Saga PLC (LON:SAGA) said its insurance broking and travel businesses were both continuing to improve and that recent trading has given management confidence in the strategic U-turn taken last year.
Reporting on the end of an eventful year to end-January, the over-50s products and services specialist said full-year underlying profit before tax was “in line” with wide previous guidance of somewhere between £105mln and £120mln amid the still-tough insurance and travel markets.
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New chief executive Euan Sutherland, who started in December after leaving Superdry earlier last year, has been joined on the board by a new chief operating officer and new insurance CEO but they are keeping to the strategy set out last April.
This was focused on “returning Saga to its heritage as a company that delivers high quality, differentiated products and services that resonate with its core customers”.
One of these new products was a three-year fixed-price insurance policy, of which 317,000 have so far been sold, with more than 60% of direct new business customers choosing this product since it was launched.
However, for the full year to 31 January, Saga-branded home and motor insurance policies are expected to be roughly 3% lower than the prior year, though with margins held at good levels.
Saga’s tour revenues were guided to be down around 5% year-on-year, as seen in the first half, in line with trading at the half year, while the collapse of Thomas Cook is expected to result in a £4mln hit to underlying profit.
The company said it was seeing a “much more resilient picture” in those parts of the business where our customer proposition is truly differentiated, such as escorted tours.
New cruise ship, the Spirit of Discovery, is expected to achieve an underlying profit of more than £20mln for the second half, while the next liner off the docks, the Spirit of Adventure, is on track for delivery in August.
Forward bookings for the coming year are at 76% of the full year target, "fully on track" with expectations for £40mln of EBITDA per new ship.