TIDMOTB
RNS Number : 6988V
On the Beach Group PLC
05 December 2023
5 December 2023
On the Beach Group plc
("On the Beach", "OTB", the "Company" or the "Group")
PRELIMINARY RESULTS FOR YEARED 30 SEPTEMBER 2023 ('FY23')
Financial Overview
2023 2022
------------------ --------------------
Adjusted(1) GAAP Adjusted(1) GAAP(7)
---------------------------- ----------- ----- ----------- -------
Group TTV(2) 1,070.4 - 849.4 -
Group revenue 170.2 143.4
Revenue as Agent(3) 112.1 92.9
Revenue as Principal(4) 58.1 50.5
Group gross profit 114.0 94.9
Gross profit as Agent 106.4 89.1
Gross profit as Principal 7.6 5.8
Group profit before tax(5) 23.6 12.9 14.2 2.2
Basic earnings per share(6) 11.6p 6.4p 6.4p 1.0p
---------------------------- ----------- ----- ----------- -------
1 Adjusted measures are non-GAAP measures, a full explanation of
the adjustments is included in the glossary. The prior period is
restated for the effects of the discontinued operations.
2 Group Total Transaction Value ('TTV') is a non-GAAP measure
representing the cumulative total transaction value of sales booked
each month before cancellations and amendments.
3 As an agent, revenue is accounted on a 'booked' rather than
'travelled' basis (unlike tour operators and airlines) and the
Group is reporting bookings taken between 1 October 2022 and 30
September 2023. Adjusted revenue is revenue before exceptional
items of GBPnil (2022: GBP1.0m) and fair value losses on forward
currency contracts of GBP0.8m (2022: gains of GBP0.8m).
4 As a principal, revenue is accounted on a 'travelled' basis
and reported on a gross basis and the Group is reporting bookings
which departed between 1 October 2022 and 30 September 2023.
5 Group adjusted profit before tax excludes amortisation of
acquired intangibles of GBP5.2m (2022: GBP5.5m), share-based
payments cost of GBP1.2m (2022: GBP4.7m) fair value losses on
forward currency contracts of GBP0.8m (2022: gains of GBP0.8m) and
exceptional items of GBP3.5m (2022: GBP2.6m). A full explanation of
the adjustments is included in the glossary.
6 Adjusted earnings per share is Group adjusted profit after tax
for continuing operations divided by the average number of shares
in issue during the period. Earnings per share is Group profit
after tax for continuing operations divided by the average number
of shares in issue during the period.
7 The prior period is restated for the effects of the discontinued operations
Overview of the year
-- Revenue of GBP170.2m was GBP26.8m (18.7%) higher than FY22:
- The Group delivered record TTV and Revenue in the year, as the
market returned to a more normal pattern after a number of years of
disruption.
- There was strong demand for holidays across its core
addressable market and strategic expansion areas, with growth
across both passenger numbers and ABVs.
- Summer 23 performance was especially pleasing, with passenger
numbers for those holidays departing between May and October up 13%
on the prior year.
- The Group continues to focus on improving the operational
efficiency of its cost base, with marketing costs reducing as a %
of revenue vs the prior year, and admin expenses as a % of revenue
in line with the prior year.
-- Exceptional cancellations in the prior year relating to the
impact of COVID-19 and supplier disruption have not repeated in the
current year, FY23: GBPnil, (FY22: GBP1.3m). Costs incurred in
respect of wildfires and other similar events in the year have been
included in the underlying result.
-- Adjusted profit before tax was GBP23.6m (FY22: GBP14.2m)
reflecting strong revenue growth in the OTB segment along with a
reduction in marketing spend as a % of revenue. Statutory profit
before tax of GBP12.9m (FY22: GBP2.2m).
Cash and liquidity
-- The Group remains in a very strong financial position with
combined cash balances of GBP184.4m (2022: GBP133.9m):
- Group cash, excluding amounts held in trust, of GBP75.8m (30 September 2022: GBP64.5m).
- Customer prepayments held in a ring-fenced trust account of
GBP108.6m (30 September 2022: GBP69.4m).
-- Net finance income in the year has increased to GBP2.6m
(2022: finance cost of GBP0.5m) due to a GBP3.8m increase in bank
interest receivable.
-- The Group recently won a legal claim which it brought in
October 2021 against Ryanair in respect of refunds owed by Ryanair
to the Group for flights that had been cancelled or had been
subject to a major change where customers had chosen a refund (the
"Refunds Claim"), and the court awarded GBP2m to the Group, plus
interest and costs. The Group intends to pursue Ryanair for further
sums due in similar circumstances which accrued after issue of the
Refunds Claim. Given the date of summary judgment was after the
balance sheet date the proceeds of this action, along with costs
recovered, will be included within exceptional items in FY24.
-- The Group is currently awaiting the announcement of ATOL
reforms. We understand that there has been further delay to the
announcement of proposed reforms which is now not expected until
2024, however the Group remains well placed regardless of the
outcome.
Current Trading and Outlook
-- Our FY23 growth has continued into the new financial year with YTD TTV as at 2 Dec +26%.
-- Our forward book is at record levels and Group Winter '23 YTD TTV is +34%.
-- We approach our key booking period in Q2 with significant momentum.
-- Our platform and proposition are stronger than ever and we
are taking share in adjacent markets.
-- Current trends and strategy give us confidence that Summer
'24 will be significantly ahead of Summer '23.
-- Reinstatement of dividend from FY24 reflecting the Group's
continuing cash generative position and in line with its capital
allocation framework
Shaun Morton, Chief Executive Officer of On the Beach Group plc,
commented:
"I am pleased with the Group's incredibly strong performance
this year, delivering record TTV and exceeding the GBP1bn revenue
milestone for the first time - a huge achievement testament to the
hard work across all our teams in the business. In line with our
broader strategy, our firm focus and investments towards our
marketing campaign has delivered our highest ever top three brand
consideration score.
"Last year we differentiated ourselves from other mainstream
holiday companies as the first to offer free lounge and fast track
on bookings and this continues to grow customer satisfaction. The
investment we have put into our proprietary technology has enhanced
our flight, hotel and front-end platform capability and thanks to
this upgraded front-end, we have improved the user experience
leveraging technology, automation and AI via our new website and
customer app. This has all helped drive growth in both the core
business and expansion segments.
"This year we have seen the majority of consumers protect - not
sacrifice - their holiday, a trend that our research shows will
continue. We are already seeing this with strong momentum into the
new financial year with TTV up 26% for the first nine weeks of FY24
and Winter FY23 bookings up 34%.
"We approach our key booking period in Q2 with significant
momentum and this gives us confidence that Summer '24 will be
significantly ahead of Summer '23."
Analyst Webinar
A briefing for sell-side equity analysts will be held today at
10.30am at FTI Consulting, 200 Aldersgate, Aldersgate Street,
London, EC1A 4HD. For those unable to attend in person, there will
be a conference call facility (no video), details of which can be
obtained from FTI Consulting.
For further information:
On the Beach Group plc via FTI Consulting
Shaun Morton, Chief Executive
Officer
Jon Wormald, Chief Financial Officer
FTI Consulting Tel: +44 (0)20 3727 1000
Alex Beagley onthebeach@fticonsulting.com
Fiona Walker
Harriet Jackson
Rafaella de Freitas
Hannah Butler
About On the Beach
On the Beach Group plc is one of the UK's largest online beach
holidays retailers, with significant opportunities for growth. Its
innovative technology, low-cost base and strong customer-value
proposition provides a structural challenge to legacy tour
operators and online travel agents, as it continues disrupting the
online retail of beach holidays. Its model is customer-centric,
asset light, profitable and cash generative.
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 financial statements and
investor presentation is available on
www.onthebeachgroupplc.com
Chief Executive's review
On the Beach Group plc is one of the UK's largest online beach
holidays retailers, with significant opportunities for growth. We
operate in a sector where consumers are seeking convenience,
choice, value, and a personalised experience with financial
protection. Our proprietary technology, coupled with a low-cost,
asset light and cash generative operating model provides a
structural challenge to tour operators.
This has been a record year for On the Beach, achieving Group
TTV for the year of GBP1.1bn, exceeding the GBP1bn milestone for
the first time. I am incredibly proud of my team and our
performance in FY23 is testament to their efforts.
In line with our strategy to capture share as demand for beach
holidays recovers, the Group successfully increased booking volumes
and Average Booking Values ("ABV") in its core addressable market,
whilst delivering a 74% increase in B2C TTV for long-haul bookings
and a 32% increase in premium 5* TTV.
Performance has been underpinned by leveraging the benefits of
continued investments in our proprietary technology platform, brand
and customer proposition. Alongside access to greater seat and bed
capacity, I am confident that the activities we have undertaken
over the last 12 months have laid further strong foundations for
the Group for the year ahead.
Following our strong second half and full year performance, we
exited FY23 with the momentum of a record forward order book and
demonstrable progress in strategic expansion areas, which we are
excited to build upon in FY24.
People
Our people continue to be the driving force behind the business
and deserve credit for our record performance this year. We've
successfully embedded hybrid and flexible working as 'the way we
work', and it's enabling us to recruit from a wider talent pool.
This is important in helping us to attract and retain talent in a
tight labour market, where people are seeking a greater degree of
flexibility.
Our business continues to support employees in all aspects of
their lives, promoting a healthy work-life balance, enabling
flexible working, creating a collaborative working environment and
a high-performance culture, where they're fully supported and
encouraged to realise their full potential.
We continually review policies and benefits to ensure that
they're competitive and relevant for our people, and in FY24 we'll
be introducing a number of new and updated policies that are
focused on Wellbeing and Family Friendly, including; the option to
buy additional days leave, increased employer pension contributions
and enhanced family friendly leave. These policies, individually
and in aggregate, will help ensure we remain competitive in the
marketplace for both hiring and retaining key talent, and will
offer the support our valued employees need.
We were delighted to achieve an Engagement Index score of 7.6 in
our Annual Engagement Survey. This shows that our people are
enjoying life at On the Beach, but we won't rest on our laurels.
We'll use the data and insight from this survey to develop action
plans that make sure we keep a sharp focus on supporting and
driving high performance and ensure On the Beach is always a place
where people are supported and encouraged to reach their
potential.
Trading
The Group significantly increased investment in the first half
of the year across brand, technology and its customer proposition,
to support strong sales growth for summer 2023 departures, to
continue to build momentum for the second half of the year and to
grow our market share. Investment in these areas was weighted to H1
to enable us to capitalise on peak bookings and build momentum into
H2.
Trading momentum continued into the second half, which resulted
in record TTV, +26% year on year, driven by growth in volumes and
ABV. Despite remaining early into FY24, bookings for Summer 24 are
also significantly ahead of where they were at the equivalent time
in the prior year.
Addressable market
Over the last few years, we have outlined our strategy to
continue to grow the Group's share of short haul beach holidays
sold online (Value), whilst penetrating new markets, including
premium and long-haul beach holidays sold online, and beach
holidays sold through our B2B channel.
Value
We have experienced a significant year on year improvement in
volumes and ABV in our core addressable market, with B2C TTV growth
on 3* holidays of 32% Year on Year ('YOY').
Having been subject to a protracted cost of living crisis, the
UK consumer is now experiencing deflation in energy bills and lower
inflation in food costs. Since May, real wage growth has turned
positive and discretionary income data indicates four consecutive
months of growth YOY.
However, against this backdrop, we are aware that the
cost-of-living crisis is certainly not over. Many consumers are
experiencing financial difficulties, for example those with
exposure to higher mortgage rates or rising rental costs. Despite
this backdrop, research shows that summer family beach holidays are
increasingly viewed as sacrosanct. Our YOY volume data for Summer
23, Winter 23/24 and early stage data for Summer 24 indicates a
positive trajectory, with 3* volumes for S24 ahead of Summer 23. We
expect volumes in the 3* value market to exceed pre-pandemic levels
in FY24.
Premium
The premium market continues to perform strongly with B2C TTV
growth in 5* holidays of +32% YOY. The premium market has shown
greater resilience to cost-of-living pressures, recovering earlier.
Attracting these customers that typically book earlier is giving
greater visibility of the season ahead and delivering higher
revenue per booking. FY23 Group premium TTV is now 126% greater
than its level in FY19.
The strategic actions the Group has taken to enhance its
proposition and access more premium hotels, positions it well to
continue to outperform in this market. The Group estimates premium
to be of a similar size to the value market in terms of passengers,
but approximately two and a half times larger in absolute value,
and the revenue margin opportunity on each individual booking is
also significantly greater.
On the Beach continues to invest in the proposition, which
supports higher searches for 5* hotels. The Group is focused on
growing TTV in this market in FY24 and we believe there is a
significant incremental revenue opportunity to be gained in the
medium term by attracting premium customers to the brand.
Long-Haul
The Group is successfully scaling its long-haul offering and OTB
is now a brand firmly associated with long-haul as well as short
haul beach holidays. Scheduled air connectivity has been enhanced
again this year with the addition of new key carriers, improving
the breadth and depth of customer choice for both Westbound and
Eastbound long haul flying, and increasing the number of
destinations we can offer to our customers.
B2C long-haul TTV was up 74% in FY23 versus the prior year and
we experienced 12 months of consistent growth in Sales on prior
periods. Group long-haul TTV mix was up to 8% of TTV in FY23, which
represents significant growth compared to 2% Group TTV in FY19. The
largest destinations (Dubai, Mexico and Dominican Republic) are
performing well, whilst destinations newer to the Group (US,
Phuket, Mauritius, Maldives) continue to gather momentum.
There remains a significant organic growth opportunity in long
haul. OTB has a low single digit share of a large B2C long haul
market. The majority of OTB's continued growth is from its existing
LH destinations, and there is significant headroom for further
penetration in these destinations. In addition, there is
opportunity for further growth from new destinations, both from
existing and recently added long-haul carriers.
B2B
The Group appointed a new CEO, Andy Freeth, at Classic in
November 2022 to drive continued growth across Classic Collection
Holidays and Classic Package Holidays. Both B2B businesses are
recognised brands operating in a market with opportunities to grow.
The Group has partnerships with the majority of the UK's travel
agent and homeworking groups and is a trusted operator in the B2B
space, having won a number of recent industry awards, voted for by
travel agents.
This has been a challenging year for high street retail, which
has experienced a sluggish recovery from the pandemic. The
competitive landscape for our B2B businesses has also become more
crowded, as tour operators and low--cost airlines compete for share
of high street agent and homeworker business. As a result of this
market backdrop, B2B growth has been slower than expected. In both
businesses, however we have been able to define and drive certain
destinations and product lines where growth has been strong.
The Group took action towards the end of FY23 to integrate B2B
back-office functions into the Group, thereby reducing overheads to
improve overall profitability. Notwithstanding recent market
headwinds, the B2B channel and share opportunity remains
significant, with online penetration lagging other consumer
verticals. The strategy for Classic continues to be to build on its
foundations, deepening partnerships with independent high street
agents. Agents are increasingly risk averse post-Covid, with a
trend away from tour operating and back to retailing.
We expect a return to B2B profitability in FY24, underpinned by
the synergies already realised across the Group, a focus on product
and destinations where we can win with a digital first
approach.
Strategy
As I set out in more detail below, in FY23, we introduced four
strategic pillars which straddle functional teams across the Group
to accelerate progress in penetrating all relevant market
segments.
Investment in our brand
In line with previous years and with strategy, we invested
significantly in OTB's brand and proposition in FY23 to continue to
gain share in all segments.
FY23 performance was supported by our largest ever offline
marketing campaign, 'The most wonderful time of the year'. This
marketing effort also delivered the Group's highest ever top 3
brand consideration score, despite a more aggressive competitive
environment.
The group is the first mainstream holiday company to offer free
lounge and fast track on bookings. Following a successful launch
last year, in which we delivered encouraging TTV growth, we have
increased our investment into lounge and fast track, alongside
continued innovation in developing a wider suite of further
perks.
Being known for perks significantly benefits OTB. It offers a
key point of differentiation from other holiday companies, makes
our offline marketing campaigns more effective, strengthens the
brand, attracts new customers, and improves our customer's overall
holiday experience, which increases the likelihood of repeat
purchase.
Finally, from a customer perspective we have continued to ensure
the contact centre has been well resourced and supported. We are
investing in automation and live chat which will improve customer
experience and reduce costs to serve in future periods. FY23 was a
record year and a higher proportion of customers are seeking
reassurance between booking and travelling on holiday as we emerge
from the pandemic. There were also periods of disruption to
navigate, including Rhodes wildfires, NATS air traffic control
issues and the Morrocco earthquake.
Our teams worked hard to assist customers experiencing issues
during each of these incidents, and to ensure we provided the best
experience possible. I'd like to thank the service teams for their
tireless efforts in helping our customers.
Investment in technology
In April 2023, our Chief Product Officer, Kasia Michalska was
appointed Chief Product & Technology Officer for Group, with
the Engineering and Product teams directly reporting into her. The
appointment was a significant opportunity to bring product,
technology and data teams in closer alignment.
The technology teams have made strong progress over the last two
years in developing our scheduled flight supply with airlines that
serve a core group of east and west bound long haul destinations.
There is significant runway for growth in many of the existing long
haul destinations and we continue to add more destinations as new
airlines are onboarded. We believe the long haul market offers a
significant opportunity for the group where our technology creates
a competitive advantage to disrupt a largely offline market.
The teams have also worked collaboratively with our airport
partners through the complex task of delivering the broadest perks
platform in the industry. This is a key point of differentiation
given other peers either do not have the scale and volumes to
appeal to the airports, or have too much volume (tour operators /
airlines with a number of outbound flights) at busy times of the
day.
As in previous years, we have significantly invested in our
proprietary technology to support continued growth and a much
larger volume of holiday bookings. This includes re-architecture of
our core platform which allows us to significantly improve site
speed and reliability. The upgraded hotel platform processes
billions of searches with a high booking success rate. The upgraded
data acquisition platform improves availability and accuracy.
Migration to the cloud this year has facilitated greater speed
of development and increased security. Utilising cloud native
technology has allowed teams to improve performance and reduce the
complexity of running our services. The new, fast and reliable
packaging service has reduced package search time and improved the
customer experience.
The re architecture of our platform and migration to the cloud
not only improves performance of our systems and their reliability
but also gives us access to a richer pool of tech talent.
Finally, we've also been investing in improving our customer
experience via the new site and our customer app. The introduction
and development of our new customer facing app has enabled faster
iterations and ongoing experimentation, which have gradually
increased our conversion rate. These investments have enabled the
Group to drive continued growth in both the core business and
expansion markets. Crucially, the investments support a much
larger, scalable business, and we expect further operating leverage
in future periods.
Investment in supply
Alongside investments in brand, proposition, and technology, the
Group has invested in supply to support growth. This includes
improved flight connectivity and deeper relationships with our
supply partners, with direct bookings in FY23 at 91%.
The Group offers seats from a diversified group of low-cost
carriers that fly to short haul East and West Mediterranean
locations and has developed relationships with destination specific
carriers that serve Turkey, which experienced a significant uplift
in demand in FY23.
We believe that by having our own relationships with our hotel
partners, we can guarantee our customers the best prices and an
enhanced hotel experience. Our operating model and reputation in
the market has allowed us to strengthen existing hotel
relationships as well as developing new ones, which has
significantly contributed to further growth in premium, long haul
and B2B markets.
We also maintain significant relationships and volumes with our
key bedbank partners, which allows access to competitive prices in
the tail of product outside of our top selling hotels.
In FY23 we have gathered more data on our hotel supplier's
sustainability position. The Global Sustainable Tourism Council
(GSTC) has harmonised various sustainability certifications into
one set of criteria, setting the industry standard.
We partnered with Bioscore, a GSTC member and identified 1,870
hotels (37% of our top selling 5,000 hotels) that operate
sustainable practices that meet GSTC standards and could therefore
validly be labelled as "Sustainable". Of our Top 500 hotels 44%
meet GSTC standards. Where we are finding gaps, we are engaging
with hotels to encourage them to qualify for accreditation via
Bioscore.
Strategic pillars
Our new four strategic pillars which straddle functional teams
across the Group to accelerate progress in penetrating all relevant
market segments are:
1. Storytellers : We will build rich, visually led and socially
integrated experiences that really bring our holidays to life and
build excitement from the outset
2. Matchmakers : We will use technology to evolve search, making
it easier and more enjoyable for consumers to find what, not just
where, they are looking for
3. Fixers : We will give our customers hiccup free holidays,
using industry leading self-service, automation and AI-enabled
contact centres, all delivered via our mobile app
4. Perkers : We will deliver holidays that start sooner with our
anticipation building exclusive perks.
The pillars speak to a continuation of our broader Group
strategy to penetrate our addressable market, but also help
summarise the strategic direction of how we intend to grow in each
market, for each of our teams and wider stakeholders.
Our investment into talent, technology, brand, proposition,
customer experience and supply enables this strategy, which has
contributed to our record performance in FY23 and sets us up for
success in FY24.
Looking ahead, given continued momentum in our expansion areas
as well as the recent positive signs of recovery in our core value
customer base, we will be building upon our strategic pillars in
the coming months and are excited by what we can achieve across the
Group in FY24.
Regulatory reform and litigation
We believe that holistic and comprehensive regulatory reform of
the travel industry is critical and urgent in order to create a
competitive and thriving travel market, which works well for
consumers and creates a level playing field for those operating
within it.
For most customers in the UK who are booking their annual beach
package holiday, this will likely be the biggest investment they
will make throughout the year, unless they are moving house or
changing their car. A recent study found that households spend a
quarter of their disposable income on holidays. It is therefore
critical that competition in the market is healthy to ensure value,
choice, flexibility and consumer protection.
However, the market power of the few airlines operating popular
leisure routes from the UK, and how that power manifests itself to
the detriment of consumers, poses a serious threat to fair
competition and choice for consumers. Low cost airlines ('LCA') are
using anti-competitive behaviours to stop consumers booking through
online travel agents, harming consumers in the process.
These increasingly sophisticated anti-competitive behaviours
include blocking OTA bookings, reducing or removing seats to
certain destinations, making them completely unbookable by OTAs or
consumers unless booked directly with the airline; harming the
consumer experience with onerous verifications only applied to
bookings made with an OTA; and false and misleading smear campaigns
that cast doubt in the minds of consumers about the validity and
benefits of booking package holidays with OTAs.
OTB published a White Paper on these where consumers surveyed
for the paper agreed. Nearly half believe that LCAs treat their
customers badly because they know that they can get away with it
and 84% say that they are worried that a lack of regulation means
airlines will be able to charge more and provide worse service in
the future.
We continue to challenge Ryanair on its anti-competitive
behaviour and withholding of refunds through ongoing litigation. We
recently successfully sued Ryanair for GBP2m of outstanding flight
refunds. This common-sense outcome should not have taken a
protracted and expensive legal process to resolve.
Both OTAs and LCAs have called for regulatory intervention and
the CMA has the power to exercise a review of the market to
preserve competition and protect customers. We continue to
encourage the Government and Regulators and other online travel
business to ensure the CMA steps in to take action to protect
holidays for everyone.
The CAA is consulting on reform of the ATOL scheme including the
assessment of funding arrangements and the protection of customer
money. The consultation process is still ongoing, but will be
delayed, We expect to hear further feedback from the CAA in
FY24.
Current trading and outlook
Our FY23 growth has continued into the new financial year with
YTD TTV as at 2 Dec +26%
Our forward book is at record levels and Group winter '23 YTD
TTV is +34%.
We approach our key booking period in Q2 with significant
momentum.
Our platform and proposition are stronger than ever and we are
taking share in adjacent markets.
Current trends and strategy give us confidence that summer '24
will be significantly ahead of summer '23.
Reinstatement of dividend from FY24 reflecting the Group's
continuing cash generative position and in line with its capital
allocation framework
Shaun Morton
Chief Executive Officer
4 December 2023
Chief Financial Officer Report
The Group's financial performance for the year ended 30
September 2023 ("FY23") is reported in accordance with UK-adopted
international accounting standards and applicable law.
The Group organised its operations during the year 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). As of 30 September 2023 the International
segment was discontinued as explained later in this report. Prior
periods have been restated accordingly.
The Group acts as agent across the OTB, International and CPH
segments as it is not the primary party responsible for providing
the components that make up the customers' booking. As a result,
revenue is accounted for on a booked rather than travelled
basis.
For the CCH segment, revenue is accounted for on a travelled
basis, as principal, and is therefore reported on a gross
basis.
Group overview
2023 2022
------------------ --------------------
Adjusted(1) GAAP Adjusted(1) GAAP(7)
---------------------------- ----------- ----- ----------- -------
Group TTV(2) 1,070.4 - 849.4 -
Group revenue 170.2 143.4
Revenue as Agent(3) 112.1 92.9
Revenue as Principal(4) 58.1 50.5
Group gross profit 114.0 94.9
Gross profit as Agent 106.4 89.1
Gross profit as Principal 7.6 5.8
Group profit before tax(5) 23.6 12.9 14.2 2.2
Basic earnings per share(6) 11.6p 6.4p 6.4p 1.0p
---------------------------- ----------- ----- ----------- -------
(1) Adjusted measures are non-GAAP measures, a full explanation
of the adjustments is included in the glossary. The prior period is
restated for the effects of the discontinued operations.
(2) Group Total Transaction Value ('TTV') is a non-GAAP measure
representing the cumulative total transaction value of sales booked
each month before cancellations and amendments.
(3) As an agent, revenue is accounted on a 'booked' rather than
'travelled' basis (unlike tour operators and airlines) and the
Group is reporting bookings taken between 1 October 2022 and 30
September 2023. Adjusted revenue is revenue before exceptional
items of GBPnil (2022: GBP1.0m) and fair value losses on forward
currency contracts of GBP0.8m (2022: gains of GBP0.8m).
(4) As a principal, revenue is accounted on a 'travelled' basis
and reported on a gross basis and the Group is reporting bookings
which departed between 1 October 2022 and 30 September 2023.
(5) Group adjusted profit before tax excludes amortisation of
acquired intangibles of GBP5.2m (2022: GBP5.5m), share-based
payments cost of GBP1.2m (2022: GBP4.7m) fair value losses on
forward currency contracts of GBP0.8m (2022: gains of GBP0.8m) and
exceptional items of GBP3.5m (2022: GBP2.6m). A full explanation of
the adjustments is included in the glossary.
(6) Adjusted earnings per share is Group adjusted profit after
tax for continuing operations divided by the average number of
shares in issue during the period. Earnings per share is Group
profit after tax for continuing operations divided by the average
number of shares in issue during the period.
(7) The prior period is restated for the effects of the
discontinued operations
Overview of the year
-- Revenue of GBP170.2m was GBP26.8m (18.7%) higher than FY22:
- The Group delivered record TTV and Revenue in the year, as the
market returned to a more normal pattern after a number of years of
disruption.
- There was strong demand for holidays across its core
addressable market and strategic expansion areas, with growth
across both passenger numbers and ABVs.
- Summer 23 performance was especially pleasing, with passenger
numbers for those holidays departing between May and October up 13%
on the prior year.
- The Group continues to focus on improving the operational
efficiency of its cost base, with marketing costs reducing as a %
of revenue vs the prior year, and admin expenses as a % of revenue
in line with the prior year.
-- Exceptional cancellations in the prior year relating to the
impact of COVID-19 and supplier disruption have not repeated in the
current year, FY23: GBPnil, (FY22: GBP1.3m). Costs incurred in
respect of wildfires and other similar events in the year have been
included in the underlying result.
-- Adjusted profit before tax was GBP23.6m (FY22: GBP14.2m)
reflecting strong revenue growth in the OTB segment along with a
reduction in marketing spend as a % of revenue. Statutory profit
before tax of GBP12.9m (FY22: GBP2.2m).
Cash and liquidity
-- The Group remains in a very strong financial position with
combined cash balances of GBP184.4m (2022: GBP133.9m):
- Group cash, excluding amounts held in trust, of GBP75.8m (30 September 2022: GBP64.5m).
- Customer prepayments held in a ring-fenced trust account of
GBP108.6m (30 September 2022: GBP69.4m).
-- Net finance income in the year has increased to GBP2.6m
(2022: finance cost of GBP0.5m) due to a GBP3.8m increase in bank
interest receivable.
-- The Group recently won a legal claim which it brought in
October 2021 against Ryanair in respect of refunds owed by Ryanair
to the Group for flights that had been cancelled or had been
subject to a major change where customers had chosen a refund (the
"Refunds Claim"), and the court awarded GBP2m to the Group, plus
interest and costs. The Group intends to pursue Ryanair for further
sums due in similar circumstances which accrued after issue of the
Refunds Claim. Given the date of summary judgment was after the
balance sheet date the proceeds of this action, along with costs
recovered, will be included within exceptional items in FY24.
-- The Group is currently awaiting the announcement of ATOL
reforms. We understand that there has been further delay to the
announcement of proposed reforms which is now not expected until
2024, however the Group remains well placed regardless of the
outcome.
.
OTB performance
2023 Adjusted(1) 2023 GAAP 2022 Adjusted(1) 2022 GAAP(1)
GBPm GBPm GBPm GBPm
------------------------------------- ---------------- --------- ---------------- ------------
TTV 983.8 - 762.7 -
Revenue 106.1 87.1
Gross profit 104.2 87.1
Online marketing costs (26.0) (27.0)
Offline marketing costs (14.6) (11.9)
------------------------------------- ---------------- --------- ---------------- ------------
Gross profit after marketing costs 63.6 48.2
Overheads (32.3) (25.9)
Depreciation and amortisation (9.9) (6.7)
Exceptional operating costs (3.3) (1.3)
Share-based payments (1.1) (4.7)
Amortisation of acquired intangibles (4.2) (4.4)
------------------------------------- ---------------- --------- ---------------- ------------
Operating profit 22.2 12.8 15.4 5.2
EBITDA 32.1 26.9 22.1 16.3
------------------------------------- ---------------- --------- ---------------- ------------
(1) Adjusted measures are non-GAAP measures, a full explanation
of the adjustments is included in the glossary. The prior period is
restated for the effects of the discontinued operations.
Revenue has increased to GBP106.1m (FY22: GBP87.1m). This is as
a result of a full year without any material impact from COVID-19,
along with continued success in our core market and our strategic
focus areas. We have seen significant growth across both premium
and long-haul markets, and the increased ABV in these areas has
contributed to an increased margin per booking of GBP209 (2022:
GBP192).
Average booking values have increased by 14% vs FY22 reflecting
the continued growth in both long-haul and premium holidays. This
has resulted in an increase in TTV to GBP984m (FY22: GBP763m).
Revenue of GBP106.1m is stated net of a GBP5.1m investment in
holiday perks for customers travelling with On The Beach. This has
been expanded in the year as part of our strategic pillar "Perkers"
which has helped to drive revenue growth and repeat booking rates.
This has been achieved through the expansion of our free airport
lounge and fast track offers across a wider range of departure
dates.
FY23 was supported by our largest ever offline marketing
campaign. This saw a transfer of spend from our online marketing
activities into offline investment, with total marketing costs as a
% of revenue having fallen versus the prior year. Total marketing
costs are now below our historic run rate of 40% of revenue.
2023 Adjusted(1) 2023 GAAP 2022 Adjusted(1) 2022 GAAP(1)
GBPm GBPm GBPm GBPm
-------------------------- ---------------- --------- ---------------- ------------
Overheads % TTV 3.3% - 3.4% -
Overheads % revenue 30% 30%
Total marketing % revenue 38% 45%
-------------------------- ---------------- --------- ---------------- ------------
(1) Adjusted measures are non-GAAP measures, a full explanation
of the adjustments is included in the glossary. The prior period is
restated for the effects of the discontinued operations.
Overheads as a % of revenue are consistent at 30% (FY22: 30%)
with inflationary pressures in respect of wages and salaries being
offset by savings made elsewhere.
Adjusted EBITDA has increased to GBP32.1m (FY22 restated:
22.1m). A full explanation of adjusted measures are included in the
glossary.
Classic Collection Holidays segment performance
2023 Adjusted(1) 2023 GAAP 2022 Adjusted(1) 2022 GAAP
GBPm GBPm GBPm GBPm
------------------------------------- ---------------- --------- ---------------- ---------
TTV 58.7 - 55.6 -
Revenue 58.1 50.5
Gross profit 7.6 5.8
Gross profit after marketing costs 5.8 4.8
Overheads (6.8) (5.2)
Depreciation and amortisation (0.3) (0.3)
Exceptional operating costs (0.2) -
Share-based payments (0.1) -
Amortisation of acquired intangibles (1.0) (1.1)
------------------------------------- ---------------- --------- ---------------- ---------
Operating loss (1.3) (2.6) (0.4) (1.8)
EBITDA (1.0) (1.3) (0.1) (0.4)
------------------------------------- ---------------- --------- ---------------- ---------
(1) Adjusted measures are non-GAAP measures, a full explanation
of the adjustments is included in the glossary. The prior period is
restated for the effects of the discontinued operations.
As a principal (rather than an agent) Classic Collection
accounts for revenue on a 'travelled' basis and reports revenue on
a gross basis. Both TTV and Revenue increased this year as consumer
confidence in travel increased.
Revenue increased to GBP58.1m (FY22: GBP50.5m) and operating
losses were GBP2.6m (FY22 GBP1.8m). Overheads increased by GBP1.6m
in part due to investment in headcount across sales and marketing
teams to deliver on the strategic growth plan.
Sales on a booked, rather than travelled, basis were GBP58.7m
(FY22: GBP55.6m). Long haul continued to perform well representing
22% of total sales in the year and is expected to be a high growth
area for the business in FY24.
Classic Package Holidays segment performance
2023 Adjusted(1) 2023 GAAP 2022 Adjusted(1) 2022 GAAP
GBPm GBPm GBPm GBPm
----------------------------------- ---------------- --------- ---------------- ---------
TTV 28.0 - 31.1 -
Revenue 6.0 5.8
Gross profit 2.1 2.0
Gross profit after marketing costs 1.5 1.0
Overheads (1.4) (1.5)
Depreciation and amortisation - (0.2)
----------------------------------- ---------------- --------- ---------------- ---------
Operating profit / (loss) 0.1 0.1 (0.3) (0.7)
EBITDA 0.1 0.1 (0.1) (0.5)
----------------------------------- ---------------- --------- ---------------- ---------
(1) Adjusted measures are non-GAAP measures, a full explanation
of the adjustments is included in the glossary. The prior period is
restated for the effects of the discontinued operations.
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 GBP6.0m (FY22: GBP5.8m), and the
operating profit was GBP0.1m (FY22: operating loss of (GBP0.7m)).
The platform being increasingly used by online agents and home
workers allowed for marketing cost control and a reduction in spend
from GBP1.0m to GBP0.6m. The focus continues to be on developing
the proposition to ensure that we are serving the trade and
holidaymakers with market leading product at competitive
prices.
Exceptional Items
Exceptional items in the year amounted to GBP3.5m, being GBP2.0m
of legal and professional fees and GBP1.5m of restructuring costs.
In the prior year exceptional operating costs totalled GBP1.3m,
with GBP2.5m of legal and professional fess being partially offset
by the release of GBP1.2m of provisions. A further GBP1.3m of
exceptional cancellation costs were incurred in the prior year.
Legal and professional fees principally related to ongoing
litigation with Ryanair. Costs awarded following the successful
judgement in November 2023 relating to refunds have not yet been
finally determined and therefore no recovery has been included.
Restructuring costs relate to the consolidation of certain group
functions between CCH and OTB in order to harmonise processes and
deliver operational synergies.
Financing
In December 2022, the Group refinanced its credit facilities
with Lloyds Bank and NatWest and entered into a new facility for
GBP60m expiring in December 2025.
Details of the current facility limits and maturity dates are as
follows:
Drawn at
30 September
Existing facilities GBP Issued Expiry 2023
------------------- ------ -------- -------- -------------
RCF - Lloyds Bank GBP30m Dec 2022 Dec 2025 Nil
RCF - NatWest GBP30m Dec 2022 Dec 2025 Nil
------------------- ------ -------- -------- -------------
Total facilities GBP60m
------------------- ------ -------- -------- -------------
Share-based payments
The Group has a number of LTIP schemes in place which vest
subject to continued employment and performance criteria. In
accordance with IFRS 2, the Group has recognised a non-cash charge
of GBP1.2m (FY22: GBP4.7m).
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. The change in the year is a result of a reduction
in the number of awards in the year as well as the change in
expectations for non-market based performance conditions. Given the
volatility and size of these charges they are added back to provide
comparability to prior periods.
Taxation
The Group tax charge of GBP2.3m represents an effective rate of
19% (FY22: 25%) which is lower than the standard UK rate of 25%
(FY22: higher than the standard rate of 19%). An increase in the UK
corporation rate from 19% to 25% (effective 1 April 2023) was
substantively enacted on 24 May 2021.
Cash flow
FY23 GBPm FY22 GBPm
--------------------------------------------- --------- ---------
Profit before tax from continuing operations 12.9 2.2
Loss before tax from discontinued operations (0.5) (0.1)
Depreciation and amortisation 15.3 12.8
Net finance (income) / costs (2.6) 0.5
Share based payments 1.2 4.7
Movement in working capital (4.1) 1.3
Corporation tax (0.2) 0.5
--------------------------------------------- --------- ---------
Cash generated from operating activities 22.0 21.9
Other cash flows
Capitalised development expenditure (12.0) (10.6)
Capitalised intangible assets - (0.5)
Capital expenditure net of proceeds - (1.3)
Net finance income / (costs) 2.8 (0.3)
Payment of lease liabilities (1.5) (0.7)
--------------------------------------------- --------- ---------
Total net cash flows 11.3 8.5
Opening cash balance 64.5 56.0
--------------------------------------------- --------- ---------
Closing cash at bank 75.8 64.5
Closing trust balance 108.6 69.4
--------------------------------------------- --------- ---------
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 account) experience a trough prior to June
and a peak following this. As a result the available credit
facilities are only utilized for a short period, in FY23 being
between January and June.
Net cash inflows were GBP11.3m (2022: GBP8.5m). This is due to
increased profitability in the period, partially offset by working
capital investment to support the continuing growth of the
business.
Not included in the Group's cash position is GBP108.6m (FY22:
GBP69.4m) of customer prepayments held in a trust account to be
released once the customer has travelled. The Civil Aviation
Authority ("CAA") is currently consulting on reform of the ATOL
scheme including the assessment of funding arrangements. The
consultation process is still ongoing and we expect to hear more in
2024.
The Group remains in a strong financial position with sufficient
cash reserves to continue to invest in its continuing success.
Discontinued Operations
During the year, following a strategic review, the Board took
the decision to close the International business which comprised
the standalone e-beach sites in Norway and Sweden. Since launch in
2015, the intended growth of this segment has been restricted by a
number of factors including COVID-19, the failure of a number of
local airlines such as Norwegian, Primera and Ving and the
infrequent scheduling of other low-cost carriers. The Board remain
confident that the core proposition is scaleable across additional
geographic markets.
During the year the International segment contributed revenue of
GBP0.9m and an operating loss of GBP0.5m.
Capital Allocation
The Board has considered and approved a revised capital
allocation policy for the Group. The primary objective is to invest
in organic growth whilst maintaining capital discipline. The Board
has signalled its intention to re-introduce a dividend for FY24
given the return to normal market conditions and a sustainable cash
generative business model.
Dividend
The Board is not recommending a final dividend in respect of
FY23.
Jon Wormald
Chief Financial Officer
4 December 2023
Financial Statements
Consolidated income statement and statement of comprehensive
income
Year ended 30 September 2023
2023 Restated*
Note GBP'm 2022 GBP'm
------------------------------------------------ ---- ------- -----------
Revenue 4,5 170.2 143.4
Cost of sales (54.2) (48.5)
Expected credit losses 15 (2.0) -
------------------------------------------------ ---- ------- -----------
Gross profit 114.0 94.9
Administrative expenses 6 (103.7) (92.2)
------------------------------------------------ ---- ------- -----------
Group operating profit 10.3 2.7
------------------------------------------------ ---- ------- -----------
Finance costs 8 (1.5) (0.8)
Finance income 8 4.1 0.3
------------------------------------------------ ---- ------- -----------
Net finance income/(costs) 2.6 (0.5)
Profit before taxation 12.9 2.2
Taxation 9 (2.3) (0.5)
Profit from continuing operations 10.6 1.7
Loss from discontinued operations 10 (0.5) (0.1)
------------------------------------------------ ---- ------- -----------
Profit for the year 10.1 1.6
Other comprehensive income:
Net (loss)/gain on cash flow hedges (0.6) 0.6
Net gain on fair value hedges 0.7 -
------------------------------------------------ ---- ------- -----------
Total comprehensive income for the year 10.2 2.2
------------------------------------------------ ---- ------- -----------
Attributable to equity holders of the parent
Profit from continuing operations 10.6 1.7
Loss from discontinued operations (0.5) (0.1)
Other comprehensive income 0.1 0.6
------------------------------------------------ ---- ------- -----------
Total comprehensive income for the year 10.2 2.2
------------------------------------------------ ---- ------- -----------
Basic and diluted earnings per share from
continuing operations attributable to the
equity shareholders of the Company:
Basic earnings per share 11 6.4p 1.0p
Diluted earnings per share 11 6.3p 1.0p
Adjusted basic earnings per share** 11 11.6p 6.4p
Adjusted diluted earnings per share ** 11 11.5p 6.4p
Basic and diluted earnings per share from
total operations attributable to the equity
Shareholders of the Company:
Basic earnings per share 11 6.1p 0.9p
Diluted earnings per share** 11 6.0p 0.9p
Adjusted profit measure**
Adjusted PBT (before amortisation of acquired
intangibles, exceptional items and share-based
payments)** 6 23.6 14.2
------------------------------------------------ ---- ------- -----------
* The prior period is restated for the effects of the
discontinued operations (see note 10).
** This is a non-GAAP measure, refer to notes listed above.
Consolidated balance sheet
At 30 September 2023
2023 2022
Assets Note GBP'm GBP'm
--------------------------------- ---- ------- -------
Non-current assets
Intangible assets 12 73.7 74.3
Property, plant and equipment 13 8.3 9.1
Deferred tax 20 2.6 3.4
Other assets 15 - 0.6
--------------------------------- ---- ------- -------
Total non-current assets 84.6 87.4
Current assets
Trade and other receivables 15 165.3 122.4
Derivative financial instruments 23 0.9 3.2
Trust account 16 108.6 69.4
Cash at bank 75.8 64.5
--------------------------------- ---- ------- -------
Total current assets 350.6 259.5
--------------------------------- ---- ------- -------
Total assets 435.2 346.9
--------------------------------- ---- ------- -------
Equity
Share capital 21 1.7 1.7
Share premium 22 89.6 89.6
Retained earnings 22 205.9 194.5
Capital contribution reserve 22 0.5 0.5
Merger reserve 22 (129.5) (129.5)
--------------------------------- ---- ------- -------
Total equity 168.2 156.8
Non-current liabilities
Trade and other payables 17 2.6 3.0
--------------------------------- ---- ------- -------
Total non-current liabilities 2.6 3.0
Current liabilities
Corporation tax payable 1.7 0.2
Trade and other payables 17 261.2 186.6
Provisions 17 0.4 0.3
Derivative financial instruments 23 1.1 -
--------------------------------- ---- ------- -------
Total current liabilities 264.4 187.1
Total liabilities 267.0 190.1
--------------------------------- ---- ------- -------
Total equity and liabilities 435.2 346.9
--------------------------------- ---- ------- -------
The financial statements were approved by the Board of Directors
and authorised for issue.
Jon Wormald Chief Financial Officer
4 December 2023 On the Beach Group plc. Reg no 09736592
Consolidated statement of cash flows
Year ended 30 September 2023
Restated*
2023 2022
Note GBP'm GBP'm
-------------------------------------------------- ---- ------ ---------
Profit before taxation
From continuing operations 12.9 2.2
From discontinued operations 10 (0.5) (0.1)
Adjustments for:
Depreciation 6 2.7 2.0
Amortisation of intangible assets 6 12.6 10.8
Finance costs 8 1.5 0.8
Finance income 8 (4.1) (0.3)
Share-based payments 24 1.2 4.7
Loss on disposal of property, plant and equipment 13 - -
-------------------------------------------------- ---- ------ ---------
26.3 20.1
Changes in working capital:
Increase in trade and other receivables (39.9) (29.6)
Increase in trade and other payables 75.0 61.3
Increase in trust account (39.2) (30.4)
-------------------------------------------------- ---- ------ ---------
(4.1) 1.3
Cash flows from operating activities
Cash used in operating activities 22.2 21.4
Tax (paid)/received (0.2) 0.5
-------------------------------------------------- ---- ------ ---------
Net cash inflow from operating activities 22.0 21.9
-------------------------------------------------- ---- ------ ---------
Cash flows from investing activities
Purchase of property, plant and equipment 13 (0.1) (1.3)
Proceeds from disposal of assets 0.1 -
Purchase of intangible assets 12 - (0.5)
Development expenditure 12 (12.0) (10.6)
Interest received 8 4.1 0.3
-------------------------------------------------- ---- ------ ---------
Net cash outflow from investing activities (7.9) (12.1)
-------------------------------------------------- ---- ------ ---------
Cash flows from financing activities
Interest paid on borrowings 8 (1.3) (0.6)
Payment of lease liabilities 18 (1.5) (0.7)
-------------------------------------------------- ---- ------ ---------
Net cash outflow from financing activities (2.8) (1.3)
-------------------------------------------------- ---- ------ ---------
Net increase in cash at bank and in hand 11.3 8.5
Cash at bank and in hand at the beginning
of the year 64.5 56.0
-------------------------------------------------- ---- ------ ---------
Cash at bank and in hand at the end of the
year 75.8 64.5
-------------------------------------------------- ---- ------ ---------
* The prior period is restated for the effects of the discontinued operations (see note 10).
Consolidated statement of changes in equity
Year ended 30 September 2023
Capital
Merger contribution Retained
Share capital Share premium reserve reserve earnings Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
----------------------------- ------------- ------------- -------- ------------- --------- ------
Balance at 30 September
2021 1.7 89.6 (129.5) 0.5 187.6 149.9
----------------------------- ------------- ------------- -------- ------------- --------- ------
Share-based charge including
tax - - - - 4.7 4.7
Total comprehensive income
for the year - - - - 2.2 2.2
----------------------------- ------------- ------------- -------- ------------- --------- ------
Balance at 30 September
2022 1.7 89.6 (129.5) 0.5 194.5 156.8
----------------------------- ------------- ------------- -------- ------------- --------- ------
Share-based charge including
tax - - - - 1.2 1.2
Total comprehensive income
for the year - - - - 10.2 10.2
----------------------------- ------------- ------------- -------- ------------- --------- ------
Balance at 30 September
2023 1.7 89.6 (129.5) 0.5 205.9 168.2
----------------------------- ------------- ------------- -------- ------------- --------- ------
Notes to the consolidated financial statements
Year ended 30 September 2023
1. General information
On the Beach Group plc is a public limited company, which is
listed on the London Stock Exchange and is domiciled and
incorporated in the United Kingdom under the Companies Act 2006.
The address of the registered office is given on page ----.
2. Accounting policies
a) Basis of preparation
The consolidated financial statements presented in this document
have been prepared in accordance with UK-adopted International
Accounting Standards in conformity with the requirements of the
Companies Act 2006.
The financial information set out herein does not constitute the
Company's statutory accounts for the years ended 30 September 2023
or 2022 but is derived from those accounts. The financial
information has been prepared using accounting policies consistent
with those set out in the annual report and accounts for the year
ended 30 September 2023. Statutory accounts for 2022 have been
delivered to the Registrar of Companies, and those for 2023 will be
delivered in due course. The auditors have reported on those
accounts; their report was unqualified, did not include a reference
to any matters to which the auditors drew attention by way of
emphasis without qualifying their report, and did not contain any
statements under Section 498(2) or (3) of the Companies Act
2006.
These financial statements are presented in pounds sterling
(GBP'm) because that is the currency of the primary economic
environment in which the Group operates.
b) Going concern
The Group covers its daily working capital requirements by means
of cash and Revolving Credit Facility ('RCF'). On 7 December 2022,
the Group increased its facility from GBP50m to GBP60m, expiring in
December 2025. At the same time the Group cancelled its CLBILS
facility of GBP25m, which was due to expire in May 2023. The RCF
has financial covenants in place, which are tested quarterly.
As at 30 September 2023, cash (excluding cash held in trust
which is ringfenced and not factored into the going concern
assessment) was GBP75.8m (30 September 2022: cash of GBP64.5m).
Cash received from customers for bookings that have not yet
travelled is held in a ringfenced trust account and is not
withdrawn until the customer returns from their holiday except
where a flight is purchased. Cash held in trust at 30 September
2023 was GBP108.6m.
The Directors have assessed a going concern period through to
March 2025 and have modelled a number of scenarios considering
factors such as airline resilience, cost of living, inflation,
interest rates and customer behaviour/demand. The Group has
performed an assessment of the impact of climate risk, as part of
the Director's assessment of the Group's ability to continue as a
going concern. Further detail of the Group's assessment of the
impact of climate risk is provided within the 'Principal risks and
uncertainties' section of this report. 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 40% lower than
historic levels, although profitability would be affected, the
Group would be able to continue operating. The impact of climate
change has not yet been reflected in these estimates and
assumptions due to the level of uncertainty about the impact of
climate change on these estimates and assumptions.
Given the assumptions above, the mitigating actions available
and within the Group's control, the Directors remain confident that
the Group continue to operate in an agile way adapting to any
continued travel disruption. Therefore, it is considered
appropriate to continue to adopt the going concern basis in
preparing these financial statements.
c) New standards, amendments and interpretations
A number of new standards and amendments to standards are
effective for annual periods beginning after 1 January 2022; the
following amended standards have been implemented, however, they
have not had a significant impact on the Group's consolidated
financial statements:
-- Amendments to IFRS 3 - Reference to Conceptual Framework
-- Amendments to IAS 16 - Property, Plant and Equipment: Proceeds before Intended Use
-- Amendments to IAS 37 - Onerous Contracts - Costs of Fulfilling a Contract
-- AIP IFRS 1 First-time Adoption of International Financial
Reporting Standards - Subsidiary as a first-time adopter
-- AIP IFRS 9 Financial Instruments - Fees in the '10 per cent'
test for derecognition of financial liabilities
-- AIP IAS 41 Agriculture - Taxation in fair value measurements
International Tax Reform - Pillar Two Model Rules - Amendments
to IAS 12 introduced a mandatory temporary exception to the
requirements of IAS 12 under which a company does not recognise or
disclose information about deferred tax assets and liabilities
related to the proposed OECD/G20 BEPS Pillar Two model rules. The
Group has applied the temporary exception in the Group's
consolidated financial statements.
Standards issued but not yet effective
Certain new financial reporting standards, amendments and
interpretations have been published that are not mandatory for the
30 September 2023 reporting period, and have not been early adopted
by the Group. The Group is currently assessing the impact of the
following standards, amendments and interpretations:
-- IFRS 17 Insurance Contracts
-- Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2
-- Definition of Accounting Estimates - Amendments to IAS 8
-- Deferred Tax related to Assets and Liabilities arising from a
Single Transaction - Amendments to IAS 12
International Tax Reform - Pillar Two Model Rules - Amendments
to IAS 12 introduced a mandatory temporary exception to the
requirements of IAS 12 under which a company does not recognise or
disclose information about deferred tax assets and liabilities
related to the proposed OECD/G20 BEPS Pillar Two model rules. The
Group has applied the temporary exception in the Group's
consolidated financial statements.
d) Climate-related matters
The Group considers climate-related matters in estimates and
assumptions where appropriate, this includes areas such as:
-- Impairment of non-financial assets: The value-in-use may be
impacted by the changes in climate-related regulations or a change
in the demand of certain holiday destinations as a result of
extreme weather or natural disasters.
-- Deferred tax asset recoverability: The forecasts used in
assessing whether the Group has sufficient future taxable income
could be impacted by climate-related regulation or change in
consumer demand for travelling abroad.
The Group's business model allows for flexibility, through being
asset-light, this means the Group can respond quickly to changes in
customer demand for certain locations. The Group is closely
monitoring changes and developments in both climate-related
legislation and extreme weather events.
e) Discontinued operations
Discontinued operations are excluded from the results of
continuing operations and are presented as a single amount of
profit or loss after tax from discontinued operations in the
consolidated income statement and statement of comprehensive
income.
Additional disclosures are provided in note 10. All other notes
to the financial statements include amounts for continuing
operations, unless indicated otherwise.
f) Basis of consolidation
The Group's consolidated financial statements consolidate the
financial statements of On the Beach Group plc and all of its
subsidiary undertakings.
i. Subsidiaries are entities controlled by the Company - Control
exists when the Company has power over the investee, the Company is
exposed, or has rights to variable returns from its involvement
with the subsidiary and the Company has the ability to use its
power of the investee to affect the amount of investor's
returns.
ii. Transactions eliminated on consolidation - Intragroup
balances, and any gains and losses, or income and expenses arising
from intragroup transactions, are eliminated in preparing the
consolidated financial information. Gains arising from transactions
with jointly controlled entities are eliminated to the extent of
the Group's interest in the entity. Losses are eliminated in the
same way as gains, but only to the extent that there is no evidence
of impairment.
g) Goodwill
Goodwill arising on the acquisition of subsidiary undertakings
and trade and assets represents the excess of the cost of
acquisition over the fair value of the identifiable assets and
liabilities at the date of acquisition. Goodwill is initially
recognised as an asset at cost and is subsequently remeasured at
cost less any accumulated impairment losses. Goodwill, which is
recognised as an asset is reviewed for impairment at least
annually. Any impairment is recognised immediately in the income
statement and is not subsequently reversed. On disposal of a
subsidiary, the attributable amount of goodwill is included in the
determination of the profit or loss on disposal.
For the purposes of impairment testing, goodwill is allocated to
the cash-generating units expected to benefit from the combination.
If the recoverable amount is less than the carrying amount of the
unit, the impairment loss is allocated to first reduce the amount
of goodwill allocated to the unit and then the other assets in the
unit. An impairment loss recognised for goodwill is not reversed in
a subsequent period.
An impairment loss recognised for goodwill is not reversed.
Impairment losses recognised for other assets are reversed only if
the reasons for the impairment have ceased to apply.
h) Foreign currency
Transactions in foreign currencies are translated to the
respective functional currencies of Group entities at the foreign
exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the
balance sheet date are retranslated to the functional currency at
the foreign exchange rate ruling at that date.
Foreign exchange differences arising on translation are
recognised in the income statement.
i) Financial instruments
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
i. Financial assets
Financial assets are classified, at initial recognition, and
subsequently measured at amortised cost, fair value through other
comprehensive income ('OCI'), and fair value through profit or
loss. In order for a financial asset to be classified and measured
at amortised cost, the financial asset is under a 'hold to collect'
business model and it needs to give rise
to cash flows that are 'solely payments of principal and
interest' ('SPPI') on the principal amount outstanding. The Group
considers financial assets in default when contractual payments are
90 days past due.
Trade and other receivables
Trade and other receivables are recognised initially at fair
value. Subsequent to initial recognition, they are measured at
amortised cost using the effective interest method, less any
impairment losses. Gains and losses are recognised in profit or
loss when the asset is derecognised, modified or impaired. An
expected credit loss is calculated using a provision matrix, which
is initially based on the Group's historical observed default rates
that is calibrated for changes in the forward-looking
estimates.
Cash at bank
Cash at bank comprises cash balances and call deposits. Bank
overdrafts that are repayable on demand and form an integral part
of the Group's cash management are included as a component of cash
at bank for the purpose only of the cash flow statement.
Trust account
All ATOL protected customer monies are held in a trust account
until after the provision of the holiday service. The trust account
is governed by a deed between the Group, the Civil Aviation
Authority Air Travel Trustees and independent trustees (Travel
Trust Services Limited), which determines the inflows and outflows
from the account.
All ATOL protected customer receipts are paid into the trust
account in full before the holiday departure date. These payments
are held in the trust account until the service is provided - for
flights on payment to the supplier, and for hotels and ancillaries
on the customer's return from holiday. The Group, therefore, does
not use customer prepayments to fund its business operations. Due
to the restrictions on accessing the funds in the trust account,
customer monies held in the trust account are presented separately
to cash at bank.
Cash flows in respect of the trust account are presented as
operating cash flows on the basis that they are linked to the
Group's revenue-producing activities as an online travel agent.
ii. Financial liabilities
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, loans
and borrowings, payables, or as derivatives designated as hedging
instruments in an effective hedge, as appropriate.
Trade and other payables
Trade and other payables are recognised initially at fair value
and net of directly attributable transaction costs. Subsequent to
initial recognition, they are measured at amortised cost using the
effective interest method. Gains and losses are recognised in
profit or loss when the liabilities are derecognised as well as
through the Effective Interest Rate ('EIR') amortisation
process.
Revolving credit facility ('RCF')
Borrowings from the RCF are recognised initially at fair value
and net of directly attributable transaction costs. After initial
recognition, the RCF is subsequently measured at amortised cost
using the EIR method.
iii. Derivative financial instruments, including hedge
accounting
The Group enters into forward foreign exchange contracts to
manage exposure to foreign exchange rate risk. Further details of
these derivative financial instruments are disclosed in note 23 of
these financial statements. Such derivative financial instruments
are initially recognised at fair value on the date on which a
derivative contract is entered into and are subsequently remeasured
at fair value.
Fair value hedges
All derivative financial instruments are assessed against the
hedge accounting criteria set out in IFRS 9. On initial designation
of the derivative as a hedging instrument, the Group formally
documents the relationship between the hedging instrument and
hedged item, the Group elects to identify the spot-element of
forward contracts as the hedging instrument. The documentation also
identifies the hedged item, the risk management objectives and
strategy in understanding the hedge transaction and the hedged
risk, together with the methods that will be used to assess the
effectiveness of the hedging relationship.
The Group makes an assessment, both at the inception of the
hedge relationship as well as on an ongoing basis, of whether the
hedging instruments are expected to be highly effective in
offsetting the changes in the fair value of the respective hedged
items attributable to the hedged risk.
Derivatives are initially recognised at the fair value on the
date a derivative contract is entered into and are subsequently
remeasured at each reporting date at their fair value. The change
in the fair value of the hedging instrument is recognised in the
statement of profit or loss as other expense. The change in the
fair value of the hedged item attributable to the risk hedged is
recorded as part of the carrying value of the hedged item and is
also recognised in the statement of profit or loss as other
expense. The change in the fair value of the forward element of the
forward contracts is recognised in other comprehensive income.
Cash flow hedges
For derivatives that are designated as cash flow hedges, and
where the hedge accounting criteria are met, the effective portion
of changes in the fair value is recognised in other comprehensive
income. The gain or loss relating to the ineffective portion is
recognised immediately in profit or loss as part of finance costs.
Amounts accumulated in equity are recognised in profit or loss when
the income or expense on the hedged item is recognised in profit or
loss.
j) Segment reporting
IFRS 8 requires operating segments to be reported in a manner
consistent with the internal reporting provided to the Chief
Operating Decision Maker. The Chief Operating Decision Maker, who
is responsible for allocating resources and assessing performance
of the operating segments, has been identified as the management
team, including the Chief Executive Officer and Chief Financial
Officer. For management purposes, the Group is organised into
segments based on location, and information is provided to the
management team on these segments for the purposes of resource
allocation and segment performance management and monitoring.
The management team considers there to be three reportable
segments:
i. 'OTB' - activity via UK websites ( www.onthebeach.co.uk , www.sunshine.co.uk and www.onthebeachtransfers.co.uk ).
ii. 'CCH' - activity via the Tour Operator, Classic Collection Holidays Limited and subsidiaries.
iii. 'CPH' - activity via the Classic Package Holidays online
business to business portal.
k) Revenue recognition
IFRS 15 Revenue from Contracts with Customers is a
principle-based model of recognising revenue from customer
contracts. It has a five-step model that requires revenue to be
recognised when control over goods and services are transferred to
the customer. The standard requires the Group to exercise
judgement, taking into consideration all of the relevant facts and
circumstances when applying each step of the model to contracts
with their customers. The following paragraphs describe the types
of contracts, when performance obligations are satisfied, and the
timing of revenue recognition. Further details of the
disaggregation of revenue are disclosed in note 4 of these
financial statements.
As agent
The Group acts as agent when it is not the primary party
responsible for providing the components that make up the customers
booking and it does not control the components before they are
transferred to customers. Revenue comprises the fair value of the
consideration received or receivable in the form of commission.
Service fees/commissions are earned through purchases from
customers of travel products such as flight tickets or hotel
accommodation from third-party suppliers. Revenue in the form of
commission or service fees recognised when the performance
obligation of arranging and facilitating the customer to enter into
individual contracts with suppliers is satisfied, usually on
delivery of the booking confirmation.
Given the level of cancellations the Group has experienced, the
commission is considered to represent variable consideration and
the transaction price of commission income determined using the
expected value method, such that revenue is recognised only to the
extent that it is highly probable that there will not be a
significant reversal of revenue recognised in future periods. The
sum of the range of probabilities of cancellations in different
scenarios based on historical trends and best estimate of future
expectations is used to calculate the extent to which the variable
consideration is reduced and a corresponding refund liability
(presented as a cancellation provision) recognised in provisions
(note 17).
Revenue earned from sales through the OTB segment is stated net.
Revenue earned from sales through CPH are stated net, with the
commission payable to agents recognised in the cost of sales.
As principal
The Group acts as principal when it is the primary party
responsible for providing the components that make up the
customer's booking and it controls the components before
transferring to the customer for the CCH segment. Revenue
represents amounts received or receivable for the sale of package
holidays and other services supplied to the customers. Revenue is
recognised when the performance obligation of delivering an
integrated package holiday is satisfied, usually over the duration
of the holiday. Revenue is stated net of discounts, rebates,
refunds and value-added tax.
l) Override income
The Group has agreements with suppliers, which give rise to
rebate income. This income relates to segments where revenue is
accounted for on an agent basis, therefore, the income received
from suppliers relates to a reduction in cost of sales
(corresponding increase in commission received), and as such is
considered part of the Group's net revenue, for the year ended 30
September 2023 override income was GBP3.4m. The Group has some
agreements whereby receipt of the income is conditional on the
Group achieving agreed volume targets.
For agreements not linked to volume targets, override income is
recognised when earned by the Group, which occurs when all
obligations conditional for earning income have been discharged,
and the income can be measured reliably based on the terms of the
contract, which is usually once the booking has been confirmed with
the supplier.
For agreements where volume targets are in place, income is
recognised once the target has been achieved. For volume targets
that span the year-end, the Group is required to make estimates in
determining the amount and timing of recognition of override. In
determining the amount of volume-related allowances recognised in
any period, management estimate the probability that the Group will
meet contractual target volumes, based on current and forecast
performance.
Amounts due, but not yet recovered, relating to override income
are recognised within trade and other receivables.
m) Business combinations
All business combinations are accounted for by applying the
acquisition method. Business combinations are accounted for using
the acquisition method as at the acquisition date, which is the
date on which control is transferred to the Group.
For acquisitions, the Group measures goodwill at the acquisition
date as:
-- the fair value of the consideration transferred; plus
-- the recognised amount of any non-controlling interests in the acquiree; plus
-- the fair value of the existing equity interest in the acquiree; less
-- the net recognised amount (generally fair value) of the
identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated
with the issue of debt or equity securities, are expensed as
incurred. Any contingent consideration payable is recognised at
fair value at the acquisition date. If the contingent consideration
is classified as equity, it is not re-measured and settlement is
accounted for within equity. Otherwise, subsequent changes to the
fair value of the contingent consideration are recognised in the
income statement.
n) Property, plant and equipment
Property, plant and equipment are stated at cost less
accumulated depreciation and accumulated impairment losses.
Depreciation is charged to the income statement on a
straight-line basis over the estimated useful lives of each part of
an item of property, plant and equipment. Land is not depreciated.
The estimated useful lives are as follows:
Fixtures, fittings and 3-10 years
equipment
Buildings freehold 50 years
Depreciation methods, useful lives and residual values are
reviewed at each balance sheet date.
The gain or loss arising on the disposal or retirement of an
asset is determined as the difference between the sales proceeds
and the carrying amount of the asset and is recognised in
income.
o) Intangible assets
i. Research and development
Expenditure on research activities is recognised in the income
statement as an expense as incurred. Expenditure on development
activities directly attributable to the design and testing of
identifiable and unique software products are capitalised if the
product or process meets the following criteria:
-- The completion of the development is technically and commercially feasible to complete;
-- Adequate technical resources are sufficiently available to complete development;
-- It can be demonstrated that future economic benefits are probable; and
-- The expenditure attributable to the development can be measured reliably.
Development activities involve a plan or design for the
production of new or substantially improved products or processes.
Directly attributable costs that are capitalised as part of the
software product, website or system include employee costs. Other
development expenditures that do not meet these criteria, as well
as ongoing maintenance, are recognised as an expense as
incurred.
Development costs for software, websites and systems are carried
at cost less accumulated amortisation and are amortised over their
useful lives (not exceeding five years) at the point in which they
come into use.
ii. Software licenses and domain names
Acquired intangible assets are capitalised at the cost necessary
to bring the asset to its working condition. The Group have applied
the guidance published by the IFRS Interpretations Committee
('IFRIC') in respect of cloud computing arrangements. The guidance
requires that cloud computing arrangements are reviewed to
determine if they are within the scope of IAS 38 Intangible Assets,
IFRS 16 Leases, or a service contract. This is to determine if the
Group has control of the software intangible asset. Control is
assumed if the Group has the right to take possession of the
software and run it on its own or a third party's computer
infrastructure, or if the Group has exclusive rights to use the
software whereby the supplier cannot make the software available to
other customers.
Costs for software licenses and domain names are carried at cost
less accumulated amortisation and are amortised over their useful
lives at the point in which they come into use.
iii. Brand
Upon acquisition of the Group by OTB Topco, the On the Beach
brand was identified as a separately identifiable asset.
Acquisitions of Sunshine.co.uk and Classic Collection Holidays
Limited resulted in the brand of each being identified and
recognised separately from goodwill at fair value.
iv. Amortisation
Amortisation is charged to the income statement on a
straight-line basis over the estimated useful lives of intangible
assets unless such lives are indefinite. Intangible assets with an
indefinite useful life and goodwill are systematically tested for
impairment at each balance sheet date. Other intangible assets are
amortised from the date they are available for use. The estimated
useful lives are as follows:
Website technology: 10 years
Website and development costs: 3 years
Brand: 10-15 years
Agent relationships: 15 years
Customer relationships: 5 years
v. Customer and agent relationships
Upon the acquisition of Classic Collection Holidays Limited,
customer relationships were identified as a separately identifiable
asset. Classic Collection's revenue is driven by a very high volume
of repeat customers due to its bespoke holiday packages and the
target market. Repeat customers are from two broad segments -
independent travel agents and direct customers, and individuals
booking directly. There is a defined margin and attrition profile
differential between the two customer groups and as such two
separate assets were identified.
p) Impairment of non-financial assets
At each balance sheet date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine whether
there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any). Where the asset does not generate
cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to
which the asset belongs. The recoverable amount of an asset or
cash-generating unit is the greater of its value in use and its
fair value less costs to sell.
Goodwill is required to be tested for impairment annually, or
more frequently where there is an indication that the goodwill may
be impaired. The goodwill acquired in a business combination, for
the purpose of impairment testing, is allocated to cash-generating
units, or 'CGU'. Subject to an operating segment ceiling test, for
the purposes of goodwill impairment testing, CGUs to which goodwill
has been allocated are aggregated so that the level at which
impairment is tested reflects the lowest level at which goodwill is
monitored for internal reporting purposes. Goodwill acquired in a
business combination is allocated to groups of CGUs that are
expected to benefit from the synergies of the combination.
In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset. For the purpose of impairment
testing, assets that cannot be tested individually are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or groups of assets (the
'cash-generating unit').
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment
losses recognised in respect of CGUs are allocated first to reduce
the carrying amount of any goodwill allocated to the units, and
then to reduce the carrying amounts of the other assets in the unit
(group of units) on a pro rata basis.
q) Leases
The Group assesses at contract inception whether a contract is,
or contains, a lease. That is, if the contract conveys the right to
control the use of an identified asset for a period of time in
exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach
for all leases, except for short-term leases and leases of
low-value assets. The Group recognises lease liabilities to make
lease payments and right-of-use assets representing the right to
use the underlying assets.
i. Right-of-use assets
The Group recognises right-of-use assets at the commencement
date of the lease (i.e. the date the underlying asset is available
for use). Right-of-use assets are measured at cost, less any
accumulated depreciation and impairment losses, and adjusted for
any remeasurement of lease liabilities. The cost of right-of-use
assets includes the amount of lease liabilities recognised, initial
direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received. The
recognised right-of-use assets are depreciated on a straight-line
basis over the shorter of the lease term and the estimated useful
lives of the assets, as follows:
Buildings 10 years-
IT equipment 3-5 years
The right-of-use assets are also subject to impairment. The
Group's right-of-use assets are included as a separate category in
property, plant and equipment.
ii. Lease liabilities
At the commencement date of the lease, the Group recognises
lease liabilities measured at the present value of lease payments
to be made over the lease term. In calculating the present value of
lease payments, the Group uses the incremental borrowing rate at
the lease commencement date where the interest rate implicit in the
lease is not readily determinable.
After the commencement date, the amount of lease liabilities is
increased to reflect the accretion of interest and reduced for the
lease payments made. In addition, the carrying amount of lease
liabilities is remeasured if there is a modification, a change in
the lease term, a change in the lease payments (e.g. changes to
future payments resulting from a change in an index or rate used to
determine such lease payments), or a change in the assessment of an
option to purchase the underlying asset.
The Group's lease liabilities are included in trade and other
payables.
r) Employee benefits
i. Pension scheme
The Group operates a defined contribution pension scheme. A
defined contribution scheme is a post-employment benefit plan under
which the Company pays fixed contributions into a separate entity
and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution
pension plans are recognised as an expense in the income statement
in the years during which services are rendered by employees.
ii. Share-based payment transactions
Employees (including senior executives) of the Group receive
remuneration in the form of share-based payments, whereby employees
render services as consideration for equity instruments
(equity-settled transactions).
Equity-settled transactions
The cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an appropriate
valuation model, further details of which are given in note 24.
That cost is recognised in employee benefits expense (note 7a),
together with a corresponding increase in equity (other capital
reserves), over the period in which the service and, where
applicable, the performance conditions are fulfilled (the vesting
period). The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date reflects
the extent to which the vesting period has expired and the Group's
best estimate of the number of equity instruments that will
ultimately vest. The expense or credit in the statement of profit
or loss for a period represents the movement in cumulative expense
recognised as at the beginning and end of that period.
Service and non-market performance conditions are not taken into
account when determining the grant date fair value of awards, but
the likelihood of the conditions being met is assessed as part of
the Group's best estimate of the number of equity instruments that
will ultimately vest. Market performance conditions are reflected
within the grant date fair value. Any other conditions attached to
an award, but without an associated service requirement, are
considered to be non-vesting conditions. Non-vesting conditions are
reflected in the fair value of an award and lead to an immediate
expensing of an award unless there are also service and/or
performance conditions.
No expense is recognised for awards that do not ultimately vest
because non-market performance and/or service conditions have not
been met. Where awards include a market or non-vesting condition,
the transactions are treated as vested irrespective of whether the
market or non-vesting condition is satisfied, provided that all
other performance and/or service conditions are satisfied.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share (further details are given in note 11).
s) Financing income and expenses
Financing expenses comprises interest payable and interest on
lease liabilities recognised in profit or loss using the effective
interest method, unwinding of the discount on provisions, and net
foreign exchange losses that are recognised in the income statement
(see foreign currency accounting policy). Financing income
comprises interest receivable on funds invested.
Interest income and interest payable is recognised in profit or
loss as it accrues, using the effective interest method. Foreign
currency gains and losses are reported on a net basis.
t) Exceptional items
Exceptional items are material items of income and expense
which, because of the nature and expected infrequency of events
giving rise to them, merit separate presentation to allow
shareholders to understand better the elements of financial
performance in the year, so as to facilitate comparison with prior
years and to assess better trends in financial performance.
u) Taxation
Tax on the profit or loss for the year comprises current and
deferred tax. Tax is recognised in the income statement except to
the extent that it relates to items recognised directly in equity,
in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the
taxable income or loss for the year, using tax rates enacted or
substantively enacted at the balance sheet date, and any adjustment
to tax payable in respect of previous years.
Deferred tax is provided on temporary differences between the
carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for taxation purposes. The following
temporary differences are not provided for: the initial recognition
of goodwill; the initial recognition of assets or liabilities that
affect neither accounting nor taxable profit other than in a
business combination; and differences relating to investments in
subsidiaries to the extent that they will probably not reverse in
the foreseeable future. The amount of deferred tax provided is
based on the expected manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted
or substantively enacted at the balance sheet date.
A deferred tax asset is recognised only to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised.
v) Share capital
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are shown in
equity as a deduction from the proceeds.
w) Share premium and other reserves
The amount subscribed for the ordinary shares in excess of the
nominal value of these new shares is recorded in 'share
premium'.
Costs that directly relate to the issue of ordinary shares are
deducted from share premium net of corporation tax.
The merger reserve represents the amount subscribed for the
ordinary shares in excess of the nominal value of the shares issued
in exchange for the acquisition of subsidiaries.
x) Earnings per share
The Group presents basic and diluted earnings per share ('EPS')
data for its ordinary shares. Basic EPS is calculated by dividing
the profit attributable to ordinary shareholders by the weighted
average number of ordinary shares outstanding during the period.
For diluted EPS, the weighted average number of ordinary shares is
adjusted to assume conversion of all dilutive potential ordinary
shares.
y) Capital management
The Group's objectives when managing capital are to safeguard
the Group's ability to continue as a going concern in order to
provide returns for shareholders and benefits for other
stakeholders, and to maintain an optimal capital structure to
reduce the cost of capital. In order to maintain or adjust the
capital structure, the Group may adjust the amount of dividends
paid to shareholders, return capital to shareholders, issue new
shares or sell assets to reduce debt.
z) Provisions
A provision is recognised in the balance sheet when the Group
has a present legal or constructive obligation as a result of a
past event, that can be reliably measured and it is probable that
an outflow of economic benefits will be required to settle the
obligation.
The Group recognises a refund liability (presented as a
cancellation provision) for the commission that is considered to
represent variable consideration due to the risk that a booking may
be cancelled (see note 2k).
aa) Non-statutory measures
One of the Groups KPI's is adjusted profit before tax. When
reviewing profitability, the Directors use an adjusted profit
before taxation ('PBT') in order to give a meaningful year-on-year
comparison. Whilst we recognise that the measure is an alternative
(non-Generally Accepted Accounting Principles ('non-GAAP'))
performance measure, which is also not defined within IFRS, this
measure is important and should be considered alongside the IFRS
measures.
Adjusted PBT is calculated by adjusting for material items of
income and expenditure where, because of the nature and/or expected
infrequency of events giving rise to them, merit separate
presentation to allow shareholders a better understanding of the
financial performance in the period. These adjustments include
amortisation of acquired intangibles and exceptional items. In
addition, share-based payments charge is excluded in order to
provide comparability to prior periods due to fluctuations in the
charge.
3. Critical accounting estimates and judgements
The Group's accounting policies have been set by management. The
application of these accounting policies to specific scenarios
requires reasonable estimates and assumptions to be made concerning
the future. These are continually evaluated based on historical
experience and expectations of future events. The resulting
accounting estimates will, by definition, seldom equal the related
actual results. Under IFRS estimates or judgements are considered
critical where they involve a significant risk of causing a
material adjustment to the carrying amounts of assets and
liabilities from period to period. This may be because the estimate
or judgement involves matters that are highly uncertain or because
different estimation methods, or assumptions, could reasonably have
been used.
Critical accounting judgements
Revenue from contracts with customers
The Group applied the following key judgements on the agent vs
principal status of each segment as well as the number of
performance objections in each.
i. Performance obligations
Revenue in the OTB, International and CPH segments is recognised
based on there being a single performance obligation at the point
of booking. This is to arrange and facilitate the customer entering
into individual contracts with principal suppliers providing
holiday-related services including flights, hotels and transfers.
For the OTB, International and CPH segments, there is not a
significant integration service and responsibility for providing
the services remains with the principal suppliers.
The Group has concluded that under IFRS 15 for revenue in the
CCH segment, a package holiday constitutes the delivery of one
distinct performance obligation, which includes flights,
accommodation, transfers and other holiday-related services. In
formulating this conclusion, management has assessed that it
provides a significant integration service to collate all of the
elements within a customer's specification to produce one
integrated package holiday. Management has further analysed the
recognition profile and concluded that under IFRS 15, revenue and
corresponding cost of sales should be recognised over the period
that a customer is on holiday.
ii. Agent vs Principal
Determining whether an entity is acting as a principal or as an
agent requires judgement and has a significant effect on the timing
and amount (gross or net basis) of revenue by the Group. As an
agent, revenue is recognised at the point of booking on a net
basis. As a principal, revenue is recognised on a gross basis over
the duration of the holiday.
In accordance with IFRS 15, revenue for the OTB, International
and CPH segments is recognised as an agent on the basis that the
performance obligation is to arrange for another entity to provide
the goods or services. This assessment has given consideration that
there is no inventory risk and limited discretion in establishing
prices. Revenue in the CCH segment is recognised as a principal on
the basis that CCH have the primary responsibility for fulfilling
the package holiday for the customer.
Capitalised website development costs
Determining the amounts to be capitalised involves judgement and
is dependent upon the nature of the related development; namely
whether it is capital (as relating to the enhancement of the
website) or expenditure (as relating to the ongoing maintenance of
the website) in nature. In order to capitalise a project, the key
judgement management have made is in determining the project's
ability to produce future economic benefits. In the year ending 30
September 2023, the proportion of development costs that have been
capitalised is higher than prior year as the development team are
focusing on key strategic development objectives. Management have
assessed each project to determine whether the project is
technically feasible, intended to be completed and used, whether
there is available resources to complete it, and whether there is
probable economic benefits from each project.
Deferred tax asset
Deferred tax assets are recognised for unused tax losses to the
extent that it is probable that taxable profit will be available,
against which the losses can be utilised. Management judgement is
required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing of future taxable profits,
together with future tax planning strategies. Using approved
budgets and forecasts covering a four-year period, management
concluded that there would be a sufficient level of future taxable
profits to support the deferred tax asset of GBP6.3m (2022:
GBP8.2m) recognised (note 20).
Whilst the forecasts include inherent estimation uncertainty,
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.
The key management judgement required was determining the
expected timing of recovery to profit and, therefore, the period
over which the deferred tax asset would be realised. In determining
the timing of recovery, 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 performed sensitivity analyses on these
forecasts that were consistent with those detailed for impairment
testing in note 20.
The Group has GBP0.2m of tax losses carried forward from
subsidiaries that have a history of losses, these losses may not be
used to offset taxable income elsewhere in the Group (2022:
GBP0.2m). On this basis, the Group has determined that it cannot
recognise deferred tax assets on these tax losses carried
forward.
Critical accounting estimates
Recoverability of airline debtor
In relation to flights cancelled during the financial year, the
Group has considered the recoverability of amounts paid to airlines
in lieu of flights that have been cancelled, which as at 30
September 2023 is a receivable balance of GBP1.2m - see note
15.
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. Alternatively, the Group may take legal action to recover
the sums owed (e.g. under the right of redress provided by
Regulation 29 of the Package Travel and Linked Travel Arrangements
Regulations 2018, or via an unjust enrichment claim). 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 was
to increase the provision by five percentage points ('ppts') this
would have resulted in a decrease of GBP0.2m in the airline
receivable of GBP1.2m.
4. Revenue
In line with IFRS 15, the Group is required to disaggregate its
revenue to show the main drivers of its revenue streams. Revenue is
accounted for at the point the Group has satisfied its performance
obligations, details of the revenue performance obligations are set
out in note 2k of these financial statements.
For the year ended 30 September 2023
OTB CCH CPH Total
GBP'm GBP'm GBP'm GBP'm
------------------------------------ ------ ------ ------ ------
Revenue before fair value FX losses
Revenue as agent 106.9 - 6.0 112.9
Revenue as principal - 58.1 - 58.1
Total revenue before fair value
FX losses 106.9 58.1 6.0 171.0
Fair value FX losses (0.8) - - (0.8)
------------------------------------ ------ ------ ------ ------
Total revenue 106.1 58.1 6.0 170.2
------------------------------------ ------ ------ ------ ------
For the year ended 30 September 2022*
OTB CCH CPH Total
GBP'm GBP'm GBP'm GBP'm
--------------------------------- ------ ------ ------ ------
Revenue before exceptional items
Revenue as agent 86.9 - 6.2 93.1
Revenue as principal - 50.5 - 50.5
--------------------------------- ------ ------ ------ ------
Total revenue before exceptional
items 86.9 50.5 6.2 143.6
Exceptional cancellations** (0.6) - (0.4) (1.0)
Fair value FX gains 0.8 - - 0.8
--------------------------------- ------ ------ ------ ------
Total revenue 87.1 50.5 5.8 143.4
--------------------------------- ------ ------ ------ ------
* The results for the year ended 30 September 2022 have been
restated to exclude the results of the discontinued operation
included in that period (note 10).
** Exceptional cancellations in the year ended 30 September 2022
relates to the impact of Covid-19 in the year and travel disruption
arising following the removal of travel restrictions.
Details of receivables arising from contracts with customers are
set out in note 15.
5. Segmental report
As explained in note 2j, the management team considers the
reportable segments to be 'OTB', 'CCH' and 'CPH'. All segment
revenue, operating profit and assets and liabilities are
attributable to the Group from its principal activities. All
revenues are derived in the United Kingdom.
OTB and CPH recognise revenue as agent on a net basis. CCH
recognises revenue as a principal on a gross basis.
2023 2022*
OTB CCH CPH Total OTB CCH CPH Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Revenue
Revenue before exceptional
cancellations 106.9 58.1 6.0 171.0 86.9 50.5 6.2 143.6
Exceptional cancellations** - - - - (0.6) - (0.4) (1.0)
Fair value FX (losses)/gains (0.8) - - (0.8) 0.8 - - 0.8
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Total revenue 106.1 58.1 6.0 170.2 87.1 50.5 5.8 143.4
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Adjusted EBITDA 32.1 (1.0) 0.1 31.2 22.1 (0.1) (0.1) 21.9
Share-based charge (1.1) (0.1) - (1.2) (4.7) - - (4.7)
Exceptional items (3.3) (0.2) - (3.5) (1.9) (0.3) (0.4) (2.6)
Fair value FX (losses)/gains (0.8) - - (0.8) 0.8 - - 0.8
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
EBITDA 26.9 (1.3) 0.1 25.7 16.3 (0.4) (0.5) 15.4
Depreciation and amortisation (14.1) (1.3) - (15.4) (11.1) (1.4) (0.2) (12.7)
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Group operating profit/(loss) 12.8 (2.6) 0.1 10.3 5.2 (1.8) (0.7) 2.7
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Finance costs (1.5) (0.8)
Finance income 4.1 0.3
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Profit before taxation 12.9 2.2
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Non-current assets
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
Goodwill 31.6 4.6 4.0 40.2 31.6 4.6 4.0 40.2
Other intangible assets 27.9 5.6 0.2 33.7 27.4 6.6 0.1 34.1
Property, plant and equipment 5.5 2.5 - 8.0 6.3 2.8 - 9.1
------------------------------ ------ ------ ------ ------ ------ ------ ------ ------
* The results for the year ended 30 September 2022 have been
restated to exclude the results of the discontinued operation
included in that period (note 10).
** Exceptional cancellations in the year ended 30 September 2022
relates to the impact of Covid-19 in the year and travel disruption
arising following the removal of travel restrictions.
6. Operating profit
a) Operating expenses
Expenses by nature including exceptional items and impairment
charges:
Restated*
2023 2022
GBP'm GBP'm
----------------------------------------------------- ------ ---------
Marketing 40.6 38.3
Depreciation 2.7 2.0
Staff costs (including share-based payments) 28.4 27.9
IT hosting, licences and support 6.2 4.5
Office expenses 0.9 0.7
Credit/debit card charges 3.9 3.2
Insurance 2.2 1.6
Professional services 1.2 0.9
Other 1.5 1.0
------------------------------------------------------ ------ ---------
Administrative expenses before exceptional items and
amortisation of intangible assets 87.6 80.1
Exceptional items 3.5 1.3
Amortisation of intangible assets 12.6 10.8
------------------------------------------------------ ------ ---------
Exceptional items and amortisation of intangible
assets 16.1 12.1
------------------------------------------------------ ------ ---------
Administrative expenses 103.7 92.2
------------------------------------------------------ ------ ---------
* The prior period is restated for the effects of the discontinued operations (see note 10).
b) Exceptional items
Exceptional items in the year ended 30 September 2023 of GBP3.5m
represents GBP2.0m of non-trade legal and professional fees
relating to ongoing litigation and GBP1.5m of redundancy costs as a
result of the consolidation of certain Group functions between OTB
and CCH.
Total exceptional items for the year ended 30 September 2022
includes GBP2.6m due to the impact of travel disruption, GBP1.3m
relates to exceptional cancellations, other exceptional operating
costs of GBP1.3m includes GBP2.5m of legal and professional fees
incurred in the year offset by the release of GBP1.2m of
provisions.
c) Services provided by the Company auditor
During the year, the Group obtained the following services from
the operating Company's auditor.
2023 2022
GBP'm GBP'm
------------------------------------------------- ------ ------
Audit of the parent company financial statements 0.1 0.1
Amounts receivable by the Company's auditor
and its associated in respect of:
- Audit of financial statements of subsidiaries
pursuant to legislation 0.4 0.3
- Review of interim financial statements - -
- Other assurance services - -
------------------------------------------------- ------ ------
0.5 0.4
------------------------------------------------- ------ ------
d) Adjusted profit before tax
Management measures the overall performance of the Group by
reference to adjusted profit before tax, a non-GAAP measure, as it
provides comparability of the Group's performance year on year:
Restated*
2023 2022
GBP'm GBP'm
--------------------------------------- ------ ---------
Profit before taxation 12.9 2.2
Exceptional items 3.5 2.6
Fair value FX losses/(gains) 0.8 (0.8)
Amortisation of acquired intangibles** 5.2 5.5
Share-based payments charge*** 1.2 4.7
---------------------------------------- ------ ---------
Adjusted profit before tax 23.6 14.2
---------------------------------------- ------ ---------
* The prior period is restated for the effects of the discontinued operations (see note 10).
** 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 the expected cost
of shares vesting under the Group's Long-Term Incentive Plan. The
share-based payment charge has decreased to GBP1.2m (2022: GBP4.7m)
as a result of a reduction in the number of awards in the year and
the change in the expectations for non-market-based performance
conditions. The year ending 30 September 2022 also included a
catch-up charge following the introduction of an underpin/minimum
award. These charges are added back to provide comparability to
prior periods due to fluctuations in the charges.
7. Employees and Directors
a) Payroll costs
The aggregate payroll costs of these persons were as
follows:
2023 2022
GBP'm GBP'm
---------------------------------- ------ ------
Wages and salaries 31.7 27.2
Defined contribution pension cost 1.0 0.7
Social security costs 3.3 2.9
Share-based payment charge 1.2 4.7
----------------------------------- ------ ------
37.2 35.5
---------------------------------- ------ ------
Staff costs above include GBP8.8m (2022: GBP7.5m) employee costs
capitalised as part of software development.
The share-based payment charge has decreased to GBP1.2m (2022:
GBP4.7m) as a result of a reduction in the number of awards in the
year and the change in the expectations for non-market based
performance conditions. The year ending 30 September 2022 also
included a catch-up charge following the introduction of an
underpin/minimum award.
b) Employee numbers
Average monthly number of people (including Executive Directors)
employed:
2023 2022
By reportable segment: No. No.
----------------------- ---- ----
OTB 522 463
CCH 148 134
CPH 11 22
------------------------ ---- ----
681 619
----------------------- ---- ----
The average monthly number of employees for the discontinued
operations was four (2022: four).
c) Directors' emoluments
The remuneration of Directors was as follows:
2023 2022
GBP'm GBP'm
----------------------------- ------ ------
Aggregate emoluments 1.8 1.0
Defined contribution pension 0.1 -
Share-based payment charges 0.4 0.8
------------------------------ ------ ------
2.3 1.8
----------------------------- ------ ------
Remuneration was paid by On the Beach Limited, a subsidiary
company of the Group.
The remuneration of the highest paid Director was as
follows:
2023 2022
GBP'm GBP'm
---------------------------- ------ ------
Aggregate emoluments 0.6 0.6
Share-based payment charges 0.3 0.8
----------------------------- ------ ------
0.9 1.4
---------------------------- ------ ------
d) Key management compensation
Key management comprised the ten members of the Executive Team
(2022: eight).
Remuneration of all key management (including Directors) was as
follows:
2023 2022
GBP'm GBP'm
--------------------------------- ------ ------
Wages and salaries 4.2 5.1
Short-term non-monetary benefits 0.2 -
Share-based payment charges 1.2 3.4
---------------------------------- ------ ------
5.6 8.5
--------------------------------- ------ ------
e) Retirement benefits
Included in pension contributions payable by the Group of
GBP1.0m (2022: GBP0.7m) is GBP25,800 (2022: GBP10,700) of
contributions that the Group made to a personal pension scheme in
relation to one Executive Director.
8. Finance income and finance costs
a) Finance costs
2023 2022
GBP'm GBP'm
-------------------------------------- ------ ------
Rolling credit facility interest/fees 1.3 0.6
Interest on lease liabilities 0.2 0.2
--------------------------------------- ------ ------
Finance costs 1.5 0.8
--------------------------------------- ------ ------
b) Finance income
2023 2022
GBP'm GBP'm
------------------------- ------ ------
Bank interest receivable 4.1 0.3
-------------------------- ------ ------
Finance income 4.1 0.3
-------------------------- ------ ------
9. Taxation
2023 2022
GBP'm GBP'm
-------------------------------------------------- ------ ------
Current tax on profit for the year 1.6 0.4
Adjustments in respect of prior years (0.1) -
--------------------------------------------------- ------ ------
Total current tax 1.5 0.4
Deferred tax on profits for the year
Origination and reversal of temporary differences 1.0 0.3
Adjustments in respect of prior years (0.2) (0.2)
--------------------------------------------------- ------ ------
Total deferred tax 0.8 0.1
--------------------------------------------------- ------ ------
Total tax charge 2.3 0.5
--------------------------------------------------- ------ ------
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 operations are as
follows.
2023 2022
GBP'm GBP'm
--------------------------------------------- ------ ------
Profit on ordinary activities before tax 12.9 2.2
Profit on ordinary activities multiplied
by a blended rate of corporation tax of 22%
(2022: 19%) 2.8 0.4
Effects of:
Impact of difference in current and deferred
tax rates (0.6) (0.5)
Adjustments in respect of prior years (0.3) (0.2)
Expenses not deductible 0.4 0.8
Total taxation charge 2.3 0.5
---------------------------------------------- ------ ------
The tax charge for the year is based on the effective rate of
corporation tax for the period of 19% (2022: 25%). 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 at 30 September 2023 have been calculated based on
this rate.
10. Loss from discontinued operations
On 30 September 2023, the Group made the decision to cease its
current operations outside of the UK. The results of the
discontinued operations are analysed below. The comparative figures
have been restated to show separately the results of the
discontinued operation included in that period. The 'International'
segment is no longer presented in the segment note.
2023 2022
GBP'm GBP'm
----------------------------------------------- ------ ------
Loss for the year from discontinued operations
Revenue 0.9 0.7
Administrative expenses (1.4) (0.8)
------------------------------------------------ ------ ------
Loss before tax (0.5) (0.1)
Loss from discontinued operations (0.5) (0.1)
------------------------------------------------ ------ ------
Earnings per share
Basic EPS (0.3p) (0.1p)
Adjusted EPS (0.3p) (0.1p)
Cash flows from discontinued operations
Net cash flows from operating activities (0.5) (0.1)
------------------------------------------------ ------ ------
Net cash flows from discontinued operations (0.5) (0.1)
------------------------------------------------ ------ ------
No impact on cash flows from investing or financing
activities.
There are no assets relating to discontinued operations held for
sale at 30 September 2023.
11. Earnings per share
Basic earnings per share are calculated by dividing the profit
attributable to equity holders of On the Beach Group plc by the
weighted average number of ordinary shares issued during the
year.
Diluted earnings per share is calculated by dividing the profit
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 basic earnings per share figures are calculated by
dividing adjusted earnings after tax for the year by the weighted
average number of shares. Adjusted diluted earnings per share
figures are calculated by dividing adjusted earnings after tax for
the year by the weighted average number of shares plus the weighted
average number of ordinary shares that would be issued on the
conversion of all dilutive potential ordinary shares into ordinary
shares.
Basic weighted
average number
of ordinary Total earnings Pence per
Earnings per share for continuing operations shares (m) GBP'm share
--------------------------------------------- --------------- -------------- ---------
Year ended 30 September 2023
Basic EPS 166.5 10.6 6.4p
Diluted EPS 167.8 10.6 6.3p
Adjusted basic EPS 166.5 19.3 11.6p
Adjusted diluted EPS 167.8 19.3 11.5p
--------------------------------------------- --------------- -------------- ---------
Basic weighted
average number
of ordinary Total earnings* Pence per
shares (m) GBP'm share
----------------------------- --------------- --------------- ---------
Year ended 30 September 2022
Basic EPS 165.9 1.7 1.0p
Diluted EPS 166.7 1.7 1.0p
Adjusted basic EPS 165.9 10.6 6.4p
Adjusted diluted EPS 166.7 10.6 6.4p
----------------------------- --------------- --------------- ---------
* The prior period has been restated to exclude the results of discontinued operations
Basic weighted
average number
of Ordinary Total earnings Pence per
Earnings per share for total operations Shares (m) GBP'm share
---------------------------------------- --------------- -------------- ---------
Year ended 30 September 2023
Basic EPS 166.5 10.1 6.1p
Diluted EPS 167.8 10.1 6.0p
---------------------------------------- --------------- -------------- ---------
Basic weighted
average number
of Ordinary Total earnings Pence per
Shares (m) GBP'm share
----------------------------- --------------- -------------- ---------
Year ended 30 September 2022
Basic EPS 165.9 1.6 0.9p
Diluted EPS 166.7 1.6 0.9p
----------------------------- --------------- -------------- ---------
Adjusted earnings after tax is calculated using the Group's
effective tax rate as follows:
2023 2022
GBP'm GBP'm
----------------------------------------- ------ ------
Profit for the year after taxation 10.6 1.7
Adjustments (net of tax at the effective
rate)*
Exceptional items 2.8 1.9
Fair value FX losses/(gains) 0.7 (0.6)
Amortisation of acquired intangibles 4.2 4.1
Share based payment charges** 1.0 3.5
------------------------------------------ ------ ------
Adjusted earnings after tax 19.3 10.6
------------------------------------------ ------ ------
* The effective tax rate for the year ending 30 September 2023
was 19% (2022: 25%), see note 9 for details.
** The share based payment charges are in relation to options which are not yet exercisable
2023 2022
GBP'm GBP'm
---------------------------------------------- ------ ------
Weighted average number of shares for basic
earnings per share 166.5 165.9
Dilution from share options 1.3 0.8
----------------------------------------------- ------ ------
Weighted average number of shares for diluted
earnings per share 167.8 166.7
----------------------------------------------- ------ ------
12. Intangible assets
Website
and development Website Customer
Brand Goodwill costs technology relationships Agent relationships Total
GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm GBP'm
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
Cost
At 1 October
2021 35.9 40.2 20.2 22.8 2.1 4.4 125.6
Additions - - 11.0 - - - 11.0
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
At 30 September
2022 35.9 40.2 31.2 22.8 2.1 4.4 136.6
Additions - - 12.0 - - - 12.0
Disposals - - (0.5) - - - (0.5)
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
At 30 September
2023 35.9 40.2 42.7 22.8 2.1 4.4 148.1
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
Accumulated
amortisation
At 1 October
2021 17.5 - 13.3 18.4 1.3 1.0 51.5
Charge for the
year 2.4 - 5.3 2.4 0.4 0.3 10.8
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
At 30 September
2022 19.9 - 18.6 20.8 1.7 1.3 62.3
Charge for the
year 2.5 - 7.4 2.0 0.4 0.3 12.6
Disposals - - (0.5) - - - (0.5)
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
At 30 September
2023 22.4 - 25.5 22.8 2.1 1.6 74.4
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
Net book amount
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
At 30 September
2023 13.5 40.2 17.2 - - 2.8 73.7
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
At 30 September
2022 16.0 40.2 12.6 2.0 0.4 3.1 74.3
---------------- ------ -------- ---------------- ----------- -------------- ------------------- ------
Brand
The brand intangibles assets consist of three brands, which were
separately identified as intangibles on the acquisition of the
respective businesses. The carrying amount of the brand intangible
assets:
At 30 September At 30 September
Remaining useful 2023 2022
Brand economic life Acquisition GBP'm GBP'm
------------------- ---------------- ---------------------- --------------- ---------------
On the Beach Travel
On the Beach 5 Limited 10.0 12.1
Sunshine.co.uk 5 Sunshine.co.uk Limited 0.6 0.7
Classic Collection
Classic Collection 10 Limited 2.9 3.2
------------------- ---------------- ---------------------- --------------- ---------------
13.5 16.0
------------------- ---------------- ---------------------- --------------- ---------------
Goodwill
Goodwill acquired in a business combination is allocated on
acquisition to the cash-generating unit ('CGU') that is expected to
benefit from that business combination. The carrying amount of
goodwill has been allocated as follows:
At 30 September At 30 September
2023 2022
Reportable segment CGU Acquisition GBP'm GBP'm
------------------- ---- ----------------------- --------------- ---------------
On the Beach Travel
OTB OTB Limited 21.5 21.5
OTB OTB Sunshine.co.uk Limited 10.1 10.1
Classic Collection
CCH CCH Limited 4.6 4.6
Classic Collection
CPH CPH Limited 4.0 4.0
------------------- ---- ----------------------- --------------- ---------------
40.2 40.2
------------------------------------------------ --------------- ---------------
Impairment of goodwill
On the Beach and Sunshine are considered to be one reportable
segment and a single CGU, as they are internally reported and
managed as one entity. Goodwill acquired through Sunshine.co.uk has
been allocated to the 'OTB' CGU. Goodwill acquired through the
Classic collection acquisition has been allocated to the 'CCH' and
'CPH' CGUs.
The Group has not recognised an impairment to the goodwill for
the year ending 30 September 2023 (2022: GBPnil).
'OTB' CGU
The Group performed its annual impairment test as at 30
September 2023 on the 'OTB' CGU. The recoverable amount of the CGU
has been determined based on the value-in-use calculations using
cash flow projections derived from financial budgets and
projections covering a five-year period. The forecasts are then
extrapolated in perpetuity based on an estimated growth rate of 2%
(2022: 2%), this being the Directors' best estimate of the future
prospects of the business. This is deemed appropriate because the
CGU is considered to be a long-term business. Management estimates
discount rates using pre-tax rates that reflect current market
assessments of the time value of money and the risks specific to
this CGU. The discount rate applied is 14.6% (2022: 13.5%).
'CCH' CGU
The Group performed its annual impairment test as at 30
September 2023 on the 'CCH' CGU. The recoverable amount of the CGU
has been determined based on the value-in-use calculations using
cash flow projections derived from financial budgets and
projections covering a five-year period. The forecasts are then
extrapolated in perpetuity based on an estimated growth rate of 2%
(2022: 2%). This is deemed appropriate based on the Directors' best
estimate of the future prospects of the business. Management
estimates discount rates using pre-tax rates that reflect current
market assessments of the time value of money and the risks
specific to the CGU. The discount rate applied is 14.6% (2022:
13.%).
'CPH' CGU
The Group performed its annual impairment test as at 30
September 2023 on the 'CPH' CGU. The recoverable amount of the CGU
has been determined based on the value-in-use calculations using
cash flow projections derived from financial budgets and
projections covering a five-year period. The forecasts are then
extrapolated in perpetuity based on an estimated growth rate of 2%
(2022: 2 percent). This is deemed appropriate based on the
Directors' best estimate of the future prospects of the business.
Management estimates discount rates using pre-tax rates that
reflect current market assessments of the time value of money and
the risks specific to the CGU. The discount rate applied is 14.6%
(2022: 13.5%)
Administrative expenses are dependent upon the net costs to the
business of purchasing services. Expenses are based on the current
cost base of the Group adjusted for variable costs.
Key assumptions used in value-in-use calculations and
sensitivity to changes in assumptions
The main assumptions on which the forecast cash flows used for
the CGUs were based include:
- Consumer demand - management considered historic performance
as well as the size of the market, current market share,
competitive pressure, consumer confidence and appetite under the
cost-of-living crisis. The Directors have used their past
experience of the business and its industry, together with their
expectations of the market.
- Impact of new marketing and planned improvements on booking
conversion - whilst the spend on incentives and improvements is
within the Group's control, the impact on increasing bookings
requires assessment of consumer demand and competitive pressures
using industry and market knowledge.
The calculation of value in use for all CGUs is most sensitive
to the following assumptions:
- Revenue: the level of sales is based on expected customer
demand, average booking values and booking conversion, however, a
material deterioration in consumer can lead to reduced demand for
holidays as well as disruption to its operations from unpredictable
domestic and international events, which can significantly impact
the level of sales. A decrease in bookings of 20% for each CGU
would not result in an impairment.
- Discount rates: Discount rates represent the current market
assessment of the risks specific to each CGU, taking into
consideration the time value of money and individual risks of the
underlying assets that have not been incorporated in the cash flow
estimates. The discount rate calculation is based on the specific
circumstances of the Group and its operating segments, and is
derived from its weighted average cost of capital ('WACC'). A rise
in the discount rate to 16% for all CGUs would not result in an
impairment.
- Growth rates used to extrapolate cash flows beyond the
forecast period: the Group operates in a fast-moving marketplace so
management recognises that the speed of technological change and
the possibility of new entrants can have a significant impact on
growth rate assumptions. A reduction in long-term growth rates by
10ppts for each CGU would not result in an impairment.
Sensitivity analysis has been completed in isolation and in
combination. Management considers that no reasonably possible
changes in assumptions would reduce a CGU's headroom to nil.
Impact of changes in customer behaviour
The Group does not consider that any CGU has been automatically
impaired as a result of either the rising cost of living or changes
in customer behaviour in respect of climate related matters with
booking volumes increasing for the year ending 30 September in
comparison to the prior year. All CGUs remain viable long term
trading assets, which the Group expects to continue to generate
positive cashflows. Inherent in the impairment test and sensitivity
analysis is the impact of customer demand being affected by either
of these factors. The Group is satisfied that sufficient headroom
exists to support the asset value.
Website and development costs
The Group capitalises development projects where they satisfy
the requirements for capitalisation in accordance with the IAS 38
and expense projects that relate to ongoing maintenance and
support.
Capitalised development costs are not treated as a realised loss
for the purpose of determining the Company's distributable profits
as the costs meet the conditions requiring them to be treated as an
asset in accordance with IAS 38.
Additions in the year relate to the development of software and
the purchase of domain names. The amortisation period for website
and development costs is three years straight line. Domain names
are amortised over ten years. Amortisation has been recognised
within operating expenses.
Research and development costs that are not eligible for
capitalisation have been recognised in administrative expenses in
the period incurred, in 2023 this was GBP0.9m (2022: GBP1.3m).
13. Tangible assets
Fixtures,
Freehold Right-of-use fittings
property asset (note and equipment
GBP'm 17) GBP'm GBP'm Total GBP'm
------------------------ --------- ------------ -------------- -----------
Cost
At 1 October 2021 2.3 3.6 7.1 13.0
Additions - 1.5 1.3 2.8
Disposals - - (1.0) (1.0)
------------------------ --------- ------------ -------------- -----------
At 1 October 2022 2.3 5.1 7.4 14.8
Additions - 1.0 0.1 1.1
Modification of lease - 0.9 - 0.9
Disposals - - (1.4) (1.4)
------------------------ --------- ------------ -------------- -----------
At 30 September 2023 2.3 7.0 6.1 15.4
------------------------ --------- ------------ -------------- -----------
Accumulated deprecation
At 1 October 2021 0.1 1.1 3.5 4.7
Charge for the year 0.1 0.6 1.3 2.0
Disposals - - (1.0) (1.0)
------------------------ --------- ------------ -------------- -----------
At 1 October 2022 0.2 1.7 3.8 5.7
Charge for the year 0.1 1.4 1.2 2.7
Disposals - - (1.3) (1.3)
------------------------ --------- ------------ -------------- -----------
At 30 September 2023 0.3 3.1 3.7 7.1
------------------------ --------- ------------ -------------- -----------
Net book amount
------------------------ --------- ------------ -------------- -----------
At 30 September 2023 2.0 3.9 2.2 8.3
------------------------ --------- ------------ -------------- -----------
At 30 September 2022 2.1 3.4 3.6 9.1
------------------------ --------- ------------ -------------- -----------
The depreciation expense of GBP2.7m for the year ended 30
September 2023 and the depreciation expense of GBP2.0m for the year
ended 30 September 2022 have been recognised within administrative
expenses.
14. Investments
The parent company, On the Beach Group plc, is incorporated in
the UK and directly holds a number of subsidiaries. The registered
address for each subsidiary is Aeroworks, 5 Adair Street,
Manchester M1 2NQ.
The table below shows details of the wholly-owned subsidiaries
of the Group.
Proportion of ordinary
shares held by
Subsidiary Nature of business the Group
--------------------------------- ---------------------- ----------------------
On the Beach Topco Limited* Holding company 100%
On The Beach Limited Internet travel agent 100%
On The Beach Beds Limited In-house bedbank 100%
On The Beach Bid Co Limited* Holding company 100%
On the Beach Travel Limited Holding company 100%
On the Beach Trustees Limited Employee trust 100%
On the Beach Holidays Limited Dormant 100%
Sunshine.co.uk Limited Internet travel agent 100%
Sunshine Abroad Limited Dormant 100%
Classic Collection Holidays
Limited Tour Operator 100%
Classic Collection Aviation
Limited Transport Broker 100%
Classic Collection Holiday,
Travel & Leisure Limited Dormant 100%
Saxon House Properties Limited Property Management 100%
Classic Package Holidays Limited Travel agent 100%
--------------------------------- ---------------------- ----------------------
* In the prior year, the Group undertook a project to simplify
the Group structure, on 30 September 2022 On the Beach Topco
Limited and On the Beach Bidco were placed into Members Voluntary
Liquidation. The Group chose to simplify the Group structure to
reduce duplication of processes, reduce complexity of the structure
without affecting the control of the Group's assets, and reduce
additional costs associated with the subsidiaries.
There are no restrictions on the Company's ability to access or
use the assets and settle the liabilities of the Company's
subsidiaries.
15. Trade and other receivables
Amounts falling due within one year: 2023 GBP'm 2022 GBP'm
------------------------------------- ---------- ----------
Trade receivables - net 147.4 100.8
Other receivables and prepayments 17.9 21.6
-------------------------------------- ---------- ----------
165.3 122.4
------------------------------------- ---------- ----------
For trade receivables, impairment analysis is performed at each
reporting date to calculate the expected credit losses. The
provision rates are based on historical default rates, see note 23
for details of credit risk.
Prepayments greater than one year are nil (2022: GBP0.6m).
For the year ended 30 September 2023, other receivables includes
GBP1.2m receivable in respect of amounts due from airlines as a
result of supplier cancellations (2022: GBP2.8m). Other receivables
and prepayments includes GBP7.4m of advanced payments to suppliers,
and GBP6.0m of rebates due from suppliers. The expected credit
losses in respect to these balances is not material. Other
receivables and prepayments for the year ending 30 September 2022
includes GBP5.3m of advanced payments to suppliers, GBP3.9m of
rebates due from suppliers and GBP2.2m receivable in relation to
value-added tax.
Expected credit losses for trade receivables
Set out below is the movement in the allowance for expected
credit losses of trade receivables:
GBP'm
------------------------------------- -----
At 1 October 2022 0.5
Provision for expected credit losses 2.0
Utilised in year (1.5)
-------------------------------------- -----
At 30 September 2023 1.0
-------------------------------------- -----
16. 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.
17. Trade, other payables and provisions
2023 GBP'm 2022 GBP'm
---------------------------- ---------- ----------
Non-current
Lease liabilities (note 18) 2.6 3.0
Current
Trade payables 236.4 158.3
Accruals and other payables 17.0 19.9
Contract liabilities 5.9 7.5
Lease liabilities (note 18) 1.9 0.9
Provision 0.4 0.3
----------------------------- ---------- ----------
264.2 189.9
---------------------------- ---------- ----------
Accruals and other payables includes GBP8.6m (2022: GBP14.9m)
for products or services received but not yet invoiced at the
year-end date, GBP6.5m relates to amounts due to non-trade
suppliers.
Contract balances
The Group acts as principal when it is the primary party
responsible for providing the components that make up the
customer's booking and it controls the components before
transferring to the customer for the CCH segment. Revenue
represents amounts received or receivable for the sale of package
holidays and other services supplied to the customers. Revenue is
recognised when the performance obligation of delivering an
integrated package holiday is satisfied, usually over the duration
of the holiday. Revenue is stated net of discounts, rebates,
refunds and value added tax.
A contract liability is recognised if a payment is received from
a customer before the Group delivers its performance obligations.
Contract liabilities are recognised as revenue when the Group
delivers its performance obligations.
Set below is the amount of revenue recognised from:
2023 GBP'm 2022 GBP'm
---------------------------------------------- ---------- ----------
Amounts included in contract liabilities
at the beginning of the year 6.6 5.3
Performance obligations satisfied in previous
years 0.8 0.2
----------------------------------------------- ---------- ----------
Provisions
Cancellations
GBP'm Total GBP'm
----------------------------------------- ------------- -----------
At 1 October 2022 0.3 0.3
Arising during the year 0.4 0.5
Utilised (0.3) -
Unused amounts reversed - -
Unwinding of discount and changes in the
discount rate - -
----------------------------------------- ------------- -----------
At 30 September 2023 0.4 0.7
------------------------------------------ ------------- -----------
Current 0.4 0.7
Non-current - -
------------------------------------------ ------------- -----------
Cancellations
A provision has been recognised in respect of expected future
cancellations for supplier and customer cancellations on the
forward order book for future departures. The Group expect this
provision to be utilised over the next year. The provision is based
on historical trends and best estimate of future expectation, there
is inherent uncertainty in terms of the level and timing of future
cancellations, which will depend on various factors including
potential supplier disruption and customer requested
cancellations.
18. Leases
The Group as a lessee
The Group has leases for its head office and IT equipment, the
lease term for the building is ten years and lease terms for the IT
equipment are between three and five years. For the year ending 30
September 2023, the Group was subject to a rent review for the
lease of the building, this resulted in the revaluation of the
lease liability and a corresponding increase in the right-of-use
asset. Each lease generally imposes a restriction that, unless
there is a contractual right for the Group to sublet the asset to
another party, the right-of-use asset can only be used by the
Group. With the exception of short-term leases and leases of
low-value underlying assets, each lease is reflected on the balance
sheet as a right-of-use asset and a lease liability. The Group
classifies its right-of-use assets in a consistent manner to its
property, plant and equipment (see note 13).
Amounts recognised in profit or loss
The following lease-related expenses were recognised under IFRS
16 in the profit or loss:
2023 GBP'm 2022 GBP'm
-------------------------------------------- ---------- ----------
Depreciation expense of right-of-use assets 1.4 0.6
Interest expense on lease liabilities 0.2 0.2
--------------------------------------------- ---------- ----------
Total amount recognised in profit or loss 1.6 0.8
--------------------------------------------- ---------- ----------
Set out below are the carrying amounts of lease liabilities
(included trade and other payables) and the movements during the
period:
2023 GBP'm 2022 GBP'm
---------------------- ---------- ----------
As at 1 October 3.9 2.9
Additions 1.0 1.5
Modification of lease 0.9 -
Accretion of interest 0.2 0.2
Payments (1.5) (0.7)
----------------------- ---------- ----------
As at 30 September 4.5 3.9
----------------------- ---------- ----------
Current (note 17) 1.9 0.9
Non-current (note 17) 2.6 3.0
----------------------- ---------- ----------
The Group had total cash outflows for leases of GBP1.5m in 2023
(2022: GBP0.7m). The above table satisfies the requirements of IAS
7.44A to present a net debt reconciliation.
19. Borrowings
Bank facility
On 7 December 2022, the Group refinanced its credit facilities
with Lloyds and NatWest. This included cancelling its previous
facilities of GBP75m with Lloyds Bank and entering into a new
facility for GBP60m, expiring in December 2025. The purpose of the
facility is to meet the day-to-day working capital requirements of
the Group. At the point of refinancing there was nothing drawn
down.
The total facility is GBP60m and has two elements as
follows:
-- GBP30m facility with Lloyds; and
-- GBP30m facility with NatWest.
The interest rate payable is equal to SONIA plus a margin. The
margin contained within the facility is dependent on net leverage
ratio and the rate per annum ranges from 2.00% to 2.75% for the
facility or any unpaid sum.
The terms of the facility prior to 7 December 2022 included the
following key financial 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; and
ii. that the ratio of total net debt to adjusted EBITDA shall not exceed 2:1
The terms of the new facility following 7 December 2022 include
the following covenants:
(i) the ratio of adjusted EBITDA to net finance charges in
respect of any relevant period shall not be less than 5:1; and
(ii) the ratio of total net debt to adjusted EBITDA shall not
exceed 2.5:1.
The Group did not breach the covenants during the period.
The RCF is available for other credit uses including currency
hedging liabilities and corporate credit cards. At 30 September
2023, the liabilities recognised in trade and other payables for
the other credit uses was GBP4.9m, leaving GBP55.1m of the
Lloyds/NatWest facility available for use. Card facilities with
other providers remain available for use.
The amount drawn down in cash at 30 September 2023 was GBPnil
and there has been nothing drawn down post balance sheet date.
20. Deferred tax
Property, Losses
Intangible plant and Share-based and unused Tax assets/
assets equipment payments tax relief (liabilities)
GBP'm GBP'm GBP'm GBP'm GBP'm
----------- ---------- ---------- ----------- ----------- --------------
2023
Assets - - 0.4 6.3 6.7
Liabilities (4.0) (0.1) - - (4.1)
----------- ---------- ---------- ----------- ----------- --------------
Total (4.0) (0.1) 0.4 6.3 2.6
----------- ---------- ---------- ----------- ----------- --------------
2022
Assets - - 0.7 8.2 8.9
Liabilities (5.2) (0.3) - - (5.5)
----------- ---------- ---------- ----------- ----------- --------------
Total (5.2) (0.3) 0.7 8.2 3.4
----------- ---------- ---------- ----------- ----------- --------------
Losses
Intangible Capital Acquired Share-based and unused
assets allowances property payments tax relief
GBP'm GBP'm GBP'm GBP'm GBP'm Total GBP'm
--------------------- ---------- ----------- --------- ----------- ----------- -----------
30 September 2021 (6.3) (0.1) (0.2) 0.7 9.5 3.6
Recognised in income 1.1 - - 0.1 (1.3) (0.1)
Recognised in equity - - - (0.1) - (0.1)
--------------------- ---------- ----------- --------- ----------- ----------- -----------
30 September 2022 (5.2) (0.1) (0.2) 0.7 8.2 3.4
Recognised in income 1.2 0.2 - (0.3) (1.9) (0.8)
Recognised in equity - - - - - -
--------------------- ---------- ----------- --------- ----------- ----------- -----------
30 September 2023 (4.0) 0.1 (0.2) 0.4 6.3 2.6
--------------------- ---------- ----------- --------- ----------- ----------- -----------
The deferred tax asset includes an amount of GBP6.3m (2022:
GBP8.2m), which relates to carried forward tax losses. 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 availability of sufficient taxable temporary differences and
the probability that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised. 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 (see note 3
for details).
In determining the recognition of deferred tax assets arising
from the carry forward of unused tax losses, the Group considered
the following:
- The Group considered the location of the taxable entities, the
loss making companies are all located in the United Kingdom, for a
full list of subsidiaries see note 14.
- The Group has considered the approved budgeted information
covering a five-year period that is consistent with the forecasts
used for the Group's review of impairment, going concern and
viability assessments. For details of the assumptions used and
sensitivity analysis performed for the forecasts, see note 12.
Whilst the forecasts include inherent estimation uncertainty, 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. On this
basis, the Group concluded that there is not a significant risk of
a material adjustment to the carrying amount of the deferred tax
asset.
- Based on the budgeted information, the Group made a
significant judgement on the timing of utilising the unused tax
losses, as detailed in note 3.
- The Group has GBP0.2m that are available indefinitely for
offsetting against future taxable profits of the companies in which
the losses arose. Deferred tax assets have not been recognised in
respect of these losses as they may not be used to offset taxable
profits elsewhere in the Group, they have arisen in subsidiaries
that have been loss-making for some time, and there are no other
tax planning opportunities or other evidence of recoverability in
the near future.
21. Share capital
Allotted, called up and fully paid 2023 GBP'm 2022 GBP'm
-------------------------------------------------------------- ---------- ----------
166,640,480 ordinary shares @ GBP0.01 each (2022: 166,258,172
ordinary shares @ GBP0.01 each) 1.7 1.7
--------------------------------------------------------------- ---------- ----------
The Group issued 382,308 ordinary shares with a nominal value of
GBP0.01. The holders of ordinary shares are entitled to receive
dividends as declared from time to time and are entitled to one
vote per share at meetings of the Group.
22. Reserves
The analysis of movements in reserves is shown in the statement
of changes in equity.
Details of the amounts included in other reserves are set out
below.
The merger reserve arose on the purchase of On the Beach TopCo
Limited in the year ended 30 September 2015.
During the year ended 30 September 2018, the Group issued
607,747 shares with a nominal value of GBP0.01 each to form part of
the acquisition of Classic. The consideration value of the shares
issued was GBP2.6m. The excess above the nominal value of the
shares was credited to the merger reserve.
The capital contribution reserve arose as a result of the
redemption of preference shares in the year ended 30 September
2015.
23. Financial instruments
Details of significant accounting policies and methods adopted,
including criteria for recognition, the basis of measurement and
the basis on which income and expenses are recognised, in respect
of each class of financial asset, financial liability and equity
instrument, are disclosed in the statement of accounting
policies.
At the balance sheet date the Group held the following:
Financial assets FV Level 2023 GBP'm 2022 GBP'm
---------------------------------------------- -------- ---------- ----------
Derivative financial assets designated as
hedging instruments
Forward exchange contracts 2 0.9 3.2
Financial assets at amortised cost
Trust account 108.6 69.4
Cash at bank 75.8 64.5
Trade and other receivables (note 15) 157.9 116.9
---------------------------------------------- -------- ---------- ----------
Total financial assets 343.2 254.0
---------------------------------------------- -------- ---------- ----------
Financial liabilities
---------------------------------------------- -------- ---------- ----------
Derivatives designated as hedging instruments
Forward exchange contracts 2 (1.1) -
Financial liabilities at amortised cost
Trade and other payables (note 17) (263.8) (189.6)
Provisions (0.4) (0.3)
---------------------------------------------- -------- ---------- ----------
Total financial liabilities (26532) (189.9)
---------------------------------------------- -------- ---------- ----------
Derivative financial instruments
The Group enters into derivative financial instruments with
various financial institutions, which 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
In order to fund seasonal working capital requirements, the
Group has a revolving credit facility with Lloyds and NatWest
Banks. The borrowing limits under the facility is GBP60m per month,
subject to covenant compliance; at year-end nothing was drawn down
on this facility (2022: GBPnil). For details of the revolving
credit facility, see note 19.
The following table provides the fair values of the Group's
financial assets and liabilities:
Financial assets FV Level 2023 GBP'm 2022 GBP'm
--------------------------- -------- ---------- ----------
Forward exchange contracts 2 (0.2) 3.2
--------------------------- -------- ---------- ----------
There is no difference between the carrying value and fair value
of cash and cash equivalents, trade and other receivables, and
trade and other payables.
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)
Level 1 Level 2 Level 3
GBP'm GBP'm GBP'm
------------------------ ------- ------- -------
Forward Contracts
As at 30 September 2023 - (0.2) -
As at 30 September 2022 - 3.2 -
------------------------ ------- ------- -------
The forward contracts have been fair valued at 30 September 2023
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.
c) Market risk
Market risk is the risk that the fair value or future cash flows
of a financial instrument will fluctuate because of changes in
market prices.
The Group's key financial market risks are in relation to
foreign currency rates. Foreign currency risk results from the
substantial cross-border element of the Group's trading and arises
on sales and purchases that are denominated in a currency other
than the functional currency of the business. Group cash resources
are matched with the net funding requirements sourced from three
sources, namely internally generated funds, loan facilities and
bank funding arrangements.
The foreign currency risk is managed at Group level by the
purchase of foreign currency contracts for use as a commercial
hedge. During the course of the period, there has been no changes
to the market risk or manner in which the Group manages its
exposure. The Group is exposed to interest rate risk that arises
principally through the Group's revolving credit facility.
Liquidity risk, credit risk and capital risk is considered
below. The Executive Team is responsible for implementing the risk
management strategy to ensure that the appropriate risk management
framework is operating effectively, embedding a risk mitigation
culture throughout the Group. The Board are provided with a
consolidated view of the risk profile of the Group. All major
exposures are identified and mitigating controls identified and
implemented. Regular management reporting and assessment of the
effectiveness of controls provide a balanced assessment of the key
risks and the effectiveness of controls.
The Group does not speculate with derivatives or other financial
instruments.
Interest rate risk
Interest rate risk is the risk that the fair value or future
cash flows of a financial instrument will fluctuate because of
changes in market interest rates. The Group's exposure to the risk
of changes in market interest rates is only through the revolving
credit facility and interest income, which is subject to
fluctuations in SONIA.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future
cash flows of an exposure will fluctuate because of changes in
foreign exchange 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 net foreign currency exposure of its
purchases. The Group foreign currency requirement is reviewed twice
weekly and forward cover is purchased to cover expected usage.
The carrying amount of the Group's foreign currency denominated
monetary assets and monetary liabilities at the reporting date are
as follows:
Euro 2023 EUR'm 2022 EUR'm
--------------------------- ---------- ----------
Cash 28.5 12.0
Trade payables (195.6) (137.0)
Trade receivables 2.8 3.0
Forward exchange contracts 163.4 129.5
---------------------------- ---------- ----------
Balance sheet exposure (0.9) 7.5
---------------------------- ---------- ----------
US Dollar 2023 $'m 2022 $'m
--------------------------- -------- --------
Cash 2.0 4.0
Trade payables (23.0) (8.1)
Trade receivables - 0.3
Forward exchange contracts 21.4 12.7
---------------------------- -------- --------
Balance sheet exposure 0.4 8.9
---------------------------- -------- --------
Swedish Krona 2023 Kr'm 2022 Kr'm
--------------------------- --------- ---------
Cash 28.8 25.0
Trade receivables 1.0 1.5
Forward exchange contracts - -
--------------------------- --------- ---------
Balance sheet exposure 29.8 26.5
---------------------------- --------- ---------
Norwegian Krona 2023 Kr'm 2022 Kr'm
--------------------------- --------- ---------
Cash 2.1 2.4
Trade receivables - -
Forward exchange contracts - -
--------------------------- --------- ---------
Balance sheet exposure 2.1 2.4
---------------------------- --------- ---------
Danish Krona 2023 Kr'm 2022 Kr'm
----------------------- ---------- ---------
Cash - 0.1
------------------------ --------- ---------
Balance sheet exposure - 0.1
------------------------ --------- ---------
Moroccan Dirham 2023 MAD'm 2022 MAD'm
--------------------------- ---------- ----------
Cash 1.8 0.2
Forward exchange contracts (3.5) (0.9)
---------------------------- ---------- ----------
Balance sheet exposure (1.7) (0.7)
---------------------------- ---------- ----------
United Arab Emirates Dirham 2023 AED'm 2022 AED'm
---------------------------- ---------- ----------
Trade payables (0.1) -
----------------------------- ---------- ----------
Balance sheet exposure (0.1) -
----------------------------- ---------- ----------
Swiss Franc 2023 CHF'm 2022 CHF'm
----------------------- ---------- ----------
Cash 0.1 -
Trade payables - -
----------------------- ---------- ----------
Balance sheet exposure 0.1 -
------------------------ ---------- ----------
Foreign currency sensitivity
The following table details the Group sensitivity to a
percentage change in Pounds Sterling against these currencies with
regards to equity. The sensitivity analysis of the Group's exposure
to foreign currency risk at the reporting date has been determined
based on a 10% change taking place at the beginning of the
financial period and held constant throughout the reporting
period:
2023 GBP'm 2022 GBP'm
-------------------- ---------- ----------
Euro
Weakening - 10% 0.9 (1.7)
Strengthening - 10% (0.9) 1.7
--------------------- ---------- ----------
US Dollar
Weakening - 10% - (0.2)
Strengthening - 10% - 0.2
--------------------- ---------- ----------
Swedish Krona
Weakening - 10% 0.2 0.2
Strengthening - 10% (0.2) (0.2)
--------------------- ---------- ----------
The Group uses forward exchange contracts to hedge its foreign
currency risk against sterling. The forward contracts have
maturities of less than 18 months after the balance sheet date.
Hedge ineffectiveness can arise from differences in timing of cash
flows of the hedged item and hedging instrument, the
counterparties' credit risk differently impacting the fair value
movements of the hedging instrument and hedged item.
As a matter of policy, the Group does not enter into derivative
contracts for speculative purposes. The details of such contracts
at the year-end, by currency were:
2023 2022
Foreign Carrying Foreign Carrying
currency Notional amount currency Notional amount
Euro EUR'm value GBP'm GBP'm EUR'm value GBP'm GBP'm
------------------- --------- ------------ -------- --------- ------------ --------
30 September
Less than 3 months 79.2 69.3 (0.5) 56.2 48.1 1.3
3 to 6 months 16.8 14.7 (0.1) 11.6 10.0 0.3
6 to 12 months 68.4 59.9 0.1 53.1 46.3 1.2
12+ months 3.9 3.4 - 2.3 2.1 -
------------------- --------- ------------ -------- --------- ------------ --------
Total 168.3 147.3 (0.5) 123.2 106.5 2.8
------------------- --------- ------------ -------- --------- ------------ --------
2023 2022
Foreign Foreign
currency Notional Carrying currency Notional Carrying
USD $'m value GBP'm amount GBP'm $'m value GBP'm amount GBP'm
------------------- --------- ------------ ------------- --------- ------------ -------------
30 September
Less than 3 months 8.9 7.1 0.1 3.9 3.1 0.4
3 to 6 months 6.6 5.3 0.1 1.8 1.5 0.1
6 to 12 months 5.9 4.7 0.2 1.8 1.6 -
12+ months 0.1 0.1 - - - -
------------------- --------- ------------ ------------- --------- ------------ -------------
Total 21.5 17.2 0.4 7.5 6.2 0.5
------------------- --------- ------------ ------------- --------- ------------ -------------
2023 2022
Foreign Carrying Foreign Carrying
currency Notional amount currency Notional amount
MAD MAD 'm value GBP'm GBP'm MAD 'm value GBP'm GBP'm
------------------- --------- ------------ -------- --------- ------------ --------
30 September
Less than 3 months 0.9 0.1 (0.1) 0.2 - -
3 to 6 months 0.2 - - - - -
6 to 12 months 0.1 - - - - -
------------------- --------- ------------ -------- --------- ------------ --------
Total 1.2 0.1 (0.1) 0.2 - -
------------------- --------- ------------ -------- --------- ------------ --------
The impact of the hedging instruments on the statement of
financial position is as follows:
Notional Carrying Change
amount amount Line in the statement in fair
GBP'm GBP'm of financial position value GBP'm
----------------------------------- -------- -------- ---------------------- ------------
As at 30 September 2023
Derivative financial
Foreign exchange forward contracts 164.5 (0.2) instruments (2.0)
As at 30 September 2022
Derivative financial
Foreign exchange forward contracts 112.6 3.2 instruments 1.3
----------------------------------- -------- -------- ---------------------- ------------
Credit risk
Credit risk refers to the risk that the counterparty will
default on its contractual obligations resulting in financial loss
to the Group. Credit risk arises from cash balances and derivative
financial instruments, as well as credit exposures to customers,
including outstanding receivables, financial guarantees and
committed transactions. Credit risk is managed separately for
treasury and operating-related credit exposures. Customer credit
risk is managed by the Group's business units, which each have
policies, procedures and controls relating to customer credit risk
management. Outstanding trade receivables balances are regularly
reviewed to monitor any changes in credit risk with concentrations
of credit risk considered to be limited given that the Group's
customer base is large and unrelated.
Trade receivables and other receivables
The ageing of trade receivables at the balance sheet date
was:
Past due Past due
Not past 0-90 days >90 days
due GBP'm GBP'm GBP'm Total GBP'm
--------------------- ---------- ---------- --------- -----------
At 30 September 2023 146.7 0.4 0.3 147.4
At 30 September 2022 100.1 0.7 - 100.8
--------------------- ---------- ---------- --------- -----------
The ageing of other receivables at the balance sheet date
was:
Past due Past due
Not past 0-90 days >90 days
due GBP'm GBP'm GBP'm Total GBP'm
--------------------- ---------- ---------- --------- -----------
At 30 September 2023 10.5 - - 10.5
At 30 September 2022 16.1 - - 16.1
--------------------- ---------- ---------- --------- -----------
In line with IFRS 9, the Group applies the simplified approach
for the impairment of trade and other receivables and, therefore,
does not track changes in credit risk, instead a loss allowance is
recognised based on lifetime expected credit losses at each
reporting date. The Group uses a provision matrix to measure
expected credit losses based on historical cancellation and
recovery rates and considers forward-looking factors, including the
impact of rising cost of living and inflation rates.
Other receivables includes a receivable in respect of amounts
due from airlines as a result of exceptional cancellations, a
provision of GBP4.8m has been recognised for airline receivables
past due greater than 12 months. The Group has recognised a net
receivable for the expected recoverable amount in note 15.
Financial instruments and cash deposits
As part of credit risk, the Group is subject to counterparty
risk in respect of the cash and cash equivalents held on deposit
with banks and foreign currency financial instruments. The Group
generally deposits cash and undertakes currency transactions with
highly rated banks, the Group considers that its cash and cash
equivalents have low credit risk based on the external credit
ratings of the counterparties. No collateral or credit enhancements
are held in respect of any financial derivatives. The maximum
exposure to credit risk at each reporting date is the fair value of
financial assets and trade receivables.
Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. It is Group policy
to maintain a balance of funds, borrowing, committed bank loans and
other facilities sufficient to meet anticipated short-term and
long-term financial requirements. In applying the policy, the Group
continuously monitors forecast and actual cash flows against the
maturity profiles of financial assets and liabilities. It is Group
policy to ensure that a specific level of committed facilities is
always available based on forecast working capital requirements.
Cash forecasts identifying the Group's liquidity requirements are
produced and are sensitised for different scenarios including, but
not limited to, decreases in profit margins and weakening of
sterling against other functional currencies.
The following are the contractual maturities of financial
liabilities:
Financial liabilities at amortised Carrying Contractual Within
cost amount cash flows 1 year 1 to 5 > 5 years
At 30 September 2023 GBP'm GBP'm GBP'm years GBP'm GBP'm
----------------------------------- -------- ----------- ------- ------------ ---------
Trade payables 236.4 236.4 236.4 - -
Lease liabilities 4.5 4.7 1.8 2.9 -
Contract liabilities 5.9 5.9 5.9 - -
Other payables 17.0 17.0 17.0 - -
----------------------------------- -------- ----------- ------- ------------ ---------
263.8 264.0 261.1 2.9 -
----------------------------------- -------- ----------- ------- ------------ ---------
At 30 September 2022
--------------------- ----- ----- ----- --- ---
Trade payables 158.3 158.3 158.3 - -
Lease liabilities 3.9 4.2 1.1 2.9 0.2
Other payables 27.4 27.4 27.4 - -
--------------------- ----- ----- ----- --- ---
189.6 189.9 186.8 2.9 0.2
--------------------- ----- ----- ----- --- ---
Capital management
It is the Group's policy to maintain an appropriate equity
capital base so as to maintain investor, creditor and market
confidence, and to sustain the future development of the
business.
The capital structure of the Group consists of the net cash
(borrowings disclosed in note 19) and equity of the Group as
disclosed in note 21.
The Group is not subject to any externally imposed capital
requirements.
24. Share-based payments
The following table illustrates the number of, and movements in,
share options granted by the Group.
LTIP No. CSOP & RSA Total No.
of share No. of share of share
options (thousands) options (thousands) options (thousands)
------------------------------------ -------------------- -------------------- --------------------
Outstanding at the beginning of the
year 2,964 1,617 4,581
Granted during the year 2,295 - 2,295
Lapsed during the year (547) - (547)
Exercised during the year (129) (226) (355)
Forfeited during the year (684) (346) (1,030)
------------------------------------ -------------------- -------------------- --------------------
Outstanding at the year-end 3,899 1,045 4,944
------------------------------------ -------------------- -------------------- --------------------
Exercisable 186 351 537
------------------------------------ -------------------- -------------------- --------------------
LTIP
For the 2020 and 2021 LTIP schemes the EPS target is measured
across a three-year performance period, to the end of year ending
September 2022/2023 respectively. For the 2020 schemes, the Group
awarded nil-cost options to certain key management within the
business. The vesting of these awards will be dependent on EBITDA
over a three-year performance period.
During the prior year, the Group awarded nil-cost options to
certain key employees within the business. The vesting of these
awards will be dependent on absolute TSR, relative TSR and Total
Transaction Value ('TTV') targets at the end of a three-year
period. On 21 December 2021, the Remuneration Committee approved
the introduction of an underpin/minimum award for the nil cost
awards originally granted at 9 July 2019. This removal of a
non-market based condition has resulted in a catch-up charge to the
income statement of GBP1.9m that reflects the scheme progress to
date, all of these shares vested in FY22.
During the current year, the Group awarded nil-cost options to
certain key employees within the business. The vesting of these
awards will be subject to continued employment, however the
Remuneration Committee have the ability to adjust the level of
vesting as deemed appropriate.
The fair value of equity-settled share-based payments has been
estimated as at date of grant using the Black-Scholes model.
Share Fair
price Risk value
No. of at grant Exercise Expected Option free Dividend Non- vesting at grant
options date price volatility Life rate yield conditions date
Award date awarded (GBP) (GBP) (%) (years) (%) (%) (%) (GBP)
--------------------- --------- --------- -------- ----------- -------- ----- -------- ------------ ---------
22 December
2021 (no conditions) 435,500 4.630 Nil 0% 3.0 0.73% 0.74% - 4.520
--------------------- --------- --------- -------- ----------- -------- ----- -------- ------------ ---------
22 December
2021 (no conditions) 44,000 2.450 Nil 0% - 0.73% 0.74% - 2.395
22 December
2021 (EBITDA
dependent) 22,000 2.450 Nil 43% - 0.73% 0.74% - 2.395
--------------------- --------- --------- -------- ----------- -------- ----- -------- ------------ ---------
25 February
2022 (Relative
TSR dependent) 275,591 2.750 Nil 46% 3.0 1.20% - - 1.710
25 February
2022 (Absolute
TSR dependent) 275,591 2.750 Nil 46% 3.0 1.20% - - 1.470
25 February
2022 (TTV condition
dependent) 551,183 2.750 Nil 0% 3.0 1.20% - - 2.749
--------------------- --------- --------- -------- ----------- -------- ----- -------- ------------ ---------
27 July 2022
(Relative TSR
dependent) 4,883 2.750 Nil 46% 3.0 1.20% - - 0.717
27 July 2022
(Absolute TSR
dependent) 4,883 2.750 Nil 46% 3.0 1.20% - - 0.613
27 July 2022
(TTV condition
dependent) 9,766 2.750 Nil 0% 3.0 1.20% - - 1.156
--------------------- --------- --------- -------- ----------- -------- ----- -------- ------------ ---------
24 February
2023 (no conditions) 2,221,629 1.610 Nil 0% 3.0 3.93% - - 1.610
30 June 2023
(no conditions) 73,274 0.960 Nil 0% 0.5 4.93% - - 0.960
--------------------- --------- --------- -------- ----------- -------- ----- -------- ------------ ---------
Expected volatility is estimated by considering historic average
share price volatility at the grant date.
Restricted Share Award (nil-cost option) and CSOP
There have been no new RSA or CSOP awarded in the current year.
Of the 2022 RSA awards, 290,398 vested on 31 December 2022. The
remaining 2022 RSA awards will vest on 31 December 2023 subject to
continued employment, employee personal performance and Company
performance.
Share Fair
price Risk value
at grant Exercise Expected Option free Dividend Non- vesting at grant
No. of date price volatility Life rate yield conditions date
Award date shares (GBP) (GBP) (%) (years) (%) (%) (%) (GBP)
----------- ------- --------- -------- ----------- -------- ----- -------- ------------ ---------
2022 RSA 793,135 2.450 Nil N/A 2.0 1.20% - Nil 2.450
2022 RSA 290,398 2.450 Nil N/A 1.0 1.20% - Nil 2.450
2022 RSA 33,164 2.750 Nil N/A 2.0 1.20% - Nil 2.750
2022 RSA 87,887 1.156 Nil N/A 1.5 1.20% - Nil 1.156
----------- ------- --------- -------- ----------- -------- ----- -------- ------------ ---------
The following has been recognised in the income statement during
the year:
2023 GBP'm 2022 GBP'm
-------------------------- ---------- ----------
LTIP 0.5 3.2
RSA 0.7 1.5
--------------------------- ---------- ----------
Total share scheme charge 1.2 4.7
--------------------------- ---------- ----------
25. Commitments and contingencies
a) Capital commitments
No new capital commitments.
b) Contingencies
In September 2010, proceedings were initiated in Ireland against
On the Beach Limited by Ryanair alleging infringement of, inter
alia, its intellectual property rights. The case lay dormant for
over 3 years with no material developments in that period, and as
such the Group sought to strike out the claim on the basis of
inordinate and inexcusable delay. The Court decided that Ryanair
was guilty of inordinate and inexcusable delay but decided that the
balance of justice lay in favour of allow the case to proceed. The
legal process is ongoing but no trial date has yet been set. The
amount of the claim by Ryanair is unquantified as at the date of
this document. The Group expects that final resolution of the
dispute might take some time.
26. Related party transactions
No related party transactions have been entered into during the
year.
Transactions with key management personnel have been disclosed
in note 7(d).
27. Events after the reporting period
On 31 October 2023, the High Court ruled in favour of the Group
in respect of the legal claim brought against Ryanair for refunds
owed by Ryanair to the Group for flights that had been cancelled or
had been subject to a major change where customers had chosen a
refund, the Group was awarded GBP2m plus costs which was received
on 4 December 2023. This is a non-adjusting post balance sheet
event and therefore no accounting entries have been recognised in
the current year.
Principal risks and uncertainties
The Board has carried out a robust assessment of the principal
risks facing the company, including those that would threaten its
business model, future performance, solvency or liquidity. A
summary of the nature of the risks currently faced by the Group is
set out below. A more detailed explanation of the risks currently
faced by the Group and how the Company seeks to mitigate those
risks can be found in the risk management section of the Group's
Annual Report and Accounts for the year ended 30 September
2023.
-- Major airline failure: The collapse of a major airline could
have a material adverse effect on the Group's business. In the
event of a major airline failure, the Group must replace the
customer's flight arrangements, or refund the customer in full for
the holiday, with no ability to claim back the costs from the
failed airline or any bond or effective insurance or the ATOL
scheme. Although the Group can usually recover flight costs it is
owed via chargeback claims or by taking legal action, this has an
impact on cash flow.
-- Flight supply: A lack of flight supply/capacity impact's the
Group's ability to fulfil consumer demand for holidays. For a
number of low-cost airlines the Group does not have agreements in
place and instead acts as the customer's agent. Certain airlines
seek to block bookings or charge customers more for choosing to
book through a travel agent. The Group is one of several online
travel agents involved in litigation with Ryanair in connection
with Ryanair's efforts to prevent OTAs from booking and selling its
flights. The legal process is ongoing. Other airlines could seek to
emulate Ryanair's claim against OTAs. Litigation is unpredictable
and if Ryanair were to prevail, this could have a material impact
on the Group's business . In order to ensure a healthy and
competitive market that protects consumers' interests, the Group is
engaging with Government and regulators on the market power of
airlines. The Group may take seats on certain key routes to
mitigate flight supply risk, although this may involve some limited
risk. If the programme is cancelled or the seats cannot be sold
profitably, the Group may incur material costs.
-- Recoverability of airline refunds: Where a customer's holiday
is cancelled, the Group provides a full cash refund within 14 days
as required under the Package Travel Regulations (PTRs). Where a
flight is cancelled, airlines have an obligation to refund the cost
of cancelled flights. Some airlines takes months to refund, put
obstacles in the way of claiming these monies, or refuse outright
to do so.
-- Data & security: A major security breach, whether
stemming from human error, deliberate action or a technology
failure, could lead to unauthorised access or to misuse of our
technology, customer data, employee data, commercially sensitive
information and disruption to core business operations. This could
result in significant financial loss, significant fines and
reputational damage.
-- Innovation, transformation and scalability: The Group
operates in a fast-moving environment. In order to meet our
strategic objectives, our technology platforms must be agile and
scalable. If we cannot keep up with growing demand and/or do not
innovate then this will impact growth and the service we can offer
to our customers.
-- Disruption to operations: The Group faces the risk of
disruption to its operations from a wide range of unpredictable
domestic and international events, ranging from smaller localised
disruptions impacting systems and operations at office locations,
incidents at holiday destinations, or major incidents affecting the
whole Group such as a pandemic or natural disaster, which could
impact our ability to trade and/or manage our business. As a
package organiser under the Package Travel Regulations, we have a
number of responsibilities including finding replacements/providing
refunds where flights are cancelled or there is a major change to a
customer's holiday and providing accommodation when customers are
stranded.
-- People: Our employees are a key asset and it is critical that
we are attracting and retaining the right talent. The North West,
where the Group's HQ is located, is an area where there is a
particularly high degree of competition for talent. If the Group
cannot attract and retain staff, or if a member of key personnel
were unable to carry out their role, this could have a material
effect on the Group's growth.
-- Customer demand: A material deterioration in consumer
confidence can lead to reduced demand for beach holidays. A weak
pound makes holidays and consumer spending abroad more expensive.
Environmental and sustainability concerns are increasingly becoming
a factor in consumer choices and demand could be impacted by
consumers choosing to travel less frequently.
-- Brand and consumer proposition: The Group relies on the
strength of its brand and reputation to set it apart from
competitors and attract customers to its website and secure
bookings. Failure to maintain and protect our brand, or events or
circumstances which give rise to adverse publicity, could damage
our brand/reputation, leading to a loss of goodwill and reduced
customer demand.
-- Non-compliance with laws and regulations: The Group's
business is highly regulated and is subject to a complex regime of
laws, rules and regulations concerning travel and aviation, online
commercial services, consumer rights and data protection. A breach
of these laws could have serious financial and reputational
implications for the Group. Unfavourable changes to or
interpretation of existing laws could adversely affect the Group's
business and financial performance.
-- Customer health & safety: The Group is responsible for
the proper performance of the package holidays it sells, therefore
it can be held liable for death/personal injury or illness suffered
by customers that are the fault of any suppliers. In the event of a
catastrophic injury/fatality, or multiple injuries, the cost could
run into millions of pounds.
-- Financial risk and liquidity: The risk that the Group has
insufficient liquidity, does not have appropriate access to funds,
there are negative movements in the market, or we cannot meet our
obligations as they fall due. Even in a recessionary environment
the business is cash-generative, and mitigating actions can be
taken if needed.
-- Acquisition and organic growth risk: Failing to achieve our
strategic organic growth target due to market competition,
insufficient working capital or poor execution could prevent the
Group from achieving its strategic goals. Failure to achieve our
strategic growth target for acquisitions due to insufficient
opportunities being identified, poor due diligence or poor
integration, or insufficient cash resources, could result in
erosion of shareholder value. Our focus has been on organic growth
opportunities and we expect this to continue into FY24.
Statement of Directors' Responsibilities
The responsibility statement below has been prepared in
connection with the Group's Annual Report & Accounts for the
year ended 30 September 2023. Certain parts thereof are not
included within this announcement. The Directors confirm, to the
best of their knowledge and belief:
-- That the consolidated financial statements, prepared in
accordance with international accounting standards in conformity
with the requirements of the Companies Act 2006, give a true and
fair view of the assets, liabilities, financial position and profit
of the Parent Company and undertakings included in the
consolidation taken as a whole;
-- That the Annual Report, including the strategic report,
includes a fair review of the development and performance of the
business and the position of the Company and undertakings included
in the consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face; and
-- That they consider the Annual Report, taken as a whole, is
fair, balanced and understandable and provides the information
necessary for shareholders to assess the company's position,
performance, business model and strategy.
Jon Wormald
Chief Financial Officer
4 December 2023
Glossary of Alternative Performance Measures ('APMs')
Reconciliation to closest GAAP
APM Definition measure
------------------- --------------------------------- ------------------------------------------
Adjusted earnings Adjusted basic EPS is
per share ('EPS') calculated on the weighted
for continuing average number of ordinary
operations shares in issue, using
the adjusted profit
after tax. Adjusted
earnings after tax is
based on 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 restructuring
and legal and professional
costs. Exceptional items
for 2022 consists of
exceptional cancellations
as a result of Covid-19
and supplier disruption
in 2022 and legal and
professional services.
These costs/income are
excluded by virtue of
their size and in order
to reflect management's
view of the performance
of the Group and allow
comparability to prior
years. Restated
(note
8)
Adjusted profit
after tax (GBP'm) 2023 2022
------------------- --------------------------------- ------------------------- ----- --------
Profit for the
year 10.6 1.7
Share-based payments
(net of tax) 1.0 3.5
Exceptional items
(net of tax) 2.8 1.9
Fair value FX
losses/(gains)
(net of tax) 0.7 (0.6)
Amortisation
of acquired intangibles
(net of tax) 4.2 4.1
---------------------------------------------------------------------------------- ----- --------
Adjusted profit
after tax 19.3 10.6
Basic weighted
average number
of ordinary shares
(m) 166.5 165.9
---------------------------------------------------------------------------------- ----- --------
Adjusted EPS
(p) 11.6 6.4
Adjusted profit Adjusted profit before
before tax tax is based on profit
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 restructuring
and legal and professional
costs. Exceptional items
for 2022 consists of
exceptional cancellations
as a result of Covid-19
and supplier disruption
in 2022 and legal and
professional services.
These costs/income are
excluded by virtue of
their size and in order
to reflect management's
view of the performance
of the Group and allow
comparability to prior
years. Restated
(note
8)
Adjusted profit
before tax (GBP'm) 2023 2022
------------------- --------------------------------- ------------------------- ----- --------
Profit before
tax 12.9 2.2
Amortisation
of acquired intangibles 5.2 5.5
Share-based payments 1.2 4.7
Exceptional items 3.5 2.6
Fair value FX
losses/(gains) 0.8 (0.8)
---------------------------------------------------------------------------------- ----- --------
Adjusted profit
before tax 23.6 14.2
Reconciliation to closest GAAP
APM Definition measure
---------------- ------------------------------- -----------------------------------------
B2B TTV B2B Total Transaction
Value ('TTV') is a non-GAAP
measure representing
the cumulative total
transaction value of
sales booked each month
before cancellations
and adjustments.
* Costs relate to the
gross costs for bookings
made on an agent basis.
** Bookings where revenue
has been recognised
on a travelled basis
as a principal. B2B (GBP'm) 2023 2022
---------------- ------------------------------- ------------------------- ------ ------
CCH revenue 58.1 50.5
CPH revenue 6.0 5.8
-------------------------------------------------------------------------- ------ ------
B2B revenue 64.1 56.3
Costs* and amendments 23.5 35.5
Booked in previous
year and travelled
in year** (20.9) (13.7)
Booked but not
yet travelled** 20.0 8.6
-------------------------------------------------------------------------- ------ ------
B2B TTV 86.7 86.7
CCH adjusted CCH adjusted EBITDA
EBITDA is based on CCH operating
profit/(loss) before
depreciation, amortisation
and the impact of exceptional
items. Amortisation
of acquired intangibles
are linked to the historical
acquisitions of businesses.
Exceptional items consists
of restructuring costs.
Exceptional items for
2022 consists of exceptional
cancellations as a result
of Covid-19 and supplier
disruption in 2022.
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 CCH adjusted
years. EBITDA (GBP'm) 2023 2022
---------------- ------------------------------- ------------------------- ------ ------
CCH operating
loss (2.6) (1.8)
Exceptional items 0.2 0.3
Share-based payment 0.1 -
Depreciation
and amortisation 0.3 0.3
Amortisation
of acquired intangibles 1.0 1.1
-------------------------------------------------------------------------- ------ ------
Adjusted CCH
EBITDA (1.0) (0.1)
CCH adjusted CCH adjusted operating
operating loss lodd is based on CCH
operating loss before
amortisation of acquired
intangibles, share-based
payments and exceptional
items Exceptional items
consists of restructuring
costs. Exceptional items
for 2022 consists of
exceptional cancellations
as a result of Covid-19
and supplier disruption
in 2022. 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 CCH adjusted
comparability to prior operating loss
years. (GBP'm) 2023 2022
---------------- ------------------------------- ------------------------- ------ ------
CCH operating
loss (2.6) (1.8)
Exceptional items 0.2 0.3
Share-based payments 0.1 -
Amortisation
of acquired intangibles 1.0 1.1
-------------------------------------------------------------------------- ------ ------
CCH adjusted
operating loss (1.3) (0.4)
CCH EBITDA CCH EBITDA is based
on CCH operating profit
before depreciation
and amortisation. CCH EBITDA (GBP'm) 2023 2022
---------------- ------------------------------- ------------------------- ------ ------
CCH operating
loss (2.6) (1.8)
Depreciation
and amortisation 1.3 1.4
-------------------------------------------------------------------------- ------ ------
CCH EBITDA (1.3) (0.4)
Reconciliation to closest GAAP
APM Definition measure
------------------------- --------------------------------- -----------------------------------------
CCH TTV CCH TTV is a non-GAAP
measure representing
the cumulative total
transaction value of
sales booked each month
before cancellations
and adjustments.
* As a principal revenue
is recognised on a travelled CCH TTV EBITDA
basis. (GBP'm) 2023 2022
------------------------- --------------------------------- ------------------------- ------ ------
Revenue 58.1 50.5
Amendments 1.5 10.2
Booked in previous
year and travelled
in year* (20.9) (13.7)
Bookings made
but not yet travelled* 20.0 8.6
------------------------------------------------------------------------------------- ------ ------
CCH TTV 58.7 55.6
CPH adjusted CPH adjusted EBITDA
EBITDA is based on CPH operating
loss before depreciation,
amortisation and the
impact of exceptional
items. Exceptional items
consists of exceptional
cancellations as result
of Covid-19 and supplier
disruption in 2022.
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 Adjusted CPH
years. EBITDA (GBP'm) 2023 2022
------------------------- --------------------------------- ------------------------- ------ ------
CPH operating
loss 0.1 (0.7)
Depreciation
and amortisation - 0.2
Exceptional items - 0.4
------------------------------------------------------------------------------------- ------ ------
Adjusted CPH
EBITDA 0.1 (0.1)
CPH EBITDA CPH EBITDA is based
on CPH
operating profit before
depreciation
and amortisation. CPH EBITDA (GBP'm) 2023 2022
------------------------- --------------------------------- ------------------------- ------ ------
CPH operating
profit/(loss) 0.1 (0.7)
Depreciation
and amortisation - 0.2
------------------------------------------------------------------------------------- ------ ------
CPH EBITDA 0.1 (0.5)
CPH adjusted CPH adjusted operating
operating profit/(loss) profit/(loss) is based
on CPH operating loss
before the impact of
exceptional items. Exceptional
items consists of exceptional
cancellations as a result
of Covid-19 and supplier
disruption in 2022.
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 CPH adjusted
comparability to prior gross profit
years. (GBP'm) 2023 2022
------------------------- --------------------------------- ------------------------- ------ ------
CPH operating
profit/(loss) 0.1 (0.7)
Exceptional items - 0.4
------------------------------------------------------------------------------------- ------ ------
CPH adjusted
operating profit/(loss) 0.1 (0.3)
CPH TTV CPH TTV is a non-GAAP
measure representing
the cumulative total
transaction value of
sales booked
each month before cancellations
and adjustments.
* Costs relate to the
gross costs for bookings
made on an agent basis. CPH TTV (GBP'm) 2023 2022
------------------------- --------------------------------- ------------------------- ------ ------
Revenue 6.0 5.8
Costs* and amendments 22.0 25.3
------------------------------------------------------------------------------------- ------ ------
CPH TTV 28.0 31.1
Reconciliation to closest GAAP
APM Definition measure
---------------- --------------------------------- ---------------------------------------------
Exceptional Exceptional items are
items certain
costs/income that derive
from events or transactions
that fall outside of
the normal activities
of the Group. For 2023,
this consists of restructuring,
legal and professional
costs. For 2022, this
consists of exceptional
cancellations as a result
of Covid-19 and supplier
disruption in 2022.
These costs/income are
excluded by virtue of
their size and in order
to reflect management's
view of the performance
of the Group and allow
comparability to prior Exceptional items
years. (GBP'm) 2023 2022
---------------- --------------------------------- -------------------------- ------- --------
Exceptional cancellations - 1.3
Exceptional operating
costs 3.5 1.3
Exceptional
items 3.5 2.6
Group TTV Group TTV is a non-GAAP
measure representing
the cumulative total
transaction value of
sales booked each month
before cancellations
and adjustments. Restated
* Costs relate to the
gross costs for bookings (note
made on an agent basis. 8)
** Bookings where revenue
has been recognised
on a travelled basis
as a principal. Group TTV (GBP'm) 2023 2022
---------------- --------------------------------- -------------------------- ------- --------
Group revenue 170.2 143.4
Costs* and amendments 901.1 711.1
Booked in previous
year and travelled
in year** (20.9) (13.7)
Booked but not
yet travelled** 20.0 8.6
-------------------------------------------------------------------------------- ------- --------
Group TTV 1,070.4 849.4
Group adjusted Group adjusted revenue
revenue as an agent is revenue
adjusted for the impact
of fair value FX losses
in 2023, for 2022, gross
profit is adjusted for
Covid-19 and supplier
disruption offset by Group adjusted
fair value FX gains. revenue (GBP'm) 2023 2022
---------------- --------------------------------- -------------------------- ------- --------
Group revenue 170.2 143.4
Exceptional cancellations - 1.0
Fair value FX
losses/(gains) 0.8 (0.8)
-------------------------------------------------------------------------------- ------- --------
Group adjusted
revenue 171.0 143.6
Group adjusted Group adjusted gross
gross profit profit is gross profit
adjusted for the impact
of fair value FX losses
in 2023, for 2022, gross
profit is adjusted for
Covid-19 and supplier
disruption offset by
fair value FX gains. Restated
(note
8)
Group adjusted
gross profit
(GBP'm) 2023 2022
---------------- --------------------------------- -------------------------- ------- --------
Gross profit
as an agent 106.4 89.1
Gross profit
as a principal 7.6 5.8
-------------------------------------------------------------------------------- ------- --------
Group gross
profit 114.0 94.9
Exceptional cancellations - 1.3
Fair value FX
loss/(gain) 0.8 (0.8)
-------------------------------------------------------------------------------- ------- --------
Group adjusted
gross profit 114.8 95.4
Reconciliation to closest GAAP
APM Definition measure
-------------- --------------------------------- --------------------------------------------
Long haul TTV Long haul TTV is a non-GAAP
measure representing
the cumulative total
transaction value of
sales booked each month
before cancellations
and adjustments.
* Costs relate to the
gross costs for bookings
made on an agent basis.
** Bookings where revenue
has been recognised
on a travelled basis Long haul TTV
as a principal. (GBP'm) 2023 2022
-------------- --------------------------------- -------------------------- ------- -------
Group revenue 170.2 143.4
Costs* and amendments 901.1 711.1
Booked in previous
year and travelled
in year** (20.9) (13.7)
Booked but not
yet travelled** 20.0 8.6
Short haul TTV (988.3) (795.9)
--------------------------------------------------------------------------- ------- -------
Long haul TTV 82.1 53.5
OTB adjusted OTB adjusted EBITDA
EBITDA is based on OTB operating
loss before depreciation,
amortisation, impact
of exceptional items
and the non-cash cost
of the share-based payment
schemes. Exceptional
items consists of restructuring
and legal and professional
costs. Exceptional items
for 2022 consists of
exceptional cancellations
as a result of Covid-19
and supplier disruption
in 2022 and legal and
professional services.
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 by virtue of their
size and in order to
reflect management's
view of the performance OTB adjusted
of the Segment. EBITDA (GBP'm) 2023 2022
-------------- --------------------------------- -------------------------- ------- -------
OTB operating
profit 12.8 5.2
Exceptional items 3.3 1.9
Fair value FX
losses/(gains) 0.8 (0.8)
Share-based payments 1.1 4.7
Depreciation
and amortisation 9.9 6.7
Amortisation
of acquired intangibles 4.2 4.4
--------------------------------------------------------------------------- ------- -------
OTB adjusted
EBITDA 32.1 22.1
OTB adjusted OTB adjusted revenue
revenue is revenue adjusted
for the impact of fair
value FX losses in 2023,
for 2022, gross profit
is adjusted for Covid-19
and supplier disruption
offset by fair value
FX gains. 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 by virtue of their
size and in order to
reflect management's
view of the performance OTB adjusted
of the Segment. revenue (GBP'm) 2023 2022
-------------- --------------------------------- -------------------------- ------- -------
OTB revenue 106.1 87.1
Exceptional cancellations - 0.6
Fair value FX
losses/gains 0.8 (0.8)
--------------------------------------------------------------------------- ------- -------
OTB adjusted
revenue 106.9 86.9
Reconciliation to closest GAAP
APM Definition measure
------------------ --------------------------------- -----------------------------------------
OTB adjusted operating
profit is based on OTB
operating profit/(loss)
before the impact of
exceptional items, amortisation
of acquired intangibles
and the non-cash cost
of the share-based payment
schemes. 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 restructuring
and legal and professional
costs. Exceptional items
for 2022 consists of
exceptional cancellations
as a result of Covid-19
and supplier disruption
in 2022 and legal and
professional services.
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 by virtue of their
size and in order to
reflect management's OTB adjusted
OTB adjusted view of the performance operating profit
operating profit of the Segment. (GBP'm) 2023 2022
------------------ ---------------------------------- ------------------------ ------ ------
OTB operating
profit 12.8 5.2
Exceptional items 3.3 1.9
Fair value FX
losses/gains 0.8 (0.8)
Share-based payments 1.1 4.7
Amortisation
of acquired intangibles 4.2 4.4
------------------------------------------------------------------------------ ------ ------
OTB adjusted
operating profit 22.2 15.4
OTB marketing OTB revenue after marketing
as % revenue cost is revenue after OTB revenue after
'OTB' online and offline marketing cost
marketing costs. (GBP'm) 2023 2022
------------------ --------------------------------- ------------------------- ------ ------
OTB revenue 106.1 87.1
OTB online marketing
costs (26.0) (27.0)
OTB offline marketing
costs (14.6) (11.9)
OTB adjusted
revenue after
marketing costs 65.4 48.2
------------------------------------------------------------------------------ ------ ------
OTB marketing
as % revenue 38% 45%
OTB EBITDA OTB EBITDA is based
on OTB operating profit
before depreciation
and amortisation. OTB EBITDA (GBP'm) 2023 2022
------------------ --------------------------------- ------------------------- ------ ------
OTB operating
profit 12.8 5.2
Depreciation
and amortisation 14.1 11.1
------------------------------------------------------------------------------ ------ ------
OTB EBITDA 26.9 16.3
Reconciliation to closest GAAP
APM Definition measure
------------------------ --------------------------------- ------------------------------------------
OTB adjusted OTB adjusted EBITDA
EBITDA as a percentage as a percentage of adjusted
of adjusted revenue revenue is based on
the OTB adjusted EBITDA
divided by the revenue
generated in the OTB
business before the
impact of exceptional
cancellations. Exceptional
items consists of restructuring
and legal and professional
costs. Exceptional items
for 2022 consists of
exceptional cancellations
as a result of Covid-19
and supplier disruption
in 2022. 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 by virtue of their
size and in order to
reflect management's OTB adjusted
view of the performance EBITDA as a percentage
of the Segment. of adjusted revenue 2023 2022
------------------------ --------------------------------- -------------------------- ------ ------
Revenue (GBP'm) 106.1 87.1
Exceptional cancellations
(GBP'm) - 0.6
Fair value FX
losses/gains
(GBP'm) 0.8 (0.8)
------------------------------------------------------------------------------------- ------ ------
OTB adjusted
revenue (GBP'm) 106.9 86.9
OTB adjusted
EBITDA (GBP'm) 32.1 22.1
------------------------------------------------------------------------------------- ------ ------
OTB adjusted
EBITDA as a percentage
of adjusted revenue 30% 25%
OTB TTV OTB TTV is a non-GAAP
measure representing
the cumulative total
transaction value of
sales booked
each month before cancellations
and adjustments
* Costs relate to the
gross costs for bookings
made on an agent basis. OTB TTV (GBP'm) 2023 2022
------------------------ --------------------------------- -------------------------- ------ ------
OTB revenue 106.1 87.1
Costs* and amendments 877.6 675.6
------------------------------------------------------------------------------------- ------ ------
OTB TTV 983.7 762.7
Overheads % Overheads as a percentage
revenue of revenue is based
on the OTB revenue divided
by the overheads for
OTB. OTB overheads is
the administrative expenses
excluding the depreciation
and amortisation. Overheads % revenue 2023 2022
------------------------ --------------------------------- -------------------------- ------ ------
OTB revenue (GBP'm) 106.1 86.9
Overheads (GBP'm) (32.3) (25.9)
------------------------------------------------------------------------------------- ------ ------
Overheads %
revenue 31% 30%
Overheads % Overheads as a percentage
TTV of TTV is based on the
OTB TTV divided by the
overheads for OTB. OTB
overheads is the administrative
expenses excluding marketing
costs, depreciation
and amortisation. Overheads % TTV 2023 2022
------------------------ --------------------------------- -------------------------- ------ ------
OTB TTV (GBP'm) 983.7 762.7
Overheads (GBP'm) (32.3) (25.9)
------------------------------------------------------------------------------------- ------ ------
Overheads %
TTV 3.3% 3.4%
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END
FR GZMGZVKLGFZG
(END) Dow Jones Newswires
December 05, 2023 02:00 ET (07:00 GMT)
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