On the Beach Group has issues a cautiously optimistic trading update ahead of its annual general meeting.

The tour operator said it had continued to perform well in the first four months of the financial year, seeing core UK revenue growth, after all marketing costs, of 20 per cent.

The company said it had seen the continuation of several long-term trends, most notably strong mobile traffic and conversion growth, strong branded share and repeat purchase supported by incremental offline marketing activity and an increasingly efficient online marketing spend.

“We also continue to make good progress directly sourcing hotels and driving an increasing proportion of sales into our top selling and more exclusive hotel product,” the company said.

Following the acquisition of Classic Collection Holidays in August, On the Beach continues to work on the platform build for the online agent-only booking portal, Classic Package Holidays, with a planned launch in March and a phased rollout across the remainder of the calendar year.

Simon Cooper, chief executive of On the Beach Group, commented: “The first four months of the new financial year have delivered another solid period of growth for the group.

“Our strategy of investing in our brands, talent and technology to drive growth has delivered performance in line with the board’s expectations, with both new and repeat customers attracted to our wide range of value for money beach holidays.

“While we remain cautious of the consumer environment in the period immediately prior to the March29th, the board remains confident in the group’s outlook and will continue to evaluate opportunities to enhance its market share position.”

He added: “We have made significant progress towards our aim to expand long haul sales, completing the full build of a direct technical integration into the Emirates flights systems in January and we will add further longer haul destinations, scheduled carriers and long-haul hotels throughout the rest of this financial year.”

The group will report results for the six months to March 31st on May 14th.