5th Feb 2021 08:54
(Alliance News) - On the Beach Group PLC on Friday said it expects trading to remain weak until Covid-19 related restrictions are lifted and more vaccines have been administered.
The beach holiday travel agent - whose annual general meeting is scheduled for Friday - said that, for the four months ended January 31, UK traffic, bookings and spend on online marketing activity were down 73%, 83% and 85%, respectively. It expects booking demand to remain weak until conditions change both in the UK and its major travel destinations, noting the weak performance will hurt its first half and full year performance.
However, On The Beach expressed belief it has an opportunity to market share gains and therefore, has continued to invest in technology to enhance its platform capabilities to ensure it benefits when the market recovers, increasing online and offline marketing activity, and delivering good customer service by refunding customers whose holidays are cancelled in advance of receipt of refunds from airlines.
The Manchester-based company noted it has GBP3 million due from airlines, where it has refunded customer flight costs before receiving the funds from airlines, and is owed GBP5 million in additional deposit payments from customers. It also has invested GBP4 million in offline marketing activity to increase awareness of the brand, with most of the amount booked before the January lockdown.
As at the end of January, On The Beach had cash of GBP39 million. It currently has a GBP75 million undrawn revolving credit facility. It highlighted GBP25 million of the facility is provided under the Coronavirus Large Business Interruption Loan Scheme and expires in May 2022, with the remaining GBP50 million expiring in December 2023. The company's monthly cash burn remains at around GBP2 million.
Shares in On The Beach were trading 0.3% higher at 356.14 pence each on Friday morning in London.
By Ife Taiwo; [email protected]
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