On the Beach raises £26m to bolster ‘firepower’ ahead of end to quarantine
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Holiday firm On the Beach has today raised £26m through a share placing, giving it more “firepower” with which to tackle the continued challenges of the pandemic for travel.
The company sold 7.8m new shares at a price of 330p, a discount of around 5.0 per cent on yesterday’s 347.5p closing price.
A number of the firm’s directors, including chief executive Simon Cooper, have subscribed to the placing, which represents 5.0 per cent of the firm’s share capital. The move takes Cooper’s stake in the firm to 4.7 per cent.
Shares in the firm sank 5.3 per cent today.
On the Beach said the proceeds from the placing would restore its cash position to where it was in May 2020, when it last went to the market.
The new money will ensure the firm has “sufficient funding available to increase marketing spend and to support the necessary short-term investment in working capital to capitalise upon that demand”, it said in a statement.
It comes as airlines and travel firms get ready for an expected loosening of travel restrictions on fully vaccinated travellers, which could come this week.
If, as expected, transport secretary Grant Shapps does confirm that such passengers will be able to travel back from amber list countries without needing to quarantine, it raises the prospect of holidays to popular destinations like Greece and Spain – in time for the summer holidays.
On the Beach, however, is focusing its attentions on bookings for the coming winter, as well as next summer.
In a statement, Cooper said: “The duration of the pandemic and its disruption to the travel sector has been more than anyone could have imagined and whilst On the Beach has undertaken numerous actions to best navigate the crisis, manage risk and conserve cash, this placing will provide the group with greater resilience, flexibility and firepower as demand for holidays recover.
“The placing will position the group strongly for growth while ensuring On the Beach is able to protect its strong market position and appropriately gain market share when there is an eventual recovery in demand.”