TIDMOTB
RNS Number : 0829O
On the Beach Group PLC
05 February 2021
5 February 2021
On the Beach Group plc
("On the Beach" or the "Group")
AGM Trading Update
On the Beach Group plc (LSE: OTB.L), the UK's leading online
retailer for beach holidays, today issues the following trading
update for the four months to 31 January 2021, in advance of its
Annual General Meeting to be held today.
As a result of the four week lockdown in November and the
subsequent UK-wide lockdown that commenced in early January 2021,
combined with further reductions in winter flying programmes,
consumer demand for forward holidays has remained very weak with UK
traffic, bookings and spend on online marketing activity across the
first four months of the financial year down 73%, 83% and 85%
respectively. The Group has responded prudently to the latest
travel restrictions by taking holidays off-sale that depart prior
to 1 May 2021. We expect booking demand to remain weak until these
restrictions are lifted and vaccine deployment is more widespread,
both in the UK and our major travel destinations, which will impact
H1 and full year performance.
The Group continues to believe that the forthcoming period
offers an unprecedented opportunity to drive market share gains and
as a result has continued to invest in the areas that will drive
the largest benefits in the medium term, including:
-- talent and technology to enhance its core platform
capabilities to ensure that we are best placed to benefit when the
market recovers;
-- delivering best-in-class customer service by refunding
customers whose holidays are cancelled in advance of receipt of
refunds from airlines and continuing to support a strong low
deposit offering;
-- building direct hotelier relationships by continuing to pay
our valued partners promptly; and
-- increasing share of voice through online and offline
marketing activity, driving brand awareness with our Everything's
Better campaign which commenced on 25 December 2020 and can be
viewed at https://www.onthebeach.co.uk/ready-when-you-are .
The Group's cash position at 31 January 2021 was GBP39m, which
reflects:
-- GBP4m investment in offline marketing activity to increase
awareness of the brand. The majority of this spend was booked prior
to the January lockdown. Subsequent investment has been scaled back
however the Board feels it is important to maintain a level of
brand awareness in the current environment;
-- GBP5m owed by customers in additional deposit payments; and
-- GBP3m due from airlines where we have refunded customer
flight costs in advance of receipt from airlines, in order to
protect the brand and generate customer goodwill.
The Group has a GBP75m undrawn revolving credit facility and the
monthly cash burn remains c.GBP2m in the event that no revenue is
received. GBP25m of the facility is provided under the Coronavirus
Large Business Interruption Loan Scheme ("CLBILS") and expires in
May 2022. The remaining GBP50m of the facility expires in December
2023.
In light of the continued market uncertainties, the Group is
maintaining its suspension of full year guidance for FY21 until
such time that there is more certainty over the timing of, and
extent to which travel can return to normal.
Simon Cooper, Chief Executive of On the Beach Group plc,
commented:
"The first four months of our financial year have seen differing
tiering levels across the UK, followed by the current nationwide
lockdown and ban on international leisure travel. Clearly this has
and continues to impact booking volumes and the Board believes that
booking volumes will remain weak through H1 and into H2. Following
the prudent activities undertaken in the last financial year, the
Group remains in a strong and debt-free financial position. The
Board is confident about the Group's long term strategy and we will
continue to evaluate the growing range of exciting opportunities to
build our market share both in the UK and internationally."
For further information:
On the Beach Group plc via FTI Consulting
Simon Cooper, Chief Executive
Officer
Shaun Morton, Chief Financial
Officer
FTI Consulting Tel: +44 (0)20 3727 1000
Alex Beagley
Fiona Walker
Sam Macpherson
Holly Ayres
About On the Beach
With over 20% share of online sales in the short haul beach
holiday market, we are one of the UK's largest online beach holiday
retailers. We have significant opportunities for growth and a
long-term mission to become Europe's leading online retailer of
beach holidays. By using our innovative technology, low-cost base
and strong customer-value proposition to provide a structural
challenge to legacy tour operators, we continue our journey to
disrupt the online retail of beach holidays. Our model is
customer-centric, asset light, profitable and cash generative.
www.onthebeachgroupplc.com
Cautionary statement
This announcement may contain certain forward-looking statements
with respect to the financial condition, results, operations and
businesses of the Company. Forward looking statements are
sometimes, but not always, identified by their use of a date in the
future or such words as 'anticipates', 'aims', 'due', 'will',
'could', 'may', 'should', 'expects', 'believes', 'intends',
'plans', 'targets', 'goal' or 'estimates'. These forward-looking
statements involve risk and uncertainty because they relate to
events and depend on circumstances that may or may not occur in the
future. There are a number of factors that could cause actual
results or developments to differ materially from those expressed
or implied by these forward-looking statements, including factors
outside the Company's control. The forward-looking statements
reflect the knowledge and information available at the date of
preparation of this announcement and will not be updated during the
year. Nothing in this announcement should be construed as a profit
forecast.
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END
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