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magazineOn The Beach storms ahead after bullish update
On The Beach (OTB) 447p
Gain to date: 23.5%
Original entry point: Buy at 362p, 20 December 2018
Beach holiday retailer On The Beach (OTB) has delivered 20% growth in UK sales (after marketing spend) in the first four months of its financial year, running to 31 January. That run-rate is ahead of the 14% forecast for the full year by investment bank Berenberg.
The company has benefited from strong mobile traffic and conversion growth as more people are buying holidays on its site.
On The Beach also says it is driving an increasing proportion of sales into its top selling and more exclusive hotel product.
Efforts to tap into the long-haul market have seen the company complete its technical link to the Emirates flight system. It plans to hook up to more carriers including British Airways and Turkish Airlines as the year progresses, says Berenberg.
Strategically this could prove to be very important for On The Beach as long-haul packages sell for about twice as much as short-haul ones and there are an estimated 3m passengers per year opting for such holidays, says Berenberg. That compares with 12m passengers in the short-haul market.
Next month will see the launch of its online booking portal Classic Package Holidays for exclusive use by travel agents, capitalising on the acquisition of Classic Collection Holidays last year.
SHARES SAYS: Keep buying.
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