In 24 May 2022

On the Beach Group plc

("On the Beach", the "Company" or the "Group")

 

INTERIM RESULTS FOR SIX MONTHS ENDED 31 MARCH 2022

WELL-PLACED TO CAPITALISE ON THE STRUCTURAL CHANGES IN THE ONLINE TRAVEL MARKET

 

Financial & Operational Highlights

 

 

	H1 22 Unaudited		H1 21 unaudited		H1 19 unaudited
	Adjusted (1)	GAAP	Adjusted (1)	GAAP	Adjusted (1)	GAAP
Monthly booked sales(1)	£385.8m		£91.5m		£365.4m
Group revenue	£52.9m	£52.9m	£12.0m	£4.4m	£63.5m	£63.5m
Revenue as Agent(2)	£39.7m	£39.7m	£11.0m	£3.4m	£45.0m	£45.0m
Revenue as Principal(3)	£13.2m	£13.2m	£1.0m	£1.0m	£18.5m	£18.5m
Group gross profit	£39.0m	£39.0m	£10.8m	£3.7m	£47.5m	£47.5m
Gross profit as Agent	£37.8m	£37.8m	£10.7m	£3.6m	£45.0m	£45.0m
Gross profit as Principal	£1.2m	£1.2m	£0.1m	£0.1m	£2.5m	£2.5m
Group profit/(loss) before tax(4)	-	(£7.0m)	(£9.5m)	(£21.6m)	£15.7m	£11.9m
Basic earnings/(loss) per share(5)	0.1p	(3.3p)	(5.0p)	(11.2p)	9.6p	7.3p
Interim dividend payable	Nil	Nil	Nil	Nil	1.3p	1.3p

 

(1)    Monthly booked sales ('sales') is the total transaction value of holidays booked every month before cancellations and adjustments.

(2)    As an agent, revenue is accounted on a "booked" rather than "travelled" basis (unlike tour operators and airlines) and the Group is reporting H1 bookings taken between 1 October 2021 and 31 March 2022.

(3)    As a principal, revenue is accounted on a "travelled" basis and reported on a gross basis and the Group is reporting H1 bookings which departed between 1 October 2021 and 31 March 2022.

(4)    Group adjusted profit before tax is profit before tax, amortisation of acquired intangibles of £2.8m (H1 21: £2.8m), share based payments cost of £3.2m (H1 21: £1.7m) and exceptional items of £1.0m (H1 21: £7.6m). A full explanation of the adjustments is included in the glossary.

(5)    Adjusted earnings per share is Group adjusted profit after tax divided by the average number of shares in issue during the period. Earnings per share is Group profit after tax divided by the average number of shares in issue during the period.

 

 

Financial headlines

 

●	The Group achieved booked sales growth of 6% vs H1 19 (up 322% vs H1 21).
●	Group revenue increased to £52.9m (H1 21: £4.4m) following the widespread relaxation of restrictions for travel from the UK to most European holiday destinations in January 2022.
●	Group revenue increased to £52.9m (H1 21: £4.4m) following the widespread relaxation of restrictions for travel from the UK to most European holiday destinations in January 2022.
●	Revenue as agent of £39.7m was £5.3m lower than H1 19. Consumer demand for booking remained subdued until restrictions were eased and revenue is stated net of £5.2m of brand investment relating to COVID tests, airport lounges and airport security fast track.
●	Growth over this period is exclusively based upon new cash bookings rather than redemption of vouchers or refund credit notes ("RCNs").
●	The Group loss before tax has reduced by £14.6m to £7.0m (H1 21: £21.6m).

 

 

 

Current trading and outlook

●	Despite the disruption during the period, the value of holiday sales that travelled over the Winter season was broadly flat versus H1 19 and as at 22 May 2022 Summer sales were 22% ahead of pre-COVID levels.
●	Sales have remained resilient into H2 and are 33% ahead of FY19 in the 8 weeks to 22 May 2022.
●	The Group continues to remain cautious regarding the consumer environment. Visibility of the near term outlook for the UK outbound travel industry is limited and it is currently unclear to what extent the cost of living crisis will impact bookings.
●	However, we are excited about the progress we have made in attracting more premium customers and the recent relaxation of restrictions for UK travel to the Spanish mainland and islands should support a stronger lates market.
●	The Group is confident that the upfront investment into the brand and proposition will ensure the Group trades profitably in the second half and will exit the year in the best possible position to grow market share.

 

Simon Cooper, Chief Executive of On the Beach Group plc, commented:

 

"During the first half of our financial year we have seen a set of unique trading dynamics which were impacted, in part, by the Omicron variant in December and January. Prior to Omicron, Group booked sales in September and October 2021 exceeded H1 19 levels, being the last full financial year not impacted by COVID, and while Group sales were heavily impacted in November and December it was pleasing to see a significant uplift in traffic and booking volumes following the easing of restrictions in the UK and key International destinations during January.

 

"Throughout the pandemic, we continued with our strategy of investing in our brand, technology and customer proposition. Our deliberate focus on capturing share in the Premium, Long Haul and B2B segments, including accessing previously unavailable premium hotel stock, has resulted in us taking market share in this area.

 

"Whilst we have entered the second half with resilient sales, visibility of the near term outlook for the UK outbound travel industry remains limited. Customers are typically booking holidays with shorter lead times and we believe we are yet to see the full impact of the escalating costs of living on bookings. Despite this, we remain confident that we have taken the right actions throughout the pandemic and we will continue to support our customers and staff as a priority. Our investments in brand and proposition will ensure profitable trading into the second half and has left us in a strong position to continue growing market share."

 

Analyst & investor webinar

A webinar for sell-side equity analysts and investors will be held today at 8.00am, the details of which can be obtained through FTI Consulting via [email protected]. 

 

For further information: 

 

On the Beach Group plc Simon Cooper, Chief Executive Officer Shaun Morton, Chief Financial Officer	via FTI Consulting
FTI Consulting  Alex Beagley Fiona Walker Sam Macpherson Rafaella de Freitas	Tel: +44 (0)20 3727 1000 [email protected]

 

About On the Beach

On the Beach is a consumer-centric disruptor on a mission to continually democratise easy access, hassle free, great value holidays. Having invested in proposition, technology, brand and service, our asset light model is well positioned to continue to attract and retain the widest possible audience of beach holidaymakers. We are a leading online retailer in the UK short haul beach holiday market. By expanding into B2B and Long Haul channels, we have doubled our UK addressable market, and have a long‐term vision to become Europe's leading online retailer of beach holidays.

 

Cautionary statement

 

This announcement may contain certain forward-looking statements with respect to the financial condition, results, operations and businesses of the Company. Forward looking statements are sometimes, but not always, identified by their use of a date in the future or such words as 'anticipates', 'aims', 'due', 'will', 'could', 'may', 'should', 'expects', 'believes', 'intends', 'plans', 'targets', 'goal' or 'estimates'. These forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that may or may not occur in the future. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by these forward-looking statements, including factors outside the Company's control. The forward-looking statements reflect the knowledge and information available at the date of preparation of this announcement and will not be updated during the year. Nothing in this announcement should be construed as a profit forecast.

 

This statement together with the interim financial statements and investor presentation is available on www.onthebeachgroupplc.com.

 

Chief Executive's Review

Summary of Performance

Group sales for the period are up 6% vs H1 19 (322% up vs H1 21), despite heavily disrupted trading for the majority of the period.

Since the onset of the pandemic, the Group has consistently outlined its strategic intention to capture market share as trading normalises and demand for beach holidays recovers.

In line with its stated strategy, the Group has materially invested in its brand, technology and customer proposition. This includes offering a differentiated customer experience with premium lounges and security fast track, increasing headcount in technology and customer service areas, and investing in above the line media to drive awareness of the brand.

Average booking values have increased over this period, borne out of the deliberate actions taken to capture share of Premium, Long Haul and B2B segments, including accessing previously unavailable premium hotel stock and launching our enhanced premium customer proposition.

As a result of these measures, the Group has delivered 34% sales growth since restrictions were eased in the last 10 weeks of the period vs H1 19, despite a softening in the demand environment following the outbreak of the war in Ukraine.

The Group does not and has not issued vouchers or refund credit notes ("RCNs") in lieu of refunds, therefore sales are from new cash bookings only. Where customers have been refunded using vouchers or RCNs they are captive, narrowing our addressable audience this year. The Group believes that our enhanced proposition and reputation will allow us to target these customers in FY23 when the playing field is levelled.

The Civil Aviation Authority ("CAA") reported that at 31 March 2022 there were still £85m unredeemed RCNs in circulation, which lose ATOL protection on 30 September 2022. The Group believes it is critical that the CAA mandates travel companies who issued RCNs to remind consumers of their rights to a cash refund before the ATOL protection expires.

The Group is confident that its strong market share growth will continue into H2 and that sales growth will also sustain relative to FY19. The Group is monitoring closely the strength of the lates market and the impact of various headwinds on booking appetite, particularly for value holidays.

 

Recent trends

Early bookings for Summer 2022 have been stronger into higher value, more premium hotels, particularly for destinations in the Eastern Mediterranean and thanks to the actions taken by the Group during the pandemic, resulting in market share gains of these early bookings.

Sales for premium holidays with 5 star hotels vs H1 19 are up 95% and 151% in the 10 weeks to 31 March.

By contrast, customers looking for value holidays to 3 star hotels, typically to Western Mediterranean destinations have been booking with shorter lead times compared to H1 19.

Sales for 3 star hotels vs H1 19 are 30% lower and 10% lower in the 10 weeks to 31 March.

Despite ongoing restrictions for some destinations, the Group's Long Haul offering, which has also benefitted from investment into improving the proposition, continues to make good progress. Long Haul sales are up 352% vs H1 19 and accounted for 8% of Group sales (H1 19: 2%). 

The Group's B2B businesses, Classic Collection and Classic Package Holidays, traded well prior to Omicron and, despite the lack of high street footfall throughout December 2021 and January 2022, total B2B sales in the YTD are up 43% on FY19.

Strategy for growth

 

The Group's vision is to build Europe's leading beach holiday retailer via a single platform multi-brand strategy. On the Beach continues to target significant medium and long-term growth in its core and adjacent markets by deploying a strategy based on the following strategic pillars:

 

Current trading and outlook

●	Despite the disruption during the period, the value of holiday sales that travelled over the Winter season was broadly flat versus H1 19 and as at 22 May 2022 Summer sales were 22% ahead of pre-COVID levels.
●	Sales have remained resilient into H2 and are 33% ahead of FY19 in the 8 weeks to 22 May 2022.
●	The Group continues to remain cautious regarding the consumer environment. Visibility of the near term outlook for the UK outbound travel industry is limited and it is currently unclear to what extent the cost of living crisis will impact bookings.
●	However, we are excited about the progress we have made in attracting more premium customers and the recent relaxation of restrictions for UK travel to the Spanish mainland and islands should support a stronger lates market.
●	The Group is confident that the upfront investment into the brand and proposition will ensure the Group trades profitably in the second half and will exit the year in the best possible position to grow market share.

 

Explanation of adjustments

●	Certain costs, including the exceptional impact of the COVID-19 pandemic in the prior period, have been excluded from performance measures in this statement as the Board consider this necessary to provide a fair, balanced and understandable view of the performance of the Group. A full reconciliation of all non-GAAP measures to the closest equivalent GAAP measure is included in the glossary and see note 2.4 for details of the adjustments.
●	The Group has not estimated the financial impact of, or made an adjustment for, the significant reduction in booking volumes as a result of the COVID-19 pandemic in either the current or prior period.
●	A summary of the adjustments between Adjusted and GAAP measures, split between the COVID-19 impact and other costs, is shown below. These adjustments represent the difference between the Adjusted and GAAP measures reported in the financial highlights table above.

 

 

	H1 2022			H1 2021
	COVID-19	Other	Total	COVID-19	Other	Total
Group revenue	-	-	-	(£7.6m)	-	(£7.6m)
Revenue as Agent	-	-	-	(£7.6m)	-	(£7.6m)
Cost of sales (1)	-	-	-	0.5m	-	0.5m
Group overheads	-	(£7.0m)	(£7.0m)	(£0.5m)	(£4.5m)	(£5.0m)
Share based payments	-	(£3.2m)	(£3.2m)	-	(£1.7m)	(£1.7m)
Acquired intangibles amortisation	-	(£2.8m)	(£2.8m)	-	(£2.8m)	(£2.8m)
Other exceptional operating costs (2)	-	(£1.0m)	(£1.0m)	(£0.5m)	-	(£0.5m)
Group profit before tax	-	(£7.0m)	(£7.0m)	(£7.6m)	(£4.5m)	(£12.1m)

 

(1)    Agents' commission no longer due on cancelled holiday bookings

(2)    Legal and professional fees £1.0m (H1 21: £0.5m)

 

A full explanation of all adjusted performance measures is included in the Glossary.

Segmental performance

The Group organises its operations into four principal financial reporting segments, being OTB (onthebeach.co.uk and sunshine.co.uk), International (ebeach.se, ebeach.no and ebeach.dk), CCH (Classic Collection Holidays) and CPH (Classic Package Holidays).

 

OTB Segment performance

	H1 2022		H1 2021
Bookings '000s	207.6		52.7
Booked sales £'m	342.8		80.4
	H1 2022	H1 2022	H1 2021	H1 2021
	Adjusted £m	GAAP £m	Adjusted £m	GAAP £m
Revenue	36.7	36.8	10.0	3.2
Online Marketing costs	(11.1)	(11.1)	(2.3)	(2.3)
Offline Marketing costs	(8.3)	(8.3)	(4.3)	(4.3)
Revenue after marketing costs	17.3	17.4	3.4	(3.4)
Overheads	(11.7)	(11.7)	(7.3)	(7.3)
Depreciation and amortisation	(2.9)	(2.9)	(2.9)	(2.9)
Exceptional operating costs	-	(1.0)	-	(0.5)
Share based payments	-	(3.2)	-	(1.7)
Amortisation of acquired intangibles	-	(2.3)	-	(2.3)
Operating profit/(loss)	2.7	(3.7)	(6.8)	(18.1)
EBITDA *	5.6	1.5	(3.9)	(12.9)
EBITDA %	15.3%	3.9%	(39%)	-

 

*see glossary for reconciliation to nearest GAAP measure

Revenue increased to £36.8m (H1 21: £3.2m, £10.0m before COVID cancellations). The increase in revenue is due to an increase in booking volumes and is shown net of £5.2m (H1 21: £nil) invested in enhancing the proposition (COVID tests, cancellation cover, airport lounge access, airport security fast track).

As the leisure travel market has started to recover following two years of disruption, material investments have been made in Offline marketing spend which was £8.3m in the period (H1 21: £4.3m). The majority of spend during the period relates to the 'Most wonderful time of the year' advertising campaign, which went live on Christmas Day.

Online marketing costs, which flex with holiday search demand, were £11.1m (H1 21: £2.3m) and 30% of revenue (H1 21: 72%). Revenue after all marketing costs increased to £17.4m (H1 21: loss (£3.4m)).

Operating leverage and overheads

	H1 2022	H1 2021
Overheads % adjusted revenue	32%	73%
Overheads % booked sales	3%	9%

 

Overheads have increased by £4.4m to £11.7m. The increase results from material investments in talent and technology, increased variable costs, and an increase in legal and regulatory costs including insurance, professional services and IT security.

Due to the low cost base of the business, even in a disrupted environment, total overheads represent only 3% of booked sales and 32% of revenue.

Adjusted EBITDA for the period was £5.6m (H1: 21 loss of (£3.9m)).  The closest GAAP equivalent measure to Adjusted EBITDA is operating loss of £3.7m (H1 21: loss £18.1m). This reduction in losses is attributable to the increase in revenue in the period.

Classic Collection Holidays segment performance

 

	H1 2022		H1 2021
Bookings '000s (booked)	4.2		1.1
Bookings '000s (travelled)	1.9		0.1
Booked sales £'m	27.8		8.2
	H1 2022	H1 2022	H1 2021	H1 2021
	Adjusted £m	GAAP £m	Adjusted £m	GAAP £m
Revenue	13.2	13.2	1.0	1.0
Gross profit	1.2	1.2	0.1	0.1
Gross Profit after marketing costs	0.9	0.9	-	-
Overheads	(2.6)	(2.6)	(1.3)	(1.3)
Depreciation and amortisation	(0.2)	(0.2)	(0.1)	(0.1)
Amortisation of acquired intangibles	-	(0.5)	-	(0.5)
Operating loss	(1.9)	(2.4)	(1.4)	(1.9)
EBITDA*	(1.7)	(1.7)	(1.3)	(1.3)

*see glossary for reconciliation to nearest GAAP measure

As a principal (rather than an agent), Classic accounts for revenue on a "travelled" basis and reports revenue on a gross basis.  Winter travel was heavily disrupted by COVID-19, therefore the H1 results are behind where they would have been during a normal trading period.

However, despite the emergence of the Omicron variant in November 2021, consumer ability and appetite to travel was significantly greater than in H1 21. As a result, Revenue increased to £13.2m (H1 21: £1.0m). Operating losses were at similar levels to H1 21 as overheads returned to normal levels to support an increasing demand for travel.

Bookings from High Street travel agents have recovered more slowly than online, due to both a sluggish return to pre-COVID footfall and staff shortages across the industry.

Over the last 12 months new luxury, tailor-made and long haul programmes have been launched and these are making up a growing proportion of bookings and revenues. During the period, long haul bookings represented 14% of total bookings made (Pre COVID: 2%).

Classic Package Holidays segment performance

	H1 2022		H1 2021
Bookings '000s	6.4		1.2
Booked sales £'m	13.7		2.6
	H1 2022	H1 2022	H1 2021	H1 2021
	Adjusted £m	GAAP £m	Adjusted £m	GAAP £m
Revenue	2.8	2.7	0.9	0.2
Gross profit	0.8	0.7	0.6	0.4
Gross Profit after marketing costs	0.4	0.3	0.5	0.3
Overheads	(0.7)	(0.7)	(1.1)	(1.1)
Depreciation and amortisation	(0.1)	(0.1)	(0.1)	(0.1)
Operating loss	(0.4)	(0.5)	(0.7)	(0.9)
EBITDA*	(0.3)	(0.4)	(0.6)	(0.8)

*see glossary for reconciliation to nearest GAAP measure

CPH provides an online B2B platform that enables high street travel agents to sell dynamically packaged holidays to their customers.

Revenue for the period was £2.7m (H1 21: £0.2m). Whilst the period has been disrupted by COVID-19, there has been a better environment for both booking holidays and travelling than in the prior period. As a result, CPH secured 6,400 package holiday bookings, which is more than five times H1 2021.

Adjusted EBITDA loss was (£0.3m) (H1 21: (£0.6m)). After accounting for COVID-19 related cancellations, operating losses were (£0.4m) vs (£0.9m) in H1 2021.

As with CCH, bookings from High Street travel agents have recovered more slowly than online, due to both a sluggish return to pre-COVID footfall and staff shortages across the industry.

CPH product is available in 2,500 high street locations and is well placed to support the travel trade with product to sell as the country emerges from the pandemic.

Financing

During the period the Group had in place a revolving credit facility of £75m with Lloyds. The cash draw down at 31 March 2022 was nil (31 March 2021: nil; 30 September 2020: nil).

 

On 25 May 2021, covenants were reset up to and including September 2022 to account for the prolonged impact COVID-19 is having on trading. Covenants will return to normal for December 2022 and are as follows:

 

 

Details of the current facility limits and maturity dates are as follows:

 

Facilities	£m	Issued	Expiry	Cash drawn at 31 March 2022
Original RCF	£50m	Apr 2020	Dec 2023	£nil
New CLBILS facility	£25m	May 2020	May 2023	£nil
Total facility	£75m			£nil

 

Share based payments

The Group has an LTIP scheme in place which vests based on performance criteria.  In accordance with IFRS 2, the Group has recognised a non-cash charge of £3.2m (H1 21: £1.7m). £1.9m of this cost relates to a performance-related award that was issued to Senior Executives prior to COVID-19. During the period, the Remuneration Committee (i) made an award (pro rata) to a new Senior Executive based on the same terms as the rest of the Senior Executives; and (ii) exercised discretion to provide a minimum level of vesting (because the performance conditions could not be met as a result of continued COVID disruption), such that the award vested in part. No such discretion was exercised for Executive Directors.

Taxation

The Group tax credit of £1.5m (H1 21: £4.0m) represents an effective rate of 21% (H1 2021: 19%) which is higher than the standard UK rate of 19% (H1 21: 19%) due to differences between rates applied to current and deferred tax.

During the period, a Corporation Tax rebate of £0.6m was received and no payments on account have been made due to the loss making position of the Group.

Cash flow

£m	H1 2022	H1 2021	FY21
Loss before tax	(7.0)	(21.6)	(36.7)
Depreciation and amortisation	6.0	5.9	11.9
Net finance costs / (income)	0.5	0.4	0.9
Share based payments	3.2	1.7	2.8
Net loss on disposal of property, plant and equipment	-	-	0.1
Movement in working capital	(36.8)	6.1	18.0
Corporation tax	0.6	3.9	4.2
Cash generated from operating activities	(33.5)	(3.6)	1.2
Other Cash Flows
Capital expenditure net of proceeds	(0.6)	-	(0.5)
Capitalised development expenditure	(4.3)	(2.2)	(4.6)
Net finance (costs) / income	(0.5)	(0.4)	(0.9)
Payment of lease liabilities	(0.3)	(0.3)	(0.6)
Net cash flows excl share proceeds	(39.2)	(6.5)	(5.4)
Proceeds from issue of share capital	-	-	24.9
Total net cash flows	(39.2)	(6.5)	19.5
Opening cash balance	56.0	36.5	36.5
Closing cash at bank	16.8	30.0	56.0
Closing trust balance	99.1	24.1	39.0

 

The cash flow profile of the Group is seasonal with approximately 50% of customers travelling in the period June to August and therefore in a normal year the cash flows (excluding any cash held in the Trust) experience a trough prior to June and a peak following this.

 

The net cash outflow during the period of £39.2m is in line with a more typical trading period than has been the case for the last two years. This cash outflow represents investments made by the Group in to online and offline marketing as well as the working capital required to fund the customer deposits scheme.

 

Customer payments made to OTB in advance of travel are deposited in the Trust account. During the period, the Trust account balance has increased from £39m to £99m, which will unwind as customers travel over the summer months.

 

The Group has not issued refund credit notes or vouchers to customers through the pandemic for cancelled holidays and all suppliers have been paid within normal terms.

 

At 23 May 2022, the RCF is undrawn and combined Trust account and unrestricted cash balances were £164m (£142m in trust), (23 May 2019 £81m, £93m in trust).

 

Dividend

The Board has not declared an interim dividend (H1 2021: nil).

 

Simon Cooper                   Shaun Morton

CEO                                        CFO

24 May 2022                       24 May 2022

 

 

On the Beach Group Plc
INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2022
CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME
For the 6 months ended 31 March 2022
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
	Note	£'m		£'m		£'m
		unaudited		unaudited		audited
Revenue	3,4	52.9		4.4		21.2
Cost of sales		(13.9)		(0.7)		(6.8)
Gross profit		39.0		3.7		14.4
Administrative expenses	5	(45.5)		(24.9)		(50.2)
Group operating loss		(6.5)		(21.2)		(35.8)
Finance costs		(0.5)		(0.5)		(1.0)
Finance income		-		0.1		0.1
Net finance costs		(0.5)		(0.4)		(0.9)
Loss before taxation		(7.0)		(21.6)		(36.7)
Taxation	6	1.5		4.0		6.5
Loss for the period		(5.5)		(17.6)		(30.2)
Other comprehensive income:
Net gain/(loss) on cash flow hedges		-		(0.4)		(0.1)
Total comprehensive loss for the period		(5.5)		(18.0)		(30.3)
Attributable to:
Equity holders of the parent		(5.5)		(18.0)		(30.3)
Basic and diluted earnings per share attributable to the equity shareholders of the Company:
Basic loss per share	7	(3.3p)		(11.2p)		(19.0p)
Diluted loss per share	7	(3.3p)		(11.2p)		(19.0p)
Adjusted basic profit/(loss) per share *	7	0.1p		(5.0p)		(9.7p)
Adjusted diluted profit/(loss) per share *	7	0.1p		(5.0p)		(9.7p)
Adjusted profit measure *
Adjusted profit/(loss) before tax (before amortisation of acquired intangibles, share based payments and exceptional items) *	5	-		(9.5)		(18.4)
* This is a non GAAP measure, refer to notes.

 

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 March 2022
										Restated (note 2.6)
			At 31 March 2022			At 31 March 2021				At 30 September 2021
			£'m			£'m				£'m
Assets	Note		unaudited			unaudited				audited
Non-current assets
Intangible assets	8		73.3			76.8				74.1
Property, plant and equipment	9		9.5			9.0				8.3
Investment property			-			0.6				-
Deferred tax			5.1			1.5				3.6
Total non-current assets			87.9			87.9				86.0
Current assets
Trade and other receivables	10		224.2			100.2				94.9
Corporation tax receivable			0.2			0.6				0.8
Trust account	12		99.1			24.1				39.0
Cash at bank			16.8			30.0				56.0
Total current assets			340.3			154.9				190.7
Total assets			428.2			242.8				276.7
Equity
Share capital			1.7			1.6				1.7
Share premium			89.6			64.8				89.6
Retained earnings			185.3			198.7				187.6
Capital contribution reserve			0.5			0.5				0.5
Merger reserve			(129.5)			(129.5)				(129.5)
Total equity			147.6			136.1				149.9
Non-current liabilities
Trade and other payables	11		3.3			3.6				2.5
Total non-current liabilities			3.3			3.6				2.5
Current liabilities
Trade and other payables	11		273.8			88.8				119.4
Provisions	11		3.1			12.3				4.6
Derivative financial instruments	13		0.4			2.0				0.3
Total current liabilities			277.3			103.1				124.3
Total liabilities			280.6			106.7				126.8
Total equity and liabilities			428.2			242.8				276.7
Shaun Morton
Chief Financial Officer
24 May 2022
On the Beach Group plc. Reg no 09736592
CONSOLIDATED STATEMENT OF CASH FLOWS
For the 6 months ended 31 March 2022
				6 months ended 31 March 2022				6 months ended 31 March 2021			Year ended 30 September 2021
				unaudited				unaudited			audited
		Note		£'m				£'m			£'m
Loss before taxation				(7.0)				(21.6)			(36.7)
Adjustments for:
Depreciation		5		0.9				0.9			1.8
Amortisation of intangible assets		5		5.1				5.0			10.1
Finance costs				0.5				0.5			1.0
Finance income				-				(0.1)			(0.1)
Share based payments				3.2				1.7			2.8
Gain on termination of lease				-				-			(0.1)
Loss on disposal of property, plant and equipment				-				-			0.2
				2.7				(13.6)			(21.0)
Changes in working capital:
(Increase)/decrease in trade and other receivables		10		(129.3)				5.0			9.9
Increase/(decrease) in trade and other payables		11		152.6				(0.6)			21.3
(Increase)/decrease in trust account				(60.1)				1.7			(13.2)
				(36.8)				6.1			18.0
Cash flows from operating activities
Cash used in operating activities				(34.1)				(7.5)			(3.0)
Tax received				0.6				3.9			4.2
Net cash (outflow)/inflow from operating activities				(33.5)				(3.6)			1.2
Cash flows from investing activities
Purchase of property, plant and equipment		9		(0.6)				-			(0.5)
Purchase of intangible assets		8		(4.3)				(2.2)			(4.6)
Interest received				-				0.1			0.1
Net cash outflow from investing activities				(4.9)				(2.1)			(5.0)
Cash flows from financing activities
Proceeds from issue of share capital				-				-			26.0
Costs related to shares issued paid				-				-			(1.1)
Interest paid on borrowings				(0.4)				(0.4)			(0.9)
Interest paid on lease liabilities				(0.1)				(0.1)			(0.1)
Payment of lease liabilities				(0.3)				(0.3)			(0.6)
Net cash (outflow)/inflow from financing activities				(0.8)				(0.8)			23.3
Net (decrease)/increase in cash at bank and in hand				(39.2)				(6.5)			19.5
Cash at bank and in hand at beginning of period				56.0				36.5			36.5
Cash at bank and in hand at end of period				16.8				30.0			56.0

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the 6 months ended 31 March 2022
	Share capital	Share premium	Merger reserve	Capital contribution reserve	Retained earnings	Total
For the year ended 30 September 2021	£'m	£'m	£'m	£'m	£'m	£'m
Balance at 30 September 2020	1.6	64.8	(129.5)	0.5	215.0	152.4
Share based payment charges including tax	-	-	-	-	2.9	2.9
Shares issued during the year	0.1	25.9	-	-	-	26.0
Costs related to shares issued	-	(1.1)	-	-	-	(1.1)
Total comprehensive loss for the year	-	-	-	-	(30.3)	(30.3)
Balance at 30 September 2021 (audited)	1.7	89.6	(129.5)	0.5	187.6	149.9
	Share capital	Share premium	Merger reserve	Capital contribution reserve	Retained earnings	Total
For the 6 months ended 31 March 2021	£'m	£'m	£'m	£'m	£'m	£'m
Balance at 30 September 2020	1.6	64.8	(129.5)	0.5	215.0	152.4
Share based payment charges including tax	-	-	-	-	1.7	1.7
Total comprehensive loss for the period	-	-	-	-	(18.0)	(18.0)
Balance at 31 March 2021 (unaudited)	1.6	64.8	(129.5)	0.5	198.7	136.1
	Share capital	Share premium	Merger reserve	Capital contribution reserve	Retained earnings	Total
For the 6 months ended 31 March 2022	£'m	£'m	£'m	£'m	£'m	£'m
Balance at 30 September 2021	1.7	89.6	(129.5)	0.5	187.6	149.9
Share based payment charges including tax	-	-	-	-	3.2	3.2
Total comprehensive loss for the period	-	-	-	-	(5.5)	(5.5)
Balance at 31 March 2022 (unaudited)	1.7	89.6	(129.5)	0.5	185.3	147.6

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the 6 months ended 31 March 2022
1	General Information
	The interim condensed consolidated financial statements of On the Beach Group plc and its subsidiaries (collectively, the Group) for the six months ended 31 March 2022 were authorised for issue in accordance with a resolution of the directors on 24 May 2022. On the Beach Group plc ('the Company') is a public limited company, incorporated and domiciled in the United Kingdom, whose shares are listed on the London Stock Exchange. The registered office is located at Aeroworks, 5 Adair Street, Manchester, M1 2NQ.
2	Basis of preparation and changes to the Group's accounting policies
2.1	Basis of preparation
	The interim condensed consolidated financial statements for the six months ended 31 March 2022 have been prepared in accordance with UK adopted IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not constitute statutory financial statements as defined in section 435 of the Companies Act 2006 and therefore do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 30 September 2021. No audit or review opinion has been provided by a statutory auditor on these interim statements. The financial information for the preceding year is based on the statutory financial statements for the year ended 30 September 2021. These financial statements, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. These financial statements did not require a statement under either section 498(2) or section 498(3) of the Companies Act 2006.
2.2	Accounting policies
	The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 September 2021.
2.3	Going concern
	The Group covers its daily working capital requirements by means of cash and a £50m Revolving Credit Facility ("RCF") expiring December 2023. In addition, the Group has a CLBILS facility of £25m. As at 31 March 2022 cash (excluding cash held in trust which is ringfenced and not factored into the going concern assessment) was £16.8m (31 March 2021 cash of £30.0m, 30 September 2021 cash of £56.0m). Where holidays are cancelled the Group is committed to refunding customers in cash rather than vouchers. Cash refunds are fully funded from the trust account (where refunds are for hotel and transfer payments) or are a pass-through from airlines.   Customer prepayments for bookings that have not yet travelled held in a ringfenced trust account at 31 March 2022 was £99.1m.
	The Directors have assessed a going concern period through to September 2023 and have modelled a number of scenarios considering factors such as airline and hotelier resilience, employee absence and customer behaviour / demand. The Directors have also considered the impact of climate risk in these scenarios concluding that it is not expected to have a significant impact over the going concern period.  Further detail of the Group's assessment of the impact of climate risk is provided within the 'Principal risks and Uncertainties' section of the Annual Report and Accounts of the Group for the year ending 30 September 2021, at pages 31-40. The Directors have modelled a reasonably possible downside scenario to sensitise the base case. In this scenario the Directors have assessed the impact to cash and revenue in an environment where bookings are 30% lower than historic levels. Even in this scenario, the Group would have positive cash and no requirement to draw down on its current facilities both during the going concern review period, and in the subsequent period prior to expiry of facilities. Given the assumptions above, the mitigating actions available and within the Group's control and that in no scenario is there any requirement to access the RCF or CLBILs facility, the Directors remain confident in their response to the pandemic and will continue to operate in an agile way adapting to any applicable government guidance. Therefore, it is considered appropriate to continue to adopt the going concern basis in preparing these financial statements.
2.4	Accounting estimates and judgements
	In preparing these interim financial statements, management have made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates.
	COVID-19
	During the period ending 31 March 2022 COVID-19 travel restrictions have lessened with testing and entry requirements substantially reduced, management have reviewed the assumptions used to estimate the provisions relating to the disruption caused by the COVID-19 pandemic. These adjustments relate primarily to lost revenue resulting from the cancellation of bookings in the financial year and beyond. The estimation includes the loss of revenues caused by the cancellation and refund of bookings, off-set by the extent to which related holiday costs can be recovered. Key areas of estimation include:
	COVID cancellation provision
	The extent to which holidays will be impacted by the pandemic, either directly due to travel restrictions or indirectly due to reductions in flying schedules. Management have estimated that up to 6% (30 September 2021: up to 20%) of forward bookings as at the balance sheet date will be cancelled within FY22, giving rise to an estimated refund liability of £2.8m, shown in note 11. In estimating this cancellation rate management have considered:   (i)            season; as historically summer cancellations are lower than the preceding winter; (ii)           flight supplier load factors; and   (iii)          experience of summer FY21 during the pandemic but taking into consideration the current levels of vaccination rate. The level of forward bookings beyond summer 2022 is not significant and any changes to this assumption would not have a material impact. If the Group were to increase the percentage of cancellations by 5 percentage points ('ppts') then the provision required would increase by 18% (30 September 2021: 23%).
	Prepayments with suppliers
	In the normal course of business the Group will advance payments to certain hotel suppliers for holidays booked. A risk assessment is made based on a review of each significant suppliers' financial stability with varying % provisions applied to different risk levels. If the Group were to increase its % provision applied by 5ppts across all specific risk categories not already fully provided, this would have resulted in a decrease of £0.3m (30 September 2021: £0.1m) in the prepayments of £10.7m shown in Note 10.
	Recoverability of airline debtor
	In relation to flights cancelled during the financial year, the Group has considered the impact of the pandemic on the recoverability of amounts paid to all airlines in lieu of cancelled flights which as at 31 March 2022 is a receivable balance of £1.4m - see note 10.
	The Group has a legal right to a refund; the airline has an obligation to refund in the event that the flight is cancelled. Where an airline is not forthcoming with a refund owed, the Group exercises its chargeback rights as governed by the card scheme rules. The Group has a right to make a chargeback when: (i)            the merchant (airline) was unable or unwilling to provide the purchased services; or (ii)           the cardholder is entitled to a refund under the merchant's cancellation policy. Where a flight has been cancelled, the Group has recognised a net receivable for the expected recoverable amount in accordance with the considerations above. Management have calculated the provision for airline refunds owed based on factors such as age, flight supplier and payment method. If the Group were to increase the provision by 5ppts this would have resulted in a decrease of £0.2m in the airline receivable of £1.4m.
2.5	New standards, amendments and interpretations
	The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 September 2021, except for the adoption of new standards effective as of 1 October 2021. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.   Several amendments and interpretations apply for the first time in 2021, but do not have an impact on the interim condensed consolidated financial statements of the Group.
2.6	Reclassification of deferred tax assets
	In April 2022, the Group received a letter from the Financial Reporting Council (FRC) as part of its regular review and assessment of the quality of corporate reporting in the UK. The letter included a request for further information on the Group's Annual Report and Accounts for the year ended 30 September 2021. The review conducted by the FRC was performed solely on the Group's published Annual Report and Accounts and does not provide any assurance that the Annual Report and Accounts are correct in all material respects. The review does not benefit from a detailed knowledge of the business or an understanding of the underlying transactions entered into. FRC letters are written on the basis that the FRC accepts no liability for reliance on them by the Company or any third party.   Following completion of the correspondence with the FRC, the Directors have concluded that the deferred tax asset of £3.6m reported in the balance sheet as at 30 September 2021 should have been presented as a non-current asset in line with the requirements of IAS 1.56, rather than as a current asset. Therefore, the comparatives for the balance sheet as at 30 September 2021 have been restated to correct the error identified. As a result, total current assets reduced by £3.6m to £190.7m and total non-current assets increased by £3.6m to £86.0m.

 

3	Revenue
	Set out below is the disaggregation of the Group's revenue from contracts with customers:
			6 months ended 31 March 2022
			unaudited
			OTB	Int'l	CCH	CPH	Total
			£'m	£'m	£'m	£'m	£'m
	Booked sales*		342.8	1.5	27.8	13.7	385.8
	Revenue
	Revenue as agent		36.7	0.2	-	2.8	39.7
	Revenue as principal		-	-	13.2	-	13.2
	Total Revenue before exceptional cancellations		36.7	0.2	13.2	2.8	52.9
	Exceptional cancellations**		0.1	-	-	(0.1)	-
	Total Revenue		36.8	0.2	13.2	2.7	52.9
			6 months ended 31 March 2021
			unaudited
			OTB	Int'l	CCH	CPH	Total
			£'m	£'m	£'m	£'m	£'m
	Booked sales*		80.4	0.3	8.2	2.6	91.5
	Revenue before exceptional cancellations
	Revenue as agent		10.0	0.1	-	0.9	11.0
	Revenue as principal		-	-	1.0	-	1.0
	Total Revenue before exceptional cancellations		10.0	0.1	1.0	0.9	12.0
	Exceptional cancellations**		(6.8)	(0.1)	-	(0.7)	(7.6)
	Total Revenue		3.2	-	1.0	0.2	4.4
			Year ended 30 September 2021
			audited
			OTB	Int'l	CCH	CPH	Total
			£'m	£'m	£'m	£'m	£'m
	Booked sales*		204.2	0.7	23.5	10.2	238.6
	Revenue before exceptional cancellations
	Revenue as agent		22.1	0.1	-	1.8	24.0
	Revenue as principal		-	-	6.5	-	6.5
	Total Revenue before exceptional cancellations		22.1	0.1	6.5	1.8	30.5
	Exceptional cancellations**		(9.1)	(0.1)	-	(0.1)	(9.3)
	Total Revenue		13.0	-	6.5	1.7	21.2
	*Booked sales: the total transaction value of holidays booked during the period, before cancellations and amendments.
	**Exceptional cancellations relate to the impact of COVID-19.
	Override income for both the current and prior periods is not material.

 

4	Segmental report
	The management team considers the reportable segments to be ''OTB'', "International", ''CCH'' and "CPH". All segment revenue, operating profit assets and liabilities are attributable to the Group from its principal activities.
	OTB, International and CPH recognise revenue as agent on a net basis. CCH recognises revenue as a principal on a gross basis.
		6 months ended 31 March 2022
		unaudited
		OTB	Int'l	CCH	CPH	Total
		£'m	£'m	£'m	£'m	£'m
	Revenue before exceptional cancellations	36.7	0.2	13.2	2.8	52.9
	Exceptional cancellations*	0.1	-	-	(0.1)	-
	Revenue	36.8	0.2	13.2	2.7	52.9
	Adjusted EBITDA	5.6	0.1	(1.7)	(0.3)	3.7
	Share based payments	(3.2)	-	-	-	(3.2)
	Exceptional costs (note 5b)	(0.9)	-	-	(0.1)	(1.0)
	EBITDA	1.5	0.1	(1.7)	(0.4)	(0.5)
	Depreciation and amortisation	(5.2)	-	(0.7)	(0.1)	(6.0)
	Group operating (loss)/profit	(3.7)	0.1	(2.4)	(0.5)	(6.5)
	Finance costs					(0.5)
	Finance income					-
	Loss before taxation					(7.0)
	Non-current assets
	Goodwill	31.6	-	4.6	4.0	40.2
	Other intangible assets	25.7	0.1	7.2	0.1	33.1
	Property, plant and equipment	6.4	-	3.1	-	9.5
		6 months ended 31 March 2021
		unaudited
		OTB	Int'l	CCH	CPH	Total
		£'m	£'m	£'m	£'m	£'m
	Revenue
	Revenue before exceptional cancellations	10.0	0.1	1.0	0.9	12.0
	Exceptional cancellations*	(6.8)	(0.1)	-	(0.7)	(7.6)
	Total Revenue	3.2	-	1.0	0.2	4.4
	Adjusted EBITDA	(3.9)	(0.2)	(1.3)	(0.6)	(6.0)
	Share based payments	(1.7)	-	-	-	(1.7)
	Exceptional costs	(7.3)	(0.1)	-	(0.2)	(7.6)
	EBITDA	(12.9)	(0.3)	(1.3)	(0.8)	(15.3)
	Depreciation and amortisation	(5.2)	-	(0.6)	(0.1)	(5.9)
	Group operating loss	(18.1)	(0.3)	(1.9)	(0.9)	(21.2)
	Finance costs					(0.5)
	Finance income					0.1
	Loss before taxation					(21.6)
	Non-current assets
	Goodwill	31.6	-	4.6	4.0	40.2
	Other intangible assets	26.8	0.1	9.4	0.4	36.6
	Property, plant and equipment	6.7	-	2.3	-	9.0
	Investment property	-	-	0.6	-	0.6
		Year ended 30 September 2021
		audited
		OTB	Int'l	CCH	CPH	Total
		£'m	£'m	£'m	£'m	£'m
	Revenue
	Revenue before exceptional cancellations	22.1	0.1	6.5	1.8	30.5
	Exceptional cancellations*	(9.1)	(0.1)	-	(0.1)	(9.3)
	Total Revenue	13.0	-	6.5	1.7	21.2
	Adjusted EBITDA	(6.1)	(0.2)	(3.1)	(1.7)	(11.1)
	Share based payments	(2.8)	-	-	-	(2.8)
	Impact of COVID-19	(9.8)	(0.1)	(0.4)	0.3	(10.0)
	EBITDA	(18.7)	(0.3)	(3.5)	(1.4)	(23.9)
	Depreciation and amortisation	(10.3)	(0.1)	(1.3)	(0.2)	(11.9)
	Group operating loss	(29.0)	(0.4)	(4.8)	(1.6)	(35.8)
	Finance costs					(1.0)
	Finance income					0.1
	Loss before taxation					(36.7)
	Non-current assets
	Goodwill	31.6	-	4.6	4.0	40.2
	Other intangible assets	26.0	0.1	7.7	0.1	33.9
	Property, plant and equipment	5.8	-	2.5	-	8.3
	Investment property	-	-	-	-	-
	*Exceptional cancellations relate to the impact of COVID-19.

 

5	Operating profit
a)	Operating expenses
	Expenses by nature including exceptional items and impairment charges:
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
		£'m		£'m		£'m
	Marketing	19.3		6.1		10.9
	Depreciation	0.9		0.9		1.8
	Staff costs (including share based payments)	11.9		7.9		18.5
	IT hosting, licences & support	2.1		1.1		2.5
	Office expenses	0.4		0.4		0.8
	Credit / debit card charges	0.9		0.2		0.5
	Insurance	0.5		0.6		1.6
	Other	3.5		2.1		2.4
	Administrative expenses before exceptional items & amortisation of intangible assets	39.4		19.4		39.0
	Exceptional costs	1.0		0.5		1.1
	Amortisation of intangible assets	5.1		5.0		10.1
	Exceptional items and amortisation of intangible assets	6.1		5.5		11.2
	Administrative expenses	45.5		24.9		50.2
b)	Exceptional items
	Exceptional operating costs in the 6 months ended 31 March 2022 consist of legal and professional fees of £1.0m.
	The total exceptional items in the 6 months ended 31 March 2021 of £7.6m represents the estimated cost of COVID-19 to trading in the period. This is primarily the cost of COVID-19 related cancellations or expected cancellations of £7.1m. Exceptional operating costs of £0.5m relates to the provision for legal and professional fees.
	The total exceptional items in the year ended 30 September 2021 of £10.0m represents the estimated cost of COVID-19 to trading in the period. This is primarily the cost of COVID-19 related cancellations or expected cancellations of £8.9m. Exceptional operating costs of £1.1m includes legal and professional fees and supplier provisions.
c)	Adjusted profit/(loss) before tax
	Management measures the overall performance of the Group by reference to Adjusted profit/(loss) before tax, a non-GAAP measure as it gives a meaningful year on year comparison of the Group's performance:
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
		£'m		£'m		£'m
	Loss before taxation	(7.0)		(21.6)		(36.7)
	Exceptional costs	1.0		7.6		10.0
	Total exceptional items	1.0		7.6		10.0
	Amortisation of acquired intangibles*	2.8		2.8		5.5
	Share based payments charge**	3.2		1.7		2.8
	Adjusted profit/(loss) before tax	-		(9.5)		(18.4)
	*These charges relate to amortisation of brand, website technology and customer relationships recognised on the acquisition of subsidiaries and are added back as they are inherently linked to historical acquisitions of businesses.
	**The share based payment charge represents a non-cash charge for the expected cost of shares vesting under the Group's Long Term Incentive Plan. On 21 December 2021 the remuneration committee approved the introduction of an underpin/minimum award for the nil cost awards originally granted 9 July 2019. This removal of a non-marked based condition has resulted in a charge to the income statement of £1.9m that reflects the scheme progress to date. These charges are added back to provide comparability to prior periods due to fluctuations in the charges.

 

6	Taxation
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
		£m		£m		£m
	Current tax on loss for the year	-		-		(0.4)
	Adjustments in respect of prior years	-		-		(0.1)
	Total current tax	-		-		(0.5)
	Deferred tax on losses for the period
	Origination and reversal of temporary differences	(1.5)		(4.0)		(6.1)
	Adjustments in respect of prior years	-		-		0.1
	Total deferred tax	(1.5)		(4.0)		(6.0)
	Total tax credit	(1.5)		(4.0)		(6.5)
	The differences between the total taxation shown above and the amount calculated by applying the standard UK corporation taxation rate to the profit before taxation on continuing operating are as follows.
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
		£m		£m		£m
	Loss on ordinary activities before tax	(7.0)		(21.6)		(36.7)
	Loss on ordinary activities multiplied by the rate of corporation tax in the UK of 19% (2021: 19%)	(1.3)		(4.1)		(7.0)
	Effects of:
	Impact of difference in current and deferred tax rates	(0.2)		-		0.2
	Adjustments in respect of prior years	-		-		-
	Expenses not deductible	-		0.1		0.3
	Total tax credit	(1.5)		(4.0)		(6.5)
	The tax charge for the year is based on the effective rate of UK corporation tax for the period of 21% (2021: 18%). An increase in the UK corporation rate from 19% to 25% (effective 1 April 2023) was substantively enacted on 24 May 2021. The deferred tax assets and liabilities have been calculated based on these rates.
	Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit is probable, deferred tax assets are reviewed at each reporting date to assess the probability that sufficient taxable profit will be available to allow all or part of deferred tax asset to be utilised. All available evidence was considered including approved budgets, forecasts and analysis of historical operating results. These forecasts are consistent with those prepared and used internally for business planning and impairment purposes. The Group determined that there would be sufficient taxable income generated to realise the benefit of the deferred tax assets and no reasonably possible change to key assumptions would result in a material reduction in forecast headroom of tax profits.

 

7	Earnings/(loss) per share
	Basic loss per share are calculated by dividing the loss attributable to equity holders of On the Beach Group plc by the weighted average number of ordinary shares issued during the year.   Diluted loss per share is calculated by dividing the loss attributable to equity holders of On the Beach Group plc by the weighted average number of ordinary shares issued during the period plus the weighted average number of ordinary shares that would be issued on the conversion of all dilutive potential ordinary shares into ordinary shares.
	Adjusted earnings/(loss) per share figures are calculated by dividing adjusted earnings after tax for the year by the weighted average number of shares.
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
	Basic loss per share
	Loss after tax for the period (£'m)	(5.5)		(17.6)		(30.2)
	Weighted average number of Ordinary Shares (m)	165.7		157.4		159.3
	Earnings per share (in pence per share)	(3.3p)		(11.2p)		(19.0p)
	Diluted loss per share
	Loss after tax for the period (£'m)	(5.5)		(17.6)		(30.2)
	Weighted average number of Ordinary Shares (m)	165.7		157.4		159.3
	Earnings per share (in pence per share)	(3.3p)		(11.2p)		(19.0p)
	There was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
	Adjusted basic earnings/(loss) per share
	Adjusted earnings after tax (£'m)	0.1		(7.8)		(15.4)
	Weighted average number of Ordinary Shares (m)	165.7		157.4		159.3
	Earnings per share (in pence per share)	0.1p		(5.0p)		(9.7p)
	Adjusted diluted earnings/(loss) per share
	Adjusted earnings after tax (£'m)	0.1		(7.8)		(15.4)
	Weighted average number of Ordinary Shares (m)	166.5		157.4		159.3
	Earnings per share (in pence per share)	0.1p		(5.0p)		(9.7p)
	Adjusted earnings after tax is calculated as follows:
		6 months ended 31 March 2022		6 months ended 31 March 2021		Year ended 30 September 2021
		unaudited		unaudited		audited
		£'m		£'m		£'m
	Loss for the year after taxation	(5.5)		(17.6)		(30.2)
	Exceptional costs	0.8		6.2		8.1
	Amortisation of acquired intangibles	2.2		2.2		4.5
	Share based payment charges*	2.6		1.4		2.2
	Adjusted earnings after tax	0.1		(7.8)		(15.4)
	* The share based payment charges are in relation to options which are not yet exercisable.

 

8	Intangible assets
				Brand		Goodwill	Website & development Costs		Website technology	Customer relationships		Total
				£'m		£'m	£'m		£'m	£'m		£'m
	Cost
	At 1 October 2021			35.9		40.2	20.2		22.8	6.5		125.6
	Additions			-		-	4.3		-	-		4.3
	At 31 March 2022			35.9		40.2	24.5		22.8	6.5		129.9
	Accumulated amortisation
	At 1 October 2021			17.5		-	13.3		18.4	2.3		51.5
	Charge for the year			1.2		-	2.4		1.2	0.3		5.1
	At 31 March 2022			18.7		-	15.7		19.6	2.6		56.6
	Net book amount
	At 31 March 2022 (unaudited)			17.2		40.2	8.8		3.2	3.9		73.3
				Brand		Goodwill	Website & development Costs		Website technology	Customer relationships		Total
				£'m		£'m	£'m		£'m	£'m		£'m
	Cost
	At 1 October 2020			35.9		40.2	15.6		22.8	6.5		121.0
	Additions			-		-	2.2		-	-		2.2
	At 31 March 2021			35.9		40.2	17.8		22.8	6.5		123.2
	Accumulated amortisation
	At 1 October 2020			15.1		-	8.7		16.0	1.6		41.4
	Charge for the year			1.2		-	2.2		1.2	0.4		5.0
	At 31 March 2021			16.3		-	10.9		17.2	2.0		46.4
	Net book amount
	At 31 March 2021 (unaudited)			19.6		40.2	6.9		5.6	4.5		76.8
				Brand		Goodwill	Website & development Costs		Website technology	Customer relationships		Total
				£'m		£'m	£'m		£'m	£'m		£'m
	Cost
	At 1 October 2020			35.9		40.2	15.6		22.8	6.5		121.0
	Additions			-		-	4.6		-	-		4.6
	At 30 September 2021			35.9		40.2	20.2		22.8	6.5		125.6
	Accumulated amortisation
	At 1 October 2020			15.1		-	8.7		16.0	1.6		41.4
	Charge for the year			2.4		-	4.6		2.4	0.7		10.1
	At 30 September 2021			17.5		-	13.3		18.4	2.3		51.5
	Net book amount
	At 30 September 2021 (audited)			18.4		40.2	6.9		4.4	4.2		74.1
	The Group capitalise development projects where they satisfy the requirements for capitalisation in accordance with the accounting standard and expense projects that relate to the operations and ongoing maintenance.
	Brand
	The brand intangible asset consists of three brands which were separately identified as intangibles on the acquisition of the respective businesses. The carrying amount of the brands are:
	Brand	Remaining amortisation period			Acquisition			At 31 March 2022		At 31 March 2021	At 30 September 2021
								unaudited		unaudited	audited
								£'m		£'m	£'m
	On the Beach	4 years			On the Beach Travel Limited			13.1		15.1	14.1
	Sunshine.co.uk	5 years			Sunshine.co.uk Limited			0.7		0.9	0.8
	Classic Collection	6 years			Classic Collection Holidays Limited			3.4		3.6	3.5
								17.2		19.6	18.4

 

9	Tangible assets
	Fixed asset additions for the 6 months ended 31 March 2022 amounted to £0.6m (6 months ended 31 March 2021: £nil, year ended 30 September 2021: £1.1m). Right-of-use assets recognised for the period amounted to £1.5m (6 months ended 31 March 2021: £nil, year ended September 2021: £nil).
	Disposals in the period amounted to £nil (6 months ended 31 March 2021: £nil, year ended 30 September 2021: £2.2m).
	Depreciation charge of the period amounted to £0.9m (6 months ended 31 March 2021: £0.9m, year ended 30 September 2021: £1.8m).
10	Trade and other receivables
		At 31 March 2022		At 31 March 2021		At 30 September 2021
		unaudited		unaudited		audited
	Amounts falling due within one year:	£'m		£'m		£'m
	Trade receivables - net	200.8		78.3		79.5
	Other receivables and prepayments	23.4		21.9		15.4
		224.2		100.2		94.9
	For the 6 months ending 31 March 2022, other receivables includes £1.4m receivable in respect of amounts due from airlines as a result of exceptional COVID-19 cancellations. Other receivables and prepayments includes £10.7m of advanced payments to suppliers.
	For the 6 months ending 31 March 2021, other receivables includes £11.8m receivable in respect of amounts due from airlines as a result of exceptional COVID-19 cancellations. Other receivables and prepayments includes £2.1m of advanced payments to suppliers.
	For the year ended 30 September 2021, other receivables includes £3.3m receivable in respect of amounts due from airlines as a result of exceptional COVID-19 cancellations. Other receivables and prepayments includes £5.3m of advanced payments to suppliers.
11	Trade, other payables and provisions
		At 31 March 2022		At 31 March 2021		At 30 September 2021
		unaudited		unaudited		audited
		£'m		£'m		£'m
	Non-current liabilities
	Lease liabilities	3.3		3.6		2.5
	Current liabilities
	Trade payables	242.7		78.3		104.3
	Accruals	30.2		10.1		14.8
	Lease liabilities	0.9		0.4		0.4
	Provisions	3.1		12.3		4.6
		280.2		104.7		126.6
	Trade payables
	For the 6 months ended 31 March 2022, trade payables includes £0.3m in respect of refunds owed to customers (6 months ended 31 March 2021: £0.8m; year ended 30 September 2021: £0.9m), with the related receivable from the airlines recognised in trade receivables. Where the refunds are not received from the airline the Group has a legally enforceable right to offset the recognised amounts. The Group has opted to show the figures gross due to no option to settle on a net basis or realise the asset and settle the liability simultaneously.
	Provisions
	For the 6 months ended 31 March 2022, the provision of £3.1m consists of £2.8m refund liability in respect of cancelled and disrupted holidays and £0.3m recognised for specific suppliers.
	For the 6 months ended 31 March 2021, the £12.3m provision is in respect of the refund liability for expected future cancellations in relation to bookings taken before 31 March 2021.
	For the year ended 30 September 2021, the provision of £4.6m consists of £4.1m refund liability in respect of expected future cancellations in relation to bookings taken before 30 September 2021 and £0.5m recognised for specific suppliers.

 

12	Trust account
	Trust accounts are restricted cash held separately and only accessible once the Trust rules are met as approved by our Trustees and the Civil Aviation Authority, this is at the point the customer has travelled or the booking is cancelled and refunded.

 

13	Financial instruments
	At the balance sheet date the Group held the following:
			FV Level		At 31 March 2022		At 31 March 2021		At 30 September 2021
					unaudited		unaudited		audited
	Financial assets				£'m		£'m		£'m
	Derivative financial assets designated as hedging instruments
	Forward exchange contracts		2		-		-		-
	Financial assets at amortised cost
	Trade and other receivables				224.2		98.1		39.0
	Trust account				99.1		24.1		56.0
	Cash at bank				16.8		30.0		89.5
	Total financial assets				340.1		152.2		184.5
	Financial liabilities
	Derivatives designated as hedging instruments
	Forward exchange contracts		2		(0.4)		(2.0)		(0.3)
	Financial liabilities at amortised cost
	Trade and other payables				(277.2)		(92.4)		(122.0)
	Provisions				(3.1)		(12.3)		(4.6)
	Total financial liabilities				(280.7)		(94.4)		(122.3)
	a) Measurement of fair values
	The table below analyses financial instruments carried at fair value, by valuation method. The different levels have been defined as follows:
	i)    Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities
	ii)   Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,  either directly (i.e., as prices) or indirectly (i.e., derived from prices)
	iii)  Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
					At 31 March 2022		At 31 March 2021		At 30 September 2021
					£'m		£'m		£'m
	Forward Contracts				(0.4)		(2.0)		(0.3)
	The forward contracts have been fair valued at 31 March 2022 with reference to forward exchange rates that are quoted in an active market, with the resulting value discounted back to present value.
	b) Financial risk management
	The Group's principal financial liabilities, other than derivatives, comprise revolving credit facility and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations. The Group's principal financial assets include trade receivables, and cash at bank that derive directly from its operations.
	In the course of its business the Group is exposed to market risk (including foreign exchange risk and interest rate risk), credit risk, liquidity risk and technology risk. The Group's overall risk management strategy is to minimise potential adverse effects on the financial performance and net assets of the Group. These policies are set and reviewed by senior finance management and all significant financing transactions are authorised by the Board of Directors.
	The Group's key financial market risks are in relation to foreign currency rates. The majority of the Group's purchases are sourced from outside the United Kingdom and as such the Group is exposed to the fluctuation in exchange rates (currencies are principally Sterling, US Dollar, Euro and Swedish Krona). The Group places forward cover on the foreign currency exposure of its purchases.
	Derivatives are valued using present value calculations. The valuation methods incorporate various inputs including the foreign exchange spot and forward rates, yield curves of the respective currencies and currency basis spreads between the respective currencies.
	Revolving credit facility
	The Group has a revolving credit facility with Lloyds Bank plc. The purpose of the facility is to meet the day to day working capital requirements of the Group.
	The total facility is £75m and has two elements as follows:
	·      Core facility of £50m expiring December 2023; and
	·      CLBILS facility of £25m expiring May 2023.
	The interest rate payable on the core facility is equal to SONIA plus a margin. The margin contained within the facility is dependent on net leverage ratio and the rate per annum is 3.75% for the facility or any unpaid sum. The interest rate payable on the CLBILS facility is equal to the base rate plus a margin. The margin contained within the facility is 2.30% per annum for the facility or any unpaid sum.
	The terms of the facility prior to 1 October 2022 include the following key financial covenants:
	i)    LTM minimum EBITDA: December 21 £20.4m loss; March 22 £1.2m loss
	ii)   EBITDA/Net debt ratio; June 22 2.5:1 ; September 22 2.25:1
	The Group did not breach the covenants during the period.
	The terms of the facility following 1 October 2022 include the following covenants:
	i)    that the ratio of adjusted EBITDA to net finance charges in respect of any relevant period shall not be less than 5:1;
	ii)   that the ratio of total net debt to adjusted EBITDA shall not exceed 2:1
	The RCF is available for other credit uses including currency hedging liabilities and corporate credit cards. At 31 March 2022, the liabilities recognised in trade and other payables for the other credit uses was £14.9m, leaving £60.1m of the Lloyds facility available for use. Card facilities with other providers remain available for use. The amount drawn down in cash at 31 March 2022 was £nil.

 

14	Related party transactions
	No related party transactions have been entered into during the period.

 

PRINCIPAL RISKS AND UNCERTAINTIES

There are a number of potential risks and uncertainties which could have a material impact on the Company's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. The directors do not consider that the principal risks and uncertainties have changed since the publication of the Annual Report for the year ended 30 September 2021. These risks and how the Company seeks to mitigate these risks are set out on pages 31 to 40 of the 2021 Annual Report and Accounts which can be found at www.onthebeachgroupplc.com.

STATEMENT OF DIRECTORS' RESPONSIBILITIES

The Directors are responsible for preparing the interim report in accordance with applicable law and regulations. The Directors confirm that the condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 ('Interim Financial Reporting') as adopted by the United Kingdom.

The interim management report includes a fair review of the information required by the Disclosure and Transparency Rules paragraphs 4.2.7 R and 4.2.8 R, namely:

·      an indication of important events that have occurred during the six months ended 31 March 2022 and their impact on the condensed set of financial information, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      material related-party transactions during the six months ended 31 March 2022 and any material changes in the related-party transactions described in the Annual report and Accounts 2021. The Directors of the Company are listed in the Annual Report and Accounts 2021.

A list of current Directors is also maintained on the Company's website: http://onthebeachgroupplc.com.

The interim report was approved by the Board of Directors and authorised for issue on 24 May 2022 and signed on its behalf by:

Shaun Morton - CFO

24 May 2022

 

GLOSSARY
APM	Definition	Reconciliation to closest GAAP measure
Adjusted CCH EBITDA	Adjusted CCH EBITDA is based on CCH operating profit before depreciation, amortisation and the impact of exceptional items. Exceptional items consists of exceptional costs as result of COVID-19 in 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Adjusted CCH EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		CCH operating loss	(2.4)	(1.9)	(4.8)
		Depreciation and amortisation	0.2	0.1	0.2
		Amortisation of acquired intangibles	0.5	0.5	1.1
		CCH EBITDA	(1.7)	(1.3)	(3.5)
		Exceptional items	-	-	0.4
		Adjusted CCH EBITDA	(1.7)	(1.3)	(3.1)
Adjusted CPH EBITDA	Adjusted CPH EBITDA is based on CPH operating loss before depreciation, amortisation and the impact of exceptional items. Exceptional items consists of legal and professional fees for 2022 and exceptional cancellations as result of COVID-19 for 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Adjusted CPH EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		CPH operating loss	(0.5)	(0.9)	(1.6)
		Depreciation and amortisation	0.1	0.1	0.2
		CPH EBITDA	(0.4)	(0.8)	(1.4)
		Exceptional items	0.1	0.2	(0.3)
		Adjusted CPH EBITDA	(0.3)	(0.6)	(1.7)
Adjusted EPS	Adjusted EPS is calculated on the weighted average number of Ordinary share in issue, using the adjusted earnings after tax.	Adjusted EPS	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		Adjusted earnings after tax	0.1	(7.8)	(15.4)
		Basic weighted average number of ordinary shares (m)	165.7	157.4	159.3
		Adjusted EPS (p)	0.1	(5.0)	(9.7)
Adjusted International EBITDA	Adjusted International EBITDA is based on International operating loss before depreciation and amortisation.	Adjusted International EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		International operating profit/(loss)	0.1	(0.3)	(0.4)
		Depreciation and amortisation	-	-	0.1
		International EBITDA	0.1	(0.3)	(0.3)
		Impact of COVID-19	-	0.1	0.1
		Adjusted International EBITDA	0.1	(0.2)	(0.2)
Adjusted OTB operating loss	Adjusted OTB EBIT is based on OTB operating loss before share based payments, amortisation of acquired intangibles and exceptional items. Amortisation of acquired intangibles are linked to the historical acquisitions of businesses. Share based payments represents the non-cash costs which fluctuates year on year. Exceptional items consists of legal and professional fees for 2022 and exceptional cancellations as result of COVID-19 for 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Adjusted OTB operating loss (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		OTB operating loss	(3.7)	(18.1)	(29.0)
		Exceptional items	0.9	7.3	9.8
		Share based payments	3.2	1.7	2.8
		Amortisation of acquired intangibles	2.3	2.3	4.4
		Adjusted OTB operating loss	2.7	(6.8)	(12.0)
Adjusted OTB EBITDA	Adjusted OTB EBITDA is based on OTB operating loss before depreciation, amortisation, share based payments and exceptional items. Share based payments represents the non-cash costs which fluctuates year on year. Exceptional items consists of legal and professional fees for 2022 and exceptional cancellations as result of COVID-19 for 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Adjusted OTB EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		OTB operating loss	(3.7)	(18.1)	(29.0)
		Depreciation and amortisation	2.9	2.9	5.9
		Amortisation of acquired intangibles	2.3	2.3	4.4
		OTB EBITDA	1.5	(12.9)	(18.7)
		Exceptional items	0.9	7.3	9.8
		Share based payments	3.2	1.7	2.8
		Adjusted OTB EBITDA	5.6	(3.9)	(6.1)
Adjusted OTB revenue after marketing cost	Adjusted OTB revenue after marketing cost is revenue, adjusted for the impact of COVID-19, after "OTB" online and offline marketing costs.	Adjusted OTB revenue after marketing cost (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		OTB revenue	36.8	3.2	13.0
		Adjustment for COVID 19	(0.1)	6.8	9.1
		Adjusted OTB revenue	36.7	10.0	22.1
		OTB online marketing costs	(11.1)	(2.3)	(5.5)
		OTB off-line marketing costs	(8.3)	(4.3)	(6.1)
		Total OTB marketing	(19.4)	(6.6)	(11.6)
		Adjusted OTB revenue after marketing costs	17.3	3.4	10.5
Adjusted earnings after tax	Adjusted earnings after tax is based on (loss)/profit after tax adjusted for amortisation of acquired intangibles, share based payments and exceptional items. Amortisation of acquired intangibles are linked to the historical acquisitions of businesses. Share based payments represents the non-cash costs which fluctuates year on year. Exceptional items consists of legal and professional fees for 2022 and exceptional cancellations as result of COVID-19 for 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Adjusted earnings after tax (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		Loss for the period	(5.5)	(17.6)	(30.2)
		Share based payments (net of tax)	2.6	1.4	2.2
		Exceptional costs (net of tax)	0.8	6.2	8.1
		Amortisation of acquired intangibles (net of tax)	2.2	2.2	4.5
		Adjusted earnings after tax	0.1	(7.8)	(15.4)
Adjusted profit/(loss) before tax	Adjusted profit/(loss) before tax is based on loss before tax adjusted for amortisation of acquired intangibles, share based payments and exceptional items. Amortisation of acquired intangibles are linked to the historical acquisitions of businesses. Share based payments represents the non-cash costs which fluctuates year on year. Exceptional items consists of legal and professional fees for 2022 and exceptional cancellations as result of COVID-19 for 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Adjusted profit/(loss) before tax (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		Loss before tax	(7.0)	(21.6)	(36.7)
		Amortisation of acquired intangibles	2.8	2.8	5.5
		Share based payments	3.2	1.7	2.8
		Exceptional costs	1.0	7.6	10.0
		Adjusted profit/(loss) before tax	-	(9.5)	(18.4)
CCH EBITDA	CCH EBITDA is based on CCH operating loss before depreciation and amortisation.	CCH EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		CCH operating loss	(2.4)	(1.9)	(4.8)
		Depreciation and amortisation	0.7	0.6	1.3
		CCH EBITDA	(1.7)	(1.3)	(3.5)
CPH EBITDA	CPH EBITDA is based on CPH operating loss before depreciation and amortisation.	CPH EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		CPH operating loss	(0.5)	(0.9)	(1.6)
		Depreciation and amortisation	0.1	0.1	0.2
		CPH EBITDA	(0.4)	(0.8)	(1.4)
Exceptional items	Exceptional items consists of legal and professional fees for 2022 and exceptional cancellations as result of COVID-19 for 2021. These costs / income are excluded by virtue of their size and in order to reflect management's view of the performance of the Segment and allow comparability to prior years.	Exceptional items (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		Impact of COVID-19		7.6	10.0
		Legal & Professional costs	1.0	-	-
		Exceptional items	1.0	7.6	10.0
International EBITDA	International EBITDA is based on International operating loss before depreciation and amortisation.	International EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		International operating profit/(loss)	0.1	(0.3)	(0.4)
		Depreciation and amortisation	-	-	0.1
		International EBITDA	0.1	(0.3)	(0.3)
OTB EBITDA	OTB EBITDA is based on OTB operating profit before depreciation and amortisation.	OTB EBITDA (£'m)	6 months ended 31 March 2022	6 months ended 31 March 2021	2021
		OTB operating loss	(3.7)	(18.1)	(29.0)
		Depreciation and amortisation	5.2	5.2	10.3
		OTB EBITDA	1.5	(12.9)	(18.7)