Macclesfield doesn’t have a very high media profile. So its residents might’ve been pleased to see the town’s name in the national newspapers last week. It was only for a short period of time – one day in fact – but hey, every little helps.
So what caused this media interest? Well, during that brief period of time an online travel company called On The Beach – which had been set up in a terraced house in Macclesfield – was briefly worth more than Thomas Cook. On that day, On The Beach’s stock market valuation briefly overtook Thomas Cook’s whose share price plummeted after it announced a truly horrendous set of financial results.
Even by the world’s crazy standards, last Wednesday’s turn of events was, well, plain crazy. On The Beach, which despite being set up just fourteen years ago but already a FTSE 250 company, posted a 24pc rise in annual pre-tax profit that so delighted investors that its shares rose three per cent in morning trading. Whereupon it passed Thomas Cook’s shares which were heading in the opposite direction. Thomas Cook’s shares shed five per cent on the day after being savaged by the markets the previous day (Tuesday) after it delivering its second profit warning in two months.
As a result, both companies were valued at around half a billion pounds, with On the Beach edging ahead of Thomas Cook early in the day. Of course like all good things, it couldn’t last and the old order has duly now been restored with Thomas Cook considered a more valuable company than On the Beach – for now at least.
That the two companies were briefly worth the same amount of money is the only similarity between them. On every other level they are like chalk and cheese. Set up in 1841, Thomas Cook employs over 22,000 employees and has 190 own-brand hotels. It operates in 17 source markets and serves over 20 million customers annually. On the Beach was set up in 2004 and, err, still now employs less than one hundred staff.
But it is growing fast. Last year, it generated £104.1m in annual sales, up nearly 25% on the previous year and so a double-digit growth rate that Thomas Cook can only dream of. Which is why institutional investors have gone crazy for it. And why Macclesfield residents may need to get used to being in the limelight.