On The Beach shares tumble on profit alert

On The Beach has warned over full-year profits as holidaymakers increasingly book last minute and revealed plans to close its Classic Collection arm after suffering losses in the division.

The package holiday firm said it would wind down its business-to-business division, called Classic Collection, which it said made a small loss over the year to September 30.

It wants to focus on its consumer business, which saw a surge in summer bookings and notched up record sales over the past year.

But despite the solid demand, the firm said summer 2026 bookings were being impacted by the wider trend for travellers to wait until closer to departure before buying holidays.

It comes after holiday giant Tui flagged on Tuesday the ongoing shift towards last-minute bookings.

On The Beach saw shares tumble as much as a fifth at one stage as it said now expects to report underlying pre-tax profits of between £34.5 million to £35.5 million, even before the loss from Classic Collection.

This is lower than the £38.4 million expected by most analysts, which had also assumed profits of £2 million for the business-to-business division.

Shares later settled around 14% lower in Thursday morning trading.

Chief executive Shaun Morton insisted the firm was focused on reaching the ongoing target for underlying pre-tax profits of £85 million a year.

The full-year update showed a 12% jump in bookings for the summer season, with sales by total transaction value up 11% to a record £1.23 billion.

On The Beach also said winter bookings were strong, up 12% year-on-year.

Mr Morton said: “It remains clear that customers are still prioritising their holidays with our winter 25 bookings up 12% and we are confident that summer 26 will continue to build, notwithstanding the later booking patterns.

“The board and management team remain focused on delivering the group’s medium-term ambition of total transaction value of £2.5 billion, EBITDA of £100 million and adjusted pre-tax profits of £85 million.”

The group will report full-year results on December 2.