Half-year Results

GROUP TTV +22%, WITH IMPROVING OPERATIONAL LEVERAGE VERSUS H1 FY23 AND CONTINUED MOMENTUM IN EXPANSION AREAS

WELL POSITIONED FOR H2 FY24

Financial & Operational Highlights

• Group booked TTV ('TTV') is the total transaction value of holidays booked in the period before cancellations and adjustments.
• As an agent, revenue is accounted on a "booked" rather than "travelled" basis (unlike tour operators and airlines) and the Group is reporting H1 bookings taken between 1 October 2023 and 31 March 2024.
• As a principal, revenue is accounted on a "travelled" basis and reported on a gross basis and the Group is reporting H1 bookings which departed between 1 October 2023 and 31 March 2024.
• See glossary for reconciliation to nearest GAAP measure.
• EBITDA is profit before tax, exceptional items, share based payments, depreciation and amortisation, see glossary for reconciliation to nearest GAAP measure.
• The prior period is restated for the effect of operations that were discontinued in the prior financial year.

Financial headlines

• Group Booked TTV for the period was £597.8m, +22% year-on-year ("YOY"), resulting in Group Revenue of £80.8m, +11% YOY. This was driven by increased passenger bookings during the period (+15%) as well as an increase in the average value of holidays sold.
• Continued delivery of operational efficiencies resulted in marketing spend and overheads lower as a % of revenue YOY.
• As a result of the above, Group adjusted EBITDA was £8.1m, up 93% on the prior year, with strong performance from OTB and Classic Package Holidays ("CPH") brands.
• Proforma continuing EBITDA following B2B changes of £10.1m (H1 23: £6.5m).
• Group adjusted profit before tax was £4.3m, (H1 23: £0.0m), and statutory profit before tax was £0.6m (H1 23: (£5.9m)).
• Interim dividend of 0.9p per share declared in line with capital allocation policy, reflecting the Board's continued confidence in the Group's prospects.

Trading dynamics

• Overall market remains strong, underpinned by an additional 7% airline capacity to beach leisure destinations for Summer 24. OTB continues to grow at ahead of this rate, supported in part by our new partnership agreement with Ryanair which ensures we have secure access to this increase in capacity.
• The premium market continues to perform strongly with TTV growth in 5* holidays within the B2C segment of +41% YOY, and now represents 34% of B2C TTV mix (H1 23: 30%).
• The value market remains more challenging, reflecting ongoing cost of living pressures, with 1% TTV growth YOY.
• Long Haul ("LH") continues to outperform as we continue to add new destinations. B2C LH TTV is up 61% vs prior year, and now represents 9% of B2C TTV mix (H1 23: 7%).

Current trading and outlook

• Trading momentum has continued since the half year date.
• Summer '24 forward order TTV currently 22% ahead of last year.
• As a result of these factors, and our new Ryanair partnership, we expect to deliver another record Summer.
• Board is confident in delivering FY24 profit in line with current consensus expectations.

Shaun Morton, Chief Executive of On the Beach Group plc, commented:

"I am pleased to report another strong set of results, marking our ninth consecutive quarter of record performance. TTV was up 22% as we saw strong growth across both volume of bookings and the average value of holidays sold. Our customers are favouring our premium and Long Haul beach holidays, whilst making the most of our enhanced customer perks.

The signing of our long-term distribution agreement with Ryanair was a milestone achievement in the period. Through this partnership, our customers can now secure free and fair access to Ryanair's seat supply, and we hope this industry-leading collaboration can be used as a blueprint for how the industry can better work together. In the two weeks since the partnership went live, demand for Ryanair seats has been encouraging and supports the growth of our value proposition that is enjoyed by families across the UK.

Looking ahead, the summer '24 forward order TTV is currently 22% ahead of last year which, coupled with our continued trading momentum since the half year, means we are confident of delivering our biggest summer ever."

Analyst & investor webinar

A meeting for sell-side equity analysts and investors will be held today at 10.00am, the details of which can be obtained through FTI Consulting via onthebeach@fticonsulting.com. There will also be a conference call option (with no Q&A function); the details of which can also be obtained from FTI Consulting.

Chief Executive's Review

Summary

Group Booked TTV in H1 was +22% ahead of the prior year, supported by strong volume growth of +15% vs H1 23 and continued momentum in strategic expansion areas, contributing to an increase in average booking values. Whilst TTV growth in the 3* market in H1 was more suppressed by ongoing cost of living pressures, OTB continues to experience very strong growth in its 5* premium and Long Haul markets.

Signing a partnership agreement with Ryanair provides OTB with free and fair access to seats from Europe's largest airline, enables the parties to move on from long standing litigation and supports the momentum we carry into the second half of the year across the lates market. This partnership agreement resolves a longstanding risk for the Group and will ensure that our customers can book package holidays with a Ryanair flight with complete confidence.

We expect the B2B channel's profitability to improve once the key measures identified to simplify its operating model have been implemented, having undertaken a review in the first half of the year.

The Group continues to develop and evolve its perks proposition and the strategy is proving effective with increased Top 3 Consideration for customers with a perk. Where customers are aware of the perks proposition, their perception of OTB as a differentiated and good value for money holiday company increases significantly which in turn improves our consideration scores.

Trading post half year date across the Group remains strong and we expect this summer to be our biggest ever.

Expansion areas

The strategic actions the Group continues to take to enhance its proposition and supply position it well to continue to outperform in the premium market. The Group estimates the premium market is a similar size to the value market in terms of passengers, but approximately two and a half times larger in absolute value, and the revenue margin opportunity on each individual booking is significantly greater. The premium market has shown greater resilience to cost-of-living pressures, recovering earlier. Attracting these customers that typically book earlier is giving greater visibility of the season ahead. Premium 5* TTV was +41% in H1 24 versus H1 23.

The Group has continued to scale its Long Haul offering and OTB is now a brand firmly associated with long-haul as well as short haul beach holidays. OTB has a low single digit but growing share of a 3m pax market. There remains a significant organic growth opportunity in Long Haul. The majority of OTB's continued growth is from its existing Long Haul destinations, and there is significant headroom for further penetration in these destinations. Booked Long Haul TTV was 61% up vs a strong comparator in H1 23 and H1 LH mix of B2C TTV is now up to 9%.

Ryanair partnership

We signed our transformational Ryanair partnership agreement in February, representing a significant milestone for OTB.

It provides free and fair access to Ryanair's seat supply for our customers, facilitating a smoother customer journey when booking Ryanair flights as part of an OTB package, which significantly improves the customer experience.

This simplifies OTB operations, while enabling greater focus on areas of strategic value. Amongst other operational benefits, we expect a reduced number of contacts into Contact Centre teams, enhanced tech reliability at reduced costs, improved working capital efficiency through funds taken out of trust, and a simplified future refunds process.

This is an important development for the holiday industry as a whole. This partnership arrangement ensures that customers will continue to benefit from the enhanced consumer protection that buying a package holiday provides combined with the low cost fares that Ryanair offers.

Finally, the agreement enables the parties to move on from the outstanding litigation and focus efforts on building the partnership. We are working collaboratively with Ryanair to resolve all historic refunds and expect this to be concluded by year-end.

B2B

During H1, we reviewed Classic Collection Holidays ("CCH") and Classic Package Holidays operations (both segments in aggregate representing B2B) and have identified several structural changes to improve performance. Both businesses represent a meaningful part of our Group, and we remain committed to continuing the growth and supporting the trade with quality service and products.

B2B operates in an increasingly competitive market, particularly post pandemic, where competition has intensified. To win share in this market, we need to operate with a simple operating model for the benefit of suppliers, agents, and customers. We will be supporting the B2B channel with a single brand trading as Classic Collection, and a single platform solution leveraging Group technology and operations. Following a short transitional period, B2B will be a more closely integrated channel within the Group, represent a single segment, and adopt an agency revenue recognition policy which will simplify Group reporting.

Si Morris-Green has taken up the role of Director of B2B and will lead the business through our next chapter of growth. Having recently completed a period of collective consultation, we are providing dedicated support to our teams, including those affected. We expect these actions will deliver a significant improvement in operating efficiency and return this channel to profitability.

Strategy for growth

Our strategy remains consistent with that set out at the end of FY23. Ongoing investment into brand, proposition, technology, customer experience and supply enables our strategy to continue to penetrate each of our addressable markets, contributing to our record performance in FY23 and building towards our biggest summer ever in FY24.

The Group is making considerable progress developing its customer proposition. Being known for Perks and investing in the customer Perks offer, including lounge, fast track and mobile data, significantly benefits OTB. It offers a key point of differentiation from other holiday companies, makes our offline marketing campaigns more effective, strengthens the brand, attracts new customers, and improves our customer's overall holiday experience, increasing the likelihood of repeat purchase. In H1 24, top 3 Consideration was 29%, whilst top 3 Consideration for those aware of Perks was 46%.

We have also recently made significant progress upgrading the core platform, increasing the accuracy and speed by which we are able to serve billions of deals to our customers. Our new platform capabilities allow us to integrate with new partners quickly and reliably (e.g. Ryanair) and ultimately enable OTB to scale more efficiently.

We are excited by what we can achieve across the Group for the remainder of FY24 and look forward to updating further on progress at the year end.

Segmental performance

The Group organises its operations into three principal financial reporting segments, being OTB (onthebeach.co.uk and sunshine.co.uk), CCH (Classic Collection Holidays) and CPH (Classic Package Holidays).

OTB Segment performance

*see glossary for reconciliation to nearest GAAP measure

Revenue increased by 18% to £56.3m (H1 23: £47.8m). The increase in revenue was due to an increase in both booking volumes and average booking values ("ABV"). The growth in ABV reflects a continuing level of price inflation across the market, in addition to the continued growth in premium and long-haul holidays, which carry a higher ABV than more traditional 3* beach holidays.

Revenue is stated net of one off costs of c.£3m retaining Ryanair flights on sale prior to finalisation of the partnership agreement.

Total marketing costs at £25.9m represent 48% of adjusted revenue (H1 23: 53%). In line with strategy, offline marketing costs at £10.5m, (H1 23 £13.4m) were heavily weighted into H1 to capitalise on the peak bookings period and build momentum into H2. Online marketing costs were £15.4m (H1 23: £12.5m) and 29% of adjusted revenue (H1 23: 26%) during the period. Total marketing costs for the full year are expected to remain within 40% of revenue.

Adjusted gross profit after all marketing costs increased by 18% to £26.7m (H1 23: £22.6m).

Operating leverage and overheads

*see glossary for reconciliation to nearest GAAP measure

Overheads have increased by £1.3m to £17.0m representing 31.7% of adjusted revenue (H1 23: 32.4%) and 3% of TTV (H1 23: 4%).

The absolute increase in overheads results primarily from increases in variable costs, and in particular credit / debit card transaction costs. Fixed overheads have been subject to underlying inflation, which has offset the benefit from a reduction in headcount in H1 vs the year-end.

Overall growth in overheads remains well behind the rate of bookings growth, demonstrating management's commitment to improved operational efficiency.

Adjusted EBITDA for the period was £9.7m (H1 23: £6.9m).

Classic Collection Holidays segment performance

*see glossary for reconciliation to nearest GAAP measure

As a principal (rather than an agent), Classic accounts for revenue on a "travelled" basis and reports revenue on a gross basis.

The high street remains an extremely competitive market for B2B sales, which has contributed to a reduction in bookings of 6% on a travelled basis since the prior year. Despite the changes made in Q4 FY23 to centralise a number of group functions, costs to serve remain high. This has driven the need for a strategic review and conclusion that a simpler operating model is required to serve the B2B market.

For the purposes of IFRS 5, we expect CCH to be classified as discontinued operations during H2 24.

Classic Package Holidays segment performance

*see glossary for reconciliation to nearest GAAP measure

CPH provides an online B2B platform that enables high street travel agents to sell dynamically packaged holidays to their customers.

Revenue for the period increased by 44% to £3.6m (H1 23: £2.5m). With marketing and overheads growing at a slower rate than bookings growth this has resulted in an increase in EBITDA of £0.8m on the prior year.

Exceptional and adjusting items

Exceptional items on a Group basis include £3.5m of costs offset by £2.8m of income following the settlement of the refunds litigation with Ryanair. Costs of £2.9m relate to legal and professional costs in respect of litigation, including Ryanair litigation prior to the signing of the partnership agreement. £0.6m relates to B2B restructuring earlier in H1 24.

The amortization of acquired intangibles has reduced by £1.2m on prior year due to full amortization of customer relationship and website technology in the period.

Financing

In the prior year, the Group refinanced its credit facilities with Lloyds Bank and NatWest. This included cancelling all current facilities and entering into a new facility for £60m expiring in December 2025.

In December 2023 an option was exercised to extend the expiry date to December 2026. In January 2024, an option was exercised to extend the facility by £25m in order to provide additional working capital headroom for continued growth. This extension is effective until July 2025.

The cash draw down on this facility at 31 March 2024 was £55m (31 March 2023: £30m).

Details of the current facility limits and maturity dates with are as follows:

Share based payments

The Group has an LTIP scheme in place which vests based on performance criteria. In accordance with IFRS 2, the Group has recognised a non-cash charge of £1.6m (H1 23: £1.3m).

The share-based payment charge represents a non-cash charge for the expected cost of shares vesting under the Group's Long-Term Incentive Plan.

Taxation

The Group tax charge of £0.1m (H1 23: credit of £1.2m) represents an effective rate of 25% (H1 23: 20%) which is in line with the standard UK rate of 25% (H1 23 higher than the standard rate of 19%).

During the period, a Corporation Tax payment of £2.1m was made in respect of the prior year.

Cash flow

The cash flow profile of the Group is seasonal with approximately 50% of customers travelling in the period June to August and therefore in a normal year the cash flows (excluding any cash held in the Trust) experience a trough prior to June and a peak following this.

Operating cashflows of £118.9m represents investments made by the Group in to online and offline marketing as well as the working capital required to fund the customer deposits scheme and meet agreed advances to hoteliers.

Customer payments made to OTB in advance of travel are deposited in the Trust account. During the period, the Trust account balance has increased from £108.6m to £195.9m, which will unwind as customers travel over the summer months. As well as reflecting the continued growth of the business, this increase is a result of an increasing number of customers choosing to book their holidays earlier.

Dividend

In view of the current full year outlook and the Board's continued confidence in the Group's prospects, it has decided to pay an interim dividend of 0.9p per share (2023: nil). The dividend will be paid on 28 June 2024 to shareholders on the register at 31 May 2024. The full year payout ratio is expected to be 25% of FY24 profit after tax, in line with the Group's capital allocation policy.

Shaun Morton Jon Wormald

CEO CFO

14 May 2024 14 May 2024

On the Beach Group Plc

INTERIM RESULTS FOR THE 6 MONTHS ENDED 31 MARCH 2024

CONDENSED CONSOLIDATED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE INCOME

For the 6 months ended 31 March 2024

Restated*

* The period ending 31 March 2023 is restated for the effects of the discontinued operations (see note 7).

** This is a non GAAP measure, refer to notes.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 March 2024

Jon Wormald

Chief Financial Officer

On the Beach Group plc. Reg no 09736592

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

For the 6 months ended 31 March 2024

Restated*

* The period ending 31 March 2023 is restated for the effects of the discontinued operations (see note 7).

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the 6 months ended 31 March 2024

The interim condensed consolidated financial statements of On the Beach Group plc and its subsidiaries (collectively, the Group) for the six months ended 31 March 2024 were authorised for issue in accordance with a resolution of the directors on 14 May 2024. On the Beach Group plc is a public limited company, incorporated and domiciled in the United Kingdom, whose shares are listed on the London Stock Exchange. The registered office is located at Aeroworks, 5 Adair Street, Manchester, M1 2NQ.

The interim condensed consolidated financial statements for the six months ended 31 March 2024 have been prepared in accordance with UK adopted IAS 34 Interim Financial Reporting. The interim condensed consolidated financial statements do not constitute statutory financial statements as defined in section 435 of the Companies Act 2006 and therefore do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual financial statements as at 30 September 2023. No audit or review opinion has been provided by a statutory auditor on these interim statements. The financial information for the preceding year is based on the statutory financial statements for the year ended 30 September 2023. These financial statements, upon which the auditors issued an unqualified opinion, have been delivered to the Registrar of Companies. These financial statements did not require a statement under either section 498(2) or section 498(3) of the Companies Act 2006.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual financial statements for the year ended 30 September 2023.

The Group covers its daily working capital requirements by means of cash and a £60m Revolving Credit Facility ('RCF') from Lloyds Bank and NatWest expiring in December 2025. In December 2023 the expiry date pushed to December 2026 as permitted by the contractual terms and then in January 2024, the facility was increased by £25m until July 2025. The RCF has financial covenants in place which are tested quarterly. As at 31 March 2024 Group cash (excluding cash held in trust which is ringfenced and not factored into the going concern assessment) was £7.7m (31 March 2023: £9.6m, 30 September 2023: £75.8m). Cash received from customers for bookings that have not yet travelled is held in a ring-fenced trust account and is not withdrawn until the customer returns from their holiday. Cash held in trust at 31 March 2024 was £195.9m (31 March 2023: £137.2m, 30 September 2023: £108.6m). The Directors have assessed a going concern period through to 30 September 2025 being the next period end after a full 12 months from the reporting date, and have modelled a number of scenarios considering factors such as airline resilience, cost of living, inflation, interest rates and customer behaviour/ demand. The Group has performed an assessment of the impact of climate risk, as part of the Director's assessment of the Group's ability to continue as a going concern. Detail of the Group's assessment of the impact of climate risk is provided within the 'Principal risks and uncertainties' section of the 2023 annual report.

The Directors have modelled a reasonably possible downside scenario to sensitise the base case. In this scenario the Directors have assessed the impact to cash and revenue in an environment where bookings are 70% lower than forecasted for 3 months followed by 40% reduction for the remaining going concern period and although profitability would be affected, the Group would be able to continue operating. The impact of climate change has not yet been reflected in these estimates and assumptions due to the level of uncertainty about the impact of climate change on these estimates and assumptions. In addition, the Directors have modelled sensitivity analysis on both average booking values and booking volumes separately, as well as a reverse stress test with a remote possibility. Although in each of these scenarios profitability would be affected, the Group would be able to continue operating. Given the assumptions above, the mitigating actions available and within the Group's control, the Directors remain confident that the Group continue to operate in an agile way adapting to any continued travel disruption. Therefore, it is considered appropriate to continue to adopt the going concern basis in preparing these financial statements.

Critical Accounting judgements

Capitalised website development costs

Determining the amounts to be capitalised involves judgement and is dependent upon the nature of the related development; namely whether it is capital (as relating to the enhancement of the website) or expenditure (as relating to the ongoing maintenance of the website) in nature. In order to capitalise a project, the key judgement management have made is in determining the project's ability to produce future economic benefits. In the period ending 31 March 2024 the development team are focusing on key strategic development objectives. Management have assessed each project to determine whether the project is technically feasible, intended to be completed and used, whether there is available resources to complete it and whether there is probable economic benefits from each project.

Revenue from contracts with customers

The Group applied the following key judgements on the agent vs principal status of each segment as well as the number of performance obligations in each.

Performance obligations

Revenue in the OTB and CPH segments is recognised based on there being a single performance obligation at the point of booking. This is to arrange and facilitate the customer entering into individual contracts with principal suppliers providing holiday related services including flights, hotels and transfers. For the OTB and CPH segments, there is not a significant integration service and responsibility for providing the services remains with the principal suppliers. The Group has concluded that under IFRS 15 for revenue in the CCH segment, a package holiday constitutes the delivery of one distinct performance obligation which includes flights, accommodation, transfers and other holiday-related services. In formulating this conclusion, management has assessed that it provides a significant integration service to collate all of the elements within a customer's specification to produce one integrated package holiday. Management has further analysed the recognition profile and concluded that under IFRS 15, revenue and corresponding cost of sales should be recognised over the period a customer is on holiday.

Agent vs Principal

Determining whether an entity is acting as a principal or as an agent requires judgement and has a significant effect on the timing and amount (gross or net basis) of revenue recognised by the Group. As an agent, revenue is recognised at the point of booking on a net basis. As a principal, revenue is recognised on a gross basis over the duration of the holiday. In accordance with IFRS 15, revenue for the OTB and CPH segments is recognised as an agent on the basis that the performance obligation is to arrange for another entity to provide the goods or services. This assessment has given consideration that there is no inventory risk and limited discretion in establishing prices. Revenue in the CCH segment is recognised as a principal on the basis that CCH have the primary responsibility for fulfilling the package holiday for the customer.

The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are consistent with those followed in the preparation of the Group's annual consolidated financial statements for the year ended 30 September 2023. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. A number of new standards and amendments to standards are effective for annual periods beginning after 1 January 2023; the following amended standards have been implemented, however, they have not had a significant impact on the Group's consolidated financial statements: • IFRS 17 Insurance Contracts • Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2 • Definition of Accounting Estimates - Amendments to IAS 8 • Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to IAS 12 • International Tax Reform - Pillar Two Model Rules - Amendments to IAS 12 introduced a mandatory temporary exception to the requirements of IAS 12 under which a company does not recognise or disclose information about deferred tax assets and liabilities related to the proposed OECD/G20 BEPS Pillar Two model rules. The Group has applied the temporary exception in the Group's consolidated financial statements.

Standards issued but not yet effective

Certain new financial reporting standards, amendments and interpretations have been published that are not mandatory for the 30 September 2023 reporting period, and have not been early adopted by the Group. The Group is currently assessing the impact of the following standards, amendments and interpretations: • Amendment to IFRS 16 - Leases on sale and leaseback • Amendment to IAS 7 and IFRS 7 - Supplier finance • Amendments to IAS 21 - Lack of ExchangeabilityInternational Tax Reform - Pillar Two Model Rules - Amendments to IAS 12 introduced a mandatory temporary exception to the requirements of IAS 12 under which a company does not recognise or disclose information about deferred tax assets and liabilities related to the proposed OECD/G20 BEPS Pillar Two model rules. The Group has applied the temporary exception in the Group's consolidated financial statements.

Set out below is the disaggregation of the Group's revenue from contracts with customers:

For the 6 months ended 31 March 2024

*The total transaction value of holidays booked during the period, before cancellations and amendments. See the glossary for the reconciliation to GAAP measure.

**Exceptional income for the period ended 31 March 2024 relates to refunds received from airlines that had previously been provided for as exceptional cancellations.

*** The results for the period ended 31 March 2023 have been restated to exclude the results of the discontinued operation included in that period.

Details of receivables arising from contracts with customers are set out in note 12.

The management team considers the reportable segments to be ''OTB'', ''CCH'' and "CPH". All segment revenue, operating profit, assets and liabilities are attributable to the Group from its principal activities. All revenues are derived in the United Kingdom. OTB and CPH recognise revenue as agent on a net basis. CCH recognises revenue as a principal on a gross basis. The Group's Chief Operating Decision Maker ("CODM") is its executive board and they monitor the performance of these operating segments as well as deciding on the allocation of resources to them based on divisional level financial reports. Segmental performance is monitored using adjusted segment operating results.

For the 6 months ended 31 March 2024

*Exceptional income for the period ended 31 March 2024 relates to refunds received from airlines that had previously been provided for as exceptional cancellations. **The results for the period ended 31 March 2023 have been restated to exclude the results of the discontinued operation included in that period (see note 7).

* The results for the year ended 31 March 2023 have been restated to exclude the results of the discontinued operation included in that period (see note 7).

Total exceptional items in the 6 months ended 31 March 2024 of £0.7m, consists of exceptional income of £2.8m for refunds received from airlines that had previously been provided for and exceptional operating costs of £3.5m. Exceptional operating costs include £2.9m legal and professional costs relating to litigation during the period and £0.6m of restructuring costs. Total exceptional items in the 6 months ended 31 March 2023 of £1.1m. Exceptional operating costs of £1.1m include £0.6m legal and professional fees and £0.5m of restructuring costs. Exceptional items in the year ended 30 September 2023 of £3.5m represents £2.0m of non-trade legal and professional fees relating to ongoing litigation and £1.5m of redundancy costs as a result of the consolidation of certain Group functions between OTB and CCH.

*The results for the period ended 31 March 2023 have been restated to exclude the results of the discontinued operation included in that period (see note 7). **These charges relate to amortisation of brand, website technology and customer relationships recognised on the acquisition of subsidiaries and are added back as they are inherently linked to historical acquisitions of businesses. ***The share based payment charge represents the expected cost of shares vesting under the Group's Long Term Incentive Plan. The share based payment charge has increased to £1.6m (31 March 2023: £1.3m, 30 September 2023: £1.2m).

The differences between the total taxation shown above and the amount calculated by applying the standard UK corporation taxation rate to the profit before taxation on continuing operating are as follows.

The effective rate of tax of 24.7% has been calculated using the full year projections and has been applied to profit before exceptional items for the period ending 31 March 2024. The standard rate of corporation tax of 25% (31 March 2023: 19%, 30 September 2023: 22%) for the full year has been applied to the exceptional items in the period ending 31 March 2024.

Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit is probable, deferred tax assets are reviewed at each reporting date to assess the probability that sufficient taxable profit will be available to allow all or part of deferred tax asset to be utilised. All available evidence was considered including approved budgets, forecasts and analysis of historical operating results. These forecasts are consistent with those prepared and used internally for business planning and impairment purposes. The Group determined that there would be sufficient taxable income generated to realise the benefit of the deferred tax assets and no reasonably possible change to key assumptions would result in a material reduction in forecast headroom of tax profits.

On 27 September 2023, the Group made the decision to cease its current operations outside of the UK. The results of the discontinued operations are analysed below. The 6 months ended 31 March 2023 have been restated to show separately the results of the discontinued operation included in that period. "International" segment is no longer presented in the segment note.

No impact on cash flows from investing or financing activities.

There are no assets relating to discontinued operations held for sale at 31 March 2024.

Adjusted earnings per share figures are calculated by dividing adjusted earnings after tax for the year by the weighted average number of shares.

*There was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

*There was no difference in the weighted average number of shares used for the calculation of basic and diluted loss per share as the effect of all potentially dilutive shares outstanding was anti-dilutive.

Adjusted earnings after tax is calculated using the tax rate of 25% (31 March 23: 20%, 30 September 23: 19%) on the basis that this is the Group's effective tax rate:

Adjustments net of tax of 25% (31 March 2023: 20%, 30 September 2023: 19%)

* The share based payment charges are in relation to options which are not yet exercisable.

The Group capitalise development projects where they satisfy the requirements for capitalisation in accordance with the accounting standard and expense projects that relate to the operations and ongoing maintenance.

Brand

The depreciation expense of £1.3m for the period ended 31 March 2024 (31 March 2023: £1.1m, 30 September 2023: £2.7m) has been recognised within administrative expenses.

Deferred tax assets and liabilities are attributable to the following:

The deferred tax asset includes an amount of £5.6m (31 March 2023: £9.4m, 30 September 2023: £6.3m) which relates to carried forward tax losses. Deferred tax assets are recognised for tax losses carried forward only to the extent that realisation of the related tax benefit is probable, deferred tax assets are reviewed at each reporting date to assess the availability of sufficient taxable temporary differences and the probability that sufficient taxable profit will be available to allow all or part of deferred tax asset to be utilised. The Group determined that there would be sufficient taxable income generated to realise the benefit of the deferred tax assets and no reasonably possible change to key assumptions would result in a material reduction in forecast headroom of tax profits.

For the 6 months ending 31 March 2024, other receivables includes £1.8m receivable in respect of amounts due from airlines as a result of supplier cancellations (31 March 2023: £1.6m, 30 September 2023: £1.2m). Other receivables and prepayments includes £20.5m of advanced payments to suppliers (31 March 2023: £19.8m, 30 September 2023: £7.4m) and £8.0m of rebates due from suppliers (31 March 2023: £5.0m, 30 September 2023: £6.0m).

Expected credit losses for trade receivables

Set out below is the movement in the allowance for expected credit losses of trade receivables:

£'m

Contract balances

The Group acts as principal when it is the primary party responsible for providing the components that make up the customer's booking and it controls the components before transferring to the customer. Bookings made in the CCH segment are all on a principal basis. Revenue represents amounts received or receivable for the sale of package holidays and other services supplied to the customers. Revenue is recognised when the performance obligation of delivering an integrated package holiday is satisfied, usually over the duration of the holiday. Revenue is stated net of discounts, rebates, refunds and value added tax.

Provisions

For the period ended 31 March 2024 a provision of £0.4m has been recognised in respect of expected future cancellations for supplier and customer cancellations on the forward order book for future departures (31 March 2023: £0.6m, 30 September 2023: £0.4m). The Group expect this provision to be utilised over the next year. The provision is based on pre-pandemic trends and best estimate of future expectation, there is inherent uncertainty in terms of the level and timing of future cancellations which will depend on various factors including potential further supplier disruption. In addition, the group has provided for £1.5m of legal costs associated with ongoing litigation (31 March 2023: £nil, 30 September 2023: £nil)

At the balance sheet date the Group held the following:

• Measurement of fair values
• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

The forward contracts have been fair valued at 31 March 2024 with reference to forward exchange rates that are quoted in an active market, with the resulting value discounted back to present value.

Financial risk management

The Group's principal financial liabilities, other than derivatives, comprise revolving credit facility, provisions and trade and other payables. The main purpose of these financial liabilities is to finance the Group's operations. The Group's principal financial assets include trade receivables, cash at bank and trust account that derive directly from its operations.

The Group's key financial market risks are in relation to foreign currency rates. The majority of the Group's purchases are sourced from outside the United Kingdom and as such the Group is exposed to the fluctuation in exchange rates (currencies are principally Sterling, US Dollar and Euro). The Group places forward cover on the foreign currency exposure of its purchases.

Derivatives are valued using present value calculations. The valuation methods incorporate various inputs including the foreign exchange spot and forward rates, yield curves of the respective currencies and currency basis spreads between the respective currencies.

Revolving credit facility

On 7 December 2022, the Group refinanced its credit facilities with Lloyds and NatWest. This included cancelling its previous facilities of £75m with Lloyds Bank and entering into a new facility for £60m expiring in December 2025. The purpose of the facility is to meet the day to day working capital requirements of the Group. At the point of refinancing there was no cash balances drawn down. In December 2023, the expiry date of the facility has been extended by 1 year into 2026 per the contract terms. In January 2024, the Group has also extended the facility by £25m (£12.5m for each party) until July 2025. The additional facility was required to fund higher than expected funding of our low deposit offering.

The total facility is £85m and has two elements as follows:

• £42.5m facility with Lloyds
• £42.5m facility with Natwest

The terms of the facility include the following covenants:

• the ratio of total net debt to adjusted EBITDA shall not exceed 2.5:1.

The Group did not breach the covenants during the period and period end.

The RCF is available for other credit uses including currency hedging liabilities and corporate credit cards. At 31 March 2024, the liabilities recognised in trade and other payables for the other credit uses was £12.0m, leaving £73.0m of the facility available for use. Card facilities with other providers remain available for use. The amount drawn down in cash at 31 March 2024 was £55m (31 March 2023 £30m, 30 September 2023: £nil).

No related party transactions have been entered into during the period.

PRINCIPAL RISKS AND UNCERTAINTIES

There are a number of potential risks and uncertainties which could have a material impact on the Company's performance over the remaining six months of the financial year and could cause actual results to differ materially from expected and historical results. In February 2024 we entered into a transformational partnership agreement with Ryanair. The effect of this has been to materially reduce a number of our principal risks, as set out below. Flight Supply - Under the agreement, OTB will have seamless access to Ryanair's seat supply. Given Ryanair's share of bookings for the B2C segment this materially reduces this risk. Recoverability of airline refunds - As part of the partnership agreement we have put in place a simplified future refunds process, as well as agreeing a collaborative approach to resolving historic refunds. Both parties have also agreed to move on from historic litigation and focus on the development of the partnership. The directors do not consider that any other principal risks and uncertainties have changed in any material respect since the publication of the Annual Report for the year ended 30 September 2023. All risks and how the Company seeks to mitigate these risks are set out on pages 30 - 41 of the 2023 Annual Report and Accounts which can be found at www.onthebeachgroupplc.com . STATEMENT OF DIRECTORS' RESPONSIBILITIES The Directors are responsible for preparing the interim report in accordance with applicable law and regulations. The Directors confirm that the condensed consolidated interim financial information has been prepared in accordance with International Accounting Standard 34 ('Interim Financial Reporting') as adopted by the European Union. The interim management report includes a fair review of the information required by the Disclosure and Transparency Rules paragraphs 4.2.7 R and 4.2.8 R, namely: · an indication of important events that have occurred during the six months ended 31 March 2024 and their impact on the condensed set of financial information, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and · material related-party transactions during the six months ended 31 March 2024 and any material changes in the related-party transactions described in the Annual report and Accounts 2022. The Directors of the Company are listed in the Annual Report and Accounts 2023. A list of current Directors is also maintained on the Company's website: http://onthebeachgroupplc.com . The interim report was approved by the Board of Directors and authorised for issue on 14 May 2024 and signed on its behalf by:

Jon Wormald - CFO

GLOSSARY

[1] The Facilities will revert to £30m for each of Lloyds Bank and NatWest on 27 July 2025.