On the Beach is a cash-rich, asset-light UK holiday platform at an inflection point—Ryanair peace deal and B2B exit unlock margin and focus, while the market still prices it like a broken travel stock.
Overview
On the Beach (OTB.L) enters 2026 at a strategic inflection point where operating performance is strengthening faster than market perception. FY25 validated management’s reset: **record TTV of £1.25bn (+11%)**, **adjusted PBT of £35.0m (+20%)**, and **adjusted EPS of 19.0p (+45%)**, alongside a **33% dividend increase** and completion of a **£50m buyback**. Revenue grew more slowly (+6%) due to the deliberate Ryanair mix shift (selling flights at zero margin to boost competitiveness and volume), but underlying economics improved as **gross profit after marketing rose 11.2%** and online marketing spend fell 6%—evidence of operating leverage and better ROAS. Strategically, OTB has become more focused by exiting the loss-making B2B Classic Collection business (one-off £16m discontinued charge), while the “peace treaty” with Ryanair removes a historic existential risk and should lower service costs and refund complexity. Despite a fortress balance sheet (net cash, trust model, undrawn £120m RCF), shares around 220p imply muted expectations; the report argues this undervalues a cash-generative digital platform facing manageable competitive and regulatory risks.