- Group pre-tax profit increases 84% to £26.5 million
- Up to £25 million share buyback programme launched
- Shares up 67% over the past year
Shares in On The Beach (OTB) jumped 15% to 197p in morning trading after the online package holiday provider reported record bookings, rising profits, a share buyback scheme, and the return of its dividend.
‘Winter 2024 volumes are up 25% year on year, as customers seek winter sun or a European city break, and we anticipate Summer 2025 to be significantly ahead of 2024, with bookings to date supporting this,’ chief executive Shaun Morton said in a statement.
The company reported record TTV (total transaction value) for the third consecutive year, up 15% year-on-year at £1.2 billion. Going forward, On the Beach hopes to achieve TTV of £2.5 billion in the medium term and EBITDA (earnings before interest taxation depreciation and amortisation) of £100 million.
Revenue for the year ending 30 September 2024 rose 14% to £128.2 million, boosted by high summer 2024 passenger numbers.
SHARE BUYBACK ANNOUNCED
There was good news for shareholders as On The Beach announced a share buyback programme up to £25 million ‘reflecting the board’s confidence in the strategy and business model.’
The company also announced a full year 2024 final dividend of 2.1p per share taking the full year payout to 3p per share, the first regular income for shareholders since dividends were axed in 2020 because of the pandemic.
On The Beach CEO Shaun Morton said: ‘This performance was driven by a combination of initiatives, including the successful integration with Ryanair (RYAAY:NASDAQ), ongoing investment in our proprietary technology platform and further enhancements to our differentiated customer proposition.
‘The partnership has facilitated an improved customer journey for those booking Ryanair flights as part of an On The Beach package, whilst enabling increased operational efficiency and a greater focus on areas of strategic value.’
EXPERT VIEW
Dan Coatsworth, investment analyst at AJ Bell said: ‘On The Beach sells beach holidays online and earns a commission on these sales. It has no physical sites and doesn’t own planes, which means it does not need to employ lots of capital to grow. Its main costs lie in marketing. The company also sells holidays offline through third-party travel agents.
‘What’s put the market in a sunny mood are the company’s ambitious medium-term targets for sales, earnings and margins. The company has experienced slowing demand at the more budget end of the market, showing that pressures on household spending are having a negative impact, although this represents a decreasing share of the company’s overall business.
‘On The Beach is looking to boost its exposure to long haul beach holidays and has begun serving customers in the Republic of Ireland. Targeting city breaks is also seen as an opportunity.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Steven Frazer) own shares in AJ Bell.
