Stockport-based online travel company, On The Beach, has reported the firm expects pre-tax profits to break even in its Full Year Trading Update.
On The Beach’s latest trading update covers the 12 months to the 30th September 2020, and include the impact of the coronavirus pandemic on the travel sector. In April the firm reported that it went into the pandemic in a strong financial position to see through the crisis, which has seen holidays and flights cancelled worldwide.
Following the reopening of the sector from July, the company was once again able to continue to sell holidays, however, it reports that the pandemic’s impact on consumer confidence had affected sales. Going into the coming financial year, the travel ban imposed from 5th November has also hit sales.
Through the April to June and July to September quarters, booking volumes were reduced by 75% and 53% respectively year-on-year. During the summer months, cancellation rates have also been in excess of 90%. Cost control measures, including accessing government support schemes such as furlough, have however allowed On The Beach to maintain pre-tax profits at break even levels.
On The Beach has been able to maintain its balance sheet performance through the availability of revolving credit schemes, and through ensuring monies from customer bookings are ring-fenced, allowing the firm to issue refunds without impacting operating finances. The Stockport travel firm has however reported that there have been delays in securing refunds from airlines.
Simon Cooper, Chief Executive of On the Beach Group plc, commented:
” would like to take this opportunity to thank all of my colleagues for their continued hard work and resilience in the most challenging times to have ever faced the travel industry. It is clear now that the full impact of Covid-19 will be every bit as extreme as any of us could have mapped out at the beginning of the year. Following the overwhelming support we received from our shareholders in May, combined with our ring-fencing of customer prepayments, we are in a strong and debt-free financial position. The Board is confident about the Group’s long term strategy and we will continue to look at the increasing number of exciting opportunities to grow our market share both in the UK and internationally.”