of Portugal from Green to Amber, the Board is pleased to have taken this decision early, so as to avoid customers suffering yet more turmoil and disappointment.

 

On the Beach has long championed the rights of both its customers and wider holiday consumers and the Board was pleased to see that The Competition and Markets Authority has opened cases to investigate whether certain airlines have broken consumer law, by failing to offer refunds for flights customers could not legally take, thereby leaving people unfairly out of pocket. It is pleasing to see increased regulatory scrutiny on the travel sector and I would like to see this taken one step further with other travel companies establishing Trust Accounts, similar to ours, so that all customer monies are ringfenced and can be immediately returned should their holiday be cancelled. All of this will help to ensure consumers are fairly treated while also restoring confidence at a time when it is needed most.

 

The Board believes that On the Beach is well-positioned to grow market share as demand for holidays recovers. Whilst this recovery is likely to take some time and the consumer environment will continue to be challenging, the differentiating features of our business model, combined with the actions taken during the pandemic, position us very strongly for successful and sustained growth as we move out of this extended period of disruption."

 

Analyst Conference Call

A conference call for sell-side equity analysts will be held today at 9.00am, the details of which can be obtained through FTI Consulting. 

For further information: 

 

On the Beach Group plc

Simon Cooper, Chief Executive Officer

Shaun Morton, Chief Financial Officer

 

via FTI Consulting 

FTI Consulting 

Alex Beagley

Fiona Walker

Sam Macpherson

 

Tel: +44 (0)20 3727 1000

 

About On the Beach

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

 

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.

 

Chief Executive's Review

Summary of Performance

On the Beach continues to be a dynamic, entrepreneurial and ambitious business delivering value for money beach holidays that are personalised to our customers' individual needs.

 

Booking volumes in October, November and December 2020 were well below normal levels as consumer appetite for booking holidays remained significantly impacted by the pandemic.

 

Legislation passed by the Government on 4 November 2020 made leisure travel from England illegal during the period from 5 November to 1 December 2020 (inclusive).

 

The re-opening of travel in December 2020 was short-lived as the UK entered its third lockdown on 4 January 2021, which included a ban on leisure travel.

 

In a normal year, holiday bookings would peak in January for travel from March - September, however it became increasingly clear before entering lockdown on 4 January 2021, that market conditions for the remainder of the first half would be more challenging than expected at the start of the financial year.

 

Whilst we had anticipated a strong return in demand by April, it seemed ever more likely that the impact on international travel would be ongoing. If the recovery was to be deferred until June or July, then summer 2021 would not deliver the green shoots that many would have hoped for at the start of the financial year.

 

On 22 February 2021 the Government announced a roadmap out of lockdown. This included a return to international leisure travel from 17 May 2021 at the earliest. Long before the introduction of the traffic light system and associated recent government announcements, we were cautious about the possibility that leisure travel would substantially resume without restrictions. On publication of the roadmap we promptly removed holidays from sale that would depart up to 30 June 2021.

 

Customer refunds

This unprecedented period of ongoing disruption has both led to depressed levels of new bookings and widespread cancellations for existing bookings.

Customer refunds have been provided in cash and within 14 days of cancellation. Many in the industry have sought to provide customers with refund credit notes rather than cash refunds for cancelled holidays. Recent Yougov data estimates the sector has issued c. €780m of refund credit notes. Statista data suggests a further £0.5bn of holidays are yet to be fully refunded, £2.5bn of holidays have been rebooked to a future date and £1bn of vouchers or refund credit notes have been used to rebook for a later date, implying total industry exposure of c.£5bn, where customer funds have potentially been used as working capital. Cash flow pressure for many businesses will become more acute when such schemes end.

Airline refunds for cancelled flights should be refunded by the operator within 7 days in accordance with EU261. Very few airlines have adhered to this timeline, and therefore OTB has invested a significant amount of working capital in to refunding customers in lieu of receiving monies from airlines.

 

These actions have been taken to ensure that OTB adheres to the rules set out in the Package Travel and Linked Travel Regulations (PTRs) and to protect our customers and the brand. Amounts owing from airlines to OTB at 31 March 2021 was £11.8m (30 September 2020: £34.3m). We continue to receive refunds from airlines and remain confident that amounts owed will be recovered.

 

Regulatory change

On 29 April 2021, the Civil Aviation Authority (CAA) published the ATOL Reform consultation to assess the way ATOL holders fund their operations and how the use of customers' monies should be considered in the regulatory scheme.

 

As the only listed UK travel business that operates a fully ring-fenced trust account in which customer funds are held until the point of travel OTB welcomes this consultation and looks forward to contributing.

 

Current trading

Booking volumes have been and will continue to be significantly influenced by the evolution of the COVID-19 pandemic and UK and European Government policy in response to it.

 

On 12 May 2021, the Board took the decision to extend the Group's off‐sale period for holidays from 30 June to 31 August 2021, following the government announcement earlier that week on the traffic light system for leisure travel, where most destinations were classified as Amber. Portugal, the only major European holiday destination to be originally classified as Green, has since been changed to Amber.

 

Consumer research also continues to indicate there is currently a general lack of consumer appetite for international leisure travel, and we believe that any upside from capturing incremental bookings will be offset by the potential disruption and the likely loss of goodwill for those holidays that might be booked but may need to be cancelled or re-arranged.

 

This position will continue to be monitored following further Government updates on travel and associated restrictions. On the Beach will return to selling summer 2021 beach holidays as soon as there is more certainty that new holidays booked will take place without disruption or cancellation, and that the traffic light requirements can be managed by authorities and consumers alike.

 

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 evolving a strategy based on the following strategic pillars:

1.    Investing in talent and technology to extend core capabilities

2.    Driving an efficient increase in traffic through branded and direct channels

3.    Personalising our customer experience

4.    Leveraging increased revenue through direct and differentiated supply

5.    Inspiring holidaymakers with destination agnostic search technologies

6.   Reaching an ever-wider audience of beach holidaymakers through product, channel and geographic extension

Outlook

In the near term there remains significant uncertainty for the industry. If summer 2021 volumes do not recover travel operators will need to sustain further cash burn over the winter. As we look to exit the pandemic, we expect opportunities for financially strong operators like OTB, to increase, with significant potential to gain market share in FY22 as the sector recovers:

-

OTB raised £65.1m of liquidity from its investor base in May 2020. It continues to have the strong support of its lender, with covenants recently amended and facilities committed to December 2023.

-

OTB pays holiday providers promptly. It does not rely on delaying supplier payments to support working capital. We expect hotel relationships to continue to strengthen.

-

The Group maintains a daily focus on improving the quality of its customer proposition and both the value and service that it provides to its customer base.

-

We have made key decisions during / following the period, such as taking summer off sale, to enhance the overall customer service experience, putting both our existing and new customers at the heart of what we do.

-

OTB operates a trust account which protects and ring-fences customer prepayments, enabling swift refunds to customers in cash, in full and within 14 days. It does not issue Refund Credit Notes.

We believe the differentiating features of our business model, combined with the actions taken during the pandemic, position us very strongly for successful and sustained growth as we move out of this extended period of disruption. We continue to evaluate UK and international commercial opportunities.

Our expansion into longer haul destinations and our B2B presence via the Classic Collection and Classic Package Holidays brands was running well ahead of plan prior to the COVID-19 shutdown. We look forward to continuing this progress in our core business and expansion areas as the market recovers.

Explanation of adjustments

Certain costs, including the exceptional impact of the COVID-19 pandemic, 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.

Whilst the underlying result has still been significantly impacted by the COVID-19 pandemic, the Board believe that adjusting for the items shown in the table below provides a clearer reflection of the Group's performance in the period. The Group organised package holidays for customers which have since been cancelled, or are likely to be cancelled, due to airspace closures and government restrictions on leisure travel. See note 2.5 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.

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 2021

H1 2020

 

COVID-19

Other

Total

COVID-19

Other

Total

Group revenue

(£7.6m)

-

(£7.6m)

(£31.4m)

-

(£31.4m)

Revenue as Agent

(£7.6m)

-

(£7.6m)

(£31.4m)

-

(£31.4m)

Cost of sales (3)

0.5m

-

0.5m

1.5m

-

1.5m

Group overheads

(£0.5m)

(£4.5m)

(£5.0m)

(£4.8m)

(£1.7m)

(£6.5m)

Share Based Payments

-

(£1.7m)

(£1.7m)

-

£1.0m

£1.0m

Acquired Intangibles Amortisation

-

(£2.8m)

(£2.8m)

-

(£2.7m)

(£2.7m)

Other exceptional operating costs (4)

(£0.5m)

-

(£0.5m)

(£4.8m)

-

(£4.8m)

Group profit before tax

(£7.6m)

(£4.5m)

(£12.1m)

(£34.7m)

(£1.7m)

(£36.4m)

 

(3)    Agents' commission no longer due on cancelled holiday bookings

(4)  Provision for legal and professional fees £0.5m (2020: amounts due from suppliers £3.3m, exceptional development spend £1.2m, legal and professional fees £0.3m)

 

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 2021

H1 2021

H1 2020

H1 2020

 

Adjusted £m

GAAP £m

Adjusted £m

GAAP £m

Revenue

10.0

3.2

34.4

5.2

 

Online Marketing costs

(2.3)

(2.3)

(11.7)

(11.7)

Offline Marketing costs

(4.3)

(4.3)

(8.4)

(8.4)

Revenue after marketing costs

3.4

(3.4)

14.3

(14.9)

Variable costs

(2.0)

(2.0)

(3.2)

(3.2)

Fixed costs

(5.3)

(5.3)

(4.9)

(4.9)

Depreciation and amortisation

(2.9)

(2.9)

(2.8)

(2.8)

Exceptional operating costs

-

(0.5)

-

(4.6)

Share based payments

-

(1.7)

-

1.0

Amortisation of acquired intangibles

-

(2.3)

-

(2.2)

Operating (loss)/profit

(6.8)

(18.1)

3.4

(31.6)

EBITDA *

(3.9)

(12.9)

6.2

(26.6)

EBITDA %

(39%)

-

18%

-

*see glossary for reconciliation to nearest GAAP measure

Adjusted revenue decreased by (71%) to £10.0m (H1 20: £34.4m). Revenue after accounting for COVID-19 cancellations, was down to £3.2m (H1 20: £5.2m). The reduction in revenue is due to reduced consumer demand.

Offline marketing spend of £4.3m, relates to the brand campaign, which went live on Christmas day.  The primary purpose of the campaign was to increase brand awareness in anticipation a return in demand for holidays.

Online marketing costs, which flex with holiday search demand, were £2.3m (H1 20: £11.7m) and 23% of revenue (H1 20: 34%). However, adjusted revenue after all marketing costs reduced by (76%) to £3.4m due to the increased offline marketing spend in the period.

 

Overhead as % of revenue

 

H1 2021

H1 2021

H1 2020

H1 2020

 

Adjusted

GAAP

Adjusted

GAAP

Variable costs % revenue

20%

62%

9%

62%

Fixed costs % revenue

53%

166%

14%

94%

Overheads % revenue

73%

228%

23%

156%

 

The severe market conditions and resulting cancellations translate to overheads as a percentage of adjusted revenue have increased to 73% (H1 20: 23%). The Group is well positioned to return to a pre-COVID operating leverage position once market conditions return to normal. 

Adjusted EBITDA loss of (£3.9m) (H1 20: £6.2m) decreased by £10.1m and adjusted EBITDA as a percentage of revenue decreased to (39%) (H1 20: 18%). The closest GAAP equivalent measure to Adjusted EBITDA is operating loss of £18.1m (H1 20: loss £31.6m). This reduction in losses is attributable to the reduction in marketing costs in the period.

International Segment performance

 

 

H1 2021

H1 2021

H1 2020

H1 2020

 

Adjusted £m

GAAP £m

Adjusted £m

GAAP £m

Revenue

0.1

-

0.3

0.1

Revenue after marketing costs

-

(0.1)

-

(0.2)

Variable costs

(0.1)

(0.1)

(0.1)

(0.1)

Fixed costs

(0.1)

(0.1)

(0.1)

(0.1)

Depreciation and amortisation

-

-

-

-

Operating loss

(0.2)

(0.3)

(0.2)

(0.4)

EBITDA*

(0.2)

(0.3)

(0.2)

(0.4)

*see glossary for reconciliation to nearest GAAP measure

Leading up to the onset of the COVID-19 pandemic, the International segment operated at a breakeven level at revenue after marketing. Thereafter, the pandemic resulted in a significant reduction in demand.

 

Demand for overseas travel in Sweden remains low, with Adjusted Revenue of £0.1m, down 67% (H1 2020: £0.3m). Revenue, after accounting for COVID-19 cancellations, was nil.

 

Adjusted EBITDA was maintained at a loss of (£0.2m) (H1 2020: loss (£0.2m)) due to a reduction in marketing spend. The closest GAAP equivalent measure to International EBITDA is operating loss, which reduced to (£0.3m) (H1 20: (£0.4m)).

 

Classic Collection Holidays segment performance

 

H1 2021

H1 2021

H1 2020

H1 2020

 

Adjusted £m

GAAP £m

Adjusted £m

GAAP £m

Revenue

1.0 

1.0 

15.5 

15.5

Gross profit

0.1 

0.1 

2.2

2.2

Gross Profit after marketing costs

-

1.7

1.7

Variable costs

(0.5) 

(0.5) 

(0.6) 

(0.6) 

Fixed costs

(0.8) 

(0.8) 

(1.4) 

(1.4) 

Depreciation and amortisation

(0.1) 

(0.1) 

(0.1) 

(0.1) 

Amortisation of acquired intangibles

-

(0.5)

-

(0.5)

Operating loss

(1.4)

(1.9)

(0.4)

(0.9)

EBITDA*

(1.3)

(1.3)

(0.3)

(0.3)

*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.  As very few customers were able to travel in the six months to March 2021, the H1 results have been impacted significantly.

Revenue decreased by 94% to £1.0m (H1 20: £15.5m) and operating losses increased to (£1.9m) (H1 20: (£0.9m)).

In line with customer preference, 64% of COVID-19 impacted bookings in the period have been amended rather than cancelled. Revenue associated with these amendments accounts for £3.3m of the forward orders yet to travel.

The management team continues to develop the overall proposition and have launched various webinars to showcase the new luxury, tailor-made and long haul programmes.

Throughout the pandemic, Classic has been recognised for delivering excellent customer service and has recently launched the 'acclaimed' programme which is designed to foster even stronger relationships with travel agents.

Classic Package Holidays segment performance

 

H1 2021

H1 2021

H1 2020

H1 2020

 

Adjusted £m

GAAP £m

Adjusted £m

GAAP £m

Revenue

0.9

0.2

2.6

0.6

Gross profit

0.6

0.4

0.6

0.1

Gross Profit after marketing costs

0.5

0.3

0.4

(0.1)

Variable costs

(0.2)

(0.2)

(0.2)

(0.2)

Fixed costs

(0.9)

(0.9)

(0.7)

(0.9)

Depreciation and amortisation

(0.1)

(0.1)

(0.1)

(0.1)

Operating loss

(0.7)

(0.9)

(0.6)

(1.3)

EBITDA*

(0.6)

(0.8)

(0.5)

(1.2)

*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.

Adjusted Revenue for the period was £0.9m (H1 20: £2.6m), and adjusted EBITDA loss was (£0.6m) (H1 20: (£0.5m)). After accounting for COVID-19 related cancellations, revenue was £0.2m and operating losses were (£0.9m).

The CPH trading result has been significantly impacted by COVID-19 due to a drop in demand, closure of high street shops for much of H1 and the cancellation of a significant proportion of winter 20/21 travel.

Prior to the onset of the pandemic, significant strategic progress had been made to increase distribution of CPH product, which is now available in 2,500 high street travel agents.

CPH has also recently launched seven new long haul destinations and is now offering nearly 4,000 hotels across all destinations.

Financing

During the period the Group had in place a revolving credit facility of £75m with Lloyds. The drawdown at 31 March 2021 was nil (H1 2020: £30.0m, 30 September 2020: nil).

 

On 25 May 2021, the Group exercised a one year extension to the CLBILS facility which now expires in May 2023. In addition, covenants have been reset until June 2022 to account for the prolonged impact COVID-19 is having on trading.

 

Details of the current facility limits and maturity dates are as follows:

 

Facilities

£m

Issued

Expiry

Drawn at 30 April 2021

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 £1.7m (H1 20: credit £1.0m). The H1 20 credit related to the reversal of benefits accrued for the 2018 incentive scheme which, as a result of COVID-19, is now unlikely to vest in full.

Taxation

The Group tax credit of £4.0m represents an effective rate of 19% (H1 2020: 19%) which equal to the standard UK rate of 19% (H1 20: 19%).

During the period a Corporation Tax rebate of £3.9m was received and no payments on account have been made due to the loss making position of the Group.

Cash flow

£m

H1 2021

H1 2020

FY20

Loss before tax

(21.6) 

(34.1)

(46.3)

Depreciation and amortisation

5.9

5.7

11.4

Net finance costs / (income)

0.4

(0.1)

0.4

Share based payments

1.7

(1.0)

(0.6)

Movement in working capital

6.1

  (31.7)

(39.7)

Corporation tax

3.9

(1.2)

(0.2)

Cash generated from operating activities

(3.6) 

(62.4)

(75.0)

 

 

 

 

Other Cash Flows

 

 

 

Capitalised development expenditure

(2.2)

 (2.0)

(4.0)

Capital expenditure net of proceeds

-

 (0.9)

(1.0)

 

 

 

 

Net finance (costs) / income

(0.4)

0.2

(0.4)

Payment of lease liabilities

(0.3)

(0.1)

(0.4)

Dividends paid

-

(2.6)

(2.6)

Net cash flows

(6.5) 

  (67.8)

(8.4)

 

 

 

 

Opening cash balance

36.5

54.8

54.8

Net cash / (debt)

30.0 

(13.0)

(28.6)

 

 

 

 

Proceeds from borrowings

-

30.0

65.1

Closing cash at bank

30.0 

17.0

36.5

Closing trust balance

24.1

68.8

25.8

 

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.

 

Net cash outflows of £6.5m are £61.3m lower than last year. The £6.5m outflow represents trading losses off-set by a reduction in amounts owed by airlines for cancelled holidays which has reduced to £11.8m at 31 March 2021.

 

Customer payments made in advance of travel are deposited in the Trust account. The balance at 31 March 2021 was £24.1m (31 March 2020: £68.8m).

 

Refunds for holidays that have or are expected to be cancelled due to the COVID-19 pandemic will either be refunded from the Trust account or from the airline.

 

Dividend

The Board has not declared an interim dividend (H1 2020: nil).

 

Simon Cooper                   Shaun Morton

CEO                                      CFO

15 June 2021                      15 June 2021

 

On the Beach Group Plc

INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2021

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

For the 6 months ended 31 March 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

 

 

 

Note

£'m

 

£'m

 

£'m

 

 

unaudited

 

unaudited

 

audited

 

 

 

 

 

 

 

Revenue

3,4

4.4

 

21.4

 

33.7

Cost of sales

 

(0.7)

 

(13.8)

 

(17.7)

Gross profit

 

3.7

 

7.6

 

16.0

 

 

 

 

 

 

 

Administrative expenses

5

(24.9)

 

(41.8)

 

(61.9)

Group operating loss

 

(21.2)

 

(34.2)

 

(45.9)

 

 

 

 

 

 

 

Finance costs

 

(0.5)

 

(0.2)

 

(0.8)

Finance income

 

0.1

 

0.3

 

0.4

Net finance (costs)/income

 

(0.4)

 

0.1

 

(0.4)

 

 

 

 

 

 

 

Loss before taxation

 

(21.6)

 

(34.1)

 

(46.3)

Taxation

6

4.0

 

6.4

 

7.5

 

 

 

 

 

 

 

Loss for the period

 

(17.6)

 

(27.7)

 

(38.8)

 

 

 

 

 

 

 

Other comprehensive income:

 

 

 

 

 

 

Net (loss)/gain on cash flow hedges

 

(0.4)

 

-

 

0.1

Total comprehensive loss for the period

 

(18.0)

 

(27.7)

 

(38.7)

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

Equity holders of the parent

 

(18.0)

 

(27.7)

 

(38.7)

  

 

 

 

 

 

 

Basic and diluted earnings per share attributable to the equity Shareholders of the Company:

Basic (loss)/earnings per share

7

(11.2p)

 

(21.1p)

 

(27.6p)

Diluted (loss)/earnings per share

7

(11.2p)

 

(21.1p)

 

(27.6p)

Adjusted (loss)/earnings per share *

7

(5.0p)

 

1.4p

 

(0.5p)

 

 

 

 

 

 

 

Adjusted (loss)/profit measure *

 

 

 

 

 

 

Adjusted PBT (before amortisation of acquired intangibles, exceptional & non underlying costs and share based payments) *

5

(9.5)

 

2.3

 

0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* This is a non GAAP measure, refer to notes.

 

 

 

 

 

 

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

As at 31 March 2021

 

 

 

 

 

 

 

 

 

At 31 March 2021

 

At 31 March 2020

 

At 30 September 2020

 

 

 

£'m

 

£'m

 

£'m

 

Assets

Note

unaudited

 

unaudited

 

audited

 

Non-current assets

 

 

 

 

 

 

 

Intangible assets

8

76.8

 

82.4

 

79.6

 

Property, plant and equipment

9

9.0

 

10.7

 

9.9

 

Investment property

 

0.6

 

0.6

 

0.6

 

Deferred tax

 

1.5

 

-

 

-

 

Total non-current assets

 

87.9

 

93.7

 

90.1

 

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

Trade and other receivables

10

100.2

 

172.1

 

104.7

 

Derivative financial instruments

13

-

 

4.0

 

0.5

 

Corporation tax receivable

 

0.6

 

7.8

 

4.5

 

Trust account

12

24.1

 

68.8

 

25.8

 

Cash at bank

 

30.0

 

17.0

 

36.5

 

Total current assets

 

154.9

 

269.7

 

172.0

 

Total assets

 

242.8

 

363.4

 

262.1

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

Share capital

 

1.6

 

1.3

 

1.6

 

Share premium

 

64.8

 

-

 

64.8

 

Retained earnings

 

198.7

 

225.6

 

215.0

 

Capital contribution reserve

 

0.5

 

0.5

 

0.5

 

Merger reserve

 

(129.5)

 

(129.5)

 

(129.5)

 

Total equity

 

136.1

 

97.9

 

152.4

 

 

 

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

 

 

Deferred tax

 

-

 

6.2

 

2.6

 

Trade and other payables

11

3.6

 

4.0

 

3.8

 

Total non-current liabilities

 

3.6

 

10.2

 

6.4

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

Trade and other payables

11

88.8

 

196.7

 

92.4

 

Loans and overdrafts

 

-

 

30.0

 

-

 

Provisions

11

12.3

 

28.6

 

10.9

 

Derivative financial instruments

13

2.0

 

-

 

-

 

Total current liabilities

 

103.1

 

255.3

 

103.3

 

 

 

 

 

 

 

 

 

Total liabilities

 

106.7

 

265.5

 

109.7

 

Total equity and liabilities

 

242.8

 

363.4

 

262.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shaun Morton

 

 

 

 

 

 

 

Chief Financial Officer

 

 

 

 

 

 

 

15 June 2021

 

 

 

 

 

 

 

On the Beach Group plc. Reg no 09736592

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

 

 

 

 

For the 6 months ended 31 March 2021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

Note

£'m

 

£'m

 

£'m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss before taxation

 

(21.6)

 

(34.1)

 

(46.3)

Adjustments for:

 

 

 

 

 

 

Depreciation

 

0.9

 

1.0

 

1.9

Amortisation of intangible assets

 

5.0

 

4.7

 

9.5

Finance costs

 

0.5

 

0.2

 

0.8

Finance income

 

(0.1)

 

(0.3)

 

(0.4)

Share based payments

 

1.7

 

(1.0)

 

(0.6)

 

 

(13.6)

 

(29.5)

 

(35.1)

Changes in working capital:

 

 

 

 

 

 

Decrease/(increase) in trade and other receivables

 

5.0

 

(81.5)

 

(7.4)

(Decrease)/increase in trade and other payables

 

(0.6)

 

74.6

 

(50.6)

Decrease/(increase) in trust account

 

1.7

 

(24.8)

 

18.3

 

 

6.1

 

(31.7)

 

(39.7)

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

Cash generated from operating activities

 

(7.5)

 

(61.2)

 

(74.8)

Tax received/(paid)

 

3.9

 

(1.2)

 

(0.2)

Net cash outflow from operating activities

 

(3.6)

 

(62.4)

 

(75.0)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Purchase of property, plant and equipment

9

-

 

(1.1)

 

(1.2)

Proceeds from disposal of assets held for sale

 

-

 

0.2

 

0.2

Purchase of intangible assets

8

(2.2)

 

(2.0)

 

(4.0)

Interest received

 

0.1

 

0.3

 

0.4

Net cash outflow from investing activities

 

(2.1)

 

(2.6)

 

(4.6)

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from issue of share capital

 

-

 

-

 

65.1

Proceeds from borrowings

 

-

 

30.0

 

-

Equity dividends paid

 

-

 

(2.6)

 

(2.6)

Interest paid on borrowings

 

(0.4)

 

-

 

(0.6)

Interest paid on lease liabilities

 

(0.1)

 

(0.1)

 

(0.2)

Payment of lease liabilities

 

(0.3)

 

(0.1)

 

(0.4)

Net cash (outflow)/inflow from financing activities

 

(0.8)

 

27.2

 

61.3

 

 

 

 

 

 

 

Net decrease in cash at bank and in hand

 

(6.5)

 

(37.8)

 

(18.3)

Cash at bank and in hand at beginning of period

 

36.5

 

54.8

 

54.8

Cash at bank and in hand at end of period

 

30.0

 

17.0

 

36.5

 

 

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

 

 

 

For the 6 months ended 31 March 2021

 

 

 

 

 

 

 

Share capital

Share premium

Merger reserve

Capital contribution reserve

Retained earnings

Total

For the year ended 30 September 2020

£'m

£'m

£'m

£'m

£'m

£'m

Balance at 30 September 2019

1.3

-

(129.5)

0.5

256.9

129.2

 

 

 

 

 

 

 

Share based credit including tax

-

-

-

-

(0.6)

(0.6)

Shares issued during the year

0.3

67.0

-

-

-

67.3

Costs related to shares issued

-

(2.2)

-

-

-

(2.2)

Dividends paid during the year

-

-

-

-

(2.6)

(2.6)

Total comprehensive loss for the year

-

-

-

-

(38.7)

(38.7)

Balance at 30 September 2020

1.6

64.8

(129.5)

0.5

215.0

152.4

 

 

 

 

 

 

 

 

Share capital

Share premium

Merger reserve

Capital contribution reserve

Retained earnings

Total

For the 6 months ended 31 March 2020

£'m

£'m

£'m

£'m

£'m

£'m

Balance at 30 September 2019

1.3

-

(129.5)

0.5

256.9

129.2

 

 

 

 

 

 

 

Share based credit including tax

-

-

-

-

(1.0)

(1.0)

Dividends paid during the period

-

-

-

-

(2.6)

(2.6)

Total comprehensive loss for the period

-

-

-

-

(27.7)

(27.7)

Balance at 31 March 2020 (unaudited)

1.3

-

(129.5)

0.5

225.6

97.9

 

 

 

 

 

 

 

 

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

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the 6 months ended 31 March 2021

 

 

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 2021 were authorised for issue in accordance with a resolution of the directors on 15 June 2021.


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 2021 have been prepared in accordance with 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 2020. 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 2020. 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 2020.

 

 

2.3

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 principal risks and uncertainties faced by the Company include the following:

·      Consumer demand

·      Flight supply

·      Supplier failure

·      Competition risk

·      Package Organiser liability

·      Recoverability of airline refunds

·      Regulatory breach

·      Damage to Brand/Reputation

·      Exchange rate fluctuation

·      IT systems and data security

·      Business interruption

·      People risk

 

The directors do not consider that the principal risks and uncertainties have materially changed since the publication of the Annual Report for the year ended 30 September 2020, save as disclosed below. A detailed explanation of the above risks and how the Company seeks to mitigate these risks can be found on pages 32 to 42 of the 2020 Annual Report and Accounts which can be found at https://www.onthebeachgroupplc.com/~/media/Files/O/On-The-Beach/documents/2020-annual-report.pdf

 

 

COVID-19 Risk

In the 2020 Annual Report and Accounts, we detailed how COVID-19 has impacted virtually every principal risk. Whilst the UK now has an advanced vaccination programme and a roadmap for exiting the COVID-19 lockdown, the pandemic will continue to have a significant impact on the Group's principal risk types for the remaining six months of the Company's financial year. We expect consumer demand to be heavily affected given confusion, complexity and additional costs caused by the traffic light system, government advice and testing and quarantine requirements, which led to the Group's announcement on 12 May 2021 to remove July and August 2021 holidays from sale until more clarity was available. We expect further package organiser liability to arise in respect of refunds for cancelled holidays as a result of the disruption.

 

Ryanair update

The Group is one of several online travel agents involved in litigation with Ryanair in connection with Ryanair's efforts to prevent online travel agents (OTAs) from booking its flights. The legal process is ongoing but remains at an early stage. The case was issued in 2010 and has been dormant for over three years, with the next step being for Ryanair to apply to court to enter a new statement of claim. In June 2021, the Group issued a motion to have the claim dismissed for inordinate and inexcusable delay on the part of Ryanair. Litigation is unpredictable and if Ryanair were to prevail in this litigation, this could have a material impact on the Group's business.

 

Since the pandemic started, there has been an escalation in Ryanair's aggression towards OTAs, including On the Beach. For example, Ryanair has (i) delayed and withheld refunds for cancelled flights; (ii) published statements and videos making serious allegations regarding OTAs; (iii) attempted to block OTA bookings; and (iv) recently started to use increasingly aggressive tactics to degrade the experience for customers of OTAs.  The Group is in correspondence with Ryanair on this matter and will pursue legal action if necessary. The Group continues to invest in its proprietary technology and its talented people to optimise its offering for its customers.

 

 

 

 

 

 

 

2.4

Going concern

 

 

 

 

 

 

On the Beach Group covers its daily working capital requirements by means of cash and a Revolving Credit Facility ("RCF").

As at 31 March 2021 cash, excluding cash held in trust, was £30.0m (31 March 2020 cash of £17.0m, 30 September 2020 cash of £36.5m).


The Group has a low fixed cost base, no inventory commitments, is cash positive, has access to an undrawn facility and operates a trust account for customer prepayments. Therefore is well positioned to continue to operate throughout the sustained disruption caused by the pandemic.

 

The Group has taken further action to ensure it has sufficient liquidity to operate through the pandemic and capitalise on opportunities once travel restrictions are eased. This includes:

·      On 25 May 2021, covenant tests were amended up to and including 30 September 2022 to account for the impact of COVID-19 on the Group's results, tests return to normal from 1 October 2022.

·      Exercised 1 year extension to the £25m RCF facility under CLBILS which now expires in May 2023.

 

 

The Directors have prepared cash flow forecasts for a period of 12 months from the date of approval of these financial statements. The Directors have modelled a number of scenarios considering factors such as airline and hotelier resilience, employee absence and customer behaviour / demand. As part of this exercise, the Directors modelled what they consider to be a severe downside scenario of no travel or bookings until 2022. Even in this scenario, the Group would have no requirement to draw down on its current facilities.

 

Given the assumptions above, 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.

 

 

2.5

Accounting estimates and judgements

 

In preparing these interim financial statements, management has 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

 

Determining the amounts to be provided for the bookings affected by the pandemic involves judgement and is dependent upon a number of assumptions by management, including the number of bookings that will be cancelled due to travel restrictions. The Group expects travel to be disrupted and cancellations to continue above normal levels throughout 2021. Sensitivity analysis was performed based on various scenarios, including the duration and severity of travel disruption resulting from the pandemic and the extent to which supplier costs can be recovered or avoided for cancelled holidays. Specifically regarding the proportion of holidays that will be cancelled, management have considered a range of scenarios and believe that the amounts recognised are management's best estimate of the costs the Group will incur.

 

 

In relation to flights cancelled during the financial year, the Group has considered the impact of the pandemic on the recoverability of supplier prepayments including amounts paid to airlines in lieu of flights which have been cancelled. The Group has a legal right to a refund under EU261/2004; the airline has an obligation to refund in the event that the flight is cancelled. EU 261 provides strict guidelines for the compensation of travellers whose flights are delayed, cancelled, or overbooked while travelling in or to EU countries. The rules apply to any flights that originate in an EU country. Where an airline is not forthcoming with a refund owed the Group exercises its chargeback rights are 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.

 

 

 

 

 

 

 

 

 

 

In relation to bookings which are due to travel after the period-end, the primary judgements are as follows:

·       The extent to which holidays will be impacted by the pandemic, either directly due travel restrictions or indirectly due   to reductions in flying schedules.

·     The level of revenue that will be reversed as a result of the cancellations and the extent to which the Group can mitigate costs related to the cancellation, such as flight, hotel and other supplier costs. The Group has assumed the majority of these costs can be recovered where holidays are cancelled by the Group.

 

 

 

 

 

 

 

 

 

 

The total exceptional costs in the period 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. The adjustment also includes provision for legal and professional fees of £0.5m.

 

 

 

 

 

 

 

 

 

2.6

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 2020. 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 2020, but do not have an impact on the interim condensed consolidated financial statements of the Group.

 

3

Revenue

 

 

 

 

 

 

 

Set out below is the disaggregation of the Group's revenue from contracts with customers:

 

 

 

 

 

 

 

 

 

 

 

For the 6 months ended 31 March 2021

 

 

 

OTB

Int'l

Classic

CPH

Total

 

 

 

£'m

£'m

£'m

£'m

£'m

 

Revenue before exceptional cancellations

 

 

 

 

 

 

 

Sales as agent

 

10.0

0.1

-

0.9

11.0

 

Sales 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

 

 

 

 

 

 

 

 

 

*Exceptional cancellations in the 6 months ended 31 March 2021 relate to the impact of COVID-19.

 

 

 

 

 

 

 

 

 

 

 

For the 6 months ended 31 March 2020

 

 

 

OTB

Int'l

Classic

CPH

Total

 

 

 

£'m

£'m

£'m

£'m

£'m

 

Revenue before exceptional cancellations

 

 

 

 

 

 

 

Sales as agent

 

34.4

0.3

-

2.6

37.3

 

Sales as principal

 

-

-

15.5

-

15.5

 

Total Revenue before exceptional cancellations

34.4

0.3

15.5

2.6

52.8

 

Exceptional cancellations*

 

(29.2)

(0.2)

-

(2.0)

(31.4)

 

Total Revenue

 

5.2

0.1

15.5

0.6

21.4

 

 

 

 

 

 

 

 

 

*Exceptional cancellations in the 6 months ended 31 March 2020 relate to the impact of COVID-19.

 

 

 

 

 

 

 

 

 

 

 

For the year ended 30 September 2020

 

 

 

OTB

Int'l

Classic

CPH

Total

 

 

 

£'m

£'m

£'m

£'m

£'m

 

Revenue before exceptional cancellations

 

 

 

 

 

 

 

Sales as agent

 

50.4

0.3

-

3.6

54.3

 

Sales as principal

 

-

-

16.9

-

16.9

 

Total Revenue before exceptional cancellations

50.4

0.3

16.9

3.6

71.2

 

Exceptional cancellations*

 

(34.5)

(0.2)

-

(2.8)

(37.5)

 

Total Revenue

 

15.9

0.1

16.9

0.8

33.7

 

 

 

 

 

 

 

 

 

*Exceptional cancellations in the year ended 30 September 2020 relate to the impact of COVID-19.

 

4

Segmental report

 

 

 

 

 

 

The management team considers the reportable segments to be ''OTB'', "International", ''Classic'' 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. Classic recognises revenue as a principal on a gross basis. See the glossary for explanations of APMs.

 

 

 

 

6 months ended 31 March 2021

 

 

OTB

Int'l

Classic

CPH

Total

 

 

 

£'m

£'m

£'m

£'m

£'m

 

Income

 

 

 

 

 

 

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

26.7

0.1

9.4

0.4

36.6

 

Property, plant and equipment

6.7

-

2.3

-

9.0

 

Investment property

                  -  

               -  

0.6

                -  

0.6

 

 

 

 

 

6 months ended 31 March 2020

 

 

OTB

Int'l

Classic

CPH

Total

 

 

 

£'m

£'m

£'m

£'m

£'m

 

Income

 

 

 

 

 

 

Revenue before exceptional cancellations

34.4

0.3

15.5

2.6

52.8

 

Exceptional cancellations*

(29.2)

(0.2)

-

(2.0)

(31.4)

 

Total Revenue

5.2

0.1

15.5

0.6

21.4

 

 

 

 

 

 

 

 

Adjusted EBITDA

6.2

(0.2)

(0.3)

(0.5)

5.2

 

Share based payments

1.0

-

-

-

1.0

 

Exceptional costs

(33.8)

(0.2)

-

(0.7)

(34.7)

 

EBITDA

(26.6)

(0.4)

(0.3)

(1.2)

(28.5)

 

Depreciation and amortisation

(5.0)

-

(0.6)

(0.1)

(5.7)

 

Group operating loss

(31.6)

(0.4)

(0.9)

(1.3)

(34.2)

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

(0.2)

 

Finance income

 

 

 

 

0.3

 

Loss before taxation

 

 

 

 

(34.1)

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Goodwill

31.6

-

4.6

4.0

40.2

 

Other intangible assets

32.3

0.1

9.4

0.4

42.2

 

Property, plant and equipment

8.5

-

2.2

-

10.7

 

Investment property

                  -  

                 -  

0.6

-  

0.6

 

 

 

 

 

 

 

 

 

 

 

 

Year ended 30 September 2020

 

 

OTB

Int'l

Classic

CPH

Total

 

 

 

£'m

£'m

£'m

£'m

£'m

 

Income

 

 

 

 

 

 

Revenue before exceptional cancellations

50.4

0.3

16.9

3.6

71.2

 

Exceptional cancellations*

(34.5)

(0.2)

-

(2.8)

(37.5)

 

Total Revenue

15.9

0.1

16.9

0.8

33.7

 

 

 

 

 

 

 

 

Adjusted EBITDA

10.6

(0.3)

(1.9)

(1.5)

6.9

 

Share based credit/(charge)

0.6

                  -  

                  -  

                  -  

0.6

 

Impact of COVID-19

(38.7)

(0.2)

(0.1)

(2.7)

(41.7)

 

Other exceptional costs

(0.3)

-

-

-

(0.3)

 

EBITDA

(27.8)

(0.5)

(2.0)

(4.2)

(34.5)

 

Depreciation and amortisation

(9.9)

(0.1)

(1.2)

(0.2)

(11.4)

 

Group operating loss

(37.7)

(0.6)

(3.2)

(4.4)

(45.9)

 

 

 

 

 

 

 

 

Finance costs

 

 

 

 

(0.8)

 

Finance income

 

 

 

 

0.4

 

Loss before taxation

 

 

 

 

(46.3)

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

 

 

Goodwill

31.6

-

4.6

4.0

40.2

 

Other intangible assets

30.1

0.1

8.9

0.3

39.4

 

Property, plant and equipment

8.1

-

1.8

-

9.9

 

Investment property

                  -  

                 -  

0.6

-

0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*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 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£'m

 

£'m

 

£'m

 

 

 

 

 

 

 

 

Marketing

6.1

 

21.1

 

22.8

 

Depreciation

0.9

 

1.0

 

1.9

 

Staff costs (including share based payments)

7.9

 

4.8

 

14.6

 

IT hosting, licences & support

1.1

 

1.3

 

2.4

 

Office expenses

0.4

 

0.5

 

0.8

 

Credit / debit card charges

0.2

 

1.0

 

1.7

 

Insurance

0.6

 

0.4

 

1.6

 

Other

2.2

 

2.2

 

2.0

 

Administrative expenses before exceptional cost & amortisation of intangible assets

19.4

 

32.3

 

47.8

 

 

 

 

 

 

 

 

Impact of COVID-19

0.5

 

4.8

 

4.3

 

Other exceptional costs

-

 

-

 

0.3

 

Amortisation of intangible assets

5.0

 

4.7

 

9.5

 

Exceptional costs and amortisation of intangible assets

5.5

 

9.5

 

 

Administrative expenses

24.9

 

41.8

 

61.9

 

 

 

 

 

 

 

b)

Exceptional operating costs

 

 

 

 

 

 

Exceptional operating costs in the 6 months ended 31 March 2021 are related to the impact of COVID-19 for the provision for legal and professional fees £0.5m.

 

 

 

Exceptional operating costs in the 6 months ended 31 March 2020 are related to the impact of COVID-19 which include provisions against amounts due from suppliers £3.3m, exceptional development spend £1.2m, legal & professional fees £0.3m.

 

 

 

For the year ended 30 September, the impact of COVID-19 consisted of provisions against amounts due from suppliers of £2.2m, exceptional development spend of £0.7m and legal and professional fees of £1.4m. During the year £0.7m of redundancy costs were offset by £0.7m of contributions in relation to the Coronavirus Job Retention Scheme. Other exceptional operating costs of £0.3m relate to legal and professional fees. Other exceptional operating costs of £0.3m relate to legal and professional fees.

 

c)

Adjusted PBT

 

 

 

 

 

 

Management measures the overall performance of the Group by reference to Adjusted PBT, a non-GAAP measure as it gives a meaningful year on year comparison of the Group's performance:

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£'m

 

£'m

 

£'m

 

Loss before taxation

(21.6)

 

(34.1)

 

(46.3)

 

Impact of COVID-19

7.6

 

34.7

 

41.7

 

Other exceptional costs

-

 

-

 

0.3

 

Total exceptional costs

7.6

 

34.7

 

42.0

 

Amortisation of acquired intangibles

2.8

 

2.7

 

5.5

 

Share based payments charge

1.7

 

(1.0)

 

(0.6)

 

Adjusted PBT

(9.5)

 

2.3

 

0.6

 

 

 

 

 

 

 

d)

Share based payments

 

 

 

 

 

 

On 22 December 2020 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 catch up charge to the income statement of £1.5m that reflects the scheme progress to date.

 

6

Taxation

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£m

 

£m

 

£m

 

 

 

 

 

 

 

 

Current tax on loss for the period

-

 

(6.5)

 

(4.0)

 

Adjustments in respect of prior years

-

 

-

 

-

 

Total current tax

-

 

(6.5)

 

(4.0)

 

 

 

 

 

 

 

 

Deferred tax on losses for the period

 

 

 

 

 

 

Origination and reversal of temporary differences

(4.0)

 

0.1

 

(3.5)

 

Total deferred tax

(4.0)

 

0.1

 

(3.5)

 

Total tax credit

(4.0)

 

(6.4)

 

(7.5)

 

 

 

 

 

 

 

 

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 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£m

 

£m

 

£m

 

 

 

 

 

 

 

 

Loss on ordinary activities before tax

(21.6)

 

(34.1)

 

(46.3)

 

 

 

 

 

 

 

 

Loss on ordinary activities multiplied by the effective rate of corporation tax in the UK of 19% (2020: 19%)

(4.1)

 

(6.5)

 

(8.8)

 

 

 

 

 

 

 

 

Effects of:

 

 

 

 

 

 

Impact of difference in current and deferred tax rates

-

 

-

 

1.3

 

Expenses not deductible

0.1

 

-

 

-

 

Adjustments in respect of prior years

-

 

0.1

 

-

 

Total taxation credit

(4.0)

 

(6.4)

 

(7.5)

 

 

 

 

 

 

 

 

The tax charge for the year is based on the standard rate of UK corporation tax for the period of 19% (2020: 19%).

The deferred tax liability has been calculated based on these rates.

 

7

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 period.

 

 

Adjusted earnings per share figures are calculated by dividing adjusted earnings after tax for the period by the weighted average number of shares.

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£'m

 

£'m

 

£'m

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic EPS

 

 

 

 

 

 

Loss after tax for the period

(17.6)

 

(27.7)

 

(38.8)

 

Basic weighted average number of Ordinary Shares (m)

157.4

 

131.2

 

140.2

 

Earnings per share (in pence per share)

(11.2p)

 

(21.1p)

 

(27.6p)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted EPS

 

 

 

 

 

 

Loss after tax for the period

(17.6)

 

(27.7)

 

(38.8)

 

Weighted average number of Ordinary Shares (m)

157.4

 

131.2

 

140.2

 

Earnings per share (in pence per share)

(11.2p)

 

(21.1p)

 

(27.6p)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted basic earnings per share

 

 

 

 

 

 

Adjusted earnings after tax

(7.8)

 

1.8

 

(0.7)

 

Weighted average number of Ordinary Shares (m)

157.4

 

131.2

 

140.2

 

Earnings per share (in pence per share)

(5.0p)

 

1.4p

 

(0.5p)

 

 

 

 

 

 

 

 

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.

 

 

 

 

 

 

 

 

Adjusted earnings after tax is calculated as follows:

 

 

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£'m

 

£'m

 

£'m

 

 

 

 

 

 

 

 

Loss for the period after taxation

(17.6)

 

(27.7)

 

(38.8)

 

Adjustments (Net of Tax at 19%)

 

 

 

 

 

 

Impact of exceptional COVID-19 cancellations

6.2

 

28.1

 

33.8

 

Other exceptional costs

-

 

-

 

0.3

 

Amortisation of acquired intangibles

2.2

 

2.2

 

4.5

 

Share based payment charges*

1.4

 

(0.8)

 

(0.5)

 

Adjusted earnings after tax

(7.8)

 

1.8

 

(0.7)

 

 

 

 

 

 

 

 

* 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 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 period

1.2

-

2.2

1.2

0.4

5.0

 

Disposals

-

-

-

-

-

-

 

At 31 March 2021

16.3

-

10.9

17.2

2.0

46.4

 

 

 

 

 

 

 

 

 

Net book amount

 

 

 

 

 

 

 

At 31 March 2021

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 2019

35.9

40.2

11.6

22.8

6.5

117.0

 

Additions

-

-

2.0

-

-

2.0

 

At 31 March 2020

35.9

40.2

13.6

22.8

6.5

119.0

 

 

 

 

 

 

 

 

 

Accumulated amortisation

 

 

 

 

 

 

 

At 1 October 2019

12.7

-

4.7

13.6

0.9

31.9

 

Charge for the period

1.2

-

2.0

1.1

0.4

4.7

 

At 31 March 2020

13.9

-

6.7

14.7

1.3

36.6

 

 

 

 

 

 

 

 

 

Net book amount

 

 

 

 

 

 

 

At 31 March 2020

22.0

40.2

6.9

8.1

5.2

82.4

 

 

 

 

 

 

 

 

 

 

Brand

Goodwill

Website & development Costs

Website technology

Customer relationships

Total

 

 

£'m

£'m

£'m

£'m

£'m

£'m

 

Cost

 

 

 

 

 

 

 

At 1 October 2019

35.9

40.2

11.6

22.8

6.5

117.0

 

Additions

-

-

4.0

-

-

4.0

 

At 30 September 2020

35.9

40.2

15.6

22.8

6.5

121.0

 

 

 

 

 

 

 

 

 

Accumulated amortisation

 

 

 

 

 

 

 

At 1 October 2019

12.7

-

4.7

13.6

0.9

31.9

 

Charge for the year

2.4

-

4.0

2.4

0.7

9.5

 

At 30 September 2020

15.1

-

8.7

16.0

1.6

41.4

 

 

 

 

 

 

 

 

 

Net book amount

 

 

 

 

 

 

 

At 30 September 2020

20.8

40.2

6.9

6.8

4.9

79.6

 

 

Development costs

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.

 

As a result of the COVID-19 pandemic, the Group has critically assessed the benefits derived from each development project to determine whether the recognition criteria to capitalise under IAS 38 still exists, considerations include:

·       Technical feasibility of completing the project

·       Intention to complete the project and use it, due to shift in priorities

·       Determining a probable future economic benefit

 

The Group concluded that a number of ongoing projects with costs totalling £0.2m no longer meet the recognition criteria due to the impact of COVID-19. The costs have been written off and have been treated as exceptional items (6 months ended 31 March 2020: £1.2m, year ended 30 September 2021: £0.7m).

 

9

Tangible assets

 

 

 

 

 

 

 

 

Fixed asset additions for the period amounted to £nil (6 months ended 31 March 2020: £1.1m, year ended 30 September 2020: £1.2m)

 

 

 

 

 

 

 

 

Disposals in the period amounted to £nil (6 months ended 31 March 2020: £nil, year ended 30 September 2020: £nil)

 

 

 

 

 

 

 

 

Depreciation charge of the period amounted to £0.9m (6 months ended 31 March 2020: £1.0m, year ended 30 September 2020: £1.9m)

 

 

 

 

 

 

 

10

Trade and other receivables

 

 

 

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

Amounts falling due within one year:

£'m

 

£'m

 

£'m

 

 

 

 

 

 

 

 

Trade receivables - net

78.3

 

147.9

 

58.9

 

Other receivables

19.8

 

21.3

 

43.6

 

Prepayments 

2.1

 

2.9

 

2.2

 

 

100.2

 

172.1

 

104.7

 

 

 

 

 

 

 

 

For the 6 months ending 31 March 2021, other receivables includes £11.8m (6 months ended 31 March 2020: £nil) receivable in respect of amounts due from airlines as a result of exceptional COVID-19 cancellations.

 

 

 

 

 

 

 

11

Trade, other payables and provisions

 

 

 

 

 

 

 

 

 

  

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

unaudited

 

unaudited

 

audited

 

 

£'m

 

£'m

 

£'m

 

Non-current

 

 

 

 

 

 

Lease liabilities

3.6

 

4.0

 

3.8

 

Current

 

 

 

 

 

 

Trade payables

78.3

 

181.6

 

80.2

 

Accruals

10.1

 

14.7

 

11.8

 

Lease liabilities

0.4

 

0.4

 

0.4

 

 

92.4

 

200.7

 

96.2

 

Provision

12.3

 

28.6

 

10.9

 

 

104.7

 

229.3

 

107.1

 

 

 

 

 

 

For the 6 months ended 31 March 2021, the £12.3m provision is in respect of expected future cancellations in relation to bookings taken before 31 March 2021. We expect to this provision to be utilised over the next year. Trade payables includes £0.8m in respect of refunds owed to customers, 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.

 

 

 

For the 6 months ended 31 March 2020, the £28.6m provision was in respect of expected future cancellations in relation to bookings taken before 31 March 2020 caused by the COVID-19 pandemic.

 

 

                     

 

12

Trust Account

 

 

 

 

 

 

 

 

 

Trust accounts are restricted cash held separately and only accessible at the point the customer has travelled or booking is cancelled and refunded.

 

13

Financial instruments

 

 

 

 

 

At the balance sheet date the Group held the following:

 

 

 

 

FV Level

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

Financial assets

 

 

£'m

 

£'m

 

£'m

 

Derivative financial assets designated as hedging instruments

 

 

 

 

 

 

 

 

Forward exchange contracts

 

2

 

-

 

4.0

 

0.5

 

Financial assets at amortised cost

 

 

 

 

 

 

 

 

 

Trade and other receivables

 

 

 

98.1

 

169.2

 

25.8

 

Trust account

 

 

 

24.1

 

68.8

 

36.5

 

Cash at bank

 

 

 

30.0

 

17.0

 

102.5

 

 Total financial assets

 

 

 

152.2

 

259.0

 

165.3

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

 

 

Derivatives designated as hedging instruments

 

 

 

 

 

 

 

 

 

Forward exchange contracts

 

2

 

(2.0)

 

-

 

-

 

Financial liabilities at amortised cost

 

 

 

 

 

 

 

 

 

Trade and other payables

 

 

 

(92.4)

 

(200.7)

 

(96.2)

 

Revolving credit facility

 

 

 

-

 

(30.0)

 

-

 

 Total financial liabilities

 

 

 

(94.4)

 

(230.7)

 

(96.2)

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

6 months ended 31 March 2021

 

6 months ended 31 March 2020

 

Year ended 30 September 2020

 

 

 

 

 

£'m

 

£'m

 

£'m

 

Forward Contracts

 

 

 

(2.0)

 

4.0

 

0.5

 

 

 

 

 

 

 

 

 

 

 

The forward contracts have been fair valued at 31 March 2021 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 net 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

·      CLBILS facility of £25m expiring May 2023 (extended to May 2023 on 25 May 2021)

 

 

The interest rate payable on the core facility is equal to LIBOR 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.

 

 

 

 

 

 

 

 

 

 

 

On 25 May 2021 covenant tests were amended up to and including 30 September 2022 to account for the impact of COVID-19 on the Group's results, tests return to normal from 1 October 2022.

 

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 2021, the liabilities for these other credit uses was £4.5m, the amount drawn down at 31 March 2021 was £nil and there has been nothing drawn down post balance sheet date.

                         

 

14

Related party transactions

 

 

 

 

 

 

 

 

 

 

 

 

No related party transactions have been entered into during the period.

             

 

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 European Union.

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 2021 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 2021 and any material changes in the related-party transactions described in the Annual report and Accounts 2020. The Directors of the Company are listed in the Annual Report and Accounts 2020.

A list of current Directors is also maintained on the Company's website: http://onthebeachgroupplc.com.  

The interim report was approved by the Board of Directors and authorised for issue on 15 June 2021 and signed on its behalf by:

Shaun Morton - CFO

15 June 2021

Glossary

 

 

 

 

 

 

APM

Definition

Reconciliation to closest GAAP measure 

 

 

 

 

 

 

Adjusted OTB EBITDA

Adjusted OTB EBITDA is based on OTB operating loss before depreciation, amortisation and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment.

Adjusted OTB EBITDA (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

OTB operating loss

(18.1)

(31.6)

(37.7)

Exceptional costs

7.3

33.8

39.0

Share based payments

1.7

(1.0)

(0.6)

Depreciation and amortisation

2.9

2.8

5.5

Amortisation of acquired intangibles

2.3

2.2

4.4

Adjusted OTB EBITDA

(3.9)

6.2

10.6

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted OTB revenue after marketing cost

 

Adjusted OTB revenue after marketing cost is adjusted revenue after "OTB" online and offline marketing costs.

 

OTB revenue after marketing cost (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

OTB revenue

3.2

5.2

15.9

Adjustment for COVID-19

6.8

29.2

34.5

OTB adjusted revenue

10.0

34.4

50.4

 

 

OTB online marketing costs

(2.3)

(11.7)

(14.2)

 

 

OTB off-line marketing costs

(4.3)

(8.4)

(8.7)

 

 

Total OTB marketing

(6.6)

(20.1)

(22.9)

 

 

OTB revenue after marketing costs

3.4

14.3

27.5

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (loss)/profit before tax

Adjusted (loss)/profit before tax is based on loss before tax adjusted for amortisation of acquired intangibles, and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Group.

Adjusted (loss)/profit before tax (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

Loss before tax

(21.6)

(34.1)

(46.3)

Amortisation of acquired intangibles

2.8

2.7

5.5

Share based payments

1.7

(1.0)

(0.6)

Impact of COVID-19

7.6

34.7

41.7

Other exceptional costs

-

-

0.3

Adjusted (loss)/profit before tax

(9.5)

2.3

0.6

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted (loss)/profit after tax

Adjusted (loss)/profit after tax is based on (loss)/profit after tax adjusted for amortisation of acquired intangibles, and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. This also includes the non-cash cost of the share based payment schemes. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Group.

Adjusted (loss)/profit after tax (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

(Loss)/profit for the period

(17.6)

(27.7)

(38.8)

Share based payments (net of tax)

1.4

(0.8)

(0.5)

Impact of COVID-19 (net of tax)

6.2

28.1

33.8

Other exceptional costs (net of tax)

-

-

0.3

Amortisation of acquired intangibles (net of tax)

2.2

2.2

4.5

Adjusted (loss)/profit after tax

(7.8)

1.8

(0.7)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EPS

Adjusted EPS is calculated on the weighted average number of Ordinary share in issue, using the adjusted profit after tax.

Adjusted EPS

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

 

Adjusted (loss)/profit after tax (£'m)

(7.8)

1.8

(0.7)

 

Basic weighted average number of ordinary shares (m)

157.4

131.2

140.2

 

Adjusted EPS (p)

(5.0)

1.4

(0.5)

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted CPH EBITDA

Adjusted CPH EBITDA is based on CPH operating loss before depreciation, amortisation and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment.

Adjusted CPH EBITDA

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

 

CPH operating loss

(0.9)

(1.3)

(4.4)

 

Depreciation and amortisation

0.1

0.1

0.2

 

CPH EBITDA

(0.8)

(1.2)

(4.2)

 

Impact of COVID-19

0.2

0.7

2.7

 

Adjusted CPH EBITDA

(0.6)

(0.5)

(1.5)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted International EBITDA

Adjusted International EBITDA is based on International operating loss before depreciation, amortization and the impact of certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group.

Adjusted International EBITDA (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

 

International operating loss

(0.3)

(0.4)

(0.6)

 

Depreciation and amortisation

-

-

0.1

 

International EBITDA

(0.3)

(0.4)

(0.5)

 

Impact of COVID-19

0.1

0.2

0.2

 

Adjusted International EBITDA

(0.2)

(0.2)

(0.3)

 

 

 

 

 

 

 

 

 

 

 

 

 

Classic EBITDA

Classic EBITDA is based on Classic operating profit before depreciation and amortisation.

Classic EBITDA (£m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

 

Classic operating loss

(1.9)

(0.9)

(3.2)

 

Depreciation and amortisation

0.6

0.6

1.2

 

 

Classic EBITDA

(1.3)

(0.3)

(2.0)

 

 

 

 

 

 

 

 

 

 

 

 

Exceptional costs

Exceptional costs are certain costs / income that derive from events or transactions that fall outside of the normal activities of the Group. These costs / income are excluded from various performance measures by virtue of their size and in order to better reflect management's view of the performance of the Group.

Exceptional costs (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

Impact of COVID-19

7.6

34.7

41.7

Other exceptional costs

-

-

0.3

Exceptional costs

7.6

34.7

42.0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted International revenue after marketing costs

Adjusted International revenue after marketing costs is based on adjusted International revenue after all marketing costs

International revenue after marketing costs (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

Revenue

-

0.1

0.1

Adjustment for COVID 19

0.1

0.2

0.2

Adjusted Revenue

0.1

0.3

0.3

Marketing costs

(0.1)

(0.3)

(0.2)

 

International revenue after marketing costs

-

-

0.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OTB EBITDA

OTB EBITDA is based on OTB operating loss before depreciation and amortisation.

OTB EBITDA (£'m)

6 months ended 31 March 2021

6 months ended 31 March 2020

2020

OTB operating loss

(18.1)

(31.6)

(37.7)

 

Depreciation and amortisation

5.2

5.0

9.9

 

 

OTB EBITDA

(12.9)

(26.6)

(27.8)

 

 

 

 

 

 

 

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