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On the Beach Group (OTB)

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Monday 09 November, 2020

On the Beach Group

Full Year Trading Update and Notice of Results

RNS Number : 5876E
On the Beach Group PLC
09 November 2020

9 November 2020


On the Beach Group plc

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


Full Year Trading Update and Notice of Results


On the Beach Group plc (LSE: OTB.L), the UK's leading online retailer of beach holidays, today provides an update on trading for the 12 months to 30 September 2020 ("FY20") ahead of announcing its Preliminary Results on 10 December 2020.


Following the reopening of airspace in early July, the Group was pleased that its customers were once again able to enjoy international beach holidays, albeit this freedom was short-lived and the subsequent impact on consumer confidence has led to significant reductions in seat capacity over the winter. This position has now been further exacerbated by a four week ban on international leisure travel which began on 5 November.


As a result of the travel restrictions in place and low levels of consumer confidence, the Group experienced a varied trading performance through Q3 and Q4 with booking volumes down 75% and 53% respectively YOY. Due to strong cost control, adjusted profit before tax for the year (which excludes exceptional costs and brand amortisation) is at breakeven levels. Cancellation rates have been in excess of 90% across summer 2020, well above our assumption at the half year. The Group expects it to continue at these levels over the winter. This has led to further exceptional costs of £10m in H2 which the Group now expects to be £45m for the full year.


The Group continues to work hard to refund all customers in cash and in full where their holidays are cancelled. OTB has continued to promptly refund the hotel and transfer elements of cancelled holidays from its fully ring-fenced customer trust account. There have been and continue to be substantial delays in receiving refunds from airlines. The Group continues to pursue these rightful refund claims on behalf of its customers.


Refund status at 6 November 2020

· Total customer refunds made in cash since 15 March 2020 of £160m (£70m hotels & transfers and £90m for flights)

· Monies received from airlines for cancelled flights £79m

· We are awaiting refunds for cancelled flights of £11m, where we have refunded flight costs in advance of receipt, in order to protect the brand and generate customer goodwill


Cash status at 6 November 2020

· On 22 May 2020, the Group received £65m net of fees for a share placing of 19.9% of the Group's share capital

· On this date, following receipt of share proceeds, Group cash was £50.5m

· On 6 November the Group had cash of £44m, excluding customer prepayments which are held in a ring-fenced trust account. This cash figure will further increase as we continue to receive monies from airlines for cancelled flights where OTB has already provided customer refunds

· The Group has access to a £75m credit facility which is undrawn

· As a reminder the Group has a zero revenue cash burn of £2m per month reduced by trading volumes


The Board continues to believe that the strength of OTB's balance sheet and flexible business model means the business is well-positioned to sustain further significant disruption and to grow market share as demand for holidays recovers.



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

"I would like to take this opportunity to thank all of my colleagues for their continued hard work and resilience in the most challenging times to have ever faced the travel industry. It is clear now that the full impact of Covid-19 will be every bit as extreme as any of us could have mapped out at the beginning of the year. Following the overwhelming support we received from our shareholders in May, combined with our ring-fencing of customer prepayments, we are in a strong and debt-free financial position. The Board is confident about the Group's long term strategy and we will continue to look at the increasing number of exciting opportunities to grow our market share both in the UK and internationally."


Analyst and investor conference call

There will be a conference call for analysts and investors at 9:00am GMT today, 9 November 2020, the details of which can be obtained from FTI Consulting.



For further information, please contact:


On the Beach Group plc:

Simon Cooper, Chief Executive Officer

Shaun Morton, Chief Financial Officer 

via FTI Consulting


FTI Consulting:

+44 (0)20 3727 1000

Alex Beagley

Fiona Walker

Sam Macpherson

Holly Ayres


About On the Beach

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


Cautionary statement


This announcement may contain certain forward-looking statements with respect to the financial condition, results, operations and businesses of the Group. 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 Group'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.

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