Holidays group predicts ‘biggest summer ever’ as it basks in strong results
Manchester-based online travel agent, On the Beach (OTB), is basking in a strong results showing for its interim period in the six months to March 31, 2024.
The group achieved an 11% improvement in revenues of £80.8m, while its total transaction value (TTV), showing the holidays booked in the period before cancellations and adjustments, rose 22% to £597.8m.
A pre-tax loss last year of £5.9m was transformed into a £600,000 pre-tax profit.
The TTV figure was driven by increased passenger bookings during the period (+15%) as well as an increase in the average value of holidays sold.
An interim dividend of 0.9p per share has been declared, against no dividend payment the previous year, in line with capital allocation policy, reflecting the board’s continued confidence in the group’s prospects.
Earlier this year the group revealed it had signed a long term distribution agreement with budget carrier, Ryanair, bringing an end to a long running legal battle between On the Beach and its CEO, Michael O’Leary, who referred to the company as “pirates” even after the conclusion of an often bitter two year court case in October 2023 which found in favour of the travel agent.
The case was brought by OTB after it took action against Ryanair regarding refunds to its customers during the pandemic, when the travel industry was severely impacted by restrictions and lockdowns.
Today’s results announcement revealed that the overall market remains strong, underpinned by an additional seven per cent airline capacity to beach leisure destinations for summer 2024. OTB continues to grow at ahead of this rate, supported, in part, by its new partnership agreement with Ryanair which ensures it has secure access to this increase in capacity.
The premium market continues to perform strongly with TTV growth in 5-star holidays within the business to customer (B2C) segment of +41% year on year (YOY), and now represents 34% of the B2C TTV mix (H1 23: 30%).
The value market remains more challenging, reflecting ongoing cost of living pressures, with one per cent TTV growth YOY.
Long Haul (LH) continues to outperform as the group continues to add new destinations. B2C LH TTV is up 61% vs the prior year, and now represents nine per cent of the B2C TTV mix (H1 23: 7%).
The group said trading momentum has continued since the half year date and the summer ’24 forward order TTV is currently 22% ahead of last year.
It said, as a result of these factors, and the new Ryanair partnership, it expects to deliver another record summer and is confident in delivering FY24 profit in line with current consensus expectations.
On the Beach chief executive, Shaun Morton, said: “I am pleased to report another strong set of results, marking our ninth consecutive quarter of record performance.
“TTV was up 22% as we saw strong growth across both volume of bookings and the average value of holidays sold. Our customers are favouring our premium and Long Haul beach holidays, whilst making the most of our enhanced customer perks.
“The signing of our long term distribution agreement with Ryanair was a milestone achievement in the period. Through this partnership, our customers can now secure free and fair access to Ryanair’s seat supply, and we hope this industry-leading collaboration can be used as a blueprint for how the industry can better work together.
“In the two weeks since the partnership went live, demand for Ryanair seats has been encouraging and supports the growth of our value proposition that is enjoyed by families across the UK.”
He added: “Looking ahead, the summer ’24 forward order TTV is currently 22% ahead of last year which, coupled with our continued trading momentum since the half year, means we are confident of delivering our biggest summer ever.”
