Belfast Telegraph

On the Beach warns on profits over plummeting pound

Shares in the company dived 17% to 371p in early trading on Friday.

On the Beach has issued a profit warning after the package holiday firm was hit by the plummeting value of the pound amid the risk of a no-deal Brexit (PA)
On the Beach has issued a profit warning after the package holiday firm was hit by the plummeting value of the pound amid the risk of a no-deal Brexit (PA)

By Henry Saker-Clark, PA City Reporter

On the Beach has issued a profit warning after the package holiday firm was hit by the plummeting value of the pound amid the risk of a no-deal Brexit.

The company said the diving value of sterling against the euro since May has forced it push up its holiday prices compared to competitors.

The package holiday operator said it does not hedge its exposure to currency changes, unlike larger travel industry rivals, but instead alters prices dependent on the value of the pound.

Sterling has dived 6.9% against the euro over the past three months – with £1 currently valued at 1.08 euro – as investors worry about the impact of a potential no-deal Brexit.

The group said that, despite a strengthening in demand over the second half of the year, it has struggled against competitors who have been able to keep prices lower.

It said it has been difficult to maintain margins and keep market share at the same time, and therefore expects to miss full-year performance targets.

Nevertheless, the company said it has made “excellent progress” towards its growth strategy, which has seen the company invest in digital recruitment after moving its headquarters to Manchester at the end of 2018.

It added that it expects to deliver revenue growth on its international platforms during the second half of the year.

Simon Cooper, chief executive of On the Beach Group, said: “In what is a difficult general economic climate, we remain confident in the resilience and flexibility of our business model, focusing on profitable growth and an ability to capitalise on any structural changes in the market.

“In full-year 2019 we have invested significantly in our infrastructure, talent and technology to ensure that we build strong foundations to support our strategic objectives.”

Shares in the company dived 17% to 371p in early trading on Friday.

PA

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