On The Beach Share Discussion Threads

[darrin1471] 13/2/2024 18:40

A counter argument would be that if TUI, Easyjet and JET2 are doing so well selling an end to end package using their own planes and hotels then that may leave less capacity and lower margins for 3rd party sellers like OTB.
OTB has not existed through a full business cycle but I think OTB may do well during a downturn when there is a lot of spare flight and hotel capacity.(ignoring Covid cycle)

[mrnumpty] 13/2/2024 17:36

“ Shares “ magazine reported today that TUI have just reported their best-ever 1st quarter revenue of € 4.3 bn , and € 6 m of EBITDA “ . The magazine quotes TUI as reporting “ higher demand at improved prices and rates “ . Surely , given that OTB don’t have all the costs of TUI , such as retail shops , the prospects for our company should be even better .

[johnrxx99] 02/2/2024 09:17

Oil down OTB up.

[adamb1978] 30/1/2024 08:13

Need to normalise for the seasonality when looking at the cash pile, so can't just take the seasonal peak in Sept.

That said, the cash low point this year I believe will be >0 so net cash throughout the year.

As such, I'm expecting them to reintroduce a divi this year, which should be another positive signal

[johnrxx99] 30/1/2024 02:41

I suspect yesterdays drop was because of oil price and middle east crisis factors.

[hatfullofsky] 29/1/2024 22:21

EV PE is just over 5 !!!! Lets not forget that huge cash pile

[paleje] 29/1/2024 16:26

On 24 Dec the Times Lucy Tobin posted a reco for OTB, her view was positive and nothing much has changed, Shore Capital fair value was 220p. Targets are higher. Truth is they'd already reassured the market in their trading update so the actual results had nothing to add and the share price stalled then started sliding and by Friday broke 160p which I guess would have triggered some stop losses then sells beget more sells. This is a truly rotten market. From the Times article:-

.......But while investors have clearly spotted the sunnier outlook, the shares have further to go. On The Beach is still trading 50 per cent lower than the £5-£6 level seen before the pandemic, and has a valuation of nine times forward earnings, down from a five-year average of 20 times. The firm has announced the return of the dividend next year following a pandemic-imposed pause, while it is cash generative and now debt-free with cash reserves above £75 million.

Investors’ worries about a heavy marketing spend to build the brand in the luxury travel market have also been allayed: marketing costs fell from an elevated 45 per cent to 38 per cent of core UK revenues.

There are decent expansion opportunities for On The Beach, which currently has only a 5 per cent share of Britain’s premium travel sector and a 2 per cent market share in long haul. Shore Capital said that the company is “walking on sunshine”. Katie Cousins, an analyst at the broker, is cautious about the very competitive travel industry, but still reckons a £2.20 share price would provide fair value, pointing out that the company is enjoying “strengthening tailwinds into 2024”, with record forward bookings and “robust” demand.

[adamb1978] 29/1/2024 16:03

No, but you can take the guided PBT and make some assumptions. All that matters really though is the bottom-line, which looks healthy

[sundance13] 29/1/2024 15:18

They haven't signalled lower EBITDA margins have they? Only that they are pushing for volume in certain areas via promotions. Might see weaker gross margin but volume gains and economies might offset those at EBITDA level.

[adamb1978] 29/1/2024 12:24

I dont think its 'narrow' margins though Highlands, though they've suggested that they might be 'narrower' than they otherwise would have been.

In Fy23 EBITDA margins were 16% up from 13.5% the year before, but way way behind pre covid margins. Therefore it depends on whether the baseline for the 'narrower' is against the 13.5% to 16% trend or against 16% or....

Either way, £30m PBT which they've confirmed comfort with suggests around 14.5p EPS so a PE of 10x....

[highlands] 29/1/2024 12:15

For Mr. Market, it's all about profits, so the narrow margins will be a big concern, especially when compared to the competitors.

[kibes] 29/1/2024 12:14

The fall today feels a bit overdone and contrived to me. They are still expecting PBT in 2024 of £30 million, so on a p/e ratio of 10 (very undemanding) that would give a market capitalisation of £300 million or 180p/share for the share price. Of course people who bought in around 100p are probably ready to book some profit above 140p but I don't see any reason to do that.

[adamb1978] 29/1/2024 11:37

Agree JM65, but I'm not sure that they could have said more(?). Too early to say they'd beat expectations...so just confirming on course is fine. The margin comment I also agree with but equally that's an input to the £30m so kind of already included...

[jm65] 29/1/2024 11:14

Thought the update was a bit underwhelming too.Thought they said nothing new but with a hint of sacrificing margins.

[adamb1978] 29/1/2024 10:56

There's a relatively clear upwards channel on the chart starting in Q3 which its reached on the upside 3 times and them come off, and on the downside looks like 146p would be in line with

[adamb1978] 29/1/2024 10:53

Far too early in their financial year to give an 'above expectations' announcement!

PE is low double digits so very undemanding IMO

[alotto] 29/1/2024 10:50

No news, simply OTB is going to deliver £30 millions PBT which is underwhelming.

[adamb1978] 29/1/2024 10:35

Anyone seen any news relating to OTB or the sector today? Sharp decline. Vols at 60% of average volume so far

[johnrxx99] 29/1/2024 09:05

Market did not like that update. They must try harder.

[kemche] 26/1/2024 09:39

I don't recall saying it was a club. You are more than welcome though.

[johnrxx99] 26/1/2024 09:24

kemche - sorry, I didn't know it was a club :-) . Can I join please?

[kemche] 26/1/2024 09:05

"I'm a new investor here."

I couldn't tell.

[johnrxx99] 26/1/2024 09:03

IMO they need to sharpen their act. Looking at the holiday website (not the OTB site), their locations lack details. It may be just me but I've sourced holidays from internet sites for over 25 years and they always show pictures of the hotels, rooms, locations etc. None of that is on thier site.

So it looks like they are relying on agents and dudes walking through doors and talking to people: doh.

If I'm wrong, please tell.

I'm a new investor here.

[adamb1978] 26/1/2024 08:00

Agree with the comments above. Feels a little bit sand-bagged, and I'd prefer that approach to the opposite. Looking for 250p+ in 2-3 years