Saga PLC (LON:SAGA) said it is trading in line with expectations with strong demand in its travel division and a mixed performance in the insurance business.
The company, which provides insurance, holidays, healthcare and financial services to people aged 50 and over, said in a trading update covering 1 August 2018 to 15 January 2019 that the home and motor insurance market continues to be competitive.
Falling average premiums and some upward pressure on net rates in the home insurance arm hurt broker revenue and profits.
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The Saga branded Motor and Home policy count is broadly stable compared to a year ago, with increased new business volumes, while results for the group’s underwriter exceeded expectations thanks to a “positive experience” for small and large personal injury claims.
In the travel business, the programme for 2018/19 is fully sold and holidays for 2019/20 are 54% sold.
Tour revenue for 2019/20 departures is roughly flat as the company shifts towards higher margin products, with fewer passengers.
Demand for cruises remains strong with its Spirit of Discovery reaching 69% of the sales target for 2019/20 departures and the Spirit of Adventure reaching 34% of the sales target for 2020/21 departures.
The group expects a non-cash impairment charge of £6mln related to the Saga Pearl II and Saga Sapphire ships leaving service in April 2019 and June 2020. It will be excluded from underlying pre-tax profit.