(Reuters) -Package holiday provider On The Beach Group on Tuesday reported summer bookings were 14% ahead of last year, and said demand for holidays was strong after a 23% jump in first-half profit.
On The Beach Reports 14% Increase in Summer Bookings
(Reuters) -Package holiday provider On The Beach Group on Tuesday reported summer bookings were 14% ahead of last year, and said demand for holidays was strong after a 23% jump in first-half profit.
Shares in the company, which have risen roughly 8% so far this year, gained as much as 5.2% in early trading. They were up 3.1% at 278.5 pence by 0722 GMT.
"Demand for holidays remains strong as our customers continue to prioritise travel," CEO Shaun Morton said in a trading update in which the company also echoed market expectations for annual profit of 38.2 million pounds ($50.4 million).
OTB's bullish view of consumer spending on holidays comes weeks after Premier Inn owner Whitbread forecast strong demand for the summer, and eases some worries that high inflation and broader economic uncertainty could curb demand.
On The Beach has benefited from selling packages that focus on city destinations rather than beach locations, expanding in new markets, and upgrading its booking platform to enhance customer experience.
"Embedding perks into our app has resonated well with customers," Morton said.
The strategy helped adjusted pretax profit climb to 7.6 million pounds ($10 million) for the six months to March 31, from 6.2 million pounds a year ago.
The company's online marketing costs rose by less than a million pounds in the first-half, which Peel Hunt analysts called a "standout figure" from Tuesday's update.
"Today’s results make OTB achieving its medium-term ambitions more likely," they said in a note, and upgraded their price target on the stock to 400 pence.
On The Beach's medium-term targets are to record 2.5 billion pounds in total transaction value, 100 million pounds in operating earnings, and 85 million pounds in pretax profit.
($1 = 0.7582 pounds)
(Reporting by Shashwat Awasthi in Bengaluru; Editing by Mrigank Dhaniwala and Kate Mayberry)
