On the Beach reinstates dividend after record year

On the Beach, the online holiday booking platform, has reinstated its dividend and announced a £25 million share buyback programme after another record year.
The London-listed company posted total transaction value of £1.2 billion for the financial year ending September 30, marking a 15 per cent increase from £1 billion in 2023 and representing the third consecutive year of record revenue growth.
This growth was attributed to expanded offerings, technological upgrades and a peace deal with Ryanair, the budget carrier whose boss Michael O’Leary had previously branded online travel agents “pirates”.
Shares of On The Beach rose by 20.1 per cent, or 34½p, to close at 206p.
Revenue rose by 14 per cent to £128.2 million, lifting group profit before tax by 84 per cent to £26.5 million. The Manchester-headquartered company expects next summer to be “significantly ahead” of last year, with underlying profits up another 22 per cent to £37.9 million.
Shaun Morton, chief executive of On the Beach, described the partnership with Ryanair as a “transformational” deal, which will allow customers to book Ryanair flights as part of On the Beach holiday packages. This has doubled the company’s addressable market by introducing city breaks alongside traditional beach breaks.
On the Beach reinstated its final dividend for the first time since Covid-19 sent the holiday sector reeling due to lockdowns and travel restrictions, while announcing a £25 million share buyback in a further boost for investors, equivalent to 25 per cent of net earnings. The buyback programme will be managed by the brokers Peel Hunt and Numis.
The move reflects the board’s confidence in the company’s long-term strategy and financial strength. “Our strategy and positive booking trends, underpinned by our track record of delivery, gives us every confidence in delivering on our medium-term ambition,” Morton said.
Winter 2024 bookings are up 25 per cent year-on-year, supported by strong demand for winter sun and European city breaks. Forward bookings for next summer also indicate continued momentum, with customers prioritising holidays despite economic uncertainty.
On the Beach is targeting medium-term growth goals of doubling total transaction value to £2.5 billion and achieving underlying profit of £100 million.
Analysts at Peel Hunt, the investment bank, reiterated its “buy” rating on the stock, declaring the results evidence of a “great year, [and] great start”.