Shares in On the Beach Group (LSE:OTB), the AIM-listed online holiday group, fell 13% to 147 pence after the company reinstated full-year guidance significantly below market expectations, forecasting adjusted profit before tax of £18 million to £25 million against a prior consensus of £36.4 million.
Panmure Liberum, which retains a 'buy' rating and 300 pence price target, noted the new range also compares poorly with its own previous expectation of £40.5 million.
The broker said the shortfall reflects lower average booking values, shorter lead times, competitive pricing and a weaker destination mix following the conflict in the Middle East, which prompted the company to suspend its outlook in March.
Customers are still booking holidays, Panmure said, but later, shorter and in some cases to lower-value destinations.
Peel Hunt, which retains a 'buy' rating with a higher 350 pence target, took a more sanguine view, noting that first-half adjusted profit before tax of £2.3 million beat its expectation of breakeven.
The broker said it is not changing its £22 million full-year forecast and described the strategic momentum as unchanged, with investments in product and process paying off.
However, Peel cut its financial year 2027 estimate by 20%.
Adjusted revenue fell 11% to £52.9 million in the first half, adjusted EBITDA halved to £6.4 million and adjusted profit before tax dropped to £2.3 million from £8.4 million.
Total transaction value rose just 2% despite booking volumes hitting a record, up 7%, implying clear pressure on average booking value, which fell 4%, partly due to a growing mix of city breaks and short stays.
Travelled volumes surged 22%, with Peel Hunt noting customers are making more repeat bookings to more destinations at lower service cost.
Both brokers highlighted strategic positives, including app monthly active users up 29%, city break volumes up 116%, Republic of Ireland bookings up 74% and integrations with AI platforms.
On the Beach has removed 108 roles, with around £4 million of annualised savings expected, while the balance sheet retains £88 million of headroom and £209.9 million in the customer trust account.
Management said booking activity has stabilised since the half-year end, with volumes up 9% over the past six weeks as the summer departure period approaches.
Panmure said the analyst meeting would be key to understanding the impact on estimates for financial years 2027 and 2028, and hence valuation.