Package holiday retailer On the Beach saw its shares drop 15 per cent to 107p today, after its narrowing losses and uptick in bookings were not enough to reassure investors.
The Manchester-based travel company saw pre-tax losses shrink from £7m to £6m in the six months before March, as its group revenue rose £73.2m, up 38 per cent on last year.
The increase in revenue was driven by an increase in passenger bookings during the period and a rise in the value of holidays sold, after the pandemic’s end opened up international travel once again.
However, the London-listed firm’s share price spiralled on the announcement, an indication of the company forking out on expensive marketing campaigns.
The results come as travel retailers face ongoing pressure from the cost of living crisis, with Brits cutting down on non-essential spending.
Despite this, the sector has benefitted from a recent boom in summer demand, which is closing in on pre-pandemic levels and has helped mitigate higher costs in other areas.
The company said today that it had “not yet recovered to pre-pandemic levels” in certain segments of the business, as a result of ongoing “cost-of-living pressures.”
Simon Cooper, On the Beach Group’s CEO, said: “I am pleased with the Group’s strong performance in the first half, delivering a record Group Booked TTV and Group revenue performance, up 28% and 38% respectively, driven by increases in both volume of bookings and the average value of holidays sold.”
“The travel sector continues to recover post-pandemic and the Group has experienced significant increases in demand for its holiday product, particularly the Premium 5* offer”
In December, the company announced that Cooper, who founded the business in 2004 would step down and be replaced by CFO Shaun Morton this year.
Cooper added: “I am confident that the right building blocks are in place for Shaun and the team to continue to deliver growth across the business and I remain excited about both the near term and longer term opportunities for On the Beach.”