Release Date: December 03, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• On The Beach Group PLC (LSE:OTB) reported a 15% increase in sales, reaching 1.2 billion, and a 13% growth in volume, marking another record summer.

• Adjusted profit before tax grew by 25% to 31 million, while reported profit before tax increased by 84% to 26.5 million.

• The company ended the year with a strong cash position of 96 million, excluding 140 million held in a trust account.

• A share buyback of up to 25 million has been initiated, reflecting a strong balance sheet and disciplined investment approach.

• The company has set a medium-term ambition to more than double its business size to 2.5 billion in sales and 85 million in adjusted profit before tax.

Negative Points

• Adjusted revenue per booking was slightly down compared to the prior year, impacted by a deflationary environment in the second half of the year.

• There was significant volatility in airfares due to excess capacity from low-cost carriers, affecting revenue growth.

• The company incurred 3 million in costs related to keeping Ryanair on sale, which were not adjusted in the financial results.

• Group headcount decreased by 14% due to changes in B2B operations and increased automation, which may impact employee morale.

• The company faces challenges in maintaining EBITDA margins at pre-pandemic levels, despite improvements in marketing and overhead efficiencies.

Q & A Highlights

• Warning! GuruFocus has detected 5 Warning Sign with LSE:OTB.

Q: Can you elaborate on the financial performance and key metrics for the year? A: The company reported sales of 1.2 billion, a 15% increase from the previous year, with a record summer showing 13% volume growth. Adjusted profit before tax rose by 25% to 31 million, and reported profit before tax increased by 84% to 26.5 million. The business ended the year with 96 million in cash, excluding 140 million held in a trust account. A final dividend of 2.1p per share was declared, totaling 3p for the year. Additionally, a share buyback of up to 25 million has commenced. (Unidentified_1)

Q: What changes were made to the revenue recognition policy, and how did it impact the financials? A: The revenue recognition policy was simplified, with all revenue now recognized on an agency basis at the time of booking. This change, along with a focus on driving efficiencies in marketing and overhead spend, contributed to a 14% growth in statutory revenue. Adjusted revenue was shown after deducting the refund settlement with Ryanair. (Unidentified_2)