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05 Feb 2021 | 07:48

On the Beach warns on continued weak bookings

(Sharecast News) - On the Beach said it expected holiday bookings to stay subdued into the second half of 2021 as the online vacation retailer reported tough trading caused by the Covid-19 crisis. Consumer demand for forward holidays has remained "very weak" in the four months to the end of January, On the Beach said in a statement before its annual general meeting. UK traffic fell 73%, bookings were down 83% and online marketing spending plunged 85% as the UK underwent lockdowns and airlines cut flights, it said.

On the Beach gave no financial guidance because the outlook is too uncertain but it said booking demand would stay weak until restrictions are lifted and vaccine take-up is greater with an impact on first-half and annual results.

Simon Cooper, On the Beach's chief executive, said: "The first four months of our financial year have seen differing tiering levels across the UK, followed by the current nationwide lockdown and ban on international leisure travel. Clearly this has and continues to impact booking volumes and the board believes that booking volumes will remain weak through H1 and into H2."

At the end of January the group had £39m of cash and an undrawn £75m revolving credit facility expiring in 2022 and 2023. With no revenue the business burns through about £2m a month, it said.

On the Beach said its cash position reflects £4m investment in offline marketing activity booked before the January lockdown, £5m owed by customers in additional deposit payments and £3m due from airlines for flight refunds made by On the Beach.

Cooper said On the Beach had a rare opportunity to take a bigger share of the market and was investing in technology while paying suppliers promptly and refunding customers to build goodwill.

"The group remains in a strong and debt-free financial position. The board is confident about the group's long-term strategy and we will continue to evaluate the growing range of exciting opportunities to build our market share both in the UK and internationally," Cooper said.

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