On the Beach hails Classic Collection's return to profitability after restructure

“As we add more product, attract new customers in new markets and increase existing customers’ purchase frequency, we expect customer annual value to increase,” said Morton.

“This will fuel the next stage of our revenue growth while also increasing the efficiency of our marketing spend.”

In the 12 months to the end of September, the OTA increased its revenue by 14% to £128.2 million, while pre-tax profit almost doubled (+84%) to £26.5 million.

TTV from shorter three- and four-star beach breaks increased by 13%, but this was eclipsed by growth in five-star sales, with TTV for this segment increasing by 21% year-on-year in defiance of the cost of living squeeze.

Meanwhile, the group’s trade brand, Classic Collection, reported earnings before interest, taxes, depreciation and amortisation (Ebitda) of £1.7 million – up from £100,000 last year – on revenue of £8.8 million, up from £6 million a year earlier. Classic’s TTV ran to £40.6 million.

It follows the group’s decision earlier this year to restore Classic Collection to a single B2B brand proposition, combining Classic Collection Holidays and Classic Package Holidays, under the leadership of Si Morris-Green.

The results have been restated to reflect the merger of the two brands, which was largely complete by the end of September. Cost of sales, which includes agent commissions, came to £4.8 million, up from £3.7 million last year.

’Competitive market’

"The B2B channel operates in an increasingly competitive market," said Morton. "However, there remains a significant opportunity to become the go-to B2B provider of Ryanair packages, while having the ability to offer tailor-made packages for the trade.

"Changes made in the year have resulted in a single brand trading as Classic Collection and operating using the group’s scalable technology platform," Morton continued. "These changes have been successful in returning the channel to profitability in FY24 and laying the foundations for sustainable profitable growth in FY25 and beyond."

Looking ahead, chief financial officer Jon Wormold said the group had set itself a mid-term target to double TTV to £2.5 billion while growing Ebitda to £100 million – 40% of revenue – with a view to achieving adjusted pre-tax profit of £85 million.

“We are excited about our strategy and what we can achieve across the group,” Morton concluded.