Group chief executive Simon Cooper told TTG that Sunshine.co.uk, its employees and the premises at Cramlington, Northumberland, would continue as a separate operation.
Cooper said that the group’s technology would help grow Sunshine.co.uk’s 200,000 bookings per year, and that the acquisition would lift On the Beach’s share of the online travel agency business to around 25% from “just over 20% now”.
While he did not rule out further acquisitions, Cooper said any future purchases would need to be “clean businesses”.
“This is the first significant acquisition we have done,” he said.
“After we’ve absorbed it, it depends. We are looking for clean businesses, not ones where we acquire a world of pain.”
Sunshine.co.uk was launched in 2007 by Chris Clarkson, a co-founder of review website HolidayWatchdog.com, with computer scientist Alan Gilmour.
On the Beach’s chief financial officer Paul Meehan described Sunshine.co.uk as a profitable business that “makes a good return”, but one that unlike On the Beach, has no direct contracts with hoteliers. “It’s a straightforward bolt-on acquisition that will drive more traffic,” he said.
Last week On the Beach Group also revealed profits before tax for the six months to the end of March up nearly 34% to £9.9 million on a turnover of £38.1 million. On the Beach has a small venture in Sweden and launched its brand in Norway during the period.
In terms of outlook for the industry, On the Beach believes hoteliers have held back capacity in the western Mediterranean this year to sell in the lates market, unlike last year, when discounts were offered early on, meaning there was little to sell in the peak period.
“Last year, in October to January, they put in discounts; this year, they have not,” said Cooper.
“Last year, May to August would have started cheap and got more expensive. This year it is the reverse. It’s good for the retailer.”
