On the Beach Group said that it remained confident about the long-term prospects of the business despite the ongoing pandemic.
The company said that its strong balance sheet meant that it was “well-positioned to sustain further significant disruption and to grow market share as demand for holidays recovers”.
Simon Cooper, CEO, On the Beach Group, said: "It is clear now that the full impact of Covid-19 will be every bit as extreme as any of us could have mapped out at the beginning of the year. Following the overwhelming support we received from our shareholders in May, combined with our ring-fencing of customer prepayments, we are in a strong and debt-free financial position. The board is confident about the group's long term strategy and we will continue to look at the increasing number of exciting opportunities to grow our market share both in the UK and internationally.”
The company said that, following the reopening of airspace in early July, it was pleased that its customers were once again able to enjoy international beach holidays, “albeit this freedom was short-lived and the subsequent impact on consumer confidence has led to significant reductions in seat capacity over the winter”. This position was exacerbated by a four-week ban on international leisure travel which began on 5 November.
As a result of the travel restrictions in place and low levels of consumer confidence, the group experienced a varied trading performance through Q3 and Q4 with booking volumes down 75% and 53% respectively year-on-year. Due to strong cost control, adjusted profit before tax for the year (which excluded exceptional costs and brand amortisation) was at breakeven levels. Cancellation rates were in excess of 90% across summer 2020, well above the company’s assumption at the half year. The group expected it to continue at these levels over the winter. This has led to further exceptional costs of £10m in the second half which the group now expected to be £45m for the full year.
The group said that it “continued to work hard” to refund all customers in cash and in full where their holidays are cancelled. It added: |’There have been and continue to be substantial delays in receiving refunds from airlines. The group continues to pursue these rightful refund claims on behalf of its customers”.
The company had made total customer refunds in cash since 15 March of £160m (£70m hotels & transfers and £90m for flights), with monies received from airlines for cancelled flights £79m
As at 6 November the group had cash of £44m, excluding customer prepayments which were held in a ring-fenced trust account and access to a £75m credit facility which was undrawn.