On the Beach is on the money

Online discount holiday provider On The Beach is raising around £90m and will be valued at £240m when it floats on the stock market.

Founded in Macclesfield, On The Beach reported EBITDA of £14.2m on revenues of £48.2m and total transactional value of £354.6m in the nine months to June this year. In the comparable period in 2014 its EBITDA was £9.8m, revenues £33.9m and TTV was £270.9m.

Conditional dealing in shares will begin this morning at a price of 184p. The lion’s share of the proceeds (£83.8m) of the placing of 52.1 million shares will go to the Cheadle company’s private equity owner, Inflexion, the management team and other investors.

After the listing Inflexion will retain a shareholding of around 37.1% of the business, while founder and chief executive Simon Cooper and his executive and senior team will hold approximately 21.7% of the stock. Unconditional dealings will begin on September 28

Inflexion will make a hearty return on its investment, having acquired around 70%  in the company only two years ago from Isis Equity Partners (now Living Bridge) for £73m.

Mr Cooper said: “In a little less than 11 years, we have established On the Beach as one of the UK’s leading online retailers of beach holidays. Our highly differentiated business model and superior technology platform has been core to the success of the business.

“The IPO of On the Beach marks an exciting milestone in the company’s development and will support us in our ambition to become Europe’s leading online retailer of beach holidays. We welcome our new shareholders and, with their support, look forward to delivering the next chapter of our growth story.”

It has grown its market share of the UK online short-haul beach holiday market to around 17% and is behind only the holiday giants TUI Travel and Thomas Cook.

On The Beach entered the Swedish market in early 2015, and in the short term intends to expand into Norway and/or Denmark. The company said it intends to begin paying dividends in 2016.