(OTB.L) released strong preliminary results today, allowing them to declare their maiden dividend.){kind=link}
Online travel agent On The Beach PLC (LON:OTB)(OTB.L) released strong preliminary results today, allowing them to declare their maiden dividend.
On The Beach posted a 13 percent increase in group revenue to £71.3 million, up from £63.1 million in 2015. The increase in revenue helped the travel company swing into a pre-tax profit after a loss in 2015.
Group 2016 pre-tax profit was £16.9 million compared to a loss of £2.5 million the year prior. Investors cheered the declaration of a final dividend of 2.2p, sending shares 7 percent higher in early trade.
Difficult conditions
On The Beach CEO Simon Cooper pointed to ‘difficult conditions’ in the travel industry in 2016 and said the group’s strength can be attributed to agility of their business.
Travel industry peers such as EasyJet PLC (LON:EZJ)(EZJ.L) and Thomas Cook (LON:TCG)(TCG.L) have also suffered in 2016, with both terrorist attacks across Europe and the weakening pound – which has made it more expensive for UK holiday-makers to go abroad – taking their toll on profits.
Year-to-date share price performance of Easyjet and Thomas Cook pays testament to On The Beach’s advantageous model and ability to weather sector-wide challenges.
User growth
The jump in revenue was facilitated by an increased number of users on its site. Daily unique visitors increased nearly 13 percent to 61 million in 2016.
The cost of acquiring each daily user fell by 18 percent, whilst revenue per user grew held steady at £1.15.
Reflecting on the results, CEO Simon Cooper said:
“Using our scale to drive exclusivity, our technology to drive innovation and our financial strength, ATOL protection and strong consumer brand to drive customer trust, we are well placed to capitalise on the structural changes in the market which will only accelerate given the difficult conditions in the market this year.”
“We remain confident in the resilience and flexibility of our business model, and the long term resilience of our sector. On the Beach continues to successfully build a leading position as more consumers discover the ease of use and wide choice of beach holidays that our platforms offer.”