Lance Batchelor is set to become one of Saga PLC’s (LON:SAGA) customers rather than its chief executive after announcing his retirement at the end of next January.
Batchelor (55) has been in charge at the over-50’s specialist for six years and led its float in 2014, but the last twelve months has been a tumultuous period for the group that saw it post a big loss, slash its dividend and issue a profit warning about its insurance business for this year.
In the time since it floated, Saga has also shed about four-fifths of its value.
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Patrick O'Sullivan, Saga's chairman, said Batchelor would leave a strong business with an attractive future though brokers still foresee problems.
In April, UBS downgraded its rating saying: “We find further execution risks around the new strategy, which we expect to weigh on the price-earnings multiple.”
Specifically, UBS thinks Saga’s plan to launch new home and motor policies with three-year fixed pricing bring risks around capital requirements in the broking unit.
Batchelor said it had been a privilege to run Saga and in his time remaining he would focus on the introduction of the new insurance products and on the launch of its new cruise ship, the Spirit of Discovery, which is scheduled for 5 July.
“Early progress in Insurance Broking is encouraging and we will provide a more detailed update at the AGM next week," added O'Sullivan.
“These developments demonstrate that Saga is a strong business with an attractive future."
In a note to clients, analysts at Peel Hunt said that Saga’s ‘new’ strategy of refocusing on a refreshed affinity broker is showing progress, especially in insurance, while the launch of Spirit of Discovery will give earnings a hefty boost."
“We believe it would make sense to appoint a new CEO with an affinity broking background to run Saga going forward," added the broker.
Saga shares eased 3.5% to 38.6p in morning trading.