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On the Beach issues profit warning as Brexit bites

On the Beach issues profit warning as Brexit bites

The weakening value of sterling and continued uncertainty around Brexit have seen package tour operator On the Beach issue a profit warning.

In a statement to markets, the company said profits this ear would be “below the board’s expectations”.

Shares in the company fell by as much as 23 per cent in response.

Unlike multinational travel companies, On the Beach does not hedge its exposure to sterling but instead changes the prices of its holidays based on the value of the pound versus other major currencies.


This has left the company exposed to the near one fifth slide in the value of the pound since the vote to leave the European Union in 2016.

Sterling has fallen 6.9 per cent against the euro since the start of May, with trading early Friday showing that £1 buys about €1.08.

The Manchester-based beach holiday retailer added in a statement: “With the increased likelihood of a no-deal Brexit, sterling has significantly devalued against the euro since the beginning of May and this accelerated at the end of July, continuing into August.”

The travel group, which bundles up flights from the likes of British Airways and Emirates with hotel deals, said that despite the “difficult market conditions” its management team remained confident that its business and strategy were viable.

“We remain confident in the resilience and flexibility of our business model,” chief executive Simon Cooper said.