On The Beach Share Discussion Threads

[paleje] 17/10/2024 17:45

Nice article JM65, add when/if they drop tomorrow. Sometimes IC articles cause a rise the following week after the magazine weekenders have digested.

There's a paywall but here's the conclusion:-

Analysts at Shore Capital think that if the company can replicate its short-haul success, then it could "more than double its revenue base and potentially Ebitda".

Investors' prior interest in the company has dwindled recently. The shares have risen by almost 60 per cent over the past year, but have fallen by a tenth since January. This has left the valuation at nine times forward consensus earnings compared with a five-year average of 19.2.

Given the opportunity posed by wealthier holidaymakers and the favourable outlook for consumer spending on travel generally, the rating is attractive. City analysts have a mean target price of around 230p, which suggests that there could be some nice gains for investors who buy in at the current price.

[jm65] 17/10/2024 17:06

Disaster!!!...it's been tipped as a Buy in Investor's Chronicle :-)

[undervaluedassets] 14/10/2024 12:30

This is all about the cash position as much it is as anything.

Very successful asset-light business model.

The recent £5million purchase by the company of shares to distribute to staff tells you everything you need to know.

Most companies issue more shares which dilutes the issue. OTB have the spare cash to go into the market and buy stock to give out as incentives to the best staff.

[jm65] 10/10/2024 07:08

At last!

Over £1.50!

Wonder if it will last???

:-)

[jm65] 08/10/2024 07:51

But then again...
Ryanair aren't going to publicly say "we're bidding for a holiday company next week" are they :-)

[jm65] 08/10/2024 07:31

I think that should they get around to it OTB would probably be on Ryanair's target list. Makes sense to buy an already established holiday business and OTB is partially integrated into their systems already.

It's just a matter of if/when this may happen. The Management at Ryanair have already made comments along the lines of any move into the holiday business may be years away.

[1goldfish] 08/10/2024 07:27

Makes you think that perhaps Ryan air should bid for OTB. Then it has its own OTA, keep the brand and all the sales in house

[adamb1978] 07/10/2024 21:07

Good spot Boon. Thanks for sharing

[boonkoh] 07/10/2024 20:35

I think it's probably smart money knowing the Love Holidays deal will be announced soon, and set a high reference price and show OTB to be massively undervalued.I wrote more about it in a Substack note:https://substack.com/@boonkoh/note/c-70517924(I hold in the Boon Fund)

[jm65] 07/10/2024 19:39

Maybe the buyback is bolstering the price?

[highlands] 07/10/2024 18:03

Why the sudden rise in so today?

[undervaluedassets] 04/10/2024 12:21

proof.. if proof were needed..that they are rolling in cash

purchasing £5 million of stock to award to employees.

most companies do this by issuing more stock. This is much better for valuation metrics as it does not dilute the number of shares outstanding

[adamb1978] 01/10/2024 09:38

I'm bullish on OTB but as posted before, the £95m is misleading as its the year-high cash balance which they goes quite negative at mid-year.

Put another way, if they distributed all that £95m to shareholders then at the mid year point they'd be highly levered for this sort of business. From memory, they'd have been around £140m in debt if they'd distributed that cash (being the mid year debt point plus another £95m debt) set against £40m EBITDA. The share price wouldn't take too kindly to that!!!

[alotto] 01/10/2024 05:59

Cash of 95 is relative to the current liabilities. If all current asset is near the current liabilities then you can forget about the cash in the bank
I'm not sure if that 95 was built with the down payments.

[weemonkey] 30/9/2024 07:40

question.

Is there another listed company of less that £250 million market cap who has built a cash pile of £95 million?

And who has grown that cash pile for the last 3 years ?

And that have no debt?

Well, I cant find one..

[boonkoh] 27/9/2024 11:55

Love holidays up for sale.... Could be worth £1bn??https://news.sky.com/story/six-nations-backer-cvc-plots-trip-with-loveholidays-13222876

[weemonkey] 27/9/2024 11:13

I wonder how many FTSE 250 companies have £95 million in cash and no debt ?

hmmm

Tell you what..

There will be a ton of FTSE 250 companies that DON'T have £95 million cash .. never mind th e no debt

[adamb1978] 27/9/2024 07:50

The dividend will help attract some investors, I agree.

It should be a 2%-2.5% yield based on the current price so not nothing albeit not why I hold.

Helpful in a display of confidence and some funds cant hold companies which dont pay dividends either

[undervaluedassets] 27/9/2024 03:24

Yup. All this company needs is a little faith from investors.

The fundamentals are all in place now: growth metrics, cash, and outlook are all good.

And now there will be a divi.

[paleje] 26/9/2024 14:46

Peel Hunt have a buy rating with 300p target.

[adamb1978] 26/9/2024 13:57

Its mis-leading if you view that cash balance as being somewhat spare cash. They use it all up (and more!) over the 6 months to March buying capacity and funding opex.

I think this is a good company, hence being an investor, and think that the balance sheet is fine...but they do need the cash for the working capital swings during the year.

Obivously as the cash balance grows they might get to the point of having surplus cash, but you need to look as much at the mid year cash/debt position as you do at the year end position in order to judge that

[undervaluedassets] 26/9/2024 12:58

I hardly think that is misleading. And they do not need a lot of cash. They have an asset-light business model with clever tech, clever people and no doubt a bit of AI to run their pricing algorithms.

[adamb1978] 26/9/2024 12:36

yes, but they need that cash to fund working capital for the next season.

I think OTB is cheap, but the end of year cash position is a little misleading. Its a big like some retailers who have a January year end given that their cash balances are high after the xmas season