Markets News

UPDATE 2-On The Beach hit by cancellations as COVID curbs continue

* Expects cancellation rates over 90% in winter

* Says annual adjusted pretax profit at breakeven levels

* Shares up 2% (Adds CEO and analyst comments, shares, details on refunds, debt)

Nov 9 (Reuters) - Package holiday provider On The Beach saw more than 90% of bookings cancelled over the summer and expects a similar rate this winter as the COVID-19 crisis continues to hammer tourism.

Nationwide lockdowns in France, Germany and Britain, as well as restrictions in other European countries, have led airlines to slash their flights for the autumn.

TUI, the world’s largest travel company, has already reduced capacity for winter.

“It is clear now that the full impact of COVID-19 will be every bit as extreme as any of us could have mapped out at the beginning of the year,” On The Beach (OTB) Chief Executive Simon Cooper said in a trading update.

The company said, however, that it had already refunded 160 million pounds ($210 million) to customers and had 44 million pounds of cash on hand, as well as an unused 75 million pounds in available credit.

After an initial dip, its shares rose 2.3% in morning trade.

“On the Beach has preserved its cash pile and continues to invest in its platform, while the rest of the travel industry tries to squeeze a quart of cash burn out of a pint pot of remaining cash resources,” said analysts from brokers Peel Hunt.

OTB also said it had received 79 million pounds from airlines for cancelled flights and was awaiting a further 11 million in refunds.

It reported booking volumes down 75% and 53% in the third and fourth quarters of its fiscal year respectively. OTB’s financial year ended on Sept. 30.

The company said it expected adjusted pretax profit for that year to be around break even, but that it would book around 45 million pounds in exceptional costs.

$1 = 0.7587 pounds Reporting by Tanishaa Nadkar in Bengaluru; Editing by Mark Potter