On the Beach reinstated its annual profit forecast at a lower level than previously expected, sending shares sharply lower as the Iran war continues to weigh on British holiday demand. The company said customers have pulled back from booking trips to destinations near the conflict zone, including Turkiye, Cyprus and Egypt, amid weakened consumer confidence.

Although bookings have stabilized since the end of March, many travelers are adopting a cautious wait and see approach. The company now expects adjusted profit before tax of between 18 million pounds and 25 million pounds for the year ending September 30, significantly below its earlier forecast. Profit for the first half of the year fell more than 70 percent, partly due to cancelations linked to the Middle East conflict.

Despite the challenges, On the Beach reported a 9 percent increase in bookings over the past six weeks as it approaches the crucial summer season. The company expressed confidence that strong demand for summer holidays will help offset earlier pressures, even as travelers book later and seek greater flexibility amid ongoing geopolitical and cost concerns.