Sorry Saga of over-50s firm

Double trouble as profit and shares slump

OVER-50s holiday and insurance giant Saga has warned a shake-up of the business will hammer this year’s profits.

Shares in the specialist crashed 37% yesterday as it also revealed customers were cutting back on travel because of Brexit.

Saga, founded in 1959, now makes most of its money from selling insurance and has been hit by cut-throat competition.

Insurance profits tumbled more than 8% in the 12 months to January 31.

Boss Lance Batchelor unveiled a fightback yesterday, including the launch of innovative products aimed at its over-50s customers – such as three-year fixed-price home and car insurance policies.

Due to tough trading last year,

Saga slashed the value of its insurance business by £310m, resulting in the firm going from a £181m profit the year before, to a £134m loss.

Excluding the write down, annual profits dropped £10m to £180m.

And looking forward, the firm warned this year’s profits could plummet as low as £105m due to its struggling insurance business and the need to invest.

Profits at Saga’s travel arm rose 2.4% last year.

But Batchelor said forward booking to Europe had suffered a 8% decline. “Brexit is a factor,” he said. “And it’s dragging our holiday business down.” Nicholas Hyett, analyst at broker Hargreaves Lansdown, said: “There have been worries for some time that the Saga brand is losing its appeal at the lower end of its ‘over 50s’ customer base. “Without brand loyalty, Saga is just another insurer.” Saga’s share price has slumped more than 60% since the firm’s flotation in 2014.