Chief executive Shaun Morton on Tuesday (3 December) laid out a roadmap for the brand’s future after the group revealed it achieved total transactional value (TTV) of £1.2 billion in the 12 months to 30 September – a 15% year-on-year increase from £1 billion in 2022/23.
On the Beach said a deal to sell Ryanair flights, the introduction of city breaks and a wholesale restructure of Classic Collection, returning the brand to profitability, has propelled the group to a third consecutive record-breaking year.
Morton said the group’s formal tie-in with Ryanair had improved the customer journey for those holidaymakers opting to fly with the budget carrier as part of an On the Beach package.
The partnership, inked in February, saw On the Beach and Ryanair kiss and make up following years of bad blood after the OTA sued the Irish carrier over its stance on Covid refund chargebacks.
Morton said progress had also been driven by the introduction of live pricing and smart caching to make pricing more accurate and speed up delivery of a greater number of holiday combinations via search.
Other developments over the past year cited by Morton included the introduction of city breaks and expanding to the Republic of Ireland.
“As we add more product, attract new customers in new markets and increase existing customers’ purchase frequency, we expect customer annual value to increase,” said Morton.
“This will fuel the next stage of our revenue growth while also increasing the efficiency of our marketing spend.”
In the 12 months to the end of September, the OTA increased its revenue by 14% to £128.2 million, while pre-tax profit almost doubled (+84%) to £26.5 million.
TTV from shorter three- and four-star beach breaks increased by 13%, but this was eclipsed by growth in five-star sales, with TTV for this segment increasing by 21% year-on-year in defiance of the cost of living squeeze.
Meanwhile, the group’s trade brand, Classic Collection, reported earnings before interest, taxes, depreciation and amortisation (Ebitda) of £1.7 million – up from £100,000 last year – on revenue of £8.8 million, up from £6 million a year earlier. Classic’s TTV ran to £40.6 million.
It follows the group’s decision earlier this year to restore Classic Collection to a single B2B brand proposition, combining Classic Collection Holidays and Classic Package Holidays, under the leadership of Si Morris-Green.
The results have been restated to reflect the merger of the two brands, which was largely complete by the end of September. Cost of sales, which includes agent commissions, came to £4.8 million, up from £3.7 million last year.
’Competitive market’
"The B2B channel operates in an increasingly competitive market," said Morton. "However, there remains a significant opportunity to become the go-to B2B provider of Ryanair packages, while having the ability to offer tailor-made packages for the trade.
"Changes made in the year have resulted in a single brand trading as Classic Collection and operating using the group’s scalable technology platform," Morton continued. "These changes have been successful in returning the channel to profitability in FY24 and laying the foundations for sustainable profitable growth in FY25 and beyond."
Looking ahead, chief financial officer Jon Wormold said the group had set itself a mid-term target to double TTV to £2.5 billion while growing Ebitda to £100 million – 40% of revenue – with a view to achieving adjusted pre-tax profit of £85 million.
“We are excited about our strategy and what we can achieve across the group,” Morton concluded.
