Over-50s firm Saga cruising along nicely as fourth year of growth nears

Result boosted by cruise ship bookings Shareholders see dividend increased

Saga, the over-50s insurer and travel firm, is on course to achieve its fourth consecutive year of growth while flagging strong pre-sales for its new cruise ship.

Releasing interim results yesterday, the group said pretax profits slipped 6.3 per cent to £103 million in the six months ending in July, as it took a hit from a “successful refinancing and net fair value losses on derivatives”.

While revenues dipped to £435.4m over the period, underlying pre-tax profits rose 5.5 per cent to £110.2m thanks to a 10.4 per cent hike in its retail broking and travel business.

The group said it was enjoying bumper pre-sales for its cruise ship, Spirit of Discovery, with travel profit jumping 63 per cent to £11.9m. The interim dividend was hiked by 11.1 per cent to 3p.

Chief executive Lance Batchelor told investors: “Saga is on track to deliver a fourth consecutive year of growth.

“Underlying profits are up again and so is our dividend. Our retail broking and travel divisions are performing well. Saga’s new ship, Spirit of Discovery, will arrive in June 2019, and pre-sales are very strong.

“Our confidence in demand has supported our decision to purchase our second new ship, Spirit of Adventure, and to bring forward delivery to August 2020.”

George Salmon, equity analyst at financial services group Hargreaves Lansdown, said: “Offering a combination of cruise ships and insurance, with a sprinkling of personal finance and healthcare services, Saga is a pretty unique animal. Tying it all together is a focus on the over-50s age group.

“Many of today’s retirees are asset rich and have comfortable pensions in place, and demographic change means this age bracket is swelling in number.

“While this means Saga has a potentially lucrative grey emerging market in front of it, the challenge is to first get the customer onside, then effectively cross-sell its numerous services. Profit is heading in the right direction.”