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On the Beach sees continued subdued trading after slumping to loss

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On the Beach Group PLC (LON:OTB) said consumer appetite for booking holidays remained subdued after slumping to a full-year loss.

Booking volumes in October and November 2020 were significantly below normal levels, especially as leisure travel from England was illegal during last month’s lockdown.

READ: Whitbread a ‘buy’, Intercontinental Hotels, On the Beach down to ‘underperform’ after Jefferies looks at vaccine effect

Demand is also depressed by regularly changing government advice, onerous destination entry requirements and quarantine restrictions, the travel operator said, while reduced consumer confidence over the summer and in recent months has resulted in the reduction and consolidation of airline flying schedules this winter.

In a normal year, holiday bookings would peak in January for travel from March to September, meaning that volumes and the timing of the peak next year will depend on how restrictions will be lifted from next month onwards.

The online retailer did not issue guidance for the current financial year but expressed confidence in grabbing market share once trading picks up.

In the year to September 30, revenue tanked 76% to £33mln and last year’s £19mln profit before tax turned into a £46mln loss.

Total cash at period-end was £36mln but rose to £51mln as at November 30.

“We may have to wait for the vaccination of the cooped-up population before pent-up demand for summer holidays is released,” analysts at house broker Peel Hunt noted.

“But we are confident that involuntary savings from 2020 will be spent on 2021 beach holidays.”

Shares dipped 2% to 360p on Thursday morning.

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