On The Beach slumps on CEO exit

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On The Beach slumps on CEO exit
Credit: © Reuters.

By Geoffrey Smith 

Investing.com -- Shares in On The Beach (LON: OTB ) slumped over 10% on Thursday as the online package holiday company said its founder and Chief Executive Simon Cooper will step down from the CEO role "within the next 12 months."

Cooper, who will continue to act as a non-executive director, will be succeeded by Chief Financial Officer Shaun Morton. The exact timing of the handover will depend on how quickly the company can find a new CFO.

The announcement came at the same time as On The Beach announced full-year results for the 12 months through September which showed the company still struggling to recover the business it lost during the pandemic. Despite a smart rebound as the European tourist trade reopened this year, adjusted revenue in the year was still a fraction below fiscal 2019, the last year before COVID-19, while profit before tax on an adjusted basis was only £14.5 million (£1=$1.2205), less than half the £34.5M reported in 2019.

The group said it expects another year of growth in fiscal 2023 despite the macroeconomic headwinds, but its commentary on current trading was conspicuously cautious, highlighting the fact that the fourth quarter of the calendar year is always its quietest period and noting weakness in its bread-and-butter 3-star short-haul holiday business, something that is consistent with reports elsewhere of higher inflation having a greater immediate impact on lower-income households. Sales of 3-star holidays were 18% below pre-pandemic levels.

By contrast, it said that its forward order book was "healthier" than at the same time in 2019 and noted that its premium, long-haul and B2B operations were all growing. Sales of 5-star holidays were up 82% from 2019 levels in the last 12 months. Higher-margin products are steadily gaining importance in the group's product mix, resulting in a 31% rise in average booking values compared to fiscal 2019.  

By 05:30 ET (10:30 GMT), On The Beach stock was down 12.6% at a three-week low. It's now down 61% this year, on concerns that the cost-of-living crisis caused by double-digit U.K. inflation will hurt U.K. consumer spending. 

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