On the Beach boss forgoes salary and Board takes 20% cut

On the Beach CEO Simon Cooper confirmed today that he has given up his salary and all board members have agreed to take a 20% cut in wages and fees.

Announcing the online travel agent and tour operator’s interim results, Cooper said that in addition there would be no bonuses paid this financial year.

OTB saw its pre-tax profits for the six months to the end of March plunge to just £2.3 million, down from £15.7 million year on year due to a sudden drop from February when Covid-19 spread across Europe.

The company is expecting to have exceptional costs in the first half of £34.7 million due to subsequent Covid-19 cancellations and admin costs.

Its net debt at the end of March was £13 million, excluding customer monies held in a trust account. A susequent share issue in May raised £65 million, boosting its cash position to £50.5 million.

The group also has access to a £75 million credit facility.

What’s the future looking like?

"The directors believe that the Group’s asset light business model, alongside trust account protection for customers, places the company in a strong position for the future," OTB said in a statement.

During April, OTB bookings were at 10% of normal levels. While there has been a ‘significant’ for holidays from mid-June, it said these were from a very low base.

However, bookings for summer 2021 are up year on year.

"Booking volumes for summer 2021 remain low, but are significantly ahead of the prior year, partially due to the early release of flights for next year by most major airlines," said OTB.

It pointed out that it is the only listed travel company that operates a fully ring-fenced trust account for clients’ monies, so it doesn’t rely on cash from forward bookings to trade.

A word from the CEO

"In the aftermath of the Thomas Cook collapse, the Group made excellent progress in the first four months of the financial year, driving record levels of brand awareness and achieving sales growth of almost 30% for holidays departing in summer 2020," said Cooper.

"We also made significant progress against our strategic objectives in the year with Classic Package Holidays going live in over 2,600 agencies alongside the continued expansion of our long haul offering.

"The onset of the Covid-19 pandemic led to a rapid slowdown in demand for foreign travel followed by the total closure of airspace across Europe by mid-March. Our staff responded brilliantly to ensure that the Group delivered the highest possible customer service standards in the most difficult of circumstances.

"On the Beach continues to successfully build a leading position as more consumers discover the ease of use and wide choice of beach holidays across our platforms.

"The flexibility and asset light nature of our business model together with our recently strengthened balance sheet and the actions we have taken since the middle of March means we are well placed to capitalise on the inevitable structural changes in the market post Covid-19.

"As a result, the Board continues to look to the future with confidence."