On the Beach Group PLC AGM Trading Update (0829O)

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: [phone] 
   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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February 05, 2021 02:00 ET (07:00 GMT)