On the Beach swings to loss after £35m coronavirus hit
Package holiday firm On the Beach has revealed it swung to a half-year loss after cancelled trips due to the coronavirus lockdown left it nursing a £35 million hit.
The group said it slumped to a statutory pre-tax loss of £34.1 million against profits of £11.9 million a year earlier after revenues crashed by two-thirds in the six months to March 31.
On an underlying basis, pre-tax profits tumbled to £2.3 million from £15.7 million a year ago.
On the Beach said before the crisis struck it had been enjoying a boost from the demise of rival Thomas Cook, with summer bookings jumping 29%.
But as the pandemic forced planes to ground from later March, it saw bookings dry up and a swathe of cancellations.
It said since the first half, bookings in April were around only 10% of normal levels.
But the group said it had seen a “significant” surge in demand since mid-June for holidays this summer as lockdown restrictions begin to ease.
Bookings for next summer remain low, though they are sharply higher than a year earlier as airlines have been releasing flights early in an attempt to get trading back on track following the lockdown.
Simon Cooper, chief executive of On the Beach, said: “The onset of the Covid-19 pandemic led to a rapid slowdown in demand for foreign travel, followed by the total closure of airspace across Europe by mid-March.
“Our staff responded brilliantly to ensure that the group delivered the highest possible customer service standards in the most difficult of circumstances.”
Shares in the group fell 2.4%.
On the Beach recently tapped shareholders for £65 million as part of a fundraising to help it emerge stronger from the coronavirus crisis.
It also increased its existing overdraft with a £25 million revolving credit facility taken out with Lloyds Bank under the Government’s coronavirus large business interruption loan scheme.
It added to the £50 million facility recently renegotiated until December 2023 while the group also furloughed staff under the Government’s scheme.
Mr Cooper added: “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.”
The group also announced that finance chief Paul Meehan had resigned and would be replaced by group finance director Shaun Morton.