On the Beach has served up a classic mixed bag of interim results. The headline is eye-catching – record H1 booking volumes of 324.2k, up 7% year on year, with travelled volumes jumping 22% to 201.6k. But once you get below that, profits were hit hard by weaker demand after 1 March, when the conflict in the Middle East disrupted booking patterns across the travel market.
So, is this good or bad? In my view, it is better than the profit line first suggests. The business is still growing faster than the wider package holiday market, its strategy is clearly gaining traction, and crucially the board has reinstated full-year guidance after pulling it in March. That said, margins have taken a knock, the guidance range is wide, and investors should not pretend this was a clean half.
On the Beach H1 2026 results: record bookings but lower revenue and profit
| Metric | H1 FY26 | H1 FY25 | Change |
|---|---|---|---|
| Booking volumes | 324.2k | 303.6k | +7% |
| Travelled volumes | 201.6k | 165.2k | +22% |
| Booked TTV | £626.2 million | £611.7 million | +£14.5 million |
| Revenue | £52.2 million | £59.4 million | -£7.2 million |
| Adjusted EBITDA | £6.4 million | £12.8 million | -£6.4 million |
| Adjusted profit before tax | £2.3 million | £8.4 million | -£6.1 million |
| Profit before tax | -£3.2 million | £4.5 million | -£7.7 million |
| Net debt | £27.5 million | £29.5 million | Improved by £2.0 million |
Booked TTV means total transaction value – basically the total value of holidays sold before cancellations and adjustments. Adjusted EBITDA is a profit measure before interest, tax, depreciation and amortisation, and strips out some one-off items to show underlying trading.
The key takeaway is simple: demand did not collapse, but profitability did weaken sharply. On the Beach sold more holidays, yet made less money from them.
Why On the Beach revenue fell despite higher holiday bookings
This is the bit that matters most. The company says customers are booking later, and that matters because the extra H1 growth came mainly from lower average booking value, shorter-duration winter holidays rather than fatter-margin summer trips.
On top of that, the conflict in the Middle East changed destination mix and hit consumer confidence from 1 March. Higher value and higher margin summer bookings, especially to eastbound destinations, were delayed as customers took a wait-and-see approach. That pushed revenue and margin into the second half, assuming those bookings still come through.
Middle East conflict created a demand and margin headwind
On the Beach says it has limited direct exposure to the Middle East, but the knock-on effects were still meaningful. There were cancellations to the UAE, more customer contact around potentially affected regions, and a higher than normal level of flight schedule changes.
The direct financial hit from exceptional cancellations was £0.7 million. The bigger issue, though, was indirect – weaker demand, a worse mix of bookings, and more competitive pricing across the sector.
Average booking value dropped as the mix shifted
The company said average booking value fell by 4%. That was driven by growth in city breaks, shorter lead-time bookings, and customers switching from destinations such as the UAE and Eastern Mediterranean into the Western Mediterranean.
None of that is disastrous in itself, but it explains why TTV rose 2% while adjusted revenue fell by £6.4 million. More bookings do not always mean more profit if the holidays are shorter, cheaper, and lower margin.
On the Beach strategy update: app growth, repeat bookings, city breaks and AI progress
This is where the RNS gets more encouraging. Operationally, the strategy looks like it is working.
- Customer search funnel conversion improved by 24%
- App monthly active users rose 29%
- The app now accounts for 38% of bookings
- In-year repeat bookings increased 24%
- Two-year repeat rates improved 17%
- City booking volumes rose 116%
- Republic of Ireland booking volumes rose 74%
That is proper evidence of a business getting stickier. More app usage and more repeat customers should, over time, lower customer acquisition costs and improve profitability.
There is also a clear expansion story here. On the Beach is no longer just a beach holiday operator. City breaks are growing fast, Ireland is scaling nicely, and cruise has now launched in a test-and-learn phase. Cruise revenue and profit contribution are not disclosed, but management is clearly flagging it as the next growth leg.
The AI angle is interesting too, although investors should keep their feet on the ground. The company says its app has launched on ChatGPT, an Anthropic integration is in progress, and AI is now embedded across customer service, engineering, supply and operations. That sounds promising, but it is still more strategic positioning than hard earnings today.
On the Beach balance sheet and cash: what net debt, trust cash and buybacks tell us
The balance sheet is healthier than the statutory loss might imply. Net debt improved to £27.5 million from £29.5 million, and the group had £88 million of headroom on its banking facilities.
There is also £209.9 million in the customer trust account, although that cash is ring-fenced. In plain English, it belongs to the booking process and cannot be treated like spare cash for the business.
One slightly awkward feature here is capital allocation. The group committed around £33 million in the half to share buybacks and dividends, including £29.1 million spent on buying back shares and a 1.0p interim dividend maintained. That signals confidence, but some investors may question whether such aggressive buybacks are ideal when first-half profit before tax was a loss of £3.2 million and cash at bank was nil at period end.
Management would argue the model is asset-light and cash generative over the cycle, which is fair. Still, it is worth noting the full-year dividend is expected to be lower than last year because it is set at 25% of FY26 profit after tax, and profits are now expected to be softer.
On the Beach FY26 guidance reinstated: adjusted PBT target of £18 million to £25 million
This is the most market-moving line in the release. On the Beach withdrew guidance in March because the geopolitical backdrop had become too uncertain. It has now reinstated guidance for FY26 adjusted profit before tax of £18 million to £25 million.
That matters because it tells investors trading has stabilised. Bookings over the last six weeks since the half year are up 9%, and management says the group continues to trade profitably and generate cash.
The catch is that the guidance range is wide. A £7 million spread tells you uncertainty has not gone away. Summer demand will do a lot of the heavy lifting from here.
What this On the Beach RNS means for retail investors
My read is cautiously positive. This was not a great profit statement, but it was a decent resilience statement. The company is still taking market share, its newer growth areas are working, and the reinstated guidance suggests the board believes the damage from March has not derailed the full year.
The negative side is obvious enough. Revenue fell, adjusted EBITDA halved, margins were squeezed, and statutory profit before tax swung to a loss. If summer trading wobbles again, that £18 million to £25 million guidance range could start to look ambitious at the top end.
Still, for retail investors, the bigger picture is that On the Beach looks operationally stronger than it did a few years ago. It is more automated, more app-led, more repeat-driven and broader in what it sells. If summer bookings keep building, this H1 may end up looking like a messy but temporary wobble rather than the start of something worse.
In short, this RNS says On the Beach is bruised, not broken. And in travel, that is an important distinction.
