Shares in On the Beach take off as travel firm vows to sustain its mid-20% sales growth levels
- Nationwide TV ad campaign planned as it looks to disrupt the market
- Company also looking to introduce new websites in Norway and Denmark
Online holiday retailer On the Beach Group saw its shares jump 12 per cent higher today after it predicted that sales would increase by more than 20 per cent for next year.
On the Beach, which only listed in London this September, specialises in selling holidays to places such as Greece, Turkey and the Algarve through its website.
The company believes it will continue to grow at its current rate by stealing market share from larger, more established operators such as TUI Group, Thomas Cook and Jet2 Holidays.
Going places: On the Beach generated a £83.8million windfall for shareholders when it floated in September
Chief executive Simon Cooper, who in 2004 founded the company from a terraced house in northern England, said: 'We're expecting growth in line with the last three years - sales growth in the mid-20 percent level.
'We're very efficient at driving traffic share to site through the tools that we've built internally. We're very good at converting the traffic once we get it onto our site.'
He added: 'We have had a strong start to the new financial year and performance is in line with Board's expectations.
'I remain confident for the year ahead as we focus on our strategic objectives while investing to deliver long-term, sustainable returns for our shareholders. We will be providing a further trading update on the 5 February 2016.'
Cooper also confirmed the company is looking to introduce new websites in Norway and Denmark next year after pouring £1.8million into a Swedish site earlier in 2015. As part of its aggressive expansion it will recruit up to 70 new staff members.
Wyn Ellis, analyst at Numis Securities, said: 'On the Beach is a market disruptor with an attractive asset light and cash generative model.
'It is growing profits very quickly and providing a significant structural challenge to legacy tour operators and travel agents with its scalable, flexible, innovative online technology, strong customer value proposition and low cost base. Future growth prospects are very promising, in our view.'
Laid back: On the Beach specialises in selling holidays to places such as Greece, Turkey and the Algarve
In its first set of financial results as a listed-company, the Cheadle-headquartered firm reported a 47 per cent rise in full year adjusted underlying pretax profit to £14.5million, on revenues of £63.1million, up from £45.8million a year earlier.
The strong numbers helped On the Beach shares climb 12 per cent, or 20.2p higher to 188.0p in late afternoon trading.
The stock was priced at 184p each when the firm listed in late September, with the flotation generating an £83.8million windfall for existing shareholders, including British buy-out firm Inflexion, which acquired a 70 per cent stake in the business for £73million in 2013.
Travel stocks have in general traded lower over recent weeks, due to concerns over security risks following the terror attacks in Paris and Britain's halting of flights to the Egyptian resort of Sharm el-Sheikh following the reported bombing of a Russian airliner.
Cooper said: 'We have seen no impact at all on top line or revenue in the last two to three weeks since the horrible events in Paris.'
'Our thoughts are with all of those affected. We have worked hard to ensure that all On the Beach customers in Sharm el Sheikh were repatriated in an orderly fashion and those that were due to travel to the Red Sea prior to Christmas have been offered alternative holidays.'
Blue chip rival TUI Group will report its annual results on tomorrow.
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