On the Beach's shares plunge following Brexit linked profit warning
UK online package holiday retailer On the Beach has issued a profit warning as the British pound continues to weaken ahead of the nation’s planned withdrawal from the European Union.
The company’s shares, which are listed on the London Stock Exchange, plunged 18% to £3.87 following the announcement on Friday.
The company said that, with the increased likelihood of a no deal Brexit, Sterling had significantly devalued against the euro since the beginning of May and this accelerated at the end of July, continuing into August.
On the Beach said that although it had seen a strengthening of demand in the second half of the year, the weakening of the pound has led to a significant increase in OTB prices versus full risk competitors with currency hedges.
“As OTB remains focused on profitable growth, these relative price increases make it difficult for the Group to gain share of market while maintaining margins”, the firm said.
“As a result, the Group anticipates delivering a full year performance below the Board's expectations.”
"In what is a difficult general economic climate, we remain confident in the resilience and flexibility of our business model, focusing on profitable growth and an ability to capitalise on any structural changes in the market”, said Simon Cooper, Chief Executive of On the Beach Group.
“In FY19 we have invested significantly in our infrastructure, talent and technology to ensure that we build strong foundations to support our strategic objectives."
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