- Shares up over 14% to 133p
- Reinstates dividend from full year 2024
- Adjusted group revenue up 19% to £171 million
Shares in On The Beach (OTB) were up over 14% to 133p in morning trading as the online package holidays in the sun seller said group adjusted pre-tax profits were up 66% to £23.6 million for the year ending 30 September 2023.
On The Beach said it had 'the best summer ever' and delivered 'record total transaction value (TTV) of £1.1 billion in full year 2023, up 26% year-on-year.’
It was good news for shareholders as the company reinstated its dividend from full year 2024 ‘reflecting the group’s continuing cash generative position and in line with its capital allocation framework.’
Shaun Morton CEO of On The Beach told Shares: 'These set of results show that people are still prioritising holidays despite the current market conditions [ongoing cost-of-living crisis], spending £600 to £650 per person on an average family holiday.'
Morton said long-haul destinations like the Maldives and short-haul destinations like Spain continue to be popular with customers along with 'new destination' Turkey.
‘Turkey has become increasingly popular as well for customers wanting the security of a five-star all-inclusive break,' said Morton.
The company said forward bookings remained strong with ‘sustained significant demand for short and long lead time bookings.’
Shares in On The Beach rise 14% lifted by strong forward bookings
Russ Mould investment director at AJ Bell said: ‘Holiday seller On The Beach is making a comeback after a difficult few years. A strategic push to become bigger in the premium and long-haul beach holiday markets initially spooked investors who feared it would have to stomach considerable marketing costs to get its brand front of mind for travellers. However, the move now appears to be paying off.
'Up until six months ago, chasing the premium end of the market seemed like a no-brainer on the assumption that wealthy people wouldn’t change their spending habits despite higher inflation.
'But in recent months we’ve seen cracks in the luxury goods market which suggest wealthier clientele aren’t completely immune to cost-of-living pressures. Will this trickle down to the premium holiday segment? Judging by On The Beach’s outlook statement, it hasn’t happened.'
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DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
