Monday 22 January 2018

Saga on track despite costs squeezing profits

The over-50s insurer and holiday firm saw pre-tax profits fall 6.3% to £103 million for the six months ending in July.

Saga stock
Saga stock

By Ben Woods, Press Association Chief City Correspondent

Saga said it was on course to achieve its fourth consecutive year of growth despite profits being squeezed by cost pressures.

The over-50s insurer and holiday firm saw pre-tax profits fall 6.3% to £103 million for the six months ending in July, as it took a hit from a “successful refinancing and net fair value losses on derivatives”.

While revenues dropped £1.8 million to £435.4 million over the period, underlying pre-tax profits rose 5.5% to £110.2 million thanks to a 10.4% hike in its retail broking and travel business.

The group said it was enjoying bumper pre-sales for its cruise ship Spirit of Discovery, with travel profit growing 63% to £11.9 million.

It came as the company also hiked its interim dividend by 11.1% to 3p.

Group chief executive Lance Batchelor said: “Saga is on track to deliver a fourth consecutive year of growth.

“Underlying profits are up again and so is our dividend. Our retail broking and travel divisions are performing well. Saga’s new ship, Spirit of Discovery, will arrive in June 2019, and pre-sales are very strong.

“Our confidence in demand has supported our decision to purchase our second new ship, Spirit of Adventure, and to bring forward delivery to August 2020.

“I believe that these results continue to demonstrate that Saga is growing, has good momentum, and is on track to deliver in line with expectations for the full year.”

Focusing on the insurance business, total revenues dropped 10.3% to £192.8 million, but retail broking profits climbed 4.7% to £70.9 million following a robust performance from motor broking.

Press Association

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