On the Beach founder to step down, as group sees return to profit
Manchester holidays group, On the Beach, revealed that chief executive, Simon Cooper, will step down from his role in the next 12 months.
The board said Shaun Morton, currently group chief financial officer, will replace him.
The timing of Mr Cooper’s departure will depend on the recruitment of an experienced CFO to work alongside Mr Morton to deliver the group’s growth strategy. Mr Cooper will remain on the board as a non-executive founder director.
Simon founded On the Beach in 2004 and has grown the business into one of the UK’s leading online beach holiday retailers. He said: “On the Beach has had an amazing journey in the 18 years since I founded it and I feel that now is the right time to hand over the reins to my successor. I am confident that Shaun is the right person to guide On the Beach through the next phase of growth and take advantage of the opportunities that lie ahead.
“Everyone that works in the travel industry has experienced immense change over the past few years and with the travel industry now returning to pre-COVID levels, I have every confidence in On the Beach continuing to be a success and look forward to transitioning to my new founder director role once the right CFO candidate has been selected.”
Shaun Morton said: “I am honoured and excited to take over from Simon as CEO of On the Beach. The travel industry is constantly evolving and I am confident that On the Beach’s flexible model will continue to win market share while delivering excellent value for our customers.”
The business also announced its financial results for the year to September 30, 2022, today, which revealed a strong recovery following the easing of pandemic travel restrictions.
Revenues were £144.1m, compared with £21.2m the previous year, and last year’s £36.7m pre-tax loss was transformed into a £2.2m pre-tax profit.
The group said it is in a very strong financial position with combined cash balances of £133.9m. Group cash, excluding amounts held in trust, was £64.5m (September 30, 2021: £56m), and customer prepayments held in a ring-fenced trust account were £69.4m (September 30, 2021: £39m).
In December 2022, the group refinanced its credit facilities with Lloyds Bank and NatWest. This included cancelling all current facilities and entering into a new facility for £60m expiring in December 2025.
The first quarter of the financial year has historically been the quietest trading period for the group, but it said, notwithstanding the widely reported macroeconomic headwinds, the group has begun the new financial year with a healthier overall forward order book than the equivalent period in 2020, before the onset of the COVID-19 pandemic.
Simon Cooper said: “2022 has been a year of strategic progress for the group. Despite a number of well-documented headwinds faced by the entire industry, including the disruption caused by Omicron in the key booking period of January, the group reported double digit growth in group sales, returned to profitability and exited the year in a strong cash position. This success is largely as a result of the investments we have made in the last 12 months across our brand, technology and customer proposition.
“During the year we developed a truly differentiated customer proposition, successfully positioning the brand to appeal to customers looking at 5* bookings across both short and long haul which led to the group capturing a greater share in the premium segment of the market.
“Our industry-first, customer-focused initiatives, including our free lounge and fast-track security offers have enhanced our customer experience and set us apart from our peers. We are looking forward to expanding this premium offer alongside growing our long haul and B2B offerings which significantly expands our total addressable market.”
He added: “Looking ahead, the visibility of the UK outbound travel industry remains unclear given the tough macroeconomic environment. Whilst winter and specifically January remains a key trading period for us, we have started the new financial year with a healthy forward order book for Summer 2023.
“Pleasingly, 2023 will also be the first year our industry is free from refund credit notes and vouchers which will significantly enhance our captive audience and I am confident that the investments we have made this year leave us ideally placed for the year ahead.”
Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “The latest numbers and outlook from online holidays platform On The Beach should have been cause for celebration. Instead of getting the pina coladas out, however, the mood in the market has been dampened by news of CEO and founder Simon Cooper stepping down.
“The succession plan looks straightforward, which suggests there won’t be too many changes to what has been up until now a highly successful strategy, particularly before the pandemic intervened.
“A very good online platform enabled On The Beach to rapidly take share in the beach holiday market, offering holidaymakers better flexibility than they could get with the big tour operators at a more attractive price.
“On The Beach has benefited from being a purely internet-based business without the extra costs associated with running its own resorts or travel shops.
“However, Morton will have to work hard to ensure the brand remains relevant and affordable for people struggling with highly pressured household finances.”