Revenues plunge at Covid-hit On the Beach
By Abigail Townsend
Date: Tuesday 15 Jun 2021
(Sharecast News) - On the Beach reported a plunge in half-year revenues on Tuesday, as Covid-19 travel restrictions continued to weigh heavily on the sector.
Sales at the online beach holiday specialist came in at £4.4m in the six months to 31 March, a 79% slump, while the adjusted pre-tax loss was £9.5m, compared to a pre-tax profit of £2.3m a year previously.
Adjusted revenues, which include the impact of Covid-related cancellations, were £12.0m against £52.8m a year previously.
The statutory pre-tax loss narrowed from £34.1m to £21.6m, however, on reduced costs and administrative expenses.
OTB attributed the half-year performance to "suppressed consumer demand".
"While the 2021 full-year was not expected to be a normal year for travel, the industry and the UK population did not foresee an extended lockdown and travel ban for the first six months of calendar 2021," it said.
"This has had a material impact on OTB's trading performance, due to low levels of consumer demand and a significant number of cancellations."
After the government unveiled its traffic light system for international travel in May, OTB announced it would extend its off-sale period for holidays to 31 August. With the exception of Portugal, which has since had its green status revoked, all major European holiday destinations were classified as amber.
OTB said it would return to selling summer 2021 holidays "as soon as there is more certainly that new holidays booked will take place without disruption or cancellation."
Booking volumes for next summer "remain low", it added, but were "significantly ahead of normal trading patterns".
Simon Cooper, chief executive, said: "The board believes that On the Beach is well-positioned to grow market share as demand for holidays recover.
"While this recovery is likely to take some time, and the consumer environment will continue to be challenging, the differentiating features of our business model, combined with the actions taken during the pandemic, position us very strongly for successful and sustained growth as we move out of this extended period of disruption."
He also welcomed the recent decision by the Competition and Markets Authority to investigate if airlines had broken consumer law by refusing to provide refunds on flights that customers could not legally take because of = restrictions.
"On the Beach has long championed the rights of both its customers and wider holiday consumers," he said. "It is pleasing to see increased regulatory scrutiny on the travel sector."
As at 1230 BST, shares in OTB were down 1% at 354.12p.
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