Prospectus.Pdf

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Your receipt of the attached document via electronic transmission is at your own risk, and it is your responsibility to take precautions to ensure that it is free from viruses and other items of a destructive nature. PROSPECTUS On the Beach PROSPECTUS

SEPTEMBER 2015 SEPTEMBER 2015 This document, which comprises a prospectus relating to On the Beach Group plc prepared in accordance with the Prospectus Rules made under section 73A of FSMA, has been approved by the FCA in accordance with section 87A of FSMA, and has been made available to the public in accordance with paragraph 3.2 of the Prospectus Rules. Applications have been made: (i) to the FCA for all of the issued and to be issued Shares to be admitted to the premium listing segment of the Official List; and (ii) to the London Stock Exchange for such Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities. Admission to trading on the London Stock Exchange’s main market for listed securities constitutes admission to trading on a regulated market. No application has been, or is currently intended to be, made for the Shares to be admitted to listing or trading on any other exchange. In the Offer, 46,739,130 Sale Shares are being offered by the Selling Shareholders for sale and 5,434,782 New Shares are being offered by the Company for subscription. Conditional dealings in the Shares are expected to commence on the London Stock Exchange at 8.00 a.m. on 23 September 2015. It is expected that Admission will become effective, and that unconditional dealings in the Shares will commence on the London Stock Exchange, at 8.00 a.m. on 28 September 2015 (International Security Identification Number: GB00BYM1K758). Dealings on the London Stock Exchange before Admission will only be settled if Admission takes place. All dealings before the commencement of unconditional dealings will be on a ‘‘when issued’’ basis, and will be of no effect if Admission does not take place, and such dealings will be at the sole risk of the parties concerned. The Company and its Directors (whose names appear on page 40 of this Prospectus) accept responsibility for the information contained in this Prospectus. To the best of the knowledge of the Company and the Directors (each of whom has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and contains no omission likely to affect the import of such information. Prospective investors are advised to examine all the risks that might be relevant in connection with an investment in the Shares. Prospective investors should read the entirety of this Prospectus, and in particular the section entitled Part 1: ‘‘Risk Factors’’, for a discussion of certain risks and other factors that should be considered in connection with any investment in the Shares. Prospective investors should be aware that an investment in the Company involves a degree of risk and that, if one or more of the risks described in this Prospectus were to occur, investors may find that their investment is materially and adversely affected. Accordingly, an investment in the Shares is only suitable for investors who are knowledgeable in investment matters and who are able to bear the loss of up to the whole or part of their investment.

ON THE BEACH GROUP PLC (incorporated under the Companies Act 2006 and registered in England and Wales with registered number 9736592) Prospectus Offer of 46,739,130 Sale Shares and 5,434,782 New Shares of £1.50 each at an Offer Price of 184 pence per Share Admission of all issued shares to the premium listing segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities Global Co-ordinator, Sponsor and Bookrunner Numis Securities Limited

Expected issued share capital immediately following Admission Number of Shares Aggregate nominal value of the Shares 130,434,763 £195,652,145

The Selling Shareholders are offering 46,739,130 Sale Shares in aggregate for sale under the Offer and the Company is offering up to 5,434,782 New Shares for subscription under the Offer. The New Shares will rank pari passu in all respects with the Sale Shares and will carry the right to receive all dividends and distributions declared, made or paid on or in respect of the Sale Shares after Admission. Numis Securities Limited (‘‘Numis’’) has been appointed as Global Co-ordinator, Sponsor and Bookrunner in connection with Admission and the Offer and is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else in connection with the Offer and Admission, and will not regard any other person (whether or not a recipient of this Prospectus) as a client in relation to the Offer and Admission and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for giving advice in relation to the Offer, Admission or any transaction, matter or arrangement referred to in this Prospectus. Apart from the responsibilities and liabilities, if any, that may be imposed on Numis by FSMA or the regulatory regime established under it, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, Numis and its affiliates do not accept any responsibility whatsoever for, or makes any representation or warranty, express or implied, as to the contents of this Prospectus or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Shares or the Offer and nothing in this Prospectus will be relied upon as a promise or representation in this respect, whether or not to the past or future. Numis and its affiliates accordingly disclaim all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this Prospectus or any such statement. Unless required to do so by law or regulation, the Company does not envisage publishing any supplementary prospectus or an update statement, as the case may be. Prior to making any decision as to whether to invest in the Shares, prospective investors should read this Prospectus in its entirety. In making an investment decision, each investor must rely on its own examination, analysis and enquiry of the Company and the terms of the Offer, including the merits and risks involved. Investors who subscribe for or purchase Offer Shares will be deemed to have acknowledged that: (i) they have not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this Prospectus or their investment decision; and (ii) they have relied only on the information contained in this Prospectus. No person has been authorised to give any information or make any representations other than those contained in this Prospectus and, if given or made, such information or representations must not be relied on as having been authorised by or on behalf of the Company, the Directors or Numis. Neither the delivery of this Prospectus nor any subscription, sale or purchase made under it shall, under any circumstances, create any implication that there has been no change in the business affairs of the Company or the Group since the date of this Prospectus, or that the information in this Prospectus is correct as of any time subsequent to its date. Recipients of this Prospectus are authorised solely to use this Prospectus for the purpose of considering an acquisition or subscription of the Shares, and may not reproduce or distribute this Prospectus, in whole or in part, and may not disclose any of the contents of this Prospectus or use any information in it for any purpose other than considering an investment in the Shares. Such recipients of this Prospectus agree to the foregoing by accepting delivery of this Prospectus. None of the Company, Numis or any of their respective representatives is making any representation to any prospective investor in the Shares regarding the legality of an investment in the Shares by such prospective investor under the laws applicable to such prospective investor. The contents of this Prospectus should not be construed as legal, financial or tax advice. Each prospective investor should consult his, her or its own legal, financial or tax adviser for legal, financial or tax advice.

NOTICE TO CERTAIN INVESTORS The Shares are subject to selling and transfer restrictions in certain jurisdictions. Prospective investors should read the restrictions described under paragraph 50 of Part 13: ‘‘Details of the Offer’’. Each investor in the Shares will be deemed to have made the relevant representations described in that paragraph. The distribution of this Prospectus and the Offer in certain jurisdictions may be restricted by law. Other than in the United Kingdom, no action has been or will be taken by the Company, the Selling Shareholders or Numis to permit a public offering of the Shares or to permit the possession or distribution of this Prospectus (or any other offering or publicity materials or application forms relating to the Shares). In particular, no actions have been taken to allow for a public offering of the Shares under the applicable securities laws of Australia, Canada, Japan, South Africa, New Zealand, Switzerland or the United States. Accordingly, neither this Prospectus nor any advertisement or any other offering material may be distributed or published in any jurisdiction except under circumstances that will result in compliance with all applicable laws and regulations. Persons into whose possession this Prospectus comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This Prospectus does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for, any securities in any jurisdiction to whom or in which such offer, invitation or solicitation is unlawful, and in particular is not for distribution in or into Australia, Canada, Japan, South Africa, New Zealand, Switzerland or the United States. The Shares have not been and will not be registered under the applicable securities laws of Australia, Canada, Japan or South Africa and, subject to certain exceptions, may not be offered or sold, directly or indirectly, in or into Australia, Canada, Japan or South Africa or to any resident thereof. The Company is not and will not be registered under the Investment Company Act. The Shares have not been and will not be registered under the Securities Act, or with any securities commission or regulatory authority or under the laws of any state or jurisdiction of the United States. Accordingly, the Shares will constitute ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) of the Securities Act, and may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in, into or from the United States except pursuant to a registration statement that has been declared effective under the Securities Act or in transactions exempt from, or not subject to, the registration requirements of the

ii Securities Act or any applicable state or local securities laws of the United States. The Shares are being offered and sold outside the United States in reliance on Regulation S under the Securities Act, and within the United States only to a person the seller and any person acting on behalf of the seller reasonably believes to be a QIB in reliance on Rule 144A. Prospective investors are hereby notified that sales of Shares may be made in reliance on an exemption from the provisions of Section 5 of the Securities Act. There will be no public offering of the Shares in the United States. The Shares have not been approved or disapproved by the US Securities and Exchange Commission, any state securities commission in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed upon or endorsed the merits of the offering of the Shares or the accuracy or adequacy of this Prospectus. Any representation to the contrary is a criminal offence in the United States. Neither the Company nor any of its subsidiaries is required to file periodic reports under Section 13 or Section 15(d) of the US Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). For so long as any Shares are ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) of the Securities Act, the Company will, during any period in which it is neither subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting pursuant to Rule 12g3-2(b) of the Exchange Act, provide, upon written request, to holders of Shares, any owner of any beneficial interest in Shares or any prospective purchaser designated by such holder or owner, the information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act. The enforcement by investors of civil liabilities under the US federal securities laws may be adversely affected by the fact that the Company is incorporated outside the United States, and that some of its directors, and the experts named herein, are residents of a foreign country. As a result, it may be difficult or impossible for investors to effect service of process within the United States upon the Company, its directors or the experts named herein, or to realise against them upon judgments of courts of the United States predicated upon civil liabilities under the federal securities laws of the United States or ‘‘blue sky’’ laws of any state within the United States. In addition, investors should not assume that the courts of the United Kingdom: (a) would enforce judgments of US courts obtained in actions against such persons predicated upon civil liabilities under the federal securities laws of the United States or ‘‘blue sky’’ laws of any state within the United States; or (b) would enforce, in original actions, liabilities against such persons predicated upon civil liabilities under the federal securities laws of the United States or ‘‘blue sky’’ laws of any state within the United States. All prospective purchasers of Shares are urged to consult with their own tax advisors concerning the US federal income tax considerations associated with acquiring, owning and disposing of Shares in light of their particular circumstances, as well as any considerations arising under the laws of any non-US state, local or other taxing jurisdiction.

INTERPRETATION Certain terms used in this Prospectus are defined in Part 16: ‘‘Definitions’’ and certain technical and other items are defined and explained in Part 17: ‘‘Glossary’’. All references to time in this Prospectus are to London time, unless otherwise stated.

iii TABLE OF CONTENTS

Page Part Summary information ...... 2 Part 1—Risk Factors ...... 16 Part 2—Presentation of Financial and Other Information ...... 36 Part 3—Directors, Secretary, Registered and Head Office and Advisers ...... 41 Part 4—Expected Timetable of Principal Events and Offer Statistics ...... 43 Part 5—Information on the Company and the Group ...... 44 Part 6—Directors, Senior Management and Corporate Governance ...... 64 Part 7—Reasons for the Offer, Use of Proceeds, Dividends and Dividend Policy ...... 69 Part 8—Regulation ...... 70 Part 9—Operating and Financial Review ...... 76 Part 10—Capitalisation and Indebtedness Statement ...... 93 Part 11—Historical Financial Information ...... 95 Part 12—Unaudited Pro Forma Financial Information ...... 136 Part 13—Details of the Offer ...... 141 Part 14—Taxation ...... 147 Part 15—Additional Information ...... 155 Part 16—Definitions ...... 188 Part 17—Glossary of Terms ...... 193

1 SUMMARY INFORMATION Summaries are made up of disclosure requirements known as ‘‘Elements’’. These Elements are numbered in Sections A to E (A.1 to E.7). This summary contains all the Elements required to be included in a summary for this type of securities and issuer. Because some Elements are not required to be addressed, there may be gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding that Element. In this case, a short description of the Element is included in the summary with the mention of ‘‘not applicable’’.

Section A—Introduction and warnings A.1 Warnings THIS SUMMARY SHOULD BE READ AS AN INTRODUCTION TO THIS PROSPECTUS. ANY DECISION TO INVEST IN THE SHARES SHOULD BE BASED ON CONSIDERATION OF THIS PROSPECTUS AS A WHOLE BY THE INVESTOR, INCLUDING IN PARTICULAR THE RISK FACTORS. Where a claim relating to the information contained in this Prospectus is brought before a court, the plaintiff investor might, under the national legislation of the member state of the European Economic Area, have to bear the costs of translating this Prospectus before the legal proceedings are initiated. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only if the summary is misleading, inaccurate or inconsistent when read together with the other parts of this Prospectus or it does not provide, when read together with other parts of this Prospectus, key information in order to aid investors when considering whether to invest in such securities.

A.2 Resale by Not applicable. The Company is not engaging any financial intermediaries Financial and has not given consent to the use of this Prospectus for subsequent Intermediaries resale or final placement of Shares by financial intermediaries.

Section B—Issuer B.1 Legal and The Company’s legal and commercial name is On the Beach Group plc. Commercial Name

B.2 Domicile; Legal The Company is a public limited company incorporated in England and form; Legislation; Wales under the Companies Act 2006 (the ‘‘Companies Act’’) with Country of registered number 9736592. It is domiciled in the United Kingdom. Incorporation

B.3 Issuer’s Current The Group is a leading online retailer of affordable short-haul beach Operations & holidays, primarily targeting customers in the United Kingdom under the Principal Activities ‘‘On the Beach’’ brand. The Group currently has a market share of the UK online short-haul beach holiday market of approximately 17 per cent. Its two largest competitors are TUI Travel and Thomas Cook (source: CAA, UK Short Haul Beach Online Estimates). The Group entered the Swedish market in early 2015, and in the short term intends to expand into Norway and/or Denmark.

2 Section B—Issuer The Group’s technology platform enables customers to package dynamically the constituent components of their holiday (including flights, hotels and transfers) to customise holidays from millions of flight and hotel combinations. The Group’s search facility connects customers to suppliers of travel products. Each travel product is booked separately. The Group’s dynamic packaging is different to the traditional package holidays offered by many tour operators, where packages of flights, hotels and other products are fixed by operators at the outset. The Group is completely independent from airlines and hotels, so that it can offer customers a full market range of flight and hotel products bookable through online channels (including by desktop, mobiles, tablets and apps) and over the phone.

B.4a Significant Trends UK short-haul beach holidays The UK dynamic packaging market in which the Group operates grew by a compound annual growth rate of 9.9 per cent. in the period from 2009 to 2014 (source: Euromonitor, Growth in Dynamic Packages). There has been an overall growth in short-haul holidays in the United Kingdom (defined as UK consumers travelling to destinations less than 6 hours flight from the UK mainland), with an overall decrease in long-haul holidays (source: Mintel, Package vs Independent Holidays UK, April 2015). The beach element of the holiday market is the most popular holiday type amongst UK consumers. Approximately 48 per cent. of UK holidaymakers who travel overseas have taken a beach holiday in the last 12 months, compared to 19 per cent. for city breaks, 15 per cent. for cultural/history breaks and 6 per cent. for cruises (sources: Mintel, Beach Holidays—UK, January 2015).

3 Section B—Issuer Online penetration of UK leisure package holidays Online penetration in the UK package holiday market has steadily increased from 48 per cent. in 2012 to 52 per cent. in 2014 and is forecast to reach 59.5 per cent. by 2019. The forecast compound annual growth rate for online package holiday sales in the United Kingdom is 2.1 per cent. in constant prices for the period from 2014 to 2019 (or 2.3 per cent. for the period from 2012 to 2019) (source: Euromonitor, Online Sales By Market). In the Netherlands and certain Scandinavian countries, online penetration in flights and hotels is already between 60 and 82 per cent. (source: Euromonitor, % Online Share for Air Only, Packages, Lodging Only) and the Board expects that online penetration of packaged holidays will continue to rise.

The European package holiday market Sales in the package holiday sector in Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Spain and Sweden amounted to EUR 55 billion in 2014. Online sales penetration in the same sector and markets is expected to grow from 26 per cent. in 2014 to 30 per cent. in 2018 (sources: Euromonitor, Offline and Online Intermediaries Sales by Market; Euromonitor, Online Intermediaries Sales by Market).

The Swedish market Package holiday sales in Sweden grew, on a compound annual growth rate basis of 1.5 per cent. between 2012 and 2014 to reach EUR 2,291 million in 2014. Offline value sales for package holidays saw a decrease of 7 per cent. in 2014. Online sales for package holidays, however, continued to grow, increasing by 1.5 per cent. in the same year. Online sales of package holidays accounted for EUR 1,543 million in 2014, which represented 67 per cent. of total travel intermediaries’ sales in Sweden for the year. Online package holiday value sales are projected to increase by 17 per cent. in Sweden between 2014 and 2018 (source: Euromonitor, Online Sales by Market).

Barriers to entry The Group focuses on a niche in the market between traditional tour operators and generalist OTAs. The Group has spent over 11 years developing and refining its business model to focus on enabling customers to dynamically package holidays to short-haul beach destinations through its sophisticated online platform. The Board believes this model would be difficult for competitors, be they new entrants, traditional tour operators, generalist OTAs or low-cost carriers, to replicate.

4 Section B—Issuer B.5 Group Structure Immediately prior to Admission, the Company will become the holding company of the Group, and the principal subsidiaries and subsidiary undertakings of the Company will be as follows:

Proportion of ownership Company Place of interests Name number incorporation (%) On the Beach Topco Limited(1)(3) ...... 08703800 United Kingdom 100 On the Beach Trustees Limited . 09118946 United Kingdom 100 On the Beach Bidco Limited(3) . 08703901 United Kingdom 100 On the Beach Travel Limited . . 06286904 United Kingdom 100 On the Beach Limited(2) ..... 03162982 United Kingdom 100 On the Beach Beds Limited . . . 06294605 United Kingdom 100 On the Beach Holidays Limited (dormant) ...... 04921509 United Kingdom 100

(1) Directly owned subsidiary. All other subsidiaries will be held indirectly. (2) On the Beach Limited has a Swedish trading division which has a corporate identity number of 516408-9186. (3) On the Beach Topco Limited and On the Beach Bidco Limited were both incorporated on 24 September 2013. There was no trade or any other transaction within either entity prior to the Acquisition of the Group on 4 October 2013.

B.6 Notifiable As at the date of this Prospectus, to the extent known by the Company, the Interests Company is owned or controlled by Inflexion, which holds 100 per cent. of the voting rights attached to the issued share capital of the Company. Immediately following Admission, to the extent known by the Company, it is expected that the following persons will be interested (directly or indirectly) in 3 per cent. or more of the Company’s issued ordinary share capital:

% of issued ordinary Name of Shareholder No. of Shares share capital % of voting rights Inflexion ...... 48,432,801 37.1 37.1 Simon Cooper ...... 14,163,688 10.9 10.9 Schroder Investment Management ...... 11,500,000 8.8 8.8 Hargreave Hale Ltd . . . 6,000,000 4.6 4.6 River & Mercantile Asset Management LLP...... 6,000,000 4.6 4.6 The Independent Investment Trust PLC 5,150,000 3.9 3.9 Newton Inv Management Ltd .... 4,750,000 3.6 3.6 Alistair Daly ...... 4,149,943 3.2 3.2 Jonathan Smith ...... 4,149,943 3.2 3.2 Wendy Parry ...... 4,149,943 3.2 3.2 The Company and Inflexion are parties to a relationship agreement (the ‘‘Relationship Agreement’’) that will become effective upon Admission. Following Admission, no Shareholder will have any special voting rights over any Shares, and all Shares will rank pari passu in all respects with all other Shares.

5 Section B—Issuer B.7 Financial The tables below set out summary financial information of the Group for Information the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Combined and consolidated income statement

9m to June 30 September 30 September 30 September 2014 9m to June 2012 2013 2014 (unaudited) 2015 £’000 £’000 £’000 £’000 £’000 Total transaction value* 230,931 280,888 359,831 270,939 354,607 Revenue ...... 30,972 37,548 45,768 33,863 48,250 Administrative expenses before amortisation and exceptional costs . . . (21,954) (26,266) (32,979) (24,505) (34,815) Group operating profit before amortisation and exceptional costs 9,018 11,282 12,789 9,358 13,435 Exceptional costs .... — — (3,724) (3,663) — Amortisation of intangible assets . . . (888) (958) (5,312) (3,962) (4,191) Group operating profit 8,130 10,324 3,753 1,733 9,244 Finance costs ...... (196) (14) (1,735) (1,378) (1,401) Interest on shareholder loans ...... (3,969) (4,759) (6,961) (5,108) (5,830) Finance income ..... 93 227 154 91 125 Net finance costs .... (4,072) (4,546) (8,542) (6,395) (7,106) Profit/(loss) before taxation ...... 4,058 5,778 (4,789) (4,662) 2,138 Taxation ...... (1,733) (2,340) (962) (952) (1,125) Profit/(loss) and total comprehensive income for the year/ period ...... 2,325 3,438 (5,751) (5,614) 1,013 Earnings per share (expressed in pence per share): Basic and diluted earnings per share . . 177p 262p (438)p (428)p 76p

* This is a non-GAAP measure.

6 Section B—Issuer Combined and consolidated balance sheet

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Assets Non-current assets Intangible assets ...... 28,380 28,501 71,854 69,125 Property, plant and equipment . . . 339 579 656 652 Deferred tax ...... 525 135 — — Total non-current assets ...... 29,244 29,215 72,510 69,777 Current assets Trade and other receivables ..... 7,587 15,003 24,734 66,884 Other financial assets ...... — — 65 9 Cash and cash equivalents ...... 27,154 33,321 31,003 62,125 Total current assets ...... 34,741 48,324 55,802 129,018 Total assets ...... 63,985 77,539 128,312 198,795 Equity Share capital ...... — — 395 470 On the Beach Travel Limited invested capital ...... (1,891) 1,547 — — Retained deficit ...... — — (5,751) (4,738) Equity shareholder funds ...... (1,891) 1,547 (5,356) (4,268) Total (deficit)/equity ...... (1,891) 1,547 (5,356) (4,268) Non-current liabilities Loans and borrowings ...... (39,211) — (79,065) (82,719) Deferred tax ...... — — (9,668) (8,937) Total non-current liabilities ..... (39,211) — (88,733) (91,656) Current liabilities Corporation tax payable ...... (1,126) (660) (832) (1,490) Derivative financial instruments . . (92) (299) (689) (3,411) Loans and borrowings ...... (1,981) (43,903) (3,140) (3,140) Trade and other payables ...... (23,466) (31,130) (40,274) (103,366) Total current liabilities ...... (26,665) (75,992) (44,935) (111,407) Total liabilities ...... (65,876) (75,992) (133,668) (203,063) Total equity and liabilities ..... 63,985 77,539 128,312 198,795

Certain significant changes to the Group’s financial position and trading results occurred during the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015. These changes are set out below: The Group’s operations are principally in the United Kingdom, which in the financial year ended 30 September 2014, accounted for over 99 per cent. of the Group’s bookings. The Group’s TTV in the UK Segment was £358.3 million for the year ended 30 September 2014. For the nine month period ended 30 June 2015, TTV in the United Kingdom was £350.4 million, which is an increase of 29.8 per cent. from the nine month period ended 30 June 2014. The Group’s TTV in the International Segment (from the Group’s Swedish website sales) for the year ended 30 September 2014 was £1.6 million. For the nine month period ended 30 June 2015, the TTV was £4.2 million, compared to TTV of £1.1 million in the nine month period ended 30 June 2014.

7 Section B—Issuer The Group’s EBITDA in the UK Segment increased from £9.9 million for the year ended 30 September 2012 to £14.1 million for the financial year ended 30 September 2014. The growth in the year ended 30 September 2014 was suppressed by the Group’s investment of £1.0 million in offline advertising and set up costs for the Group’s direct contracting function. This investment has, however, led to accelerated growth in the nine month period ended 30 June 2015, with nine month year-on-year growth in EBITDA in the United Kingdom of 48.6 per cent. (from £10.4 million in the nine month period ended 30 June 2014 to £15.4 million in the nine month period ended 30 June 2015). There has been no significant change in the financial position or trading results of the Group since 30 June 2015.

B.8 Pro Forma The unaudited pro forma net assets statement set out below has been Information prepared to illustrate the effects of the offer, Reorganisation and re-financing on the consolidated net assets of the Group, had the offer, Reorganisation and re-financing taken place as at 30 June 2015. The pro forma net asset statement has been prepared for illustrative purposes only in accordance with Annex II of the Prospectus Rules. Because of its nature, such statement addresses a hypothetical situation, and therefore does not represent the Group’s financial position or results on 30 June 2015. The unaudited pro forma statement of net assets is based on the combined and consolidated balance sheet of the Group as at 30 June 2015. No account has been taken of any results or other activity since 30 June 2015.

Net proceeds of Group as at the Offer Unaudited 30 June receivable by Pro Forma 2015 the Company Reorganisation Re-financing Total £’000 £’000 £’000 £’000 £’000 Assets Non-current assets Intangible assets ...... 69,125 — — — 69,125 Property, plant and equipment ...... 652 — — — 652 Total non-current assets ...... 69,777 — — — 69,777 Current assets Trade and other receivables ...... 66,893 — — — 66,893 Cash and cash equivalents ...... 62,125 6,408 (3,082) (6,978) 58,473 Total current assets ...... 129,018 6,408 (3,082) (6,978) 125,366 Total assets ...... 198,795 6,408 (3,082) (6,978) 195,143

Non-current liabilities Shareholder loans ...... (68,881) — 68,881 — — External bank debt ...... (13,838) — — 13,838 — Deferred tax liability ...... (8,937) — — — (8,937) Total non-current liabilities ...... (91,656) — 68,881 13,838 (8,937) Current liabilities External bank debt ...... (3,140) — — (6,860) (10,000) Current income tax liabilities ...... (1,490) — — — (1,490) Other financial liabilities ...... (3,411) — — — (3,411) Trade and other payables ...... (103,366) — — — (103,366) Total current liabilities ...... (111,407) — — (6,860) (118,267) Total liabilities ...... (203,063) — 68,881 6,978 (127,204) Net assets ...... (4,268) 6,408 65,799 — 67,939

8 Section B—Issuer B.9 Profit Estimate Not applicable. This Prospectus does not include any profit forecasts or estimates.

B.10 Audit Report Not applicable. There are no qualifications in any audit report on the Qualifications historical financial information included in this Prospectus.

B.11 Insufficiency of Not applicable. The Company is of the opinion that, taking into account Working Capital the net proceeds receivable by the Company from the Offer and the bank facilities available to the Company and the Group (which reference to ‘‘Group’’ for the purposes of this paragraph includes the Company following completion of the Reorganisation), the working capital available to the Company and the Group is sufficient for the Company’s and the Group’s present requirements, that is, for at least the next 12 months following the publication of this Prospectus.

Section C—Securities C.1 Securities Offered The Offer comprises an offering to certain institutional and other investors of up to 5,434,782 New Shares and 46,739,130 Sale Shares (together, the ‘‘Offer Shares’’). When admitted to trading, the Shares will have an ISIN Number of GB00BYM1K758, SEDOL number BYM1K75 and will trade under the symbol ‘‘OTB’’.

C.2 Currency The Shares will be denominated in pounds sterling.

C.3 Issued Shares As at the date of this Prospectus, the issued share capital of the Company is £50,000, divided into one ordinary share of £1 and one redeemable preference share of £49,999. The nominal value of the total issued share capital of the Company immediately following Admission will be £195,652,145, divided into 130,434,763 Shares of £1.50 each. All Shares in issue on Admission will be fully paid.

C.4 Rights The Shares will rank pari passu in all respects with each other, including for voting and dividend rights and rights on a return of capital. Subject to the provisions of the Companies Act, any equity securities issued by the Company for cash must first be offered to Shareholders in proportion to their holdings of Shares. The Companies Act and the Listing Rules allow for the disapplication of pre-emption rights which may be waived by a special resolution of the Shareholders, either generally or specifically, for a maximum period not exceeding five years. Except in relation to dividends which have been declared and rights on a liquidation of the Company, the Shareholders have no rights to share in the profits of the Company. The Shares are not redeemable. However, the Company may purchase or contract to purchase any of the Shares on- or off-market, subject to the Companies Act and the requirements of the Listing Rules.

C.5 Restrictions on Not applicable. The Shares are freely transferable and there are no Transferability restrictions on transfer.

9 Section C—Securities C.6 Application for Application has been made to the FCA for the Shares to be admitted to Admission the premium listing segment of the Official List of the FCA and to the London Stock Exchange for the Shares to be admitted to trading on the London Stock Exchange’s main market for listed securities. No application has been made or is currently intended to be made for the Shares to be admitted to listing or trading on any other exchange.

C.7 Dividend Policy Whilst the Group operates a highly cash generative business model, the Board intends for the significant majority of profits to be reinvested in the business to support further growth. The Board intends to declare its first dividend in respect of the year ended 30 September 2016. Thereafter, the Group will adopt a progressive dividend policy.

Section D—Risks D.1 Key Information Difficult macroeconomic circumstances in the United Kingdom could reduce on the Key Risks demand for the Group’s products. (Company & In the year ended 30 September 2014, customers in the United Kingdom Industry) accounted for approximately 99 per cent. of the Group’s bookings. Accordingly, changes in the demand for travel products or difficult macroeconomic circumstances in the United Kingdom could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group operates in an increasingly competitive environment. The Group operates in the highly competitive travel industry and competes with a variety of companies, including established and emerging online and traditional retailers of travel-related services. Currently, these direct competitors include, among others, traditional travel agencies and tour operators, other OTAs, travel suppliers (such as airlines, hotel companies and tour operators), metasearch companies, online portals and search engines. If the Group is unable to respond effectively to competition, this could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group is dependent on key personnel and its ability to attract skilled senior personnel. The success of the Group will depend upon the performance and expertise of its current and future senior management, each of whom has significant relevant experience within the online/travel retail segments. An inability to hire, train and retain a sufficient number of qualified employees could materially hinder the Group’s business by, for example, delaying its ability to bring new products and services to market or impairing the success of its operations. Even if the Group is able to maintain its employee base, the resources needed to attract and retain such employees, as well as to update their skills as the technological demands of the Group’s industry change, may adversely affect its profits, growth and operating revenue.

10 Section D—Risks The Group may be unable to innovate to provide functionality that consumers demand and keep up with rapid technological changes. The Group’s success depends on its ability to innovate and to provide functionality that makes its websites and mobile apps user-friendly for customers. The Group must continue to invest significant resources in research and development to improve the speed, accuracy and comprehensiveness of its products. If the Group is unable to continue offering innovative products, it may be unable to attract additional consumers or retain its current consumers, which could have a material adverse effect on its business, results of operations, financial condition and prospects.

The Group may be unable to adapt its IT infrastructure to technological developments or industry trends. The Group depends on the use of sophisticated information technologies and systems. Delays or difficulties in implementing new or enhanced systems may keep the Group from achieving the desired results in a timely manner, to the extent anticipated, or at all, and the Group may also be unable to devote adequate financial resources to develop or acquire new technologies and systems in the future, which could have a material adverse effect on its business, results of operation, financial condition and prospects.

11 Section D—Risks The Group relies on the strength of its brand, which can be affected by the actions of the Group’s suppliers. The Group’s brand, image and reputation are important to its business. Any negative event, such as a poor quality of products being provided by the Group’s travel suppliers, that do not meet customers’ expectations, or the failure to reimburse for products not effectively provided, often leads to customer complaints which can result in damage to the Group’s image, reputation or brand. In addition, failure to use appropriate promotion and marketing channels could adversely affect its business, financial condition and results of operations.

Certain third parties may seek to hinder or block the Group’s access to their websites. The Group aggregates data from various sources to build a cache of flight inventory. The Group does not have relationship agreements with certain airlines, but is currently able to use technology to access such suppliers’ products and then present certain flight inventory to its customers. From time to time, certain third-parties have sought to hinder or block the Group’s (and other OTAs’) access to their websites using technological, legal or other means and may do so in the future. If the Group’s access to flight inventory data is limited by these or similar actions, its offering may be less extensive, which could have a material adverse effect on its business, financial condition, results of operations and prospects.

The Group is one of several OTAs involved in litigation with Ryanair in connection with Ryanair’s efforts to prevent OTAs from booking and selling its flights. The Group generates a significant amount of its business from the booking of Ryanair flights. Ryanair does not allow OTAs to integrate their flight booking system with its own and, in 2008, Ryanair began to take action against OTAs including OTB Limited in an attempt to enforce its distribution policy. These legal proceedings allege infringement of the terms of use of the Ryanair website, infringement of Ryanair’s intellectual property rights in its trademarks and database and unfair commercial practices. It has taken five years from issue of proceedings to reach a final decision on jurisdiction. The Group expects that the Irish proceedings, including any appeal, may not be resolved until 2018/19, but that EU-related aspects of the claim mean that if a reference to the European Court of Justice is necessary, the final resolution of this case may not be until 2021. Litigation is unpredictable. The foregoing time estimate is subject to unexpected applications, appeals or other delays which could mean that the final resolution of the dispute might take until 2022 or later. The Group cannot assure prospective investors that it will prevail in these proceedings and, if Ryanair were to prevail, this could have a material adverse effect on the Group’s business, financial condition and results of operations.

D.3 Key Information Trading market for the Shares on the Key Risks The share price of newly listed companies can be highly volatile and (Shares) shareholdings illiquid. The market price of the Shares may be subject to wide fluctuations in response to many factors, some specific to the Group and its operations and others to the broader equity markets in general. In addition, stock markets have from time to time experienced extreme price and volume fluctuations which could adversely affect the market price of the Shares.

12 Section D—Risks Future sales of Shares could cause the Share price to fall. Sales of Shares by significant investors could depress the market price of the Shares. A substantial amount of Shares being sold, or the perception that sales of this type could occur, could also depress the market price of the Shares. Both scenarios may make it more difficult for Shareholders to sell the Shares at a time and price that they deem appropriate.

The Company may in the future issue new Shares, which may dilute Shareholders’ equity. The Company has no current plans to issue more equity. It may, however, decide to do so in the future. If pre-emption rights in the Articles are disapplied, any additional equity financing may be dilutive to those Shareholders who cannot, or choose not to, participate in such financing.

Section E—Offer E.1 Net Proceeds & Through the sale of the Sale Shares pursuant to the Offer, it is expected Expenses that the Selling Shareholders will receive net proceeds of approximately £83,849,999. Additionally, the issue of 5,434,782 New Shares by the Company is expected to raise approximately £6.4 million of net proceeds for the Company (after deducting underwriting commissions and other estimated Offer-related fees and expenses of approximately £2.7 million). Other than in respect of expenses of, or incidental to, Admission and the Offer which will be paid by the Company, there are no commissions, fees or expenses to be charged to investors by the Company or the Selling Shareholders under the Offer.

E.2a Reasons for The Board believes that the Offer and Admission will position the Group Offer & Use of for its next stage of development, including further raising the profile of Proceeds the Group, assisting in retaining and incentivising employees and providing it with a structure for future growth. Admission will also enable the Selling Shareholders to partially realise their investment in the Company. No proceeds of the offer of Sale Shares will be received by the Company. The majority of the gross proceeds of the offer of New Shares will be used by the Company to fund expenses associated with the Offer, including paying the Exit Fee to Inflexion 2010 General Partner Guernsey LP pursuant to the Investment Agreements. It is estimated that the Exit Fee will be £902,656. The net proceeds of approximately £6.4 million will be used to repay accrued interest on loan notes of approximately £3.6 million, with the remainder being used for general working capital purposes.

E.3 Terms & The Offer comprises an offer of 46,739,130 Sale Shares to be sold and Conditions 5,434,782 New Shares to be issued at a price of £1.84 each. Under the Offer, the Offer Shares are being offered for sale or subscription (as appropriate) to certain institutional and other investors in the United Kingdom and elsewhere outside the United States in reliance on Regulation S under the Securities Act, and in the United States only to QIBs in reliance on Rule 144A or another exemption from the registration requirements under the Securities Act.

13 Section E—Offer Admission is expected to become effective, and dealings in the Shares are expected to commence on the London Stock Exchange, at 8.00 a.m. on 28 September 2015. The Offer is subject to the satisfaction of conditions contained in the Underwriting Agreement. These conditions include those which are customary for transactions of this type, including Admission becoming effective by no later than 8.00 a.m. on 28 September 2015 (or such later time and/or date as the Company and Numis may agree, not being later than 8.00 a.m. on 1 October 2015) and the Underwriting Agreement not having been terminated prior to Admission. None of the Offer Shares may be offered for subscription, sale or purchase or be delivered, or be subscribed, sold or delivered, and this Prospectus and any other offering material in relation to the Offer Shares may not be circulated, in any jurisdiction where to do so would breach any securities laws or regulations of any such jurisdiction or give rise to an obligation to obtain any consent, approval or permission, or to make any application, filing or registration.

E.4 Material Interests There are no interests known to the Company that are material to the Offer or Admission or which are conflicting interests.

E.5 Selling Selling Shareholders Shareholders/ 46,739,130 Sale Shares will be sold by the Selling Shareholders pursuant to Lock-up the Offer (representing approximately 35.8 per cent. of the issued share arrangements capital of the Company following Admission). The Offer will provide the Selling Shareholders with a partial realisation of their investment in the Company.

Lock-up arrangements Pursuant to the terms of the Underwriting Agreement, the Executive Directors and certain persons connected with them and Inflexion have agreed to certain lock-up restrictions in respect of the Shares that will be held by them following Admission. The Executive Directors and certain persons connected with them are subject to a 12 month lock-up period following Admission, and Inflexion is subject to a lock-up period ending the longer of six months from the date of Admission or the date of publication of the audited financial results of the Company for the year ended 30 September 2015, during which time they may not dispose of any interest in their Shares. Pursuant to their respective lock-up arrangements, the Executive Directors and certain persons connected with them and Inflexion have agreed that, for a further six month period following the expiry of their lock-up periods referred to above, they will not dispose of any Shares or interests in Shares other than through Numis with a view to maintaining an orderly market in the Company’s securities. All lock-up arrangements and orderly market arrangements are subject to certain customary exceptions.

E.6 Dilution The New Shares will represent approximately 4.2 per cent. and the Sale Shares will represent approximately 35.8 per cent. of the expected enlarged issued share capital of the Company immediately following Admission.

14 Section E—Offer E.7 Expenses charged Not applicable. Other than in respect of expenses of, or incidental to, to investors Admission and the Offer which will be paid by the Company, there are no commissions, fees or expenses to be charged to investors by the Company or the Selling Shareholders under the Offer.

15 PART 1 RISK FACTORS Investing in and holding Shares involves financial risk. Prospective investors in the Shares should carefully review all of the information contained in this Prospectus and should pay particular attention to the following risks associated with an investment in the Shares, the Group’s business and the industry in which it participates. The risk factors set out below apply to the Company and Group as at the date of this document. For the purposes of this Part 1, the term ‘‘Group’’ includes the Company following completion of the Reorganisation. Prospective investors should note that the risks relating to the Group’s business, its industry and the Shares summarised in the section of this Prospectus headed ‘‘Summary Information’’ are the risks that the Company believes to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Shares. However, as the risks which the Group faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on key risks summarised in the section of this Prospectus headed ‘‘Summary Information’’ but also, among other things, the risks and uncertainties described below. The risks and uncertainties described below are not an exhaustive list and do not necessarily comprise all, or explain all, of the risks associated with the Group and the industry in which it participates or an investment in the Shares. They comprise the material risks and uncertainties in this regard that are known to the Company and should be used as guidance only. Additional risks and uncertainties relating to the Group and/or the Shares that are not currently known to the Company, or which the Company currently deems immaterial, may arise or become (individually or collectively) material in the future, and may have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. If any such risk or risks should occur, the price of the Shares may decline and investors could lose part or all of their investment. Prospective investors should consider carefully whether an investment in the Shares is suitable for them in the light of the information in this Prospectus and their personal circumstances. Prospective investors should consult a legal adviser, an independent financial adviser or a tax adviser for legal, financial or tax advice if they do not understand any part of this Prospectus.

RISKS RELATED TO THE GROUP’S BUSINESS The Group generates most of its revenue from customers in the United Kingdom. Difficult macroeconomic circumstances in the United Kingdom could reduce demand for the Group’s products. In the year ended 30 September 2014, customers in the United Kingdom accounted for approximately 99 per cent. of the Group’s bookings. Accordingly, changes in the demand for travel products in the United Kingdom, including as a result of the factors discussed elsewhere in these risk factors, could have a material adverse effect on the Group’s overall results. For example, if difficult macroeconomic circumstances in the United Kingdom cause a sustained and/or significant fall in the demand for travel products, it may have a material adverse effect on the Group’s business, financial condition and results of operations. See also the risk factor entitled ‘‘Declines or disruptions in the overall level of leisure travel activity due to a downturn in discretionary spending levels may reduce demand for the Group’s offering’’.

The Group operates in an increasingly competitive environment. The Group, whose business consists primarily of its travel websites, operates in the highly competitive travel industry, of which the Group’s core market is short-haul beach holidays for UK customers. Factors affecting the competitive success of the Group’s business include the prices it offers consumers, the availability of travel supply (e.g. flights to and hotels in the relevant beach holiday destinations), brand recognition, its ability to attract new customers at reasonable acquisition costs, customer service, ease of use, fees charged to travellers, accessibility and reliability. The Group competes with a variety of companies, including established and emerging online and traditional retailers of travel-related services. Currently, these direct competitors include, among others: • traditional travel agencies and tour operators, including pan-European brands Thomas Cook (‘‘TC’’) and TUI; • other online travel agents (‘‘OTAs’’); • travel suppliers, such as airlines, hotel companies and tour operators, many of which have their own branded websites, in addition to their retail outlets; and • metasearch companies, online portals and search engines.

16 Traditional travel agencies and tour operators: TC and TUI are the leading market players which have an interest in, in aggregate, two-thirds of the UK market for package holidays. In the face of stiff competition from OTAs, traditional tour operators continue to experiment with their mix of online platforms and high-street retail outlets and have the financial resources to invest and expand their online and mobile sales channels. OTAs: The Group faces competition from other OTAs, such as Travel Republic and lowcostholidays, which in some cases may offer more attractive products for both travellers and suppliers, offer products on more favourable terms, such as lower prices (including as a result of accepting lower operating revenue), increased or exclusive product availability, absence of fees or more favourable connectivity and inventory. These more favourable terms could make the offerings of other OTAs more attractive to consumers than the Group’s. In the Scandinavian markets into which the Group is expanding, there are incumbent OTAs that are already established in the relevant market. The Group also faces competition from Expedia, an OTA which offers its customers single element products (e.g. flight only) and packaged holidays (e.g. flight and hotel combined) to a range of holiday destinations, including beach destinations, city breaks and cottage hire (which is differentiated from the Group, which specialises in dynamically packaged beach holidays). Travel suppliers: Many airline operators and hotel suppliers, including suppliers with which the Group conducts business, have been increasingly focusing on increasing online demand on their own websites rather than relying on third-party distributors such as OTAs, including the Group’s own website. For example, certain low-cost carriers (such as Ryanair), which have gained segment share at the expense of network carriers, seek to distribute their online supply exclusively through their own websites. Other travel suppliers may seek to limit the Group’s access to their products to create, distribute and promote on specific distribution channels custom-made offers based on their own products. Where there is no relationship agreement, the Group cannot assure prospective investors that the Group’s Direct Connect technology will continue to enable it to access such products. In addition, travel suppliers who sell on their own websites may offer products and services on more favourable terms, including lower prices, increased or exclusive product availability, all-in packages combining airline, hotel and/or car rental products, absence of fees or unique access to which could make their offerings more attractive to consumers than the Group’s. Metasearch companies, online portals and search engines: The activities of online travel metasearch sites, such as Kayak, Skyscanner, Trivago, Travelsupermarket and Momondo, which utilise their search technology to aggregate travel search results across travel supplier, OTA and other websites as well as similar services offered by large online portal and search companies, such as Google and Yahoo! affect the markets in which the Group operates. Whilst the Group does not view metasearch companies and search engines as direct competitors as the majority do not currently allow customers to book a dynamically packaged holiday (but rather single element products (e.g. flights or hotels only)) and typically no bookings are made through their websites, this could change. In addition, metasearch companies and search engines may merge, or develop a successful metasearch holiday offering (rather than single element), which would change the distribution channels from which the Group would sell its holidays. Furthermore, large established internet search engines with substantial resources, expertise in developing online commerce and facilitating internet traffic and brand recognition are creating (and the Company expects them to continue to create) inroads into the online travel channel, as evidenced by recent technological innovations and proposed and actual acquisitions by companies such as Google or Microsoft. For example, in July 2010 Google acquired ITA Software, a US-based flight information software company. The next year, Google launched ‘‘Google Flights’’ in the United States, an enhanced single element metasearch flight tool offering access directly on its search engine to a large inventory of travel products, including from GDS operators, but excluding OTA search results. Google Flights was partially launched in Europe in 2013 and, despite Google’s agreement in February 2014 to comply with certain requirements against the background of antitrust proceedings against Google pending before the European Commission, the Group cannot assure prospective investors that Google or other competitors will not roll out this service or similar services. These activities could result in increased competition from supplier websites and higher customer acquisition costs for OTAs. If any of the above were to occur, and the Group were unable to respond effectively, it could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

17 The Group is dependent on key personnel and its ability to attract skilled senior personnel. The success of the Group will depend upon the performance and expertise of its current and future senior management, each of whom has significant relevant experience within the online/travel retail segments. The Group cannot assure prospective investors that they will continue to serve in their current roles. The departure of key personnel from the Group without an adequate replacement may have a material adverse effect on the Group’s business, results of operations, financial condition or prospects. Competition for well-qualified employees in certain aspects of the Group’s business, including senior management, software engineers, developers, marketing and supplier relationship managers and other business, finance and technology professionals remains intense. Staff with the specialised skills the Group requires are difficult and time-consuming to recruit and, as a result, such skills can be in short supply. The Group typically needs a long time to hire and train replacement personnel, and it takes time for newly recruited specialists to learn the Group’s systems and business before they become productive. An inability to hire, train and retain a sufficient number of qualified employees could materially hinder the Group’s business by, for example, delaying its ability to bring new products and services to market or impairing the success of its operations. Even if the Group is able to maintain its employee base, the expenditure of resources needed to attract and retain such employees, as well as to update their skills as the technological demands of the Group’s industry change, may adversely affect its profits, growth and operating revenue.

The Group may be unable to innovate to provide functionality that consumers demand and keep up with rapid technological changes. The Group’s success depends on its ability to innovate and to provide functionality that makes its websites and mobile apps user-friendly for customers. The Group regularly adapts travel related products and features. The Group’s technology needs to keep up with changes in its suppliers’ websites and inventory. For example, airlines are increasingly selling flights on an unbundled basis, whereby an airline charges separately for the component parts of a flight (seat type/seat selection, tax, luggage and so forth) separately. This industry trend affects the Group’s Direct Connect products in particular, and requires the Group to adapt its technology to keep pace with these new pricing features. The Group must continue to invest significant resources in research and development to improve the speed, accuracy and comprehensiveness of its products. If the Group is unable to continue offering innovative products, it may be unable to attract additional consumers or retain its current consumers, which could have a material adverse effect on its business, results of operations, financial condition and prospects. Some of the Group’s current and potential competitors, including large traditional travel service providers, have longer operating histories, larger customer bases, greater brand recognition and/or significantly greater financial, marketing, personnel, technical and other resources than the Group does, and may be better placed to invest in (although not necessarily better able to exploit) rapid technological changes. The Group’s current and potential competitors may develop technology similar to or better than the Group’s which could result in it losing its competitive advantage over time and negatively affect the Group’s overall competitive position. Increased competition may result in reduced operating revenue, as well as loss of market share, brand recognition and competitiveness, which could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group may be unable to adapt its IT infrastructure to technological developments or industry trends. The Group depends on the use of sophisticated information technologies and systems, including customised in-house technology and systems used to attract customers to its websites, for website visability, mobile apps, product building and pricing, reservations, customer service, internal and external communications, procurement, payments, fraud detection, administration and reporting. As its operations grow in size, scope and complexity, the Group must continuously improve and upgrade its systems and infrastructure to offer an increasing number of travellers enhanced products, features and functionalities, while maintaining the reliability and integrity of its systems and infrastructure. Expanding the Group’s systems and infrastructure to meet any projected increases in business volume may require it to commit substantial financial, operational and technical resources before those increases materialise, with no assurance that they actually will. Furthermore, delays or difficulties in implementing new or enhanced systems may keep the Group from achieving the desired results in a timely manner, to the

18 extent anticipated, or at all, and the Group may also be unable to devote adequate financial resources to develop or acquire new technologies and systems in the future which could have a material adverse effect on its business, results of operation, financial condition and prospects.

The Group may fail to address the challenges presented by recent trends in social media, consumer adoption and use of mobile devices. In recent years, use of social media websites, such as Facebook.com (‘‘Facebook’’) and mobile devices including smartphones and tablets have become increasingly prevalent. The emergence of mobile platforms has led to increasing use by consumers of standalone mobile applications or ‘‘apps’’ to research and book travel. In addition, Facebook has launched enhanced search functionality for data included within its website, which may develop into alternative research resources for travellers. In addition, social media websites may also introduce new dynamics into the competitive landscape. For example, consumers may more easily share reviews with other users of social media websites, which may ultimately be spread among a very large number of actual and potential customers. The Group may have limited ability to control the dissemination of, or respond to, in particular unfavourable customer reviews, which may significantly harm the Group’s reputation in the markets in which it operates. The trends in consumer adoption and use of mobile devices (i.e. smartphones and tablets) also create new challenges for the Group’s business in terms of developing new platforms and optimising the customer experience across multiple devices. Furthermore, given the device sizes and technical limitations of mobile devices, mobile consumers may not be willing to download multiple apps from multiple travel service providers, and instead prefer to use one or a limited number of apps for their mobile travel activity. As a result, the consumer experience with mobile apps as well as brand recognition and loyalty are likely to become increasingly important. The Group believes that it will be increasingly important for it to effectively offer its products through mobile apps and on mobile optimised websites on smartphones and tablets and to integrate the customer experience across the multiple devices that customers may use to access the Group’s products. As a result, the Group intends to continue to spend significant resources maintaining, developing and enhancing its websites, including its mobile optimised websites, and its mobile apps and other technology. If the Group is unable to continue to innovate rapidly and create new, user-friendly and differentiated mobile offerings and efficiently and effectively advertise and distribute on these platforms, or if the Group’s mobile apps are not downloaded and used by travel consumers, the Group could lose market share to existing competitors or new entrants, and its future growth and results of operations could be adversely affected. Moreover, the consumer shift to mobile devices could enable device companies that have substantial market shares in the mobile devices industry and that control the operating systems of these devices, such as Apple’s iOS and Google’s Android, to compete directly with the Group. Apple and Google have more experience producing and developing mobile apps and have access to greater resources than the Group. To the extent Apple or Google use their mobile operating systems or app distribution channels to favour any such travel service offerings of their own, the Group’s business could be adversely affected. If the Group does not remain competitive on this front, it may lose market share as customers increasingly make their bookings on mobile devices.

The Group may be unable to protect its intellectual property effectively from misappropriation by others, including current or potential competitors. The Group’s success and ability to compete depend, in part, upon its technology and other intellectual property, including its brand. The Group’s websites rely on content and technology intellectual property, much of which the Group regards as proprietary. The Group protects its logo, brand name, websites’ domain names and its content and proprietary technology by relying on domain names, trademarks, copyrights, trade secret laws and confidentiality agreements. However, not all of the Group’s intellectual property has been or can be protected by registration. If someone else were to copy or otherwise obtain and use the Group’s proprietary technology or content without its authorisation or to develop similar technology independently, the Group’s competitive advantage based on its technology could be threatened. In addition, effective trademark, copyright, patent and trade secret protection may not be available in every jurisdiction in which the Group competes. Policing unauthorised use of the Group’s proprietary information is difficult and expensive. As the Group expands to new jurisdictions, some of which may have less robust protections for intellectual property, the cost of protecting, and the risk of third-party infringement of, its intellectual property increases.

19 The Group cannot assure prospective investors that the steps it takes will in all instances preserve its ability to enforce its intellectual property rights or prevent unprotected disclosure or misappropriation of its proprietary information. Unauthorised use and misuse of the Group’s intellectual property or disclosure of its proprietary information could have a material adverse effect on its business, financial condition and results of operations. In addition, although the Group seeks to protect its intellectual property through confidentiality or non-disclosure agreements and agreements not to compete with the Group, these agreements typically have terms that end after several years. Furthermore, the Group may need to go to court or other tribunals to enforce its intellectual property rights, to protect its trade secrets or to determine the validity and scope of the proprietary rights of others. The legal remedies available to the Group may not adequately compensate the Group for the damages caused by unauthorised use, which could have a material adverse effect on its business, financial condition and results of operations.

The Group relies on the strength of its brand, which may be affected by the actions of the Group’s suppliers. The Group’s brand, image and reputation are important to its business. The Group’s success over the years has largely depended on its ability to develop its brand and image as one of the leading online beach holiday companies in the United Kingdom. Consumers expect that the Group will offer a large selection of high quality travel products at low prices and this reputation has strengthened its image and brands. Any negative event, such as a poor quality of products provided by the Group’s travel suppliers (over which it has no direct control) and offered through its websites, that do not meet customers’ expectations, or the failure to reimburse for products not effectively provided, often leads to customer complaints. These can result in damage to the Group’s image, reputation or brand which can, in turn, have a material adverse effect on the Group’s business, financial condition and results of operations. The Group’s reputation can also be damaged when customer complaints or negative reviews of the Group or its activities are exchanged on public social networks’ websites. The Group receives complaints in the ordinary course of its business, and seeks to address them to protect its reputation. The Group’s brand is a key asset of its business and the strength of its brand is directly related to the cost of customer acquisition. A strong brand means the Group is less reliant on non-branded key-word traffic to its websites, for which it pays on a ‘pay per click’ basis via search bid auctions. The Group has spent considerable financial and human resources to date on the establishment and maintenance of its brand and it will continue to invest in, and devote resources to, advertising and marketing, as well as other brand- building efforts to preserve and enhance consumer awareness of its brand. However, there is no assurance that the Group will be able to enhance or maintain its brand’s value, and a material increase in the cost of customer acquisition could adversely affect the Group’s business, financial condition and results of operations. There is a risk that third parties could bid against the Group on internet search auctions for travel-related keywords which directly relate to the Group’s brand. This might increase the Group’s marketing costs. If a third-party were to win such auctions, their use of terminology directly related to the Group’s brand could confuse current and potential customers, and have a material adverse effect on the Group’s profile and reputation. Some of the Group’s competitors use marketing channels the Group is not familiar with to maintain customer awareness of their brands. For example, the Group has only limited experience in using television and other traditional media channels as a means of promoting and marketing its products. Substantially all of the Group’s advertising activities are online. Failure to use appropriate promotion and marketing channels could adversely affect its business, financial condition and results of operations. From time to time, third parties (such as tour providers at local resorts or transport providers) fraudulently hold themselves out as affiliates of or otherwise aligned with the Group’s brand (such as by wearing uniforms intended to convey an affiliation). The Group may not always be aware of or able to intervene in such incidents, and poor service by such third parties could have a negative effect on the Group’s reputation and brand. The Group cannot assure prospective investors that the Group will be able to successfully maintain or enhance consumer awareness of its brand. If the Group is unable to maintain or enhance consumer awareness of its brands and generate demand in a cost-effective manner, it would negatively affect its ability to compete in the travel industry and would have a material adverse effect on its business. As new media, such as social media, and devices, such as smartphones and tablets, continue to develop, the Group

20 will need to expend additional funds to promote its brand awareness on such media and devices. If the Group is unable to adapt to such new media forms and devices, it may lose online travel segment share, which would have a material adverse effect on the Group’s business. See also ‘‘The Group may fail to address the challenges presented by recent trends in social media, consumer adoption and use of mobile devices.’’

The Group relies on its reputation to attract and retain customers. The Group’s reputation is key to its future success, in terms of the way in which it conducts its business, the customers it attracts and the financial results which it achieves. A number of factors could damage the Group’s reputation, making it more difficult for the Group to attract and retain customers. These factors (some of which the Group has experienced in the past and may do so in the future) include: • negative publicity resulting from lawsuits; • negative media coverage, reviews (including on public social networks’ websites) or customer complaints relating to customer service and/or poor quality of products; • a decline in the quality or selection of the travel products and services provided by airlines, hotels and other suppliers; • the Group’s inability to provide the level of customer service demanded by its customers; • human error on the part of the Group’s employees, travel providers or third-party service providers; • interruptions in service caused by failure or malfunction of the Group’s technical systems; or • damage, such as theft of personal data, resulting from hacking or infection with viruses or other malware. Such negative developments need not actually occur to cause reputational damage; even an incorrect perception among consumers can damage the Group’s image. Furthermore, the Group can be adversely affected by developments over which the Group has no control and with which the Group is not involved. For example, although the Group is not contractually responsible for poor hotelier service, customers that booked a holiday through the Group may nonetheless perceive the Group as the ‘‘service provider’’ and, as a result, view the Group in a negative light. Damage to the Group’s reputation can cause users to choose its competitors over the Group or may make suppliers less willing to do business with the Group which would, in turn, have a material adverse effect on the Group’s business, financial condition and results of operations.

Certain third parties may seek to hinder or block the Group’s access to their websites. The Group aggregates data from various sources to build a cache of flight inventory, which enables the Group to offer its customers an extensive array of flight options from multiple suppliers, giving the customer flexibility and choice when booking their dynamically packaged beach holiday through the Group’s websites. Although the Group has formal agreements in place with both third parties and direct providers of all hotel accommodation and ancillary services, it does not have relationship agreements with certain airlines. The Group is currently able to use technology to access such suppliers’ products and then present certain flight inventory to its customers after they have deployed the Group’s search and booking engine via the Group’s website. From time to time, certain third-parties have sought to hinder or block the Group’s (and other OTAs’) access to their websites using technological, legal or other means, and may do so in the future. For example, certain airlines have installed technologies which try to restrict OTAs from accessing their websites. To date, the Group has been able to limit the effect of such technological measures, but cannot guarantee that it will be able to continue to do so in the future. See ‘‘The Group is one of several OTAs involved in litigation with Ryanair in connection with Ryanair’s efforts to prevent OTAs from booking and selling its flights.’’ If the Group’s access to flight inventory data is limited by these or similar actions, its offering may be less extensive, which could have a material adverse effect on its business, financial condition, results of operations and prospects.

21 The Group is one of several OTAs involved in litigation with Ryanair in connection with Ryanair’s efforts to prevent OTAs from booking and selling its flights. The Group generates a significant amount of its business from the booking of Ryanair flights. In the financial year ended 31 September 2014, Ryanair represented approximately 5.6 per cent. of revenue as part of the Group’s beach holiday offering. Ryanair’s distribution policy is that customers book all Ryanair flights either directly through its own website or telephonic booking service, or indirectly via GDS including Travelport, Sabre and Amadeus. Ryanair does not allow OTAs to integrate their flight booking system with its own. In 2008, Ryanair began to take action against OTAs including the Group in an attempt to enforce its distribution policy. These legal proceedings allege infringement of the terms of use of the Ryanair website, infringement of Ryanair’s intellectual property rights in its trademarks and database and unfair commercial practices. Ryanair filed proceedings in 2010 against OTB Limited in the High Court in the Republic of Ireland relating to the process by which OTB Limited collects data from Ryanair’s website. OTB Limited aggregates data from various sources to build a cache of flight inventory, which enables it to offer its customers Ryanair flights through the Group’s website. There is no contract between OTB Limited and Ryanair. OTB Limited acts as agent on behalf of its customers at the point of sale of the Ryanair flight to such customers. Ryanair objects to this practice, and is claiming (amongst other things): • breach of contract, on the basis that OTB Limited is bound by Ryanair’s terms and by offering Ryanair flights to OTB Limited’s customers it is in breach of those terms; and • OTB Limited’s infringement of Ryanair’s database rights. To date, there have been approximately 24 reported decisions in proceedings brought by Ryanair in six other EU member states (many in relation to interim relief and jurisdiction, rather than the merits). The proceedings have taken several years to reach trial. In Ireland, proceedings against Bravofly Rumbo, which made an initial public offering in 2014, have been underway for approximately five years and may not be resolved until 2019 (if appealed). Proceedings against the same group in Spain have been unsuccessful, as have Spanish proceedings brought by Ryanair against eDreams, another OTA that made an initial public offering in 2014. It is difficult to estimate a timeframe for the current proceedings. It has taken five years from issue of proceedings to reach a final decision on jurisdiction. The Group expects that the Irish proceedings, including any appeal, may not be resolved until 2018/19 but that EU-related aspects of the claim mean that if a reference to the European Court of Justice is necessary the final resolution of this case may not be until 2021. Litigation is unpredictable. The foregoing time estimate is subject to unexpected applications, appeals or other delays, which could mean that the final resolution of the dispute might take until 2022 or later. However, the Group cannot assure prospective investors that it will prevail in these proceedings. If Ryanair were to prevail in its proceedings against OTB Limited, it could have a material adverse effect on the Group’s business. In particular, if a court were temporarily or permanently to enjoin the Group from booking Ryanair flights, the Group’s offerings to prospective customers may be less extensive. The Group may not be able to offer its customers the best value flights directly through its website. Consequently, the Group may have to find alternative hotel inventory if flights are not readily available at commercially reasonable rates to fly to such destinations where such hotels are located. Furthermore, if Ryanair were to prevail, it could increase the risk that other carriers decide to adopt similar policies, or otherwise attempt to use legal or technological or other means to restrict the Group’s ability to access and distribute their products and services. See the above risk factor entitled ‘‘Certain third parties may seek to hinder or block the Group’s access to their websites.’’ As a result, Ryanair’s partial or complete success in these proceedings could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group’s business could be negatively affected by changes in search engine algorithms and search engine relationships. The Group utilises to a significant extent internet search engines, principally through the purchase of travel-related keywords, in particular on Google, and inclusion in metasearch results, to generate traffic to its websites. The purchase of travel-related keywords consists of anticipating what words and terms consumers will use to search for travel on internet search engines and then bidding on those words and

22 terms in the applicable search engine’s auction system. The Group bids against other advertisers for preferred placement on the applicable internet search engine’s results page. The Group also generates a significant proportion of its bookings on its websites from ‘‘organic traffic’’ resulting from customers clicking a non-paid results link in a Google or other search engine. The Group’s positioning on such search engines’ search results depends on algorithms designed by the various search engine providers such as Google and is based on various criteria including, in particular, the historical level of traffic on its websites. As a result, if search engine providers such as Google change their search algorithms in a manner that is competitively disadvantageous to the Group, whether to support their own travel-related services or otherwise, the Group’s ability to generate traffic to its websites would be harmed which, in turn, could adversely affect the Group’s business, market share and financial performance. In addition, if the Group were to fail to maintain its current strong levels of traffic and its search rankings fall as a consequence thereof, its free traffic would fall and its revenue, business and financial performance could be adversely affected. For example, in July 2012, the Group’s website was affected by the Penguin 1.0 Google update, which treated the large volume of historic back-links as ‘‘unnatural’’. Once the Group built a natural back-link profile, its rankings returned to the previous level. It is also possible that search engines could change the criteria they apply to paid search dynamics so as to negatively affect the placement and display of results relating to the Group pursuant to a consumer’s search. Furthermore, a significant amount of traffic is directed to the Group’s websites through its participation in pay-per-click and display advertising on internet media properties and search engines whose pricing and operating dynamics can experience rapid change, both technically and competitively. If one or more of such arrangements are terminated or if competitive dynamics further affect market pricing in a negative manner, the Group may experience a decline in traffic on its websites which, in turn, could adversely affect its revenue, business, financial condition and results of operations. Moreover, changes in the Group’s relationships with certain search engines, metasearch or affiliate partners that feature links to the Group’s sites could limit the Group’s access to customers at a reasonable cost which, in turn, could adversely affect its revenue, business, financial condition and results of operations.

The Group’s exposure to certain risks will increase as it expands into markets outside the United Kingdom. Nearly all of the Group’s customers are in the United Kingdom. However, the Group expanded its geographic footprint into Sweden in January 2015, and plans further expansion in Scandinavia in the short term. To achieve widespread acceptance as the Group enters additional countries and markets, the Group must continue to tailor its products and business model to the characteristics of such countries and markets. These include travel supplier relationships, traveller preferences and adding additional languages to its website interfaces. In each additional market that the Group enters, it will need to address the particular economic, currency, political and regulatory risks associated with such markets. These may include, among other things, finding new acquisition partners, hiring and training new call centre staff with local language skills and an understanding of the local market, adapting to alternative payment methods favoured in that market, implementing new fraud systems and processing additional currencies. As the Group seeks to continue to expand its operations into new geographies as part of its growth strategy, increasing the awareness, perceived quality and perceived different attributes of the Group’s brand and image into new European countries will be vital to expand its customer base, which is likely to involve a large marketing expenditure. Learning the customs and cultures of various countries, particularly with respect to travel patterns and practices, and subsequently integrating the Group’s operations across different cultures and languages, can be difficult, costly and divert management and personnel resources. In particular, establishing effective payment processing systems in the countries and markets the Group enters can be time-consuming and challenging. The Group expects to continue to face ongoing and additional risks in operations outside the United Kingdom. These risks may include: • different regulatory requirements, including data privacy requirements, consumer protection and retail regulations, labour laws and anti-competition regulations, and the Group’s general ability to comply with local laws and regulations and increased compliance costs associated therewith; • diminished ability to enforce the Group’s contractual rights;

23 • increased risk and limits on the Group’s ability to enforce intellectual property rights; • consumer preferences for local providers; • financial risk arising from transactions in multiple currencies, including the Group’s failure to adequately manage those risks; and • difficulties in managing staffing due to language and cultural differences. If the Group is not able to effectively control these risks, it could have a material adverse effect on the Group’s business, financial condition and results of operations.

The Group may be involved in other litigation. In addition to its involvement in the Ryanair litigation mentioned above, the Group may, from time to time, become involved in legal actions in connection with the activities it carries out. In addition to being a defendant, the Group may also act as a claimant or counterclaimant in certain actions and there can be no assurance that any claim or counterclaim will be resolved in the Group’s favour. In addition, the Group may not make adequate provisions for potential litigation-related liabilities. Litigation, whether or not determined in the Group’s favour of or settled by the Group, can be costly and may divert the efforts and attention of the Group’s management and other personnel from normal business operations. Further, claimants against the Group may be able to devote substantially greater financial resources in litigating claims than the Group is able to. The occurrence of any of these events may have a material adverse effect on the Group’s reputation, business, results of operations, financial condition or prospects.

The Group generates the majority of its revenue from customers booking beach holidays, and so is dependent upon this type of holiday remaining popular with consumers. The Group derived approximately 92.4 per cent. of its revenue for the financial year ended 30 September 2014 from selling beach holidays to the leisure market in the United Kingdom. Although beach holidays are one of the most popular type of holidays for UK consumers, with short-haul beach holidays to the Western Mediterranean being particularly popular, there is no guarantee that this trend will continue. If beach holidays were to fall out of favour with consumers in the Group’s key geographies and it were unable to adapt quickly to provide alternative holiday packages (e.g. city breaks), it could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

The Group relies on third parties for the provision of certain services and systems. The Group relies on third-party service providers for flights, hotels, transfers and other services, and it may in the future migrate additional services to third-party providers. The Group currently relies on certain third-party computer systems, service providers and software companies to: • process credit or debit card payments, including fraud prevention and detection systems; • provide computer infrastructure critical to its business, including hosting, internet bandwidth and firewall protection; • provide reporting data, including data analysis and benchmarking; and • facilitate customer acquisition, including agreements with metasearch engines. If these third parties were to experience difficulty meeting the requirements or standards as advertised on the Group’s website, it could damage the Group’s reputation or make it difficult for the Group to operate certain aspects of its business. In addition, if such third-party service providers were to suspend or cease operations, or face financial distress or other business disruption, the Group could suffer increased costs and delays in its ability to provide similar services until an equivalent service provider is found or the Group develops replacement technology or operations. Any transition of services currently provided by the Group to a third-party provider could result in labour-related costs or disruptions. If the Group were to fail to replace any such defaulting service provider, it could have a material adverse effect on its revenue. If the Group is unsuccessful in choosing or managing its partners who thereby fail to meet its quality standards, it could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

24 The Group’s success is dependent on its ability to maintain relationships with its technology partners. If the Group’s arrangements with any of such third parties were impaired or terminated, the Group may not be able to find an alternative source of systems support on a timely basis or on commercially reasonable terms, which could result in significant additional cost or disruptions to its businesses. In addition, some of the Group’s agreements with third-party service providers can be terminated by those parties on short notice and, in many cases, provide no recourse for service interruptions. One or more such events could have a material adverse effect on the Group’s reputation, business, financial condition and results of operations.

A significant proportion of the Group’s supplier and agency relationships are on short-term contracts and terminable on short notice. Many of the formal agreements the Group has entered into with hotel suppliers are short-term contracts, providing the Group’s counterparties with a right to terminate at short notice or without notice. While in certain cases the Group has entered into long-term agreements, no assurances can be given that certain hotel suppliers will not reduce or eliminate incentives paid to the Group, attempt to charge travel agencies for content, credit or debit card fees or other services, or otherwise attempt to change the financial terms of the Group’s agreements, any of which could reduce the Group’s revenue, thereby adversely affecting its business, financial condition and results of operations. Under certain of the Group’s agreements with hotel suppliers, no sales incentive will be due to the Group unless the Group meets certain minimum sales thresholds by selling a certain number of beds to its customers. Any requirement to repay any sales incentive bonus in part or in full may have a material adverse effect on the Group’s business, financial condition and results of operations. To the extent any of the Group’s travel suppliers reduce or eliminate the incentive payments they pay to the Group, the Group’s revenue may be reduced unless the Group is able to compensate for such reduction by increasing the service fees the Group charges to its customers in a sustainable manner. However, any increase in service fees may also result in a loss of potential customers.

The Group’s processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental and/or industry regulation, conflicting law requirements and differing views of personal privacy rights. Customer information is increasingly subject to legislation, regulation and industry policies in numerous jurisdictions around the world. As the Group expands the number of places where it operates, the Group faces additional challenges to comply with these requirements and restrictions, which are not, and may not in the future be, necessarily consistently applied. Such regulations and policies are typically intended to protect the privacy and security of personal information (including credit or debit card information) that is collected, processed and transmitted in or from the governing jurisdiction. The Group could be adversely affected if legislation, regulations or other requirements are expanded (for example, the new General Data Protection Regulation referred to in Part 8: ‘‘Regulation’’ of this prospectus) to require changes in the Group’s current business practices or if governing jurisdictions or industry groups interpret or implement their requirements in ways that negatively affect the Group’s business, financial condition and results of operations. Moreover, the Group’s failure to comply with any of these requirements or interpretations could have a material adverse effect on its reputation and operations and subject the Group to litigation. As privacy and data protection have become more sensitive issues for regulators and consumers, the Group may also become exposed to potential liabilities as a result of differing views on the protections that should apply to travel and/or online data. These and other privacy and security developments are difficult to anticipate and could adversely affect the Group’s business and financial performance.

The Group is exposed to risks of security breaches associated with online commerce security. In the processing of the Group’s customer transactions, the Group receives and stores a large volume of personally identifiable information and it relies on information collected online for the purposes of advertising to visitors to its websites. Substantial or ongoing security breaches, whether instigated internally or externally on the Group’s systems or other internet-based systems, could significantly harm the Group’s business, including its relations with its suppliers. The Group incurs, and expects to continue to incur, substantial expense to protect itself against, and remedy, security breaches and their consequences. The Group relies on encryption and authentication technology to effect secure transmission of confidential

25 customer information, including credit or debit card numbers. However, advances in technology or other developments could result in a compromise or breach of the technology that the Group uses to protect customer and transaction data. It is possible that computer circumvention capabilities, new discoveries or advances or other developments, including the Group’s own acts or omissions, could result in a party (whether internal, external, an affiliate or unrelated third-party) compromising or circumventing its security systems and stealing customer transaction/personal data or its proprietary information or cause significant interruptions in its operations. For example, in August 2015, holiday company Thomson announced a high-profile security breach that exposed its customers’ personal information. The Group cannot guarantee that its security measures will prevent data breaches, or that third-party service providers will be successful in implementing security systems to prevent data breaches. Failure to improve the Group’s standards or a substantial data breach in any of its businesses, or in the systems of third parties upon which the Group relies, could expose the Group to a risk of loss or litigation and possible liability and could significantly harm its business. The Group’s insurance may not be adequate to reimburse the Group for losses caused by security breaches. Security breaches could also damage the Group’s reputation and cause existing and potential customers to lose confidence in its security, which would have a negative effect on the value of its brands and the demand for its products. Moreover, public perception concerning general security and privacy on the internet could adversely affect customers’ willingness to use the Group’s websites. A publicised breach of security, even if it were only to affect other companies conducting business over the internet, could inhibit the growth of consumers’ willingness to provide private information or effect commercial transactions on the internet and, therefore, demand for the Group’s products as a means of conducting commercial transactions.

System interruption may cause the Group to lose customers or forego business opportunities. The Group caches data from its suppliers’ computer systems and websites and then presents this information to customers on its own website, which assists in facilitating and processing the purchase of dynamically packaged beach holidays. The inability of the Group and/or its suppliers to maintain and improve their respective information technology systems and infrastructure may result in system interruptions. Like many online businesses, the Group and its suppliers have experienced and may in the future experience system interruptions. Any interruptions, outages or delays in systems the Group utilises or deterioration in their performance could impair the Group’s ability to process user traffic and transactions and decrease the quality of products that the Group can offer to consumers. The Group currently operates three data processing and hosting facilities, two of which are located in Manchester and one of which is located in London. Currently, some of the functions performed by these facilities are redundant for backup purposes (with the databases of each facility being synchronised in predetermined intervals with the databases of the other facilities). Fire, flood, power loss, telecommunications failure, physical break-ins, earthquakes, acts of war or terrorism, acts of God, computer viruses, electronic intrusion attempts from both external and internal sources and similar events or disruptions may affect, damage or interrupt computer or communications systems or business processes or data at any time. For example, the Group may experience security intrusions and attacks on its systems for fraud or service interruption (called ‘‘denial of service’’ attacks) that may make portions of its websites slow or unavailable for certain periods. Although the Group has taken measures to protect certain portions of its facilities, assets and data, if the Group were to experience frequent or persistent system failures or security breaches, such events could significantly curtail its ability to conduct its business and generate revenue, and its reputation and brand could be harmed. While the Group has backup systems and contingency plans for critical aspects of its operations and business processes, the Group’s disaster recovery or business continuity planning may not be sufficient. In addition, the Group may have inadequate insurance coverage or insurance limits to compensate for losses from a major interruption, and remediation may be costly and have a material adverse effect on its financial condition and results of operations. See the risk factor entitled ‘‘The Group’s insurance policies may not cover, or fully cover, certain types of losses. ’’

26 The growth of the Group’s business depends on access to a large selection of hotel offerings, many of which the Group obtains by direct contracting with hotel suppliers. An important component of the Group’s business success depends on its ability to obtain, maintain and expand relationships with hotel suppliers by means of its direct contracting system. Maintaining and expanding such relationships is important for the Group’s profitability, with a portion of its revenue (3.7 per cent. in the year ended 30 September 2014) being derived from incentive payments and fees negotiated with the Group’s hotel suppliers, being hotel aggregators with which the Group has entered into formal relationships. Reductions in overall supply via direct contracting could adversely affect the quantity of products the Group is able to sell to its customers and the revenue that the Group makes per booking which may, in turn, have a material adverse effect on its business, financial condition and results of operations.

The Group relies on ‘white label’ agreements for its ancillary sales, which are subject to a number of limitations. In general, the Group’s arrangements with its ‘white label’ sourcing partners for ancillary sales (excluding coach and private taxi transfers) do not require them to make available on the Group’s websites any specific quantity of airport hotels or car parking, or to make the hotel room or accommodation reservations available in any geographic area at any particular price. Any amendment or termination of the Group’s relationships with any of its white label sourcing partners, as well as inability or unwillingness on the part of any of its white label sourcing partners to perform their obligations could divert its customers’ demand for its white label sourcing partners’ products to competitors’ websites, and have a material adverse effect on an important revenue stream for the Group.

The Group generates a substantial portion of its revenue from its hotels activities. Changes in customer patterns with respect to the proportion of the aggregate spend on the hotel element of a holiday may adversely affect the Group. The Group’s revenue depends on its ability to allow customers to book dynamically packaged beach holidays on its website, consisting of a flight product and a hotel booking that travellers customise based on their individual specifications by combining select products from different travel suppliers. The Group’s hotel business contributed 48.8 per cent. of its TTV in the nine month period ended 30 June 2015. The revenue margin per booking for the hotel element is substantially greater than the flight element. If customers were to decide to spend a greater proportion of their aggregate holiday spend on the flight element relative to the hotel element of their dynamically packaged holiday, this may reduce the Group’s revenue which could, in turn, have a material adverse effect on the Group’s business, financial condition and results of operations.

Claims by third parties that the Group infringes on their intellectual property rights could result in significant costs and may impair the Group’s ability to use certain intellectual property. The Group may face claims that it has infringed the patents, copyrights, trademarks or other intellectual property rights of others. In addition, to the extent that the Group’s employees, contractors or other third parties with which the Group does business use intellectual property owned by others in their work for the Group, disputes may arise as to the rights in related or resulting know-how and inventions. Intellectual property litigation is complex, expensive and time-consuming and may divert managerial attention and resources from the Group’s business objectives. Successful infringement claims against the Group could result in significant monetary liability, including any indemnification due to travel suppliers for claims made against them. Such claims could also delay or prohibit the use of existing, or the release of new, products, services or processes and the development of new intellectual property. The Group could be required to obtain licenses to use the intellectual property that is the subject of the infringement claims, which may be expensive to obtain and resolution of these matters may not be available on acceptable terms within a reasonable time frame or at all. Intellectual property claims against the Group could result in a loss of intellectual property protections that relate to certain parts of the Group’s business, and therefore could have a material adverse effect on its business, financial condition and results of operations.

The Group’s insurance policies may not cover, or fully cover, certain types of losses. The Board believes the Group maintains insurance policies customary (including the terms of, and the coverage provided by, such insurance) for the industry in which it operates and considers the Group’s insurance coverage to be adequate both as to risks and amounts for the business the Group conducts.

27 However, there can be no assurance that all types of potential losses are insured or that policy limits would be adequate to cover them. Furthermore, the scope of insurance policies maintained by and available to the Group may vary from that of insurance policies typically maintained by OTAs in jurisdictions in which the Group operates outside of the United Kingdom. Any uninsured loss or a loss in excess of insured limits could adversely affect the Group’s existing operations, which could, in turn, have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

The Group could experience business disruption arising from Euro instability, particularly as it seeks to expand its international operations. The continued existence of the Euro as a currency in its current form is not certain. If any country were to leave the Eurozone, or if the Eurozone were to dissolve entirely, the treatment of debt and payment obligations previously denominated in Euro would be uncertain. Whether such obligations were re-denominated into a new currency would depend on a number of factors, including the place of payment, the place of incorporation of the debtor and the governing law of the relevant contract or transaction. The partial or total collapse of the Euro may lead to a number of operational and practical issues for the Group, particularly as it seeks to expand its international operations which could, in turn, have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

The Group’s business and financial performance could be negatively affected by adverse tax events. The Group is subject to corporate income tax, withholding tax, value added tax, payroll taxes and social security taxes and in certain countries to local taxes on income or assets. The estimated net result of the Group’s business is based on tax rates that currently prevail, as well as current legislation, jurisprudence, regulations and interpretations by local tax authorities. A change in applicable corporate tax rates or in general of any tax rule or interpretation made by local tax authorities will affect its net results of operations. The countries in which the Group operates could either increase the applicable income tax rates and/or seek to enlarge the taxable basis to generate more tax revenue. The application of tax laws, rules and regulations to the Group’s business is subject to interpretation by the competent tax authorities. The Group relies on generally available interpretations of tax laws and regulations in the jurisdictions in which it operates. The Group cannot assure prospective investors that tax authorities will agree with the Group’s interpretations. Similarly, the Group may, from time to time, change the way it organises and conducts its business operations to enhance efficient management of its business, the tax consequences of which may be viewed by the tax authorities of the relevant jurisdictions differently from the Group. This could result in a reassessment by tax authorities, increasing the Group’s tax expense for past periods and may trigger penalties and interest for the underpayment of taxes. The Group pays income tax in the countries in which its operating companies are resident, irrespective generally of where its customers are located or where the travel products are actually purchased or consumed by its customers. The payment of income tax in the relevant countries in which the Group operates is based on the current internationally accepted tax rules and transfer pricing framework. The current rules, based on which taxable profits are allocated, may change or be interpreted differently in the future, which would result, for example, in taxable profits being (partly) allocated to countries where customers are located or where the travel product is actually consumed. This may lead to a shift of taxable profits to other countries where less favourable tax rates and rules regarding the determination of taxable income are applicable. The allocation of the Group’s taxable profits to a different country mix may affect its future income tax expense. In the Group’s industry, tax authorities focus increasingly on the actual behaviour of travel agents in addition to the contractual relationship between the travel agent and its customers to determine whether or not the travel agent is a disclosed agent for VAT purposes. This may affect the determination of the country in which VAT is due as well as the basis on which VAT is due. While the Board believe that the Group has taken a prudent position in this respect, the Group cannot assure prospective investors that tax authorities will take the same view, which may affect the amount of VAT which is due on the services which the Group renders to its customers. Tax authorities of a country may consider that VAT is due in their country, for example, because the customer is a resident of that country or because the travel service is deemed to be used and enjoyed in that country, whereas the Group may take the view that VAT is not due in that country. If tax authorities successfully enforce their different view, they may require the Group to pay tax which it currently does not

28 collect or pay. Passing on the cost of additional taxes to the customer may reduce the demand for the Group’s services. Although the Group believes its tax position is true and accurate and it has taken a prudent position for the purpose of recognising a provision for tax risks, the position taken by tax authorities based on tax audits could be different from the position which the Group has taken, which could result in the Group having to pay more taxes than expected, which would have a material adverse effect on the Group’s business, results of operations, financial condition or prospects.

The Group is exposed to foreign currency exchange rate fluctuations. The Group buys and sells products in foreign currencies and the prices on its websites are therefore subject to fluctuations in the exchange rate. The Group is not currently materially exposed to transaction effects as it forward covers and sells to match prices set in the system and any translation effects are not material. However, exchange rate fluctuations could have a material adverse effect on the price that the Group can offer products to its customers which could, if the prices were to increase to an unattractive level for customers, reduce demand and therefore have a material adverse effect on the Group’s business, results of operations, financial performance or prospects.

The Group is exposed to risks associated with payment fraud. The Group has historically suffered, and expects to continue to suffer, from internet-related fraud. The Group is liable for accepting fraudulent credit or debit cards and is subject to other payment disputes with its customers for such sales. In instances in which the Group is unable to combat the use of fraudulent credit or debit cards, the Group is liable vis-a-vis` suppliers for the entire airfare (even though the Group does not bear inventory risk). Its revenue from such sales could also be subject to automatic chargebacks related to fraudulent transactions from credit or debit card processing companies or demands from the relevant banks. If fraud levels were to increase significantly, it could have a material adverse effect on the Group’s business, financial condition and results of operations. The Group’s ability to detect and combat increasingly sophisticated fraudulent schemes may be negatively affected by the adoption of new payment methods, the emergence of new technology platforms such as smartphones and tablets and expansion into new markets. Whilst the Group has fraud protection measures in place, if the Group is unable effectively to combat the use of fraudulent credit cards or debit cards on its websites and is forced to invest in more sophisticated and expensive anti-fraud technologies, the additional costs could have a material adverse effect on its results of operations.

RISKS RELATING TO THE TRAVEL INDUSTRY Declines or disruptions in the overall level of leisure travel activity due to a downturn in discretionary spending levels may reduce demand for the Group’s offering. The Group’s revenue is directly related to the overall level of leisure travel activity which is, in turn, largely dependent on discretionary spending levels. Discretionary spending generally declines during recessions and other periods in which disposable income is adversely affected. As a substantial portion of leisure travel expenditure is discretionary, such expenditure tends to decline or grow more slowly during economic downturns or periods when discretionary spending levels are depressed. For example, if mortgage interest rates were to rise as a result of an increase in the Bank of England base rate, it is likely that overall levels of discretionary spending would decline, which could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects. See also the risk factor entitled ‘‘The Group generates most of its revenue from customers in the United Kingdom. Difficult macroeconomic circumstances in the United Kingdom could reduce demand for the Group’s products.’’

The Group’s business could be adversely affected by the occurrence of events affecting travel safety, such as natural disasters and political and social instability, which are outside its control. The travel industry is sensitive to safety concerns. The Group’s business could be adversely affected by the occurrence of travel-related accidents, such as airplane crashes (whether caused by human or technical defaults or otherwise), incidents of actual or threatened terrorism, political instability or conflict or other events whereby travellers become concerned about safety issues, including as a result of unusual weather patterns or natural disasters (such as hurricanes, tsunamis, earthquakes or volcanic ash clouds), potential outbreaks of epidemics or pandemics (such as influenza, H1N1 virus, Avian Flu or Severe Acute

29 Respiratory Syndrome outbreaks) or other human or natural disasters (such as those that may result in exposure to radiation). For example, the volcanic ash cloud over Iceland in April 2010 had a very significant short term adverse effect on the travel industry. In addition, political and social instability in Africa, the Middle East and Europe, such as in Libya, Egypt and Syria since late 2010, the ongoing hostilities in Ukraine, the terrorist attacks in Tunisia in June 2015 and fears that such instability could deepen or spread, could have a material adverse effect on the Group’s business, financial performance and results of the Group’s operations. Such concerns, or concerns arising from similar events in the future, are outside the Group’s control and could result in a significant decrease in demand for the Group’s travel products. Any such decrease in demand, depending on its scope and duration, together with any other issues affecting travel safety, could materially and adversely affect the Group’s business and financial performance over the short and long term. The occurrence of such events could result in a decrease in Group customers’ appetite to travel and adversely affect the Group’s business, financial condition and results of operations. Moreover, due to the seasonal nature of the Group’s business, the occurrence of any of the events described above during the Group’s peak summer or holiday travel seasons, or when customers are considering booking their summer vacations, could exacerbate or disproportionately magnify the adverse effects of any such event and, as a result, could materially and adversely affect the Group’s business or financial performance. See also the risk factor entitled ‘‘The Group’s business experiences seasonal fluctuations and comparisons of sequential periods’ results may not be meaningful.’’

The Group’s business may be negatively affected by adverse changes in the markets in which its suppliers operate, or by the deterioration of the financial condition of its suppliers. As the Group is an intermediary in the travel industry, a substantial portion of its revenue is affected by the fares and tariffs charged by the Group’s suppliers (including airlines and hotels) and the volume of products offered by its suppliers. In particular, as a significant portion of the Group’s revenue depends on the Group’s sales of flight products, the Group could be adversely affected by changes in the airline industry, including consolidation or bankruptcies and liquidations and, in many cases, the Group will have no control over such changes. Events or weaknesses specific to the flight travel industry that could negatively affect the Group’s business include air fare fluctuations, airport, airspace and landing fee increases, seat capacity constraints, removal of destinations or flight routes, travel-related strikes or labour unrest, imposition of taxes or surcharges by regulatory authorities and fuel price volatility. In addition, the implementation of further transaction costs (such a fee being charged by airlines per booking) would be applied across all OTAs, and it is likely that some if not all of the fee would be passed on to customers. Even though no more than 12 per cent. of the Group’s revenue comes from any third-party hotel supplier and 5.6 per cent. from any flight supplier, if one or more of the Group’s major suppliers on which it is reliant for flight and hotel bookings were to suffer a deterioration in its financial condition or restructures its operations, it could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group’s businesses are subject to a complex regime of rules and regulations. The Group’s business is highly regulated and subject to a complex regime of laws, rules and regulations concerning air transportation, travel, online commerce, financial services, consumer rights and data protection, among others. The Group’s business and financial performance could be adversely affected by unfavourable changes in, or interpretations of, existing laws, rules and regulations, or the promulgation of new laws, rules and regulations applicable to the Group and its businesses. In particular, any further tightening of the European legislation relating to packaged travel could adversely affect the Group’s business. For example, the amendment of the European Package Travel Directive 90/314/EEC on packaged travel, packaged holidays and packaged tours proposed by the European Commission in July 2013, if adopted, would extend the scope of the directive to more dynamic forms of packaged travel, which could increase the costs of conducting the Group’s business and subject it to additional responsibilities and liabilities. Another example of increased regulation in the travel industry arises out of the memorandum of understanding reached between the Competition and Markets Authority (the ‘‘CMA’’) and the CAA in June 2014. In working together with the CMA, the CAA looks to further the interests of users of air transport services regarding the range, availability, continuity, cost and quality of airport operation services

30 through the promotion of effective competition. In furthering this objective, the CAA from time to time may contact travel agents and tour operators to review their terms, conditions or business practices. For example, when the Group launched its low deposit scheme, it worked with the CAA to ensure that how the Group delivered the scheme on its websites fell within CAA/CMA guidelines (fees and additional costs were clearly promoted to consumers to ensure fair and transparent decision making). Another example was when the CAA contacted a number of online travel agents and flight-only OTAs to require that the costs for credit cards compared to debit cards be included at the first stage of the flight search results. There is, and will likely continue to be, an increasing number of laws, regulations and court decisions pertaining to the internet and online commerce and consumer law in general, which may relate to liability for information retrieved from or transmitted over the internet, display of certain taxes, discounts and fees, online editorial and user-generated content, user privacy, behavioural targeting and online advertising, taxation, liability for third-party activities, rights and remedies for consumers and the quality of products and services. For example, in certain jurisdictions where the Group operates, local regulations impose restrictions on or prohibit the credit/debit card operations that it can perform, to protect the privacy and security of personal information that is collected, processed and transmitted in or from the governing jurisdiction. The growth and development of online commerce has also recently prompted calls for more stringent consumer protection laws and more aggressive enforcement efforts by regulatory authorities, including on price transparency, that may impose additional burdens on online businesses generally. These include increased costs associated with stronger data protection systems, fines and a loss of competitive advantage as a result of any disclosure related to operations. Such trends are likely to continue in the future. Furthermore, if such laws and regulations are not enforced equally against the Group’s competitors in a particular market, the Group’s compliance with such laws and regulations may put it at a competitive disadvantage vis-a-vis` competitors who do not comply with such requirements. See also the risk factor entitled ‘‘The Group’s processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental and/or industry regulation, conflicting law requirements and differing views of personal privacy rights.’’ The Group’s business strategy involves expansion into new jurisdictions, which could have legal, regulatory (including license) or tax requirements with which the Group is currently not familiar. Compliance with such requirements will place demands on the Group’s time and resources, and the Group may nonetheless experience unforeseen and potentially adverse legal, regulatory or tax consequences. A failure by the Group is to comply with these laws and regulations may subject it to fines, penalties and potential criminal sanctions, as well as publicity which may be harmful to the Group’s reputation.

The Group is required to hold certain licenses or accreditations that are critical to its business. In some jurisdictions in which the Group operates, it is required to hold various travel agency and other licenses and accreditations and pay certain license fees. Regulatory authorities have a relatively broad discretion whether to grant, renew and revoke licenses and approvals and to implement regulations. Accordingly, regulatory authorities could prevent or temporarily suspend the Group from carrying on some or all of its activities or otherwise penalise the Group if its practices are found not to comply with the then current regulatory or licensing requirements or any interpretation of such requirements by the regulatory authority. For instance, in order for the Group to sell air travel (which forms part of its dynamically packaged holidays) it must either hold a ‘‘Flight Plus’’ ATOL or be a member of an ATOL accredited body. If the Group failed to retain its ATOL licence, it could deter customers from booking their holiday with the Group, as they will not have the peace of mind that their money (including any deposit) is protected by the ATOL scheme and that they can get home if their travel company collapses. This could have a material adverse effect on the Group’s business, financial condition, results of operations and prospects.

The Group’s business experiences seasonal fluctuations and comparisons of sequential quarters’ results may not be meaningful. The Group’s revenue and operating results have varied, and the Board expects they will continue to vary over time. This is in large part attributable to the fact that the Group’s business experiences seasonal fluctuations, which are a function of seasonal trends for travel products, in particular leisure travel. Because the Group generates the largest portion of its revenue from hotel and flight bookings and this revenue is generally recognised at the time of booking, these trends cause the Group’s revenue to be highest in the periods during which travellers book their vacations. Therefore, the Group’s revenue tends to be lower in the quarter ending 31 December than in other quarters and typically highest in the quarter

31 ending 31 March, corresponding to bookings for the busy spring and summer travel seasons. As a result, sequential period-on-period comparisons of the Group’s revenue, cash flows and operating results may not be meaningful.

The Group’s business is influenced by the level of internet penetration in its markets. The Group generates its revenue through the online sale of beach holidays. As a result, the Group’s business is affected by the level of internet penetration in the countries in which it operates (currently the United Kingdom and Sweden), and in particular the proportion of travel bookings made through the internet. Online penetration remains high in Scandinavia and the United Kingdom, where relatively high income and tech-savvy consumers have embraced online booking. In addition, the Group continues to seek to expand its international presence and a successful entrance into new countries will depend on the level of internet penetration in such countries. A slower adoption of use of the internet by consumers as an e-commerce platform for leisure holidays in the countries the Group enters compared to the countries in which it currently operates, could adversely affect the Group’s growth prospects and results of operations. Linked to the level of internet penetration is the level of package holiday sales online penetration, defined by Euromonitor International as the percentage of total retail package holiday sales made online. According to Euromonitor International, the online penetration of package holidays in the United Kingdom was 52 per cent. in 2014, and is expected to be 55 per cent. in 2016. In Sweden, package holiday sales online penetration was 67 per cent. in 2014. Sales in the package holiday sector in Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Spain and Sweden amounted to A55 billion in 2014. Online sales penetration in the same sector and markets is expected to grow from 26 per cent. in 2014 to 30 per cent. in 2018 (sources: Euromonitor, Offline and Online Intermediaries Sales by Market; Euromonitor, Online Sales by Market). However, there can be no guarantee that online travel penetration will continue to grow or remain at current levels. As the substantial majority of the Group’s operations are in Europe, a slowing of the growth in online travel penetration in Europe, or a fall, could have an adverse effect on its growth prospects and its business, financial condition and results of operations.

RISKS RELATING TO THE OFFER AND THE SHARES There is no existing market for the Shares. There is presently no public trading market for the Shares, and the Group cannot assure prospective investors that a liquid market for the Shares will develop following Admission. If an active and liquid trading market does not develop or is not sustained, the liquidity and trading price of the Shares could be materially adversely affected, and investors may have difficulty selling their Shares. Even if an active trading market develops, the market price for the Shares may fall below the Offer Price, perhaps substantially. As a result of fluctuations in the market price of the Shares, investors may not be able to sell their Shares at or above the Offer Price, or at all.

The market price of the Shares may fluctuate significantly in response to a number of factors, many of which will be out of the Group’s control. The Offer Price may not be indicative of the market price for the Shares following Admission. Publicly- traded securities from time to time experience significant price and volume fluctuations that may be unrelated to the operating performance of the company that has issued them. The market price of the Shares may prove to be highly volatile in response to a number of factors, many of which are beyond the Group’s control. These include variations in operating results in the Group’s reporting periods, cyclical fluctuations in the performance of the Group’s business, changes in financial estimates by securities analysts, changes in market valuation of similar companies, announcements by the Group of significant contracts, acquisitions, joint ventures, or capital commitments, speculation (whether or not well-founded) regarding the intentions of the Group’s major shareholders or significant sales of Shares by any such shareholders or short selling of the Shares, speculation (whether or not well-founded) regarding possible changes in the Group’s management team, loss of one or more major suppliers, additions or departures of key personnel, any shortfall in revenue or any increase in losses from levels expected by securities analysts, and future issues or sales of Shares. Any or all of these events could result in a material decline in the price of the Shares. Investors may not be able to sell their shares at or above the Offer Price, or at all.

32 Shareholders may not be able to exercise their pre-emption rights. In the case of certain increases in the Company’s share capital, the existing holders of the Shares generally would be entitled to pre-emption rights pursuant to the Companies Act unless such rights have been waived by a special resolution of the Shareholders at a general meeting or, in certain circumstances, pursuant to the Articles. Holders of Shares outside the United Kingdom may not be able to exercise their pre-emption rights in respect of Shares unless exemptions from any overseas securities law requirements are available and the Company decides to comply with local law and regulations. In particular, US holders of the Shares may not be able to exercise pre-emption rights unless the Shares or other securities issued by the Company are registered under the Securities Act, or an exemption from the registration requirements is available. The Company cannot assure prospective investors that any exemption from such overseas securities law requirements would be available to enable US and other non-UK holders to exercise such pre-emption rights or, even if available, that the Company will seek to rely on any such exemption.

It may be difficult to enforce US or other foreign law judgments against the Company or its officers and directors. The Company is a public company incorporated under the laws of England and Wales. The Directors are citizens or residents of countries other than the United States, and all or substantially all of the assets of such persons and the Company are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon the Company or such persons, or to enforce outside of the United States judgments obtained against the Company or such persons in the United States, including without limitation judgments based upon the civil liability provisions of the US federal securities laws or the laws of any state or territory within the United States. In addition, an award or awards of punitive damages in actions brought in the United States or elsewhere may be unenforceable in the United Kingdom. Investors may also have difficulties enforcing, in original actions brought in courts in jurisdictions outside the United States, liabilities under US securities laws.

Exchange rate fluctuations may affect the value of Shares. The Shares will be quoted and any dividends to be paid in respect of them will be in pounds sterling. An investment in Shares by an investor in a jurisdiction whose principal currency is not pounds sterling exposes the investor to foreign currency rate risk. Any depreciation of the pound sterling in relation to such foreign currency will reduce the value of the investment in the Shares or any dividends in foreign currency terms.

Shareholders may earn a negative or no return on their investment in the Company, and the Company’s ability to pay dividends may be restricted. The Group’s results of operations and financial condition are entirely dependent on the trading performance of the members of the Group. The Group currently conducts substantially all of its operations through OTB Topco’s subsidiaries and such entities generate substantially all of the Group’s operating income and cash flow, with OTB Topco having no direct operations or significant assets other than the investment in its subsidiaries. As a holding company, the Company’s ability to pay dividends in the future is affected by a number of factors, principally the Company’s ability to receive sufficient dividends from its subsidiaries. The payment of dividends by subsidiaries depends largely on their financial condition and ability to generate profits. In addition, because the subsidiaries are separate and distinct legal entities, they will have no obligation to pay any dividends or to lend or advance the Company funds. They may be restricted from doing so by contract, including other financing arrangements, provisions in their constitutional documents or the applicable laws and regulations of the various countries in which they operate. These factors could limit or prohibit the payment of dividends to the Company by its subsidiaries, which could restrict the Company’s ability to pay dividends to Shareholders. Furthermore, although the Shareholders have passed a resolution approving the cancellation of the amount standing to the credit of the Company’s share premium account to create distributable reserves equal to that amount for the Company, there can be no guarantee that the necessary court order confirming this will be granted, or that the court will not impose conditions in any such order limiting the circumstances in which any reserves created are to be distributable. As a result, Shareholders may not receive any return on an investment in the Shares unless they are able to sell the Shares for a price greater than that which they paid for them.

33 The issue of additional Shares in the Company in connection with future acquisitions, any share incentive or share option plan or otherwise may dilute all other shareholdings. The Group may seek to raise financing to fund future acquisitions and other growth opportunities. The Group may, for these and other purposes, such as in connection with share incentive and share option plans, issue additional equity or convertible equity securities. As a result, the Company’s existing Shareholders may suffer dilution in their percentage ownership or the price of the Shares may be adversely affected.

Inflexion will retain a significant interest in the Company following Admission, and its interests may differ from those of the other Shareholders. Following Admission, Inflexion will hold 37.13 per cent. of the Company’s issued share capital. Therefore, it may be able to exercise negative control over certain matters by blocking a special resolution of the Company. The interests of Inflexion and the Shareholders that acquire Ordinary Shares in the Offer may not be aligned. Inflexion may make acquisitions of, or investments in, other businesses in the same sector as the Company. These businesses may be, or may become, competitors of the Company. In addition, funds or other entities managed or advised by Inflexion may be in direct competition with the Company on potential acquisitions of, or investments in, certain businesses. Inflexion and the Company have entered into a Relationship Agreement, which governs certain aspects of Inflexion’s conduct in relation to the Company. However, these agreements and other measures may be insufficient to safeguard the interests of other Shareholders.

Substantial future sales of Shares (including sales by certain Existing Shareholders including Inflexion or the Directors, following the expiry of the terms of the lock-up arrangements) could affect the market price of the Shares. Following Admission, it is expected that Inflexion and the Directors will in aggregate hold voting rights in respect of approximately 60.00 per cent. of the Company’s issued share capital. The Executive Directors and certain persons connected to them are subject to a 12 month lock-up period following Admission, and Inflexion is subject to a lock-up period ending the longer of six months from the date of Admission or the date of publication of the audited financial results of the Company for the year ended 30 September 2015. In addition, the Executive Directors and Inflexion have agreed that, for a further six month period following the expiry of their lock-up periods, they will not dispose of any Shares or interests in Shares other than through Numis. After the expiry of such arrangements, the Shares held by them will be freely transferrable. In addition, Numis may elect to waive such lock-up arrangements in certain circumstances. The Company cannot predict what effect, if any, future sales of Shares, or the availability of Shares for future sale, will have on the market price of Shares. Sales of substantial numbers of Shares in the public market following the Offer, or the perception or any announcement that such sales could occur, following the expiry of any lock-up arrangements, could adversely affect the market price of the Shares, and may make it more difficult for investors to sell their Shares at a time and price which they deem appropriate. Such sales may also make it more difficult for the Company to issue equity securities in the future at a time and at a price that it deems appropriate. During the periods immediately before and after the periods of sales restriction provided for by these lock-up arrangements, the market price of the Shares may fall in anticipation of a sale of Shares. Following the expiry of these arrangements, there will be no contractual restriction on the sale of the Shares owned by the Shareholders who were previously subject to them. The Group cannot predict whether a substantial number of Shares in addition to those which will be available in the Offer will be sold in the open market following the expiration or waiver of these restrictions. In particular, there can be no assurance that after the restrictions expire, or before such time if any such restrictions are waived, such Shareholders will not reduce their holdings of Shares.

US holders of the Shares may suffer adverse tax consequences if the Company is characterised as a passive foreign investment company. Generally, if, for any taxable year, at least 75 per cent. of the Company’s gross income is passive income, or at least 50 per cent. of the value of the Company’s assets are attributable to assets that produce passive income or are held for the production of passive income, including cash, the Company would be characterised as a passive foreign investment company, or PFIC, for US federal income tax purposes. For purposes of these tests, passive income includes dividends, interest and gains from the sale or exchange of investment property and rents and royalties other than rents and royalties which are received from unrelated parties in connection with the active conduct of a trade or business. If the Company is characterised as a PFIC, US holders of the Shares may suffer adverse tax consequences, including having

34 gains realised on the sale of the Shares treated as ordinary income, rather than capital gain, the loss of the preferential rate applicable to dividends received on the Shares by individuals who are US holders and having interest charges apply to distributions by the Company and the proceeds of sales of the Shares. See paragraph 2 of Part 14: ‘‘Taxation’’. The Company’s status as a PFIC will depend on the composition of its income and the composition and value of its assets (which, assuming the Company is not a ‘‘controlled foreign corporation’’ under Section 957(a) of the Code for the year being tested, may be determined in large part by reference to the market value of the Shares, which may be volatile) from time to time. With respect to the 2015 taxable year and foreseeable future taxable years, the Company does not anticipate that it will be a PFIC based upon the expected value of its assets, including any goodwill and the expected composition of the Company’s income and assets. However, the Company’s status as a PFIC is a fact-intensive determination made on an annual basis and the Board cannot provide any assurances regarding the Company’s PFIC status for the current or future taxable years. The Board does not currently intend to provide the information necessary for US holders to make a ‘‘qualified electing fund’’, or QEF, election if the Company is treated as a PFIC for any taxable year and prospective investors should assume that a QEF election will not be available.

35 PART 2 PRESENTATION OF FINANCIAL AND OTHER INFORMATION General Investors should only rely on the information in this Prospectus (and any supplementary prospectus produced to supplement the information contained in this Prospectus). No person has been authorised to give any information or to make any representations other than those contained in this Prospectus in connection with the Offer and, if given or made, such information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Directors or Numis. No representation or warranty, express or implied, is made by Numis in relation to the contents of this Prospectus, including its accuracy or completeness, and nothing in this Prospectus shall be relied upon as a promise or representation in this respect as to the past or future. Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to section 87(G)(1) of FSMA and paragraph 3.4.1 of the Prospectus Rules, neither the delivery of this Prospectus nor any subscription, sale or purchase of Shares pursuant to the Offer shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Company or the Group since the date of this Prospectus or that the information in this Prospectus is correct as of any time subsequent to its date. As required by the Prospectus Rules, the Company will update the information provided in this Prospectus by means of a supplement to it if a significant new factor that may affect the evaluation by prospective investors of the Offer occurs prior to Admission or if this Prospectus contains any material mistake or inaccuracy. Any supplement to this Prospectus will be subject to approval by the FCA and will be made public in accordance with the Prospectus Rules. If a supplement to this Prospectus is published prior to Admission then, to the extent provided in section 87Q of FSMA, investors shall have the right to withdraw their subscriptions or purchases made prior to the publication of the supplement. Such withdrawal must be done within the time limits set out in the supplement (if any) (which shall not be shorter than two working days after publication of the supplement). The contents of this Prospectus are not to be construed as legal, business or tax advice. Each prospective investor should consult its, his or her own lawyer, financial adviser or tax adviser for legal, financial or tax advice in relation to any subscription, purchase or proposed subscription or purchase of Shares. In making an investment decision, each prospective investor must rely on its, his or her own examination, analysis and enquiry of the Company and the terms of the Offer, including the merits and risks involved. This Prospectus is not intended to provide the basis of any credit or other evaluation and should not be considered as a recommendation by any of the Company, the Directors, Numis or any of their respective representatives that any recipient of this Prospectus should subscribe for or purchase any of the Offer Shares. Prior to making any decision as to whether to subscribe for or purchase any of the Offer Shares, prospective investors should read the entirety of this Prospectus. Investors should ensure that they read the whole of this Prospectus and not just rely on key information or information summarised within it. Investors who subscribe for or purchase Offer Shares will be deemed to have acknowledged that: (i) they have not relied on Numis or any person affiliated with Numis in connection with any investigation of the accuracy of any information contained in this Prospectus for their investment decision; and (ii) they have relied only on the information contained in this Prospectus and no person has been authorised to give any information or to make any representations concerning the Company or the Shares (other than as contained in this Prospectus) and, if given or made, any such other information or representations must not be relied upon as having been authorised by or on behalf of the Company, the Directors or Numis. None of the Company, the Directors, Numis or any of their representatives is making any representation to any offeree, subscriber or purchaser of Offer Shares regarding the legality of an investment by such offeree, subscriber or purchaser. In connection with the Offer, Numis and any of its affiliates, acting as investors for their own accounts, may subscribe for or purchase Offer Shares and, in that capacity, may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Offer Shares, its or their other securities of the Company or other related investments in connection with the Offer or otherwise. Accordingly, references in this Prospectus to the Offer Shares being offered, subscribed, acquired, placed or otherwise dealt in should be read as including any issue, offer or sale to, or subscription, purchase, dealing or placing by, Numis or any of its affiliates acting as an investor for its or their own account(s). Numis does not intend to disclose the extent of any such investment or transactions otherwise than in accordance with any legal or regulatory obligation to do so.

36 Presentation of financial information and non-financial operating data The combined and consolidated financial information in Part 11: ‘‘Historical Financial Information’’ has been prepared in accordance with the requirements of the Prospectus Directive Regulations and the Listing Rules and in accordance with the basis of preparation. The basis of preparation and significant IFRS accounting policies are further explained in the notes to the financial information set out in Section B of Part 11: ‘‘Historical Financial Information’’.

Financial information The Company was incorporated on 17 August 2015 in order to acquire 100 per cent. of the share capital of OTB Topco, and on completion of the Reorganisation will become the holding company for the Group. As a consequence, there is no historical financial information relating to the Company. Rather, the historical financial information in this Prospectus relates to the Operating Group. For further information, see the definition of ‘‘Group’’ in Part 16: ‘‘Definitions’’ and paragraph 2(a) of Section B, Part II: ‘‘Historical Financial Information’’. The Group presents its annual accounts as of 30 September in each financial year. The interim financial information included in Section B, Part 11: ‘‘Historical Financial Information’’ has been drawn up to 30 June 2015. The combined and consolidated financial information included in Part 11: ‘‘Historical Financial Information’’ for the three years ended 30 September 2014 and the nine months ended 30 June 2015 has been reported on in accordance with Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom and have been prepared in accordance with the basis of preparation included in paragraph 2(a) of Section B of Part 11: ‘‘Historical Financial Information’’. None of the financial information used in this Prospectus has been audited in accordance with auditing standards generally accepted in the United States of America (‘‘US GAAS’’) or auditing standards of the Public Company Accounting Oversight Board (United States) (‘‘PCAOB’’). US GAAS and the auditing standards of the PCAOB do not provide for the expression of an opinion on accounting standards which have not been finalised and are still subject to modification, as is the case with accounting standards as adopted for use in the EU and included in Part 11: ‘‘Historical Financial Information’’. Accordingly, it would not be possible to express any opinion on the financial information in Part 11: ‘‘Historical Financial Information’’ under US GAAS or the auditing standards of the PCAOB. In addition, there could be other differences between the auditing standards issued by the Auditing Practices Board in the United Kingdom and those required by US GAAS or the auditing standards of the PCAOB. Potential investors should consult their own professional advisers to gain an understanding of the financial information’’ in Part 11: ‘‘Historical Financial Information’’ and the implications of differences between the auditing standards noted herein.

Pro forma financial information In this Prospectus, any reference to ‘‘pro forma’’ financial information is to information which has been extracted without material adjustment from the unaudited pro forma financial information contained in Section A of Part 12: ‘‘Unaudited Pro Forma Financial Information’’, which is based on the consolidated interim financial information of the Group as at 30 June 2015 as set out in Section B of Part 11: ‘‘Historical Financial Information’’. The unaudited pro forma financial information has been prepared to illustrate the effect of the Offer, Reorganisation and re-financing as if it had taken place on 30 June 2015. Due to its nature, the unaudited pro forma financial information addresses a hypothetical situation and, therefore, does not represent the Group’s actual financial position or results. It may not, therefore, give a true picture of the Group’s financial position. The pro forma financial information has been prepared for illustrative purposes only in accordance with Annex II of the Prospectus Directive Regulation.

Non-IFRS financial information This Prospectus contains certain financial measures that are not defined or recognised under IFRS, including TTV, EBITDA, revenue per daily unique visitor, overhead costs, variable costs and marketing costs. Information regarding these measures is sometimes used by investors to evaluate the efficiency of a company’s operations and its ability to employ its earnings toward repayment of debt, capital expenditures and working capital requirements. There are no generally accepted principles governing the calculation of these measures and the criteria upon which these measures are based can vary from company to company.

37 These measures, by themselves, do not provide a sufficient basis to compare the Company’s performance with that of other companies, and should not be considered in isolation or as a substitute for operating profit or any other measure as an indicator of operating performance, or as an alternative to cash generated from operating activities as a measure of liquidity. Revenue per daily unique visitor is a robust benchmark that measures the quality of the traffic a brand generates from its website platforms. It helps inform the Board how much each daily unique visitor is worth. It provides the Group with a monetisation model that links two traditional e-commerce benchmarks (that of conversion and revenue per booking). The revenue per daily unique visitor metric both simplifies and aligns the finance and marketing function with one trading metric: Revenue per booking multiplied by conversion equals revenue per daily unique visitor. TTV, which is stated net of Value Added Tax and associated taxes, does not represent the Group’s statutory turnover. TTV represents the price at which goods or services have been sold across the Group’s various platforms. TTV is calculated by taking the volume of bookings multiplied by the average booking value. It allows the Board to measure customer value and, more importantly, make commercial decisions on pricing as the basis of customer value. EBITDA represents operating profit before depreciation, amortisation, holding company costs and non underlying costs, and TTV represents total transaction value. The Board uses EBITDA and TTV (amongst other things) as key performance indicators of the Group’s business and to evaluate the performance of its operations, to develop budgets and to measure its performance against those budgets. The Board believes EBITDA to be a useful supplemental tool to assist in evaluating operating performance because it eliminates depreciation and amortisation. The Board believes that such measures provide useful supplemental information without regard to such items. EBITDA and EBITDA-related measures are not a measurement of performance under IFRS and should not be considered by prospective investors in isolation or as a substitute for measures of profit, or as an indicator of the Group’s operating performance or cash flows from operating activities as determined in accordance with IFRS. The Board has presented these supplemental measures because it uses them to manage the Group’s business. In addition, the Board believes that EBITDA and EBITDA-related measures are commonly reported by comparable businesses and used by investors and analysts in comparing the performance of businesses without regard to depreciation and amortisation, which can vary significantly depending upon accounting methods. EBITDA and EBITDA-related measures may not be comparable to similarly-titled measures disclosed by other companies, and prospective investors should not use these non-IFRS measures as a substitute for the figures provided in the Group’s historical financial information included in Section B of Part 11: ‘‘Historical Financial Information’’.

Currency presentation Unless otherwise indicated, all references in this Prospectus to: • ‘‘sterling’’, ‘‘pounds sterling’’, ‘‘GBP’’, ‘‘£’’, or ‘‘pence’’ are to the lawful currency of the United Kingdom; • ‘‘dollars’’, ‘‘US dollars’’ or ‘‘$’’ are to the lawful currency of the United States of America; and • ‘‘euros’’ or ‘‘A’’ are to be the lawful currency of the European Monetary Union. The Company prepares its financial statements in pounds sterling.

Roundings Certain data in this Prospectus, including financial, statistical, and operating information, have been rounded. As a result of the rounding, the totals of data presented in this Prospectus may vary slightly from the actual arithmetic totals of such data. Percentages in tables have been rounded and accordingly may not add up to 100 per cent.

Market, industry and economic data Unless the source is otherwise identified, the market, economic and industry data and statistics in this Prospectus constitute Directors’ estimates, using underlying data from third parties. The Company obtained market and economic data and certain industry statistics from internal reports, as well as from third-party sources as described in the footnotes to such information. The Company confirms that all

38 third-party information set out in this Prospectus has been accurately reproduced and that, so far as the Company is aware and has been able to ascertain from information published by the relevant third-party, no facts have been omitted which would render the reproduced information inaccurate or misleading. Where third-party information has been used in this Prospectus, the source of such information has been identified. Such third-party information has not been audited or independently verified. This Prospectus includes market share, industry and forecasts that the Company has obtained from industry publications, surveys and internal company sources. As noted in this Prospectus, the Company has obtained market and industry data relating to the Group’s business from providers of industry data, including: • BDRC—Holiday Trends Report, 2013 • Euromonitor International • Mediacom—ontheBeach.co.uk Brand Tracking Results, 23rd March 2015 • Mintel—Beach Holidays—UK, January 2015 • Mintel—Package vs Independent Holidays UK, April 2015 • Google Analytics • Hitwise Market and industry data are inherently predictive and speculative, and are not necessarily reflective of actual market conditions. Statistics in such data are based on market research, which itself is based on sampling and subjective judgments by both the researchers and the respondents, including judgments about what types of products and transactions should be included in the relevant market. The value of comparisons of statistics for different markets is limited by many factors, including that: (i) the markets are defined differently; (ii) the underlying information was gathered by different methods; and (iii) different assumptions were applied in compiling the data. Consequently, the industry publications and other reports referred to above generally state that the information contained therein has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed and, in some instances, these reports and publications state expressly that they do not assume liability for such information. Research by Euromonitor International Limited should not be considered as the opinion of Euromonitor International Limited as to the value of any security or advisibility of investing in the Company.

Information regarding forward-looking statements This Prospectus includes forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond the Company’s control and all of which are based on the Directors’ current beliefs, expectations and assumptions about future events. Forward-looking statements are sometimes identified by the use of forward-looking terminology such as ‘‘believes’’, ‘‘expects’’, ‘‘may’’, ‘‘will’’, ‘‘could’’, ‘‘should’’, ‘‘shall’’, ‘‘risk’’, ‘‘intends’’, ‘‘estimates’’, ‘‘aims’’, ‘‘plans’’, ‘‘predicts’’, ‘‘continues’’, ‘‘assumes’’, ‘‘positioned’’ or ‘‘anticipates’’ or the negative of those terms, other variations on those terms or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this Prospectus, and include statements regarding the intentions, beliefs and current expectations of the Directors or the Company concerning, among other things, the results of operations, financial condition, liquidity, prospects, growth, strategies, and dividend policy of the Company and the industry in which it operates. In particular, the statements under the following headings ‘‘Summary Information’’, Part 1: ‘‘Risk Factors’’, Part 5: ‘‘Information on the Company and the Group’’ and Part 9: ‘‘Operating and Financial Review’’ regarding the Company’s strategy and other future events or prospects are forward-looking statements. These forward-looking statements and other statements contained in this Prospectus regarding matters that are not historical facts involve predictions. No assurance can be given that such future results will be achieved; actual events or results may differ materially as a result of risks and uncertainties facing the Company. Such risks and uncertainties could cause actual results to vary materially from the future results indicated, expressed, or implied in such forward-looking statements. Please refer to Part 1: ‘‘Risk Factors’’ for further information in this regard. The forward-looking statements contained in this Prospectus speak only as of the date of this Prospectus. The Company, the Directors and Numis expressly disclaim any obligation or undertaking to update these

39 forward-looking statements contained in this Prospectus to reflect any change in their expectations or any change in events, conditions, or circumstances on which such statements are based unless required to do so by applicable law, the Prospectus Rules, the Listing Rules or the Disclosure and Transparency Rules. Prospective investors should note that the contents of these paragraphs relating to forward-looking statements are not intended to qualify the statements made as to sufficiency of working capital in this Prospectus.

No incorporation of website information The contents of the Company’s website, any website mentioned in this Prospectus or any website directly or indirectly linked to these websites have not been verified and do not form part of this Prospectus, and prospective investors should not rely on such information.

40 PART 3 DIRECTORS, SECRETARY, REGISTERED AND HEAD OFFICE AND ADVISERS

Directors ...... Richard Segal (Chairman)* Simon Cooper (Chief Executive Officer) Gwendoline (Wendy) Parry (Chief Financial Officer) Lee Ginsberg (Non-Executive Director) David Kelly (Non-Executive Director) Company secretary ...... Kirsteen Vickerstaff (General Counsel) Registered office ...... Park Square Bird Hall Lane Cheadle Heath Stockport SK3 0XN United Kingdom Global Co-ordinator, Sponsor and Bookrunner ...... Numis Securities Limited The London Stock Exchange Building 10 Paternoster Square London EC4M 7LT United Kingdom Legal advisers to the Company as to UK law ...... Taylor Wessing LLP 5 New Street Square London EC4A 3TW United Kingdom Legal advisers to the Company as to US law ...... Goodwin Procter LLP The New York Times Building 620 Eighth Avenue New York, NY 10018-1405 United States of America Legal advisers to the Global Co-ordinator, Sponsor and Bookrunner as to UK law and US law ...... Simmons & Simmons LLP CityPoint One Ropemaker Street London EC2Y 9SS United Kingdom Auditors ...... KPMG LLP 1 St Peter’s Square Manchester M2 3AE United Kingdom Reporting Accountants ...... PricewaterhouseCoopers LLP 33 Wellington Street Leeds LS1 4JP United Kingdom

* Richard was appointed as a director of the Company on 17 August 2015, but his position as Chairman is not effective until Admission.

41 Registrars ...... Capita Asset Services The Registry 34 Beckenham Road Kent BR3 4TU United Kingdom Financial public relations advisers to the Company ...... Citigate Dewe Rogerson 3 London Wall Buildings London EC2M 5SY United Kingdom

42 PART 4 EXPECTED TIMETABLE OF PRINCIPAL EVENTS AND OFFER STATISTICS

Event Time and date Expected timetable of principal events Announcement of Offer Price ...... 7.00 a.m. on 23 September 2015 Commencement of conditional dealings in the Shares on the London Stock Exchange ...... 8.00 a.m. on 23 September 2015 Prospectus published ...... 23September 2015 Admission and commencement of unconditional dealings in the Shares on the London Stock Exchange ...... 8.00 a.m. on 28 September 2015 CREST accounts credited in respect of uncertificated Shares ..... 28September 2015 Share certificates in respect of certificated Shares despatched .... 12October 2015 All times are London, UK times. Each of the times and dates in the above timetable is indicative only and is subject to change without further notice. Offer statistics Offer Price (per Share) ...... 184 pence Number of Shares in issue immediately prior to Admission ...... 130,434,763 Number of Shares in the Offer ...... 52,173,912 —to be sold by the Selling Shareholders (the Sale Shares) ..... 46,739,130 —to be issued by the Company (the New Shares) ...... 5,434,782 Percentage of the existing issued share capital to be issued pursuant to the Offer ...... 37.4 per cent. Number of Shares in issue immediately following Admission ..... 130,434,763 Expected market capitalisation of the Company at the Offer Price(1) ...... approximately £240.0 million Expected net proceeds of the Offer receivable by the Company(2) . approximately £6.4 million Estimated net proceeds of the Offer receivable by the Selling Shareholders(3) ...... approximately £83.8 million

(1) The market capitalisation of the Company at any given time will depend on the market price of the Shares at that time. There can be no assurance that the market price of a Share will equal or exceed the Offer Price. (2) After deduction of estimated commissions, fees and expenses payable by the Company of £2,688,955. (3) After deduction of estimated commissions, fees and expenses payable by the Selling Shareholders of £2,150,000.

43 PART 5 INFORMATION ON THE COMPANY AND THE GROUP Investors should read this Part 5 in conjunction with the more detailed information contained in this Prospectus, including the risk factors appearing in Part 1: ‘‘Risk Factors’’ and financial and other information appearing in Part 9: ‘‘Operating and Financial Review’’. Where stated, financial information in this Part 5 has been extracted without material adjustment from Part 11: ‘‘Historical Financial Information’’.

1. BACKGROUND The Group is a leading online retailer of affordable short-haul beach holidays, primarily targeting customers in the United Kingdom under the ‘‘On the Beach’’ brand. The Group currently has a market share of the UK online short-haul beach holiday market of approximately 17 per cent. Its two largest competitors are TUI Travel and Thomas Cook (source: CAA, UK Short Haul Beach Online Estimates). The Group entered the Swedish market in early 2015, and in the short term intends to expand into Norway and/or Denmark. The Group’s technology platform enables customers to package dynamically the constituent components of their holiday (including flights, hotels and transfers) to customise holidays from millions of flight and hotel combinations. The Group’s search facility connects customers to suppliers of travel products. Each travel product is booked separately. The Group’s dynamic packaging is different to the traditional package holidays offered by many tour operators, where packages of flights, hotels and other products are fixed by operators at the outset. The Group is completely independent from airlines and hotels, so that it can offer customers a full market range of flight and hotel products bookable through online channels (including by desktop, mobiles, tablets and apps) and over the phone. The Group has a differentiated customer proposition focused on three key areas: • Simplicity: the Group’s online platform provides ease of navigation, clarity and transparency; • Value: the Group offers choice, flexibility, competitive pricing and relevant products, combined with financial protection and high service standards; and • Personalisation: the Group visually tailors and personalises the customer experience across each device that customers use to visit the Group’s websites based on customer preference to maximise customer conversion rates. The Group’s competitive advantages are based on the strength of its customer proposition, plus the following core strengths which help it to increase scale and revenue: • Focus: The Group’s focus on offering customers short-haul beach holidays sets it apart from generalist OTAs. Approximately 93 per cent. of the Group’s sales of holidays were booked via its online platform for the nine month period ended 30 June 2015. It has a lower fixed-cost base than most traditional ‘‘bricks and mortar’’ tour operators. In addition, because the Group has no stock commitments with airlines or hotels, it can provide a more flexible range of beach holiday products to its customers, and does not need to factor in unsold stock into its sales prices. The Group’s online business model means it is cash generative with favourable working capital dynamics, which allows it to invest into key areas such as brand, technology and customer service. • Expertise: The Group has an effective and committed management team, with over 50 years of travel and online experience in aggregate. The Group has operated exclusively in the beach holiday segment for 11 years and has built up considerable consumer and market know-how. By utilising site visitor profiling technology, the Group is able to personalise the customer experience by offering more relevant product options and targeted deals. • Agility: A flat, entrepreneurial culture is engrained across the business to drive innovation of ideas and enable the Group to continually evolve by improving those elements of its business which will have the biggest effect on revenue and customer experience. This culture, coupled with the Group’s technological platform which was wholly developed and is maintained in-house, enables data to be aggregated, filtered and enriched with speed and efficiency which, in turn, allows the Group to improve its offering and create a seamless customer experience over multiple devices. Over the financial years ended 30 September 2013 and 30 September 2014, customer conversion rates on

44 smartphones, desktops and tablets increased by 20 per cent., 22 per cent. and 22 per cent., respectively. • Brand: The Group’s focus as a short-haul beach holiday provider allows it to direct its marketing efforts on creating a brand that specialises in a certain segment of the market. The strength of the ‘‘On the Beach’’ brand has helped the Group increase its share of traffic from branded, free and direct sources from 40 per cent. in the financial year ended 30 September 2012 to 55 per cent. in the nine month period ended 30 June 2015 (source: Google Analytics). The strength of the Group’s brand is instrumental in minimising the Group’s cost per acquisition. Currently, there is a structural shift in the travel intermediaries market towards online channels and dynamically packaged holidays to give consumers flexibility and a broader product choice, both of which are core features of the Group’s business model (source: Euromonitor, Online Sales by Market; Euromonitor Growth in Dynamic Packages). This shift provides the Group with added flexibility and breadth of product offering. The United Kingdom and Scandinavian online short-haul beach holiday market is continuing to grow, with the Group well positioned to take further market share from mainstream ‘‘bricks and mortar’’ competitors with extensive retail stores and a more limited customer proposition than the Group’s current offering. The UK and continental European OTA markets include a wide range of public and private companies, some of which have a clear regional focus, while others operate across regions and worldwide. Market participants vying for the same consumer travel spending as the Group include other OTAs, traditional (offline) travel agencies and travel suppliers themselves, such as airlines, hotels and tour operators. For the financial year ended 30 September 2014, the Group reported revenue for the United Kingdom of £45.6 million and EBITDA of £15.4 million. For the nine month period ended 30 June 2015, the Group reported revenue for the United Kingdom of £47.7 million and EBITDA of £15.4 million.

2. HISTORY AND DEVELOPMENT The first Group company was established by current CEO Simon Cooper in 2003, and became a trading subsidiary of On the Beach Limited in 2008. Mr Cooper was also a founder of On the Beach Limited (formerly known as On the Piste Travel Limited) which was incorporated in 1996. The Group initially operated on a digital platform operated by Teletext Holidays, with bookings being taken via a call centre. In October 2004, the Group launched its first ‘static’ website to show hotels to prospective customers. Shortly thereafter, the Group began to develop an offers-based website providing dynamically packaged holidays, which launched in September 2005. At this stage, the Group had access to a single hotel- aggregator (known as a ‘bed-bank’) and one provider of flight data. During this time, the Group’s call centre function expanded rapidly. In 2007, the private equity firm Livingbridge (then known as ISIS) acquired a majority stake in the Group. The Group continued to develop its website specialising in beach holidays, offering dynamic packages focusing on the search and demand patterns of consumers who would otherwise book from traditional tour operators. Following the investment by Livingbridge, the executive and senior management team of the Group grew and the proportion of online bookings increased. By 2011, approximately 79 per cent. of the Group’s bookings were made online, with the remainder being made via the call centre. In 2011, the Group launched its own proprietary technology platform which is characterised by flexible, modularised architecture to enable the Group to handle data with speed and efficiency. The platform has allowed the Group continuously to improve its offering and create a seamless customer experience over multiple devices, such as desktops and smartphones. In 2011, the Group acquired a technology platform, brand and URL from ResortTaxis.com out of administration for approximately £10,000 to assist with transporting holidaymakers from overseas airports to their destination hotels. The Group later rebranded this initiative as ‘‘On the Beach Transfers’’. In January 2012, the Group launched its 24-hour telephone support service to provide customers with access to the Group’s service team throughout their holidays. In October 2013, Inflexion (a partnership whose general partner is advised by the private equity firm Inflexion Private Equity Partners LLP) acquired a majority stake in the Group from Livingbridge. Since then, the Group has improved its revenue by developing and optimising its technology platform across

45 multiple devices, grown its direct contracting system, maximise its brand awareness by continuing to invest in online and TV advertising, expand its offering of holiday ancillaries (e.g. transfers and insurance products) and begun international expansion. In early 2015, the Group launched an international platform in Sweden under the ‘‘ebeach.se’’ domain name, and plans further expansion into Norway and/or Denmark in the short term.

3. MARKET OVERVIEW UK short-haul beach holidays The Group’s core market is UK short-haul beach holidays that are booked online. The UK dynamic packaging market in which the Group operates grew at a compound annual growth rate of 9.9 per cent. in the period 2009 to 2014 (source: Euromonitor, Growth in Dynamic Packages). Bookings from the United Kingdom accounted for over 99 per cent. of the Group’s bookings in the financial year ended 30 September 2014. There has been an overall growth in short-haul holidays in the United Kingdom (defined as UK consumers travelling to destinations less than 6 hours flight from the UK mainland), with an overall decrease in long-haul holidays. The compound annual growth rate for short-haul holidays from the United Kingdom was 4.7 per cent. for the period from 2010 to 2014, compared to a decline in long-haul holidays of 1.3 per cent. over the same period. In 2014, UK travellers made approximately 12.3 million visits abroad to short-haul package holiday destinations compared to approximately 3.83 million visits abroad to long-haul package holiday destinations (source: Mintel, Package vs Independent Holidays UK, April 2015). The Board believes this trend is largely attributable to the costs associated with long-haul flying (particularly the increasing costs of jet fuel and the Air Passenger Duty on all long-haul flights from the United Kingdom). In addition, the Board believes there has been an overall increase in the quality (both in terms of services and facilities) of hotels in the western Mediterranean to compete with hotels in long-haul destinations. The beach holiday category is the most popular holiday type amongst UK consumers. Approximately 48 per cent. of UK holidaymakers who travel overseas have taken a beach holiday in the last 12 months, compared to 19 per cent. for city breaks, 15 per cent. for cultural/history breaks and 6 per cent. for cruises. Mintel estimates the value of the overseas beach holiday market at £10.7 billion (excluding flight costs) (source: Mintel, Beach Holidays—UK, January 2015).

Dynamic packages as a share of the wider UK market Dynamic packaging is a booking process that allows customers to book their own combinations of flights, hotels and transfers from millions of available options on a website or through the app of an OTA or tour operator. The key drivers of growth in dynamic packaging are: • increased market share of European short-haul low cost carriers at the expense of main carriers. In terms of UK outbound beach holidays, the proportion booked through low cost carriers as a percentage of all flights has increased from 43 per cent. in 2008 to 63 per cent. in 2014 (source: CAA, Low Cost Flights vs All Flights UK); • the search by UK consumers for greater flexibility and value to maximise their holiday budgets, which is a cause and result of increasing online penetration; and • the increasing ability of consumers to create their own holidays through advanced filtering options and high quality hotel sales information. The dynamically packaged holiday market in the United Kingdom is forecast to grow from 2014 to 2019 at the expense of traditional pre-packaged holidays. During this period, traditional package holiday sales are forecast to decline by a compound annual growth rate of 3.9 per cent. in the United Kingdom, whilst dynamic packaging sales are forecast to grow by a compound annual growth rate of 1.7 per cent. (source: Euromonitor, Growth in Dynamic Packages). Euromonitor estimate the proportion of UK package holiday sales that are dynamically packaged was £2.72 billion in 2009, rising to £4.37 billion in 2014 and representing a compound annual growth rate of 9.9 per cent. UK traditional package holiday sales reduced from £8.97 billion to £6.54 billion over the same

46 period, representing a compound annual growth rate of minus 6.1 per cent (source: Euromonitor, UK Growth in Dynamic Package v Traditional Package Holidays).

Online penetration of UK leisure package holidays Online penetration in the UK package holiday market has steadily increased from 48 per cent. in 2012 to 52 per cent. in 2014, and is forecast to reach 59.5 per cent. by 2019. The forecast compound annual growth rate for online package holiday sales in the United Kingdom is 2.1 per cent. for the period from 2014 to 2019 (or 2.3 per cent for the period from 2012 to 2019) (source: Euromonitor, Online Sales By Market). In the UK market in 2014, online penetration of travel sales made via intermediaries was 52 per cent. for package holidays, 85 per cent. for accommodation (sold as a single component) and 81 per cent. for flights (sold as a single component). In the UK market, by 2019 online penetration rates of accommodation and flights sold as single components via intermediaries are projected to rise to 89 per cent. and 84 per cent. respectively, and online penetration rates of package holidays are projected to rise to 59.5 per cent. (source: Euromonitor, Online Intermediaries Sales by Market). In the Netherlands and certain Scandinavian countries, online penetration in flights and hotels is already between 60 and 82 per cent. (source: Euromonitor, % Online Share for Air Only, Packages, Lodging Only), and the Board expects that online penetration of packaged holidays will continue to rise.

The European package holiday market Sales in the package holiday sector in Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Spain and Sweden amounted to A55 billion in 2014. Online sales penetration in the same sector and markets is expected to grow from 26 per cent. in 2014 to 30 per cent. in 2018 (sources: Euromonitor, Offline and Online Intermediaries Sales by Market; Euromonitor, Online Sales by Market).

The Swedish market Package holiday sales in Sweden grew, on a compound annual growth rate basis of 1.5 per cent. between 2012 and 2014 to reach A2,291 million in 2014. Offline value sales for package holidays saw a decrease of 7 per cent. in 2014. Online sales for package holidays, however, continued to grow, increasing by 1.5 per cent. in the same year. Online sales of package holidays accounted for A1,543 million in 2014, which represented 67 per cent. of total travel intermediaries’ sales in Sweden for the year. Online package holiday value sales are projected to increase by 17 per cent. in Sweden between 2014 and 2018 (source: Euromonitor, Online Sales by Market).

Barriers to entry for competitors The Group focuses on a niche in the market between traditional tour operators and generalist OTAs. The Group has spent over 11 years developing and refining its business model, and the Board believes that there are significant barriers to entry for companies looking to compete in the short-haul beach holiday market. The Group focuses on enabling customers to dynamically package holidays to short-haul beach destinations through its online platform. The Board believes this model would be difficult for competitors, be they new entrants, traditional tour operators, generalist OTAs or low-cost carriers to replicate.

Tour operators • High fixed-costs: Core operations are typically run from high street shops, which leads to high fixed-cost bases and operational inefficiencies. This traditional offline focus has discouraged tour operators from investing heavily to increase their online penetration, limiting tour operators’ ability to cost-effectively replicate the Group’s online, low fixed-cost base business model. Management estimates the Group’s fixed cost per booking, to be approximately £23 for the financial year ended 30 September 2014, which the Board believes is appreciably lower than that for tour operators. • Conflicts of interest: Tour operators are typically committed to fill a certain capacity for flights and hotels. As a result, tour operators would be acting against their own interests and potentially negatively affecting their own profitability by offering customers the choice of flights and hotels from a variety of providers.

47 • Incomplete offering: A comparative lack of inventory and technology infrastructure makes it difficult for tour operators to provide a similar level of choice and flexibility that the Group is able to offer to its customers.

Generalist OTAs • Dependence on Global Distribution Systems: OTAs typically depend on Global Distribution Systems for hotel room and flight availability, which limits their ability to respond quickly to searches (as they are dependent on the response times of the relevant Global Distribution System), and the choices that are available via searches. • Lack of specialist knowledge: OTAs typically have no specialist focus on beach holidays. In addition, without a brand associated with beach holidays, generalist OTAs may struggle to make a positive return bidding on generic beach holiday keywords and, as a result, do not directly compete with the Group for traffic to their websites. • Lack of dynamic packaging: The majority of generalist OTAs specialise in single element bookings (e.g. either flights or hotels) and their technological platforms are not optimised to offer customers the ability to dynamically package these constituent parts into a single bespoke holiday offering.

Low-cost carriers • Incomplete offering: The single element offering of low-cost flights means the current platforms of low-cost carriers only offer hotels as an ancillary product. Development of expertise would be required (particularly in terms of building supplier and hotel relationships) for low-cost carriers to offer the breadth of products that the Group currently offers. • Conflicts of interest: Similarly to tour operators, low cost carriers’ interests are aligned with offering self-operated flights, which disincentives them from offering a broad range of products, therefore limiting consumer choice.

New entrants • Building a strong brand: The Group has spent 11 years growing brand recognition in the short-haul beach holiday sector online and, more recently, offline via TV advertising and through developing the Group’s bid modelling tool. For the nine month period ended 30 June 2015, the Group’s share of traffic from branded, free and direct sources was 55 per cent. (source: Google Analytics). New entrants would lack this advantage, meaning their proportion of branded traffic would likely be lower for a significant period of time following launch. Non-branded traffic costs more per click than branded traffic and drives lower conversion rates than branded traffic and, as a result, a lack of branded traffic will have a significant effect on profitability for a new entrant. In addition, because of the lack of history of new entrants, the search engine quality score for new entrants will be lower. The Group’s conversion rates on non-branded traffic will also be higher than that of a new entrant into the market given the sophistication of the Group’s technology platform and the wide recognition of the Group’s brand across users who continue to visit the Group’s website via non-branded keywords. • Lack of existing relationships: New entrants have limited access to hotel suppliers due to a lack of existing relationships, potentially resulting in higher costs per booking and higher costs for consumers or lower revenue for the new entrant. Lack of hotel supplier relationships also reduces the breadth of product offering, overall user experience and choice. • Costs of developing a suitable technology platform: A significant investment in time and money is required to achieve agility and scalability of a suitable platform to compete with the in-house technology that the Group has developed over a number of years. • Developing scale: The scale of the Group’s operation drives competitive input rates and lowers fixed- costs per booking which would be difficult for a new entrant to replicate. In addition, the modular nature of the Group’s platform is easily scalable into new markets and able to handle increased transaction volumes, which may not be the case for new entrants.

48 4. KEY STRENGTHS OF THE GROUP A focus on online, dynamically packaged beach holidays for UK customers gives the Group significant advantages over its market competitors The Group is a leading provider of dynamically packaged beach holidays for UK customers and possesses significant advantages over its key market competitors. The Group has operated exclusively in the beach holiday segment for 11 years, and has built up considerable know-how in understanding what its customers want from a beach holiday. The Group’s focus on beach holidays sets it apart from the generalist OTAs, which gives it a competitive advantage as it can tailor its business model to exclusively serve the online beach segment. Generalist OTAs find it more difficult to prioritise single sector, single market projects based on the ability to deliver significant financial returns. The Group’s focus on the beach segment has allowed it to concentrate its marketing efforts in creating a brand that specialises in a certain segment of the holiday market that resonates with beach holiday makers. The strength of the ‘‘On the Beach’’ brand has helped increase its share of traffic from branded, free and direct sources from 40 per cent. in the financial year ended 30 September 2012 to 55 per cent. in the nine month period ended 30 June 2015 (source: Google Analytics). The Group’s brand has been instrumental in driving down the Group’s cost per acquisition. Furthermore, when compared to other categories of holiday (for example, city breaks), beach holidays provide a resilient offering with less volatility with regard to aggregate passenger numbers and destinations, with the majority of outbound UK consumers travelling to either Spain or Greece according to the CAA (sources: Mintel, Beach Holidays—UK, January 2015; CAA). These destinations also represent the largest proportion of the Group’s revenue over the last three years, demonstrating the Group’s focused offerings. The Group’s online offering also is founded upon a lower fixed-cost base compared to tour operators, whose business models (including ‘‘bricks-and-mortar’’ retail stores, significant levels of committed beds and in-house airline capacity) have resulted in them operating higher fixed-cost base models, with a limited opportunity to provide a broader range of products to consumers. These traditional tour operators’ business models are restrained by in-house and committed capacity in flights and hotels; in contrast, the Group has no stock commitments and therefore is able to provide more choices. As a result of these market dynamics, within the UK short-haul beach holiday market, the Group has increased its UK outbound passenger numbers by 125 per cent. from 2011 to 2014, whilst Thomas Cook and TUI Travel’s outbound UK and Ireland passenger numbers for short-haul beach holiday destinations have declined by 21 per cent. and 8 per cent. over the same time period, respectively. The Group’s ability to enable customers to dynamically package holidays is different from generalised OTAs, who typically provide only a single element offering (mainly flights), which have a lower basket value and are lower revenue products in comparison to packaged offerings comprising multiple elements. In particular, the Group’s ability to dynamically package its offerings (which represented 92.4 per cent. of the Group’s TTV for the financial year ended 30 September 2014) enables customers to select flight and hotel options from different suppliers with complete flexibility on dates and timings in comparison to traditional package holidays. This difference represents a high revenue opportunity for the Group as it is able to leverage revenue on multiple elements where the customer is focused on the aggregate package price.

Experienced and entrepreneurial management team with significant travel and online experience The Group has an effective and committed management team with over 50 years of travel and online experience in aggregate. A flat, entrepreneurial culture is engrained across the business to drive innovation of ideas. In particular, the founder and Chief Executive Officer Simon Cooper has significant experience in the travel industry, having founded On the Piste (a ski tour operator) in 1996, a business which was eventually sold to TUI Travel in 2008. Chief Financial Officer Wendy Parry has also held Managing Director, Commercial Director and Finance Director roles at divisions of Holidaybreak plc and Booker, whilst Jonathan Smith, the Chief Technology Officer, and Alistair Daly, the Chief Marketing Officer, have significant online experience, having held senior roles at Moneysupermarket.com and Lastminute.com, respectively. William Allen, the Supply Director, and Oliver Garner, the International Director, have held senior commercial and marketing positions at MyTravel and On Holiday Group, and Thomas Cook, Thomson and Hotels.com, respectively.

49 Agile, scalable and flexible in-house technological platform supported by a robust MI platform The Group’s in-house technological platform has been designed, assembled and maintained through approximately £11.6 million of investment over the last five years, replacing a third-party technology solution. By developing an in-house platform, the Group is able to respond to changing market dynamics with greater agility, scalability and flexibility. The Group’s technology platform is modular, with each component being written and maintained in-house which enables data to be aggregated with speed and efficiency. Moreover, the modular architecture of the platform is easily scalable into new markets and able to handle increased transaction volumes. Parallel teams are able to work on the individual modules within the overall e-commerce platform, whilst the Group’s data caching system promotes high performance and scalability. Importantly, the technological platform is supported by a robust MI platform, which provides a single source of data for all business areas to inform rapid decision making. In particular, the MI platform enables daily split testing to measure customers’ booking experiences, tests on conversion and revenue to optimise revenue per daily unique visitor and improve traffic through the Group’s bid modelling tool.

UK market-leading customer proposition focused on simplicity, value, personalisation and differentiation The Group has a customer proposition that appeals across a wide range of customer segments across the United Kingdom and is focused on simplicity, value, personalisation and differentiation. Simplicity is core to the Group’s proposition, with the Group undertaking split testing to simplify and improve the online booking process and offer clarity and transparency. These tests are based on customer insight and are prioritised by the Group according to what changes to the technological platform are likely to have the greatest effect on customer conversion rates and revenue. In terms of value, the Group offers competitively priced holidays on account of its low fixed-cost base and ability to source a broad range of flights, hotels and ancillary products. The majority of flights are sourced from the United Kingdom’s largest low cost carriers, with the Group’s pricing logic aiming to leverage greater point of sale revenue. Furthermore, the Group’s recent initiatives, such as its direct contracting system, have complemented third-party supply (particularly in hotel bookings). The Group is also increasingly personalising the customer experience. Site visitor profiling is able to track and record details of user interaction with the Group’s websites and targeted deals are provided to customers according to their individual site visitor profile. Personalisation is integrated into the Group’s CRM system for personalised email marketing campaigns both during the research period and subsequently to drive repeat purchases and bookings. For example, the Group presents ‘‘personalised star hotels’’ to customers looking at up to 15 facets of their search history and has experienced conversion rates for these hotels which are up to three times higher than when the relevant hotels are not presented to customers on a personalised basis. The Group has developed a ‘‘Platinum’’ microsite which it can direct customers to through its personalisation platform. The ‘‘Platinum’’ microsite has a more upmarket design than the Group’s standard booking path and, through a combination of the ‘‘Platinum’’ microsite and the Group’s personalisation platform, sales of luxury hotels by the Group have increased by 165 per cent. from the nine month period ended 30 June 2014 to the nine month period ended 30 June 2015. If a customer books more than defined number of days in advance of departure, the customer is able to take advantage of the Group’s low deposit scheme. Currently the prescribed number of days is 45, however management has the flexibility to amend this and has done so frequently in the past. When a low deposit offer is in operation, a customer can secure his or her booking with a deposit which is a percentage of the normal deposit level described above. The deposit paid by the customer is therefore typically lower than the flight cost. This deposit is paid into the trust and released the following day. The Group pays the full flight cost on booking and therefore funds the balance above the deposit from cash and debt facilities. The remainder of the balance due from the customer is then payable normally 28 days after booking for the flight cost and 14 days before departure date for hotel and other elements. The balance of the flight deposit is released from the trust, and all other customer monies are held in trust until the customer returns from holiday. This offer is in contrast to other OTAs, who typically charge customers the full balance between 8 and 12 weeks prior to holiday departure. See paragraph 4 of Part 8 ‘‘Regulation’’.

50 These above factors underpin a differentiated customer proposition that is focused exclusively on beach holidays, as a result of which branded and free traffic accounts for approximately 70 per cent. of all bookings that are made. Furthermore, the Group has a strong Net Promoter Score of 67 (source: BDRC, Holiday Trends Report, 2013) and repeat booking volumes have grown by 48 per cent. on a compounded annual basis from the financial year ended 30 September 2011 to the financial year ended 30 September 2014, demonstrating the strength of the Group’s customer proposition in driving continued growth in booking volumes. Repeat booking volumes were 45,652, 70,576 and 96,705 for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014, respectively. Along with the Group’s strong Net Promoter Score, the Group has found that customer complaint ratios have decreased from the financial year ended 30 September 2013 to the nine month period ended 30 June 2015 from 0.88 per cent. of total passengers to 0.86 per cent. of total passengers. The Board believes that these complaint ratios are broadly comparable with those of its competitors.

Efficient business model supporting increased investment in demand generation As a result of the Group’s agile, online technological platform and customer proposition, the Group operates with a low fixed-cost base that enables it to allocate a larger portion of its revenue into marketing spending in comparison to traditional tour operators, who often have a significantly higher fixed-cost base as a result of their legacy ‘‘bricks and mortar’’ retail stores. In particular, the Group invests in non-branded advertising initiatives such as Google and other pay-per-click mechanisms. This has resulted in the Group taking a 31 per cent. share of generic beach holiday traffic in the United Kingdom on Google in May 2015 (as compared to Thomas Cook’s 9 per cent. share) (source: Google Analytics). As at 20 June 2015, the Group had a 17 per cent. share of beach holiday keywords on a paid search (as compared to lowcostholidays’ 11.1 per cent. share and Thomas Cook’s 4.9 per cent. share) (source: Hitwise). This drives an increase in total traffic to the Group’s websites. For the period between the financial year ended 30 September 2012 and the financial year ended 30 September 2014, traffic growth to the Group’s websites grew by a compound annual growth rate of 14 per cent. but fixed and variable costs as a percentage of revenue fell at a compound annual growth rate of 14 per cent. In the same period, revenue per daily unique visitor grew by a compound annual growth rate of 6 per cent. A positive virtuous circle is created where customers migrate from using non-branded to branded advertising mechanisms to make further repeat bookings, which further lowers the Group’s fixed-cost base and increases the operational leveragability and efficiency of its business model.

Strong financial track record of growth, profitability and cash generation The Group has a strong financial track record of growth, profitability and cash generation. From the financial year ended 30 September 2012 to the financial year ended 30 September 2014, TTV grew at a compound annual growth basis of 24.8 per cent., with revenue growing by 21.5 per cent. on the same basis. These increases are the result of the Group increasing its UK market share, on account of increasing overall online penetration in the UK market and a greater share of the online market being captured by the Group. The Group has also increased profitability over the last three financial years and maintains good EBITDA margins (as a percentage of revenue) despite marketing investment to grow traffic share and continued investment in IT, service and supply. From the financial year ended 30 September 2012 to the financial year ended 30 September 2014, EBITDA grew at a compound annual growth basis of 19.2 per cent. The growth in the year ended 30 September 2014 was affected by a £1 million investment into offline and direct contracting which has accelerated the growth in EBITDA in the nine months to 30 June 2015, with EBITDA growth year-on-year of 48.6 per cent. For the financial year ended 30 September 2014, EBITDA margin (as a percentage of revenue) was 30.9 per cent. (33.1 per cent. excluding offline marketing spend). Finally, the Group operates a cash generative business model that has favourable working capital dynamics, as payment is received from customers when it is due to suppliers (except in the case of the Group’s low deposit and pay later schemes). In addition, the Group has no stock commitment and, therefore, does not make supplier pre-payments based on allocations.

51 5. OBJECTIVES AND STRATEGY FOR THE GROUP Continued evolution of the customer proposition The Group intends to enhance the customer booking experience through the ongoing delivery of split testing and trialling of changes and improvements, such as personalisation and further development of the Group’s multi-device capabilities. The Group has licenced third-party software to review user videos and monitor customer behaviour to determine the areas of its websites which are most frequently scanned by visitors, which support the Group’s existing MI functionalities. In order to improve personalisation, it is intended that existing customers will have accounts automatically created for them, whilst new features will also become available to the Group’s account holders.

Personalisation of customer experience Multi-device capabilities will be further developed through the employment of specialist staff, further development of existing online tools and enhanced customer communication. Specialist staff will work to enhance the 24-7 telephone hotline in order to increase customer satisfaction. A number of existing online tools are being further developed. Notably, the Group intends to develop its ‘‘Mobile Manage Your Booking’’ system and products to enhance customers’ pre-trip experiences (including auto check-in for flights and auto-appending ancillaries post-booking). Finally, the Group intends to improve customer communication through developing a pre-trip programme, SMS Day of Departure feature and Post Trip CRM Programme, all of which will be measured through Net Promoter Score and Feefo customer satisfaction scores.

Leverage revenue performance The Board believes that a number of opportunities exist to further leverage revenue per booking to enhance profitability. These opportunities include investment into the Group’s direct contracting system to dis-intermediate third-party suppliers of beds and the implementation of flexible payment terms offered to customers, as well as increasing levels of existing and new ancillary products. The Group’s direct contracting system represents a significant opportunity to increase revenue, as it removes the necessity to source bed supply through third-party intermediaries that charge a margin on each customer transaction. The Group can leverage higher revenues through prompt payment mechanisms to hoteliers without affecting the Group’s operating cash flows. The Group has identified and is focusing on properties that provide the highest revenue in each destination. The Board believes that the Group is well positioned to scale its direct contracting system so as to achieve a net margin contribution of £7.9 million in the financial year ended 30 September 2019. Furthermore, the Group intends to continue to offer flexible payment options for customers prior to them departing on holiday. This enables customers to pay their total booking price in instalments, through which the Group plans to charge fees that increase the revenue per booking. The Group intends to launch two new flexible payment options for customers, being ‘‘Pay Later’’ and ‘‘Hold that Price’’. ‘‘Pay Later’’ will target late booking customers, who will be provided with credit from Paypal until the relevant holiday is paid in full, while ‘‘Hold that Price’’ will target early booking customers, allowing them to reserve a holiday for a finite period of time for a small fee.

Enhancement of the Group’s bid modelling tool and app launch to increase market share of total traffic The Group intends to enhance its bid modelling tool to enable it to recognise the same user across different devices, such as desktop and tablet. In addition, work has been undertaken on the Group’s bid modelling tool to be able to analyse customer trends more closely and understand the effect of individual keywords and campaigns. Furthermore, the Group intends to continue to invest in offline advertising in order to drive brand awareness and reduce reliance on non-brand paid search activity. This offline advertising will be supported by an integrated and personalised CRM programme with the aim of increasing the level of repeat bookings.

52 Finally, the recent launch by the Group of iOS and Android apps has enabled customers to gain access to the Group’s brand throughout the whole holiday booking process and increase their level of brand engagement at each stage of the booking cycle. In addition, the Group expects that diversion of increasing levels of traffic towards its apps will result in a reduction in overall marketing spending and offer the Group opportunities to increase revenue by selling ‘in-resort’ products to its customers. The Group’s share of market traffic to its websites has grown at a compound annual growth rate of 12.9 per cent. over the period between the financial year ended 30 September 2012 and the financial year ended 30 September 2014, with a compound annual growth rate of 14.4 per cent. more daily unique visitors to the Group’s websites over that same period (source: Hitwise).

Continued expansion in Sweden and launch in further markets outside the United Kingdom The Group intends to expand its business model in certain other European markets to address the EUR 55 billion package holiday market opportunity in Belgium, Denmark, France, Germany, Italy, Netherlands, Norway, Spain and Sweden (source: Euromonitor, Off and Online Intermediaries Sales by Market). The Group entered the Swedish market in early 2015 and proposes to expand into Norway and/or Denmark, given certain similarities between the UK and Scandinavian package holiday markets. These similarities include a strong and growing dynamic packaged holiday market, forecast low-cost carrier penetration growth and high consumer propensity to book package holidays online (source: Euromonitor, Off and Online Intermediaries Sales by Market; Euromonitor, Online Sales by Market). The Group’s expansion programme into Sweden required an upfront outlay in development, content and marketing resource, which the Board estimates will total approximately £3 million. The Board estimates it will take two to three years to reach the break-even point with a payback period of four to five years post-entry. The majority of investment into the Swedish proposition is variable marketing expenditure and the Group expects to leverage its core competencies from the United Kingdom (including paid search efficiencies and the ability to leverage conversion and revenue from a growing number of daily unique visitors). Should the Swedish expansion progress as expected, the intention is to expand into Norway and/or Denmark in the short term, followed by two further markets in Central and/or Northern Europe in the short to medium term.

6. MARKETING The Group’s marketing activities focus principally on three areas: customer acquisition through online channels, brand awareness and repeat bookings. Marketing activities aim to drive high-quality traffic to the Group’s websites but also support phone bookings through the Group’s contact centre. The Group is now the third most well-known brand for beach holidays in the United Kingdom, with a 14 per cent. spontaneous awareness score. The proportion of traffic coming to the Group’s websites from branded, free and direct sources is increasing and, in the nine month period to 30 June 2015, represented 55 per cent. of overall traffic mix (compared to 52 per cent. for the nine month period to 30 June 2014) (source: Google Analytics, Mediacom, ontheBeach.co.uk Brand Tracking Results, 23rd March 2015).

Customer acquisition The Group acquires customers from the following principal sources:

Branded and free traffic Branded and free traffic includes: • paid online advertising whereby search-engine providers are paid (on a cost-per-click basis) to display sponsored links to the Group’s websites at the top of search results for certain keywords, including branded search terms such as ‘‘On the Beach’’ or ‘‘OntheBeach.co.uk’’ (‘‘Paid-for Branded Traffic’’); • customers typing in the URL of one of the Group’s websites (e.g. ‘‘onthebeach.co.uk’’) directly into an internet browser’s address bar and/or customers being directed to the Group’s websites through email, such as clicking on a link on the Group’s email newsletters (‘‘Direct Traffic’’); • customers being directed to the Group’s websites by the natural search results of search engines (‘‘Organic Traffic’’);

53 • customers being directed to the Group’s websites through social media, such as by clicking on a link on the Group’s Facebook page or Twitter page (‘‘Social Traffic’’); and • customers downloading and being directed to the Group’s apps (‘‘Mobile Apps traffic’’).

Paid-for Branded Traffic Paid-for branded traffic is a crucial factor in driving down the costs of customer acquisitions, as the Group pays less per click for branded searches as there is less demand in the bidding process from competitors for these terms. The Group has historically committed significant resources to paid online advertising, which the Board believes increases paid-for branded traffic.

Direct Traffic The Group’s brand recognition attracts a high volume of traffic to its websites and, in the nine month period to 30 June 2015, the proportion of traffic coming to the Group’s websites from branded, free and direct sources represented 55 per cent. of overall traffic mix. Direct Traffic helps to deliver more revenue for the Group as customer acquisition costs are lower, with the Group paying fewer fees to search engines in respect of such visitors (source: Google Analytics).

Organic Traffic and Social Traffic The Group carries out search engine optimisation to improve the rankings of the Group in search engines’ natural search results through modifications of design or content on the actual website pages, which includes optimising the use of tags and keywords within each webpage, tagging videos and images and using descriptive language, URLs and site maps. Furthermore, the Group has improved its brand visibility and customer engagement through the effective utilisation of social media, and currently has over 217,000 Facebook followers, 92,000 Google Plus followers and 35,000 Twitter followers.

Mobile Apps Traffic The Group’s Mobile Apps Traffic is currently sourced from iOS and Android devices for smartphones and tablets. By 30 June 2015, the Group’s app downloads had exceeded 260,000 (source: iTunes Apple Store MI). Mobile apps represent three per cent. of total traffic to the Group’s websites and approximately two per cent. of its total bookings.

Non-Branded Traffic Non-branded traffic includes: • generic paid online advertising whereby search-engine providers are paid (on a cost-per-click basis) to display sponsored links to the Group’s websites at the top of search results for certain keywords and generic search terms such as ‘‘family holidays’’ and are paid (on a cost-per-click basis) to display retargeting adverts on search engines and targeted adverts on social media sites (‘‘Non-Branded Paid Traffic’’); • customers being directed to the Group’s website through price comparison websites such as TravelSupermarket and TripAdvisor (‘‘Meta Traffic’’); and • customers being directed through affiliate content websites such as Quidco and TopCashback (‘‘Affiliate Traffic’’).

Non-Branded Paid Traffic The Group uses internet search engines, principally through the purchase of travel-related keywords, in particular on Google, to generate traffic to the Group’s websites. The cost of travel-related keywords consists of anticipating what words and terms consumers will use to search for travel on internet search engines and then bidding on those words and terms in the applicable search engine’s auction system. The Group bids against other advertisers for preferred placement on the search engine’s results page. The Group monitors, using robust MI and analytic tools, the return on investment of travel-related keywords so that those non-branded search terms that result in the highest return per click are prioritised in the bidding process.

54 Personalised direct communications The Board believes the Group has a clear understanding of its UK customers through robust MI and analytical tools. The Group tags its UK customers with a third-party socio-demographic code, based on UK postcode, which allows the Group to recognise repeat customers moving through life stages and drives an understanding of customers who make repeat purchases. The Group also analyses the search and order history that customers or prospective customers have made on its websites and mobile platforms (e.g. the star rating of hotels, flight destinations, price points etc.) which enables it to provide customers with relevant product options when returning to the Group’s websites or through direct email campaigns. The Group’s understanding of its customers helps to drive effective traffic shaping and improved revenue.

Offline advertising The Group’s historic advertising efforts have focused primarily on online digital marketing. The Board believes that continued investment (both online and offline) is important to retaining and expanding the Group’s market share. The Group commenced a twelve-week TV campaign in the Midlands region on 26 December 2013. During the TV campaign, the Group’s prompted brand awareness in the Midlands region rose from a pre-TV advertising score of 21 per cent. to 39 per cent. during the TV advertising campaign (source: Mediacom, ontheBeach.co.uk Brand Tracking Results, 23rd March 2015). The TV campaign was extended in March 2014 to the North West region and Scotland. In addition, the Group increased its existing expenditure on advertising in the Midlands region. During this phase of TV advertising, the Group’s year-on-year bookings for the North West region, Scotland and the Midlands region outperformed other regions in the United Kingdom and this continued following the conclusion of the TV advertising (with the Group’s year-on-year bookings for the TV advertising regions averaging 36 per cent. compared to 17.7 per cent. for other regions during the period from 15 March 2014 to 31 August 2014). The Group continued with a £1.5 million investment in a TV campaign which commenced on 26 December 2014 and ended on 14 February 2015. More regions were targeted in this campaign, including Mid-West England (the Midlands, HTV West, Central and South-West regions), North England (the Granada, Yorkshire and Border regions) and Scotland (the North and Central regions). The Group experienced a seven per cent. increase in bookings for the nine month period ended 30 June 2015 in those regions exposed to TV advertising for the first time compared to those regions where there was no TV advertising. The Group generated a three per cent. increase in spontaneous brand awareness from 11 per cent. to 14 per cent., which placed the Group as the third most recognised brand for beach holidays in the United Kingdom (source: Mediacom, ontheBeach.co.uk Brand Tracking Results, 23rd March 2015). The Board believes that regional and national TV advertising will increase brand awareness and accelerate branded searches. The Group is planning a national campaign for the financial year ending 30 September 2016 that will include the London and Meridian regions, with investment in offline advertising expected to be an amount equal to 2.5 per cent. of revenue margin for the financial year ended 30 September 2016. The Board expects to deliver a positive return from TV advertising activity over the next 24 months. The Group also intends to expand its targeted offline marketing activities to include outdoor advertisements, radio and social media.

Repeat customers The Group has implemented and continues to implement a strategy for attracting repeat customers. The Group has experienced increased customer loyalty over the last three financial years, which has been demonstrated by customers purchasing additional holidays after their first purchase. Repeat customers (defined as customers who had made a previous purchase from the Group using the same email address in the previous five calendar years) accounted for 20.5 per cent. of the Group’s bookings volumes for the year ended 30 September 2011, compared to 30.4 per cent. for the year ended 30 September 2014 and representing a compound annual growth rate of 48.8 per cent. The percentage of total customers that are repeat customers has increased notwithstanding growth in new customers during these periods. Repeat booking volumes were 45,652, 70,576 and 96,705 for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014, respectively.

55 The Group has implemented and continues to implement a strategy for attracting repeat customers by aiming to provide excellent customer service supported by increased personalisation. Repeat customers are a key driver of customer acquisitions from unpaid and lower cost sources, such as natural and branded search results, thereby lowering the Group’s per booking customer acquisition costs.

7. BOOKING CHANNELS The Group’s customers can book their flights, hotels and other supplementary products through various channels and the Group’s integrated platforms enables them to dynamically package these constituent parts into a bespoke holiday. The vast majority of the Group’s bookings are processed online and can be completed either on a desktop or laptop computer through its websites, on a mobile device such as a smartphone or tablet, or on the Group’s iOS or Android apps. In addition, for the nine month period to 30 June 2015, approximately 6 per cent. of the Group’s bookings were processed offline by its contact centre operations. The Group’s contact centre operations primarily deal with customers from its websites who have specific requests, such as multi-family bookings where one family wants half board and the other family wants full-board but would like to book together to be sure they are on the same flight and at the hotel for the duration of their stay.

Desktop and laptop computer bookings The Group operates three branded domains, being onthebeach.co.uk, onthebeachtransfers.co.uk and ebeach.se. Its websites have been designed to provide a simple and personalised experience to customers and are reviewed and upgraded regularly. Using the Group’s websites, customers can easily and quickly review the pricing and availability of all of the Group’s services and products, evaluate and compare options and book and purchase such services and products online within minutes and in a variety of languages, including English and Swedish. Typically, a transaction using one of the Group’s websites involve the following steps: Landing page. The customer is directed to a landing page on the Group’s website, which is relevant to the keyword term he or she searched for using a search engine or which the Group’s MI and analytical tools have provided. Search and select flight. A customer conducts a search for flights based on the city of departure and destination, dates of travel and flexibility. The Group’s websites’ search capabilities employ scalable search and routing logic that return comprehensive results without increasing search response times. The Group’s web-based booking engines have been designed to cache data from its suppliers’ systems in order to deliver near real-time information to customers. Search and select hotel. The Group’s websites display to the customer matching selections that are available in a user-friendly format listed in pricing order and that also provide the customer with available special offers or provide additional information about the hotel. The Group’s websites allow customers to sort or refine search results by further defining certain parameters, including: price range, preferred hotel, star rating, board basis (e.g. all inclusive, full board etc.) and hotel amenities (e.g. air conditioning, by the beach etc.). Review. After a customer has selected its flight and hotel, the Group’s websites provide the customer with an opportunity to review the details of the dynamically packaged holiday being purchased and the terms and conditions of such purchase. At this stage, the Group’s websites re-connect to the end suppliers or intermediaries to confirm the availability and pricing of the products selected. Customers will also be shown options to purchase transfers, extra baggage allowances and other ancillary services. Payment. The Group offers its customers a variety of payment methods, including debit cards or credit cards, in multiple currencies and the option to pay a deposit with the balance to follow in due course or to pay the full amount in the first instance. The payment gateways for sales on the Group’s websites are secured. Confirmation. The customer is provided with a validation on screen and is sent an email with confirmation of his or her purchase a few minutes after payment is accepted.

56 Mobile bookings Over the past few years, mobile devices (including smartphones and tablets) have become an increasingly important channel for customers to make holiday bookings, and the Board expects this trend to continue. Interactions are no longer contained within a single moment in time or a single touch point thanks to the increase in device accessibility—spanning smartphones, tables, laptops and desktop computers—and convenient access to cloud-based services. The Board believes customers also increasingly plan and book their journeys when they happen to have free time slots, irrespective of their immediate whereabouts and mobile devices afford customers that convenience to make travel arrangement while on the go. The Group is actively engaged in the design, rollout and improvement of applications for mobile devices. In 2013, the Group launched its first mobile web browser. Since then, the Group has continuously developed its websites for mobile devices. For the financial year ended 30 September 2014, 70 per cent. of all mobile traffic to the Group’s websites originated from an iOS device. For the nine months ended 30 June 2015, the proportion of iOS device traffic as a percentage of all mobile traffic was 64 per cent. (source: Google Analytics). The Group also experienced significant increases in orders by customers using tablets and smart phones via mobile optimised web browsers. Approximately 10.5 per cent. of the Group’s holidays were booked through the Group’s smartphone mobile web browser device in the nine month period ended 30 June 2015, compared with approximately 6.1 per cent. in the nine month period ended 30 June 2014. Combining tablets and smartphones, these channels represented an average of 39 per cent. of all orders for the financial year ended 30 September 2014 compared with an average of 24 per cent. for the financial year ended 30 September 2013. Average order values and the time gap between booking and departing are similar across platforms. The Group launched its first iOS mobile app for smart-phone and tablet in September 2014. By 30 June 2015, the Group’s app downloads had exceeded 260,000 (source: iTunes Apple Store MI). Mobile apps represent three per cent. of total traffic to the Group’s websites and approximately two per cent. of its total orders. The Group launched its first Android app in July 2015. The Board believes that a key step in improving the Group’s customer proposition is to fully integrate it across multiple devices (e.g. desktops, laptops, tablets and smartphones). Over the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014, customer conversion rates on smartphones, desktops and tablets increased by 20 per cent., 22 per cent. and 22 per cent., respectively. The Group plans to continue to develop specific software and applications under a variety of new platforms and operating systems, which are generally expected by its customers to offer the same features and to be as easily operated as desktop interfaces. This has required and will continue to require the Group to make significant financial and operational investments to develop its proprietary systems.

Contact centre Although a vast majority of the Group’s bookings are completed automatically without any human intervention, its in-house contact centre located in Cheadle Heath, United Kingdom handles offline sales and post-sales customer service support. Customers can call the contact centre seven days a week to consult with dedicated sales representatives, receive comprehensive, near real-time product information and make holiday bookings. Sales representatives in the contact centre are able to assist the Group’s customers in several languages to cover its principal geographical markets, including English and Swedish. The Group’s contact centre is equipped with systems which allow it to monitor the performance of its representatives and they are remunerated according to clear key performance indicators. The Group utilises software allowing it to log-on to customer calls to perform random checks on its contact centre on a real-time basis. This system allows the Group to monitor the number of waiting calls and limit customer aborted calls on its hotlines due to unacceptably long waiting times, helping the Group to maintain high contact centre conversion and customer satisfaction scores. This feedback loop helps to enhance the Group’s customer proposition and overall customer loyalty as evidenced by the Group’s strong Net Promoter Score of 67 (source: BDRC, Holiday Trends Report, 2013).

8. COMPETITION The UK and European OTA markets include a wide range of public and private companies, some of which have a clear regional focus while others operate across regions and worldwide. Market participants vying

57 for the same consumer travel spending as the Group include other OTAs, traditional (offline) travel agencies and travel suppliers themselves, such as airlines, hotels and tour operators. The UK and European travel market is, therefore, very competitive, although the competition is primarily from companies that offer a different customer proposition to that of the Group. The principal competitors in the Group’s market include:

OTAs OTAs enable customers to purchase individual elements of a trip (such as a flight or a hotel) from various providers. A distinction can be drawn between the Group and other OTAs in that they principally focus on a single element rather than providing customers with a dynamically packaged holiday. The European OTA sector is itself highly fragmented and competitive, with one in three beach holiday bookings now being made via an OTA. Leading OTAs now feature strongly in the ATOL top ranking list and, although beach holiday booking remains multi-channel, the role of the OTA is set to expand. (source: Mintel, Beach Holidays—UK, January 2015)). While there are a number of global OTAs with brand presence across multiple countries, each country has regional OTAs competing in their respective markets.

Traditional travel agencies (‘‘TTAs’’) In the United Kingdom, where the Group generates most of its revenue, the majority of travel bookings are still made through TTAs. TTAs provide pan-European beach package holidays but, unlike the Group, do not typically provide customers with the ability to package these holidays dynamically. Instead, they typically focus on providing traditional package holidays, which may lead to limited choice and flexibility for customers (along with typically higher prices). Other than TUI, Thomas Cook and Kuoni, TTAs are typically smaller than OTAs and therefore lack the scale, brand recognition and technological resources often associated with OTAs. TTAs tend to have fewer employees and rely more on manual processes that may not be as efficient as the automation used by many OTAs. The presence of independent travel agencies has decreased over recent years, with many TTAs being acquired by larger tour operators which lack independence and can be limited in the products that they offer as a result. Since their inception, OTAs have gained market share from TTAs on a gross bookings basis and the Group expects this trend to continue. In the UK, the total number of travel intermediary outlets (including currency exchange services) has been in decline over the period from 2008 to 2014, falling from 6,087 in 2008 to 4,995 in 2014. (source: Euromonitor, Number of Outlets).

Airline and hotel direct websites Airlines and hotels are partners and suppliers of OTAs and have benefitted from cooperation since OTAs began operating. However, airlines and hotels as suppliers have also tried to diversify their distribution channels and acquire customers directly and, as such, may be seen as being competitors of OTAs with regard to customer acquisition. Airline and hotel direct websites, like OTAs, have shown strong growth in the past years. The Board believes that airline and hotel direct websites pose less competition to the Group than more traditional OTA models, as they look to sell flights or hotels on a single element basis and, therefore, do not address the Group’s core market in providing customers with ability to book dynamically packaged beach holidays. In addition, the hotels offered by the Group are typically independent hotels, rather than large chains, and thus are more reliant on distributors in order to sell their products.

Pure metasearch companies Metasearch companies, such as Tripadvisor, Travelsupermarket and Trivago, are distributors of OTAs. In addition, Google has established Google Flights, a metasearch service in the United States and Europe. Whilst metasearch companies source customers and send them to OTAs’ and suppliers’ websites to complete a booking, offering a broad choice of products and the ability to compare prices, pure metasearch companies do not aggregate for holidays, instead offering only single element bookings.

58 9. INFORMATION TECHNOLOGY SYSTEMS The Group has invested £11.6 million over the last five years to develop its in-house technology platform which it launched in 2011, having previously relied on a platform developed and run for the Group by a third-party technology solution provider. The new platform gives the Group flexibility and agility, which was not possible with its previous solution.

IT architecture The Group has proprietary technologies which provide high levels of reliability, security and scalability and which have been designed to handle high transaction volumes across all its websites. The Group’s technologies include the following (each of which is described in further detail under the headings below): • the Group’s e-commerce platform; • the Group’s aggregation technology; • the Group’s split testing capabilities; • the Group’s bespoke MI platform; • the Group’s automatic monitoring of data by its service management team; and • the Group’s security monitoring software and fraud-detection systems. The Board believes that the modularised, scalable and flexible architecture of the Group’s technologies will allow the Group to develop ongoing improvements in functionality, sustain high growth and expand rapidly to address new business opportunities.

E-commerce platform The Group operates an increasingly robust e-commerce platform with highly efficient processes, focused around the integration of search services, inventory sourcing, product customisation, dynamic pricing, inventory management, booking, accounting/reporting, collection and payment. The platform allows the Group to offer a wide variety of products sourced in close to real time from supplier systems and other sources of product data. In addition, the platform allows the Group to complete a high percentage of transactions automatically, thereby reducing the average cost per transaction. For certain travel product suppliers, the Group’s booking system accesses their public websites directly using the Group’s aggregation technology.

Aggregation technology The Group has developed its own data aggregation technology which allows the Group to gather product information directly from suppliers’ websites ready for display on the Group’s own websites. In some cases, the data is not available through any other source. The Group’s technology provides it with a competitive advantage as it allows the Group to collect supplier product data more frequently and also to collect data tailored to its requirements. This, in turn, improves data accuracy which provides the Group’s customers with the best possible prices whilst protecting revenue and reducing cancellation rates. It closely mimics the behaviour of humans when accessing supplier websites, making it difficult to detect as automated activity and, therefore, difficult to block. The Group’s aggregation technology also allows for simultaneous searching of multiple suppliers and other sources of data in real time to present to users a curated list of product information, availability and prices. It uses multi-tiered caching for accelerated performance which manages and protects against slowdowns in suppliers’ systems which could negatively affect the Group’s websites. Detailed product information is captured to support advanced searches and sorting, filtering features and input prices are fed through in-house pricing logic designed to allow granular control of pricing policies. Split testing of changes to pricing and discounting is used to improve revenue whilst maintaining customer conversion rates. The technology is easily extendable to support new product types as currently product lines are filtered to ‘beach only’ destinations, but supply is readily available for other trip types.

Split testing The Group’s e-commerce platform has split testing capabilities built into its core functions for pricing as well as user experience. Split testing is a process whereby the Group makes changes to pricing policies or

59 the user experience and exposes those changes to only a portion of users on its websites. The rest of the users see an unaltered version of the websites and therefore constitute the control group for comparison. The effect of the changes can then be measured by comparing the commercial performance of the test group and the control group with detailed and close to real time analytics tools. All changes to the Group’s websites are tested in this way, which gives the Group confidence that the regular improvements to its websites are in fact delivering measurable benefit.

MI platform The Group has built a bespoke MI platform using Microsoft SQL Server Business Intelligence tools as a platform, which it developed in-house to meet the exact needs of the business. The MI platform has a wide range of analytics tools and metrics to provide detailed and specific insight into the commercial performance of, and user behaviour on, the Group’s websites. Example reports include conversion by destinations searched on the websites and funnel analytics (reviewing the volume of searches that commence on the home page and then complete with a booking). Additionally, most of the information is generated in close to real time allowing early insight into the websites that are performing, which promotes rapid and informed decision making. The MI platform is fully integrated into the Group’s split testing technology and allows the Group to accurately and quickly understand the effect of changes made to the user experience and pricing policies.

Service management The Group’s service management team has created a range of management, monitoring and alerting tools to ensure high service availability and optimise performance. The Group monitors third-party data with the aim of improving the speed and quality of data and the performance of the Group’s internal systems. Furthermore, the key performance indicators of the Group’s service management team are monitored with data which is visible on wall boards, web tools and mobile devices. The Group’s alerting system responds in real-time to issues and provides early warnings to service management and live support teams through the delivery of the following functionalities: • around the clock incident management provides robust trouble-shooting and well defined escalation processes; • post incident problem management identifies root causes and defines remedial actions where necessary to prevent repeat incidents; • pre-emptive problem management is driven through trend analysis of key performance indicators which predict reliability issues before they affect live service; • an active capacity management process ensures high platform performance and maintains scalability; • a continuous service improvement regime constantly looks for opportunities to improve performance; and • high security infrastructure with regular vulnerability scanning in-house and by third parties supports Payment Card Industry Data Security Standard compliancy.

Security The Group is committed to protecting the security of its customers’ information. The Group’s information security team is responsible for implementing and maintaining controls to prevent unauthorised users from accessing the Group’s systems or to protect them from denial of services and other cyber-attacks. These controls include the implementation of information security policies and procedures, security monitoring software, access policies, password policies, physical access limitations and detection and monitoring of fraud from internal staff. The Group also operates fraud detection systems which use transaction patterns and other data sources seeking to prevent fraudulent transactions in real time.

10. REGULATION The Group is subject to a number of laws and regulations, including those regarding ATOL and consumer protection aspects such as price display, sales of packages, e-commerce and data protection. Further detail of the regulatory landscape in which the Group operates is provided in Part 8: ‘‘Regulation’’.

60 11. SUPPLIER RELATIONSHIPS An important component of the success of the Group’s business depends on its ability to maintain, expand and further diversify its relationships with suppliers and partners to enable the Group to provide a wide product offering through its websites to its customers. Access to market-leading flight inventory and relevant, competitively priced hotels and ancillaries sourced directly and from third parties is material to the Group’s current and future performance. The Group operates under the agency model, meaning it acts as an agent for suppliers or consumers (as appropriate) in booking flights, hotels and ancillary products rather than being the primary obligor. This means that inventory and financial risk lies with the primary obligor rather than the Group.

Flights The Group’s holiday sales are predominantly underpinned by low-cost airlines. Flight bookings which are sourced and fulfilled through the Group’s websites are via non-contractual relationships using direct APIs, intermediaries or the Group’s proprietary data aggregation technology, which allow the Group to gather product information directly from suppliers’ websites and display them on the Group’s own websites. In early 2013, the Group signed a contract with Travelport (a GDS service provider) that allows scheduled and certain low-cost carrier seats to be searched for and booked through the GDS system. To date, due to limited volumes of scheduled airline passengers, the Group does not receive material incentives from the GDS provider. In the nine month period to 30 June 2015, flights accounted for 48 per cent. of the Group’s TTV and generated a revenue margin for the Group of 3.3 per cent.

Hotels The Group has entered into a number of agreements with hotel suppliers (primarily independent hotels or small hotel chains) and supplier intermediaries that are short-term and provide both counterparties with a right to terminate on short notice or without notice. This currently includes seven partnerships with third- party bed-banks. The Group receives commission from the sale of beds sourced from third-party bed-banks, the amount of which varies by bed-bank provider. The Group receives incentives from its third-party bed-bank suppliers based on the volume of bookings completed by the Group and such incentives are payable based on a formula that requires a minimum level of sales. Incentive ratchets are in place should specific volume thresholds be reached. The Group has implemented an in-house function to contract directly with hotels (through ‘‘On the Beach Beds’’), being its direct contracting system. Incremental revenue is available through the disintermediation of third-party bed-banks (as no fee is payable to third-party bed-banks). The Board believes that incremental revenue is also available through the Group’s direct contracting system as prompt payment to hoteliers by the Group can result in hoteliers offering better rates. The Group’s direct contracting system is based on relevant, high volume 3, 4 and 5 star hotels identified through the Group’s in-house MI platforms. Contracts are negotiated by the Group’s team of hotel contractors and maintained on its direct contracting system by an administration team. The Group’s direct contracting system also connects directly to hotel channel management tools enabling access to the latest offers and last-room availability, reducing the administration required to maintain relationships with thousands of low volume hotel suppliers (known as the long-tail stock). In the nine month period to 30 June 2015, the Group reached a 50 per cent. share with direct contracts with 4 percentage points of incremental revenue as a percent of TTV. An increased investment to scale the function in March 2014 delivered a £1.4 million revenue increase over the same period last year, which the Board believes will allow the Group to increase revenue with a modest further investment in technology and resource. The Group’s direct contracting system is a key contributor to low-input prices and the ability to negotiate advantageous contract terms with third-party bed-banks. The ability to disintermediate the third-party bed-banks and provide prompt payment directly to the hotelier is a differentiator that the Board believes will underpin future business and revenue growth.

61 In the nine month period to 30 June 2015, hotels accounted for 48.8 per cent. of the Group’s TTV. Over this same period, hotels booked through the Group’s direct contracting system generated a revenue margin for the Group of 22.8 per cent. while other hotels generated a revenue margin for the Group of 18.6 per cent.

Transfers The Group operates an in-house transfer management system which enables customers to book coach and taxi transfers with third-party providers for the journey from the airport to the hotel through the Group’s website. This model benefits from a relatively low administration overhead compared to partnering with a third-party provider and the ownership of the integration platform helps to maintain high standards of customer service. The product is fully integrated into the Group’s online search service and included in the Group’s websites in real-time, to help drive revenue both on the supply and customer side. Revenue for the 12 months ended 30 June 2015 was £5.4 million and 66 per cent. of customers who book flight and hotel products on the Group’s website also purchase a transfer. Over this same period, transfers accounted for 2.5 per cent. of the Group’s TTV.

Insurance The Group makes regulated sales of travel insurance through its websites as an appointed representative of Maintenance Assist Limited. The travel insurance can only be sold alongside a holiday (or elements of a holiday) and not on a standalone basis. The sale (and administration) of insurance is highly regulated, further details of which can be found in Part 8: ‘‘Regulation’’ of this Prospectus. The insurance product option was integrated into the Group’s websites in December 2014 and allows customers to purchase the insurance product at the end of the booking path. In the nine month period to 30 June 2015, insurance has increased to a take-up rate of 16.4 per cent. and delivered an increase in revenue per booking of 1 per cent.

Ancillary sales Ancillary sales (excluding coach and private taxi transfers) have historically not been material to the Group’s revenue performance. The Group relies on one principal white label sourcing partner for airport parking and airport hotel bookings. In the nine month period to 30 June 2015, ancillary sales generated a revenue margin for the Group of 44.7 per cent. Following the Group’s launch of its iOS and Android apps, the Board believes there is a significant opportunity to sell ‘in-resort’ ancillary products through mobile booking channels, which will drive further revenue growth. The Group will be able to tailor the type of products it offers customers through its apps on the basis of destination, hotel location, customer profile and other customer preference information it has acquired during the booking process. The Group intends to start selling ‘in-resort’ products in the short to medium term via its mobile app.

12. INTELLECTUAL PROPERTY The Group’s intellectual property rights include trademarks and domain names associated with the name ‘On the Beach’, as well as other rights arising from agreements relating to its websites content and technology. The Board regards the Group’s intellectual property as a factor contributing to its success. The Group relies on trademark law, copyright law, trade secret protection, non-competition and confidentiality agreements with its employees and some of its partners to protect its intellectual property rights. The Group requires its employees to enter into agreements to keep confidential all information relating to the Group’s customers, methods, business and trade secrets during and after their employment with the Group. The Group’s employees are required to acknowledge and recognise that all inventions, trade secrets, works of authorship, developments and other processes made by them during their employment are the property of the Group. The Group has registered its material domain names and has full legal rights over these domain names for the period for which such domain names are registered.

13. PROPERTY The Group operates solely from its office in Park Square, Bird Hall Lane, Cheadle Heath, Stockport SK3 0XN, United Kingdom.

62 14. EMPLOYEES As at 22 September 2015 (being the latest practicable date prior to the publication of this Prospectus) and as at 30 September 2014, the Group had 323 and 239 employees, respectively. The table below sets out the number of employees of the Group as at 30 September 2012, 2013 and 2014 and 30 June 2015.

As at 30 September As at 2012 2013 2014 30 June 2015 Sales ...... 33 23 29 36 Information technology (including websites and mobile platform developers) ...... 30 42 55 63 Marketing ...... 9 11 17 26 Contact centre ...... 71 74 92 147 General and administrative ...... 25 27 46 51 The Group employs a number of temporary workers in its contact centre, with numbers fluctuating throughout each year in line with the seasonality of holiday bookings. For the financial year ended 30 September 2014, the average number of temporary full time equivalent employees was 48.1 and, for the nine month period ended 30 June 2015, this number reduced to 47.4.

15. INSURANCE The Board believes the Group maintains insurance policies customary (including the terms of, and the coverage provided by, such insurance) for the industry in which it operates to cover certain risks. The Board considers the Group’s insurance coverage to be adequate both as to risks and amounts for the business the Group conducts.

16. HEALTH AND SAFETY Employee health and safety is of high importance to the Group and specific employees are responsible for implementing the Group’s health and safety policies at the Group’s workplace (including those relating to fire safety and first aid). Such policies are regularly reviewed and updated to take account of new legislative requirements and best practice as well as to reflect new or increased health and safety risks.

63 PART 6 DIRECTORS, SENIOR MANAGEMENT AND CORPORATE GOVERNANCE 1. DIRECTORS The following table lists the names, dates of birth, positions and dates of appointment as a director for each Director:

Date appointed Name Date of birth Position as a Director Richard Segal ...... 20 May 1963 Chairman(1) 17 August 2015 Simon Cooper ...... 2 July 1972 Chief Executive Officer 17 August 2015 Wendy Parry ...... 17 October 1961 Chief Financial Officer 17 August 2015 Lee Ginsberg ...... 31 August 1957 Non-Executive Director 17 August 2015 David Kelly ...... 23 September 1963 Non-Executive Director 28 August 2015

(1) Richard was appointed as a director of the Company on 17 August 2015, but his position as Chairman is not effective until Admission. The business address of all of the Directors is Park Square, Bird Hall Lane, Cheadle Heath, Stockport SK3 0XN, United Kingdom. The management expertise and experience of each of the Directors is set out below:

Richard Segal (Chairman) Richard Segal is currently a director of the Company and will be Chairman of the Company with effect from Admission. He is also Chairman of HostelWorld Group and Encore Tickets. Previously, Richard was Chairman for Esporta and Barratts PriceLess, a founding partner of 3i Quoted Private Equity, a non-executive director at The Kyte Group, Chief Executive Officer at PartyGaming Plc and Odeon Cinemas (where he led a management buy-out from the Rank Group) and Managing Director of Rank Group’s entertainment sector. He holds a BA in economics from Manchester University and is a member of the Institute of Chartered Accountants of England and Wales.

Simon Cooper (Chief Executive Officer) Simon Cooper is founder of the Group and Chief Executive Officer of the Company. He began his career in the travel industry while attending university, when he founded a ski company called On the Piste. He focused the business towards groups of students wanting to go on budget-friendly ski holidays to the French Alps via coach. Simon Cooper operated On the Piste from 1996 to 2008. Meanwhile, in 2004, Simon began work on a new venture: On the Beach.

Wendy Parry (Chief Financial Officer) Wendy Parry joined the Group in April 2010 as Chief Financial Officer. Wendy qualified as a chartered accountant at KPMG and, before joining the Group, she held a wide variety of senior commercial, financial and operational roles within large private and listed companies. She has held Managing Director, Commercial Director and Finance Director roles at divisions of Holidaybreak plc, she was Finance Director at Booker Foodservice Ltd and Liverpool John Moores University and she was Group Chief Accountant of Courtaulds Textiles plc.

Lee Ginsberg (Non-Executive Director) Lee Ginsberg joined the Company in August 2015 as Senior Independent Non-Executive Director and Chairman of the Audit Committee. He is a Chartered Accountant by profession and was previously Chief Financial Officer of Domino’s Pizza Group plc. Prior to his role at Dominos Pizza Group plc, Lee held the post of Group Finance Director at Health Club Holdings Limited, formerly Holmes Place plc, where he also served for 18 months as Deputy Chief Executive. Lee is a non-executive director and Chairman of the Audit and Risk Committee of Mothercare plc and is a non-executive director and Chairman of the Audit and Risk Committee of Trinity Mirror plc. Lee is also the non-executive Deputy Chairman, senior independent director and Chairman of the Audit Committee of Patisserie Valerie Holdings plc.

64 David Kelly (Non-Executive Director) David Kelly joined the Company in August 2015 as a Non-Executive Director and Chairman of the Remuneration Committee. David was previously the Operations Director at Amazon from 1998 to 2000, the Chief Operating Officer at Lastminute.com from 2000 to 2003 the Vice President, Operations/Chief Operating Officer at eBay from 2003 to 2007 and Senior Vice President of International at Rackspace from 2010 to 2012. In 2007, David co-founded mydeco.com and, more recently, has built a wide portfolio of non-executive and advisory positions—including Chairman/Non-Executive Director of Love Home Swap, Pure 360 and Car Loan 4U.

2. SENIOR MANAGERS The Company’s Senior Managers, in addition to the Executive Directors listed above, are as follows:

Date appointed as an Employee Name Date of birth Position of the Group Alistair Daly ...... 13 April 1970 Chief Marketing Officer 10 June 2008 Jonathan Smith ...... 12 November 1970 Chief Technology Officer 16 November 2009 William Allen ...... 4 September 1965 Supply Director 24 March 2014 Oliver Garner ...... 20 June 1980 International Director 1 October 2014 Kirsteen Vickerstaff ...... 28 March 1979 General Counsel and 11 June 2015 Company Secretary The management expertise and experience of each of the Senior Managers is set out below:

Alistair Daly (Chief Marketing Officer) Alistair Daly is Chief Marketing Officer for the Group with responsibility for demand generation, online conversion, repeat purchase and ongoing management of the customer service function as well as forward looking brand strategy. Previously, Alistair was Marketing Director at Lastminute.com and has over 20 years marketing and advertising experience with brands such as Prudential, HSBC and VisitBritain.

Jonathan Smith (Chief Technology Officer) Jonathan Smith is Chief Technology Officer for the Group with responsibility for the ongoing development and management of all aspects of the Company’s technology platform and infrastructure as well as the Group’s forward-looking technology strategy. Previously, Jonathan was IT Director at Moneysupermarket.com and a senior technology and systems management consultant for Azlan plc. Jonathan spent his early career as a software developer and database systems consultant.

William Allen (Supply Director) William Allen is the Supply Director for the Group with responsibility for all sourcing and operations of accommodation, flight, transfer and ancillary suppliers including the Group’s direct contracting system. Previously, William was Managing Director at bedbank On Holiday Group and Overseas Purchasing Director for MyTravel UK. William has 25 years of experience negotiating and managing supplier relationships in the short-haul beach market.

Oliver Garner (International Director) Oliver Garner is the International Director of the Group, responsible for leading the strategic, operational development and performance of the Group’s international business. Oliver joined the Group in 2014 from Expedia Inc, where he was Marketing Director EMEA, responsible for business performance in the United Kingdom and Ireland, Nordics and new and emerging markets. Oliver has also held senior managerial roles in both TUI and Thomas Cook, focusing particularly on their online channels of distribution.

65 Kirsteen Vickerstaff (General Counsel and Company Secretary) Kirsteen Vickerstaff is General Counsel and Company Secretary for the Group and is a solicitor with over 10 years post-qualification experience. She qualified at Squire Sanders in corporate finance where she advised private and listed companies on mergers and acquisitions, private equity, initial public offerings, reverse takeovers, company law and company secretarial matters. Prior to joining the Group, she was Senior Legal Counsel for Phones 4u and its group (including an insurance business) where she handled all legal matters for the Group including contracts, compliance and regulatory issues, governance and company secretarial matters.

3. CORPORATE GOVERNANCE The Board is committed to the highest standards of corporate governance and to maintaining a sound framework for the control and management of the Group.

3.1 The Board The Board is responsible for leading and controlling the Group and has overall authority for the management and conduct of the Group’s business, strategy and development. The Board is also responsible for ensuring the maintenance of a sound system of internal control and risk management (including financial, operational and compliance controls and for reviewing the overall effectiveness of systems in place) and for the approval of any changes to the capital, corporate and/or management structure of the Group.

3.2 Overview of compliance with corporate governance and requirements Board and committee independence The UK Corporate Governance Code recommends that, other than in the case of a UK listed company that is a ‘‘smaller company’’ (as defined in the UK Corporate Governance Code as being a company that is below the FTSE 350, as the Company is expected to be), at least half the board of directors of a UK listed company, excluding the chairman, should comprise non-executive directors determined by the Board to be independent in character and judgement and free from relationships or circumstances which may affect, or could appear to affect, the director’s judgement. The UK Corporate Governance Code recommends that a ‘‘smaller company’’ should have at least two independent non-executive directors. As of the date of this Prospectus, the Board consists of two Non-Executive Directors (excluding the Chairman) and two Executive Directors. The Company regards both of the Non-Executive Directors ‘‘independent non-executive directors’’ within the meaning of the UK Corporate Governance Code and free from any relationship that could materially interfere with the exercise of their independent judgement. The Board is satisfied that this is the case notwithstanding the fact that both Non-Executive Directors are also non-executive directors of Trinity Mirror plc. The UK Corporate Governance Code recommends that the chairman of a company admitted to the premium listing segment of the Official List should meet the independence criteria set out in the UK Corporate Governance Code. The Board regards Richard Segal as an ‘‘independent non-executive director’’ within the meaning of the UK Corporate Governance Code. In reaching this determination, the Board has had regard to: (i) Richard’s shareholding in OTB Topco (to be in the Company following the Reorganisation); and (ii) the material business relationships he has developed within the Group over his tenure as Non-Executive Chairman of OTB Topco since October 2013. The Board is satisfied with the judgment, experience and approach adopted by Richard and has determined that Richard is of independent character and judgment, notwithstanding the circumstances described at (i) and (ii) above.

Senior Independent Director The UK Corporate Governance Code recommends that the board of directors of a company with a premium listing on the Official List should appoint one of the Non-Executive Directors to be the Senior Independent Director to provide a sounding board for the chairman and to serve as an intermediary for the other directors when necessary. The Senior Independent Director should be available to shareholders if they have concerns which contact through the normal channels of the Chairman, CEO or other Executive Directors has failed to resolve or for which such contact is inappropriate. Lee Ginsberg has been appointed Senior Independent Director.

66 3.3 Board committees As envisaged by the UK Corporate Governance Code, the Board has established three committees: an Audit Committee, a Nomination Committee and a Remuneration Committee.

Audit Committee The Audit Committee assists the Board in discharging its responsibilities with regard to financial reporting, external and internal audits and controls, including reviewing and monitoring the integrity of the Group’s annual and interim financial statements, reviewing and monitoring the extent of the non-audit work undertaken by external auditors, advising on the appointment of external auditors, overseeing the Group’s relationship with its external auditors, reviewing the effectiveness of the external audit process and reviewing the effectiveness of the Group’s internal control review function. The ultimate responsibility for reviewing and approving the annual report and accounts and the half-yearly reports remains with the Board. The Audit Committee will give due consideration to laws and regulations, the provisions of the UK Corporate Governance Code and the requirements of the Listing Rules. The UK Corporate Governance Code recommends that an audit committee should comprise at least three members who are Independent Non-Executive Directors (other than the Chairman), and that at least one member should have recent and relevant financial experience. The Audit Committee will be chaired by Lee Ginsberg, and its other members will be David Kelly and Richard Segal. The Directors consider that Lee Ginsberg has recent and relevant financial experience. The Audit Committee will meet not less than two times a year. The Audit Committee has taken appropriate steps to ensure that the Auditors are independent of the Company and obtained written confirmation from the Auditors that they comply with guidelines on independence issued by the relevant accountancy and auditing bodies. Appointments to the Audit Committee will be made by the Board, on recommendation by the Nomination Committee. Appointments to the Audit Committee will be for a period of up to three years and may be extended for further periods of up to three years, provided the Director whose appointment is being considered still meets the criteria for membership. When appropriate, the Audit Committee will meet with the Group’s senior managers in attendance. The Audit Committee will also meet separately at least once a year with the Group’s external and internal auditors without management present. From Admission, the chairman of the Audit Committee will be available at annual general meetings of the Company to respond to questions from Shareholders on the Audit Committee’s activities.

Nomination Committee The Nomination Committee will assist the Board in discharging its responsibilities relating to the composition and make-up of the Board and any committees of the Board. It will also be responsible for periodically reviewing the Board’s structure and identifying potential candidates to be appointed as Directors or committee members as the need may arise. The Nomination Committee will be responsible for evaluating the balance of skills, knowledge and experience and the size, structure and composition of the Board and committees of the Board, retirements and appointments of additional and replacement Directors and committee members and will make appropriate recommendations to the Board on such matters. The UK Corporate Governance Code recommends that a majority of the members of a nomination committee should be Independent Non-Executive Directors. The Nomination Committee will be chaired by Richard Segal, and its other members will be Lee Ginsberg and David Kelly. The Nomination Committee will meet not less than twice a year. From Admission, the Nomination Committee will also generate a report to be included in the Company’s annual report. This will describe the activities of the Nomination Committee, including the process used to make appointments and explain if external advice or open advertising has not been used.

Remuneration Committee The Remuneration Committee will assist the Board in determining its responsibilities in relation to remuneration, including making recommendations to the Board on the Company’s policy on executive remuneration, including setting the over-arching principles, parameters and governance framework of the

67 Group’s remuneration policy and determining the individual remuneration and benefits package of each of the Executive Directors and the Company secretary. The Remuneration Committee will also ensure compliance with the UK Corporate Governance Code in relation to remuneration wherever possible. The UK Corporate Governance Code, as it will apply to the Company on Admission, provides that a remuneration committee should comprise at least two members who are Independent Non-Executive Directors (other than the Chairman). The Remuneration Committee will be chaired by David Kelly, and its other members will be Lee Ginsberg and Richard Segal. The Remuneration Committee will meet not less than twice a year. Appointments to the Remuneration Committee will be made by the Board, on recommendation by the Nomination Committee. Appointments to the Remuneration Committee will be made for a period of up to three years, which may be extended for further periods of up to three years, provided the Director whose appointment is being considered still meets the criteria for membership.

4. SHARE DEALING CODE The Company has adopted, with effect from Admission, a code of securities dealings in relation to the Shares which is based on, and is at least as rigorous as, the model code as published in the Listing Rules. The code adopted will apply to the Directors and other persons discharging managerial responsibilities within the Group. The Directors will take all reasonable steps to secure compliance.

5. RELATIONSHIP AGREEMENT On 23 September 2015, the Company and Inflexion entered into the Relationship Agreement. The principal purpose of the Relationship Agreement is to ensure that the Company will be capable of carrying on its business independently of Inflexion for so long as Inflexion (together with its concert parties) holds a Controlling Interest. Pursuant to the Relationship Agreement (and for so long as Inflexion holds a Controlling Interest): (i) the parties shall procure that all transactions and relationships between the Company and any other member of the Group and Inflexion (or any of its associates) are conducted at arm’s length and on normal commercial terms; and (ii) Inflexion shall (and shall procure that each of its associates shall), amongst other matters: (i) not take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and (ii) not propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules. The Relationship Agreement will be effective as from Admission and remain in effect for so long as: (i) Inflexion (and/or any of its associates or concert parties) holds a Controlling Interest; and (ii) the Ordinary Shares are admitted to the premium listing segment of the Official List maintained by the FCA. Following Admission, for so long as there is a controlling shareholder (as defined in the Listing Rules), the Articles allow for the election or re-election of any independent director to be approved by separate resolutions of (i) the Company’s shareholders and (ii) the Company’s shareholders excluding any controlling shareholder. If either of the resolutions is defeated, the Company may propose a further resolution to elect or re-elect the proposed independent director, which (a) may be voted on within a period commencing 90 days and ending 120 days from the original vote, and (b) may be passed by a vote of the shareholders of the Company voting as a single class. Furthermore, in the event that the Company wishes the FCA to cancel the listing of the Shares on the premium listing segment of the Official List or transfer the Shares to the standard listing segment of the Official List, the Company must obtain at a general meeting the prior approval of (y) a majority of not less than 75 per cent. of the votes attaching to the shares voted on the resolution, and (z) a majority of the votes attaching to the shares voted on the resolution excluding any shares voted by a controlling shareholder. In all other circumstances, controlling shareholders have and will have the same voting rights attached to the Shares as all other shareholders.

68 PART 7 REASONS FOR THE OFFER, USE OF PROCEEDS, DIVIDENDS AND DIVIDEND POLICY 1. REASONS FOR THE OFFER The Board believes that the Offer and Admission will position the Group for its next stage of development, including further raising the profile of the Group, assisting in retaining and incentivising employees and providing it with a structure for future growth. Admission will also enable the Selling Shareholders to partially realise their investment in the Company.

2. USE OF PROCEEDS The majority of the gross proceeds of the offer of New Shares will be used by the Company to fund expenses associated with the Offer, including paying the Exit Fee to Inflexion 2010 General Partner Guernsey LP pursuant to the Investment Agreements. Further information on the Exit Fee is set out in paragraph 11 of Part 15: ‘‘Additional Information’’. The net proceeds of approximately £6.4 million will be used to repay accrued interest on loan notes of approximately £3.6 million with the remainder being used for general working capital purposes.

3. DIVIDENDS AND DIVIDEND POLICY Since being incorporated on 17 August 2015, the Company has not yet paid a dividend. Whilst the Group operates a highly cash generative business model, the Board intends for the significant majority of profits to be reinvested in the business to support further growth. The Board intends to declare its first dividend in respect of the year ended 30 September 2016. Thereafter, the Group will adopt a progressive dividend policy. The ability of the Company to pay dividends is dependent on a number of factors and there is no assurance that the Company will pay dividends or, if a dividend is paid, what the amount of such dividend will be. See Part 1: ‘‘Risk Factors’’. Consequently, investors may not receive any return on investment unless they sell their Shares for a price greater than that which they paid for them.

69 PART 8 REGULATION The Group’s business is highly regulated and subject to a complex regime of laws, rules and regulations concerning air transportation, travel, online commerce, financial services, consumer rights and data protection, among others. As the Group seeks to continue to expand its operations into new jurisdictions, it will encounter legal, regulatory or tax requirements with which it is currently not familiar. Likewise, such regulations can be amended or interpreted in a manner that is unfavourable to the Group and its business. Compliance with such requirements, which could conflict between jurisdictions, would result in a greater regulatory compliance burden for the Group’s business, and as a result could increase its costs of compliance, or could otherwise be detrimental to its business. As far as the Directors are aware, in addition to the discussion below and the risks included in Part 1: ‘‘Risk Factors’’ of this Prospectus, there are currently no significant factors, including unusual or infrequent events or new developments, relating to governmental, economic, financial, monetary or political policies or other factors that might materially affect, or materially affects, directly or indirectly, the Group’s operations. The Group’s operations are principally in the United Kingdom, where it has to comply with a number of European Union regulations and national implementing legislation and domestic legislation that is applicable to its business. Compliance with such regulations, as implemented in the relevant jurisdictions, is critical to its business. Certain of these regulations that the Board believe most directly apply to the Group’s business are set forth below.

1. REGULATION SPECIFIC TO THE TRAVEL INDUSTRY Package Travel Directive The scope of the EU Package Travel Directive 90/314/EEC on package travel, package holidays and package tours (the ‘‘Package Travel Directive’’) is limited to the non-occasional sale of package tours by an ‘‘organiser’’ (person who organises packages and sells or offers them for sale, whether directly or through a retailer) or a ‘‘retailer’’ (person who sells or offers for sale packages put together by an organiser) to a consumer, to the exclusion of individually organised tours or to the delivery of single travel services, such as a scheduled flight or hotel accommodation. For the purposes of the Package Travel Directive, ‘‘package’’ means a combination previously put together by an organiser or a combination of elements tailored by the travel agent at the request of the consumer including not fewer than two of the following elements: transportation, accommodation or other tourist services not ancillary to transportation or accommodation but which account for a significant part of the package. Additionally, in order to be covered under the ‘‘package’’ definition, such combinations are required to be sold or offered for sale at an inclusive price and the services must cover a period of more than 24 hours or include overnight accommodation. The EU member countries were allowed to implement a more extensive regime and, accordingly, the implementation of the Package Travel Directive may differ from one EU member country to another. If the Group were to act as an organiser or retailer of a package, its activities would be affected by the Package Travel Directive and implementing national legislations, primarily with respect to: (i) minimum standards concerning the information to be provided to consumers; (ii) formal requirements for package travel contracts, including mandatory rules concerning cancellation, modification and the civil liability of package tour organisers or retailers; and (iii) providing effective protection to consumers in the event of the package tour organiser’s insolvency, namely repayment of the price and repatriation of consumers. Under the Package Travel Directive, member states were allowed to choose between mandatory joint liability of the organiser and the retailer or to split liabilities in consideration of organisers and retailer’s traditional roles and responsibilities; therefore, a company within the Group could be subject to different standards of liability depending on the jurisdictions in which it operates. For instance, in the Group’s core market in the United Kingdom, liability is split between organisers and retailers. However, for French and Spanish consumers for example, the Group would be subject to mandatory joint liability. The Group does not currently offer ‘packages’ within the meaning of the Package Travel Directive: instead, it provides a search facility to enable the customer’s connection to suppliers of travel products. Each travel product the customer chooses is a separate booking, independent of other travel products booked at the same time.

70 However, on 28 May 2015, the European Commission confirmed a political agreement to the Package Travel Directive (the ‘‘Proposal’’) to bring it up to date with developments in the travel market, such as consumers’ increased preference for dynamic packages, where they create their own customised travel arrangements with the assistance of different online or offline operators instead of opting for pre-arranged products. The objective of the Proposal is, among others, to extend the current protection for traditional pre-arranged packages to a new combination of travel services. If those new combinations of travel services feature the characteristics associated with packages, the consumer is protected under the new rules. Depending on what kind of package is purchased, the proposed changes to the Package Travel Directive will offer: (i) consumer improved protection rights, such as more predictable prices and increased cancellation rights; and (ii) protection to buyers of customised travel arrangements in the event of a packaged tour organiser’s insolvency. The European Parliament is expected to confirm the text of the Council’s political agreement with a vote in second reading at an upcoming plenary session. The text will undergo a legal-linguist revision before the Council can formally approve it. It should be published in the Official Journal of the EU before end 2015. Implementation of the Proposal could lead to increased costs and increased commitments by the Group towards its customers if suppliers of travel products default on their performance obligations.

EC Regulations governing airline industry services The Group’s business is affected by various EC regulations governing services in the airline industry. These regulations include:

EC Regulation No. 261/2004 EC Regulation No. 261/2004 establishes common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights (more than three hours may qualify). While this regulation is primarily addressed to airline carriers, as intermediaries or agents the Group is required to comply with the obligations set forth in the regulation on the airline carrier’s behalf. Failing to do so could result in the airline carrier having a compensation claim against the Group. A proposal for a revised regulation was published on 13 March 2013 and has been submitted to the European Parliament. The implementation of such proposal could lead to the expansion of the rights of passengers and, accordingly, this may affect the Group’s internal policies.

EC Regulation No. 1008/2008 EC Regulation No. 1008/2008 on common rules for the operation of air services governs certain price display information. While primarily addressed to airline carriers, this regulation also requires the Group to comply with the rules set forth therein. For European and certain non-European airline carriers, it codifies the pricing freedom principle and sets forth certain information obligations vis-a-vis` customers.

National-level regulation ATOL Licence The laws of certain jurisdictions set forth additional license or other requirements for the operation of the Group’s online travel agency business. These requirements vary from one jurisdiction to another and compliance costs associated therewith can be significant. For instance, the Group is subject to the UK Civil Aviation (Air Travel Organisers’ Licensing (‘‘ATOL’’)) Regulations (the ‘‘ATOL Regulations’’), administered by the UK Civil Aviation Authority that have introduced a protection scheme for holiday packages. According to the ATOL Regulations, most UK tour operators selling air travel are required to hold an ATOL licence. Pursuant to an amendment to the ATOL Regulations made in 2012, the scope of the ATOL Regulations has been extended to ‘‘flight-plus’’ arrangements. The Group holds an ATOL licence with the appropriate level of authorisation for its requirements. The scope of the protection for customers under ATOL is limited to the financial failure of a company in the Group’s supply chain (e.g. a hotel or airline goes into insolvency). In the event of a natural disaster or other act of God resulting in bookings being cancelled, the Group (in its capacity as agent and not as principal) is refunded by the airline and the Group then reimburses the customer. The Group would also cancel the accommodation and refund the customer net of any accommodation providers’ cancellation charges (usually zero in such circumstances).

71 In order to meet the conditions of issue of the ATOL licence, the Group operates a trust account, under which all funds (with some exceptions) received by the Group from consumers are paid into a trustee account and then only upon satisfaction of certain conditions can the funds be paid to the Group.

ABTA membership The Group is also a member of the Association of British Travel Agents (‘‘ABTA’’), and as such is bound to abide by the ABTA code of conduct and the ABTA articles of association and has in place a bond in a form which, together with the trust account referred to above, is acceptable to the ABTA board for the protection of monies taken by a member for the provision of travel arrangements.

Swedish regulations The Group complies with certain regulations in Sweden, including the provision of a variable bond to the Swedish administrative authority, Kammarkollegiet. Companies who arrange or sell travel arrangements are subject to the provisions of the Swedish Travel Guarantees Act (1972:204) (‘‘TGA’’) and must lodge a travel guarantee with Kammarkollegiet before these arrangements can be marketed or sold. The purpose of the TGA is to provide financial protection for travellers if a travel arrangement is cancelled or interrupted, usually as the result of the bankruptcy of the travel operator. The amount secured by the guarantee can be used to recompense the costs of any advance payment, full payment, value of the benefits included in the travel agreement and possible costs for repatriation. If the tour has for some reason not been completed, the guarantee can be used to reimburse the travellers affected. The provision of the bond ensures that only travel companies with sufficient funding to offer protection to their customers actually venture into the travel business.

Air Passenger Duty Air passenger duty (‘‘APD’’) is a per passenger charge on out-bound air travel from UK airports (other than the Scottish Highlands and Islands and long haul flights from Northern Ireland). APD is paid by the airlines to HMRC, although it is typically passed on to passengers via ticket prices. The level of duty varies depending on the class of travel (with economy class having a smaller charge) and the distance travelled which, from April 2015 is split into two bands. Band A includes flights under 2,000 miles (which includes flights to destinations like Spain, Croatia, Turkey and the Canary Islands) and band B includes flights over 2,000 miles (which includes destinations like Egypt, Thailand and the US). A number of exemptions apply depending on the age of the passenger. Children under two years of age who do not have their own seat are exempt from APD as are children under 12 in the lowest class of travel. From 1 May 2016, children under 16 in the lowest class of travel will also be exempt from APD.

2. CONSUMER LAW Consumers are protected by a raft of interwoven EU and UK primary and secondary legislation and consumer law is an area of law which is constantly evolving. The key pieces of legislation are outlined below.

General Consumer Law & Consumer Rights Act 2015 Currently, UK general consumer legislation is fragmented across multiple pieces of legislation. For the provision of services, the key legislation includes: • the Supply of Goods and Services Act 1982 (‘‘SGSA’’) which implies various terms into contracts to supply a service; • the Sale and Supply of Goods to Consumers Regulations 2002 (SI 2002/3045) (‘‘SSGCRs’’); and • the Unfair Contract Terms Act 1977 (‘‘UCTA’’) and the Unfair Terms in Consumer Contract Regulations 1999 (SI 1999/2083) (‘‘UTCCRs’’), which restrict the ability of a supplier to exclude or limit its liability for terms implied under the SGSA. The Consumer Rights Act 2015 (‘‘CRA’’) received Royal Assent on 26 March 2015 and will be brought into force in October 2015. It consolidates existing consumer law, and although for the most part, the law set

72 out in the CRA is similar to existing law, there are some changes (for example, customers will have statutory remedies of ‘repeat performance’ and price reduction if a service does not conform to the contract). The Group will need to review and, where appropriate, update existing processes and customer documentation as a result of the change in law.

Consumer Rights Directive The Consumer Rights Directive (2011/83/EU) (the ‘‘Consumer Rights Directive’’) was implemented into UK law by two sets of regulations: • the Consumer Rights (Payment Surcharges) Regulations 2012 (‘‘Payment Surcharges Regulations’’), which came into force on 6 April 2013, and which ban excessive payment surcharges; and • the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (SI 2013/3134) (‘‘Consumer Contracts Regulations’’), which came into force on 13 June 2014, and which set out the new rules for on premises, off premises and distance contracts, including information to be given prior to conclusion of the contract, requirements during the sale process and cancellation rights (which are not applicable to holidays) and other rights and remedies for the customer after the sale.

Unfair Commercial Practices Directive The Unfair Commercial Practices Directive (2005/29/EC) (the ‘‘UCPD’’) was transposed into UK law through the Consumer Protection from Unfair Trading Regulations (SI 2008/1277) (‘‘CPUT’’) and sought to harmonise unfair trading laws across all EU member states and establishes a single regulatory framework to govern unfair commercial practices. It sets out a general prohibition on traders treating consumers unfairly and requires businesses not to mislead customers through acts or omissions or subject them to aggressive commercial practices. Breach of the CPUT regulations can lead to criminal offences and, following an amendment to the regulations in 2014, consumer claims for civil redress.

3. MARKETING & DATA PROTECTION Advertising Advertising, in whatever form (including advertising which appears online or on social media) must comply with UK advertising codes of practice, consumer protection laws (including CPUT), the BIS pricing practices guide, and sector-specific laws and regulations (e.g. FCA rules on consumer credit advertising and FCA rules on financial promotions) and must not infringe upon any third-party intellectual property rights.

Data protection and privacy In collecting and using personal data about its customers, the Group must comply with multiple sources of UK and EU legislation, including: • the EU data protection regime within Directive 95/46/EC on the protection of individuals with regard to the processing of personal data and on the free movement of such data, and the UK data protection regime, where the collection and use of personal data is primarily governed by the Data Protection Act 1998. Together, this legislation sets out general principles of data protection and specific rules relating to the collection, storage, handling, security, use, and destruction of personal data; and • the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2003/2426) (as amended), in relation to obtaining the consent of consumers to receive electronic marketing communications, and in relation to the use of cookies and similar technologies. The European Commission has proposed a reform of the European Union’s data protection rules, involving a draft Regulation setting out a general EU framework for data protection and a draft Directive on protecting personal data and the way it is processed. On 24 June 2015, official discussions commenced between the European Commission, the European Parliament and the European Council, which are expected to produce the final version of the General Data Protection Regulation (‘‘GDPR’’) in early 2016. The aim of the GDPR, once finalised, is for data protection laws to be completely harmonised across Europe. The reform of data protection legislation will involve additional requirements and administrative obligations on the Group.

73 4. FINANCIAL SERVICES Insurance Mediation Directive The Group makes regulated sales of travel insurance via its website as an appointed representative (‘‘AR’’) of Maintenance Assist Limited (the ‘‘Principal’’). The travel insurance can only be sold alongside a holiday (or elements of a holiday) and not on a standalone basis. The sale (and administration) of insurance is highly regulated by the FCA, pursuant to: • European legislation (primarily EU Directive 2002/92/EC, known as the ‘‘Insurance Mediation Directive’’ or ‘‘IMD’’), although at present, travel insurance is exempt from the IMD requirements; • UK primary legislation (Financial Services and Markets Act 2000 (as amended) (‘‘FSMA’’)); • UK secondary legislation (in particular the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (SI 2001/544) (as amended) (‘‘RAO’’); and • the FCA handbook (including its perimeter guidance and supervisory manuals and the insurance conduct of business sourcebook), (together, the ‘‘FCA Rules’’). Because the Group acts as an AR, it is not directly authorised by the FCA, and has no direct regulatory obligations to the FCA, and the Principal takes the full regulatory risk for any failure to comply with FCA Rules. However, the Group is bound by contractual obligations to comply with all applicable regulatory requirements, so is in effect bound to ensure that it sells the travel insurance in accordance with the FCA Rules. Because sales are only made on the website and not via telephone, it is easier to control compliance, and the customer journey and sales process must be reviewed on behalf of the underwriters and the Principal to ensure they comply with the requirements. With proposals in an advanced stage to extend the scope of the IMD in 2016 or 2017 to include the sale of travel insurance, this may increase the Group’s administrative burden.

Consumer credit The regulation of consumer credit in the United Kingdom materially changed in April 2014 when the FCA took over regulation of consumer credit from the OFT. The regulatory framework now consists of FSMA and its secondary legislation, retained provisions in the Consumer Credit Act 1974 (‘‘CCA’’) and its retained secondary legislation, and rules and guidance in the FCA Handbook, including the Consumer Credit sourcebook (‘‘CONC’’). Firms who previously had consumer credit licences granted by the OFT could apply for interim permissions under the new FCA consumer credit regime, but in order to convert these into full permissions, this required a full and detailed application to the FCA with supporting application forms, business plans and documentation. The Group has already completed its full application to the FCA, which was granted, so the Group is now fully authorised by the FCA to carry out certain regulated consumer credit activities. In particular, it holds permission to carry out: • credit broking (e.g. offering customers the opportunity to take credit from a third-party); and • limited permission lending (e.g. offering customers credit itself). ‘‘Limited permission lending’’ is a permission granted only to lower risk firms whose lending activities are secondary to their primary business activities, and the regulatory regime is therefore considerably lighter than for firms with full lending permission (e.g. credit card companies). Although it has held the authorisation to do so since 1 May 2015, the Group has not carried on any regulated consumer credit activities other than the new Paypal credit payment option referred to below. The Group currently offers a low deposit scheme, where customers pay a low deposit starting at £50 per person, then pay the remainder of their holiday in two instalments, the first being the balance of the deposit (usually the balance of the cost of their flight) which is payable within 28 days of booking, and the second being the balance of the holiday which is payable two weeks prior to their departure. The low deposit scheme falls outside of the scope of the consumer credit regime (there is no ‘credit’ for the purposes of the legislation, and even if there were, the scheme would fall under the ‘instalment exemption’ set out in Article 60(F)(2) of the RAO). See paragraph 7 of Part 9: ‘‘Operating and Financial Review’’.

74 The Group applied for its authorisation to carry out regulated consumer credit activities to enable it to be able to add credit facilities to support the purchase of holidays via its website (either lending itself pursuant to its authorisation to carry out limited permission lending, or to offer customers credit from a third-party pursuant to its authorisation to carry out credit broking). The Group has an agreement with Paypal for the provision of additional payment options for customers purchasing holidays from the Group. As well as the usual payment options open to customers (i.e. credit and debit card payments and the low deposit scheme), customers will also be able to pay via a normal Paypal account, or to open a Paypal credit account (which is akin to a credit card but it is paperless and linked to a Paypal account) in order to pay for their holiday. The Group is to run a trial of these additional payment options which is expected to take place during September 2015, although the timing of this trial is yet to be confirmed. Offering customers the facility to open a Paypal credit account involves the regulated activity of credit broking and the Group will need to comply with the relevant provisions of the legislation, for example the rules with regard to credit advertising. To the extent the Group begins to carry out further regulated consumer credit activities, it will need to comply with the extensive and complex web of rules under the FCA consumer credit regime, including how the credit is advertised, the pre-sales, sales and post-sales process and documentation and also management of customer credit accounts and enforcement action.

75 PART 9 OPERATING AND FINANCIAL REVIEW The following is a discussion of the Group’s results of operations and financial condition. Prospective investors should read the following discussion, together with the whole of this Prospectus, including Part 1: ‘‘Risk Factors’’ and Part 11: ‘‘Historical Financial Information’’ and should not just rely on the key or summarised information contained in this Part 9. Unless otherwise stated, the financial information in this Part 9 relates to financial information that has been extracted without material adjustment from Part 11: ‘‘Historical Financial Information’’. This Part 9 contains ‘‘forward-looking statements’’. Those statements are subject to risks, uncertainties and other factors that could cause the Group’s future results of operations or cash flows to differ materially from the results of operations or cash flows expressed or implied in such forward-looking statements. See Part 2: ‘‘Presentation of Financial and Other Information’’.

1. OVERVIEW The Group specialises in short-haul beach holidays, servicing approximately 1.1 million passengers in the 12 month period ended 30 June 2015. The Group currently has a market share of the UK online short-haul beach holiday market of approximately 17 per cent. (source: CAA, UK Short Haul Beach Online Estimates; ATOL Data), with its two largest competitors being TUI Travel and Thomas Cook. In particular, the Group specialises in offering dynamically packaged beach holidays (representing 92.4 per cent. of the Group’s revenue for the financial year ended 30 September 2014), where customers are able to choose the components of their holidays as opposed to being offered traditional package holidays. The Group operates solely under the trademarked brand ‘‘On the Beach’’ in the United Kingdom. The Group is independent and has no fixed ties to airlines or hotels, meaning that it can offer customers a full market range of flight and hotel products bookable through online channels (including by desktop, mobiles, tablets and apps) and over the phone. The Group takes no stock commitment for either flights or beds. The Group directly contracts hotels through On the Beach Beds Ltd. In-house accommodation accounted for 42.5 per cent. of all hotel sales for the nine month period ended 30 June 2015. Historically, all hotel sales were generated from third-party bed-banks and the Group currently has seven partnerships with third-party bed-banks. The Group’s in-house direct contracting system allows it to better control hotel distribution and leverage increased revenue. In addition, the Group operates an in-house transfer business that allows consumers to attach airport transfers (coach or private taxi) between their flights and hotels. In the financial year ended 30 September 2014, 64.8 per cent. of all holidays had a transfer attached to the booking and this has increased to 66.4 per cent. in the nine month period ended 30 June 2015. The Group is classed as a travel agent rather than a tour operator. While the Group does not sell traditional package holidays, all holidays it sells are protected under the CAA ATOL scheme. The Group organises its operations into two principal financial reporting segments, being UK (the ‘‘UK Segment’’) (the Group’s established market) and international (the ‘‘International Segment’’) (the Group’s new market). In each of the UK Segment and the International Segment, the Group offers dynamically packaged holidays but with options to book single element products such as flights or hotels. The Group’s operations are principally in the United Kingdom, which in the financial year ended 30 September 2014, accounted for over 99 per cent. of the Group’s bookings. The Group’s TTV in the UK Segment was £358.3 million for the year ended 30 September 2014. For the nine month period ended 30 June 2015, TTV in the United Kingdom was £350.4 million, which is an increase of 29.8 per cent. from the nine month period ended 30 June 2014. The Group’s TTV in the International Segment (from the Group’s Swedish website sales) for the year ended 30 September 2014 was £1.6 million. For the nine month period ended 30 June 2015, the TTV was £4.2 million, compared to TTV of £1.1 million in the nine month period ended 30 June 2014. The Group’s EBITDA in the UK Segment increased from £9.9 million for the year ended 30 September 2012 to £14.1 million for the financial year ended 30 September 2014. The growth in the year ended 30 September 2014 was suppressed by the Group’s investment of £1.0 million in offline advertising (see paragraph 2.5 of this Part 9: ‘‘Operating and Financial Review’’) and set up costs for the Group’s direct

76 contracting function (see paragraph 2.8 of this Part 9: ‘‘Operating and Financial Review’’). This investment has, however, led to accelerated growth in the nine month period ended 30 June 2015, with nine month year on year growth in EBITDA in the United Kingdom of 48.6 per cent. (from £10.4 million in the nine month period ended 30 June 2014 to £15.4 million in the nine month period ended 30 June 2015). The following table sets out a summary of the Group’s operating profit for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m TTV...... 230.9 280.9 359.8 270.9 354.6 Revenue ...... 31.0 37.5 45.8 33.9 48.2 Marketing Costs ...... (14.3) (18.8) (24.8) (18.4) (26.2) Variable Costs ...... (3.4) (3.2) (3.7) (2.7) (3.6) Overhead Costs ...... (3.5) (3.2) (3.9) (2.9) (4.2) Depreciation ...... (0.2) (0.3) (0.3) (0.2) (0.3) Holding Company Costs ...... (0.2) (0.2) (0.3) (0.3) (0.3) Non underlying costs ...... (0.4) (0.5) — — (0.2) Administrative expenses before amortisation and exceptional costs(1) ...... (22.0) (26.3) (33.0) (24.5) (34.8) Group operating profit before amortisation and exceptional costs ...... 9.0 11.3 12.8 9.4 13.4 EBITDA ...... 9.9 12.2 13.4 9.8 14.2

(1) Administrative expenses presented in Section B of Part 11: ‘‘Historical Financial Information’’.

77 2. SIGNIFICANT FACTORS AFFECTING THE GROUP’S FINANCIAL CONDITION AND RESULTS OF OPERATIONS The Group’s business model is centred on driving efficient growth in market share whilst maintaining and improving both conversion and revenue per booking. The Group’s strategic initiatives are focused on improving the performance of these levers, as summarised in the diagram below:

ADDRESSABLE MARKET STRUCTURAL Short-haul MARKET beach holidays Online OTB share of Daily GROWTH & dynamically penetration market traffic unique visitors MARKET packaged

OPTIMISE Revenue per CUSTOMER £ Revenue per daily unique Conversion PROPOSITION booking visitor & LEVERAGE £ MARGIN

Revenue

DRIVING EFFICIENT Marketing Daily unique SHARE spend per daily visitors Marketing GROWTH & unique visitor investment STRENGTH OF BRAND Fixed and variable costs

SCALE DRIVES OPERATIONAL LEVERAGE EBITDA 28AUG201507504469

Source: Company information The Group’s operating and financial results during the periods under review have been materially affected by the factors discussed below.

2.1 Growth in the online segment of the UK market for short-haul beach holidays There has been an overall growth in short-haul holidays from the United Kingdom (defined as UK consumers travelling to destinations less than 6 hours flight from the UK mainland), with an overall decrease in long-haul holidays. The compound annual growth rate for short-haul holidays from the United Kingdom was 4.7 per cent. for the period from 2010 to 2014, compared to a decline in long-haul holidays of 1.3 per cent. over the same period. In 2014, there were approximately 12.3 million UK visits abroad to short-haul package holiday destinations compared to approximately 3.8 million UK visits abroad to long-haul package holiday destinations (source: Mintel, Package vs Independent Holidays UK, April 2015). The Board believes this trend has been principally driven by the costs associated with long-haul flying (particularly fuel price volatility and the Air Passenger Duty on all long-haul flights from the United Kingdom (see paragraph 1 of Part 8: ‘‘Regulation’’)). In addition, the Board believes there has been an overall increase in the quality (both in terms of services and facilities) of hotels in Western Europe that compete with hotels in long-haul destinations, improving the attractiveness to UK consumers of short-haul holidays. The beach element of the holiday market is the most popular holiday type amongst UK consumers. Approximately 48 per cent. of UK holidaymakers who travel overseas have taken a beach holiday in the

78 last 12 months, compared to 19 per cent. for city breaks, 15 per cent. for cultural/history breaks and 6 per cent. for cruises. Mintel estimates the value of the overseas beach holiday market at £10.7 billion (excluding flight costs) (sources: Mintel, Beach Holidays—UK, January 2015). In addition to the increasing migration to online purchasing forecast by Euromonitor, the Board expects the Group to continue to increase its share of the online short-haul beach holiday market in line with its current growth strategy. There is also increasing online penetration of the UK package holiday market, being 48.3 per cent. in 2012 and forecast to reach 59.5 per cent. in 2019 with a projected compound annual growth rate of 2.3 per cent. in constant prices over this same period (source: Euromonitor, Online Sales by Market). The dynamically packaged holiday market in the United Kingdom is forecast to grow at the expense of traditional pre-packaged holidays from 2014 to 2019. During this period, traditional package holiday sales are forecast to decline by a compound annual growth rate of 3.9 per cent. in the United Kingdom, whilst dynamic packaging sales are forecast to grow by a compound annual growth rate of 1.7 per cent. over this same period (source: Euromonitor, Growth in Dynamic Packages). Euromonitor estimate the proportion of UK package holiday sales that are dynamically packaged was £2.72 billion in 2009, rising to £4.37 billion in 2014 and representing a compound annual growth rate of 9.9 per cent. UK traditional package holiday sales reduced from £8.97 billion to £6.54 billion over the same period, representing a compound annual growth rate of minus 6.1 per cent (source: Euromonitor, UK Growth in Dynamic Package v Traditional Package Holidays). The Board believes that the key driver of this growth in dynamic packaging is increasing online penetration, which has allowed consumers to create their own holiday packages through access to millions of flight and hotel combinations with access to transparent prices. This has provided consumers with the ability to make their own choices while reducing the need for human intervention or support from retail stores.

2.2 Increasing traffic The Group’s model is centered on increasing its market share whilst maintaining and improving its customer conversion rates and revenue per booking. The Group’s share of market traffic to its websites has grown by 12.9 per cent. compound annual growth over the period between the financial year ended 30 September 2012 and the financial year ended 30 September 2014, with 14.4 per cent. compound annual growth in daily unique visitors to the Group’s websites over that same period (source: Hitwise). The Group has been increasing marketing spend in offline channels to increase brand awareness. The Board believes that the strength of the Group’s brand and customer proposition has led to an increased proportion of branded traffic and repeat purchase rate. In addition, the iOS and Android apps launched by the Group in the past two financial years have helped to increase its share of branded traffic. Maintaining branded traffic allows the Group to grow its market share whilst sustaining its revenue performance. The Group’s cost per daily unique visitor (defined as total marketing expenses divided by number of daily unique visitors) was £0.46 per daily unique visitor and £0.51 per daily unique visitor for the financial years ended 30 September 2013 and 30 September 2014, respectively. The Group uses a mixture of proprietary and third-party technology to manage its digital advertising channels. The technology provides flexibility, speed-to-market and a robust insight into performance across digital channels. The Group’s cross-channel attribution technology informs its budget allocations and increases efficiency by measuring the effectiveness of all digital marketing channels. The Group’s predictive bid technology automatically manages spend across search engines and regularly refines the accuracy of the Group’s forecast models.

2.3 Driving efficient share growth The Group’s marketing cost as a percentage of revenue (excluding offline marketing expenditure) rose from 45.9 per cent. in the financial year ended 30 September 2012 to 49.9 per cent. for the financial year ended 30 September 2013. This rise was driven by a management decision to accelerate traffic share at a time when management was of the view that there was a low level of competition in the marketplace.

79 In the financial years ended 30 September 2013 and 30 September 2014 and the nine month period ended 30 June 2015, the Group spent an amount equal to approximately 50 per cent. of its revenue on marketing to increase its market share. The Group also carried out regional offline advertising during the financial year ended 30 September 2014 and the nine month period ended 30 June 2015 (see paragraph 2.5 of this Part 9: ‘‘Operating and Financial Review’’). In addition, the Board believes that the Group’s multi-channel offering and proprietary technology have resulted in an organic increase in the Group’s market share. The Group is now the third most well-known brand for beach holidays in the United Kingdom with a 14 per cent. spontaneous awareness score (source: Mediacom, ontheBeach.co.uk Brand Tracking Results, 23rd March 2015). The proportion of traffic coming to the Group’s websites from branded, free and direct sources is increasing and, in the nine month period to 30 June 2015, represented 55 per cent. of overall traffic mix (compared to 52 per cent. for the nine month period to 30 June 2014).

2.4 Optimisation of the Group’s customer proposition has led to increased customer conversion rates and revenue As shown in paragraph 6 of this Part 9: ‘‘Operating and Financial Review’’, the Group has achieved 23.5 per cent growth in revenue per daily unique visitor in the nine month period ended 30 June 2015 compared to the nine month period ended 30 June 2014. This has contributed to an acceleration in revenue growth which has increased from a compound annual growth rate of 22 per cent. for the three years period ended 30 September 2014 to a growth rate of 41 per cent. for the nine month period ended 30 June 2015. These metrics have been underpinned by the Group’s proprietary technology and customer proposition, including; (a) regular split testing to simplify the booking process; (b) flexible customer payment schemes; (c) user-level personalisation in close to real time; and (d) the Group’s increasingly sophisticated bid modelling tool. The Group has experienced an increase in the number of bookings in each of the last three financial years. The Group made 271,196 bookings and 325,867 bookings for the financial years ended 30 September 2013 and 30 September 2014, respectively. The Group has handled the increase in bookings while, at the same time, has improved its technology infrastructure so that further increases bookings can be fulfilled at a lower cost per booking. The Board believes that, since the establishment of the Group’s new technology platform in 2011, the Group has been able to address increases in booking numbers by making only limited additional capital expenditures to expand the Group’s data warehousing and processing capabilities.

2.5 Accelerated brand awareness through offline TV advertising and supporting digital channels The Group’s historic advertising efforts have focused primarily on online digital marketing. The Board believes that continued investment (both online and offline) is important to retaining and expanding the Group’s market share.

Offline advertising in the financial year ended 30 September 2014 The Group commenced a twelve-week TV campaign in the Midlands on 26 December 2013. The Board attributes the increase in year on year bookings for the Midlands region that outpaced other regions in the United Kingdom and which was sustained following the conclusion of the TV campaign, to the TV campaign. During the TV campaign, the Group’s prompted brand awareness in the Midlands region rose from a pre-TV campaign advertising score of 21 per cent. to 39 per cent. during the TV advertising campaign (source: Mediacom, ontheBeach.co.uk Brand Tracking Results, 23rd March 2015). The TV campaign was extended in March 2014 to two additional two UK regions, the North West region and Scotland. During this phase of TV advertising, the Group’s year-on-year bookings for the TV advertising regions averaged 36 per cent. compared to 17.7 per cent. for other regions during the period from 15 March 2014 to 31 August 2014. The Group’s total investment in TV advertising for the financial year ended 30 September 2014 was £1.0 million.

80 Offline advertising in the nine month period ended 30 June 2015 The Group continued with a £1.5 million investment in a TV campaign which commenced on 26 December 2014 and ended on 14 February 2015. More UK regions were targeted in this campaign, including Mid-West England (the Midlands, HTV West, Central and South-West regions), North England (the Granada, Yorkshire and Border regions) and Scotland (the North and Central regions). The Group generated a three percentage point increase in spontaneous brand awareness from 11 per cent. to 14 per cent., which placed the Group as the third most recognised brand for beach holidays in the United Kingdom (source: Mediacom, ontheBeach.co.uk Brand Tracking Results, 23rd March 2015).

Offline advertising in future financial years The Board believes that regional and national TV advertising will increase brand awareness and accelerate and increase branded searches. The Group is planning a national campaign in the financial year ended 30 September 2016, with investment in offline advertising expected to be an amount equal to 2.5 per cent. of revenue margin for the financial year ended 30 September 2016. The Board expects to deliver a positive return from TV advertising activity over the next 24 months.

2.6 Trends towards consumers booking on mobile devices Over the past few years, mobile devices (including smartphones and tablets) have become an increasingly important channel for customers to make holiday bookings and the Board expects this trend to continue. Interactions are no longer contained within a single moment in time or a single touch point due to the increase in device accessibility—spanning smartphones, tablets, laptops and desktop computers—and convenient access to cloud-based services. The Board believes customers also increasingly plan and book their journeys when they happen to have free time slots, irrespective of their immediate whereabouts and mobile devices afford customers that convenience to make travel arrangement while on the go. The Group is actively engaged in the design, rollout and improvement of applications for mobile devices. In 2013, the Group launched its first mobile web browser. Since then, the Group has continuously developed its websites for mobile devices. For the financial year ended 30 September 2014, 70 per cent. of all mobile traffic to the Group’s websites originated from an iOS device. For the nine month period ended 30 June 2015, the proportion of iOS device traffic as a percentage of all mobile traffic was 64 per cent. (source: Google Analytics). The Group also experienced significant increases in orders by customers using tablets and smart phones via mobile optimised web browsers. Approximately 10.5 per cent. of the Group’s holidays were booked through the Group’s smartphone mobile web browser device in the nine month period ended 30 June 2015, compared with approximately 6.1 per cent. in the nine month period to 30 June 2014. Combining tablets and smartphones, these channels represented an average of 39 per cent. of all orders for the financial year ended 30 September 2014 compared with an average of 24 per cent. for the financial year ended 30 September 2013. Average order values and the time gap between booking and departing are similar across platforms (source: Google Analytics). The following table sets out a summary of the Group’s orders by platform for the financial years ended 30 September 2013 and 30 September 2014:

Year ended Nine months 30 September ended 30 June Orders by platform 2013 2014 2014 2015 Non desktop(1) ...... 24% 37% 38% 49% Desktop ...... 76% 63% 62% 51% Total orders(2) ...... 100% 100% 100% 100%

(1) Non desktop means smart-phone and tablet orders, whether through apps or browsers. (2) Order data sourced from Google Analytics. Orders comprise all customer bookings including those which are subsequently cancelled in advance of travel. The order data by platform shown above is believed to be consistent with the bookings by platform trend. The Group launched its first iOS mobile app for smart-phone and tablet in September 2014. By 30 June 2015, the Group’s app downloads had exceeded 260,000 (source: iTunes Apple Store MI). Mobile apps

81 represent three per cent. of total traffic to the Group’s websites and approximately two per cent. of its total orders. The Group launched its first Android app in July 2015.

2.7 Increasing number of bookings from repeat customers The Group has implemented and continues to implement a strategy for attracting repeat customers. During the periods under review, the Group experienced increased customer loyalty, which was demonstrated by customers purchasing additional holidays after their first purchase. Repeat customers (defined as customers who had made a previous purchase from the Group using the same email address in the previous five calendar years) accounted for 20.5 per cent. of the Group’s bookings volumes for the year ended 30 September 2011, compared to 30.4 per cent. for the year ended 30 September 2014, representing a compound annual growth rate of 48.8 per cent. The percentage of total customers that are repeat customers has increased notwithstanding growth in new customers during these periods. The Group has implemented and continues to implement a strategy for attracting repeat customers by aiming to provide an excellent customer service supported by an increasingly personalised experience, which builds a dialogue with existing and lapsed customers (defined as customers who had made a previous purchase from the Group but have not done so for three or more years) over the medium to long term. Repeat customers are a key driver of customer acquisitions from unpaid and lower cost sources, such as natural and branded search results, thereby lowering the Group’s per booking customer acquisition costs.

2.8 Increasing number of in-house accommodation bookings through the Group’s direct contracting system The Group has implemented an in-house function to contract directly with hotels (through ‘‘On the Beach Beds’’), being its direct contracting system. Incremental revenue is available through the disintermediation of third-party bed-banks (as no fee is payable to third-party bed-banks). The Board believes that incremental revenue is also available through the Group’s direct contracting system as prompt payment to hoteliers by the Group can result in hoteliers offering better rates. The Group’s direct contracting system is based on relevant, high volume 3, 4 and 5 star hotels identified through the Group’s in-house MI platforms. Contracts are negotiated by the Group’s team of hotel contractors and maintained on its direct contracting system by an administration team. The Group’s direct contracting system also connects directly to hotel-channel management tools enabling access to the latest offers and last-minute room availability, reducing the administration required to maintain relationships with thousands of low volume hotel suppliers (known as the long-tail stock). The Group’s direct contracting system is a key contributor to low input prices and the ability to negotiate advantageous contract terms with third-party bed-banks. The ability to disintermediate the third-party bed-banks and provide prompt payment directly to the hotelier is a differentiator that the Board believes will underpin future business and revenue growth. In addition, bookings made directly with hoteliers produce less than half the number of operational changes and complaints than beds booked from third-party bed-banks. The high volume of the Group’s bookings also allows it to target marketing contributions from in-resort suppliers such as attractions and tourist organisations. In the nine month period ended 30 June 2015, the Group had up to a 50 per cent. share with direct contracts with 4 per cent. of incremental revenue. An increased investment to scale the function in March 2014 delivered a £1.4 million revenue increase over the same period last year, which the Board believes will allow the Group to increase revenue with a modest further investment in technology and resource. In the nine month period ended 30 June 2015, hotels booked through the Group’s direct contracting system generated a revenue margin for the Group of 22.8 per cent. while other hotels generated a revenue margin for the Group of 18.56 per cent.

82 customer service. The product is fully integrated into the Group’s online search service and included in the Group’s websites in real-time, to help drive revenue both on the supply and customer side. Revenue for the 12 months ended 30 June 2015 was £5.4 million and 66 per cent. of customers who booked flight and hotel products on the Group’s websites also purchased a transfer. Over this same period, transfers accounted for 2.5 per cent. of the Group’s TTV.

Insurance The Group makes regulated sales of travel insurance through its websites as an appointed representative of Maintenance Assist Limited. The travel insurance can only be sold alongside a holiday (or elements of a holiday) and not on a standalone basis. The sale (and administration) of insurance is highly regulated and further details can be found in Part 8: ‘‘Regulation’’. The insurance product option was integrated into the Group’s websites in December 2014 and allows customers to purchase the insurance product at the end of the booking path. In the nine month period ended 30 June 2015, insurance has increased to a take-up rate of 16.4 per cent. and delivered an increase in revenue per booking of 1 per cent.

Ancillary sales Ancillary sales (excluding coach and private taxi transfers) have historically not been material to the Group’s revenue performance. The Group relies on one principal white label sourcing partner for airport parking and airport hotel bookings. In the nine month period to 30 June 2015, ancillary sales generated a revenue margin for the Group of 44.7 per cent. Following the Group’s launch of its iOS and Android apps, the Board believes there is a significant opportunity to sell ‘in-resort’ ancillary products through mobile booking channels which will drive further revenue growth. The Group intends to start selling ‘in-resort’ products in the short to medium term via the mobile app.

3. RECENT DEVELOPMENTS, CURRENT TRADING AND PROSPECTS In the period since 30 June 2015, the Group’s strong financial performance has continued and the Group is trading in line with the Board’s expectations.

4. DESCRIPTION OF KEY INCOME STATEMENT ITEMS 4.1 TTV TTV represents the total transaction value of all flight and hotel, flight only and hotel only sales, calculated by aggregating the gross price paid by customers for their bookings.

4.2 Revenue Revenue is measured at the fair value of consideration received or receivable, net of cancellations and discounts. It is recognised on the date of booking. The Group’s gross commission is earned as agent for the supplier or consumer in purchases of travel products such as flight tickets or hotel accommodation from third-party suppliers.

4.3 Marketing Costs Marketing spend represents the investment into media and the resulting demand generated through initiatives such as paid search engine marketing, digital display (banners on third-party websites) and off line marketing programmes such as TV advertising. The spend may be associated with paying a search engine for clicks on the Group’s websites, or paying a partner a percentage commission for a booking or indeed paying in advance for advertising spots on television.

4.4 Variable costs Variable costs consist of contact centre wages, credit card fees and communication costs.

83 4.5 Overhead costs Overhead costs consist of salaries, IT hosting and support costs, office costs and other administrative costs, excluding depreciation and amortisation.

4.6 Finance costs External finance costs consist of bank interest on the Group’s term loan and overdraft interest net of interest earned on money held in the Group’s trust account.

4.7 Shareholder interest Shareholder interest consists of interest on various shareholder loans which will be paid down in full as part of the Reorganisation.

4.8 Holding company costs Holding company costs consist of non-executive directors’ fees and other fees paid to Inflexion Private Equity Partners LLP.

4.9 Non underlying costs Non trading costs which do not relate to the UK or international trading segments.

5. RESULTS OF OPERATIONS The following table sets out the combined and consolidated income statement for the UK Segment for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended 30 September Nine months ended 30 June CAGR 2014 UK Segment 2012 2013 2014 12 - 14 (unaudited) 2015 % Y - Y £m £m £m % £m £m % TTV...... 230.1 280.8 358.3 24.8 269.9 350.4 29.8 Revenue ...... 30.9 37.5 45.6 21.5 33.8 47.7 41.1 Revenue after marketing costs ...... 16.7 18.8 21.5 13.5 15.9 23.0 44.7 Variable costs ...... (3.4) (3.2) (3.5) (2.7) (3.6) Overhead costs ...... (3.4) (3.4) (3.9) (2.8) (4.0) Depreciation and amortisation(1) ...... (1.0) (1.2) (1.3) (1.0) (1.2) EBIT ...... 8.9 11.0 12.8 20.1 9.4 14.2 51.1 EBITDA ...... 9.9 12.2 14.1 19.2 10.4 15.4 48.6 EBITDA % revenue ...... 32.0 32.8 30.9 30.8 32.4

(1) Excludes amortisation of brand and website technology intangible assets.

5.1 TTV TTV increased from £230.1 million for the financial year ended 30 September 2012 to £358.3 million for the financial year ended 30 September 2014, representing a compound annual growth rate of 24.8 per cent. The growth throughout the period was predominantly due to a 14.4 per cent. compound annual growth in traffic to the Group’s websites, stronger year on year conversion with an increase of 3.7 per cent. on a compound basis and higher average revenue per booking. For the nine month period ended 30 June 2015, the TTV of £350.4 million was 29.8 per cent. ahead of the nine month period ended 30 June 2014. This growth throughout the period was primarily due to a 14.6 per cent. increase in year-on-year traffic to the Group’s websites with a 5.6 per cent. increase in customer conversion rates. This resulted in a 21.1 per cent. increase in bookings at a higher revenue per booking. Year-on-year growth is driven by the Group continually improving the customer proposition (including through enhancing customer personalisation, offering flexible payment schemes and providing a high level of customer service). The Board expects that the percentage of TTV attributable to hotels will increase through selling of higher value products using customer personalisation technology and the Group’s direct contracting system.

84 5.2 Revenue Revenue increased from £30.9 million for the financial year ended 30 September 2012 to £45.6 million for the financial year ended 30 September 2014, representing a compound annual growth rate of 21.5 per cent. Revenue per daily unique visitor was £0.85 for the financial year ended 30 September 2012 and increased by 6.2 per cent. on a compound basis to £0.96 for the financial year ended 30 September 2014. Revenue per booking also increased over the same period from £133.4 to £140.0. For the nine month period ended 30 June 2015, revenue was £47.7 million, a 41.1 per cent. increase on the same period in the prior year. Revenue per daily unique visitor for the nine month period ended June 2015 was 23.5 per cent. higher than for the comparable period in the prior year and revenue per booking was 16.6 per cent. higher at £162.4. Several factors have led to the rise in average revenue per booking, including an increase in the volume of in-house accommodation bookings, the launch of a new insurance product (see paragraph 2.8 of this Part 9: ‘‘Operating and Financial Review’’) and increased attachment rates of in-house transfers to bookings.

5.3 Marketing and advertising expenses Marketing and advertising expenses (excluding offline advertising) as a percentage of revenue increased from 46.0 per cent. for the financial year ended 30 September 2012 to 50.7 per cent for financial year ended 30 September 2014. The rise in marketing and advertising expenses over this period was primarily due to an increase in paid online advertising to accelerate the Group’s growth in market share and number of daily unique visitors (resulting in a 14.4 per cent. increase on a compound basis). In 2014, the Group invested in its first offline UK regional TV campaign. An initial trial was launched in the Midlands region in December 2013, during which there was a significant increase in the Group’s brand awareness. As a result, the trial was extended to two further regions, the North West region and Scotland. The total investment in TV advertising during the financial year ended 30 September 2014 was £1.0 million. For the nine month period ended 30 June 2015, marketing and advertising expenses (excluding offline advertising) represented 48.6 per cent. of revenue, compared to 50.0 per cent. for the prior year period. This improvement was as a result an increase in revenue per daily unique visitor of 23.5 per cent. over the same period and improvements in the efficiency of marketing spend driven from investment in the Group’s bid modelling tool. Following the success of the initial offline campaign in 2014, investment in UK regional television advertising continued in early 2015 to engage a wider audience across the United Kingdom. This cost was £1.5 million in total.

5.4 Revenue after marketing costs Revenue after marketing costs increased from £16.7 million for the financial year ended 30 September 2012 to £21.5 million for the financial year ended 30 September 2014, representing a 13.5 per cent. increase on a compound basis. For the nine month period ended 30 June 2015, revenue after marketing costs increased from £15.9 million to £23.0 million (representing a 44.7 per cent. increase on the comparable period in the prior year).

5.5 Costs The following table sets out a summary of costs for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Variable costs ...... 3.4 3.2 3.5 2.7 3.6 Overhead costs ...... 3.4 3.3 3.9 2.8 4.0 Depreciation/amortisation(1) ...... 1.0 1.2 1.3 1.0 1.2 Total costs ...... 7.8 7.7 8.7 6.5 8.8

(1) Excludes amortisation of brand and website technology intangible assets.

85 %%%%% Revenue Revenue Revenue Revenue Revenue Variable costs ...... 10.8% 8.5% 7.7% 7.9% 7.5% Overhead costs ...... 11.0% 8.8% 8.6% 8.3% 8.2% Depreciation/amortisation ...... 3.2% 3.2% 2.9% 3.0% 2.5% Total costs ...... 25.2% 20.5% 19.2% 19.3% 18.4%

5.6 Variable costs Variable costs have decreased as a percentage of revenue from 10.8 per cent. in the financial year ended 30 September 2012 to 7.7 per cent. in the financial year ended 30 September 2014. Variable costs also decreased as a percentage of revenue from 7.9 per cent. in the nine month period ended 30 June 2014 to 7.5 per cent. in the nine month period ended 30 June 2015. This reduction over this period was the result of increased efficiencies in the contact centre, where the proportion of holidays booked online has increased from 88.2 per cent. in the financial year ended 30 September 2012 to 89.5 per cent. in the financial year ended 30 September 2014. This has increased further in the nine month period ended 30 June 2015 to 93.6 per cent. Over the financial years from 30 September 2012 to 30 September 2014, the proportion of business transacted on debit cards has also increased from 57.5 per cent. to 72.8 per cent., respectively (thereby reducing card costs). The Board considers that variable costs are closely linked to booking volumes.

5.7 Overhead costs As a percentage of revenue, overhead expenses reduced for the financial year ended 30 September 2012 from 11 per cent. to 8.8 per cent. for the financial year ended 30 September 2013 as the Group’s business gained operational leverage. The reduction slowed in the financial year ended 30 September 2014 as the Group invested in its direct contracting function to drive revenue through disintermediation of third-party suppliers. For the nine month period ended 30 June 2015, overhead expenses as a percentage of revenue remained constant at 8.2 per cent. compared to the comparable period in the previous year with operational leverage offset by the investment in its direct contracting function year-on-year.

5.8 Holding company costs Following Admission, the Board expects the incremental costs of being a listed company to be broadly in line with historic holding company costs (excluding any costs arising from awards under the LTIP in the near future).

5.9 EBITDA for the UK Segment The Group increased EBITDA for the UK Segment by a compound annual growth rate of 19.2 per cent. from £9.9 million for the financial year ended 30 September 2012 to £14.1 million for the financial year ended 30 September 2014, with investment in 2014 in offline and direct contracting suppressing growth in EBITDA. EBITDA performance for nine months ended 30 June 2015 reached £15.4 million versus £10.4 million for the nine months ended 30 June 2014, an increase of 48.6 per cent with the accelerated growth being delivered as a result of the investments made in the financial year ended 30 September 2014.

5.10 International Segment The following table sets out a summary of the combined and consolidated income statement and the number of bookings for the International Segment for the financial years ended 30 September 2012,

86 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 International 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m TTV...... 0.9 0.1 1.6 1.1 4.2 Revenue ...... 0.1 — 0.1 0.1 0.5 Revenue after Marketing ...... — — (0.6) (0.5) (1.0) Variable costs ...... — — — — (0.1) Overhead costs ...... — — (0.1) (0.1) (0.2) EBITDA ...... — — (0.7) (0.6) (1.3) Number of bookings ...... 1,725 190 1,231 837 3,572 During the financial year ended 30 September 2012, the Group offered a hotel-only proposition into seven European markets. While sales were evidenced, the profitability of the venture was under pressure due to the low booking values associated with single element sales and the high marketing expenses of competing with other single element OTAs via Google. The Group’s management took the decision to withdraw investment from this offering and review the Group’s expansion strategy for the following financial year. In October 2014, the Group recruited a Director of International with significant online travel experience in markets outside of the United Kingdom to oversee the roll-out of the Group’s international offering. The Group focused its point of sale holiday platform in Sweden (under the eBeach brand name) which has traded in line with Board expectations. In the nine month period ended 30 June 2015, TTV was £4.2 million. The Group launched a national TV campaign in Sweden in May 2015 (at a cost of £0.2 million) that drove an increase in branded visitors to the Group’s websites with branded share rising to 23 per cent. in that same month. The Group plans to launch new point of sale platforms in Norway and/or Denmark in the short term, subject to Sweden’s performance in the financial year ended 30 September 2015.

5.11 Retained earnings The following table sets out a summary of the Group’s retained earnings for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Group operating profit before amortisation and exceptional costs ...... 9.0 11.3 12.8 9.4 13.4 Exceptional costs ...... — — (3.7) (3.7) — Amortisation of intangible assets ...... (0.9) (1.0) (5.3) (4.0) (4.2) Group operating profit ...... 8.1 10.3 3.8 1.7 9.2 Finance costs ...... (0.2) — (1.7) (1.4) (1.4) Shareholder interest ...... (4.0) (4.8) (7.0) (5.1) (5.8) Finance income ...... 0.1 0.2 0.1 0.1 0.1 Profit/(loss) before taxation ...... 4.0 5.7 (4.8) (4.7) 2.1 Taxation ...... (1.7) (2.3) (1.0) (0.9) (1.1) Profit/(loss) for the year/period ...... 2.3 3.4 (5.8) (5.6) 1.0

5.12 Taxation (charge)/credit on ordinary activities The Group recorded a taxation charge on ordinary activities of £1.7 million, £2.3 million and £1 million for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014, respectively.

87 This taxation charge was £0.9 million and £1.1 million for the nine month periods ended 30 June 2014 and 30 June 2015, respectively. The unaudited statutory rate of tax applicable was 25.3 per cent., 23.6 per cent. and 22 per cent. for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014, respectively and 22 per cent. and 20.7 per cent. for the nine month periods ended 30 June 2014 and 30 June 2015, respectively. The equivalent effective tax rate for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 was 42.7 per cent., 40.5 per cent. and 32.7 per cent., respectively and the equivalent effective tax rate for the nine month periods ended 30 June 2014 and 30 June 2015 was 40.3 per cent. and 20.8 per cent., respectively. The Board currently expects that the effective tax rate of the Group shall be broadly in line with the statutory rate of tax on an ongoing basis. This was affected in all periods by disallowed shareholder interest under the Advance Thin Capitalisation Agreement programme and, in the year ended 30 September 2014, by a deferred tax credit of £0.7 million which is released in line with the amortisation of £4.3 million on the valuation of acquired intangibles of £30.1 million (representing the Group’s brand) and £22.5 million (representing the Group’s technology) on the investment by Inflexion in October 2013. The deferred tax credit for the nine month period ended 30 June 2015 was £0.7 million.

5.13 Profit/(loss) for the year/period The Group recorded profit of £2.3 million, £3.4 million and a loss of £5.8 million for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014, respectively. These figures were a loss of £5.6 million and a profit of £1 million for the financial periods ended 30 June 2014 and 30 June 2015, respectively. This recorded profit was after charging shareholder interest on shareholder loans associated with Livingbridge’s investment over the financial years ended 30 September 2012 and 30 September 2013 and Inflexion’s investment over the financial year ended 30 September 2014 of £4.0 million, £4.8 million, and £7.0 million, respectively and over the nine month periods ended 30 June 2014 and 30 June 2015 of £5.1 million and £5.8 million, respectively. The shareholder interest charged in 2012 and 2013 was paid in October 2013 when Inflexion made its investment and the interest charged in 2014 was compounded into the loan balance at the end of the year. In the financial year ended 30 September 2014, the exceptional costs include deal fees charged to the profit and loss account of £3.7 million, which were costs associated with the investment by Inflexion.

6. KEY PERFORMANCE INDICATORS The following table sets out a summary of selected unaudited key performance indicators of the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended 30 September Nine months ended 30 June CAGR % 2012 2013 2014 12 - 14 2014 2015 Y - Y Number of bookings ‘000 ...... 231,634 271,196 325,867 18.6% 242,664 293,809 21.1 Revenue per booking (£)(1) ...... 133.4 138.3 140.0 2.4% 139.3 162.4 16.6 Daily unique visitors(2) ...... 36,438,507 40,278,249 47,671,666 14.4% 34,346,458 39,378,033 14.6 Conversion rate %(3) ...... 0.64 0.67 0.68 3.7% 0.71 0.75 5.6 Revenue per daily unique visitor (£)(4) ...... 0.85 0.93 0.96 6.2% 0.98 1.21 23.5 Marketing as a % of revenue(5) .... 46.0 49.9 50.7 50.0 48.6 Variable cost as a % of revenue(6) . . 10.8 8.5 7.7 7.9 7.5 Overhead cost as a % of revenue(7) . 11.0 8.8 8.6 8.3 8.2

(1) The revenue per booking value is revenue divided by the number of bookings. (2) The number of daily unique visitors to the websites. (3) Conversion rate: The total number of bookings divided by total daily unique visitors. (4) Revenue per daily unique visitor: The total pound revenue divided by the total daily unique visitors. (5) Marketing expenses excluding offline advertising expenses divided by revenue. (6) Variable costs include wages in the contact centre, card costs and communications divided by revenue. (7) Overhead costs excluding depreciation divided by revenue.

88 7. LIQUIDITY AND CAPITAL RESOURCES 7.1 Overview The Group generated positive net cash in all financial periods under review in this section apart from the financial year ended 30 September 2014, when £8.9 million was paid to various sellers in connection with Livingbridge’s exit and Inflexion’s investment. The following table sets out the cash flow information for the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Cash flows from operating activities ...... 18.4 9.6 6.2 17.2 35.0 Cash flows from investing activities ...... (1.0) (1.3) (24.8) (24.4) (1.6) Cash flows from financing activities ...... (1.3) (2.1) 16.3 17.0 (2.3) Net increase/(decrease) in cash and cash equivalents ...... 16.1 6.2 (2.3) 9.8 31.1 Cash and cash equivalents at beginning of year/period ...... 11.0 27.1 33.3 33.3 31.0 Cash and cash equivalents at end of year/period ...... 27.1 33.3 31.0 43.1 62.1

7.2 Cash generated from operating activities The following table sets out selected cash flow information for the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 Cash flows from operating activities 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Profit before taxation ...... 4.1 5.8 (4.8) (4.7) 2.1 Adjustments for: Depreciation ...... 0.2 0.3 0.3 0.2 0.3 Amortisation of intangible assets ...... 0.9 0.9 5.3 4.0 4.2 Finance costs ...... 4.1 4.8 8.7 6.5 7.1 Finance income ...... (0.1) (0.2) (0.1) (0.1) (0.1) 9.2 11.6 9.4 5.9 13.6 Increase in trade and other receivables ...... — (7.5) (9.8) (34.1) (42.1) Increase in trade and other payables ...... 9.8 7.9 9.6 47.6 65.8 Decrease/(increase) in working capital ...... 9.8 0.4 (0.2) 13.5 23.7 Tax paid ...... (0.5) (2.4) (1.5) (1.1) (1.2) Interest paid ...... (0.1) — (1.5) (1.1) (1.1) Net cash inflow from operating activities ...... 18.4 9.6 6.2 17.2 35.0

Trust account The Group provides clear and comprehensive consumer protection as it holds an ATOL licence and all customer monies are held in a trust account until after the provision of the holiday service. The trust account is governed by a deed between the Group, the Civil Aviation Authority Air Travel Trustees, ABTA and independent trustees (Barclays Wealth), which determines the inflows and outflows from the account. All customer receipts are paid into the trust account in full before the holiday departure date. These payments are held in the trust account until the service is provided—for flights on payment to the supplier and for hotels and ancillaries on the customer’s return from holiday. The Group does not therefore use customer pre-payments to fund its business operations.

89 Other than when a customer utilises the low deposit scheme, a customer booking in advance will pay: (a) a deposit at the time of booking (which will cover the flight cost, plus a minimal hotel deposit and any ancillary costs payable up front); this amount will pass through the trust and be paid to the flight provider at the time of booking; and (b) the balance of their holiday cost at least 14 days before departure. This amount is paid into the trust until the customer returns from holiday, when it is released to the Group. This will typically be in advance of the hotel or bed bank suppliers being paid. Similarly, a customer making a late booking within 14 days of the departure date will pay the full cost when booking. The full amount will be paid into the trust, with flight costs paid to the flight provider on booking and the related customer payment released from the trust the following day. The balance will remain in the trust until the customer returns from holiday, as described above. Customers booking outside of 14 days can choose to pay in full, as opposed to deposit and balance, at the time of booking in which case the cashflows follow those booked within 14 days.

Low deposit scheme If a customer books more than defined number of days in advance of departure, the customer is able to take advantage of the Group’s low deposit scheme. Currently the prescribed number of days is 45, however management has the flexibility to amend this and has done so frequently in the past. When a low deposit offer is in operation, a customer can secure his or her booking with a deposit which is a percentage of the normal deposit level described above. The deposit paid by the customer is therefore typically lower than the flight cost. This deposit is paid into the trust and released the following day. The Group pays the full flight cost on booking and therefore funds the balance above the deposit from cash and debt facilities. The remainder of the balance due from the customer is then payable normally 28 days after booking for the flight cost and 14 days before departure date for hotel and other elements. The balance of the flight deposit is released from the trust, and all other customer monies are held in trust until the customer returns from holiday. This offer is in contrast to other OTAs, who typically charge customers the full balance between 8 and 12 weeks prior to holiday departure. See paragraph 4 of Part 8: ‘‘Regulation’’. Increased use of the low deposit scheme therefore has a cash flow effect on the Group and exposes the Group to the additional risk of customer cancellation, however it is an important aspect of the Group’s strategy to drive conversion rates and often enables customers to benefit from lower prices given LCCs generally offer lower prices the earlier the booking is made. Cancellation rates have been low historically. The amount of the low deposit as a percentage of the total booking price varies subject to a minimum of £50, the exact terms of the low deposit scheme vary from month to month and provide management a lever to manage the level of cash in the business.

Historic operating cashflows The Group’s cash generated from operating activities decreased from a cash inflow of £18.4 million in the financial year ended 30 September 2012 to inflows of £9.6 million and £6.2 million in the financial years ended 30 September 2013 and 30 September 2014, respectively. This was due to an increase in cash held in the trust on the initial set up of the trust in July 2011. The Group’s cash inflow increased from £17.2 million in the nine month period ended 30 June 2014 to £35.0 million in the nine month period ended 30 June 2015, because of increased profit before tax and an increase in inflow from working capital due to growth in volumes where customers have paid cash in advance of travel into the trust. The Group operates a highly cash generative business model and makes no stock commitment. January is the peak month for traffic and booked sales (accounting for 13.9 per cent. of bookings for the financial year ended 30 September 2014) and in February to September sales are relatively stable (with monthly bookings ranging for the financial year ended 30 September 2014 from 7.3 per cent. to 10.7 per cent.). The period prior to Christmas is quiet, particularly November and December (with monthly bookings for the financial year ended 30 September 2014 being 3.1 per cent. and 3.7 per cent., respectively). Approximately fifty per cent. of customers travelled in the period June through August in the financial year ended 30 September 2014 and the Group experiences a similar peak each year. Consequently, the Group’s cash flows (excluding any cash held in the Trust) experiences a trough prior to June through August and a cash balance peak in September (excluding restricted cash held). In contrast, only approximately nine per cent. of customers travelled in the period November through February in the financial year ended

90 30 September 2014. The Group maintains a working capital facility with Lloyds to cover seasonal requirements and the Group regularly monitors its liquidity position.

7.3 Cash flows from investing activities The following table sets out selected cash flow information for the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 Cash flows from investing activities 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Acquisition of shares ...... — — (23.1) (23.1) — Purchase of property, plant and equipment ...... (0.3) (0.5) (0.4) (0.3) (0.3) Purchase of intangible assets ...... (0.8) (1.1) (1.5) (1.1) (1.4) Interest received ...... 0.1 0.3 0.2 0.1 0.1 Net cash outflow from investing activities ...... (1.0) (1.3) (24.8) (24.4) (1.6)

The Group’s cash from investing activities increased from an outflow of £1.0 million in the financial year ended 30 September 2012 to £1.3 million and £24.8 million in the financial years ended 30 September 2013 and 30 September 2014, respectively. The outflow reduced from £24.4 million in the nine month period ended 30 June 2014 to £1.6 million in the nine month period ended 30 June 2015 with the year to 30 September 2014 and the nine months to 30 June 2014 affected by the acquisition of shares in the Group of £23.1 million. Purchase of property, plant and equipment is primarily IT equipment for staff and data centres and, in the financial year ended 30 September 2013, £0.3 million from the relocation of the Group’s office to larger premises to accommodate growth in November 2012. Purchase of intangible assets is capitalised costs of IT development. IT development costs as a percentage of total revenue increased marginally from 2.6 per cent. in the financial year ended 30 September 2012 to 2.9 per cent. and 3.3 per cent. in the financial years ended 30 September 2013 and 30 September 2014, respectively. For the nine month periods ended 30 June 2014 to 30 June 2015, this reduced from 3.3 per cent. to 3.1 per cent., respectively. The increased investment in staff has underpinned acceleration of the Group’s product development. The Board believes IT innovation is important to increase customer conversion rates and revenue growth opportunities. The Group plans to invest material staff resources into IT development across the multiple platforms (desktop, smartphone, tablet and apps) to support both the UK Segment and the International Segment.

7.4 Cash flows from financing activities The following table sets out selected cash flow information for the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 Cash flows from financing activities 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Proceeds from issue of share capital ...... — — 0.1 0.1 0.1 Proceeds from borrowings ...... — — 20.3 20.3 — Repayment of borrowings ...... (1.3) (2.1) (1.5) (0.8) (2.4) Proceeds from related party loan notes on acquisition ...... — — 41.9 41.9 — Repayment of related party loan notes on acquisition ...... — — (44.5) (44.5) — Net cash (outflow)/inflow from financing activities ...... (1.3) (2.1) 16.3 17.0 (2.3)

The Group’s net cash out flow from financing activities increased from £1.3 million in the financial year ended 30 September 2012 to £2.1 million in the financial year ended 30 September 2013 to an inflow of £16.3 million in the financial year ended 30 September 2014. The increase in the financial year ended

91 30 September 2014 was primarily due to the net effect of finance raised for the acquisition by Inflexion net of loans repaid. The repayment of borrowings in the financial years ended 30 September 2012 and 30 September 2013 related to shareholder loans and, in the financial year ended 30 September 2014, related to repayment of the Group’s bank term loan of £11.0 million (which was part of the financing for the investment by Inflexion in October 2013). The Group’s net cash flow from financing activities decreased from an inflow of £17.0 million in the nine month period ended 30 June 2014 to an outflow of £2.3 million in the nine month period ended 30 June 2015 due to the effect of the acquisition in October 2013 outlined above. As at the date of this document, the shareholder loans comprise loan notes created by the following instruments: (a) the consideration loan note instrument entered into by OTB Bidco constituting £13,805,525.56 12 per cent. unsecured loan notes due 2019; (b) the consideration loan note instrument entered into by On the Beach Travel Limited constituting £1,127,725.89 12 per cent. unsecured loan notes due 2019; (c) the management loan note instrument entered into by OTB Topco constituting £12,018,192.36 12 per cent. unsecured loan notes due 2019; (d) the investor loan note instrument entered into by OTB Bidco (as amended and restated immediately prior to Admission as part of the Reorganisation) constituting £42,573,105.92 12 per cent. loan notes due 2019; and (e) the vendor loan note instrument entered into by OTB Topco constituting £1,500,000 12 per cent. unsecured loan notes due 2019.

7.5 Cash and borrowings The following table sets out the cash and cash equivalents and indebtedness for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

Year ended Nine months ended 30 September 30 June 2014 2012 2013 2014 (unaudited) 2015 £m £m £m £m £m Cash and cash equivalents ...... 27.1 33.3 31.0 43.3 62.1 Above includes balance held in the trust ...... 17.0 18.2 20.5 42.6 56.6 Borrowings Bank loan ...... (0.3) — (20.5) (21.3) (18.0) Amortised term loan fees ...... — — 1.3 1.4 1.1 External loans ...... (0.3) — (19.2) (19.9) (16.9) Shareholder loans ...... (40.9) (43.9) (63.1) (61.2) (68.8) Net (debt)/cash (excluding trust balances and shareholder loans) ...... 9.8 15.1 (8.7) (19.2) (11.4) The trust was set up in July 2011 and the balance at 30 September 2011 was £6.6 million. The bank loan relates to a term loan of £22.0 million raised on 4 October 2013 as part of the financing for the investment by Inflexion, being the First Lloyds Facility. It is intended that the First Lloyds Facility be repaid in full out of the Group’s existing cash balances following Admission. The Company has entered into the Second Lloyds Facility, being a revolving credit facility of up to £35 million. OTB Topco, OTB Bidco and certain other members of the Group will accede to the Second Lloyds Facility on Admission. Drawdown of the loan under the Second Lloyds Facility is subject to evidence that the Reorganisation has taken effect, Admission, the First Lloyds Facility being repaid in full, OTB Topco, OTB Bidco and certain other members of the Group having executed an accession deed, in respect of the Second Lloyds Facility and certain customary conditions (such as receipt of corporate authorities and legal opinions). The Group’s average month end net debt (excluding trust balances and shareholder loans) for the 12 month period ended 30 June 2015 was £16.7 million.

8. CRITICAL ACCOUNTING POLICIES The Group’s critical accounting judgements and estimates are described in note 3 to the combined and consolidated historical financial information presented in Section B of Part 11: ‘‘Historical Financial Information’’.

92 PART 10 CAPITALISATION AND INDEBTEDNESS STATEMENT The Company’s capitalisation as at 17 August 2015 (being the date of incorporation) was £50,000, divided into one ordinary share of £1 and one redeemable preference share of £49,999 and its cash was £1. The table below set out the Group’s indebtedness as at 31 July 2015 and the Group’s capitalisation as at 30 June 2015. This statement of capitalisation and indebtedness has been prepared under IFRS using policies which are consistent with those used in the preparing the Group’s financial information for the nine month period ended 30 June 2015 as set out in Section B of Part 11: ‘‘Historical Financial Information’’. The indebtedness information as at 31 July 2015 has been extracted without material adjustment from the Group’s unaudited accounting records. The capitalisation information as at 30 June 2015 has been extracted without material adjustment from the Group’s financial information for the nine month period ended 30 June 2015 as set out in Section B of Part 11: ‘‘Historical Financial Information’’.

Capitalisation and indebtedness

31 July 2015 (unaudited) £’000 Total current debt Secured ...... (3,143) Total current debt ...... (3,143) Total non-current debt (excluding current portion of the long term debt) Secured ...... (13,945) Unguaranteed / unsecured ...... (69,583) Total non-current debt ...... (83,528)

Notes: The Group’s debt is shown net of unamortised issue costs. The Group’s secured liabilities relate to bank loans. The Group has no guaranteed debt. The Group’s unsecured / unguaranteed liabilities relate to the Shareholder loans.

Shareholders’ equity

30 June 2015 £’000 Share capital ...... 470 470

Note: Shareholders’ equity does not include the profit and loss account reserve.

93 The following table sets out the net consolidated financial funds of the Group as at 31 July 2015:

31 July 2015 Net indebtedness (unaudited) £’000 Cash ...... 9,894 Cash equivalents (restricted cash trust accounts) ...... 58,547 Total liquidity ...... 68,441 Current financial receivable Current bank debt Current portion of non current debt ...... (3,143) Current financial debt ...... (3,143) Net current financial indebtedness ...... 65,298 Non-current bank loans ...... (13,945) Other non-current financial debt ...... (69,583) Non current financial indebtedness ...... (83,528) Net financial indebtedness ...... (18,230)

Notes: The Group has no indirect or contingent indebtedness as at 31 July 2015. The Group’s debt is shown net of unamortised issue costs. The Group has derivatives not reflected in the analysis above with the following fair values as at 31 July 2015:

Liability (unaudited) £’000 Foreign current hedging Liabilities ...... (2,806) Total ...... (2,806)

94 PART 11 HISTORICAL FINANCIAL INFORMATION SECTION A: ACCOUNTANTS’ REPORT

26AUG201506570176

The Directors On the Beach Group plc Park Square Bird Hall Lane Cheadle SK3 0XN Numis Securities Limited (the ‘‘Sponsor’’) The London Stock Exchange Building 10 Paternoster Square London EC4M 7LT 23 September 2015 Dear Sirs

On the Beach Group plc We report on the combined and consolidated financial information of the Group (being On the Beach Travel Limited and its subsidiaries prior to 4 October 2013, and On the Beach Topco Limited and its subsidiaries thereafter) for the years ended 30 September 2012, 30 September 2013 and 30 September 2014, and the nine months ended 30 June 2015 set out in Section B of Part 11: ‘‘Historical Financial Information’’ below (the ‘‘Financial Information Table’’). The Financial Information Table has been prepared for inclusion in the prospectus dated 23 September 2015 (the ‘‘Prospectus’’) of On the Beach Group plc (the ‘‘Company’’) on the basis of the accounting policies set out in note 2 to the Financial Information Table. This report is required by item 20.1 of Annex I to the PD Regulation and is given for the purpose of complying with that item and for no other purpose. We have not audited the financial information for the nine months ended 30 June 2014 and accordingly do not express an opinion thereon.

Responsibilities The Directors of the Company are responsible for preparing the Financial Information Table in accordance with the basis of preparation set out in note 2(a) to the Financial Information Table. It is our responsibility to form an opinion as to whether the Financial Information Table gives a true and fair view, for the purposes of the Prospectus and to report our opinion to you. Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 23.1 of Annex I to the PD Regulation, consenting to its inclusion in the Prospectus.

PricewaterhouseCoopers LLP, Benson House, 33 Wellington Street, Leeds, LS1 4JP T: +44 (0) 1132 894 000, F: +44 (0) 1132 894 460, www.pwc.uk

PricewaterhouseCoopers LLP is a limited liability partnership registered in England with registered number OC303525. The registered office of PricewaterhouseCoopers LLP is 1 Embankment Place, London WC2N 6RH. PricewaterhouseCoopers LLP is authorised and regulated by the Financial Conduct Authority fo r designated investment business. UKMATTERS:35977341.1 95 Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. Our work included an assessment of evidence relevant to the amounts and disclosures in the financial information. It also included an assessment of significant estimates and judgments made by those responsible for the preparation of the financial information and whether the accounting policies are appropriate to the Group’s circumstances, consistently applied and adequately disclosed. We planned and performed our work so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial information is free from material misstatement whether caused by fraud or other irregularity or error. Our work has not been carried out in accordance with auditing or other standards and practices generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion In our opinion, the Financial Information Table gives, for the purposes of the Prospectus dated 23 September 2015, a true and fair view of the state of affairs of the Group as at the dates stated and of its profits/losses, cash flows and changes in equity for the periods then ended in accordance with the basis of preparation set out in note 2(a) to the Financial Information Table.

Declaration For the purposes of Prospectus Rule 5.5.3R(2)(f) we are responsible for this report as part of the Prospectus and declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I to the PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLP Chartered Accountants

96 SECTION B: HISTORICAL FINANCIAL INFORMATION OF THE GROUP COMBINED AND CONSOLIDATED INCOME STATEMENT For the years ended 30 September 2012, 30 September 2013, 30 September 2014 and the 9 month periods ended 30 June 2014 (unaudited) and 30 June 2015

9m to June 2014 9m to June Note 2012 2013 2014 (unaudited) 2015 £’000 £’000 £’000 £’000 £’000 Total transaction value* ...... 230,931 280,888 359,831 270,939 354,607 Revenue ...... 5 30,972 37,548 45,768 33,863 48,250 Administrative expenses before amortisation and exceptional costs ..... (21,954) (26,266) (32,979) (24,505) (34,815) Group operating profit before amortisation and exceptional costs ...... 9,018 11,282 12,789 9,358 13,435 Exceptional costs ...... 7 — — (3,724) (3,663) — Amortisation of intangible assets ...... (888) (958) (5,312) (3,962) (4,191) Group operating profit ...... 8,130 10,324 3,753 1,733 9,244 Finance costs ...... 8 (196) (14) (1,735) (1,378) (1,401) Interest on shareholder loans ...... 8 (3,969) (4,759) (6,961) (5,108) (5,830) Finance income ...... 9 93 227 154 91 125 Net finance costs ...... (4,072) (4,546) (8,542) (6,395) (7,106) Profit/(loss) before taxation ...... 4,058 5,778 (4,789) (4,662) 2,138 Taxation ...... 11 (1,733) (2,340) (962) (952) (1,125) Profit/(loss) and total comprehensive income for the year/period ...... 2,325 3,438 (5,751) (5,614) 1,013 Earnings per share (expressed in pence per share): Basic and diluted earnings per share ..... 12 177p 262p (438)p (428)p 76p

* This is a non-GAAP measure. See note 2(j).

97 COMBINED AND CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

Attributable to owners of the parent On the Beach Travel Limited Retained Share capital invested capital earnings Total equity £’000 £’000 £’000 £’000 Balance at 1 October 2011 ...... (4,216) (4,216)

Profit for the year ...... — 2,325 — 2,325 Balance at 30 September 2012 ...... — (1,891) — (1,891)

Balance at 1 October 2012 ...... — (1,891) — (1,891) Profit for the year ...... — 3,438 — 3,438 Balance at 30 September 2013 ...... — 1,547 — 1,547

Balance at 1 October 2013 ...... — 1,547 — 1,547 Issue of shares on incorporation (note 1) ...... 370 — — 370 Issue of shares ...... 25 — 25 Loss for the year ...... — — (5,751) (5,751) Changes in ownership interests on acquistion (note 1) ...... (1,547) — (1,547) Balance at 30 September 2014 ...... 395 — (5,751) (5,356)

Balance at 1 October 2014 ...... 395 — (5,751) (5,356) Issue of shares ...... 75 — — 75 Profit for the period ...... 1,013 1,013

Balance at 30 June 2015 ...... 470 — (4,738) (4,268)

98 COMBINED AND CONSOLIDATED BALANCE SHEET

30 September 30 September 30 September 30 June Note 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Assets Non-current assets Intangible assets ...... 13 28,380 28,501 71,854 69,125 Property, plant and equipment ...... 14 339 579 656 652 Deferred tax ...... 20 525 135 — — Total non-current assets ...... 29,244 29,215 72,510 69,777 Current assets Trade and other receivables ...... 16 7,587 15,003 24,734 66,884 Other financial assets ...... 23 — — 65 9 Cash and cash equivalents ...... 17 27,154 33,321 31,003 62,125 Total current assets ...... 34,741 48,324 55,802 129,018 Total assets ...... 63,985 77,539 128,312 198,795 Equity Share capital ...... 21 — — 395 470 On The Beach Travel Limited invested capital ...... (1,891) 1,547 — — Retained deficit ...... — — (5,751) (4,738) Equity shareholder funds ...... (1,891) 1,547 (5,356) (4,268) Total (deficit)/equity ...... (1,891) 1,547 (5,356) (4,268) Non-current liabilities Loans and borrowings ...... 19 (39,211) — (79,065) (82,719) Deferred tax ...... 20 — — (9,668) (8,937) Total non-current liabilities ...... (39,211) — (88,733) (91,656) Current liabilities Corporation tax payable ...... (1,126) (660) (832) (1,490) Derivative financial instruments ...... 23 (92) (299) (689) (3,411) Loans and borrowings ...... 19 (1,981) (43,903) (3,140) (3,140) Trade and other payables ...... 18 (23,466) (31,130) (40,274) (103,366) Total current liabilities ...... (26,665) (75,992) (44,935) (111,407) Total liabilities ...... (65,876) (75,992) (133,668) (203,063) Total equity and liabilities ...... 63,985 77,539 128,312 198,795

99 COMBINED AND CONSOLIDATED CASH FLOW STATEMENT For the years ended 30 September 2012, 30 September 2013, 30 September 2014 and the 9 month periods ended 30 June 2014 (unaudited) and 30 June 2015

30 June 2014 30 June 2012 2013 2014 (unaudited) 2015 £’000 £’000 £’000 £’000 £’000 Cash flows from operating activities Profit/ (loss) before taxation ...... 4,058 5,778 (4,789) (4,662) 2,138 Adjustments for: Depreciation ...... 195 252 292 223 268 Amortisation of intangible assets ...... 888 958 5,312 3,962 4,191 Finance costs ...... 4,165 4,773 8,696 6,486 7,231 Finance income ...... (93) (227) (154) (91) (125) 9,213 11,534 9,357 5,918 13,703 Changes in working capital: Decrease/(increase) in working capital ...... 9,767 450 (201) 13,500 23,665 Cash generated from operations ...... 18,980 11,984 9,156 19,418 37,368 Tax paid ...... (500) (2,417) (1,508) (1,094) (1,199) Interest paid ...... (75) (4) (1,463) (1,097) (1,164) Net cash inflow from operating activities ...... 18,405 9,563 6,185 17,227 35,005 Cash flows from investing activities Acquisition of shares in Group (includes NCI—see note 4) ...... — — (23,098) (23,098) — Purchase of property, plant and equipment ...... (233) (497) (369) (324) (264) Purchase of intangible assets ...... (818) (1,079) (1,506) (1,111) (1,462) Interest received ...... 93 227 154 91 125 Net cash outflow from investing activities ...... (958) (1,349) (24,819) (24,442) (1,601) Cash flows from financing activities Proceeds from issue of share capital ...... — — 75 51 75 Repayment of borrowings ...... (1,310) (2,047) (1,499) (750) (2,357) Proceeds from borrowings on acquisition ...... — — 20,319 20,319 — Proceeds from related party loan notes on acquisition . — — 41,912 41,912 — Repayment of related party loan notes on acquisition . — — (44,491) (44,491) — Net cash (outflow)/inflow from financing activities ... (1,310) (2,047) 16,316 17,041 (2,282) Net increase/(decrease) in cash and cash equivalents . . 16,137 6,167 (2,318) 9,826 31,122 Cash and cash equivalents at beginning of year/period . 11,017 27,154 33,321 33,321 31,003 Cash and cash equivalents at end of year/period ..... 27,154 33,321 31,003 43,147 62,125

100 1. GENERAL INFORMATION On the Beach Topco Limited (‘‘OTB Topco’’) is a company incorporated and domiciled in the UK. The address of the registered office is: Park Square, Bird Hall Lane, Cheadle, SK3 0XN. OTB Topco is the holding company of On the Beach Bidco Limited (‘‘OTB Bidco’’) and its subsidiaries, whose principal activity is the provision of an internet travel agent, trading under the name On the Beach. The registered number of OTB Topco is 8703800. On 4 October 2013, OTB Bidco acquired the entire share capital of On the Beach Travel Limited (‘‘OTB Travel’’) (the ‘‘Acquisition’’). Prior to the Acquisition, OTB Travel was the parent company within the Group. At the date of the Acquisition, the ultimate parent of OTB Bidco was OTB Topco. For the purposes of this historical financial information, the term ‘‘Group’’ means prior to 4 October 2013, OTB Travel and its consolidated subsidiaries and undertakings, and thereafter, OTB Topco and its consolidated subsidiaries and undertakings. Following Admission, the ‘‘Group’’, unless the context otherwise requires, shall mean On the Beach Group plc (the ‘‘Company’’) and its consolidated subsidiaries and undertakings.

2. ACCOUNTING POLICIES (a) Basis of preparation The constituent parts of the Group during the track record period are explained in note 1. The combined and consolidated historical financial information therefore presents a financial track record of the Group for the years ended 30 September 2012, 30 September 2013, 30 September 2014 and the 9 month periods ended 30 June 2014 and 30 June 2015 of those businesses which were part of the Group at the date of this document. The historical financial information is prepared for the purposes of inclusion in the Prospectus of the Company for the purposes of admission on the main market operated by the London Stock Exchange. This financial information has been prepared in accordance with the requirements of the Prospectus Directive regulation and the Listing Rules and in accordance with International Financial Reporting Standards as adopted by the European Union (‘‘IFRS’’), except as noted below. IFRS does not provide for the preparation of combined and consolidated financial information and, accordingly, in preparing the combined and consolidated financial information certain accounting conventions commonly used for the preparation of historical financial information for inclusion in investment circulars, as described in the Annexure to SIR 2000 (Investment Reporting Standard applicable to public reporting engagements on historical financial information) issued by the UK Auditing Practices Board, have been applied. The application of these conventions results in a material departure from IFRS. In other respects IFRS has been applied. Due to a change in capital structure of the Group on 4 October 2013, the historical financial information is prepared on a combined and consolidated basis which reflects the following: (i) For the years ended 30 September 2012 and 2013 The financial information is based on the consolidated financial statements of OTB Travel. (ii) For the year ended 30 September 2014 The financial information is a combination of the consolidated financial information of OTB Travel and its subsidiaries, On the Beach Beds Limited and On the Beach Limited, for the period from 1 October 2013 to 4 October 2013 and the consolidated financial information of OTB Topco from 5 October 2013 to 30 September 2014. (iii) For the nine months ended 30 June 2014 The financial information is a combination of the consolidated financial information of OTB Travel and its subsidiaries, On the Beach Beds Limited and On the Beach Limited, for the period from 1 October 2013 to 4 October 2013 and the consolidated financial information of OTB Topco from 5 October 2013 to 30 June 2014. (iv) For the nine months ended 30 June 2015 The financial information is based on the consolidated financial statements of OTB Topco.

101 The Group’s deemed transition date to IFRS is 1 October 2011. The principles and requirements for first time adoption of IFRS are set out in IFRS 1 ‘‘First-time adoption of International Financial Reporting Standards’’. IFRS 1 allows certain exemptions in the application of particular standards to prior periods in order to assist companies with the transition process. In this regard, the Group has not applied the requirements of IFRS 3 to acquisitions that occurred before 1 October 2011. This combined and consolidated historical financial information is prepared on a going concern basis and under the historical cost convention, as modified for the revaluation of certain financial instruments. The historical financial information is presented in thousands of pounds sterling (‘‘£’’) except when otherwise indicated. The combined and consolidated historical financial information has not been prepared in accordance with IAS 33 given the changes in the capital structure. An illustrative earnings per share measure for the three years and nine months is included in note 12 to present the earnings attributable to the shares as at Admission. The preparation of historical financial information in conformity with IFRS requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of revenue and expenses during the reporting period. Although these estimates are based on management’s reasonable knowledge of the amount, event or actions, actual results may differ from those estimates. The principal accounting policies adopted in the preparation of the combined and consolidated financial information are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

(b) Going concern This historical financial information relating to the Group has been prepared on the going concern basis. After making appropriate enquiries, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future and for at least twelve months from the date of this historical financial information. For these reasons the Directors continue to adopt the going concern basis in preparing the Group’s historical financial information. The cashflow projections are the sole responsibility of the Directors based upon their present plans, expectations and intentions. In this context, the Directors have prepared and considered cash flow projections for the Group for a period extending one year from the date of approval of this historical financial information. Based on these cash flows, and having regard to the provision of the debt facilities as described in notes 19 and 26 to this historical financial information the Directors are satisfied that the Group are able to meet their liabilities as and when they fall due for the foreseeable future and for a minimum period of twelve months from the date of this historical financial information.

(c) New standards, amendments and interpretations IFRS, expected to be applicable in so far as this is currently known to the annual financial statement of the Group for the year ended 30 September 2015, have been applied. The accounting policies adopted in the presentation of the historical financial information reflect the adoption of the following new standards as of 1 October 2014: IFRS 10, ‘Consolidated financial statements’ builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements of the parent company. The standard provides additional guidance to assist in the determination of control where this is difficult to assess. IFRS 11, ‘Joint arrangements’ focuses on the rights and obligations of the parties to the arrangement rather than its legal form. There are two types of joint arrangements: joint operations and joint ventures. Joint operations arise where the investors have rights to the assets and obligations for the liabilities of an arrangement. A joint operator accounts for its share of the assets, liabilities, revenue and expenses. Joint ventures arise where the investors have rights to the net assets of the arrangement; joint ventures are accounted for under the equity method. Proportional consolidation of joint arrangements is no longer permitted. IFRS 12, ‘Disclosures of interests in other entities’ includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, structured entities and other off balance sheet vehicles.

102 Amendment to IAS 32, ‘Financial instruments: Presentation’ on offsetting financial assets and financial liabilities. This amendment clarifies that the right of set-off must not be contingent on a future event. It must also be legally enforceable for all counter-parties in the normal course of business, as well as in the event of default, insolvency or bankruptcy. The amendment also considers settlement mechanisms. Amendments to IAS 36, ‘Impairment of assets’, on the recoverable amount disclosures for non-financial assets. This amendment removed certain disclosures of the recoverable amount of cash generating units (‘‘CGUs’’) which had been included in IAS 36 by the issue of IFRS 13. Amendment to IAS 39, ‘Financial instruments: Recognition and measurement’ on the novation of derivatives and the continuation of hedge accounting. This amendment considers legislative changes to ‘over-the-counter’ derivatives and the establishment of central counter-parties. Under IAS 39 novation of derivatives to central counter-parties would result in discontinuance of hedge accounting. The amendment provides relief from discontinuing hedge accounting when novation of a hedging instrument meets specified criteria. IFRIC 21, ‘Levies’, sets out the accounting for an obligation to pay a levy if that liability is within the scope of IAS 37 ‘Provisions’. The interpretation addresses what the obligating event is that gives rise to pay a levy and when a liability should be recognised. Other standards, amendments and interpretations which are effective for the financial period ended 30 September 2015 are not material to the Group.

(d) New standard, amendments and interpretations not yet adopted A number of new standards and amendments to standards and interpretations are effective for annual periods beginning after 1 July 2015, and have not been applied in preparing these combined and consolidated historical financial information. None of these is expected to have a significant effect on the combined and consolidated historical financial information of the Group, except the following set out below: IFRS 9, ‘Financial instruments’, addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income (‘‘OCI’’) and fair value through profit and loss. The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in OCI not recycled. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in OCI, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Group is yet to assess IFRS 9’s full effect. IFRS 15, ‘Revenue from contracts with customers’ deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted. The Group is still assessing the effect of IFRS 15.

103 (e) Basis of consolidation (i) Subsidiaries Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. (ii) Transactions eliminated on consolidation Intragroup balances, and any gains and losses or income and expenses arising from intragroup transactions, are eliminated in preparing the combined and consolidated financial information. Gains arising from transactions with jointly controlled entities are eliminated to the extent of the Group’s interest in the entity. Losses are eliminated in the same way as gains, but only to the extent that there is no evidence of impairment.

(f) Goodwill Goodwill arising on the acquisition of subsidiary undertakings and trade and assets represents the excess of the cost of acquisition over the fair value of the identifiable assets and liabilities at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently remeasured at cost less any accumulated impairments losses. Goodwill which is recognised as an asset is reviewed for impairment at least annually. Any impairment is recognised immediately in the income statement and is not subsequently reversed. On disposal of a subsidiary the attributable amount of goodwill is included in the determination of the profit or loss on disposal. For the purposes of impairment testing, goodwill is allocated to the cash generating units expected to benefit from the combination. If the recoverable amount is less than the carrying amount of the unit, the impairment loss is allocated to first reduce the amount of goodwill allocated to the unit and then the other assets in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(g) Foreign currency Transactions in foreign currencies are translated to the respective functional currencies of Group entities at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement.

(h) Financial instruments (i) Derivative financial instruments The Group enters into forward foreign exchange contracts to manage exposure to foreign exchange rate risk. Further details of these derivative financial instruments are disclosed in note 23 of this historic financial information. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in the profit or loss immediately. (ii) Trade and other receivables Trade and other receivables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method, less any impairment losses. (iii) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only of the cash flow statement.

104 All customer monies are held in a trust account until after the provision of the holiday service. The trust account is governed by a deed between the Group, the Civil Aviation Authority Air Travel Trustees, ABTA and independent trustees (Barclays Wealth), which determines the inflows and outflows from the account. All customer receipts are paid into the trust account in full before the holiday departure date. These payments are held in the trust account until the service is provided—for flights on payment to the supplier and for hotels and ancillaries on the customer’s return from holiday. The Group does not therefore use customer pre-payments to fund its business operations. See note 17. (iv) Trade and other payables Trade and other payables are recognised initially at fair value. Subsequent to initial recognition they are measured at amortised cost using the effective interest method. (v) Interest-bearing borrowings Interest-bearing borrowings are recognised initially at fair value less attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings are stated at amortised cost using the effective interest method, less any impairment losses.

(i) Revenue recognition Commission is measured at the fair value of consideration received or receivable, net of cancellations and discounts. Cancellations are estimated at the reporting date based on the historical profile of bookings. Revenue on bookings is recognised on the date of booking. The Group’s commission is earned as an agent for the supplier or consumer in purchases of travel products such as flight tickets or hotel accommodation from third party suppliers.

(j) Total Transaction Value Total transaction value (‘‘TTV’’) is a non-GAAP measure and does not represent the Group’s statutory turnover as the Group acts as an agent. TTV represents the price at which goods and services have been sold to the consumer by the principal.

(k) Business combinations All business combinations are accounted for by applying the acquisition method. Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. For acquisitions, the Group measures goodwill at the acquisition date as: (i) the fair value of the consideration transferred; plus (ii) the recognised amount of any non-controlling interests in the acquiree; plus (iii) the fair value of the existing equity interest in the acquiree; less (iv) the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss.

(l) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.

105 Depreciation is charged to the income statement on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. The estimated useful lives are as follows:

Computer equipment ...... 3 years Fixtures and fittings ...... 5 years Depreciation methods, useful lives and residual values are reviewed at each balance sheet date. Assets held under finance leases are depreciated over their expected useful economic lives on the same bases as owned assets, or where shorter, over the term of the relevant lease. The gain or loss arising on the disposal of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in income.

(m) Intangible assets and goodwill (i) Goodwill Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but is tested annually for impairment. In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment in the investee. (ii) Website and development costs Expenditure on research activities is recognised in the income statement as an expense as incurred. Expenditure on development activities is capitalised if the product or process is technically and commercially feasible and the Group intends to and has the technical ability and sufficient resources to complete development, future economic benefits are probable and if the Group can measure reliably the expenditure attributable to the intangible asset during its development. Development activities involve a plan or design for the production of new or substantially improved products or processes. The expenditure capitalised includes the cost of materials and direct labour. Other development expenditure is recognised in the income statement as an expense as incurred. Capitalised development expenditure is stated at cost less accumulated amortisation and less accumulated impairment losses. (iii) Brand Upon acquisition of the Group by OTB Topco, the On the Beach brand was identified as a separately identifiable asset. (iv) Website technology Upon the acquisition of the Group by OTB Topco, the core platform was identified as a separately identifiable asset. The Core Platform provides infrastructure to host, maintain and develop the website. (v) Amortisation Amortisation is charged to the income statement on a straight-line basis over the estimated useful lives of intangible assets unless such lives are indefinite. Intangible assets with an indefinite useful life and goodwill are systematically tested for impairment at each balance sheet date. Other intangible assets are amortised from the date they are available for use. The estimated useful lives are as follows:

Website technology: ...... 10 years Website & development costs: ...... 3 years Brand: ...... 15 years

(n) Impairment of non-financial assets At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangibles assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash generating unit to which the asset belongs. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of

106 money and the risks specific to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the ‘‘cash-generating unit’’, or ‘‘CGU’’). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to CGUs. Subject to an operating segment ceiling test, for the purposes of goodwill impairment testing, CGUs to which goodwill has been allocated are aggregated so that the level at which impairment is tested reflects the lowest level at which goodwill is monitored for internal reporting purposes. Goodwill acquired in a business combination is allocated to groups of CGUs that are expected to benefit from the synergies of the combination. An impairment loss is recognised if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the units, and then to reduce the carrying amounts of the other assets in the unit (group of units) on a pro rata basis.

(o) Employee benefits The Group operates a defined contribution pension scheme. A defined contribution scheme is a post-employment benefit plan under which OTB Topco pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an expense in the income statement in the years during which services are rendered by employees.

(p) Debt Debt is initially stated at the amount of net proceeds after the deduction of issue costs. The carrying amount is increased by the finance cost using the EIR method in respect of the accounting period and reduced by payments made in the period.

(q) Financing income and expenses Financing expenses comprise interest payable, finance charges on shares classified as liabilities and finance leases recognised in profit or loss using the effective interest method, unwinding of the discount on provisions, and net foreign exchange losses that are recognised in the income statement (see foreign currency accounting policy). Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that takes a substantial time to be prepared for use, are capitalised as part of the cost of that asset. Financing income comprise interest receivable on funds invested, dividend income, and net foreign exchange gains. Interest income and interest payable is recognised in profit or loss as it accrues, using the effective interest method. Dividend income is recognised in the income statement on the date the entity’s right to receive payments is established. Foreign currency gains and losses are reported on a net basis.

(r) Exceptional costs The Group presents on the face of the income statement, those material items of income and expense which, because of the nature or expected infrequency of events giving rise to them, merit separate presentation to allow shareholders to understand better the elements of financial performance in the year, so as to facilitate comparison with prior years and to assess better trends in financial performance.

(s) Taxation Tax on the profit or loss for the year comprises current and deferred tax. Tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to tax payable in respect of previous years. Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The following temporary differences are not provided for: the initial recognition of goodwill; the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business combination, and

107 differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the balance sheet date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised.

(t) Provisions Provisions are created where the Group has a present obligation as a result of a past event, where it is probable that it will result in an outflow of economic benefits to settle the obligation and where it can be reliably measured.

(u) Operating leases Leases where the lessor retains substantially all the risks and rewards of ownership are classified as operating leases. Lease payments are charged to the income statement on a stringent basis over the term of the lease.

(v) Segmental reporting IFRS 8 requires operating segments to be reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the management team, including the Chief Executive Officer, Chief Operating Officer and Chief Finance Officer. For management purposes, the Group is organised into segments based on location, and information is provided to the management team on these segments for the purposes of resource allocation and segment performance management and monitoring. The management team considers there to be two reportable segments: (i) Core—activity via UK website (‘‘UK’’) (ii) Sweden—activity via Swedish website (eBeach.se) (‘‘International’’)

(w) Capital Management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

3. CRITICAL ACCOUNTING JUDGEMENTS AND ESTIMATES The preparation of the Group’s combined and consolidated financial information under IFRS requires the Directors to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. Estimates and judgements are continually evaluated and are based on historical experience and other factors including expectations of future events that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The Directors consider that the following estimates and judgements are likely to have the most significant effect on the amounts recognised in the combined and consolidated financial information.

(a) Goodwill The calculation for considering the impairment of the carrying amount of goodwill requires a comparison of the present value of cash generating units for which goodwill has been allocated, to the value of goodwill in the combined and consolidated balance sheet. The calculation of present value requires an estimate of the future cash flows expected to arise from the cash-generating units and the selection of a suitable discount rate. Such calculations require judgement relating to the appropriate discount factors and long-term growth prevalent in a particular market as well as short and medium-term business plans. The Directors draw upon experience and sensitivity analysis as well as external resources in making these judgements.

108 (b) Useful economic life of intangible assets The Group’s policy for applying useful economic lives and residual value of intangible assets has been determined through applying historical experience and taking into consideration the nature of assets and their intended use.

(c) Income taxes Estimates may be required in determining the level of current and deferred income tax assets and liabilities, which the Directors believe are reasonable and adequately recognise any income tax related uncertainties. Various factors may have favourable or adverse effects on the income tax assets or liabilities. These include an estimate of allowable interest deduction which is permitted within HMRC’s thin capitalisation rules.

4. BUSINESS COMBINATIONS On 4 October 2013, the Group acquired all of the ordinary shares in OTB Travel for £30,748,000, satisfied in cash, vendor loans and £11,178,000 via equity instruments issued. The activity of the Group acquired is that of an internet travel agent. The purpose of the business combination was to facilitate the sale of the Group to the current controlling party. The subsidiary contributed net profit of £8,642,000 to the consolidated net profit for the year ended 30 September 2014. The acquisition had the following effect on the Group’s assets and liabilities:

Recognised values Acquiree’s net assets at the acquisition date: on acquisition £’000 Intangible assets ...... 52,592 Property plant and equipment ...... 579 Trade and other receivables ...... 20,422 Cash and cash equivalents ...... 25,724 Trade and other payables ...... (34,909) Loans and borrowings ...... (44,491) Deferred tax liabilities ...... (10,713) Net identifiable assets and liabilities ...... 9,204 Consideration paid: Cash price paid ...... 18,070 Loan notes issued ...... 11,178 Vendor loans ...... 1,500 Total consideration ...... 30,748 Goodwill ...... 21,544

The goodwill arising for the acquisition is attributable to the strength of the management team and the growth prospects of the Group. Acquisition-related costs of £3,724,000 have been charged to exceptional costs (see note 7) in the combined and consolidated income statement for the year ended 30 September 2014. The fair value and gross contractual amount of trade and other receivables is £20,422,000. Acquisition of shares in Group of £23,098,000 in the cash flow statement includes the £18,070,000 above, with a remaining payment on acquisition for non-controlling interests.

5. SEGMENTAL REPORTING As explained in note 2(v) above, the management team considers the reportable segments to be UK and International. All segment revenue, operating profit, assets and liabilities are attributable to the Group

109 from its principal activities as an online travel agent, and all revenue is generated from external customers only.

Year ended 30 September 2012 UK International Total £’000 £’000 £’000 Income Revenue ...... 30,901 71 30,972 EBITDA ...... 9,876 (25) 9,851 Holding company board costs ...... (162) — (162) Depreciation and amortisation ...... (1,057) (26) (1,083) Segment operating profit/(loss) ...... 8,657 (51) 8,606 Other costs ...... (525) Other income ...... 49 Group operating profit ...... 8,130 Finance costs ...... (4,165) Finance income ...... 93 Profit before taxation ...... 4,058

Year ended 30 September 2013 UK International Total £’000 £’000 £’000 Income Revenue ...... 37,535 13 37,548 EBITDA ...... 12,211 (47) 12,164 Holding company board costs ...... (165) — (165) Depreciation and amortisation ...... (1,167) (43) (1,210) Segment operating profit/(loss) ...... 10,879 (90) 10,789 Other costs ...... (465) Group operating profit ...... 10,324 Finance costs ...... (4,773) Finance income ...... 227 Profit before taxation ...... 5,778

Year ended 30 September 2014 UK International Total £’000 £’000 £’000 Income Revenue ...... 45,621 147 45,768 EBITDA ...... 14,081 (661) 13,420 Holding company board costs ...... (339) — (339) Depreciation and amortisation ...... (5,558) (46) (5,604) Exceptional acquisition costs ...... (3,724) — (3,724) Segment operating profit/(loss) and Group operating profit/(loss) ..... 4,460 (707) 3,753

Finance costs ...... (8,696) Finance income ...... 154 Loss before taxation ...... (4,789)

110 9 months ended 30 June 2014 (unaudited) UK International Total £’000 £’000 £’000 Income Revenue ...... 33,765 98 33,863 EBITDA ...... 10,394 (547) 9,847 Holding company board costs ...... (263) — (263) Depreciation and amortisation ...... (4,155) (31) (4,186) Segment operating profit/(loss) ...... 5,976 (578) 5,398 Acquisition costs ...... (3,665) Group operating profit ...... 1,733 Finance costs ...... (6,486) Finance income ...... 91 Loss before taxation ...... (4,662)

9 months ended 30 June 2015 UK International Total £’000 £’000 £’000 Income Revenue ...... 47,721 529 48,250 EBITDA ...... 15,446 (1,253) 14,193 Holding company board costs ...... (285) — (285) Depreciation and amortisation ...... (4,406) (53) (4,459) Segment operating profit/(loss) ...... 10,755 (1,306) 9,449 Other costs ...... (205) Group operating profit ...... (9,244) Finance cost ...... (7,231) Finance income ...... 125 Profit before taxation ...... 2,138

6. EMPLOYEES AND DIRECTORS (a) Staff numbers Average monthly number of people (including Executive Directors) employed:

Year ended Year ended Year ended 9 months ended 30 September 30 September 30 September 30 June 2014 9 months ended 2012 2013 2014 (unaudited) 30 June 2015 By reportable segment: UK...... 181 161 241 234 299 International ...... 4 8 8 6 8 185 169 249 240 307

111 (b) Staff costs The aggregate payroll costs of these persons were as follows:

Year ended Year ended Year ended 9 months ended 30 September 30 September 30 September 30 June 2014 9 months ended 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Wages and salaries ...... 4,632 4,957 5,972 4,365 5,326 Defined contribution pension cost (note 6(f)) ...... 5 4 17 10 29 Social security costs ...... 443 477 565 415 491 5,080 5,438 6,554 4,790 5,846

(d) Highest paid director

(e) Key management compensation Key management comprises the Executive Directors, their compensation is as follows:

Year ended Year ended Year ended 9 months ended 30 September 30 September 30 September 30 June 2014 9 months ended 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Wages and salaries ...... 594 778 597 449 448 Short-term non-monetary benefits ...... 6 7 11 13 11 Post-employment benefits ..... 4 3 3 2 2 604 788 611 464 461

Pension costs under defined contribution schemes are included in the post-employment benefits disclosed above.

(f) Retirement benefits The Group offers membership of several defined contribution pension schemes to eligible employees, the only pension arrangements operated by the Group. The schemes are defined contribution schemes and the pensions cost in the 9 months to 30 June 2015 was £29,000 (9 months to 30 June 2014 (unaudited): £10,000, year ended 30 September 2014: £17,000, year ended 30 September 2013: £4,000, year ended 30 September 2012: £5,000).

112 7. EXCEPTIONAL ITEMS As referred to in note 1, on 4 October 2013, OTB Bidco acquired the entire issued share capital of OTB Travel. Non-recurring acquisition related costs of £3,724,000 were incurred in the year ended 30 September 2014 (9 months ended 30 June 2014 (unaudited): £3,663,000). All such costs have been treated as non-deductible for tax purposes and have increased the tax charge by £819,000 in the year ended 30 September 2014 (9 months ended 30 June 2014 (unaudited): £806,000)

8. FINANCE COSTS

Year ended Year ended Year ended 9 months ended 30 September 30 September 30 September 30 June 2014 9 months ended 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Bank loan interest ...... 52 4 1,735 1,378 1,401 Amortisation of bank loan arrangement fees ...... 144 10 — — — Finance costs ...... 196 14 1,735 1,378 1,401 Loan note interest ...... 3,790 4,692 6,961 5,108 5,830 Other interest ...... 179 67 — — — Interest on shareholder loans .. 3,969 4,759 6,961 5,108 5,830 Total finance costs ...... 4,165 4,773 8,696 6,486 7,231

9. FINANCE INCOME

10. AUDITOR REMUNERATION During the year, the Group obtained the following services from OTB Topco’s auditors at costs as detailed below:

Year ended Year ended Year ended 9 months ended 30 September 30 September 30 September 30 June 2014 9 months ended 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Fees payable to Company’s auditor and its associates for other services: —The audit of Company’s subsidiaries ...... 35 36 37 28 35 —Non-audit services ...... — — 5 4 4 —Tax advisory services ...... — — 14 — — 35 36 56 32 39

113 11. TAXATION

Year ended Year ended Year ended 9 months ended 9 months ended 30 September 30 September 30 September 30 June 2014 30 June 2012 2013 2014 (unaudited) 2015 £’000 £’000 £’000 £’000 £’000 Current tax on profits/(losses) for the year ...... 854 1,508 1,679 1,430 1,856 Adjustments in respect of prior years/periods ...... 467 444 — — — Total current tax ...... 1,321 1,952 1,679 1,430 1,856 Deferred tax on profits for the year Origination and reversal of temporary differences ...... 330 316 (727) (479) (731) Effect of change in tax rate . . . 8 40 1 1 — Adjustments in respect of prior years/periods ...... 74 32 9 — — Total deferred tax ...... 412 388 (717) (478) (731) (note 20) Total tax charge ...... 1,733 2,340 962 952 1,125

The tax charge differs from the standard rate of corporation tax in the UK. The differences are explained below:

9 months ended Year ended Year ended Year ended 30 June 9 months ended 30 September 30 September 30 September 2014 30 June 2012 2013 2014 (unaudited) 2015 £’000 £’000 £’000 £’000 £’000 Profit/(loss) on ordinary activities before tax ...... 4,058 5,778 (4,789) (4,662) 2,138 Profit/(loss) on ordinary activities multiplied by the rate of corporation tax in the UK of 20.67% (30 September 2014: 22%, 30 June 2014: 22%, 30 September 2013: 23.6%, 30 September 2012: 25.3%) ...... 1,028 1,358 (1,054) (1,026) 442 Effects of: Other expenses not deductible ...... 113 12 2,003 1,940 723 Amortisation deductible ...... — 6 — 137 65 Short term timing differences ..... 51 488 4 (99) (105) Adjustments in respect of prior years/periods ...... 541 476 9 — — Total taxation charge ...... 1,733 2,340 962 952 1,125

Reductions in the UK corporation tax rate from 23 per cent. to 21 per cent. (effective from 1 April 2014) and 20 per cent. (effective from 1 April 2015) were substantively enacted on 2 July 2013. In the Budget on 8 July 2015, the Chancellor announced additional planned reductions to 18 per cent. by 2020. This will reduce the Company’s future current tax charge accordingly. The deferred tax balances at 30 June 2015 have been calculated based on the rate of 20 per cent. substantively enacted at the balance sheet date. Future rate reductions would further reduce the UK deferred tax assets recognised but the actual effect will be dependent on the deferred tax position at the time.

114 12. EARNINGS PER SHARE

9 months ended Year ended Year ended Year ended 30 June 9 months ended 30 September 30 September 30 September 2014 30 June 2012 2013 2014 (unaudited) 2015 £’000 £’000 £’000 £’000 £’000 Profit/(loss) for the year/period .... 2,325 3,438 (5,751) (5,614) 1,013 Weighted average number of ordinary shares in issue for the year/period Basic earnings per share (number of shares) ...... 1,313,000 1,313,000 1,313,000 1,313,000 1,326,000 Basic earnings per share (in pence per share) ...... 177 262 (438) (428) 76 There are no shares or options with a dilutive effect and hence the basic and diluted earnings per share are the same. The earnings per share presented for the years ended 30 September 2012 and 30 September 2013 are based on the issued share capital of OTB Topco as at 30 June 2015 (see note 1). As the Company will not be listed until Admission, an illustrative earnings per share (‘‘EPS’’) calculation has been presented below using the Shares of On the Beach Group plc as existing immediately prior to Admission and following the share restructure described in note 26, in order to demonstrate the earnings attributable to the Shares prior to Admission. The calculation of illustrative basic earnings per Share is based on profit attributable to Shareholders, as disclosed below, and on 124,999,981 Shares.

13. INTANGIBLE ASSETS

2012 Website & development Goodwill costs Total £’000 £’000 £’000 Cost At 1 October 2011 ...... 26,977 2,562 29,539 Additions ...... — 818 818 At 30 September 2012 ...... 26,977 3,380 30,357 Accumulated amortisation At 1 October 2011 ...... — 1,089 1,089 Charge for the year ...... — 888 888 At 30 September 2012 ...... — 1,977 1,977 Net book amount ...... At 30 September 2012 ...... 26,977 1,403 28,380

115 2013 Website & development Goodwill costs Total £’000 £’000 £’000 Cost At 1 October 2012 ...... 26,977 3,380 30,357 Additions ...... — 1,079 1,079 Disposals ...... — (49) (49) At 30 September 2013 ...... 26,977 4,410 31,387 Accumulated amortisation ...... At 1 October 2012 ...... — 1,977 1,977 Charge for the year ...... — 958 958 On disposals ...... — (49) (49) At 30 September 2013 ...... — 2,886 2,886 Net book amount At 30 September 2013 ...... 26,977 1,524 28,501

2014 Website & development Website Brand Goodwill costs technology Total £’000 £’000 £’000 £’000 £’000 Cost At 1 October 2013 ...... — 26,977 4,410 — 31,387 Eliminated on acquisition ...... — (26,977) — — (26,977) Arising on acquisition ...... 30,080 21,544 — 22,512 74,136 Additions ...... — — 1,506 — 1,506 At 30 September 2014 ...... 30,080 21,544 5,916 22,512 80,052 Accumulated amortisation At 1 October 2013 ...... — — 2,886 — 2,886 Charge for the year ...... 2,005 — 1,056 2,251 5,312 At 30 September 2014 ...... 2,005 — 3,942 2,251 8,198 Net book amount At 30 September 2014 ...... 28,075 21,544 1,974 20,261 71,854

30 June 2015 Website & development Website Brand Goodwill costs technology Total £’000 £’000 £’000 £’000 £’000 Cost At 1 October 2014 ...... 30,080 21,544 5,916 22,512 80,052 Additions ...... — — 1,462 — 1,462 At 30 June 2015 ...... 30,080 21,544 7,378 22,512 81,514 Accumulated amortization At 1 October 2014 ...... 2,005 — 3,942 2,251 8,198 Charge for the period ...... 1,504 — 999 1,688 4,191 At 30 June 2015 ...... 3,509 — 4,941 3,939 12,389 Net book amount At 30 June 2015 ...... 26,571 21,544 2,437 18,573 69,125

(a) Website and development costs Additions in each year relate to the development of software. The amortisation period for website development costs is 3 years straight line. Amortisation has been recognised within operating profits.

116 (b) Impairment of goodwill Goodwill acquired through business combinations has been allocated for impairment testing purposes to two cash generating units, for impairment testing purposes. This represents the lowest level within the Group at which goodwill is monitored for internal management purposes. The Group performed its annual impairment test as at 30 June 2015 on the two cash generating units. The recoverable amount of the CGU has been determined based on the value in use calculations using cash flow projections derived from financial budgets and projections covering a five year period. The forecasts are then extrapolated in perpetuity based on an estimated growth rate of 2 per cent. (all other periods 2 per cent.), being the Directors’ estimated view of the long term compound growth in the economy. This is deemed appropriate because the CGU is considered to be a long term business. Management estimates discount rates using pre-tax rates that reflect current market assessments of the time value of money and the risks specific to this CGU. The discount rate applied is 15 per cent. (all other periods 15 per cent.). The main assumptions on which the forecast cash flows were based include the level of sales and administrative expenses within the business and have been set by the Directors based on their past experience of the business and its industry, together with their expectations of the market. The level of sales depends upon the size of the markets in which the Group operates together with the Directors’ estimations of its market share and competitive pressures, including the level of supplier overrides. Administrative expenses are dependent upon the net costs to the business of purchasing services. Expenses are based on the current cost base of the Group adjusted for variable costs and known plans for the business.

(c) Website technology Website technology is the core platform that provides the infrastructure to host and develop the website. The amortisation period for website technology is 10 years straight line. Amortisation has been recognised within operating profit.

(d) Sensitivity to changes in assumptions Sensitivity analysis has been completed on key assumptions in the goodwill impairment model in isolation, and the headroom is significant. This indicates that the value in use will be equal to its carrying amount following a reduction in EBITDA of 60 per cent. Management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to exceed its recoverable amount.

14. PROPERTY, PLANT AND EQUIPMENT

2012 Fixtures and Computer fittings equipment Total £’000 £’000 £’000 Cost At 1 October 2011 ...... 124 1,012 1,136 Additions at cost ...... 31 202 233 At 30 September 2012 ...... 155 1,214 1,369 Accumulated depreciation At 1 October 2011 ...... 90 745 835 Charge for the year ...... 21 174 195 At 30 September 2012 ...... 111 919 1,030 Net book amount At 30 September 2012 ...... 44 295 339

117 2013 Fixtures and Computer fittings equipment Total £’000 £’000 £’000 Cost At 1 October 2012 ...... 155 1,214 1,369 Additions at cost ...... 181 316 497 Disposals ...... (109) (658) (767) At 30 September 2013 ...... 227 872 1,099 Accumulated depreciation At 1 October 2012 ...... 111 919 1,030 Charge for the year ...... 32 220 252 Disposals ...... (105) (657) (762) At 30 September 2013 ...... 38 482 520 Net book amount At 30 September 2013 ...... 189 390 579

2014 Fixtures and Computer fittings equipment Total £’000 £’000 £’000 Cost At 1 October 2013 ...... 227 872 1,099 Additions at cost ...... 24 345 369 Disposals ...... — (3) (3) At 30 September 2014 ...... 251 1,214 1,465 Accumulated depreciation At 1 October 2013 ...... 38 482 520 Charge for the year ...... 30 262 292 Disposals ...... — (3) (3) At 30 September 2014 ...... 68 741 809 Net book amount At 30 September 2014 ...... 183 473 656

30 June 2015 Fixtures and Computer fittings equipment Total £’000 £’000 £’000 Cost At 1 October 2014 ...... 251 1,214 1,465 Additions at cost ...... — 264 264 At 30 June 2015 ...... 251 1,478 1,729 Accumulated depreciation At 1 October 2014 ...... 68 741 809 Charge for the period ...... 13 255 268 At 30 June 2015 ...... 81 996 1,077 Net book amount At 30 June 2015 ...... 170 482 652

15. INVESTMENTS The Group consists of the parent company, OTB Topco, incorporated in the UK and a number of subsidiaries held directly or indirectly by OTB Topco.

118 The table below shows details of the wholly owned subsidiaries of the Group.

Proportion of Proportion of ordinary ordinary shares shares Country of held by held by the Subsidiary Nature of business incorporation parent Group %% On the Beach Limited(1) ...... Internet travel agent UK 100 100 On the Beach Beds Limited ...... Internet travel agent UK 100 100 On the Beach Bidco Limited ...... Holding company UK 100 100 On the Beach Travel Limited ...... Internet travel agent UK 100 100 On the Beach Trustees Limited ...... Employee trust UK 100 100 On the Beach Holidays Limited ...... Dormant UK 100 100 (1) On the Beach Limited has a Swedish trading division which has a corporate identity number of 516408-9186. There are no restrictions on OTB Topco’s ability to access or use the assets and settle the liabilities of OTB Topco’s subsidiaries.

16. TRADE AND OTHER RECEIVABLES

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Amounts falling due within one year: Trade receivables — net ...... 7,071 13,431 22,343 63,275 Other receivables ...... 195 1,222 2,058 3,214 Prepayments ...... 321 350 333 395 7,587 15,003 24,734 66,884

All receivables are reviewed regularly to assess any associated credit risk. There are no significant concentrations of credit risk. No impairment has been made to the amounts included above. Fair value is equal to carrying value for each of the amounts above.

17. CASH AND CASH EQUIVALENTS

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Cash at bank and in hand ...... 10,122 15,123 10,550 5,571 Trust account ...... 17,032 18,198 20,453 56,554 27,154 33,321 31,003 62,125

Trust accounts are restricted cash held separately and only accessible at the point the customer has travelled.

18. TRADE AND OTHER PAYABLES

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Current Trade payables ...... 18,744 25,340 34,045 92,579 Other tax and social security payable ...... 570 748 144 729 Accruals and deferred income ...... 4,152 5,042 6,085 10,058 23,466 31,130 40,274 103,366

The fair value of financial liabilities approximates their carrying value due to short maturities. Financial liabilities are denominated in pounds sterling.

119 19. BORROWINGS

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Non-current Bank borrowings ...... — — 16,015 13,838 Shareholder loans: Amounts owed to related parties—Livingbridge ..... 23,628 — — — Amounts owed to related parties—Inflexion ...... — — 47,855 52,281 Amounts owed to related parties—Directors & Management ...... 15,583 — 15,195 16,600 39,211 — 63,050 68,881 39,211 — 79,065 82,719 Current Bank borrowings ...... 313 — 3,140 3,140 Amounts owed to related parties—Livingbridge ..... 1,668 29,791 — — Amounts owed to related parties—Directors & Management ...... — 14,112 — — 1,981 43,903 3,140 3,140 Total borrowings ...... 41,192 43,903 82,205 85,859

The nominal value of these borrowings at each reporting date is as follows:

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Bank Loan A ...... — — 9,429 7,071 Bank Loan B ...... — — 11,000 11,000 Amounts owed to Livingbridge ...... 15,402 15,402 — — Amounts owed to Inflexion ...... — — 42,573 50,761 Amounts owed to Directors & Management ...... 10,663 10,663 13,518 13,518 26,065 26,065 76,520 82,350

Interest rates applicable are as follows:

30 September 30 September 30 September 30 June 2012 2013 2014 2015 %% % % Bank loan A ...... — — LIBOR + 4.5% LIBOR + 4.5% Bank loan B ...... — — LIBOR + 5.0% LIBOR + 5.0% A loan notes (Livingbridge) ...... 13% 14% — — A (PIK) Loan notes (Livingbridge) . . . 4% 4% — — AA loan notes (Livingbridge) ...... 10% 10% — — B & C loan notes (Livingbridge) ..... 13% 14% — — E loan notes (Directors & Management) ...... 13% 14% — — Investor A loans (Inflexion) ...... — — 12% 12% B & C loans (Directors & Management) ...... — — 12% 12% Loan notes are unsecured payment in kind notes maturing in 2020. The term loans (Bank loan A and B) are secured against the Group’s assets.

120 Borrowings have the following maturity profile:

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Less than one year ...... 1,981 49,360 4,161 4,045 Two to five years ...... 47,379 — 135,900 132,882 Over five years ...... — — — — Total repayment (including interest) ...... 49,360 49,360 140,061 136,927 Less interest cash flows: Bank borrowings ...... — — (2,635) (1,859) A loan stock ...... (16,539) (16,539) — — A (PIK) loan stock ...... (840) (840) — — AA loan stock ...... (690) (690) — — B loan stock ...... (120) (120) — — C loan stock ...... (667) (667) — — E loan stock ...... (13) (13) — — Deferred consideration ...... (3,770) (3,770) — — Completion loan ...... (656) (656) — — Investor A loans (Inflexion) ...... — — (43,886) (35,698) B loans (Directors & Management) ...... — — (1,720) (1,720) C loans (Directors & Management) ...... — — (15,300) (15,300) Total principal cash flows ...... 26,065 26,065 76,520 82,350

20. DEFERRED TAX

Intangible asset Property, plant Capitalised Tax assets/ revaluation and equipment development costs (liabilities) £’000 £’000 £’000 £’000 30 September 2012 Assets ...... — 786 — 786 Liabilities ...... — — (261) (261) Total ...... — 786 (261) 525 30 September 2013 Assets ...... — 398 — 398 Liabilities ...... — — (263) (263) Total ...... — 398 (263) 135 30 September 2014 Assets ...... — 110 — 110 Liabilities ...... (9,670) — (108) (9,778) Total ...... (9,670) 110 (108) (9,668) 30 June 2015 Assets ...... — 122 — 122 Liabilities ...... (9,032) — (27) (9,059) Total ...... (9,032) 122 (27) (8,937)

1 October Recognised in 30 September 2011 income 2012 £’000 £’000 £’000 Property, plant and equipment ...... 893 (107) 786 Capitalised development costs ...... (261) — (261) 632 (107) 525

121 1 October Recognised in 30 September 2012 income 2013 £’000 £’000 £’000 Property, plant and equipment ...... 786 (388) 398 Capitalised development costs ...... (261) (2) (263) 525 (390) 135

Acquired in 1 October business Recognised in 30 September 2013 combination income 2014 £’000 £’000 £’000 £’000 Intangible asset revaluation ...... — (10,520) 850 (9,670) Property, plant and equipment ...... 398 — (288) 110 Capitalised development costs ...... (263) — 155 (108) 135 (10,520) 717 (9,668)

1 October Recognised in 30 June 2014 income 2015 £’000 £’000 £’000 Intangible asset revaluation ...... (9,670) 638 (9,032) Property, plant and equipment ...... 110 12 122 Capitalised development costs ...... (108) 81 (27) (9,668) 731 (8,937)

Deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.

21. CALLED UP SHARE CAPITAL

30 September 30 September 30 September Issue of 30 June 2012 2013 2014 shares 2015 £’000 £’000 £’000 £’000 £’000 Allotted, called up and fully paid A ordinary shares ...... — — 32 — 32 B ordinary shares ...... — — 9 — 9 C ordinary shares ...... — — 350 75 425 D ordinary shares ...... — — 4 — 4 — — 395 75 470

On 4 October 2013 the following shares were issued by OTB Topco: 643,997 £0.05 A ordinary shares for £32,200, 186,000 B £0.05 ordinary shares for £9,300, 140,000 £2.50 C ordinary shares for £350,000, and 356,000 £0.01 D ordinary shares for £3,560. All of A, B, C and D share issues have been settled in cash. The holders of A, B and C ordinary shares are entitled to receive dividends as declared from time to time. Furthermore, the holders of A and D ordinary shares are entitled to one vote per share at meetings of OTB Topco. During the period ended 30 June 2015, 30,000 additional C ordinary shares were issued at their nominal value of £2.50 per share.

22. COMMITMENTS AND CONTINGENCIES (a) Capital commitments The Group had no capital commitments for the years ended 30 September 2012, 2013 and 2014 and for the periods ended 30 June 2014 (unaudited) and 30 June 2015.

122 (b) Operating lease commitments The future aggregate minimum lease payments under non-cancellable operating leases as follows:

30 September 30 September 30 September 2012 2013 2014 30 June 2015 £’000 £’000 £’000 £’000 Land & Buildings One year ...... 39 197 228 143 Two to five years ...... 1,260 800 714 771 Over 5 years ...... 252 1,028 714 514 1,551 2,025 1,656 1,428

The Group’s lease commitments relate to its head office.

(c) Contingencies In September 2010, proceedings were initiated against On the Beach Limited by Ryanair alleging infringement of, inter alia, it’s intellectual property rights. The amount of the claim by Ryanair is unquantifiable by the Group as at the date of this document, given that the legal proceedings are still at an early stage and the Group’s expectation that final resolution of the dispute might take some time.

23. FINANCIAL INSTRUMENTS Details of significant accounting policies and methods adopted, including criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 2, accounting policies.

30 September 30 September 30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Financial assets Fair value through profit and loss Interest rate swap ...... — — 65 9 Loans and receivables Cash and cash equivalents ...... 27,154 33,321 31,003 62,125 Trade and other receivables (note 16) ...... 7,266 14,653 24,401 66,489 Total financial assets ...... 34,420 47,974 55,469 128,623 Financial liabilities Fair value through profit and loss Forward exchange contracts ...... (92) (299) (689) (3,411) Financial liabilities measured at amortised cost Trade and other payables (note 18) ...... (18,744) (25,340) (34,045) (92,579) Borrowings (note 19) ...... (41,192) (43,903) (82,205) (85,859) Total financial liabilities ...... (59,936) (69,243) (116,250) (174,438)

The following table provides the fair values of the Group’s financial assets and liabilities:

30 September 30 June 2012 2013 2014 2015 FV Level £’000 £’000 £’000 £’000 Financial assets designated as fair value through profit and loss Interest swap rate ...... ——6592 Financial liabilities designated as fair value through profit and loss Forward exchange contracts ...... (92) (299) (689) (3,411) 2 Financial liabilities held at amortised cost Loan notes ...... (40,879) (43,903) (93,819) (98,010) 2 Bank borrowings ...... — — (11,569) (14,648) 2

123 There is no difference between the carrying value and fair value of cash and cash equivalents, trade and other receivables and trade and other payables.

(a) Financial assets and liabilities designated at fair value through profit and loss The table below analyses financial instruments measured at fair value, into a fair value hierarchy based on the valuation technique used to determine fair value. (i) Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities (ii) Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices) (iii) Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs)

Interest rate hedge Level 1 Level 2 Level 3 £’000 £’000 £’000 At 30 September 2014 ...... — 65 — At 30 June 2015 ...... — 9 —

Forward contracts Level 1 Level 2 Level 3 £’000 £’000 £’000 At 30 September 2012 ...... — (92) — At 30 September 2013 ...... — (299) — At 30 September 2014 ...... — (689) — At 30 June 2015 ...... — (3,411)

Treasury risk overview The Group is exposed to a variety of financial risks as set out below: (iv) Market Risk The Group’s key financial market risks are in relation to foreign currency rates. Foreign currency risk results from the substantial cross-border element of the Group’s trading and arises on sales and purchases that are denominated in a currency other than the functional currency of the business. Group cash resources are matched with the net funding requirements sourced from three sources namely internally generated funds, loan facilities and bank funding arrangements. The foreign currency risk is managed at Group level by the purchase of foreign currency contracts for use as a commercial hedge. During the course of the period there has been no changes to the market risk or manner in which the Group manages its exposure. The Group is exposed to interest rate risk that arises principally through the Group’s floating rate bank loans. Liquidity risk, credit risk and capital risk is considered below. The executive team is responsible for implementing the risk management strategy to ensure that appropriate risk management framework is operating effectively, embedding a risk mitigation culture throughout the Group. The Board are provided with a consolidated view of the risk profile of the Group. All major exposures are identified and mitigating controls identified and implemented. Regular management reporting and assessment of the effectiveness of controls provide a balanced assessment of the key risks and the effectiveness of controls. The Group does not speculate with derivatives or other financial instruments.

Interest rate risk The Group is exposed to interest rate risk because entities in the Group borrow funds at fixed and floating rates. The risk is mitigated by the Group maintaining an appropriate mix between fixed and floating rate borrowings, and by the used of interest rate swap contracts.

124 Interest rate swap contracts The Group entered into an interest rate swap instrument during the year. This instrument enabled the Group to mitigate interest rate fluctuation risk. Under interest rate swap contracts, the Group agrees to exchange the difference between fixed and floating rate interest amounts calculated on agreed notional principal amounts. Such contracts enable the Group to mitigate the risk of changing the cash flow exposures on the issued variable rate debt held. The fair value of the interest rate swaps at the reporting date is determined by discounting the future cash flows using the curves at the reporting date and the credit risk inherent in the contracts. The following table details the notional principal amounts and remaining terms of interest rate swap contracts outstanding at the reporting date:

June 2015

Trade Effective Termination Notional Fixed Outstanding date date date Currency amount Fair value rate % Receive fixed pay floating contracts . . 25-Nov-13 07-Jan-14 30-Sep-16 GBP 14,652 (9) 2%

September 2014

Trade Effective Termination Notional Fixed Outstanding date date date Currency amount Fair value rate % Receive fixed pay floating contracts . . 25-Nov-13 07-Jan-14 30-Sep-16 GBP 14,652 (65) 2% At the balance sheet date the interest rate profile of the Group’s interest-bearing financial instruments was:

30 September 30 June Fixed rate instruments 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Financial liabilities Bank loans ...... 313 — 19,155 16,978 Loan notes ...... 40,879 43,903 63,050 68,881 41,192 43,903 82,205 85,859

Sensitivity analysis As all instruments are fixed any change of basis points in interest rates at the balance sheet date would have no effect on equity and profit or loss. This calculation assumes that the change occurred at the balance sheet date and had been applied to risk exposures existing at that date. This analysis assumes that all other variables, in particular foreign currency rates, remain constant and considers the effect of financial instruments with variable interest rates, financial instrument at fair value through profit or loss or available for sale with fixed interest rates and the fixed rate element of interest rate swaps. The fair value of the interest rate swaps for all periods was determined by discounting the future cash flows using yield curve data at the reporting date. The interest rate swaps settle on a quarterly basis. The Group will settle the difference between the fixed and floating interest rate on a net basis. Hedge accounting has not been applied to these derivative instruments.

Foreign currency risk management The majority of the Group’s purchases are sourced from outside the United Kingdom and as such the Group is exposed to the fluctuation in exchange rates (currencies are principally Sterling, US Dollar, Euro and Swedish Krona). The Group places forward cover on the net foreign currency exposure of its purchases. The Group foreign currency requirement is reviewed twice weekly and forward cover is purchased to cover expected usage.

125 The carrying amount of the Group’s foreign currency denominated monetary assets and monetary liabilities at the reporting date is as follows:

30 September 30 June Euro (E’000) 2012 2013 2014 2015 Cash ...... 839 659 2,506 1,458 Trade payables ...... (14,180) (18,048) (27,063) (73,798) Forward exchange contracts ...... 12,596 16,689 24,677 68,058 (745) (700) 120 (4,282)

30 September 30 June US Dollar ($’000) 2012 2013 2014 2015 Cash ...... — 19 (94) 378 Trade payables ...... — (338) (1,824) (2,994) Forward exchange contracts ...... — 364 1,018 2,280 — 45 (900) (336)

30 September 30 June Swedish Krona (SEK ‘000) 2012 2013 2014 2015 Cash ...... — 17 163 423 Trade payables ...... — — — (6) Trade receivables ...... 37 7 74 289 Forward exchange contracts ...... — — — (490) 37 24 237 216

Foreign currency sensitivity The Group is mainly exposed to US Dollars and Euros. The following table details the Group sensitivity to a percentage change in Pounds Sterling against these currencies. The sensitivity analysis of the Group’s exposure to foreign currency risk at the reporting date has been determined based on a 10 per cent. change taking place at the beginning of the financial period and held constant throughout the reporting period:

30 September 30 June 2012 2013 2014 2015 £’000 £’000 £’000 £’000 Euro—10% Weakening—10% ...... (39) (22) (67) (168) Strengthening—10% ...... 75 26 82 219 US Dollar Weakening—10% ...... — 6 (150) 19 Strengthening—10% ...... — 26 123 (24) SEK Weakening—10% ...... — — — (20) Strengthening—10% ...... — — — 24 The Group uses forward exchange contracts to hedge its foreign currency risk against sterling. The forward contracts have maturities of less than one year after the balance sheet date.

126 As a matter of policy the Group does not enter into derivative contracts for speculative purposes. The details of such contracts at the year-end, by currency were:

EUR Foreign currency Notional Value Fair value E’000 £’000 £’000 30 June 2015 Less than 3 months ...... 77,625 57,673 (2,877) 3 to 6 months ...... 15,554 11,391 (410) 6 to 12 months ...... 3,225 2,351 (74) Total ...... 96,404 71,415 (3,361)

E’000 £’000 £’000 30 September 2014 Less than 3 months ...... 20,275 16,283 (443) 3 to 6 months ...... 3,969 3,162 (61) 6 to 12 months ...... 6,548 5,232 (117) Total ...... 30,792 24,677 (621)

E’000 £’000 £’000 30 September 2013 Less than 3 months ...... 15,327 13,043 (998) 3 to 6 months ...... 2,101 1,791 (150) 6 to 12 months ...... 2,183 1,855 (149) Total ...... 19,611 16,689 (1,297)

E’000 £’000 £’000 30 September 2012 6 to 12 months ...... 615 487 2 Total ...... 615 487 2

SEK Foreign currency Notional Value Fair value Kr’000 £’000 £’000 30 June 2015 Less than 3 months ...... 6,200 485 (10) 3 to 6 months ...... 200 16 (1) Total ...... 6,400 501 (11)

USD Foreign currency Notional Value Fair value $’000 £’000 £’000 30 June 2015 Less than 3 months ...... 1,820 1,189 (31) 3 to 6 months ...... 460 321 (8) Total ...... 2,280 1,510 (39)

$’000 £’000 £’000 30 September 2014 Less than 3 months ...... 10 6 — Total ...... 10 6 —

127 $’000 £’000 £’000 30 September 2013 Less than 3 months ...... 599 377 (7) Total ...... 599 377 (7)

(v) Credit risk Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Group. Credit risk arises from cash balances and derivative financial instruments, as well as credit exposures to customers, including outstanding receivables, financial guarantees and committed transactions. Credit risk is managed separately for treasury and operating related credit exposures. The ageing of trade receivables at the balance sheet date was:

Not Past due Past due past due 0 - 30 days > 30 days Total £’000 £’000 £’000 £’000 At 30 September 2012 ...... 7,064 1 6 7,071 At 30 September 2013 ...... 13,425 3 3 13,431 At 30 September 2014 ...... 22,340 1 2 22,343 At 30 June 2015 ...... 63,270 2 3 63,275 The maximum exposure to credit risk at each reporting date is the fair value of financial assets and trade receivables.

(vi) Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. It is Group policy to maintain a balance of funds, borrowing, committed bank loans and other facilities sufficient to meet anticipated short-term and long-term financial requirements. In applying the policy the Group continuously monitors forecast and actual cash flows against the maturity profiles of financial assets and liabilities. It is Group policy to ensure that a specific level of committed facilities is always available based on forecast working capital requirements. Cash forecasts identifying the Group’s liquidity requirements are produced and are sensitised for different scenarios including, but not limited to, decreases in profit margins and weakening of sterling against other functional currencies.

128 The following are the contractual maturities of financial liabilities:

Carrying Contractual Within Between Financial liabilities at amortised cost amount cash flows 1 year 1 and 5 years £’000 £’000 £’000 £’000 30 September 2012 Trade payables ...... 18,744 18,744 18,744 — Other payables ...... 4,722 4,722 4,722 — Bank loans ...... 313 313 313 — Other interest bearing loans ...... 40,879 49,047 1,668 47,379 64,658 72,826 25,447 47,379

£’000 £’000 £’000 £’000 30 September 2013 Trade payables ...... 25,340 25,340 25,340 — Other payables ...... 5,790 5,790 5,790 — Other interest bearing loans ...... 43,903 49,360 49,360 — 75,033 80,490 80,490 —

£’000 £’000 £’000 £’000 30 September 2014 Trade payables ...... 34,045 34,045 34,045 — Other payables ...... 6,085 6,085 6,085 — Any other liabilities ...... 144 144 144 — Bank loans ...... 19,155 23,062 4,161 18,901 Other interest bearing loans ...... 63,050 116,999 — 116,999 122,479 180,335 44,434 135,900

£’000 £’000 £’000 £’000 30 June 2015 Trade payables ...... 92,579 92,579 92,579 — Other payables ...... 10,787 10,787 10,787 — Bank loans ...... 16,978 19,928 4,045 15,883 Other interest bearing loans ...... 68,881 116,999 — 116,999 189,225 240,293 107,411 132,882

Capital management It is the Group’s policy to maintain an appropriate equity capital base so as to maintain investor, creditor and market confidence and to sustain the future development of the business. The capital structure of the Group consists of the net cash (borrowings disclosed in note 19) and equity of the Group as disclosed in note 21. The Group is not subject to any externally imposed capital requirements.

24. RELATED PARTY TRANSACTIONS The following transactions were carried out with related parties: (a) Loan notes

30 September 30 September 30 September 30 June 2014 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Movement in the year/period: Livingbridge ...... 15,641 15,402 Inflexion ...... — — 47,855 46,450 4,426 Directors and members of the close family of directors ...... — 196 13,583 13,137 1,405

129 Loan notes issued are unsecured. Loan notes are to be settled in cash upon maturity. Interest is charged on the outstanding balances at the rates set out in note 19. The outstanding balance of the above transactions at the year end date was:

(b) Management fees

30 September 30 September 30 September 30 June 2014 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Fees charged by: Inflexion ...... — — 227 185 222 Livingbridge ...... 63 63 — — — Fees charged by related parties are settled in cash. All amounts owing had been settled prior to the year end date. In addition, an Exit Fee (estimated to be £902,656) will be paid by the Group to Inflexion 2010 General Partner Guernsey LP immediately following Admission pursuant to the Investment Agreement. The Exit Fee will be triggered by, amongst other things, a listing of the Company and is equal to the sum of 1 per cent. of the enterprise value of the Company (reduced proportionately to reflect the fact that the listing of the Company is not a disposal of the entire issued share capital of the Company).

25. ULTIMATE PARENT COMPANY AND PARENT COMPANY OF LARGER GROUP The ultimate controlling party of OTB Topco is deemed to be OTB Holdings Limited Partnership (acting by its general partner Inflexion 2010 General Partner Limited) as a result of its majority shareholding in OTB Topco. OTB Topco was incorporated on 24 September 2013. The consolidated financial statements of the Group are available to the public and can be obtained from Companies House, Crown Way, Cardiff CF14 3UZ.

26. POST BALANCE SHEET EVENTS (a) Second Lloyds Facility The Company entered into the Second Lloyds Facility on 18 September 2015 with Lloyds. OTB Topco, OTB Bidco and certain other members of the Group will accede to the Second Lloyds Facility on Admission. A revolving credit facility is being made available under the terms of the Second Lloyds Facility in an aggregate amount of up to £35,000,000. Drawdown of the loan under the Second Lloyds Facility is subject to evidence that the Reorganisation has taken effect, Admission, the First Lloyds Facility being repaid in full, OTB Topco, OTB Bidco and certain other members of the Group having executed an accession deed in respect of the Second Lloyds Facility and certain customary conditions (such as receipt of corporate authorities and legal opinions). The borrowing limits under the Second Lloyds Facility will vary monthly throughout the period of the Second Lloyds Facility to reflect the seasonal borrowing requirements of the Group, ranging from £2,000,000 in one month to the full £35,000,000 in another month. The Second Lloyds Facility will be available up to the second anniversary of the closing date (or for a shorter period of time at the Company’s discretion). It is to be repaid in monthly installments which vary in accordance with the Group’s seasonal requirements. No early prepayment fees are payable.

130 The margin contained in the Second Lloyds Facility is dependent on gross leverage ratio and the rate per annum ranges from 1.10 per cent. to 1.90 per cent. for the utilised facility and 0.39 per cent. to 0.67 per cent. for the non-utilised facility. The terms of the Second Lloyds Facility include the following financial covenants: (i) that the ratio of total debt to EBITDA in respect of any relevant period shall not exceed 2:1 (with a one-off increase to a ratio of 2.5:1); and (ii) that the ratio of EBITDA to finance charges in respect of any relevant period shall not be less than 5:1.

(b) Reorganisation In connection with Admission, the Group has undertaken a reorganisation of its corporate structure that will result in the Company becoming the ultimate holding company of the Group and OTB Topco becoming the Company’s direct subsidiary. The Company was incorporated on 17 August 2015 and, in connection with the Offer, the Reorganisation is due to take place immediately prior to Admission to result in the Company becoming the ultimate holding company of the Group and OTB Topco becoming the Company’s direct subsidiary. On incorporation and immediately prior to publication of this Prospectus, the share capital of the Company was £50,000, divided into one ordinary share of £1 and one redeemable preference share of £49,999, both of which were allotted to Inflexion. The consideration for the issue of the redeemable preference share on incorporation was an undertaking by Inflexion to pay cash of £49,999, while the consideration for the issue of the ordinary share on incorporation was £1 which was paid in cash by Inflexion. As part of the Reorganisation, Inflexion shall pay the £49,999 outstanding in respect of its redeemable preference share in the Company, following which the redeemable preference share shall be immediately redeemed by the Company out of the proceeds of the Offer receivable by the Company. The insertion of the Company as a new holding company constitutes a group reorganisation and will be accounted for using merger accounting principles. The Reorganisation will not be effective until immediately prior to Admission and the consolidated financial statements plc will be presented as if the Company had always been part of the same group. As part of the Reorganisation, shareholder loan notes outstanding immediately prior to Admission of £67,328,107 will be exchanged for shares. The accrued but unpaid interest thereon (excluding the loan notes held by Inflexion) of £3,568,013 will be paid in cash.

(c) Adoption of employee share plans On 3 September 2015, the Company adopted the LTIP and the SIP conditional upon Admission. No awards have been made conditional upon Admission. The LTIP and the SIP are further described in paragraph 9 of Part 15: ‘‘Additional Information’’ of this document.

(d) Relationship Agreement On 23 September 2015, the Company and Inflexion entered into the Relationship Agreement. The principal purpose of the Relationship Agreement is to ensure that the Company will be capable of carrying on its business independently of Inflexion for so long as Inflexion (together with its concert parties) holds a Controlling Interest. Pursuant to the Relationship Agreement (and for so long as Inflexion holds a Controlling Interest): (i) the parties shall procure that all transactions and relationships between the Company and any other member of the Group and Inflexion (or any of its associates) are conducted at arm’s length and on normal commercial terms; and (ii) Inflexion shall (and shall procure that each of its associates shall), amongst other matters: (i) not take any action that would have the effect of preventing the Company from complying with its obligations under the Listing Rules; and (ii) not propose or procure the proposal of a shareholder resolution which is intended or appears to be intended to circumvent the proper application of the Listing Rules. The Relationship Agreement will be effective as from Admission and remain in effect for so long as: (i) Inflexion (and/or any of its associates or concert parties) holds a Controlling Interest; and

131 (ii) the Ordinary Shares are admitted to the premium listing segment of the Official List maintained by the FCA.

27. EXPLANATION OF TRANSITION TO IFRS The date of the Group transition to IFRS for the purposes of this document is 1 October 2011 (the ‘‘Transition Date’’). The accounting policies described in note 2 were applied when preparing the combined and consolidated historical financial information for the years ended 30 September 2012, 30 September 2013, 30 September 2014, the 9 months ended 30 June 2014 (unaudited) and the 9 months ended 30 June 2015 and the combined and consolidated balance sheet as at the Transition Date. In preparing its opening IFRS combined and consolidated balance sheet and adjusting amounts reported previously in the financial statements prepared in accordance with UK GAAP (Generally Accepted Accounting Practice in the UK, previous GAAP), the Group has applied IFRS 1 First-Time Adoption of International Financial Reporting Standards, which contains a number of voluntary exemptions and mandatory exceptions from the requirement to apply IFRS retrospectively.

Adjustments Made in Connection with Transition to IFRS This is the first combined and consolidated historical financial information prepared in accordance with IFRS. The following material adjustments were made to the UK GAAP financial statements in connection with the transition to IFRS: (a) To align the presentation of certain items of assets and liabilities, income and expenses with the requirements of IFRS, the Group made a number of adjustments from the UK GAAP financial statements. (b) The major adjustments were: (i) Under Adopted IFRSs, website development costs are recognised as intangibles, rather than expensed in the profit and loss account, and amortised over their useful economic life. As such the carrying value of development costs has been reclassified to intangible assets. In addition, certain existing website development assets have been reclassified from property, plant and equipment to intangible costs (IAS 38 Intangible assets in the subsequent tables). (ii) Under Adopted IFRS’s derivatives must be separately disclosed. As a result the foreign exchange balances have been revalued to prevailing spot rates (IAS 39 Financial instruments in the subsequent tables). (iii) The reclassification of development costs and associated amortisation has created timing differences with the underlying tax base. As a result a deferred tax liability has been created (IAS 12 Deferred tax in the subsequent tables). (iv) Under Adopted IFRSs, goodwill is not amortised, but is instead subject to periodic impairment reviews. As such previous amortisation has been reversed (IAS 38 Intangible assets (goodwill) in the subsequent tables).

132 Reconciliations to IFRS of data provided under previous GAAP are provided in the tables below.

IAS 38 Total effect Intangible IAS 12 of change to 1 October 2011 UK GAAP assets Deferred tax IFRS Under IFRS £’000 £’000 £’000 £’000 £’000 Assets Non-current assets Goodwill ...... 26,977 — — — 26,977 Other intangible assets ...... 68 1,407 — 1,407 1,475 Property, plant and equipment ...... 541 (240) — (240) 301 Total non-current assets ...... 27,586 1,167 — 1,167 28,753 Current assets ...... — — — Trade and other receivables ...... 7,414 — — — 7,414 Cash and cash equivalents ...... 11,018 — — — 11,018 Deferred tax ...... 894 — (262) (262) 632 Total current assets ...... 19,326 — (262) (262) 19,064 Total assets ...... 46,912 1,167 (262) 905 47,817 Equity Share capital ...... (1,015) — — — (1,015) Share premium ...... (126) — — — (126) Retained earnings ...... 6,262 (1,167) 262 (905) 5,357 Total equity ...... 5,121 (1,167) 262 (905) 4,216 Non-current liabilities Financial liabilities ...... (35,759) — — — (35,759) Total non-current liabilities ...... (35,759) — — — (35,759)

Current liabilities Trade and other payables ...... (16,274) — — — (16,274) Current tax liabilities ...... — — — — — Total current liabilities ...... (16,274) — — — (16,274) Total liabilities ...... (52,033) — — — (52,033) Total equity and liabilities ...... (46,912) (1,167) 262 (905) (47,817)

133 IAS 38 Total IAS 39 Intangible IAS 38 IAS 12 effect of Financial assets Intangible Deferred change to 30 September 2013 UK GAAP instruments (goodwill) assets tax IFRS Under IFRS £’000 £’000 £’000 £’000 £’000 £’000 £’000 Assets Non-current assets Goodwill ...... 22,109 — 4,868 — — 4,868 26,977 Other intangible assets ...... 50 — — 1,474 — 1,474 1,524 Property, plant and equipment .... 585 — — (6) — (6) 579 Deferred tax ...... 433 — — — (298) (298) 135 Total non-current assets ...... 23,177 — 4,868 1,468 (298) 6,038 29,215 Current assets Trade and other receivables ...... 14,966 37 — — — 37 15,003 Cash and cash equivalents ...... 33,352 (31) — — — (31) 33,321 Total current assets ...... 48,318 6 — — — 6 48,324 Total assets ...... 71,495 6 4,868 1,468 (298) 6,044 77,539 Equity Share capital ...... (1,020) — — — — — (1,020) Share premium ...... (126) — — — — — (126) Retained earnings ...... 5,643 (6) (4,868) (1,468) 298 (6,044) (401) Total equity ...... 4,497 (6) (4,868) (1,468) 298 (6,044) (1,547) Current liabilities Trade and other payables ...... (31,429) 299 — — — 299 (31,130) Other financial instruments ...... — (299) — — — (299) (299) Loan notes ...... (43,903) — — — — — (43,903) Current tax liabilities ...... (660) — — — — — (660) Total liabilities ...... (75,992) — — — — — (75,992) Total equity and liabilities ...... (71,495) (6) (4,868) (1,468) 298 (6,044) (77,539)

Reconciliation of profit for the year ended 30 September 2013

Effect of transition to Adopted UK GAAP adopted IFRSs IFRSs £’000 £’000 £’000 Revenue ...... 37,548 — 37,548 Administrative expenses ...... (27,421) 1,155 (26,266) Group operating profit before amortisation ...... 10,127 1,155 11,282 Amortisation ...... (2,434) 1,476 (958) Group operating profit after amortisation ...... 7,693 2,631 10,324 Finance costs ...... (4,773) — (4,773) Finance income ...... 227 — 227 Net finance costs ...... (4,546) — (4,546) Profit before taxation ...... 3,147 2,631 5,778 Taxation ...... (2,309) (31) (2,340) Profit for the year ...... 838 2,600 3,438

Notes to the reconciliation of profit: (a) Under adopted IFRSs the accounting policy for goodwill is such that goodwill is not amortised but tested annually for impairment. As such the amortisation charge was removed from the combined and consolidated income statement.

134 (b) Under adopted IFRSs the costs of acquisition costs cannot be added to the cost of investment. As such the costs have been written off in the year. (c) Under adopted IFRSs development costs must be capitalised. As such expenses incurred to develop the website have been capitalised as intangible assets. The costs in the year have been added to intangible assets. Amortisation of the carrying value of the capitalised assets has been charged to the combined and consolidated income statement.

135 PART 12 UNAUDITED PRO FORMA FINANCIAL INFORMATION SECTION A: UNAUDITED PRO FORMA FINANCIAL INFORMATION The unaudited pro forma statement of net assets for the Group set out below has been prepared on the basis set out in the notes below to illustrate the effect of the Offer, Reorganisation and re-financing on the net assets of the Group, had the Offer, Reorganisation and re-financing taken place on 30 June 2015. The unaudited pro forma information has been prepared for illustrative purposes only and, by its nature, addresses a hypothetical situation and does not, therefore, represent the Group’s actual financial position or results. The unaudited pro forma information does not constitute financial statements within the meaning of Section 434 of the Companies Act 2006. Shareholders should read the whole of this document and not rely solely on the summarised financial information contained in this Part 12 (‘‘Unaudited Pro Forma Financial Statement of Net Assets’’). PricewaterhouseCoopers LLP’s report on the unaudited pro forma statement of net assets is set out on Section B of this Part 12 (‘‘Unaudited Pro Forma Financial Statement of Net Assets’’). The unaudited pro forma statement of financial position has been prepared on a basis consistent with the accounting policies of the Group which are under IFRS and on the basis set out in the notes below, and in accordance with Annex II to the Prospectus Directive Regulation. It should be read in conjunction with the notes below. The unaudited pro forma statement of net assets is compiled from the combined and consolidated balance sheet of the Group as at 30 June 2015 as set out in Part 11: ‘‘Historical Financial Information’’. There is no financial information for the Company, which was incorporated on 17 August 2015; accordingly, the Company is excluded from the unaudited pro forma statement of net assets. In addition, the unaudited pro forma financial information does not purport to represent what the Group’s financial position and results of operations actually would have been if the Offer, Reorganisation and re-financing had been completed on the dates indicated nor do they purport to represent the results of operations for any future period or the financial condition at any future date.

136 Shareholders should read the whole of this Prospectus and not rely solely on the summarised financial information contained in this Part 12: ‘‘Unaudited Pro Forma Financial Information’’.

Net proceeds of the Unaudited Group as at Offer receivable by Pro Forma 30 June 2015 the Company Reorganisation Re-financing Total £’000 £’000 £’000 £’000 £’000 (Note 1) (Note 2) (Note 3) (Note 4) Assets Non-current assets Intangible assets ...... 69,125 — — — 69,125 Property, plant and equipment 652 — — — 652 Total non-current assets ..... 69,777 — — — 69,777 Current assets Trade and other receivables . . 66,893 — — — 66,893 Cash and cash equivalents . . . 62,125 6,408 (3,082) (6,978) 58,473 Total current assets ...... 129,018 6,408 (3,082) (6,978) 125,366 Total assets ...... 198,795 6,408 (3,082) (6,978) 195,143 Non-current liabilities Shareholder loans ...... (68,881) — 68,881 — — External bank debt ...... (13,838) — — 13,838 — Deferred tax liability ...... (8,937) — — — (8,937) Total non-current liabilities .. (91,656) — 68,881 13,838 (8,937) Current liabilities External bank debt ...... (3,140) — — (6,860) (10,000) Current income tax liabilities . (1,490) — — — (1,490) Other financial liabilities ..... (3,411) — — — (3,411) Trade and other payables .... (103,366) — — — (103,366) Total current liabilities ...... (111,407) — — (6,860) (118,267) Total liabilities ...... (203,063) — 68,881 6,978 (127,204) Net assets ...... (4,268) 6,408 65,799 — 67,939

Notes 1. The financial information has been extracted, without material adjustment, from the combined and consolidated financial information of the Group as at 30 June 2015 as set out in Section B of Part 11: ‘‘Historical Financial Information’’. 2. This column reflects the net proceeds of the Offer receivable by the Company being gross proceeds of £10 million receivable by the Company, less estimated fees and expenses in relation to the Offer of £2.7 million payable by the Company. In addition, the Exit Fee (estimated to be £902,656) will be paid by the Company to Inflexion 2010 General Partner Guernsey LP immediately following Admission pursuant to the Investment Agreements and in connection with the listing of the Company. The remaining new proceeds of £3,326,000 will be used by the Company to partly repay the existing external bank debt (see note 4). 3. This column reflects the net effect of the following adjustments relating to the Reorganisation as set out below:

Reorganisation a. The Company was incorporated on 17 August 2015 and, in connection with the Offer, the Reorganisation is due to take place immediately prior to Admission to result in the Company becoming the ultimate holding company of the Group and OTB Topco becoming the Company’s direct subsidiary. On incorporation and immediately prior to publication of this Prospectus, the share capital of the Company was £50,000, divided into one ordinary share of £1 and one redeemable preference share of £49,999, both of which were allotted to Inflexion. The consideration for the issue of the redeemable preference share on incorporation was an

137 undertaking by Inflexion to pay cash of £49,999, while the consideration for the issue of the ordinary share on incorporation was £1 which was paid in cash by Inflexion. As part of the Reorganisation, Inflexion shall pay the £49,999 outstanding in respect of its redeemable preference share in the Company, following which the redeemable preference share shall be immediately redeemed by the Company out of the proceeds of the Offer receivable by the Company. b. The insertion of the Company as a new holding company constitutes a group reorganisation and will be accounted for using merger accounting principles. The Reorganisation will not be effective until immediately prior to Admission and the consolidated financial statements will be presented as if the Company had always been part of the same group. c. As part of the Reorganisation, shareholder loan notes as at 30 June 2015 of £65,798,656 will be exchanged for shares. The accrued but unpaid interest thereon of £3,082,000 as at 30 June 2015 will be paid in cash. 4. This column reflects the re-financing that is taking place in connection with the Offer and Admission, being the repayment of the existing external bank debt of £16,978,000 (of which £3,140,000 is classified within current liabilities and £13,838,000 is classified within non-current liabilities as at 30 June 2015). This repayment will be refunded using a drawdown of £10,000,000 available at Admission under the new Second Lloyds Facility, and the remaining balance of £6,978,000 will be funded from the Group’s cash balance (having taken into account the remaining proceeds of the Offer). 5. No adjustment has been made to take account of trading results or other transaction undertaken by the Group since 30 June 2015.

138 SECTION B: ACCOUNTANTS’ REPORT ON PRO FORMA FINANCIAL INFORMATION

26AUG201506570176 The Directors On the Beach Group plc Park Square Bird Hall Lane Cheadle SK3 0XN Numis Securities Limited (the ‘‘Sponsor’’) The London Stock Exchange Building 10 Paternoster Square London EC4M 7LT 23 September 2015 Dear Sirs

On the Beach Group plc (the ‘‘Company’’) We report on the pro forma financial information (the ‘‘Pro Forma Financial Information’’) set out in section A of Part 12: ‘‘Unaudited Pro Forma Financial Information’’ of the Company’s prospectus dated 23 September 2015 (the ‘‘Prospectus’’) which has been prepared on the basis described in the notes to the Pro Forma Financial Information, for illustrative purposes only, to provide information about how the proposed Offer, Reorganisation and re-financing might have affected the financial information presented on the basis of the accounting policies to be adopted by the Company in preparing the financial statements for the period ending 30 September 2015. This report is required by item 7 of Annex II to the PD Regulation and is given for the purpose of complying with that PD Regulation and for no other purpose.

Responsibilities It is the responsibility of the directors of the Company to prepare the Pro Forma Financial Information in accordance with Annex II of the PD regulation. It is our responsibility to form an opinion, as required by item 7 of Annex II to the PD Regulation as to the proper compilation of the Pro Forma Financial Information and to report our opinion to you. In providing this opinion we are not updating or refreshing any reports or opinions previously made by us on any financial information used in the compilation of the Pro Forma Financial Information, nor do we accept responsibility for such reports or opinions beyond that owed to those to whom those reports or opinions were addressed by us at the dates of their issue. Save for any responsibility which we may have to those persons to whom this report is expressly addressed and for any responsibility arising under item 5.5.3R(2)(f) of the Prospectus Rules to any person as and to the extent there provided, to the fullest extent permitted by law we do not assume any responsibility and will not accept any liability to any other person for any loss suffered by any such other person as a result of, arising out of, or in connection with this report or our statement, required by and given solely for the purposes of complying with item 23.1 of Annex I to the PD, consenting to its inclusion in the Prospectus.

PricewaterhouseCoopers LLP, Benson House, 33 Wellington Street, Leeds, LS1 4JP T: +44 (0) 1132 894 000, F: +44 (0) 1132 894 460, www.pwc.uk

139 Basis of opinion We conducted our work in accordance with the Standards for Investment Reporting issued by the Auditing Practices Board in the United Kingdom. The work that we performed for the purpose of making this report, which involved no independent examination of any of the underlying financial information, consisted primarily of comparing the unadjusted financial information with the source documents, considering the evidence supporting the adjustments and discussing the Pro Forma Financial Information with the directors of the Company. We planned and performed our work so as to obtain the information and explanations we considered necessary in order to provide us with reasonable assurance that the Pro Forma Financial Information has been properly compiled on the basis stated and that such basis is consistent with the accounting policies of the Company. Our work has not been carried out in accordance with auditing standards or other standards and practices generally accepted in the United States of America and accordingly should not be relied upon as if it had been carried out in accordance with those standards and practices.

Opinion In our opinion: a) the Pro Forma Financial Information has been properly compiled on the basis stated; and b) such basis is consistent with the accounting policies of the Company.

Declaration For the purposes of Prospectus Rule 5.5.3 R(2)(f) we are responsible for this report as part of the Prospectus and we declare that we have taken all reasonable care to ensure that the information contained in this report is, to the best of our knowledge, in accordance with the facts and contains no omission likely to affect its import. This declaration is included in the Prospectus in compliance with item 1.2 of Annex I to the PD Regulation.

Yours faithfully

PricewaterhouseCoopers LLP Chartered Accountants

140 PART 13 DETAILS OF THE OFFER 1. SUMMARY OF THE OFFER This Part 13 should be read in conjunction with Part 4: ‘‘Expected Timetable of Principal Events and Offer Statistics’’. 52,173,912 Offer Shares are available under the Offer, comprising 5,434,782 New Shares to be issued by the Company and 46,739,130 Sale Shares to be sold by the Selling Shareholders. The Offer Price is 184 pence per Share. Shares other than the New Shares will represent 95.8 per cent. of the total issued share capital of the Company immediately following Admission. Under the Offer, the Offer Shares are being made available to certain institutional and other investors in the United Kingdom and elsewhere outside of the United States in reliance on Regulation S and in accordance with other applicable laws, and in the United States only to QIBs in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act. Certain restrictions that apply to the distribution of this Prospectus and the Shares being issued and sold under the Offer in certain jurisdictions are described in paragraph 50 of this Part 13: ‘‘Details of the Offer’’. When admitted to trading, the Shares will be registered with ISIN GB00BYM1K758 and SEDOL number BYM1K75 and will trade under the symbol ‘‘OTB’’. Admission is expected to take place and unconditional dealings in the Shares are expected to commence on the London Stock Exchange on 28 September 2015. The New Shares being issued by the Company will, on Admission, rank pari passu in all respects with, and will rank in full for all dividends and other distributions after that date declared, made or paid on, all Shares then in issue. The Sale Shares being sold by the Selling Shareholders will be sold together with the right to receive all dividends and other distributions after that date declared, made or paid on all Shares after Admission. The Shares will be freely transferable. Immediately following Admission, it is expected that 37.8 per cent. of the Company’s issued ordinary share capital will be held in ‘‘public hands’’ (within the meaning of paragraph 6.1.19R of the Listing Rules).

2. ALLOCATION AND PRICING All Shares sold or issued pursuant to the Offer will be sold or issued, payable in full, at the Offer Price. Allocations under the Offer and the Offer Price were determined by the Company and Inflexion in consultation with Numis. A number of factors were considered in determining the Offer Price and the basis of allocation under the Offer, including the level and nature of demand for Shares and the objective of encouraging the development of an orderly after-market in the Shares. Upon accepting any allocation, prospective investors are contractually committed to acquire the number of Shares allocated to them at the Offer Price and, to the fullest extent permitted by law, are deemed to have agreed not to exercise any rights to rescind or terminate, or withdraw from, such commitment. The rights attaching to the Shares will be uniform in all respects and they will form a single class for all purposes. Each investor is required to pay the Offer Price for the Shares sold or issued to such investor in such manner as directed by Numis. Liability for stamp duty and stamp duty reserve tax is described in Part 14: ‘‘Taxation’’.

3. DEALINGS AND ADMISSION It is expected that dealings in the Shares will commence on a conditional basis on the London Stock Exchange at 8.00 a.m. on 23 September 2015. The earliest date for settlement of such dealings will be 28 September 2015. All dealings in the Shares prior to the commencement of unconditional dealings will be on a ‘‘when issued basis’’, will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned. Admission is expected to become effective, and unconditional dealings in the Shares are expected to commence on the London Stock Exchange, at 8.00 a.m. on 28 September 2015. It is expected that Shares allocated to investors will be delivered in uncertificated form and settlement will take place through

141 CREST on 28 September 2015 or as soon thereafter as is practicable. Temporary documents of title will not be issued.

4. CREST CREST is a paperless settlement system enabling securities to be transferred and held by electronic means rather than by a certificate or written instrument. The system is designed to reduce the costs of settlement and facilitate the processing of settlements and the updating of registers, through an electronic settlement system. Shares held by the Company’s shareholders in CREST will be in electronic form and evidence of title to Shares will be established on an electronic register maintained by the Registrar which can only be altered by an electronic instruction sent through CREST. It will be possible for shareholders in CREST to transfer their Shares without executing written stock transfer forms. With effect from Admission, the Articles will permit the holding of Shares under the CREST system. The Company has applied for the Shares to be admitted to CREST with effect from Admission. Accordingly, settlement of transactions in the Shares following Admission may take place within the CREST system if any shareholder so wishes. CREST is a voluntary system and holder of Shares who wish to receive and retain share certificates will be able to do so. An investor applying for Shares under the Offer may, however, elect to receive Shares in uncertificated form if such investor is a system-member (as defined in the CREST Regulations) in relation to CREST.

5. UNDERWRITING ARRANGEMENTS The Company, the Directors, the Selling Shareholders and Numis entered into the Underwriting Agreement pursuant to which Numis agreed, subject to certain conditions, to procure subscribers for the New Shares to be issued by the Company and purchasers for the Sale Shares to be sold by the Selling Shareholders in the Offer, or failing which to subscribe for or purchase such Shares themselves, at the Offer Price. The Underwriting Agreement provides that the obligations of Numis are conditional upon the satisfaction of certain conditions, including Admission occurring by no later than 8.00 a.m. on 28 September 2015 or such later time and/or date as the Company and Numis may agree (not being later than 1 October 2015). Further details of the terms of the Underwriting Agreement are set out in paragraph 10 of Part 15: ‘‘Additional Information’’.

6. LOCK-UP ARRANGEMENTS Pursuant to the Underwriting Agreement, the Executive Directors and certain persons connected with them and Inflexion have each undertaken, subject to certain exceptions, that they will be subject to certain lock-up arrangements with respect to the Shares and related securities. Each of the Executive Directors and certain persons connected with them and Inflexion has given certain customary representations, warranties and undertakings to Numis in respect of the lock-up arrangements. Further details of the lock-up arrangements are set out in paragraph 10 of Part 15: ‘‘Additional Information’’.

7. SELLING AND TRANSFER RESTRICTIONS Other than in the United Kingdom, no action has been or will be taken in any jurisdiction that would permit a public offering of the Offer Shares pursuant to the Offer, or possession or distribution of this Prospectus or any other offering material or application relating to the Offer Shares in any country or jurisdiction where action for that purpose is required. Accordingly, the Offer Shares may not be offered or sold, directly or indirectly, in connection with the Offer and neither this Prospectus nor any other offering material or advertisement in connection with the Offer Shares may be distributed or published in or from any country or jurisdictions, except in circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdiction. This Prospectus does not constitute an offer to subscribe for or purchase any of the Offer Shares pursuant to the Offer to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction. The distribution of this Prospectus and the Offer in certain jurisdictions may be restricted by law and therefore persons into whose possession this Prospectus comes should inform themselves about and

142 observe any restrictions, including those set out in the paragraphs that follow. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

7.1 European Economic Area In relation to each Member State which has implemented the Prospectus Directive (each, a ‘‘Relevant Member State’’) no Shares have been offered or will be offered pursuant to the Offer to the public in that Relevant Member State prior to the publication of a prospectus in relation to the Shares which has been approved by the competent authority in that Relevant Member State or, where appropriate, approved in another Relevant Member State and notified to the competent authority in that Relevant Member State, all in accordance with the Prospectus Directive, except that offers of Shares may be made to the public in that Relevant Member State at any time under the following exemptions under the Prospectus Directive, if they are implemented in that Relevant Member State: (a) to any legal entity which is a ‘‘qualified investor’’ as defined under the Prospectus Directive (‘‘Qualified Investor’’); (b) to fewer than 100, or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than Qualified Investors as defined in the Prospectus Directive) subject to obtaining the prior consent of Numis for any such offer; or (c) in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of Shares shall result in a requirement for the publication of a prospectus pursuant to Article 3 of the Prospectus Directive or any measure implementing the Prospectus Directive in a Relevant Member State. For the purposes of this provision, the expression an ‘‘offer to the public’’ in relation to any Shares in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the Offer and any Shares to be offered so as to enable a prospective investor to decide to subscribe for any Shares, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State. The expression ‘‘Prospectus Directive’’ means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in each Relevant Member State and the expression ‘‘2010 PD Amending Directive’’ means Directive 2010/73/EU. In the case of any Shares being offered to a financial intermediary as that term is used in Article 3(2) of the Prospectus Directive, such financial intermediary will also be deemed to have represented, acknowledged and agreed that the Shares acquired by it in the Offer have not been acquired on a nondiscretionary basis on behalf of, nor have they been acquired with a view to their offer or resale to persons in circumstances which may give rise to an offer of any Shares to the public other than their offer or resale in a Relevant Member State to Qualified Investors as so defined or in circumstances in which the prior consent of Numis has been obtained to each such proposed offer or resale. The Company, Numis and their affiliates, and others will rely upon the truth and accuracy of the foregoing representation, acknowledgement and agreement. Notwithstanding the above, a person who is not a Qualified Investor and who has notified Numis of such fact in writing may, with the prior consent of Numis, be permitted to acquire Shares in the Offer.

7.2 United Kingdom In the United Kingdom, this Prospectus is being distributed to, and is directed only at, ‘‘qualified investors’’ (as defined in the Prospectus Directive) who are also: (i) persons having professional experience in matters relating to investments falling within the definition ‘‘investment professionals’’ in Article 19(5) of The Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘‘Order’’); or (ii) high net worth bodies corporate, unincorporated associations and partnerships and trustees of high value trusts as described in Article 49(2) of the Order and other persons to whom it may lawfully be communicated. Any investment or investment activity to which this communication relates is only available to and will only be engaged in with such persons and persons within the United Kingdom who receive this Prospectus (other than persons falling within (i) and (ii) above) should not rely on or act upon this Prospectus.

143 7.3 United States The Company has not been, and will not be, registered under the Investment Company Act and, as such, investors will not be entitled to the benefits of the Investment Company Act. No offer, purchase, sale or transfer of the Shares may be made except under circumstances which will not result in the Company being required to register as an investment company under the Investment Company Act. The Shares have not been and will not be registered under the Securities Act, or with any securities commission or regulatory authority of any state or other jurisdiction of the United States. Accordingly, the Shares will constitute ‘‘restricted securities’’ within the meaning of Rule 144(a)(3) of the Securities Act and may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in, into or from the United States except pursuant to a registration statement that has been declared effective under the Securities Act or an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state of the United States. The Offer Shares are being offered and sold: (i) outside the United States in reliance on Regulation S; and (ii) in the United States only to a person the seller or any persons acting on its behalf reasonably believes to be a QIB in reliance on Rule 144A or another exemption from the registration requirements of the Securities Act. In addition, until 40 days after the commencement of the offering of the Offer Shares, an offer or sale of Offer Shares in the United States by any dealer (whether or not participating in the offering) may violate the registration requirements of the Securities Act if such offer or sale is made otherwise than in accordance with Rule 144A.

7.4 Australia This document: (a) does not constitute a prospectus or a product disclosure statement under the Corporations Act 2001 of the Commonwealth of Australia (the ‘‘Australia Corporations Act’’); (b) does not purport to include the information required of a prospectus under Part 6 D.2 of the Australia Corporations Act or a product disclosure statement under Part 7.9 of the Australia Corporations Act; (c) has not been, nor will it be, lodged as a disclosure document with the Australian Securities and Investments Commission (‘‘ASIC’’), the Australian Securities Exchange operated by ASX Limited or any other regulatory body or agency in Australia; and (d) may not be provided in Australia other than to select investors (‘‘Exempt Investors’’) who are able to demonstrate that they: (i) fall within one or more of the categories of investors under section 708 of the Australia Corporations Act to whom an offer may be made without disclosure under Part 6 D.2 of the Australia Corporations Act; and (ii) are ‘‘wholesale clients’’ for the purpose of section 761G of the Australia Corporations Act. The Offer Shares may not be directly or indirectly offered for subscription or purchased or sold, and no invitations to subscribe for, or buy, the Offer Shares may be issued, and no draft or definitive offering memorandum, advertisement or other offering material relating to any Offer Shares may be distributed, received or published in Australia, except where disclosure to investors is not required under Chapters 6D and 7 of the Australia Corporations Act or is otherwise in compliance with all applicable Australian laws and regulations. By submitting an application for the Offer Shares, each purchaser of or subscriber for Offer Shares represents and warrants to the Company, the Selling Shareholders, Numis and their affiliates that such purchaser or subscriber is an Exempt Investor. As any offer of Offer Shares under this Prospectus, any supplement or the accompanying prospectus or other document will be made without disclosure in Australia under Parts 6D.2 and 7.9 of the Australia Corporations Act, the offer of those Offer Shares for resale in Australia within 12 months may, under the Australia Corporations Act, require disclosure to investors if none of the exemptions in the Australia Corporations Act applies to that resale. By applying for the Offer Shares, each purchaser of or subscriber for Offer Shares undertakes to the Company, the Selling Shareholders and Numis that such purchaser or subscriber will not, for a period of 12 months from the date of issue or purchase of the Offer Shares, offer,

144 transfer, assign or otherwise alienate those Offer Shares to investors in Australia except in circumstances where disclosure to investors is not required under the Australia Corporations Act or where a compliant disclosure document is prepared and lodged with ASIC.

8. TERMS AND CONDITIONS OF THE OFFER Each investor who applies to acquire the Offer Shares will be bound by the following terms and conditions.

8.1 Agreement to acquire Offer Shares Conditional on: (i) Admission occurring and becoming effective by 8.00 a.m. on or prior to 28 September 2015 (or such later time and/or date as Numis and the Company may agree (not being later than 1 October 2015)); and (ii) the investor being allocated Offer Shares, an investor who has applied for Offer Shares agrees to acquire those Offer Shares allocated to it by Numis (such number of Offer Shares not to exceed the number applied for by such investor) at the Offer Price. To the fullest extent permitted by law, each investor acknowledges and agrees that it will not be entitled to exercise any remedy of rescission at any time. This does not affect any other rights an investor may have. Each such investor is deemed to acknowledge receipt and understanding of this Prospectus and in particular the risk and investment warnings contained in this Prospectus..

8.2 Payment for Offer Shares Each investor must pay the Offer Price for the Offer Shares issued to the investor in the manner directed by Numis. If any investor fails to pay as so directed by Numis, the relevant investor’s application for Offer Shares may be rejected. If Admission does not occur, subscription monies will be returned without interest at the risk of the applicant.

8.3 Representations, warranties, undertakings, agreements and acknowledgements Each investor and, in the case of paragraph (l) below, a person who agrees on behalf of an investor, to purchase Offer Shares under the Offer and/or who authorises Numis to notify the investor’s name to the Registrar, will be deemed to represent, warrant, undertake, agree and, acknowledge to Numis, the Registrar and the Company that: (a) in agreeing to purchase Offer Shares, the investor is relying solely on this document, any supplementary prospectus and any regulatory announcement issued by or on behalf of the Company on or after the date hereof and prior to Admission, and not on any other information or representation concerning the Company, the Selling Shareholders or the Offer. The investor agrees that none of the Company, Numis or the Registrar nor any of their respective officers or directors will have any liability for any other information or representation. The investor irrevocably and unconditionally waives any rights it may have in respect of any other information or representation; (b) apart from the responsibility and liabilities, if any, that may be imposed on Numis by FSMA or the regulatory regime established under it, or under the regulatory regime of any jurisdiction where the exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, the content of this document is exclusively the responsibility of the Company and the Directors and none of Numis, the Registrar nor any person acting on their behalf nor any of their respective affiliates is responsible for or shall have any liability for any information, representation or statement contained in this document or any information published by or on behalf of the Company, and none of Numis, the Registrar nor any person acting on their behalf nor any of their respective affiliates will be liable for any decision by an investor to participate in the Offer based on any information, representation or statement contained in this document or otherwise; (c) it has not relied on any information given or representations, warranties or statements made by the Company, the Directors, the Selling Shareholders, any of the Numis, the Registrar or any other person in connection with the Offer other than information contained in this document and/or any supplementary prospectus or regulatory announcement issued by or on behalf of the Company on or after the date hereof and prior to Admission. The investor irrevocably and unconditionally waives any rights it may have in respect of any other information or representation;

145 (d) Numis is not making any recommendations to the investor or advising it regarding the suitability or merits of any transaction it may enter into in connection with the Offer and the investor acknowledges that participation in the Offer is on the basis that it is not and will not be a client of Numis and that Numis is acting for the Company and no one else in connection with the Offer and will not be responsible to anyone other than its clients for the protections afforded to its clients, nor for providing advice in relation to the Offer, the contents of this document or any transaction, arrangements or other matters referred to herein, or in respect of any representations, warranties, undertakings or indemnities contained in the Underwriting Agreement or for the exercise or performance of Numis’ rights and obligations under the Underwriting Agreement, including any right to waive or vary any condition or exercise any termination right contained therein; (e) it has complied with its obligations in connection with money laundering and terrorist financing under the Proceeds of Crime Act 2002, the Terrorism Act 2000 and the Money Laundering Regulations 2003, and applicable legislation in any other jurisdiction (together, the ‘‘Money Laundering Regulations’’) and, if it is making payment on behalf of a third party, it has obtained and recorded satisfactory evidence to verify the identity of the third party as required by the Money Laundering Regulations; (f) it is entitled to purchase the Offer Shares under the laws of all relevant jurisdictions which apply to it; it has fully observed such laws and obtained all governmental and other consents which may be required under such laws and complied with all necessary formalities; it has paid all issue, transfer or other taxes due in connection with its acceptance in any jurisdiction; and it has not taken any action or omitted to take any action which will or may result in any of Numis, the Company, the Selling Shareholders, the Registrar or any of their respective directors, officers, agents, employees or advisers acting in breach of the legal and regulatory requirements of any jurisdiction in connection with the Offer or, if applicable, its acceptance of or participation in the Offer; (g) in the case of a person who agrees on behalf of an investor, to purchase Offer Shares under the Offer and/or who authorises Numis to notify the investor’s name to the Registrar, that person represents and warrants that he has authority to do so on behalf of the investor; and (h) it will pay to Numis (or as it may direct) any amounts due from it in accordance with this document on the due time and date set out herein. The Company, the Selling Shareholders and Numis will rely upon the truth and accuracy of the foregoing representations, warranties, undertakings, agreements and acknowledgements. If any of the foregoing representations, warranties, undertakings, agreements and acknowledgements are no longer accurate or have not been complied with, the investor shall promptly notify the Company.

8.4 Miscellaneous The rights and remedies of the Company, the Selling Shareholders, Numis and the Registrar under these terms and conditions are in addition to any rights and remedies which would otherwise be available to each of them and the exercise or partial exercise of one will not prevent the exercise of others. On application, if an investor is a discretionary fund manager, that investor may be asked to disclose in writing or orally to Numis the jurisdictions in which its funds are managed or owned. All documents will be sent at the investor’s risk. They may be sent by post to such investor at an address notified to Numis. The contract to acquire Offer Shares, the appointments and authorities mentioned herein and the representations, warranties and undertakings set out herein will be governed by, and construed in accordance with, English law. For the exclusive benefit of Numis, the Company, the Selling Shareholders and the Registrar, each investor irrevocably submits to the exclusive jurisdiction of the English courts in respect of these matters. This does not prevent an action being taken against an investor in any other jurisdiction. In the case of a joint agreement to acquire Offer Shares, references to an ‘‘investor’’ in these terms and conditions are to each of the investors who are a party to that joint agreement and their liability is joint and several. Numis and the Company expressly reserve the right to modify the terms of the Offer (including, without limitation, its timetable and settlement) at any time before closing.

146 PART 14 TAXATION 1. UK TAXATION The following is a summary of certain UK tax considerations relating to an investment in the Shares. It assumes that the Company is and remains resident for applicable tax purposes solely in the United Kingdom. The comments set out below are based on current UK law and published HMRC practice (which is not binding on HMRC), as at the date of this Prospectus, and which may be subject to change, possibly with retrospective effect. They are intended as a general guide and apply only to Shareholders resident and, in the case of individuals, domiciled for tax purposes in the United Kingdom (except insofar as express reference is made to the treatment of non-UK residents), who hold their Shares as an investment and who are the absolute legal and beneficial owners of them (and the shares are not held through an Individual Savings Account or a Self Invested Personal Pension). The discussion does not address all possible tax consequences relating to an investment in the Shares. Certain categories of Shareholders, including but not limited to those carrying on certain financial activities, those subject to specific tax regimes or benefitting from certain reliefs or exemptions, those connected with the Company and those for whom the Shares are employment-related securities, may be subject to special rules and this summary does not apply to such Shareholders. Shareholders or prospective Shareholders who are in any doubt about their tax position and/or who are resident or otherwise subject to taxation in a jurisdiction outside the United Kingdom, should consult their own professional advisers immediately.

1.1 Taxation of dividends (a) The Company will not be required to withhold amounts on account of UK tax at source when paying a dividend. (b) A UK resident individual Shareholder who receives a dividend from the Company will be entitled to a tax credit which may be set off against the Shareholder’s total income tax liability. The tax credit will be equal to 10 per cent. of the aggregate of the dividend and the tax credit (the ‘‘gross dividend’’). Such an individual Shareholder who is liable to income tax at the basic rate will be subject to tax on the dividend at the rate of 10 per cent. (2015/16) of the gross dividend, so that the tax credit will satisfy in full such Shareholder’s liability to income tax on the dividend. In the case of such an individual Shareholder who is liable to income tax at the higher rate, the tax credit will be set against but not fully match the Shareholder’s tax liability on the gross dividend and such Shareholder will have to account for additional income tax equal to 22.5 per cent. (2015/16) of the gross dividend (which is also equal to 25 per cent. of the cash dividend received) to the extent that the gross dividend when treated as the top slice of the Shareholder’s income falls above the threshold for higher rate income tax. In the case of such an individual Shareholder who is subject to income tax at the additional rate, the tax credit will also be set against but not fully match the Shareholder’s liability on the gross dividend and such Shareholder will have to account for additional income tax equal to 27.5 per cent. (2015/16) of the gross dividend (which is also equal to approximately 30.6 per cent. of the cash dividend received) to the extent that the gross dividend when treated as the top slice of the Shareholder’s income falls above the threshold for additional rate income tax. (c) A UK resident individual Shareholder who is not liable to income tax in respect of the gross dividend and other UK resident taxpayers who are not liable to UK tax on dividends, including pension funds and charities, will not be entitled to claim repayment of the tax credit attaching to the dividend. (d) Shareholders that are within the charge to corporation tax will be subject to corporation tax on dividends paid by the Company, unless (subject to special rules for such Shareholders that are small companies) the dividends fall within an exempt class and certain other conditions are met. Each Shareholder’s position will depend on its own particular circumstances, although it would normally be expected that the dividends paid by the Company would fall within an exempt class. Regardless of whether dividends fall within an exempt class, such Shareholders will not be entitled to a tax credit attaching to the dividend. (e) Non-UK resident Shareholders will not generally be able to claim repayment from HMRC of any part of the tax credit attaching to dividends paid by the Company. A shareholder resident outside the United Kingdom may also be subject to foreign taxation on dividend income under local law.

147 Shareholders who are not resident for tax purposes in the United Kingdom should obtain their own tax advice concerning tax liabilities on dividends received from the Company. (f) On 8 July 2015, the Chancellor announced in Summer Budget 2015 that legislation will be implemented, taking effect from April 2016, to abolish the current dividend tax credit for individuals. It is proposed that it will be replaced with a new tax-free allowance of £5,000 in dividend income per tax year. Dividend income in excess of the tax-free allowance will be taxed at the following rates: (i) 7.5 per cent. (basic rate taxpayers); (ii) 32.5 per cent. (high rate taxpayers); and (iii) 38.1 per cent. (additional rate taxpayers). The new legislation is expected to form part of the Finance Bill 2016.

1.2 Taxation of Capital Gains (a) Individual and corporate Shareholders who are resident in the United Kingdom may, depending on their circumstances (including the availability of allowances, exemptions or reliefs) be liable to UK taxation on capital gains in respect of any gains arising from a sale or other disposal of Shares. (b) An individual Shareholder who is only temporarily resident outside the United Kingdom may, under anti-avoidance legislation, still be liable to UK tax on any capital gain realised (subject to available allowances, exemptions or reliefs) upon a sale or other disposal of Shares. (c) Shareholders who are not resident in the United Kingdom and, in the case of an individual Shareholder, not temporarily non-resident, will not be liable for UK tax on capital gains realised on a sale or other disposal of Shares unless such Shares are used, held or acquired for the purposes of a trade, profession or vocation carried on in the United Kingdom through a branch or agency or, in the case of a corporate Shareholder, through a permanent establishment. (d) Shareholders who are not resident in the United Kingdom may be subject to foreign taxation on any gain under local law.

1.3 UK inheritance tax Shares will be assets situated in the United Kingdom for the purposes of UK inheritance tax. A gift of such assets by, or upon the death of, an individual holder of such assets may (subject to certain exemptions and reliefs) give rise to a liability to UK inheritance tax, even if the holder is or was neither domiciled in the United Kingdom nor deemed to be domiciled there, under certain rules relating to long residence or previous domicile. Generally, UK inheritance tax is not chargeable on gifts to individuals if the transfer is made more than seven complete years prior to death of the donor. For inheritance tax purposes, a transfer of assets at less than full market value may be treated as a gift and particular rules apply to gifts where the donor reserves or retains some benefit. Special rules also apply to close companies and to trustees of settlements who hold Shares bringing them within the charge to inheritance tax. Holders of Shares should consult an appropriate professional adviser if they make a gift of any kind or intend to hold any Shares through a trust or similar indirect arrangements. They should also seek professional advice in a situation where there is potential for a double charge to UK inheritance tax and an equivalent tax in another country or if they are in any doubt about their UK inheritance tax position.

1.4 Stamp duty and stamp duty reserve tax (‘‘SDRT’’) The statements in this section are intended as a general guide to the current UK stamp duty and SDRT position. Investors should note that certain categories of person are not liable to stamp duty or SDRT and others may be liable at a higher rate or may, although not primarily liable for tax, be required to notify and account for SDRT under the Stamp Duty Reserve Tax Regulations 1986.

1.5 General (a) Except in relation to depositary receipt systems and clearance services (to which the special rules outlined below apply), no stamp duty or SDRT will arise on the issue of Shares in registered form by the Company.

148 (b) An unconditional agreement to transfer Shares will normally give rise to a charge to SDRT at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer. SDRT is a liability of the purchaser. (c) Instruments transferring Shares will generally be subject to stamp duty at the rate of 0.5 per cent. of the consideration given for the transfer (the amount of duty to be rounded up to the next £5, if necessary). The purchaser normally pays the stamp duty. An exemption from stamp duty is available on an instrument transferring the Shares where the amount or value of the consideration is £1,000 or less, and it is certified on the instrument that the transaction effected does not form part of a larger transaction or series of transactions in respect of which the aggregate amount or value of the consideration exceeds £1,000. (d) If a duly stamped or exempt transfer completing an agreement to transfer Shares is produced within six years of the date on which the agreement is made (or, if the agreement is conditional, the date on which the agreement becomes unconditional), any SDRT paid is generally repayable, normally with interest, and otherwise the SDRT charge is cancelled.

1.6 CREST Paperless transfers of Shares within the CREST system are generally liable to SDRT, rather than stamp duty, at the rate of 0.5 per cent. of the amount or value of the consideration payable. CREST is obliged to collect SDRT on relevant transactions settled within the CREST system. Deposits of Shares into CREST will not generally be subject to SDRT or stamp duty, unless the transfer into CREST is itself for consideration.

1.7 Depositary receipt systems and clearance services Following the European Court of Justice decision in C-569/07 HSBC Holdings Plc and Vidacos Nominees Limited v The Commissioners for Her Majesty’s Revenue & Customs and the First-tier Tax Tribunal decision in HSBC Holdings Plc and The Bank of New York Mellon Corporation v The Commissioners for Her Majesty’s Revenue & Customs, HMRC has confirmed that 1.5 per cent. SDRT is no longer payable when new shares are issued to a clearance service or depositary receipt system. Where Shares are transferred (as opposed to issued) (a) to, or to a nominee or an agent for, a person whose business is or includes the provision of clearance services or (b) to, or to a nominee or an agent for, a person whose business is or includes issuing depositary receipts, stamp duty or SDRT will generally be payable at the higher rate of 1.5 per cent. of the amount or value of the consideration given (rounded up in the case of stamp duty, if necessary, to the next £5) or, in certain circumstances, the value of the Shares. Any liability for stamp duty or SDRT in respect of a transfer into a clearance service or depositary receipt system, or in respect of a transfer within such a service, which does arise, will strictly be accountable by the clearance service or depositary receipt system operator or their nominee, as the case may be, but will, in practice, be payable by the participants in the clearance service or depositary receipt system. There is an exception from the 1.5 per cent. charge on the transfer to, or to a nominee or agent for, a clearance service where the clearance service has made and maintained an election under section 97A(1) of the Finance Act 1986, which has been approved by HMRC. In these circumstances, SDRT rather than stamp duty at the rate of 0.5 per cent. of the amount or value of the consideration payable for the transfer will arise on any transfer of Shares into such an account and on subsequent agreements to transfer such Shares within such account. The sale of Shares by the Selling Shareholders under the Offer will give rise to a charge to stamp duty and/or SDRT as described above. The Selling Shareholders will meet the liability to stamp duty and/or SDRT of initial purchasers of Shares pursuant to the Offer at the normal rate 0.5 per cent that will arise on such sale under the Offer. Any person who is in any doubt as to his or her taxation position or who is liable to taxation in any jurisdiction other than the United Kingdom should consult his or her professional advisers.

2. US TAXATION The following is a summary of certain material US federal income tax considerations relating to the acquisition, ownership and disposition of the Shares by a US holder (as defined below). This summary addresses only the US federal income tax considerations for US holders that are initial purchasers of the Shares pursuant to the offering

149 and that will hold such Shares as capital assets for US federal income tax purposes. This summary does not address all US federal income tax matters that may be relevant to a particular US holder. This summary does not address tax considerations applicable to a holder of Shares that may be subject to special tax rules including, without limitation, the following: • banks, financial institutions or insurance companies; • brokers, dealers or traders in securities, currencies, commodities, or notional principal contracts; • tax-exempt entities or organisations, including an ‘‘individual retirement account’’ or ‘‘Roth IRA’’ as defined in Section 408 or 408A of the Code (as defined below), respectively; • real estate investment trusts, regulated investment companies or grantor trusts; • persons that hold the Shares as part of a ‘‘hedging,’’ ‘‘integrated’’ or ‘‘conversion’’ transaction or as a position in a ‘‘straddle’’ for US federal income tax purposes; • partnerships (including entities classified as partnerships for US federal income tax purposes) or other pass-through entities, or persons that will hold the Shares through such an entity; • certain former citizens or long term residents of the United States; • holders that own directly, indirectly, or through attribution 10 per cent. or more of the voting power or value of the Shares and shares; and • holders that have a ‘‘functional currency’’ for US federal income tax purposes other than the US dollar. Further, this summary does not address the US federal estate, gift, or alternative minimum tax considerations, or any US state, local, or non-US tax considerations of the acquisition, ownership and disposition of the Shares. This description is based on the US Internal Revenue Code of 1986, as amended (the ‘‘Code’’); existing, proposed and temporary US Treasury Regulations promulgated thereunder, administrative and judicial interpretations thereof; and the income tax treaty between the United Kingdom of Great Britain and Northern Ireland and the United States in each case as in effect and available on the date hereof. All the foregoing is subject to change, which change could apply retroactively, and to differing interpretations, all of which could affect the tax considerations described below. There can be no assurances that the US Internal Revenue Service (the ‘‘IRS’’) will not take a contrary or different position concerning the tax consequences of the acquisition, ownership and disposition of the Shares or that such a position would not be sustained. Holders should consult their own tax advisers concerning the US federal, state, local and non-US tax consequences of acquiring, owning, and disposing of the Shares in their particular circumstances. For the purposes of this summary, a ‘‘US holder’’ is a beneficial owner of Shares that is (or is treated as), for US federal income tax purposes: • an individual who is a citizen or resident of the United States; • a corporation, or other entity that is treated as a corporation for US federal income tax purposes, created or organised in or under the laws of the United States, any state thereof, or the District of Columbia; • an estate, the income of which is subject to US federal income taxation regardless of its source; or • a trust, if a court within the United States is able to exercise primary supervision over its administration and one or more US persons have the authority to control all of the substantial decisions of such trust or has a valid election in effect under applicable US Treasury Regulations to be treated as a United States person. If a partnership (or any other entity treated as a partnership for US federal income tax purposes) holds Shares, the US federal income tax consequences relating to an investment in the Shares will depend in part upon the status of the partner and the activities of the partnership. Such a partner or partnership should consult its tax advisor regarding the US federal income tax considerations of acquiring, owning and disposing of the Shares in its particular circumstances. As indicated below, this discussion is subject to US federal income tax rules applicable to a ‘‘passive foreign investment company,’’ or a PFIC. Persons considering an investment in the Shares should consult their own tax advisors as to the particular tax consequences applicable to them relating to the acquisition, ownership and disposition of the Shares, including the applicability of US federal, state and local tax laws and non-US tax laws.

150 2.1 Distributions Subject to the discussion under the heading ‘‘Passive Foreign Investment Company Considerations’’ below, the gross amount of any distribution (before reduction for any amounts withheld in respect of UK withholding tax) actually or constructively received by a US holder with respect to Shares will be taxable to the US holder as a dividend to the extent of the US holder’s pro rata share of the Company’s current and accumulated earnings and profits as determined under US federal income tax principles. Distributions in excess of earnings and profits will be non-taxable to the US holder to the extent of, and will be applied against and reduce, the US holder’s adjusted tax basis in the Shares. Distributions in excess of earnings and profits and such adjusted tax basis will generally be taxable to the US holder as either long-term or short-term capital gain depending upon whether the US holder has held the Shares for more than one year as of the time such distribution is received. However, since the Company does not calculate its earnings and profits under US federal income tax principles, it is expected that any distribution will be reported as a dividend, even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above. Non-corporate US holders may qualify for the preferential rates of taxation with respect to dividends on Shares applicable to long-term capital gains (i.e., gains from the sale of capital assets held for more than one year) applicable to qualified dividend income (as discussed below) if the Company is a ‘‘qualified foreign corporation’’ and certain other requirements (discussed below) are met. A non-United States corporation (other than a corporation that is classified as a PFIC for the taxable year in which the dividend is paid or the preceding taxable year) generally will be considered to be a qualified foreign corporation if it is eligible for the benefits of a comprehensive tax treaty with the United States which the Secretary of Treasury of the United States determines is satisfactory for purposes of this provision and which includes an exchange of information provision. The Company, which is incorporated under the laws of the United Kingdom, believes that it qualifies as a resident of the United Kingdom for purposes of, and is eligible for the benefits of, the Convention between the Government of the United States of America and the Government of the United Kingdom and Northern Ireland for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Gains, signed on July 24, 2001, or the US-UK Tax Treaty, although there can be no assurance in this regard. Further, the IRS has determined that the US-UK Tax Treaty is satisfactory for purposes of the qualified dividend rules and that it includes an exchange-of-information program. Therefore, subject to the discussion under the heading ‘‘Passive Foreign Investment Company Considerations’’ below, such dividends will generally be ‘‘qualified dividend income’’ in the hands of individual US holders, provided that a holding period requirement (more than 60 days of ownership, without protection from the risk of loss, during the 121-day period beginning 60 days before the ex-dividend date) and certain other requirements are met. The dividends will not be eligible for the dividends-received deduction generally allowed to corporate US holders. A US holder generally may claim the amount of any UK withholding tax as either a deduction from gross income or a credit against US federal income tax liability. However, the foreign tax credit is subject to numerous complex limitations that must be determined and applied on an individual basis. Generally, the credit cannot exceed the proportionate share of a US holder’s US federal income tax liability that such US holder’s taxable income bears to such US holder’s worldwide taxable income. In applying this limitation, a US holder’s various items of income and deduction must be classified, under complex rules, as either ‘‘foreign source’’ or ‘‘US source.’’ In addition, this limitation is calculated separately with respect to specific categories of income. The amount of a distribution with respect to the Shares that is treated as a ‘‘dividend’’ may be lower for US federal income tax purposes than it is for UK income tax purposes, potentially resulting in a reduced foreign tax credit for the US holder. Each US holder should consult its own tax advisors regarding the foreign tax credit rules. In general, the amount of a distribution paid to a US holder in a foreign currency will be the dollar value of the foreign currency calculated by reference to the spot exchange rate on the day the US holder receives the distribution, regardless of whether the foreign currency is converted into US dollars at that time. Any foreign currency gain or loss a US holder realises on a subsequent conversion of foreign currency into US dollars will be US source ordinary income or loss. If dividends received in a foreign currency are converted into US dollars on the day they are received, a US holder should not be required to recognise foreign currency gain or loss in respect of the dividend.

151 2.2 Sale, exchange or other taxable disposition of the Shares A US holder will generally recognise gain or loss for US federal income tax purposes upon the sale, exchange or other taxable disposition of Shares in an amount equal to the difference between the US dollar value of the amount realised from such sale or exchange and the US holder’s tax basis for those Shares. Subject to the discussion under the heading ‘‘Passive Foreign Investment Company Considerations’’ below, this gain or loss will generally be a capital gain or loss. The adjusted tax basis in the Shares generally will be equal to the cost of such Shares. Capital gain from the sale, exchange or other taxable disposition of Shares of a non-corporate US holder is generally eligible for a preferential rate of taxation applicable to capital gains, if the non-corporate US holder’s holding period determined at the time of such sale, exchange or other taxable disposition for such Shares exceeds one year (i.e., such gain is long-term taxable gain). The deductibility of capital losses for US federal income tax purposes is subject to limitations under the Code. Any such gain or loss that a US holder recognises generally will be treated as US source income or loss for foreign tax credit limitation purposes.

2.3 Medicare tax Certain US holders that are individuals, estates or trusts are subject to a 3.8 per cent. tax on all or a portion of their ‘‘net investment income,’’ which may include all or a portion of their dividend income and net gains from the disposition of Shares. Each US holder that is an individual, estate or trust is urged to consult its tax advisors regarding the applicability of the Medicare tax to its income and gains in respect of its investment in the Shares.

2.4 Passive foreign investment company considerations If the Company is classified as a passive foreign investment company (‘‘PFIC’’) in any taxable year, a US holder would be subject to special rules generally intended to reduce or eliminate any benefits from the deferral of US federal income tax that a US holder could derive from investing in a non-US company that does not distribute all of its earnings on a current basis. A corporation organised outside the United States generally will be classified as a PFIC for US federal income tax purposes in any taxable year in which, after applying certain look-through rules with respect to the income and assets of its subsidiaries, either: (i) at least 75 per cent. of its gross income is ‘‘passive income’’ or (ii) at least 50 per cent. of the average quarterly value of its total gross assets (which, assuming the Company is not a controlled foreign corporation for the year being tested, would be measured by the fair market value of the Company’s assets, and for which purpose the total value of the Company’s assets may be determined in part by the market value of the Shares and the Company’s ordinary shares, which are subject to change) is attributable to assets that produce ‘‘passive income’’ or are held for the production of ‘‘passive income.’’ Passive income for this purpose generally includes dividends, interest, royalties, rents, gains from commodities and securities transactions, the excess of gains over losses from the disposition of assets which produce passive income, and includes amounts derived by reason of the temporary investment of funds raised in offerings of the Shares. If a non-US corporation owns directly or indirectly at least 25 per cent. by value of the stock of another corporation, the non-US corporation is treated for purposes of the PFIC tests as owning its proportionate share of the assets of the other corporation and as receiving directly its proportionate share of the other corporation’s income. If the Company is classified as a PFIC in any year with respect to which a US holder owns the Shares, the Company will continue to be treated as a PFIC with respect to such US holder in all succeeding years during which the US holder owns the Shares, regardless of whether the Company continues to meet the tests described above. Whether the Company is a PFIC for any taxable year will depend on the composition of its income and the projected composition and estimated fair market values of the Company’s assets in each year, and because this is a factual determination made annually after the end of each taxable year, there can be no assurance that the Company will not be considered a PFIC in any taxable year. The market value of the Company’s assets may be determined in large part by reference to the market price of the Shares and the Company’s ordinary shares, which is likely to fluctuate after the offering. Based on the foregoing, with respect to the 2015 taxable year and foreseeable future tax years, the Company does not anticipate that it will be a PFIC based upon the expected value of its assets, including any goodwill, and the expected composition of the Company’s income and assets, however, as previously mentioned, the Board cannot provide any assurances regarding the Company’s PFIC status for the current, prior or future taxable years.

152 If the Company is a PFIC, and you are a US holder, then unless you make one of the elections described below, a special tax regime will apply to both: (a) any ‘‘excess distribution’’ by the Company to you (generally, your ratable portion of distributions in any year which are greater than 125 per cent. of the average annual distribution received by you in the shorter of the three preceding years or your holding period for the Shares); and (b) any gain realised on the sale or other disposition of the Shares. Under this regime, any excess distribution and realised gain will be treated as ordinary income and will be subject to tax as if: (a) the excess distribution or gain had been realised ratably over your holding period; (b) the amount deemed realised in each year had been subject to tax in each year of that holding period at the highest marginal rate for such year (other than income allocated to the current period or any taxable period before the Company became a PFIC, which would be subject to tax at the US holder’s regular ordinary income rate for the current year and would not be subject to the interest charge discussed below); and (c) the interest charge generally applicable to underpayments of tax had been imposed on the taxes deemed to have been payable in those years. In addition, dividend distributions made to you will not qualify for the lower rates of taxation applicable to long-term capital gains discussed above under the heading ‘‘Distributions.’’ Certain elections exist that may alleviate some of the adverse consequences of PFIC status and would result in an alternative treatment (such as mark-to-market treatment) of the Shares. If a US holder makes the mark-to-market election, the US holder generally will recognise as ordinary income any excess of the fair market value of the Shares at the end of each taxable year over their adjusted tax basis, and will recognise an ordinary loss in respect of any excess of the adjusted tax basis of the Shares over their fair market value at the end of the taxable year (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). If a US holder makes the election, the US holder’s tax basis in the Shares will be adjusted to reflect these income or loss amounts. Any gain recognised on the sale or other disposition of Shares in a year when the Company is a PFIC will be treated as ordinary income and any loss will be treated as an ordinary loss (but only to the extent of the net amount of income previously included as a result of the mark-to-market election). The mark-to-market election is available only if the Company is a PFIC and the Shares are ‘‘regularly traded’’ on a ‘‘qualified exchange.’’ The Shares will be treated as ‘‘regularly traded’’ in any calendar year in which more than a de minimis quantity of the Shares are traded on a qualified exchange on at least 15 days during each calendar quarter (subject to the rule that trades that have as one of their principal purposes the meeting of the trading requirement as disregarded). It is not clear whether the London Stock Exchange is a qualified exchange for this purpose and, consequently, if the Shares are regularly traded, the mark-to-market election may not be available to a US holder. If the Company is a PFIC for any year during which a US holder holds the Shares, the Company must generally continue to be treated as a PFIC by that US holder for all succeeding years during which the US holder holds the Shares, unless the Company ceases to meet the requirements for PFIC status and the US holder makes a ‘‘deemed sale’’ election with respect to the Shares. If such election is made, the US holder will be deemed to have sold the Shares it holds at their fair market value on the last day of the last taxable year in which the Company qualified as a PFIC, and any gain from such deemed sale would be subject to the consequences described above. After the deemed sale election, the US holder’s Shares with respect to which the deemed sale election was made will not be treated as shares in a PFIC unless the Company subsequently becomes a PFIC. The tax consequences that would apply if the Company were a PFIC would also be different from those described above if a US holder were able to make a valid ‘‘qualified electing fund,’’ or QEF, election. However, the Board does not currently intend to provide the information necessary for US holders to make a QEF election if the Company were treated as a PFIC for any taxable year and prospective investors should assume that a QEF election will not be available. US Holders should consult their tax advisors to determine whether any of these above elections would be available and if so, what the consequences of the alternative treatments would be in their particular circumstances. If the Company is determined to be a PFIC, the general tax treatment for US Holders described in this section would apply to indirect distributions and gains deemed to be realised by US Holders in respect of any of the Company’s subsidiaries that also may be determined to be PFICs. If a US holder owns Shares during any taxable year in which the Company is a PFIC, the US holder generally will be required to file an IRS Form 8621 (Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund) with respect to the company, generally with the

153 US holder’s federal income tax return for that year. If the Company were a PFIC for a given taxable year, then you should consult your tax advisor concerning your annual filing requirements. The US federal income tax rules relating to PFICs are complex. Prospective US investors are urged to consult their own tax advisers with respect to the acquisition, ownership and disposition of the Shares, the consequences to them of an investment in a PFIC, any elections available with respect to the Shares and the IRS information reporting obligations with respect to the acquisition, ownership and disposition of the Shares.

2.5 Backup withholding and information reporting US holders generally will be subject to information reporting requirements with respect to dividends on the Shares and on the proceeds from the sale, exchange or disposition of Shares that are paid within the United States or through US-related financial intermediaries, unless the US holder is an ‘‘exempt recipient.’’ In addition, US holders may be subject to backup withholding on such payments, unless the US holder provides a taxpayer identification number and a duly executed IRS Form W-9 or otherwise establishes an exemption. Backup withholding is not an additional tax, and the amount of any backup withholding will be allowed as a credit against a US holder’s US federal income tax liability and may entitle such holder to a refund, provided that the required information is timely furnished to the IRS.

2.6 Foreign asset reporting Certain US holders who are individuals are required to report information relating to an interest in the Shares, subject to certain exceptions (including an exception for shares held in accounts maintained by US financial institutions) by filing IRS Form 8938 (Statement of Specified Foreign Financial Assets) with their federal income tax return. US holders are urged to consult their tax advisors regarding their information reporting obligations, if any, with respect to their ownership and disposition of the Shares. THE DISCUSSION ABOVE IS A GENERAL SUMMARY. IT DOES NOT COVER ALL TAX MATTERS THAT MAY BE OF IMPORTANCE TO A PROSPECTIVE INVESTOR. EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR ABOUT THE TAX CONSEQUENCES TO IT OF AN INVESTMENT IN THE SHARES IN LIGHT OF THE INVESTOR’S OWN CIRCUMSTANCES.

154 PART 15 ADDITIONAL INFORMATION 1. RESPONSIBILITY STATEMENT The Company and the Directors, whose names appear on page 40 of this Prospectus, accept responsibility for the information contained in this Prospectus. To the best of the knowledge and belief of the Company and the Directors (each of whom has taken all reasonable care to ensure that such is the case), the information contained in this Prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information.

2. INCORPORATION AND SHARE CAPITAL 2.1 The Company was incorporated and registered in England and Wales on 17 August 2015 as a public company limited by shares under the Companies Act with the name ‘‘On the Beach Group plc’’ and with the registered number 9736592. On 3 September 2015, the Company was granted a certificate under section 761 of the Companies Act entitling it to commence business and to exercise its borrowing powers. 2.2 The Company’s registered office is at Park Square, Bird Hall Lane, Cheadle Heath, Stockport SK3 0XN. The Company’s telephone number is +44 (0) 161 444 0910. 2.3 The principal laws and legislation under which the Company operates and the Shares have been created are the Companies Act and regulations made under that Act. 2.4 The business of the Company, and its principal activity, is to act as the holding company of the companies listed in paragraph 14.2 below. 2.5 The share capital history of Company is as follows: (a) on incorporation and immediately prior to publication of this Prospectus, the share capital of the Company was £50,000, divided into one ordinary share of £1 and one redeemable preference share of £49,999, both of which were allotted to Inflexion; and (b) immediately following completion of the Offer, the issued share capital of the Company is expected to be £195,652,145 comprising 130,434,763 Shares of £1.50 each (all of which will be fully paid or credited as fully paid, one redeemable preference share of £49,999 and 356,000 deferred shares of £0.00001 each. 2.6 The consideration for the issue of the redeemable preference share on incorporation was an undertaking by Inflexion to pay cash of £49,999, while the consideration for the issue of the ordinary share on incorporation was £1 which was paid in cash by Inflexion. 2.7 On 21 September 2015, by resolutions of the Company in general meeting: (a) the Company was authorised to carry out a court-approved capital reduction post-Admission in accordance with the Companies Act in order to provide it with certain distributable reserves to pay dividends; (b) the Company shall adopt new articles of association in the form presented to the general meeting immediately prior to the matters described in paragraphs 2.7(c) and 2.7(d)(i) below taking place; (c) the ordinary share of £1 in the Company issued on incorporation and the E ordinary share of £131.61 in the Company be subdivided and consolidated into one A ordinary share of £132.61 in the Company; (d) the Directors were generally and unconditionally authorised for the purposes of section 551 of the Companies Act to exercise all or any powers of the Company to allot shares in the Company up to an aggregate nominal amount of £187,500,103 in connection with the Reorganisation, comprising: (i) one new E ordinary share of £131.61; (ii) in connection with the Share Exchange: (A) new A ordinary shares of £132.61 each; (B) new B ordinary shares of £132.61 each; (C) new C ordinary shares of £132.61 each; and

155 (D) new D ordinary shares of £0.00001 each; (iii) in connection with the repayment of loan notes in the Company, up to 36,591,358 Shares of £1.50 each; (e) the Directors were empowered to allot equity securities (within the meaning of section 560(1) of the Companies Act) for cash as if section 561(1) of the Companies Act did not apply to any such allotment, such power being limited to the allotment of shares pursuant to the authorities described in paragraph 2.7(d) above; (f) the Company shall adopt new articles of association in the form presented to the general meeting immediately prior to the matter described in paragraph 2.7(g) below taking place, being the Articles, a summary of which is included at paragraph 4 of this Part 15 ‘‘Additional Information’’; and (g) the various classes of ordinary shares in the Company be converted into Shares (being a single class of ordinary shares in the Company with the same economic and voting rights) by way of a sub-division or otherwise, in such manner as may be approved by the Board in accordance with the Reorganisation Deed. Such authorities shall expire (unless previously revoked, varied or renewed) on 31 December 2015 (save that, in the case of the resolutions described in paragraphs 2.7(d) and 2.7(e) above, the Company may before the expiry of such period make an offer or agreement which would or might require shares to be allotted or rights to be granted after expiry of such authorities or powers and the Directors may allot the shares or grant rights to subscribe for or convert any security into a share in pursuance of such offer or agreement as if the authorities or powers conferred by these resolutions had not expired). 2.8 On 21 September 2015, by resolutions of the Company in general meeting, conditional on Admission: (a) the Directors were generally and unconditionally authorised for the purposes of section 551 of the Companies Act to exercise all or any powers of the Company: (i) to allot Shares up to an aggregate nominal amount equal to £9,000,000 in connection with the Offer; and (ii) following Admission, to allot Shares and to grant rights to subscribe for or to convert any security into Shares: (A) up to an aggregate nominal amount equal to £65,217,381.50 (being equivalent to one-third of the nominal value of the issued share capital of the Company immediately following Admission); and (B) comprising equity securities (as defined in the Companies Act) up to an aggregate nominal amount equal to £130,434,763.00 (being equivalent to two-thirds of the nominal value of the issued share capital of the Company immediately following Admission) in connection with an offer by way of a rights issue, such authorities to expire (unless previously revoked, varied or renewed) on the earlier of the end of the next annual general meeting of the Company and close of business on the date which is fifteen months after the date of the general meeting at which the resolution was passed (save that the Company may before the expiry of such period make an offer or agreement which would or might require Shares to be allotted or rights to be granted to subscribe for or convert any security into a Share, after expiry of these authorities and the Directors may allot the Shares or grant rights to subscribe for or convert any security into a Share in pursuance of such offer or agreement as if the authorisations conferred by this resolution had not expired); (b) the Directors were empowered to allot equity securities (within the meaning of section 560(1) of the Companies Act) for cash as if section 561(1) of the Companies Act did not apply to any such allotment, such power being limited to: (i) the allotment of shares pursuant to the authorities described in paragraph 2.8(a)(i) above; (ii) the allotment of equity securities in connection with an offer of equity securities to the Shareholders in proportion (or as nearly may be) to their existing holding and to people who hold other equity securities, if this is required by the rights of those securities, or, if the Directors consider it necessary, as permitted by the rights of those securities, but in each case subject to such exclusions or other arrangements as the Directors deem necessary or expedient in relation

156 to fractional entitlements or any legal or practical problems under the laws of any territory, or the requirements of any regulatory body or stock exchange; and (iii) the allotment of equity securities for cash (other than as described in (i) and (ii) above) with an aggregate nominal value of up to £19,565,214.45 (being equivalent to 10 per cent. of the nominal value of the issued share capital of the Company immediately following Admission), such powers to expire (unless previously revoked, varied or renewed) on the earlier of the end of the next annual general meeting of the Company and close of business on the date which is fifteen months after the date of the general meeting at which the resolution was passed (save that the Company may before the expiry of such period make an offer or agreement which would or might require Shares to be allotted or rights to be granted after expiry of these powers and the Directors may allot the Shares or grant rights to subscribe for or convert any security into a Share in pursuance of such offer or agreement as if the powers conferred by this resolution had not expired); (d) the Company was generally and unconditionally authorised to make market purchases of Shares pursuant to section 701 of the Companies Act, subject to the following conditions: (i) the maximum number of Shares authorised to be purchased may not be more than the number equal to 19,565,214.45 (being equivalent to 10 per cent. of the number of shares comprised in the issued share capital of the Company immediately following Admission); (ii) the minimum price (excluding expenses) which may be paid for a Share is its nominal value at the time of purchase; (iii) the maximum price (excluding expenses) which may be paid for a Share shall be the higher of: (A) an amount equal to 105 per cent. of the average of the middle market quotations of a Share as derived from the London Stock Exchange Daily Official List for the five business days immediately preceding the day on which a Share is contracted to be purchased; and (B) an amount equal to the higher of the price of the last independent trade of a Share and the highest current independent bid for a Share as derived from the London Stock Exchange Trading System (‘‘SETS’’) as stipulated by Article 5(1) of Commission Regulation (EC) 22 December 2003 implementing the Market Abuse Directive as regards exemptions for buy-back programmes and stabilisation of financial instruments (No 2273/2003); such authority to expire (unless previously revoked, varied or renewed) on the earlier of the end of the next annual general meeting of the Company and close of business on the date which is fifteen months after the date of the general meeting at which the resolution was passed so that the Company may, before the expiry of the authority enter into a contract to purchase Shares which will or may be executed wholly or partly after the expiry of such authority; and (e) the Company was authorised in accordance with the Articles, until the Company’s next annual general meeting, to call general meetings on 14 clear days’ notice. 2.9 Save as disclosed above and in paragraph 9 below: (a) no share or loan capital of the Company has, within three years of the date of this Prospectus, been issued or agreed to be issued, or is now proposed to be issued, fully or partly paid, either for cash or for a consideration other than cash, to any person; (b) there has been no change in the amount of the issued share or loan capital of the Company and no material change in the amount of the issued share or loan capital of any other member of the Group (other than intra-group issues by wholly owned subsidiaries) within three years of the date of this Prospectus; (c) no commissions, discounts, brokerages or other special terms have been granted by the Company in connection with the issue or sale of any share or loan capital of the Company; and (d) no share or loan capital of the Company is under option or agreed conditionally or unconditionally to be put under option.

157 2.10 The Company will be subject to the continuing obligations of the UK Listing Authority with regard to the issue of Shares for cash. The provisions of section 561(1) of the Companies Act (which confer on Shareholders rights of pre-emption in respect of the allotment of equity securities which are, or are to be, paid up in cash other than by way of allotment to employees under an employees’ share scheme as defined in section 1166 of the Companies Act) apply to the unissued share capital of the Company (in respect of which the Directors have authority to make allotments pursuant to section 551 of the Companies Act as referred to in paragraph 55.6 above), except to the extent such provisions have been disapplied as referred to in paragraph 55.6 above. 2.11 The Directors fully intend to comply with the guidelines on ‘‘Directors’ Powers to Allot Share Capital and Disapply Shareholders’ Pre-Emption Rights’’ as published by the Association of British Insurers and not to allot shares for cash on a non-pre-emptive basis: (a) in excess of an amount equal to 5% of the Company’s issued ordinary share capital; or (b) in excess of an amount equal to 7.5% of the Company’s issued ordinary share capital in a rolling three-year period, in each case other than in connection with an acquisition or specified capital investment which is announced contemporaneously with the allotment, or which has taken place in the preceding six-month period and is disclosed in the announcement of the allotment. 2.12 As at 22 September 2015, being the latest practicable date prior to the publication of this Prospectus, the Company did not hold any Shares in treasury. 2.13 There are no present plans to undertake a rights issue or to allot new Shares, other than as set out in paragraph above. 2.14 The Company has no convertible securities, exchangeable securities or securities with warrants in issue.

3. REORGANISATION 3.1 Pre-Admission steps under the Reorganisation On 23 September 2015, the Reorganisation Deed was entered into by the Company, OTB Topco, OTB Bidco and the Existing Shareholders. Pursuant to the Reorganisation Deed, the following steps will be carried out under the Reorganisation immediately prior to Admission to result in the Company becoming the holding company of OTB Topco (which is the Group’s existing holding company): (a) Step 1 Inflexion shall transfer the loan notes in OTB Bidco held by it to OTB Topco and OTB Topco shall issue replacement loan notes to Inflexion. (b) Step 2 Inflexion shall subscribe for one redeemable preference share of £49,999 in the capital of OTB Topco in consideration for the repayment of £49,999 of the principal amount of the loan notes held by it in OTB Topco. (c) Step 3 A new E ordinary share of £131.61 in the Company shall be issued to Inflexion and then be subdivided and consolidated with the ordinary share of £1 in the Company which was issued to Inflexion on incorporation into an A ordinary share of £132.61 in the Company. (d) Step 4 The Company and the Existing Shareholders shall effect the Share Exchange whereby each of the Existing Shareholders will transfer all of the shares in OTB Topco held by them to the Company in exchange for the allotment and issue by the Company of an equivalent number of shares in the Company. The nominal value of the shares issued by the Company will be greater than the nominal value of the shares in OTB Topco, but the number and rights of the shares will be identical.

158 The below table sets out the proposed share capital of OTB Topco immediately prior to the Share Exchange and the proposed share capital of the Company immediately following the Share Exchange:

Share capital of OTB Topco Share capital of the Company immediately prior to the Share immediately following the Share Exchange Exchange 643,997 A ordinary shares of £0.05 each 643,997 A ordinary shares of £132.61 each 186,004 B ordinary shares of £0.05 each 186,004 B ordinary shares of £132.61 each 170,000 C ordinary shares of £2.50 each 170,000 C ordinary shares of £132.61 each 356,000 D ordinary shares of £0.01 each 356,000 D ordinary shares of £0.00001 each one redeemable preference share of £49,999 one redeemable preference share of £49,999 (e) Step 5 The Existing Loan Note Holders shall transfer the loan notes in OTB Topco held by them to the Company (other than accrued interest in respect of certain loan note holders) and the Company shall issue replacement loan notes to the Existing Loan Note Holders. (f) Step 6 The various classes of ordinary shares in the Company other than the D ordinary shares shall be converted into Shares (being a single class of ordinary shares in the Company with the same economic and voting rights) by way of a sub-division and re-designation. The conversion ratio shall take into account the then relative values of each class of ordinary share in the Company. The D ordinary shares shall be re- designated as deferred shares of £0.00001 each. (g) Step 7 The Company shall repay the loan notes in the Company in full by way of the issue of Shares to the Existing Loan Note Holders. The number of Shares to be issued shall be calculated to reflect the value of the loan noted being repaid.

3.2 Post-Admission steps under the Reorganisation It is intended that the following steps will be carried out under the Reorganisation following Admission pursuant to the Reorganisation Deed: (a) Step 1 Inflexion shall pay the £49,999 outstanding in respect of its redeemable preference share in the Company, following which the redeemable preference share shall be immediately redeemed by the Company out of the proceeds of the offer of New Shares. (b) Step 2 The Company shall pay the Exit Fee to Inflexion 2010 General Partner Guernsey LP and then contribute the remaining proceeds from the Offer to OTB Topco by way of a gift. OTB Topco shall settle in cash accrued interest on certain loan notes and transaction costs incurred in connection with the Offer. (c) Step 3 The various classes of ordinary shares in OTB Topco shall be subdivided and consolidated into ordinary shares with the same rights. (d) Step 4 The Company will undertake a court-approved capital reduction in accordance with the Companies Act in order to provide it with certain distributable reserves to pay dividends post-Admission. (e) Step 5 Surplus holding companies may be wound up in due course to reduce the administrative burden on the Group and help prevent future dividend blocks.

159 3.3 Structural changes to the Group under the Reorganisation The structure chart below illustrates the structure of the Group as at the date of this Prospectus, before completion of the steps of the Reorganisation due to take place immediately prior to Admission.

Management Inflexion

B/C/D Ordinary Shares A Ordinary Shares

On the Beach Topco Limited

100% 100%

On the Beach On the Beach Trustees Limited Bidco Limited 100%

On the Beach Travel Limited

100% 100%

On the Beach On the Beach Limited Beds Limited

100% On the Beach Holidays Limited (Dormant) 22SEP201519312854

160 The structure chart below illustrates the structure of the Group at Admission, following completion of the Reorganisation steps which will take effect immediately prior to Admission.

Public Management Investors Inflexion

On the Beach Group plc

100%

On the Beach Topco Limited

100% 100%

On the Beach OnOn Thethe BeachBeach Trustees Limited Bidco Limited

100%

On the Beach Travel Limited

100% 100%

On the Beach On the Beach Limited Beds Limited

100%

On the Beach Holidays Limited (Dormant) 22SEP201519312993

161 4. ARTICLES OF ASSOCIATION The Articles, which were adopted by a special resolution of the Company on 21 September 2015, contain certain provisions, the material provisions of which are set out below. This is a description of significant rights and does not purport to be complete or exhaustive.

4.1 Objects Pursuant to section 31 of the Companies Act, the objects for which the Company is established are unrestricted and the Company has full power and authority to carry out any object not prohibited by law.

4.2 Votes of members Subject to the provisions of the Companies Act and to any special rights or restrictions as to voting attached to any shares or call of shares or otherwise provided by the Articles: (a) on a show of hands of every member who is present in person shall have one vote; (b) every proxy present who has been duly appointed by more than one member entitled to vote on the resolution and is instructed by one or more of those members to vote for the resolution and by one or more others to vote against it, or is instructed by one or more of those members to vote in a way and is given discretion as to how to vote by one or more others (and wishes to use that discretion to vote in the other way) shall have one vote for and one vote against the resolutions; (c) every corporate representative present who has been duly authorised by a corporation shall have the same voting rights as the corporation would be entitled to; and (d) on a poll, every member who is present in person or by duly appointed proxy or corporate representative shall have one vote for every share of which he is the holder or in respect of which his appointment of proxy or corporate representative has been made.

4.3 Restriction on rights of members where calls outstanding Unless the Board otherwise determines, no member shall be entitled to receive any dividend or to be present and vote at a general meeting or at any separate general meeting of the holders of any class of shares either personally or by proxy, or to be reckoned in a quorum, or to exercise any other right or privilege conferred by membership in respect of a share held by him in relation to meetings of the Company unless and until he shall have paid all calls or other sums presently due and payable by him, whether alone or jointly with any other person, to the Company.

4.4 Transfer of shares Subject to the provisions in the Articles regarding uncertificated shares, all transfers of certificated shares may be effected by transfer in writing in any usual or common form or in any other form acceptable to the Board and may be under hand only. The instrument of transfer shall be signed by or on behalf of the transferor and (except in the case of fully paid shares) by or on behalf of the transferee. In relation to both certificated and uncertificated shares, the transferor shall remain the holder of the shares concerned until the name of the transferee is entered in the register in respect of such shares. All instruments of transfer which are registered may be retained by the Company. Transfers of uncertified shares may be effected by means of a relevant system (i.e. CREST).

4.5 Dividends Subject to the provisions of the Companies Act and of the Articles, the Company may by ordinary resolution declare dividends to be paid to members according to their respective rights and interests but no such dividends shall exceed the sum recommended by the Board. All unclaimed dividends may be made use of by the Board for the Company’s benefit until claimed. Any dividend unclaimed for 12 years shall revert to the Company.

4.6 Capitalisation of profits and reserves (a) The Board may, with the sanction of an ordinary resolution of the Company, capitalise any sum standing to the credit of any of the Company’s reserve accounts (including any share premium account, capital redemption reserve, or other undistributable reserve) or any sum standing to the credit of profit and loss account.

162 (b) Such capitalisation shall be effected by appropriating such sum to the holders of ordinary shares on the register of members of the Company at the close of business on the date of the resolution (or such other date as may be specified in such resolution or determined as provided in such resolution) in proportion to their holdings of ordinary shares and applying such sum on their behalf in paying up in full unissued ordinary shares (or, subject to any special rights previously conferred on any shares or class of shares for the time being issued, unissued shares of any other class not being redeemable shares) for allotment and distribution credited as fully paid up to and amongst them in proportion to their holdings. (c) The Board may do all acts and things considered necessary or expedient to give effect to any such capitalisation, with full power to the Board to make such provision as it thinks fit for any fractional entitlements which would arise on the basis aforesaid (including provisions whereby fractional entitlements are disregarded or the benefit of such fractional entitlements accrues to the Company rather than to the members concerned). The Board may authorise any person to enter on behalf of all the members interested into an agreement with the Company providing for any such capitalisation and matters incidental to such capitalisation and any agreement made under such authority shall be effective and binding on all concerned.

4.7 Share capital (a) Variation of rights Whenever the share capital of the Company is divided into different classes of shares, the special rights for the time being attached to any share or class of share in the Company may, subject to the provisions of the Companies Act, be varied or abrogated either with the consent in writing of the holders of not less than three-quarters in nominal value of the issued shares of the class or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of the shares of the class (but not otherwise) and may be so varied or abrogated whilst the Company is a going concern or during or in contemplation of a winding-up. To every such separate general meeting all the provisions of the Articles relating to general meetings of the Company and to the proceedings at such general meetings shall with necessary modifications apply, except that: (i) the necessary quorum shall be two persons holding or representing by proxy at least one-third in nominal value paid up of the issued shares of the class (but so that if at any adjourned meeting a quorum as defined above is not present, any one holder of any shares of the class present in person or by proxy shall be a quorum); and (ii) any holder of shares of the class present in person or by proxy may demand a poll and every such holder shall on a poll have one vote for every share of the class held by him. The Article only applies to the variation or abrogation of the special rights attached to some only of the shares of any class as if each group of shares of the class differently treated formed a separate class the special rights of which are to be varied.

(b) Special rights The special rights attached to any class of shares having preferential rights shall not, unless otherwise expressly provided by the terms of issue of that class of shares, be deemed to be varied: (i) by the allotment or issue of further shares ranking as regards participation in the profits or assets of the Company in some or all respects equally with such shares but in no respect in priority to such shares; (ii) by the purchase by the Company of any of its own shares (and the holding of any such shares as treasury shares); or (iii) the Board resolving that a class of shares shall become, or the operator of the relevant system permitting such class of shares to be, a participating security (the phrases ‘‘operator’’, ‘‘relevant system’’ and ‘‘participating security’’ having the meanings set out in the CREST Regulations). (c) Sub-division of shares Whenever the Company sub-divides its shares, or any of them, into shares of smaller nominal value, the Company may, by ordinary resolution determine that, as between the shares resulting from the

163 sub-division, any of them may have any preference or advantage or be subject to any restriction as compared to the others.

(d) Purchase of own shares Where there are in issue convertible securities convertible into or carrying a right to subscribe for equity shares of a class proposed to be purchased, a separate meeting of the holders of the convertible securities must be held and their approval by extraordinary resolution obtained before the Company enters into any contract to purchase equity shares of the relevant class. Subject to this and notwithstanding anything to the contrary contained in the Articles, the rights and privileges attached to any class of shares shall be deemed not to be altered or abrogated by anything done by the Company in pursuance of any resolution passed under the powers conferred by the Companies Act.

4.8 Directors (a) Number of directors The directors of the Company shall not be less than two or more than eight in number. The Company may by ordinary resolution from time to time vary the minimum number and/or maximum number of directors.

(b) Directors’ fees The ordinary remuneration of the directors shall from time to time be determined by the Board except that such remuneration shall not exceed £600,000 per annum in aggregate or such higher sum as may from time to time be determined by ordinary resolution of the Company and shall (unless such resolution otherwise provides) be divisible among the directors as the Board may agree, or, failing agreement, equally, except that any director who shall hold office for part only of the period in respect of which such remuneration is payable shall be entitled only to rank in such division for a proportion of remuneration related to the period during which he has held office. Any director who holds any executive office may be paid such extra remuneration or may receive such other benefits as the Board may determine.

(c) Directors’ expenses The Board may repay to any director all such reasonable expenses as he may properly incur in attending and returning from meetings of the Board or of any committee of the Board or shareholders’ meetings or otherwise in connection with the performance of his duties as a director of the Company.

(d) Directors’ pensions and other benefits The Board shall have power to pay and agree to pay gratuities, pensions or other retirement, superannuation, death or disability benefits to (or to any person in respect of) any director or ex-director and for the purpose of providing any such gratuities, pensions or other benefits to contribute to any scheme or fund or to pay premiums.

(e) Directors’ permitted interests Provided that he has declared to the directors the nature and extent of any interest, a director may (save as to the extent not permitted by law), have an interest of the following kind, namely: (i) where a director (or a person connected with him) is party to, or directly or indirectly interested in, or has any duty in respect of, any existing or proposed contract, arrangement or transaction with the Company or any other undertaking in which the Company is interested; (ii) where a director (or a person connected with him) is a director, employee or other officer of, or a party to any arrangement or transaction with, or interested in, any body corporate promoted by the Company or in which the Company is interested; (iii) where a director (or a person connected with him) is directly or indirectly interested in shares or share options of the Company or is directly or indirectly interested in shares or share options of, or an employee, director or other officer of a parent undertaking of, or a subsidiary undertaking of a parent undertaking of, the Company; (iv) where a director (or a person connected with him) holds and is remunerated in respect of any office or place of profit (other than the office of auditor) under the Company or body corporate in which the Company is interested;

164 (v) where a director is given, or is to be given, a guarantee in respect of an obligation incurred by or on behalf of the Company or any body corporate in which the Company is interested; (vi) where a director (or a person connected with him or of which he is a member or employee) acts (or any body corporate promoted by the Company or in which the Company is interested of which he is a director, employee or other officer acts) in a professional capacity for the Company or any body corporate promoted by the Company or in which the Company is interested (other than as auditor) whether or not he or it is remunerated for this; (vii) an interest which cannot reasonably be regarded as likely to give rise to a conflict of interest; or (viii) any other interest authorised by ordinary resolution. No authorisation pursuant to the Articles shall be necessary in respect of the above interests.

(f) Authorisation of directors’ interests (i) The directors shall have the power, subject to the Articles, to authorise any matter which would or might otherwise constitute or give rise to a breach of the duty of a director to avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company. Any authorisation will only be effective if any quorum requirement at any meeting in which the matter was considered is met without counting the director in question or any other interested director and the matter was agreed to without their voting or would have been agreed to if their votes had not been counted. The Board may impose limits or conditions on any such authorisation or may vary or terminate it at any time. (ii) Subject to the Companies Act, the Company may by ordinary resolution ratify any contract, transaction or arrangement, or other proposal, not properly authorised by reason of a contravention of any provisions of the Articles. (iii) Subject to the article as summarised in paragraph 4.9(f)(iv) below, if a director, otherwise than by virtue of his position as director, receives information in respect of which he owes a duty of confidentiality to a person other than the Company, he shall not be required: (A) to disclose such information to the Company or to the directors, or any other officer or employee of the Company; or (B) otherwise to use such information for the purpose of or in connection with the performance of his duties as a director. (iv) Where such duty of confidentiality arises out of a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the interests of the Company the article as summarised in paragraph 4.9(f)(iii) shall apply only if the conflict arises out of a matter which is permitted or has been authorised by the Articles (subject to any imposed restrictions).

(g) Provisions applicable to declarations of interest Subject to the Companies Act and the Articles summarised in paragraph 4.9(e), a director shall declare to the other directors the nature and extent of his interest: (i) if such interest is permitted under the Articles and is an interest which may reasonably be regarded as likely to give rise to a conflict of interest; (ii) if he is in any way, directly or indirectly, interested in a proposed transaction or arrangement with the Company; or (iii) if he is in any way, directly or indirectly, interested in a transaction or arrangement that has been entered into by the Company, unless the interest has been so declared. A director need not declare an interest: (i) if it cannot reasonably be regarded as likely to give rise to a conflict of interest; (ii) if, or to the extent that, the other directors are already aware of it (or ought reasonably to be aware); or

165 (iii) if it concerns terms of his service contract that have been or are to be considered by a meeting, or a committee, of the directors appointed for the purpose.

(h) Appointment of executive directors The Board may from time to time appoint one or more of their body to be the holder of any executive office (including, where considered appropriate, the office of chairman or deputy chairman) on such terms and for such period as they may (subject to the provisions of the Companies Act) determine and, without prejudice to the terms of any contract entered into in any particular case, may at any time revoke or vary the terms of any such appointment.

(i) Powers of executive directors The Board may entrust to and confer upon any director holding any executive office any of the powers exercisable by them as directors upon such terms and conditions and with such restrictions as they think fit and either collaterally with or to the exclusion of their own powers, and may from time to time revoke, withdraw, alter or vary all or any of such powers.

4.9 Appointment and retirement of directors (a) Power of Company to appoint directors The Company may by ordinary resolution appoint any person who is willing to act to be a director, either to fill a vacancy or as an addition to the existing Board.

(b) Power of the Board to appoint directors Without prejudice to the power of the Company in general meeting pursuant to any of the provisions of the Articles to appoint any person to be a director, the Board may appoint any person who is willing to act to be a director, either to fill a vacancy or as an addition to the existing Board. Any director so appointed must retire from office at, or at the end of, the next following annual general meeting and will then be eligible to stand for election but shall not be taken into account in determining the directors or the number of directors who are to retire by rotation at that meeting.

(c) Retirement by rotation At each annual general meeting, one-third of the directors for the time being shall retire from office by rotation (or, if their number is not a multiple of three, the number nearest to but not exceeding one-third) and shall so retire provided always that all directors must be subject to re- election at intervals of no more than three years.

(d) Selection of directors to retire by rotation The directors to retire by rotation shall include (so far as necessary to obtain the number required) any director who is due to retire at the meeting by reason of age or who wishes to retire and not to offer himself for re-election. Any further directors so to retire shall be those of the other directors subject to retirement by rotation who have been longest in office since their last re-election and so that as between persons who became or were last re-elected directors on the same day those to retire shall, unless they otherwise agree among themselves, be determined by lot together with those who in the absence of any such retirement would continue in office for a period in excess of three years. A retiring director shall be eligible for re-election.

(e) Vacation of office The office of a director shall be vacated by that director if: (i) he ceases to be a director by virtue of any provision of the Companies Act or he becomes prohibited by law from being a director; (ii) he becomes bankrupt, has an interim receiving order made against him, makes any arrangement or compounds with his creditors generally or applies to the court for an interim order under section 253 of the Insolvency Act 1986 in connection with a voluntary arrangement under that Companies Act;

166 (iii) he is, or may be suffering from mental disorder and either: (A) he is admitted to hospital in pursuance of an application for admission for treatment under the Mental Health Act 1983 or, in Scotland, an application for admission under the Mental Health (Scotland) Act 1960; or (B) an order is made by a court having jurisdiction (whether in the United Kingdom or elsewhere) in matters concerning mental disorder for his detention or for the appointment of a receiver, curator bonis or other person to exercise powers with respect to his property or affairs; (iv) he resigns by writing under his hand left at the Company’s registered office or he offers in writing to resign and the Board resolves to accept such offer; (v) he shall for more than six consecutive months have been absent without permission of the Board from meetings of the Board held during that period and the Board resolves that his office be vacated; or (vi) notice stating he is removed from office as a director is served upon him signed by all his co-directors who must account to the members at the next general meeting of the Company. If a director holds an appointment to an executive office which automatically determines on his removal from office under this or the preceding sub-paragraph, such removal shall be deemed an act of the Company and shall have effect without prejudice to any claim for damages for breach of any contract of service between him and the Company.

(f) Removal of directors The Company may in accordance with and subject to the provisions of the Companies Act by ordinary resolution of which special notice has been given remove any director from office (notwithstanding any provision of the Articles or of any agreement between the Company and such director, but without prejudice to any claim he may have for damages for breach of any such agreement) and elect another person in place of a director so removed from office.

4.10 Shareholder meetings The Company must in each year hold a general meeting as its annual general meeting (‘‘AGM’’). Not more than 15 months can elapse between AGMs. An AGM must be convened, unless all shareholders entitled to attend and vote agree to short notice, on giving 21 days’ notice in writing to the members of the Company. Other meetings can be convened by the Company from time to time referred to as extraordinary general meetings (‘‘GMs’’). The length of written notice to convene such a meeting is 14 clear days. GMs can be convened on shorter notice with the agreement of shareholders being a majority in number and holding not less than 95 per cent. in nominal value of the shares giving a right to attend and vote at the meeting. Shareholders need not attend a meeting of the Company in person but can do so by way of a validly appointed proxy. Proxies are appointed in accordance with the Articles. In essence, to be validly appointed, details of the proxy must be lodged at the Company’s registered office no later than 48 hours before the commencement of the relevant meeting. Failure to lodge details of the appointed proxy in accordance with the Articles could result in the vote of the proxy being excluded on any resolution and possibly to the exclusion of the proxy from the meeting unless they were also a shareholder. If a shareholder is a corporation, whether or not a company, it can pass a resolution of its directors or other governing body to authorise such person as it thinks fit to act as its representative at any meeting of the Company or class meeting of shareholders of the Company.

4.11 Notification of major holdings of Shares Whilst disclosure of shareholdings is not a requirement of the Articles, chapter 5 of the Disclosure and Transparency Rules makes provision regarding notification of certain shareholdings and holdings of financial instruments.

167 Where a person holds voting rights in the Company as shareholder or through direct or indirect holdings of financial instruments, then the person has an obligation to make a notification to the FCA and the Company of the percentage of voting rights held where that percentage reaches, exceeds or falls below three per cent. or any whole percentage figure above three per cent. The requirement to notify also applies where a person is an indirect shareholder and can acquire, dispose of or exercise voting rights in certain cases.

5. DIRECTORS’, SENIOR MANAGERS’ AND OTHER INTERESTS 5.1 The names of the Directors and Senior Managers, their functions within the Group and brief biographies are set out in Part 6: ‘‘Directors, Senior Management and Corporate Governance’’. 5.2 Each of the Directors can be contacted at the Company’s head office address at Park Square, Bird Hall Lane, Cheadle Heath, Stockport SK3 0XN, United Kingdom. 5.3 The table below sets out the interests of the Directors and Senior Managers (and of certain persons connected with them) in the share capital of the Company (all of which, unless otherwise stated, are beneficial) as at the date of this document and as they are expected to be immediately following completion of the Reorganisation and Admission:

At the date of this document Immediately prior to Admission(2) Immediately following Admission % of issued % of issued % of issued ordinary ordinary ordinary No. of share % of voting No. of share % of voting No. of share % of voting Name Shares capital rights Shares capital rights Shares capital rights Director Richard Segal . . . — — — 1,768,170 1.4 1.4 406,680 0.3 0.3 Simon Cooper(1) . . — — — 17,708,618 13.6 13.6 14,163,688 10.9 10.9 Wendy Parry .... — — — 5,187,428 4.0 4.0 4,149,943 3.2 3.2 Lee Ginsberg . . . — — — — — — — — — David Kelly ..... — — — — — — — — — Senior Manager Alistair Daly .... — — — 5,187,428 4.0 4.0 4,149,943 3.2 3.2 Jonathan Smith . . — — — 5,187,428 4.0 4.0 4,149,943 3.2 3.2 William Allen . . . — — — 937,130 0.7 0.7 749,704 0.6 0.6 Oliver Garner . . . — — — 707,268 0.5 0.5 565,815 0.4 0.4 Kirsteen Vickerstaff .... — — — — — — — — —

(1) The interests of Simon Cooper in the share capital of the Company include the interests held by The Sule Cooper 2014 Discretionary Settlement (of which Simon’s wife Sule Cooper is the sole beneficiary). (2) Following completion of the Reorganisation described in paragraph 3.1 of this Part 15: ‘‘Additional Information’’. Save as set out in this paragraph 5.3, none of the Directors or Senior Managers has, or on Admission, will have any interests, beneficial or non-beneficial, in the share capital of the Company or any of its subsidiaries. 5.4 No Director has or has had any interest in any transaction which is or was unusual in its nature or conditions or is or was significant to the business of the Group and which was effected by the Group in the current or immediately preceding financial year or which was effected during an earlier financial year and remains in any respect outstanding or unperformed. 5.5 As at 22 September 2015 (being the latest practicable date prior to the date of this Prospectus) and save in respect of the loans being capitalised as part of the Reorganisation, there were no outstanding loans granted by any member of the Group to any Director or Senior Manager, nor by any Director or Senior Manager to any member of the Group, nor was any guarantee which had been provided by any member of the Group for the benefit of any Director or Senior Manager, or by any Director or Senior Manager for the benefit of any member of the Group, outstanding.

168 5.6 The companies and partnerships of which the Directors and Senior Managers are, or have been, within the past five years, members of the administrative, management or supervisory bodies or partners (excluding the Company) are as follows:

Position still Name Current or former directorships/partnerships held (Y/N) Director Richard Segal ...... Zezees Limited Y Hampstead Theatre Limited Y Spread A Smile Y Spencer Walk Residents Association Limited Y Anytrip.com Limited Y Hostelworld Services Limited Y On The Beach Bidco Limited Y On The Beach Topco Limited Y Full House Topco Limited Y New Holding Limited N BL HC (DSCH) Limited N BL HC (DSCLI) Limited N BL HC Dollview Limited N BL HC Health And Fitness Holdings Limited N BL HC Invic Leisure Limited N BL HC Property Holdings Limited N BL Health Clubs PH No 1 Limited N BL Health Clubs PH No 2 Limited N Esporta Financial Services Limited N Esporta H & F Propco (1A) Limited N Esporta H & F Propco (2A) Limited N Esporta Health & Fitness Limited N Esporta Health & Racquets Club Gloucester Limited N Esporta Health & Racquets Club Hamilton Limited N Esporta Health Club Peterborough Limited N Esporta Health Clubs Limited N Esporta Limited N Esporta Management Services Limited N Esporta Non Racquets Limited N Esporta Racquets And Non Racquets Holdings Limited N Esporta Racquets Limited N Esporta Tennis Clubs Limited N I S L Leisure Limited N Invicta (Club Indigo) Limited N Invicta Leisure (Brentwood) Limited N Invicta Leisure (Manchester) Limited N Invicta Leisure (Plymouth) Limited N Invicta Leisure (Sunderland) Limited N Invicta Leisure (Swansea) Limited N Invicta Leisure (Tennis) Limited N Ocean Park Leisure Limited N Riverside Limited N Riverside Racquet Centre Limited N The Riverside Health & Racquets Club Northwood Limited N The Royal County of Berkshire Health & Racquets Club Limited N The Charles Kalms, Henry Ronson Immanuel College N EG01 Limited N Bridge BP Realisations Limited N Cookridge Hall Country Club Limited N Esporta Chislehurst Limited N Esporta Health & Racquets Club Lichfield Limited N Esporta Health Club Northampton Limited N Esporta Health Club Repton Park Limited N Esporta Health Club Rustington Limited N Esporta Health Club Wolverhampton Limited N Esporta Lifestyle Clubs Limited N

169 Position still Name Current or former directorships/partnerships held (Y/N) Esporta Racquets Clubs Limited N Humberston Country Club Limited N Invicta Leisure (Brighton) Limited N Invicta Leisure (Financial Services) Limited N Invicta Leisure (Overseas) Limited N Northwood Developments Limited N Riverside Childcare Limited N Riverside Chiswick Limited N Riverside Croydon Limited N Surrey Tennis & Country Club (STCC) Limited N The Norfolk Health & Racquets Club Limited N The Oxford Health & Racquets Club Limited N Three Years Limited N Two Years Limited N Simon Cooper ...... On the Beach Limited Y On the Beach Holidays Limited Y On the Beach Beds Limited Y On the Beach Travel Limited Y On the Beach Bidco Limited Y On the Beach Topco Limited Y On the Beach Trustees Limited Y Wendy Parry ...... On the Beach Travel Limited Y On the Beach Limited Y On the Beach Beds Limited Y On the Beach Bidco Limited Y On the Beach Holidays Limited Y On the Beach Topco Limited Y On the Beach Trustees Limited Y Lee Ginsberg ...... Oriole Restaurants Limited Y Mothercare Plc Y Trinity Mirror Plc Y Patisserie Holdings Plc Y Cantina Laredo (UK) Limited Y D.P. Newcastle Limited N Domino’s Pizza Group Plc N Domono’s Pizza UK & Ireland Limited N DP Capital Limited N DP Group Developments Limited N DP Realty Limited N DP Milton Keynes Limited N DPG Holdings Limited N Domino’s Leasing Limited N Domino’s Pizza Germany (Holdings) Limited N Domino’s Pizza Germany Limited N Domino’s Pizza West Country Limited N DP Beach A Limited N DP Beach B Limited N DP Shayban Limited N D A Hall Trading Limited N Daht Limited N MLS Ltd N David Kelly ...... Holiday Extras Investments Limited Y Skillvillage Limited Y Purepromoter Group (Holdings) Limited Y Xbridge Limited Y Camelot UK Lotteries Limited Y Trinity Mirror Plc Y Camelot Global Services Limited Y Zuto Holdings Limited Y Zuto Limited Y

170 Position still Name Current or former directorships/partnerships held (Y/N) Rackspace Limited Y Basekit Platform Limited Y Senior Manager Alistair Daly ...... Oliver Daly Limited Y Karen Daly Limited Y On the Beach Travel Limited Y On the Beach Beds Limited Y On the Beach Bidco Limited Y On the Beach Holidays Limited Y On the Beach Limited Y On the Beach Topco Limited Y Jonathan Smith ..... On the Beach Travel Limited Y On the Beach Beds Limited Y On the Beach Bidco Limited Y On the Beach Holidays Limited Y On the Beach Limited Y On the Beach Topco Limited Y William Allen ...... On Holiday Group Limited Y Euro Rooms Worldwide Limited Y Oliver Garner ...... None N/A Kirsteen Vickerstaff . . None N/A 5.7 Save as set out in paragraph 5.6 above, none of the Directors or Senior Managers has any business interests, or performs any activities, outside the Group which are significant with respect to the Group. 5.8 The Company and the Directors are not aware of any arrangements the operation of which may at a subsequent date result in a change in control of the Company. 5.9 Save as set out in paragraph 5.10 below, at the date of this Prospectus, none of the Directors or Senior Managers has at any time within the previous five years: (a) had any convictions in relation to fraudulent offences; (b) been associated with any bankruptcies, receiverships or liquidations acting in the capacity of any of the positions set out against the name of the Director or Senior Manager in paragraph 5.6 above; (c) been subject to any official public incrimination and/or sanctions by any statutory or regulatory authorities (including designated professional bodies); or (d) been disqualified by a court from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer. 5.10 William Allen was a director of On Holiday Group Limited until 9 July 2015. This company entered into a members’ voluntary liquidation on 10 June 2014 and is currently in liquidation. Richard Segal resigned as a director of Bridge BP Realisations Limited on 9 December 2011. This company entered administration on 8 December 2011, a creditors’ voluntary liquidation on 28 November 2012 and is currently in liquidation. 5.11 As at the date of this Prospectus, there are no: (a) potential conflicts of interest between any duties to the Company of the Directors and Senior Managers and their private interests and/or other duties; or (b) arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any Director or Senior Manager was selected as a Director or Senior Manager (respectively). 5.12 Save for the Company’s code on dealings in securities and the lock-up agreements described in paragraph 49 of Part 13: ‘‘Details of the Offer’’, there are no restrictions agreed by any Director or Senior Manager on the disposal within a certain time of their holdings in the Company’s securities.

171 6. INTERESTS OF SIGNIFICANT SHAREHOLDERS 6.1 As at the date of this Prospectus, to the extent known by the Company, the Company is owned or controlled by Inflexion, which holds 100 per cent. of the voting rights attached to the issued share capital of the Company. 6.2 Immediately following Admission, to the extent known by the Company, it is expected that the following persons will be interested (directly or indirectly) in 3 per cent. or more of the Company’s issued ordinary share capital:

% of issued ordinary share % of voting Name of Shareholder No. of Shares capital rights Inflexion ...... 48,432,801 37.1 37.1 Simon Cooper ...... 14,163,688 10.9 10.9 Schroder Investment Management ...... 11,500,000 8.8 8.8 Hargreave Hale Ltd ...... 6,000,000 4.6 4.6 River & Mercantile Asset Management LLP ...... 6,000,000 4.6 4.6 The Independent Investment Trust PLC ...... 5,150,000 3.9 3.9 Newton Inv Management Ltd ...... 4,750,000 3.6 3.6 Alistair Daly ...... 4,149,943 3.2 3.2 Jonathan Smith ...... 4,149,943 3.2 3.2 Wendy Parry ...... 4,149,943 3.2 3.2 6.3 Save as set out above, the Company is not aware of any person who has, or will immediately following Admission have, a notifiable interest of 3 per cent. or more of the issued share capital of the Company. 6.4 No Shareholder set out above has (nor will it have) different voting rights attached to the Shares it holds to those held by the other Shareholders. 6.5 For a description of the steps that the Company has taken to ensure that the Company will be capable of carrying on its business independently of Inflexion for so long as Inflexion (together with its concert parties) holds a Controlling Interest, please see paragraph 11(d) (Relationship Agreement) of this Part 15: ‘‘Additional Information’’.

7. DIRECTORS’ SERVICE AGREEMENTS, LETTERS OF APPOINTMENT, REMUNERATION AND OTHER MATTERS 7.1 The Directors and their functions are set out in Part 6: ‘‘Directors, Senior Management and Corporate Governance’’. 7.2 Set out below are summary details of the Company’s terms of appointment with the Executive Directors: (a) Simon Cooper (Chief Executive Officer) entered into a service agreement with the Company dated 22 September 2015. Simon is entitled to receive an annual salary of £127,000 plus a discretionary contractual bonus and is eligible to participate in the LTIP. Simon’s appointment is terminable at any time on six months’ notice given by either party. The Company is entitled to terminate Simon’s employment by payment of a cash sum in lieu of notice, equal to: (i) his basic salary that would have been payable; and (ii) any accrued but untaken holiday pay entitlement. Simon’s appointment may be terminated summarily by the Company if he is, amongst other things, guilty of dishonesty or serious misconduct which renders him unfit to continue as an executive of the Company. The service agreement does not provide for any extra payment to be given to Simon upon termination of his employment. (b) Wendy Parry (Chief Financial Officer) entered into a service agreement with the Company dated 22 September 2015.Wendy is entitled to receive an annual salary of £127,000 plus a discretionary contractual bonus and is eligible to participate in the LTIP. Wendy’s appointment is terminable at any time on six months’ notice given by either party. The Company is entitled to terminate Wendy’s employment by payment of a cash sum in lieu of notice, equal to: (i) her basic salary that would have been payable; and (ii) any accrued but untaken holiday pay entitlement. Wendy’s appointment may be terminated summarily by the Company if she is, amongst other things, guilty of dishonesty or serious misconduct which renders her unfit to continue as an executive of the Company. The service

172 agreement does not provide for any extra payment to be given to Wendy upon termination of her employment. 7.3 Set out below are summary details of the Company’s terms of appointment with the Non-executive Directors: (a) Richard Segal has entered into the terms of an appointment letter as non-executive Chairman dated 3 September 2015, which will become effective on Admission. Richard’s appointment is for an initial period of two terms of three years each from the date of Admission. The annual fee payable is £100,000 and the notice period for either party to terminate the agreement is three months. (b) Lee Ginsberg has entered into the terms of an appointment letter as non-executive director dated 17 August 2015. Lee’s appointment is for an initial period of two terms of three years each from the date of Admission. The annual fee payable is £45,000, together with £5,000 per annum while Lee performs his duties as senior independent non-executive director and £7,500 per annum while Lee performs his duties as chairman of the audit committee. The notice period for either party to terminate the agreement is three months. (c) David Kelly has entered into the terms of an appointment letter as non-executive director dated 28 August 2015. David’s appointment is for an initial period of two terms of three years each from the date of Admission. The annual fee payable is £45,000, together with £5,000 per annum while David performs his duties as chairman of the remuneration committee. The notice period for either party to terminate the agreement is three months. 7.4 Save as set out in paragraphs 7.2 and 7.3 above, there are no existing or proposed service agreements or letters of appointment between the Directors and any member of the Group. 7.5 In anticipation of Admission, the Remuneration Committee undertook a review of the Group’s remuneration policy for senior management, including the Executive Directors, in order to ensure that it is appropriate for the listed company environment. In undertaking this review, the Remuneration Committee sought independent, specialist advice. 7.6 The Company’s remuneration strategy is to provide pay packages that attract, retain and motivate high-calibre talent to help ensure its continued growth and success as a listed company. 7.7 The Company’s remuneration strategy aims to encourage and support a high performance culture, reward for achievement of the Group’s corporate strategy and delivery of sustainable growth and align the interests of the Executive Directors, senior management and employees to the long-term interests of shareholders, whilst ensuring that remuneration and incentives adhere to the principles of good corporate governance and support good risk management practice and sustainable Company performance. 7.8 Consistent with this remuneration strategy, the Remuneration Committee has agreed a structure for future remuneration arrangements for Executive Directors and senior management, taking into account evolving market and best practices. Remuneration will be set at a level that is considered by the Remuneration Committee to be appropriate for the size and nature of the business. Performance- related pay will be based on stretching targets, and will form an important part of the overall remuneration package. There will be an appropriate balance between short and longer-term performance targets linked to delivery of the Group’s business plan. 7.9 The Company intends to deliver this policy for senior management, including Executive Directors, via a remuneration framework which combines base salary, benefits, an annual bonus plan and share- based awards under the LTIP. 7.10 It is intended that the following arrangements will form part of the remuneration policy from Admission subject to formal approval by shareholders at the first annual general meeting of the Company following Admission:

(a) Base salary The base salaries for Executive Directors and senior management will depend on their experience and the scope of their role as well as having regard to practices at peer companies of equivalent size and complexity. In considering the base salary (and other elements of remuneration) of Executive Directors and senior management, due regard will be taken of the pay and conditions of the workforce generally. Base salaries will typically be reviewed on an annual basis. Base salaries on Admission for both Simon

173 Cooper and Wendy Parry are £127,000 but will be increased to £200,000 and £175,000, respectively from 1 January 2016 as part of the normal annual salary review. In setting the base salaries, the Committee recognises that these are below the market median but has given regard to the material shareholding in the Company of the current Executive Directors and a desire to focus the remuneration structure on a long-term strategy.

(b) Annual bonus plan Executive Directors and senior management are eligible to participate in a cash bonus plan. Annual bonuses will be primarily linked to the Company’s annual financial performance. The maximum opportunity for Executive Directors is proposed to be 100 per cent. of salary.

(c) LTIP Awards under the LTIP will normally be granted annually to Executive Directors and selected senior management. It is expected that these awards will vest at the end of a three year period subject to the recipient’s continued employment at the date of vesting and satisfaction of the performance conditions. It is anticipated that the first awards to be granted under the LTIP to the Executive Directors (and other selected members of senior management) will be made during the course of 2016. The maximum value of the Shares underlying the initial LTIP Awards may not exceed 150 per cent. (or 200 per cent. in exceptional circumstances) of an individual’s annual salary based on the market value of a Share at the close of the previous financial year. The detail of the performance metrics, targets and weightings will be set at the time awards are granted. Further details of the LTIP are provided in paragraph 9.1 of this Part 15.

(d) Minimum shareholding requirement Whilst the current Executive Directors have significant shareholdings in the Company, the Remuneration Committee wishes to ensure that a shareholding guideline is in place to cater for future Executive Directors who may not hold shares. Accordingly, the Remuneration Committee has also adopted formal shareholding guidelines that will encourage the Executive Directors to build up over a five year period and then subsequently hold a shareholding equivalent to 150 per cent. of their base salary. This policy ensures that the interests of Executive Directors and those of shareholders are closely aligned.

(e) SIP The Executive Directors and senior management will be entitled to participate in any all-employee share schemes adopted by the Company, for example the new SIP, on the same terms as other employees. A summary of the proposed terms of the SIP are provided in paragraph 9.2 of this Part 15.

(f) Recruitment policy New Executive Director and senior management hires will be offered remuneration packages in line with the Company’s remuneration policy in force at the time. In addition to the above elements of remuneration, the Committee may, in exceptional circumstances, consider it appropriate to grant an award under a different structure in order to facilitate the buyout of outstanding awards held by an individual on recruitment. Any buyout award would be limited to what the Remuneration Committee considers to be a fair estimate of the value of awards foregone when leaving the former employer and will be structured so as to take into account other key terms, such as vesting schedules and performance targets, of the awards which are being replaced. The Remuneration Committee will keep the remuneration arrangements for the Executive Directors and key senior management under review taking into consideration business strategy over the period; overall corporate performance; market conditions affecting the Company; and evolving best practice.

(g) Chairman and Non-Executive Director fees The Chairman’s and the other Non-Executive Directors’ fees will be set at a level to reflect the amount of time and level of involvement required in order to carry out their duties as members of the Board and its committees, and to attract and retain Non-Executive Directors of a high calibre with relevant commercial and other experience. Fee levels are set by reference to non-executive director fees at companies of similar size and complexity and general increases for salaried employees within the Company. The fee paid to the Chairman is determined by the Remuneration Committee, while the fees for other Non-Executive Directors are determined by the Board as a whole. Additional fees are payable for acting as Senior Independent Director and as Chairman of the Board’s Audit and Remuneration Committees. Non-Executive Directors are not eligible to participate in any of the Company’s incentive arrangements.

174 7.11 The details of the Company’s Executive Director remuneration arrangements, including the operation of the Company’s incentive plans and payments made under them, will be set out each year in a remuneration report contained in the Company’s annual report. The Company will be required to submit its remuneration policy (as it relates to the Directors) to a binding vote of Shareholders at the first annual general meeting of the Company following Admission. It is the current intention of the Remuneration Committee that the Remuneration policy for Directors will apply for three years from its date of approval. Accordingly, the Company will outline the detail of its future policy relating to the Directors’ remuneration, including participation in the annual bonus plan and LTIP, in its annual report and accounts for the financial year ending 30 September 2015.

8. DIRECTORS’ AND SENIOR MANAGERS’ REMUNERATION IN THE YEAR ENDED 30 SEPTEMBER 2014 8.1 Under the terms of their service agreements, letters of appointment and applicable incentive plans, in the year ended 30 September 2014, the aggregate remuneration and benefits to the directors of OTB Topco and the senior management of the Group who served during 2014, consisting of seven individuals, was £749,212. 8.2 There is no arrangement under which any Director has waived or agreed to waive future emoluments nor has there been any waiver of emoluments during the financial year immediately preceding the date of this Prospectus. 8.3 For the year ended 30 September 2014, the Group made pension contributions of £3,120 on behalf of Simon Cooper (but did not otherwise make any pension contributions or other retirement related benefits on behalf of the Directors and Senior Managers who served during 2014).

9. SHARE PLANS See below a summary of the principal terms of the share plans proposed to be approved and adopted by the Company on Admission, being the LTIP and the SIP.

9.1 The LTIP Under the LTIP, awards may be granted in the form of options to acquire Shares (‘‘Options’’) and/or conditional rights to acquire Shares (‘‘Conditional Share Awards’’) (together, ‘‘Awards’’). The Remuneration Committee will supervise the operation of the LTIP and the grant of Awards. Options may be granted with an exercise price of nil or nominal value. It is proposed that the first set of Awards will be granted in the form of nil-cost Options in January 2016 and will be based 70 per cent. on EPS performance targets and 30 per cent. on share price conditions measured over the period beginning on 1 October 2015 until 30 September 2018.

(a) Participation Employees and executive directors of the Group may participate in the LTIP at the absolute discretion of the Remuneration Committee.

(b) Timing of grant of Awards Except as otherwise provided, the grant of Awards may only be made at times permitted by the Model Code contained in the Listing Rules issued by the UK Listing Authority (as amended from time to time) and any code adopted by the Company or any order or regulation governing dealing in shares by which the Company is bound that may be issued from time to time.

(c) Dilution limits The maximum number of Shares over which Awards may be granted under the LTIP and under any other employees share scheme in any 10 year period may not exceed 10 per cent. of the number of Shares in issue from time to time. Awards which have lapsed or have been surrendered shall not count towards this dilution limit.

175 (d) Individual participation limit The number of Shares (based on the market value as at the final day of the Company’s prior financial year) over which Awards under the LTIP may be granted to a participant in any financial year of the Company may not exceed 150 per cent. of his annual basic salary. If exceptional circumstances arise, the Remuneration Committee may grant Awards outside this limit.

(e) Performance conditions and vesting Awards will normally vest after a minimum period of three years from the date of grant. Vesting of Awards will be subject to the achievement of appropriate performance conditions as determined by the Remuneration Committee at the date of grant and will be subject to the participant continuing to be an employee or director of the Group at the time of vesting. If an event occurs which causes the Remuneration Committee to consider that any performance condition subject to which an Award has been granted is no longer appropriate, that condition may be substituted, varied or waived as is considered reasonable in the circumstances and produces a fairer measure of performance.

(f) Cessation of employment Unvested Awards will normally lapse on cessation of employment. If a participant ceases employment as a result of death, ill health, injury or disability, retirement, redundancy or being employed by an entity which is transferred out of the Group or for any other reason as determined by the Remuneration Committee, the Award will not lapse and will instead continue until the normal time of vesting. Awards will normally be pro-rated to reflect the time from the date of grant of the Award until the date of cessation.

(g) Change of control and other corporate events If there is a change of control of the Company as a result of a takeover, a court-sanctioned compromise or arrangement or a voluntary winding up (or any other similar event including a demerger) The proportion of an Award will vest to the extent determined by the Remuneration Committee in its absolute discretion and taking into account the period of time the Award has been held by the Participant and the extent to which the performance conditions have been achieved. Options to the extent vested may be exercised for a period of 6 months and if not so exercised will lapse at the end of such period unless the Remuneration Committee determines that a longer period shall apply. Where appropriate, and with the agreement of an acquiring company, Awards may be exchanged for Awards over shares in the acquiring company.

(h) Dividend equivalent An Award may include the right to additional Shares or cash amount on vesting/exercise of an amount equal to dividends paid during the life of the Award in respect of the number of Shares over which the Award has vested. Such amount will assume the reinvestment of dividends and (unless the Remuneration Committee determine otherwise) will include special dividends and dividends in specie.

(i) Malus & clawback The Remuneration Committee may determine at the time of grant of an Award that such Awards shall be subject to malus and/or clawback. If an Award is made subject to malus, the Remuneration Committee at any time before an Award has vested, reduce the number of Shares subject to the Award (including to nil) in the following circumstances: (i) discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any member of the Group; and/or (ii) action or conduct of participant which, in the reasonable opinion of the Remuneration Committee, amounts to employee misbehaviour, fraud or gross misconduct.

176 If an Award is subject to clawback, then for a period of two years following the date of vesting, then if any of the following circumstances arise the Remuneration Committee may in its absolute discretion require the relevant Award Holder to transfer some or all of the Shares that were subject to his Award or pay an equivalent cash amount: (i) discovery of a material misstatement resulting in an adjustment in the audited consolidated accounts of the Company or the audited accounts of any member of the Group for a period that was wholly or partly before the end of the period over which the Performance Target applicable to an Award was assessed; and/or (ii) action or conduct of an Award Holder which, in the reasonable opinion of the Remuneration Committee, amounts to employee misbehaviour, fraud or gross misconduct.

(j) Taxation Under the terms of the LTIP, the participant agrees to pay to the relevant company in the Group any amount of income tax and national insurance contributions (or overseas equivalents) that the relevant company is required to withhold and/or account to any fiscal authority. To the extent permitted by law, such liabilities may be deducted from other payments due to the participant and the relevant company in the Group may withhold and sell Shares to which the participant may otherwise be entitled under the LTIP in order to meet such liabilities. To the extent permitted by law, national insurance contribution (or overseas equivalent) may include employer contributions.

(k) Variation of share capital In the event of any variation in the share capital of the Company, the number of Shares subject to an Award, the description of the Shares, the exercise price (where relevant), or any one or more of these, may be adjusted in such manner as the Remuneration Committee may determine.

(l) Amendment of the LTIP The Remuneration Committee may from time to time amend the rules of the LTIP (including for the purposes of establishing a sub-plan for the benefit of employees located overseas). However, no amendment may be made without the prior approval of the Company in general meeting for the benefit of existing or future Participants to the Rules relating to: (i) the basis for determining an employee’s entitlement (or otherwise) to be granted an Award and/or to acquire Shares on the exercise of an Option and/or to become absolutely entitled to Shares subject to a Conditional Share Award (as the case may be) under the LTIP; (ii) the persons to whom an Award may be granted; (iii) the limit on the aggregate number of Shares over which Awards may be granted; (iv) the limit on the number of Shares over which Awards may be granted to any one employee; (v) the adjustment of Awards on a capitalisation issue, rights issue, open offer, sub-division or consolidation of shares or reduction of capital or any other variation of capital; or (vi) the rule relating to amendments to the LTIP, except for amendments which are minor and benefit the administration of the LTIP or in order to take account of a change of legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for participants in the LTIP, the Company or some other Group company.

(m) Term of the LTIP The life of the LTIP will be 10 years and no Award may be granted more than 10 years after the date on which the LTIP was adopted.

(n) Pension benefits Awards under the LTIP are not pensionable.

177 9.2 The SIP The SIP has been designed to satisfy the conditions set out in schedule 2 to the Income Tax (Earnings & Pensions) Act 2003 (‘‘ITEPA’’) so that Shares may be provided to employees of the Group in a tax-efficient manner. The SIP will operate through a UK resident trust (‘‘SIP Trust’’) which will be administered by professional third party trustees (‘‘Trustees’’). The Trustees will acquire Shares (by subscription or purchase on the market) which are then held on behalf of participants in the SIP (‘‘Participants’’).

(a) Eligibility All UK resident employees who have been employed within the Group for a minimum qualifying period specified by the Remuneration Committee in relation to any particular proposed award (not being more than 18 months or such other period as may be specified by the legislation from time to time) are eligible to participate in the SIP on similar terms.

(b) Dilution limits The maximum number of Shares over which awards may be granted under the LTIP and under any other employees share scheme in any 10 year period may not exceed 10 per cent. of the number of Shares in issue from time to time. Awards which have lapsed or have been surrendered shall not count towards this dilution limit.

(c) Types of award which may be granted Under the SIP, the Remuneration Committee may make the following types of award: (i) free share award; (ii) partnership share award; and/or (iii) matching share award. Dividend shares may also be acquired. The Remuneration Committee may make different types of award in different financial periods. The principal features of these different types of award are set out below. (i) Free Shares Awards of free Shares (‘‘Free Shares’’) may be made to Participants up to a maximum value of £3,600 per Participant in each tax year (or such other maximum from time to time permitted by the legislation). Free Shares must be offered to all Participants on similar terms but the number awarded can be determined by reference to the employee’s remuneration, length of service, number of hours worked and/or the satisfaction of fair and objective performance criteria. (ii) Partnership Shares The Remuneration Committee may allow Participants the opportunity to purchase Shares (‘‘Partnership Shares’’) out of their pre-tax salary, up to a maximum of £1,800 per tax year or 10 per cent. of pre-tax salary if lower (or such other limits from time to time permitted by the legislation). The purchase price will be deducted from salary subject to a minimum specified by the Remuneration Committee, which may not be greater than £10 on any occasion (or such other amount from time to time specified by the legislation). The salary allocated to Partnership Shares can be accumulated for a period of up to 12 months (‘‘Accumulation Period’’) or Partnership Shares can be purchased out of deductions from the Participant’s pre-tax annual basic salary when those deductions are made. A Participant and the Company may agree to vary the amount of salary deductions and the intervals of those deductions. If there is an Accumulation Period, the number of Shares purchased shall be determined by dividing the Participant’s aggregate pay deducted during the Accumulation Period by the market value of the Partnership Shares. Once acquired, Partnership Shares may be withdrawn from the SIP by the Participant at any time.

178 (iii) Matching Shares Where Participants purchase Partnership Shares, they may be given up to two free Shares (‘‘Matching Shares’’) for every purchased Partnership Share. If Matching Shares are allocated, all Participants who have purchased Partnership Shares must be awarded Matching Shares on the same basis. (iv) Dividend Shares Participants may be required or permitted to purchase additional Shares (‘‘Dividend Shares’’) using dividends received by them in respect of their Shares held under the SIP.

(d) Holding period and cessation of employment All Free Shares and Matching Shares must normally remain within the SIP Trust for a period of 3 to 5 years, as specified by the Remuneration Committee at the time the awards are made, unless the Participant ceases to be employed within the Group. If a Participant ceases to be an employee within the Group by reason of death, injury or disability, redundancy, retirement, by reason of a relevant transfer within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 2006 or by reason of the Participant’s employing company ceasing to a member of the Group (each a ‘‘Good Leaver’’) his Free Shares and/or Matching Shares will be transferred to him (or to his personal representative). The Remuneration Committee may, in its discretion, provide that if a Participant ceases to be an employee of the Group within a period specified by the Remuneration Committee at the date the award is made in circumstances when he is not a Good Leaver, his Free Shares and Matching Shares will be forfeited and he will have no further entitlement to them.

(e) Rights relating to the Shares Shares held under the SIP shall, subject to the provisions of the SIP, rank pari passu in all respects with other Shares. Where Shares are held under the SIP by the Trustee on behalf of a Participant, the Trustee must obtain from, and comply with, any voting instructions given by the Participant and otherwise, save as required or permitted by the SIP, deal with a Participant’s Shares only in accordance with his directions.

(f) Corporate events In the event of a general offer being made to Shareholders (or similar takeover event taking place) during a holding period, Participants will be able to direct the Trustee as to how to act in relation to their Shares held in the SIP. In the event of a corporate re-organisation, any Shares held by Participants may be replaced by equivalent shares in a new holding company.

(g) Variation of share capital Shares, or rights to them, acquired by Participants on a variation of share capital of the Company will usually be treated in the same way as the Shares acquired or awarded under the SIP, in respect of which the rights were conferred and as if they were acquired or awarded at the same time.

(h) Amendments to the SIP The Remuneration Committee may alter the SIP but certain alterations cannot take effect without the approval of the Company’s shareholders in general meeting, unless they are minor amendments to the benefit of the administration of the SIP, to take account of the change in legislation, are to obtain or maintain favourable tax, exchange control or regulatory treatment for Participants in the SIP or for any member of the Group, being amendments to the class of eligible employees, the limits on the number of new Shares which may be issued under the SIP, the maximum entitlement of an individual Participant, the price payable for Shares by a Participant, the adjustments that may be made in the event of any variation to the share capital of the Company and the basis for determining any Participant’s entitlement to Shares. No alteration to the SIP can be made which would adversely prejudice (to a material extent) the rights attaching to Shares acquired by the Participants.

179 (i) Pension benefits Awards under the SIP are not pensionable.

10. UNDERWRITING AGREEMENT On 23 September 2015, the Company, the Directors, the Selling Shareholders and Numis entered into the Underwriting Agreement. Pursuant to the terms of the Underwriting Agreement: (a) the Company confirmed the appointment of Numis as global co-ordinator, sponsor and bookrunner and underwriter in connection with the application for Admission and the Offer; (b) the Company has agreed, subject to certain conditions, to allot and issue, at the Offer Price, the New Shares to be issued in connection with the Offer; (c) the Selling Shareholders have agreed, subject to certain conditions, to sell, at the Offer Price, the Sale Shares to be sold in connection with the Offer; (d) Numis has agreed, subject to certain conditions, to procure subscribers for the New Shares and purchasers for the Sale Shares or, failing which, itself to subscribe for New Shares and/or to purchase Sale Shares at the Offer Price; (e) the Company has agreed that a base commission of 2 per cent. will be payable to Numis for New Shares sold on Admission, together with an incentive commission of up to 1.5 per cent.; (f) each of the Selling Shareholders has agreed that a base commission of 2 per cent. will be payable to Numis in respect of the Sale Shares held by them and sold on Admission, together with an incentive commission of up to 1.5 per cent.; (g) the obligations of Numis to procure subscribers and/or purchasers for or, failing which, itself to subscribe for or purchase New Shares and Sale Shares (as the case may be) are subject to certain conditions. These conditions include the absence of any breach of warranty or undertaking given by the Company, the Directors or the Selling Shareholders under the Underwriting Agreement and Admission occurring by no later than 8.00 a.m. (London time) on 28 September 2015 (or such later time and/or date as Numis and the Company may agree but, in any event, no later than 8.00 a.m. on 1 October 2015). In addition, Numis has the right to terminate the Underwriting Agreement, exercisable in certain circumstances, prior to Admission. The circumstances include, among others, of certain material adverse changes in the condition (financial, operational, legal or otherwise) or in the earnings, management, business affairs, solvency, business prospects or financial prospectus of the Company or the Group and certain changes in political, financial or economic conditions. If this right is exercised, the Offer will lapse, the Company will not seek Admission and any moneys received from investors in respect of the Offer will be returned without interest; (h) the Company has agreed to pay certain of the costs, charges, fees and expenses relating to the Offer (together with any related value added tax) and the Selling Shareholders have agreed to pay any stamp duty payable on the transfer of the Sale Shares; (i) each of the Company, the Directors and the Selling Shareholders has given certain warranties and undertakings to Numis; (j) the Company has given an indemnity covering certain customary matters to Numis; (k) the parties to the Underwriting Agreement have given certain covenants to each other regarding compliance with laws and regulations affecting the making of the Offer in relevant jurisdictions; (l) each of the Executive Directors and certain persons connected with them and Inflexion has agreed that, during the 12 month period following Admission, subject to certain customary exceptions, he or she will not, (and will procure that none of his or her connected persons acting on his or her behalf will) without the prior written consent of Numis directly or indirectly, offer, issue, lend, mortgage, assign, charge, pledge, sell or contract to sell, issue options in respect of, or otherwise dispose of, directly or indirectly, or announce an offering of any Shares (or any interest in therein or in respect thereof) or any other securities exchangeable for, or convertible into, or substantially similar to, Shares or enter into any transaction with the same economic effect as the foregoing; (m) Inflexion has agreed that, during the period ending the longer of six months from the date of Admission or the date of publication of the audited financial results of the Company for the year

180 ended 30 September 2015, subject to certain customary exceptions, it will not, (and will procure that none of its connected persons acting on its behalf will) without the prior written consent of Numis directly or indirectly, offer, issue, lend, mortgage, assign, charge, pledge, sell or contract to sell, issue options in respect of, or otherwise dispose of, directly or indirectly, or announce an offering of any Shares (or any interest in therein or in respect thereof) or any other securities exchangeable for, or convertible into, or substantially similar to, Shares or enter into any transaction with the same economic effect as the foregoing; and (n) in addition to the lock-up arrangements described in paragraphs (l) and (m) above, each of the Executive Directors and certain persons connected with them and Inflexion have agreed that, for a further six month period following the expiry of their lock-up periods referred to above, subject to certain customary exceptions, they will not dispose of any Shares or interests in Shares other than through Numis with a view to maintaining an orderly market in the Company’s securities. 10.2 The customary exceptions to the lock-up arrangements referred to in paragraphs 10.1(l) and (m) above include the following: (a) selling any Sale Shares pursuant to the Offer; (b) accepting a general offer made to all holders of issued and allotted Shares made in accordance with the City Code on terms which treat all such holders alike and which has become or been declared unconditional in all respects, or been recommended for acceptance by the Directors; (c) executing and delivering an irrevocable commitment or undertaking to accept a general offer (without any further agreement to transfer or dispose of any Shares or any interest therein) as is referred to in paragraph 10.2(b); (d) selling or otherwise disposing of Shares pursuant to any offer by the Company to purchase its own Shares which is made on identical terms to all holders of Shares in the Company; (e) transferring or disposing of Shares pursuant to a compromise or arrangement between the Company and its creditors, or any class of them, or between the Company and its members, or any class of them, which is agreed to by the creditors or members and (where required) sanctioned by the court under the Companies Act; (f) taking up or disposing of any rights granted in respect of a rights issue or other pre-emptive share offering by the Company; (g) disposing of Shares in accordance with any order made by a court of competent jurisdiction; or (h) in the case of the Executive Directors only, disposing or agreeing to dispose of Shares, or any interest therein, following the death of the relevant Shareholder.

11. MATERIAL CONTRACTS Set out below is a summary of: (a) each material contract (other than a contract in the ordinary course of business) to which the Company or another member of the Group is a party which has been entered into within the two years immediately preceding the date of this Prospectus; and (b) any other contract (other than a contract in the ordinary course of business) entered into by the Company or another member of the Group which contains a provision under which any member of the Group has any obligation or entitlement which is material to the Group as at the date of this Prospectus.

(a) Underwriting Agreement Details of the Underwriting Agreement are set out in paragraph 10 above.

(b) Reorganisation Deed The Reorganisation Deed was entered into by The Company, OTB Topco, OTB Bidco, the Selling Shareholders and others on 23 September 2015. The Reorganisation Deed sets out the steps required to be carried out by the Company (or otherwise involving the Company) in connection with the Reorganisation prior to and following the date of Admission. Details of the Reorganisation are set out in paragraph 3 of this Part 15: ‘‘Additional Information’’.

181 (c) Investment Agreements The Existing Investment Agreement was entered into by OTB Topco, OTB Bidco and various shareholders and investors in OTB Topco and OTB Bidco including Simon Cooper and Inflexion on 4 October 2013. The Existing Investment Agreement sets out the terms pursuant to which the shareholders and investors invested in shares in OTB Topco and loan notes in OTB Bidco. The Existing Investment Agreement contains a number of customary provisions for an agreement of this nature, including warranties, information rights, corporate governance, restrictions on disposals of shares and reserve matters requiring consent. It also provides for the Exit Fee (as described below). As part of the Reorganisation, the following matters will take place immediately prior to Admission: (i) in connection with the Share Exchange: (A) the New Investment Agreement (which will be on identical terms to the Existing Investment Agreement except that it will relate to the Company rather than OTB Topco) will be entered into by the Company, OTB Bidco, the Existing Shareholders, Inflexion and others; and (B) the Existing Investment Agreement will be terminated; and (ii) as the final step of the Reorganisation prior to Admission, the New Investment Agreement will be terminated, save as to the provisions relating to the Exit Fee. Under the New Investment Agreement, the payment of the Exit Fee will be triggered by, amongst other things, a listing of the Company and is equal to the sum of 1 per cent. of the enterprise value of the Company (reduced proportionately to reflect the fact that the listing of the Company is not a disposal of the entire issued share capital of the Company). The Board expects that the Exit Fee payable by the Company to Inflexion 2010 General Partner Guernsey LP will be £902,656. After payment of the Exit Fee, the remaining provisions of the New Investment Agreement relating to the Exit Fee will terminate.

(e) First Lloyds Facility OTB Topco and OTB Bidco entered into the First Lloyds Facility on 4 October 2013 with Lloyds. Two facilities were made available under the terms of the First Lloyds Facility (being ‘‘Facility A’’ and ‘‘Facility B’’) in amounts of £11,000,000 each. Both Facility A and Facility B have been drawn in full. Facility A is available for a four year term expiring on 30 September 2017, to be repaid in quarterly installments as set out in the First Lloyds Facility. Facility B is available for a five year term expiring on 4 October 2018, to be repaid in full on the date of expiry. Facility A is available to be repaid at the

182 discretion of OTB Topco, however, all repayment installments outstanding under the First Lloyds Facility will reduce pro rata by the amount cancelled. It is intended that the First Lloyds Facility will be repaid in full out of the Group’s existing cash balances following Admission.

(f) Second Lloyds Facility The Company entered into the Second Lloyds Facility on 18 September 2015 with Lloyds. OTB Topco, OTB Bidco and certain other members of the Group will accede to the Second Lloyds Facility on Admission. A revolving credit facility is being made available under the terms of the Second Lloyds Facility in an aggregate amount of up to £35,000,000. Drawdown of the loan under the Second Lloyds Facility is subject to evidence that the Reorganisation has taken effect, Admission, the First Lloyds Facility being repaid in full, OTB Topco, OTB Bidco and certain other members of the Group having executed an accession deed in respect of the Second Lloyds Facility and certain customary conditions (such as receipt of corporate authorities and legal opinions). The borrowing limits under the Second Lloyds Facility will vary monthly throughout the period of the Second Lloyds Facility to reflect the seasonal borrowing requirements of the Group, ranging from £2,000,000 in one month to the full £35,000,000 in another month. The Second Lloyds Facility will be available up to the second anniversary of the closing date (or for a shorter period of time at the Company’s discretion). It is to be repaid in monthly installments which vary in accordance with the Group’s seasonal requirements. No early prepayment fees are payable. The margin contained in the Second Lloyds Facility is dependent on gross leverage ratio and the rate per annum ranges from 1.10 per cent. to 1.90 per cent. for the utilised facility and 0.39 per cent. to 0.67 per cent. for the non-utilised facility. The terms of the Second Lloyds Facility include the following financial covenants: (i) that the ratio of total debt to EBITDA in respect of any relevant period shall not exceed 2:1 (with a one-off increase to a ratio of 2.5:1); and (ii) that the ratio of EBITDA to finance charges in respect of any relevant period shall not be less than 5:1.

12. RELATED PARTY TRANSACTIONS Save as set out below, there are no related party transactions that were entered into by members of the Group during the period covered by the financial information contained in Part 11: ‘‘Historical Financial Information’’ and during the period from 1 October 2014 to 23 September 2015 (being the date of this Prospectus). Save as set out below, since the date of its incorporation on 17 August 2015 until 23 September 2015 (being the date of this Prospectus) the Company has not entered into any related party transactions. The following table sets out the loan notes and accrued interest outstanding to related parties of the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

30 September 30 September 30 September 30 June 2014 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Issued to: Livingbridge ...... 25,296 29,791 — — — Inflexion ...... — — 47,855 46,450 52,281 Directors and members of the close family of directors ...... 15,583 14,112 15,195 14,749 16,600 The loan notes and accrued interest are being capitalised in full as part of the Reorganisation (further details of which are set out in paragraph 56 of this Part 15: ‘‘Additional Information’’).

183 The following table sets out the management fees paid to related parties of the Group for the financial years ended 30 September 2012, 30 September 2013 and 30 September 2014 and the nine month periods ended 30 June 2014 and 30 June 2015:

30 September 30 September 30 September 30 June 2014 2012 2013 2014 (unaudited) 30 June 2015 £’000 £’000 £’000 £’000 £’000 Fees charged by: Inflexion ...... — — 227 185 222 Livingbridge ...... 63 63 — — — OTB Limited and On The Beach Beds Limited (‘‘OBBL’’) entered into an agency agreement on 1 September 2011 pursuant to which OBBL appointed OTB Limited as its non-exclusive agent for the sale and promotion of accommodation (the ‘‘Accommodation’’) owned and/or operated by a third-party accommodation provider (a ‘‘Accommodation Provider’’) and OBBL acts as booking agent for various Accommodation Providers. OTB Limited is entitled to a commission from the Accommodation Provider for the sum of 15 per cent. of the gross rate (inclusive of any VAT, local taxes and any commissions payable by the Accommodation Provider). The agreement shall continue in force until terminated by either party giving not less than three months’ written notice. However, OBBL may give notice in writing to OTB Limited terminating the agreement with immediate effect if the Accommodation Providers cease to use OBBL as their booking agent. On 23 September 2015, the Company, OTB Topco, OTB Bidco and the Existing Shareholders entered into the Reorganisation Deed pursuant to which the Company will become the holding company of OTB Topco immediately prior to Admission. Further details of the Reorganisation Deed are provided at paragraph 3 in Part 15 of this document. In addition, an Exit Fee (estimated to be £902,656) will be paid by the Group to Inflexion 2010 General Partner Guernsey LP immediately following Admission pursuant to the Investment Agreement. The Exit Fee will be triggered by, amongst other things, a listing of the Company and is equal to the sum of 1 per cent. of the enterprise value of the Company (reduced proportionately to reflect the fact that the listing of the Company is not a disposal of the entire issued share capital of the Company). On 23 September 2015, the Company and Inflexion entered into the Relationship Agreement. The principal purpose of the Relationship Agreement is to ensure that the Company will be capable of carrying on its business independently of Inflexion for so long as Inflexion together with its concert parties holds a Controlling Interest. For more information on the Relationship Agreement, please see section 11 of this Part 15: ‘‘Additional Information’’.

13. LITIGATION 13.1 Save for the Ryanair litigation (details of which are provided below), there are no governmental, legal or arbitration proceedings (including such proceedings which are pending or threatened of which the Company or the Group is aware) during the 12 months preceding the date of this Prospectus, which may have, or in the recent past have had, a significant effect on the Company’s and/or the Group’s financial position or profitability. 13.2 Ryanair initiated legal proceedings in the Irish High Court in September 2010 and served those proceedings in December 2010 claiming that OTB Limited: (a) was in breach of the terms and conditions of use of Ryanair’s website, which stated that only the private use of the website was allowed and expressly prohibited the data aggregation method used by OTB Limited; (b) violated Ryanair’s rights as author and manufacturer of the database of flights contained on its website; (c) infringed intellectual property rights over software used on its website; and (d) is liable for ‘‘passing off’’, in that OTB Limited is allegedly representing to its customers that it has an affiliation with Ryanair, and other infringements.

184 13.3 Ryanair is seeking damages for breach of contract, damages in tort, aggravated or exemplary damages, an account of profits OTB Limited made as a result of OTB Limited’s alleged infringement of Ryanair’s trademarks and/or database rights and injunctive relief. 13.4 The data aggregation method that is the subject of Ryanair’s claim is used by the Group to access Ryanair flight inventory. This facilitates customers purchasing Ryanair flight tickets on the Group’s website. OTB Limited charges the customer a contingency fee in the event that a booking is made. Data aggregation is the use of software to scan third-party websites to collect commercial information about products and services the third-party offers. The Group has not entered into an agreement with Ryanair, whose policy is to sell its tickets only through its own website. 13.5 OTB Limited challenged the jurisdiction of the Irish Courts in the first instance. The Irish High Court accepted jurisdiction. OTB Limited appealed to the Supreme Court in Ireland and, following agreement between the parties, the proceedings were stayed pending the outcome of the appeal. On 19 February 2015, the Supreme Court in Ireland upheld the High Court’s decision and confirmed that the Irish courts had jurisdiction over the claim. 13.6 Following the judgment of the Supreme Court, the stay was lifted, and Ryanair served a Statement of Claim on 22 April 2015. On 4 June 2015, OTB Limited served a Notice for Particulars on Ryanair seeking further information in relation to the allegations raised in the Statement of Claim. Following receipt of the response to the Notice for Particulars, OTB Limited will prepare its defence which it anticipates to serve on Ryanair in the last quarter of 2015. 13.7 The Company expects that the Irish proceedings, including any appeal, may not be resolved until 2018/19 but that EU-related aspects of the claim mean that if a reference to the European Court of Justice is necessary the final resolution of this case may not be until 2021. Litigation is unpredictable. The foregoing time estimate is subject to unexpected applications, appeals or other delays which could mean that the final resolution of the dispute might take until 2022 or later. 13.8 The amount of the claim by Ryanair is unquantifiable by the Company as at the date of this Prospectus, given that the legal proceedings are still at an early stage and the Company’s expectation that final resolution of the dispute might take some time.

14. INVESTMENTS, SUBSIDIARIES AND PRINCIPAL ESTABLISHMENTS 14.1 The Company currently has no principal investments (in progress or planned for the future on which the Directors have made firm commitments or otherwise) other than the subsidiary undertakings listed below. 14.2 Immediately prior to Admission, the Company will become the holding company of the Group and the principal subsidiaries and subsidiary undertakings of the Company will be as follows:

Proportion of Company Place of ownership interests Name number incorporation (%) On the Beach Topco Limited(1) ...... 08703800 United Kingdom 100 On the Beach Trustees Limited ...... 09118946 United Kingdom 100 On the Beach Bidco Limited ...... 08703901 United Kingdom 100 On the Beach Travel Limited ...... 06286904 United Kingdom 100 On the Beach Limited(2) ...... 03162982 United Kingdom 100 On the Beach Beds Limited ...... 06294605 United Kingdom 100 On the Beach Holidays Limited (dormant) ...... 04921509 United Kingdom 100

(1) Directly owned subsidiary. All other subsidiaries will be held indirectly. (2) On the Beach Limited has a Swedish trading division which has a corporate identity number of 516408-9186. 14.3 As at the date of this Prospectus, the following establishment is the only principal establishment of the Group (which is used as an office building):

Establishment Tenure Park Square, Bird Hall Lane, Cheadle Heath, Stockport SK3 0XN, United Kingdom ..... Leasehold

185 15. WORKING CAPITAL The Company is of the opinion that, taking into account the net proceeds receivable by the Company from the Offer and the bank facilities available to the Company and the Group (which reference to the ‘‘Group’’, for the purposes of this paragraph 15, includes the Company following completion of the Reorganisation), the working capital available to the Company and the Group is sufficient for the Company’s and the Group’s present requirements, that is, for at least the next 12 months following the publication of this Prospectus.

16. MATERIAL INTERESTS There are no interests known to the Company that are material to the Offer or Admission or which are conflicting interests.

17. SIGNIFICANT CHANGE There has been no significant change in the trading or financial position of the Operating Group since 30 June 2015, being the date to which the combined and consolidated historical financial information for the Operating Group set out in Section B of Part 11: ‘‘Historical Financial Information’’ was prepared. There has been no significant change in the trading or financial position of the Company since 17 August 2015 (being the date the Company was incorporated).

18. CONSENT PricewaterhouseCoopers LLP has given and has not withdrawn its written consent to the inclusion in this Prospectus of its reports set out in Section A of Part 11: ‘‘Historical Financial Information’’ and Section B of Part 12: ‘‘Unaudited Pro Forma Financial Information’’ in the form and context in which they appear and has authorised the contents of such reports solely for the purposes of Rule 5.5.3R(2)(f) of the Prospectus Rules. A written consent under the Prospectus Rules is different from a consent filed with the SEC under section 7 of the Securities Act. PricewaterhouseCoopers LLP has not filed and will not be required to file a consent under section 7 of the Securities Act.

19. STATUTORY AUDITORS The Group’s auditors are KPMG LLP of 1 St Peter’s Square, Manchester M2 3AE, United Kingdom, who are a member firm of the Institute of Chartered Accountants in England and Wales.

20. MISCELLANEOUS 20.1 Whilst there are no provisions in the Articles that require disclosure of shareholding ownership, the Disclosure and Transparency Rules require a member to notify the Company if the voting rights held by such member (including by way of certain financial instruments) reach, exceed or fall below 3 per cent. and each 1 per cent. threshold thereafter up to 100 per cent. Under the Disclosure and Transparency Rules, certain voting rights in the Company may be disregarded. 20.2 The financial information contained in this Prospectus does not constitute full statutory accounts as referred to in section 434(3) of the Companies Act. 20.3 The total expenses of the Offer and Admission, whether incidental or otherwise, payable by the Company including the London Stock Exchange fee, professional fees and the costs of preparation, printing and distribution of documents, are estimated to amount to approximately £2,688,955 (inclusive of recoverable VAT). 20.4 Each Share will be offered at a premium of approximately £0.34 to its nominal value of £1.50 each. 20.5 No Shares have been marketed to, nor are available for purchase in whole or in part by, the public in the United Kingdom or elsewhere in conjunction with the Offer and this Prospectus does not constitute an offer or the solicitation of an offer to the public in the United Kingdom to subscribe for or buy any securities in the Company or any other entity.

21. TAKEOVER BIDS The City Code is issued and administered by Takeover Panel. The Company is subject to the City Code and therefore its Shareholders are entitled to the protections afforded by the City Code.

186 22. MANDATORY BIDS Rule 9 of the City Code provides that, except with the consent of the Takeover Panel, when: (a) any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which persons acting in concert with it are interested) carry 30 per cent. or more of the voting rights of a company; or (b) any person, together with persons acting in concert with it, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with it, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which it is interested, then, in either case, that person, together with the persons acting in concert with it, is normally required to extend offers in cash, at the highest price paid by it (or any persons acting in concert with it) for shares in the company within the preceding 12 months, to the holders of any class of equity share capital whether voting or non-voting and also to the holders of any other class of transferable securities carrying voting rights.

23. SQUEEZE-OUT Under the Companies Act, if a ‘‘takeover offer’’ (as defined in section 974 of the Companies Act) is made for the Shares and the offeror were to acquire, or unconditionally contract to acquire, not less than 90 per cent. in value of the Shares to which the takeover offer relates (the ‘‘Takeover Offer Shares’’) and not less than 90 per cent. of the voting rights attached to the Takeover Offer Shares within three months of the last day on which its offer can be accepted, it could acquire compulsorily the remaining 10 per cent. It would do so by sending a notice to outstanding Shareholders telling them that it will acquire compulsorily their Takeover Offer Shares and then, six weeks later, it would execute a transfer of the outstanding Takeover Offer Shares in its favour and pay the consideration to the Company, which would hold the consideration on trust for outstanding Shareholders. The consideration offered to the Shareholders whose Takeover Offer Shares are acquired compulsorily under the Companies Act must, in general, be the same as the consideration that was available under the takeover offer.

24. SELL-OUT The Companies Act also gives minority Shareholders a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer related to all the Shares and at any time before the end of the period within which the offer could be accepted the offeror held or had agreed to acquire not less than 90 per cent. of the Shares to which the offer relates, any holder of Shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those Shares. The offeror is required to give any Shareholder notice of his right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of the minority Shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period. If a Shareholder exercises his or her rights, the offeror is bound to acquire those Shares on the terms of the offer or on such other terms as may be agreed.

25. DOCUMENTS AVAILABLE FOR INSPECTION Copies of the following documents are available for inspection during usual business hours on any weekday (Saturdays, Sundays and English public holidays excepted) for a period of 12 months from Admission at the offices of Taylor Wessing LLP, 5 New Street Square, London EC4A 3TW, United Kingdom: (a) the Articles; (b) the combined and consoldiated financial information in respect of the three financial years ended 30 September 2012, 2013 and 2014 and the nine month period ended 30 June 2015 together with the related report from PricewaterhouseCoopers LLP, which are set out in Part 11: ‘‘Historical Financial Information’’; (c) the report prepared by PricewaterhouseCoopers LLP on the pro forma financial information set out in section B of Part 12: ‘‘Unaudited Pro Forma Financial Information’’; (d) the letters of consent referred to in paragraph 18 above; and (e) this Prospectus. Dated: 23 September 2015

187 PART 16 DEFINITIONS The following definitions apply throughout this Prospectus unless the context requires otherwise:

2010 PD Amending Directive ...... 2010 EU directive (2010/73/EU), which amended the Prospectus Directive; Admission ...... the admission of the Offer Shares to the premium listing segment of the Official List and to trading on the London Stock Exchange’s main market for listed securities becoming effective in accordance with, respectively, the Listing Rules and the Admission and Disclosure Standards; Admission and Disclosure Standards . the current edition of the Admission and Disclosure Standards published by the London Stock Exchange; Articles of Association or Articles . . . the articles of association of the Company which were adopted, conditional only on Admission, by a special resolution passed on 21 September 2015 (and as amended from time to time after that date); Audit Committee ...... the audit committee of the Board; Auditors ...... KPMG LLP, 1 St Peter’s Square, Manchester M2 3AE; Board ...... the board of Directors; certificated or in certificated form . . . a share or other security (as appropriate) not in uncertificated form (that is, not in CREST); Chairman ...... the chairman of the Board; CHAPS ...... clearing house automated payment system; City Code ...... the UK City Code on Takeovers and Mergers, as amended, supplemented or replaced; Closing Date ...... 28September 2015, being the expected date of Admission; Companies Act ...... the UK Companies Act 2006, as amended; Company ...... On the Beach Group plc; Controlling Interest ...... the ability to control or exercise 20 per cent. or more of the votes able to be cast on all or substantially all matters at the Company’s general meetings; CREST ...... the relevant system (as defined in the CREST Regulations) for paperless settlement of sales and purchases of securities and the holding of shares in uncertificated form in respect of which Euroclear is the operator (as defined in the CREST Regulations); CREST Regulations ...... the Uncertificated Securities Regulations 2001 (SI 2001/3755), as amended; Directors ...... the Executive Directors and the Non-Executive Directors; Disclosure and Transparency Rules . . the disclosure rules and transparency rules of the FCA made for the purposes of Part VI of FSMA in relation to the disclosure of information by an issuer whose financial instruments are admitted to trading on a regulated market in the United Kingdom; EBITDA ...... earnings before interest, taxes, depreciation and amortisation; EU ...... the European Union, first established by the treaty made at Maastricht on 7 February 1992;

188 Euroclear ...... Euroclear UK & Ireland Limited, the operator (as defined in the CREST Regulations) of CREST; European Economic Area or EEA . . . together, the EU, Iceland, Norway and Liechtenstein; Executive Directors ...... the executive directors of the Company; Existing Investment Agreement ..... the investment agreement dated 4 October 2013 between OTB Topco, OTB Bidco and various shareholders and investors in OTB Topco and OTB Bidoco including Simon Cooper and Inflexion (as amended and restated from time to time); Existing Loan Note Holder ...... a holder of loan notes in the capital of OTB Topco as at the date of this document; Existing Shareholder ...... a holder of Existing Shares; Existing Shares ...... the shares in the capital of OTB Topco as at the date of this document; Exit Fee ...... the exit fee payable to Inflexion 2010 General Partner Guernsey LP by the Company pursuant to the Investment Agreements; FCA ...... the UK Financial Conduct Authority; First Lloyds Facility ...... the facility agreement dated 4 October 2013 between OTB Topco, OTB Bidco and Lloyds (as amended and restated from time to time); FSMA ...... the Financial Services and Markets Act 2000, as amended; Group ...... (i) as at the date of this document and at all times prior to completion of the Reorganisation, the Operating Group; and (ii) following completion of the Reorganisation immediately prior to Admission, the Company and its subsidiaries and subsidiary undertakings from time to time; Group Company ...... a company within the Group; HMRC ...... HM Revenue and Customs; IFRS ...... International Financial Reporting Standards, as adopted in the EU; Independent Non-Executive Directors the ‘‘independent non-executive directors’’ of the Company, within the meaning of the UK Corporate Governance Code; Inflexion ...... OTB Holdings Limited Partnership (acting by its general partner Inflexion 2010 General Partner Limited); Investment Agreements ...... the Existing Investment Agreement and the New Investment Agreement; Investment Company Act ...... US Investment Company Act of 1940, as amended; Listing Rules ...... the rules of the FCA relating to admission to the Official List made in accordance with section 73A(2) of FSMA; Livingbridge ...... Livingbridge EP LLP and Livingbridge VC LLP; Loan Note Exchange ...... the exchange of loan notes in OTB Topco for loan notes in the Company pursuant to the Reorganisation Deed; London Stock Exchange ...... London Stock Exchange plc; Lloyds ...... Lloyds Bank plc (company number 00002065); LTIP ...... the On the Beach Group plc Long Term Incentive Plan to be adopted by the Company on Admission;

189 Member States ...... member states of the EEA; Money Laundering Regulations ..... the Money Laundering Regulations 2007 (SI 2007/2157), as amended; New Investment Agreement ...... the investment agreement to be entered into by the Company, OTB Bidco, the Existing Shareholders, Inflexion and others immediately prior to Admission as part of the Reorganisation (as amended and restated from time to time); New Shares ...... the 5,434,782 new Shares to be offered for subscription by the Company under the Offer; Nomination Committee ...... the nomination committee of the Board; Non-Executive Directors ...... the non-executive directors of the Company (including the Chairman); Numis ...... Numis Securities Limited of 10 Paternoster Square, London EC4M 7LT, United Kingdom; Official List ...... the Official List of the UK Listing Authority; Offer ...... the offer of Offer Shares to certain institutional and other investors in the United Kingdom and elsewhere as described in Part 13: ‘‘Details of the Offer’’; Offer Price ...... the price at which each Share is to be sold or issued (as the case may be) under the Offer, being 184 pence; Offer Shares ...... the Existing Shares and the New Shares to be sold at the Offer Price pursuant to the Offer; Operating Group ...... prior to 4 October 2013, On the Beach Travel Limited and its Subsidiaries from time to time and thereafter until immediately prior to Admission, On the Beach Topco Limited and its Subsidiaries from time to time; OTB Bidco ...... On the Beach Bidco Limited (company number 08703901); OTB Limited ...... On the Beach Limited (company number 03162982); OTB Topco ...... On the Beach Topco Limited (company number 08703800); Prospectus ...... this document; Prospectus Directive ...... the EU Prospectus Directive (2003/71/EC) (and any amendments to it, including the 2010 PD Amending Directive, to the extent implemented by the Relevant Member State) and any relevant implementing measure in each Relevant Member State; Prospectus Directive Regulation .... the EU Prospective Directive Regulation (2004/89/EC); Prospectus Rules ...... the rules of the FCA made for the purposes of Part VI of FSMA in relation to offers of securities to the public and the admission of securities to trading on a regulated market; QIB ...... ‘‘qualified institutional buyer’’ as defined in Rule 144A under the Securities Act; Registrars ...... Capita Asset Services, The Registry, 34 Beckenham Road, Kent BR3 4TU, United Kingdom; Regulation S ...... Rules 901 to 905 (including Preliminary Notes) of Regulation S promulgated under the Securities Act; Relationship Agreement ...... the relationship agreement between the Company and Inflexion. See section 11 of Part 15: ‘‘Additional Information’’;

190 Relevant Member State ...... a Member State which has implemented the Prospectus Directive; Remuneration Committee ...... the remuneration committee of the Board; Reorganisation ...... the reorganisation of the Company in preparation for the Offer (to occur immediately prior to Admission) as described in paragraph 3 of Part 15: ‘‘Additional Information’’; Reorganisation Deed ...... the reorganisation deed dated 23 September 2015 between the Company, OTB Topco, OTB Bidco, the Selling Shareholders and others; Reporting Accountant ...... PricewaterhouseCoopers LLP of Benson House, 33 Wellington Street, Leeds LS1 4JP, United Kingdom; RPI ...... the UK retail prices index; Sale Shares ...... the 46,739,130 Shares in issue immediately prior to Admission which are to be offered for sale by the Selling Shareholders under the Offer; SEC ...... the US Securities and Exchange Commission; Second Lloyds Facility ...... the facility agreement dated 18 September 2015 entered into between the Company and Lloyds (to be acceded to by OTB Topco, OTB Bidco and certain other members of the Group on Admission) (as amended and restated from time to time); Securities Act ...... US Securities Act of 1933, as amended; Selling Shareholders ...... means Inflexion, Simon Cooper, Wendy Parry, Richard Segal, Alistair Daly, Jonathan Smith and certain other current and former employees and non-executive directors of the Group, who are each selling Sale Shares pursuant to the Offer; Senior Independent Director ...... the ‘‘senior independent director’’, as referred to in the UK Corporate Governance Code; Senior Managers ...... certain members of the Company’s management team (other than the Directors), details of whom are set out in Part 6: ‘‘Directors, Senior Management and Corporate Governance’’; Share Exchange ...... the exchange of shares in OTB Topco for shares in the Company pursuant to the Reorganisation Deed; Shareholders ...... the holders of Shares from time to time; Shares ...... ordinary shares of £1.50 each in the capital of the Company having the rights set out in the Articles; SIP ...... the On the Beach Group plc Share Incentive Plan to be adopted by the Company on Admission; Subsidiary ...... has the meaning given to it in section 1159 of the Companies Act and includes group companies included in the consolidated financial statements of the Group from time to time; Takeover Panel ...... the UK Panel on Takeovers and Mergers; UK Corporate Governance Code .... the UK Corporate Governance Code published by the Financial Reporting Council in September 2012, as amended; UK Listing Authority ...... the FCA in its capacity as the competent authority for the purposes of Part VI of FSMA; uncertificated or in uncertificated form ...... in relation to a share or other security, a share or other security title to which is recorded on the relevant register of the share or

191 security concerned as being held in uncertificated form in CREST and title to which, by virtue of the CREST Regulations, may be transferred through CREST; Underwriting Agreement ...... the underwriting and sponsor agreement dated 23 September 2015 and entered into by the Company, the Directors, the Selling Shareholders and Numis; United Kingdom or UK ...... the United Kingdom of Great Britain and Northern Ireland; United States or US ...... the United States of America, its territories and possessions, any State of the United States of America, and the District of Columbia; and VAT ...... UK value added tax.

192 PART 17 GLOSSARY OF TERMS The following technical terms or other abbreviations (or variations of them) are used in this Prospectus:

ABTA ...... Association of British Travel Agents; Android ...... a mobile operating system based on the Linux kernel and currently developed by Google; API ...... an application-programming interface, being a set of programming instructions and standards for accessing a web-based software application or web tool; app or application ...... a self-contained program or piece of software designed to fulfil a particular purpose, usually downloaded by a user to a mobile device; ATOL ...... Air Travel Organiser Licensing, a CAA scheme intended to protect consumers who have purchased package holidays and flights from a member tour operator; bed-bank ...... a specialist database dedicated to supplying hotel capacity to tour operators, traditional travel agents and OTAs (see also direct contracting); bid modelling tool ...... the Group’s in-house technology used for the automatic controlling of bids as part of its paid search marketing; CAA ...... the UK Civil Aviation Authority; cookie ...... data generated by a website saved by a user’s web browser, and used to track the user’s future web activity; CRM ...... customer relationship management, being an approach to managing a company’s interactions with current and future customers; daily unique visitors ...... the number of individuals, as defined by an IP address and a further identifier, frequenting pages from the Group’s websites during a 24 hour period, regardless of how often they visit during this 24 hour period; Direct Connect and Direct Connects . the proprietary technology the Group uses to distribute certain network and low-cost carrier flight products by either connecting customers directly to an airline’s proprietary inventory platform that the Group can access under a formal agreement or by facilitating customers to book via an airline’s public access website, in each case, without the intermediation of a GDS; direct contracting ...... the sourcing of hotel beds for customers directly from hotels, rather than via third-party bed-banks as intermediaries (see also bed-bank); direct contracting system ...... a database allowing an OTA to source beds for customers by contracting directly with hotels rather than from third-party bed-banks as intermediaries; dynamic packaging ...... package holidays including at least two travel products (e.g. flight and hotel) which customers can build in a personalised way on a website or through the app of a OTA or tour operator; dynamically packaged holidays ..... holiday packages consisting of at least two travel products (eg, flight and hotel), which customers can select and combine themselves (see also traditional package holidays);

193 EBITDA ...... earnings before interest, tax, depreciation and amortisation; GDS or Global Distribution System . . a global distribution system, also referred to as a computer reservation service, which provides a centralised, comprehensive repository of travel products, including availability and pricing of seats on airline flights and hotel accommodations; iOS ...... a mobile operating system created and developed by Apple Inc.; IT ...... information technology; MI ...... management information; Net Promoter Score ...... a score based on customer responses to assist companies in getting a clear measure of their performance in identifying customers who are ‘‘promoters’’ and likely to recommend a company’s services to others; online penetration ...... the relationship between the number of online package holiday retails sales value and the total package holidays retail sales value; OTA ...... online travel agency; split testing ...... a process whereby the Group makes changes to pricing policies of the user experience on its websites and exposes these changes only to a portion of users on its websites to measure the effect of the changes; traditional package holidays ...... holiday packages consisting of at least two travel products (eg, flight and hotel), which are pre-set by the travel agent or tour operator, and which customers cannot vary (see also dynamically packaged holidays); TTV ...... the total transaction value of all flight and hotel, flight only and hotel only sales, calculated by aggregating the gross price paid by customers for their bookings; and white label ...... the marketing by one company under its own brand of a product provided by another company.

194 PROSPECTUS On the Beach PROSPECTUS

SEPTEMBER 2015 SEPTEMBER 2015