Online travel agent On The Beach has seen its share price rise nearly five per cent after posting strong sales and profit figures in its latest annual results.
While Britain’s hot summer and the World Cup football tournament may have been keeping some people at home, On The Beach’s annual pre-tax profits rose by 18 per cent to £33.6million, while sales increased by 24.5 per cent to £104.1million.
On Tuesday, rival travel firm Thomas Cook issued its third profit warning this year, blaming its performance on rising costs and a slower summer season.
Results: Online travel agent On The Beach has seen its share price rise nearly five per cent after posting strong sales and profit figures
Commenting on On The Beach’s results, analysts at AJ Bell said: ‘On The Beach has demonstrated the benefits of being agile and able to adapt to changing market conditions.
‘In stark contrast to Thomas Cook’s profit warning on November 27, On The Beach has managed to grow revenue, profit and its dividend by a substantial amount, clearly showing that you can still make decent money from selling holidays.’
FTSE-250 listed On The Beach’s share price is up 4.98 per cent or 20p to 422p.
The group has increased its annual dividend for investors by 17.9 per cent, up from 2.8p a share to 3.3p a share.
The company saw reduced demand from in the UK as the combination of warmer weather and the World Cup kept potential holidaymakers at home.
Chief executive Simon Cooper said the company was able to adapt to the shifting trading environment.
He said: ‘Whilst this impacted our headline revenue growth during the period, the weaker demand also drove a significant reduction in the Group’s marketing spend, ensuring growth in revenue after marketing costs remained strong.
‘This is further testament to On The Beach’s resilient and flexible business model.’
On the up: FTSE-250 listed On The Beach’s share price is up 4.98 per cent or 20.00p to 422.00p
Profit: On The Beach’s annual pre-tax profits rose by 18 per cent to £33.6million
The group’s smartphone traffic comprises 66 per cent of all traffic and smartphone bookings have increased by 48 per cent year-on-year.
The company saw a ‘strong return’ in appetite for customers to travel to eastern Mediterranean destinations like Turkey, but also found itself up against ‘aggressive discounting’ of tor operators in the ‘lates market’ to boost sales figures.
On Tuesday, shares in Thomas Cook fell over 30 per cent after the group issued its second profit warning in two months.
In an unscheduled update ahead of its full-year results due to be published on Thursday, the holiday firm’s boss, Peter Fankhauser, admitted the group’s year had been ‘disappointing.’
For this year, Thomas Cook now expects underlying profits to come in at around £250million, which is £30million lower than it was expecting two months ago.
Slump: For this year, Thomas Cook now expects underlying profits to come in at around £250million, which is £30million lower than it was expecting two months ago