On the Beach has suffered one of its biggest-ever single-day stock selloffs amid investor fears over a slowdown in holiday bookings. Shares in the Manchester-based business plunged 17 per cent to 140p after the London-listed business said it saw a more than 12 per cent fall in sales to £52.2m for the six months to the end of March.
Financial performance
The firm posted a pre-tax loss of £3.2m for the period, turning around a profit of £4.5m the previous year. On the Beach put the revenue slide down to “an industry-wide later booking profile which is continuing to build as customers book higher value summer holidays closer to departure.”
CEO comments
Chief executive Shaun Morton told City AM: “This was a trend we started to see in the back end of last year – customers booking a bit closer to the departure date. That’s generally a reflection of confidence and what the customer thinks their household balance sheet will look like in the future. So this tells us that customers are less confident at the moment but so far it doesn’t tell us that customers are any less likely to travel.”
Lower holiday prices
Morton said booking prices for flights and hotels were largely unchanged for the peak summer season compared to last year, but “certainly for what people are booking now that’s departing in the next month or so, we are seeing the prices lower this year than last year,” because “there is a lot of capacity in the market at the moment.”
He added that website conversion rates were higher and customers were typically spending less time on the website before buying, indicating that Brits are more likely to research destinations in advance rather than shopping around for deals.
Market context
On the Beach shares have fallen by more than a third since the start of the year amid a wider sell-off of leisure-related stocks hit by travel disruption and soaring fuel prices following the outbreak of the war in Iran in February. Easyjet shares are down by 30 per cent since January, while Ryanair has dropped 22 per cent and Premier Inn owner Whitbread has slid 10 per cent.
