OnTheBeach getting better at online marketing

London-listed OnTheBeach has lifted revenues and pretax profit in six months to end-March, with improvements in its online marketing performance also noted.

The topline financials show revenues up 7.3% to £38.1 million, generating a profit before tax of £9.9 million, up 33.8%.

As a UK-based short-haul beach holiday specialist, OnTheBeach believes that its scale and technological capability is giving it the lead over traditional tour operators in a competitive environment. It claims a 20% share of the UK’s online short-haul beach market and yesterday bought the “highly complementary” business sunshine.co.uk for £12 million.

Its online marketing is driven by a bespoke bid management technology, which helped OnTheBeach reduce its online marketing costs as a percentage of revenue to 40.4% this half compared with 46.3% last time. It has increased the proportion of branded and free traffic to 56.7% from 54.6%, at the same time as daily unique visitors (UVs) has gone up by 9.5% to reach 27.5 million.

Daily UVs are defined as ” number of individuals, as defined by an IP address, visiting pages from the onthebeach.co.uk website during a 24 hours period.”

It is also working on multichannel and personalisation, and has increased the number of users logging in to the site during the half to 5 million sessions compared with 3.6 million. Smartphone traffic has increased to 52.7% from 42.4% in the same half last year.

The business aspires to become “Europe’s leading online retailer of beach holidays” and has an expanded into Sweden and Norway. These two markets only generated revenue of £0.6 million in the half, with offline branding campaigns leading to an EBITDA loss of £1 million.

Investors, however, seem unimpressed with what bosses have described as “a solid performance.” At the time of writing its share price was down 5.76% on the day at 358.13p, giving it a market cap of £467 million.

Click here for the statement.

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