On the Beach shares plunge as UK holidaymakers delay summer bookings

Manchester business saw a more than 12 per cent fall in sales to £52.2m for the six months to the end of March

On the Beach has seen one of its most severe single-day share price collapses as investors grow anxious over a slowdown in holiday bookings.

Shares in the Manchester-headquartered company tumbled 17 per cent to 140p in morning trading after the Manchester firm revealed sales had dropped by more than 12 per cent to £52.2m during the six months to the end of March.

The business recorded a pre-tax loss of £3.2m for the period, a reversal from the £4.5m profit achieved the year before.

On the Beach attributed the revenue decline to “an industry-wide later booking profile which is continuing to build as customers book higher value summer holidays closer to departure.”

Chief executive Shaun Morton explained to City AM: “This was a trend we started to see in the back end of last year – customers booking a bit closer to the departure date. That’s generally a reflection of confidence and what the customer thinks their household balance sheet will look like in the future.

“So this tells us that customers are less confident at the moment but so far it doesn’t tell us that customers are any less likely to travel.”

Mr Morton noted that booking prices for items such as flights and accommodation had remained broadly stable for the peak summer period this year versus last year, though “certainly for what people are booking now that’s departing in the next month or so, we are seeing the prices lower this year than last year,” as “there is a lot of capacity in the market at the moment.” He noted that website conversion rates had improved and customers were generally spending less time browsing before making a purchase, suggesting Brits are more inclined to research destinations beforehand rather than hunting for bargains.

On the Beach shares have tumbled by more than a third since the beginning of the year amid a broader sell-off of leisure stocks that have been battered by travel disruption and spiralling fuel costs following the outbreak of war in Iran in February.

Easyjet shares are down 30 per cent since January, while Ryanair has fallen 22 per cent and Premier Inn owner Whitbread has slipped 10 per cent.