The shares have a strong debut, rising 11% to 205p, with investors clearly liking the group’s one million-strong customer base and gross revenues of £360 million last year.
Chief executive Simon Cooper says the company, which he founded 11 years ago, has a ‘highly differentiated business model and superior technology platform’. The company lets people book each component of their holiday separately, rather than provided a fixed-cost package of flights and hotels.
On the Beach primarily targets the UK, but it aims to become Europe’s leading online retailer of beach holidays. It entered the Swedish market earlier this year and intends to expand into Norway and/or Denmark in the short-term.
It says its largest competitors are TUI Travel (TUI) and Thomas Cook (TCG), although it is worth noting they are significantly greater in size with respective market caps of £6.9 billion and £1.8 billion.
The group has been profitable from the start and is cash generative yet it plans to reinvest the majority of its profits into the business to support further growth.
The IPO has raised £90.2 million of which £83.8 million will go to the selling shareholders, primarily private equity firm Inflexion.