Saga says annual profit set to more than double

(Sharecast News) - Saga said on Tuesday that it expects full-year underlying pre-tax profit to more than double on the previous year as it hailed an "outstanding" year for the cruise and travel businesses. In an update for the period from 1 August 2023 to 29 January 2024, Saga - which specialises in products and services for the over-50s - said it now expects revenue growth of between 10% and 15%.

Ocean Cruise revenue is expected to grow by around 30% year-on-year, it said, delivered through a load factor of 87% and per diem of £331, both significantly ahead of the 75% and £318 seen a year earlier.

As a result, and in line with previous guidance, the group expects to exceed its target of £40m Ocean Cruise trading EBITDA per ship.

Meanwhile, the river cruise segment is expected to return to underlying profit, supported by a load factor of 85% and a per diem of £285. This equates to revenue of around £44m and 17,000 passengers, up from £29m and 12,000 a year earlier.

Travel revenue growth is expected to be between 40% and 45%, with 58,000 passengers, up more than 20% on the prior year. In line with previous guidance, travel - when combined with the river cruise business for consistency with previous reporting - is on track to return to pre-pandemic underlying pre-tax profit, it said.

Chief executive Mike Hazell said: "For 2023/24, Saga remains on track to deliver significant growth in revenue, in addition to an underlying profit more than double that of the prior year, exceeding our previous guidance.

"Our cruise and travel businesses have had an outstanding year, having taken around 120k passengers on holiday, with customers continuing to be drawn to the strength of the Saga brand and offer. As a result, these businesses will return to profitability, in line with expectations. In insurance, the market-wide inflationary environment and declining policy volumes are continuing to impact our performance.

"The year ahead will see a continuation of these trends across our business. Bookings for the new seasons in cruise and travel are robust, showing good overall progress."