- Annual underlying revenue up 13% to £732.7 million
- River Cruise and Travel returns to profit
- Strong customer base of 9.6 million
Shares in Saga (SAGA) were marginally higher this morning as the over 50s travel and insurance company reported a 146% rise in underlying pre-tax profit to £38.2 million for the year ending 31 January 2024 lifted by forward bookings from their cruise and travel businesses.
Underlying revenue for Ocean Cruise grew by 28% to £215.9 million compared with 2022/3, supported by a load factor of 88%.
Saga’s River Cruise operations returned to profit reporting an underlying pre-tax profit of £3 million compared with an underlying pre-tax loss of £5.1 million in 2022/3.
The company’s Travel division also returned to profit for the first time since the pandemic, reporting an underlying pre-tax profit of £1.5 million, an improvement of £5.6 million compared to the £4.1 million underlying pre-tax loss last year.
Mike Hazell, Saga CEO said: ‘Ocean Cruise had an outstanding year and, as a result, we far exceeded our initial earnings targets, while River Cruise and Travel both returned to profit for the first time since the pandemic.
‘Looking ahead, forward bookings are strong, with all three of these businesses significantly ahead of the same point in the prior year.’
DEBT REDUCTION
The company said their ‘key priority’ was to reduce debt level going forward.
Net debt was reduced by £74.5 million (10% lower than 31 January 2023) over the past 12 months to close the period at £637.2 million.
‘Following a series of actions taken to increase the group's financial flexibility, we have sufficient liquidity to meet the £150 million bond repayment in May 2024 through a combination of available Cash and utilisation of the £85 million facility with Roger De Haan, the company said.
INSURANCE DIVISION SETBACKS
It was not all good news however as the over 50s travel and insurance company faced challenges with its insurance business with ‘inflationary headwinds’ impacting policy volumes and margins particularly for three-year fixed price policies.
The company’s insurance broking arm reported an underlying pre-tax profit of £39.8 million compared with £71.5 million in the previous year – with the number of total policies in force 9% behind the prior year.
Policy sales across the 12-month period were also 9% behind, reflecting a 9% fall in motor and home policies, alongside 8% and 3% fewer sales of travel and private medical insurance policies, respectively.
Saga Money’s underlying pre-tax profit was lower compared to last year ‘reflecting the short-term impact of high interest rates on customer demand for equity release products,’ said the company.
Year-to-date the shares have lost 18% to 111p.
