Package holiday firm On the Beach today said that revenue had fallen two-thirds in the first half of the year due to the coronavirus pandemic.
Prior to the onset of the virus, the group said that it had been trading well, moving into the space left by the collapsed Thomas Cook, with summer bookings up 29 per cent.
The firm also said that finance chief Paul Meehan had resigned and would be replaced by group finance director Shaun Morton.
Due to a combination of cancellations and falling demand, revenue in the first half for On the Beach slipped 66 per cent to £21.4m.
Profit before tax fell £13.4m to £2.3m as the drop in demand was compounded by an increase in offline marketing spending, the firm said.
In total, On the Beach have estimated the cost of the pandemic as £34.7m for the half, primarily in the form of cancellations.
As of the end of March, the firm’s net debt stood at £13m, with a cash position of £50.5m, due to last month’s successful equity raise.
In light of the continued uncertainty over the disease, the company said it would continue to suspend its guidance for the year.
Why it’s interesting
On the Beach said that holiday bookings continued to be depressed, but from June onwards had begun to increase significantly from a low base.
With the government due to announce its plans to get international travel going again through a number of “air bridges” to low-risk countries, the company will be hopeful of a boost to bookings.
In the future, the firm said it was confident that it would be able to challenge for greater market share as the industry recovers from the pandemic.
On the Beach remains the only listed UK travel business that operates a fully ring-fenced customer trust account in which customer funds are held until the point of travel, meaning it does not rely on cash received for forward bookings to trade.
Booking volumes for 2021 are low at the moment, although considerably ahead of where they would normally be.
What On the Beach said
On the Beach chief executive Simon Cooper said: “On the Beach continues to successfully build a leading position as more consumers discover the ease of use and wide choice of beach holidays across our platforms.
“The flexibility and asset light nature of our business model together with our recently strengthened balance sheet and the actions we have taken since the middle of March means we are well placed to capitalise on the inevitable structural changes in the market post Covid-19.
“As a result, the board continues to look to the future with confidence.”