On The Beach Share Discussion Threads

[hamhamham1] 27/2/2024 08:27

They say 2024 will be even more of a record summer, so I see no reason why it won't hit previous highs of a couple of years ago. 500p area.
No debt, ever increasing cash levels in bank. Even after deducting the ring-fenced customer monies.

[blueball] 27/2/2024 08:24

162p today easy money.

[hamhamham1] 27/2/2024 08:05

Make that 156p now!

[hamhamham1] 27/2/2024 08:02

I should aim higher in life :)
(152p open)

[blueball] 27/2/2024 07:15

How right you are great news today.

[hamhamham1] 27/2/2024 07:02

Up we go, albeit to only the 145-150p area (initially today).
This should be 3 quid, but time will get us there, for now, we can wait, in comfort. in the airport lounge

[hamhamham1] 27/2/2024 07:02

RNS Number : 5207E
On the Beach Group PLC
27 February 2024

27 February 2024



On the Beach Group plc

("On the Beach" or the "Group")



Partnership with Ryanair



On the Beach Group plc (LSE: OTB.L) is delighted to announce that it has signed a long-term distribution agreement with Ryanair Holdings ("Ryanair").

The agreement represents a transformational shift in OTB's relationship with its most significant low cost carrier. It enables OTB customers to seamlessly access Ryanair's low fare flights as part of their holiday packages with full price transparency, whilst continuing to benefit from OTB's flexible payment plans, customer perks (including free lounge and fast track), and ATOL protection. In summary, the agreement:

- secures OTB free and fair access to Ryanair seat supply;

- facilitates a smoother customer journey when booking Ryanair flights as part of an OTB package;

- simplifies OTB operations while enabling greater focus on areas of strategic value; and

- enables the parties to move on from the outstanding litigation and focus efforts on building the partnership

Shaun Morton, CEO of On the Beach Group plc said:

"We are excited to have entered into this transformational partnership with Ryanair. This will improve the booking and travel experience for our customers selecting Ryanair flights, while ensuring we can continue to provide customers with best value package holidays. We will continue our campaign to safeguard consumer choice in the travel sector and the signing of this agreement marks a significant milestone in On the Beach's journey, as we strive to do the best for our customers. Importantly, this agreement enables both parties to move on from outstanding litigation and we look forward to working closely with our new partner."

Ryanair's Dara Brady said:

"Ryanair is pleased to announce our latest partnership with leading OTA, On the Beach. This new deal will see Ryanair partner with its fourth approved OTA partner. On the Beach customers can now book Ryanair flights, seats, and bags as part of their holiday package with the guarantee that they will have full price transparency of Ryanair products (without any overcharges), and that they will receive any information regarding their flight directly from Ryanair as well as having direct access to their booking through their myRyanair account."

[adamb1978] 26/2/2024 20:35

Paleje - I think its just because of that pricing comment in the last update. It distracted heavily from the profit guidance

[alotto] 26/2/2024 16:45

OTB is benefitting from a lot of headwind. I guess investors are on the sidelines until there is visibility on revenue consistency, perhaps growth.

[paleje] 26/2/2024 16:20

Set against their mcap it compares with others in sector, better than some. If you strip the cash out it is superior to most so unless there's something they're not telling us the share price seems inexplicably low.

[alotto] 26/2/2024 15:39

Higher revenue but I bet the margins will be lower then, overall possible dent in profit margins. I am surprised OTB is not back to the 100p mark. PBT (£30M) was quite disappointing in the last trading update.

[darrin1471] 26/2/2024 14:59

Ryanair warns of 10% higher flight prices due to new Boeing planes being delayed leading to constrained capacity.


Could lead to higher revenue and lower volumes for OTB

[alphahunter] 15/2/2024 17:49

Quite the opposite: the more fixed cost, the stronger the leverage effect.

[adamb1978] 15/2/2024 08:54

Thanks Paleje. I'm not so worried about OTB's profitability given their recent guidance confirmed that whatever weakness there is at gross margin level, there isnt any at PBT

Nice to see the sector continuing to perform well

[paleje] 15/2/2024 08:28

Jet2 have updated this morning highest growth area for them is package holidays with summer looking good, they do mention input costs are increasing but no specifics and they are currently mitigating with slightly higher prices. Overall it's confident and they'll update again in April.

[darrin1471] 14/2/2024 20:35

Bloomberg) -- Ryanair Holdings Plc is nearing a deal to provide flights for package holiday giant TUI AG, according to people familiar with the matter, striking a fresh blow in its battle against online travel agents.

A Ryanair partnership with the German travel company could be announced as soon as Thursday, one of the people said, asking not to be named before a deal is final. The talks with TUI follow an agreement Ryanair reached in January with online travel firm Loveholidays, under the condition that no mark-ups were allowed on the Irish discounter’s flights, the person said.

A deal would give travelers another way to bypass online agents and arrange holidays on Ryanair flights. The low-cost carrier’s chief executive officer, Michael O’Leary, has branded sites such as Booking.com and Lastminute.com as “pirates,” and called on regulators in UK and the European Union to halt their practice of adding fees for services such as changes to a Ryanair itinerary.

The online aggregators act as middlemen arranging for flights, hotels, car rentals and other travel services. They have accused Ryanair, Europe’s largest discount airline, of abusing its market dominance by disrupting their services. In December, many of the sites unexpectedly dropped Ryanair flights from their listings.

The move caused a drop in demand at Ryanair, which has since started to reach separate deals with individual sites. In addition to Loveholidays, Ryanair has also sealed a partnership with Kiwi.com.

TUI, Europe’s biggest package-tour company, operates its own flights, as well as cruises and hotels. It has faced recent competition from EasyJet Plc, whose own package-tour business has been rapidly expanding.

An alliance with Ryanair would allows TUI to tap the Irish airline’s broad network for to offer more flights to its customers. It currently operates its own airline fleet, and allows customers to choose flights from other carriers, including EasyJet, Norwegian Air Shuttle ASA, Eurowings and Wizz Air Holdings Plc.

TUI Chief Executive Officer Sebastian Ebel said on Tuesday that the company wanted to close the “gaps” in its offering by adding more flights from discount carriers.

[adamb1978] 14/2/2024 10:19

Yep, sorry, wasnt trying to refer to the specifics in what you said. More just that generally, both in terms of positive and negatives about the strategic position of companies, its very very hard to have a true edge and really know what will drive the price up or down. Need to rely on the company's disclosures, and make an assumption about the truth!

[elsa7878] 14/2/2024 08:46

Hi Adam,

I'm not trying to talk it down just providing some reasons as to why OTB shares are static/ falling when all other airlines and holiday company's shares are rising....

Might be of help to some....

[adamb1978] 14/2/2024 08:34

Hi Elsa

Thanks for the post and all the best for wherever you deploy your capital afterwards.

I try to apply a large degree of strategic ignorance partly because having spent a large chunk of my career in two FTSE 100 companies, I've seen how badly wrong analysts and investors can get the real drivers for business performance and magnitude of various threats (and similarly also upsides). Part of this due to poor research, and partly actually that companies are organic beasts and adapt to circumstances.

As a result, I tend to focus on the numbers and things I can see rather than trying to be an industry expert in the range of things which I invest in, which would be impossible.

On the margin threat, so I agree that gross margins seem to have come down based on the recent trading statement, but if you look at their guidance for PBT that has increased at a similar rate or faster than transaction volume. So if gross margins have come down, it follows that they've protected that via opex control (ie increasing opex less than turnover growth). I think its something which they could have worded better in the TS.

See you around

Adam

[elsa7878] 14/2/2024 08:25

Reasons for caution.

1) Competition in the OTA space is fierce and while OTBs growth rates have been impressive, others eg Love Holidays are growing much faster and have a much higher planned growth rate (95%).
2) OTA's are seeing increased access resistance from airlines eg Ryanair. OTA's model is very sensitive to seat availability.
3) EasyJet holidays now making over £100m PAT profit and with it's much deeper pockets can easily outspend OTB. It also planning huge capacity increases of circa 35%.
4) OTB sacrificing margin for bookings. Is that sustainable (see 3 above). Consensus estimates for OTB came down throughout substantially in 2023 while they were going up for easyJet, Jet2 etc.
5) Airlines and tour operators that control inventory benefit from higher fare prices through higher operational gearing. OTA's package fares at cost so higher fares would normally mean lower bookings.

[adamb1978] 14/2/2024 08:03

Hi Darrin

On the multiple, when I look at:

- 10% top-line growth forecast for Sept-25 and Sept-26
- very good ROE/ROCE
- net cash and probably even net cash at their seasonal low point this year
- asset light business model so any further cash generation can go to shareholders

....even if it doesnt get back to the high-teens, 10x just looks wrong. Hence my valuation yesterday which I based on 15x, and getting to c.100% upside here over 2-3 years.

Risk/reward balance here looks hugely favourable in my view.

Adam

[aishah] 14/2/2024 07:41

TUI record results a good read across for OTB imo.
Now that TUI are moving their UK listing to Germany, maybe some money will flow here.

[darrin1471] 13/2/2024 21:56

OTB used to trade in the high teens when they were on a high growth multiple. Historically higher revenue was due to higher volumes of travelers rather than today where higher revenue comes from higher average prices.

"Group cash, excluding amounts held in trust, of GBP75.8m (30 September 2022: GBP64.5m)"
So group cash grew £11.3m in 12 months compared to a market cap of £241m with no dividend paid.

"The cash flow profile of the Group is seasonal with approximately 50% of customers travelling in the period June to August and therefore in a normal year the cash flows experience a trough prior to June and a peak following this. As a result the available credit facilities are only utilized for a short period, in FY23 being between January and June."
So when valuing OTB do you take the £76m cash they have at the end of September or the debt they owe at the end of May (up to £60m banking facility). Average cash or debt could be a fair figure but I don't see that figure. I would of thought OTB has a small cash balance when averaged out over the year.

[mrnumpty] 13/2/2024 20:12

Adam and Darrin . Thanks for the intelligent comments . However , don’t forget that OTB have 46p ( £ 76 m ) per share in net cash so ex-cash that’s about £ 1.00 a share which , accepting Adam’ statement of 19p EPS forecast for Sept 2026 , that gives a forward p/e of about 5 .

[adamb1978] 13/2/2024 19:24

OTB are performing very well at the moment based on their recent TS. Its easy to hypothesise about impact of one company on another but very very easy to get those wrong.

They're on a PE of 10x Sept-23 and have net cash even at the seasonal low point I believe now. They used to trade on high-teens.

Investing is about probability weighted bets rather than anything ever being a sure thing, and IMO that sort of multiple for OTB gives a great chance of decent gains via earnings growth combined with multiple appreciation. I think there's 100% upside potential in 2-3 years

19p EPS forecast for Sept-26. Put that on 15x and you get 285p vs 145p now (plus add in 3p-4p divis p.a. too)