- Saga’s cruise division profits surge, buoyed by demand
- Insurance division experiences 53% profit decline, seeks partnerships
- Group’s underlying profit rises 146%, debt decreases 10%
New results indicate that Saga’s cruise and travel divisions returned to profitability in 2018 due to a significant increase in demand.
According to preliminary annual results, the group’s ocean cruise division generated an underlying pre-tax profit of £35.5 million in the year ending in January, compared to a loss of £700,000 in the prior year.
The organisation stated, “Bookings for ocean cruises continue to be exceptionally robust, and we have already secured a 78% load factor and £3,679 per diem for 2024/25.”
On the other hand, the insurance division experienced a 53% decline in total underlying pre-tax profit to £38.4 million over the previous fiscal year.
To ensure “long-term success,” Saga stated it was accelerating the search for potential partners for its cruise and insurance businesses.
On Wednesday, Saga shares increased 2.45%, or 2.67p, to 111.67p, after declining more than 13% over the previous year.
The underlying pre-tax profit for the over-50s river cruises division increased to £3 million for the year from £5.1 million in the prior year.
The group’s underlying pre-tax profit increased by 146% year-over-year to £38.2 million by December 31.
The company incurred a loss before taxes of £129 million for the fiscal year, comprised of impairment of insurance broking goodwill amounting to £104.9 million and other exceptional items totalling £62.3 million.
The findings disclosed that underlying revenue increased by 13 per cent to £732.7 million for the fiscal year ending in January.
At the end of the period, the group’s debt, amounting to £637.2 million, had decreased by 10 per cent.
Saga stated that insurance underwriting reported an underlying loss before taxes of £1.4 million, which is £12.1 million less than anticipated in 2023.
“Having implemented substantial price increases over the past 18 months, the insurance underwriting industry is now on a much stronger footing,” the statement continued.
A measure of underwriting profitability, the group’s underwriting combined ratio, improved marginally due to “sustained level of claims inflation.”
According to the group, Saga Money’s decrease in underlying pre-tax profit from £2.3 million in the prior year to £1.1 million “reflects the short-term impact of high interest rates on customer demand for equity release products.”
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We are taking the necessary steps to reposition the business,” said CEO Mike Hazell, “even though our insurance business continued to be hampered by challenging conditions, with inflationary headwinds affecting policy volumes and margins, particularly for our three-year fixed-price policies.
“Forward bookings are robust, with all three of these companies significantly ahead of last year’s corresponding period,” he stated.
Hazell stated, “By expediting our partnership strategy, we will afford ourselves a capital-light trajectory towards expansion, thereby diminishing indebtedness and furnishing enduring, sustainable value to every stakeholder.”
