On The Beach Investors - OTB

On The Beach Investors - OTB

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Stock Name Stock Symbol Market Stock Type
On The Beach Group Plc OTB London Ordinary Share
  Price Change Price Change % Stock Price Last Trade
15.50 4.43% 365.50 16:35:02
Open Price Low Price High Price Close Price Previous Close
360.50 345.00 368.50 365.50 350.00
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Industry Sector

Top Investor Posts

bottomfisher: I am not an expert in internet stocks or the travel industry but met OTB's management at the last AGM and got the impression that they knew what they were doing in a fast-changing industry. After a 30% fall in the share price I am tempted to increase my stake. But the change of chairman is a slight worry. On paper at least, the new chairman Lee Ginsberg, a former CFO of Domino’s Pizza, does not appear to have the same entrepreneurial background as Richard Segal, the outgoing chairman. In addition he owns just 16,300 shares compared with Segal’s 406,680. More important, however, are concerns about how OTB’s revenues are faring in the face of a long hot UK Summer which must have depressed demand for overseas holidays, the impact of Ryanair’s problems on OTB’s customers, and fears about how the various shades of Brexit will affect the company. On past form will have to wait another 2 ½ months before OTB is scheduled to issue its year end trading update which should give an indication of how well this company can cope with far from ideal conditions. Would welcome any thoughts from better informed investors.
lomax99: Something smells, adding in the 450's! From yesterday: On the Beach share slide is buying opportunity for Berenberg (Sharecast News) - The fall in On the Beach's shares is a "compelling" buying opportunity for a structural growth stock, Berenberg analysts said as they reiterated their 'buy' rating on the shares. The online beach holiday company's first half results on 10 May were slightly weaker than expected but the shares decline of more than 25% is overdone, Berenberg said. Management said disappointing growth was caused by higher airline seat prices after the collapse of low-cost carrier Monarch. Air fares have gone back to normal and this should help On the Beach. The company, which lets customers put together their own package holiday from thousands of hotels and flights, is taking market share and is investing in marketing without expenses increasing as a percentage of sales, the analysts said. More than 40% of the UK holiday market is yet to shift online and with cash in the bank On the Beach can grow without much more capital. Investors also have a free option on the company expanding overseas through its nascent international operation. "OTB remains a high-margin, high-return structural growth story, and the pull-back creates a compelling buying opportunity," the analysts said. The analysts kept their 'buy' rating for On the Beach and left their price target unchanged at 600p a share. At the time of publication the share price was 473p.
lomax99: FT: On The Beach shares fly into uncharted territory Online travel agent valued twice as highly as bigger competitors “Cheap holidays. Book today,” shouts On The Beach. The Cheadle-based online travel agent can’t call its stock cheap, though. Shares in On The Beach, which allows punters to build their own trips online, rose above £6 last week before settling back to 555p, still about three times their price at flotation in London in September 2015. That is on the back of a 30 per cent rise in revenues between September 2015 and 2017 and a 96 per cent rise in pre-tax profits. The market now values OTB, founded in 2004 by chief executive Simon Cooper in a bedroom in a terraced house in Macclesfield, at just under £800m, or about 30 times earnings per share forecast this year. The multiples in long-established travel operators Thomson-owner Tui and Thomas Cook are only half as high. And they command networks of shops, cruise ships, hotels and planes to take trippers round the world. They dominate the niche that OTB specialises in, together sharing about 40 per cent of the UK’s online short-haul beach package holiday market. OTB is a titch by comparison with just a fifth of the market and almost no tangible assets. Still, OTB has doubled its market share since 2011 and, unlike Tui and Thomas Cook, it does not make big bets on passengers numbers. It does not pre-book airline seats or have branded hotels. It simply takes sun-worshippers where and when they want to go. That has its advantages — OTB is not worried by occupancy rates or fallow periods when tourists stay home and hoteliers renovate rooms. It has a fraction of the overheads and little exposure to the high-street gloom. Nonetheless, sending 1.5m passengers abroad annually to don thongs and build sandcastles is a volatile business. Bookings hinge on the weather, how flush holiday makers feel and the latest news on sterling and terrorism. Monarch Airline’s collapse last year constrained flight capacity, pushed up seat prices and hit bookings during the winter, prompting analysts to trim OTB’s full-year profit forecasts by £1m or so to about £34m against £28.5m last year. And still OTB shares trade on higher multiples of earnings than many online peers. Its debt plus equity value is 16 times expected earnings — twice that of Expedia, the vast US online travel business. The enterprise value of Hostelworld, the Irish agency that also listed in London in 2015, is 14 times forecast earnings. In fact, OTB’s rating may be closer to Purplebricks, the web-based middleman for housebuyers that floated the same year. Purplebricks’ shares are five times higher now, based on a fourfold increase in revenues to £47m in two years. OTB’s sales growth at about 20 per cent a year looks pedestrian by comparison. The beach holiday business is profitable. Purplebricks is not. But Purplebricks is breaking new ground in the property industry, whereas OTB is just another online travel business like easyJet or Jet2, which has to spend close to half of revenues a year on marketing to establish its name. But to classify OTB as a bucket shop is to miss the point, say OTB fans. It is disrupting the online package holiday market. “OTB is a tech business playing in leisure,” says Berenberg analyst Owen Shirley, who said he believes the company has something even its bigger rivals lack. OTB has built booking technology that enables it to personalise and finesse offers to holiday makers, convert more browsers to bookings, reduce average costs per click paid to search engines and optimise revenues per booking. Now more than 40 per cent of OTB customers bypass search engines to make repeat bookings. That means OTB does not have to work so hard or pay so much for business. It also has more clout to drive better deals with hotels. Operating margins, despite the marketing spend, are a juicy 40 per cent. Rivals will have to spend oodles of cash to catch up while OTB expands, says Mr Shirley. And that is really why OTB is rated so highly. Investors think one of OTB’s bigger deep-pocketed peers such as Expedia or Priceline, now Booking.com, will decide it is easier to buy OTB than build its own proprietary systems to compete in what is after all a small market. OTB’s board seems to think that too. It has NM Rothschild on standby to advise it just in case a bidder should knock on its office door. That is dandy. But it doesn’t make the shares cheap.
ayl30: Amazing to think this was sub 400p at start of month, buy and hold investors have done well on this - I bought @368p
nikki40: Panic investor - what's your predictions about top line growth?
aishah: Hitting new highs here. SCSW out tomorrow. Wouldn't be surprised if they've added it to their portfolio. From last issue: "Numis recently upgraded its forecast to £27m pretax profit (eps 17.3p) for the year to end September, lifting to £35m (eps 22.2p) and £42.8m (eps 27p) for the next two years. Ahead of reporting interims on 11 May, OTB has already said that sales for the latest four months to end January were up 20% year-on-year, which if sustained online would alone lead to further forecast upgrades but OTB has said it sees a stronger second half. I think the shares will be hitting a new peak before results on 11 May, which will undoubtedly create excitement and draw the attention of investors to a company doing better than many probably realise on a valuation that is too low for a market disruptor. Keep buying."
saucepan: ali47fish: OTB is fully listed, hence it is subject to stamp duty. However, it is not yet in the FTSE 250. Its market capital is not great enough. Having said that, it is not too far off: perhaps something for investors to consider as a bonus for the future if/when the share price gets a bit higher and trackers are obliged to buy.
kenmitch: Interesting to see rambutan2 here! I seem to remember you from successful shares in the distant past? Not sure about charts for AIM shares Saucepan, as too often other factors affect the share price far more. e.g unfortunately once the news about OTB spreads, too many private investors could gear up via spread bets. Then those punters have to sell out to pay for losses and margin calls on other holdings. Such situations can be the time to add and not sell. A few plus points for OTB include 70% of package holidays being booked on line, and OTB has a 17% share of the UK online market which is more than Thomas Cook and not too far behind market leader TUI travel. And the online companies haven't the huge overheads of the likes of Thomas Cook with all their staff and shops to be paid for. Also online opportunities are there worldwide for the likes of OTB to exploit and expand, so it is looking promising. Against that a possible negative would be an increase in ISIS terror activity worldwide though since that is just as likely to happen in the Countries people live in, as where they holiday, even that might not have a major effect on prospects for OTB.
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