Saga cruises back to growth as over 50s return to the high seas
Saga, the UK’s specialist in products and services for people over 50, has reported a jump in revenue and profit off the back of higher demand for its holiday packages.
The company told the market this morning that underlying revenue for the year to the end of January had risen 13 per cent to £732.7m, and trading earnings before interest, tax, depreciation, and amortisation (EBITDA) had jumped 26 per cent to £116.5m.
However, despite the higher revenue and EBITDA figures, Saga still reported a loss before tax of £129m for the year, although this was much improved on the -£272.7m loss reported for fiscal 2023. The group’s underlying profit before tax was £38.2m, up 146 per cent compared to the prior year.
Insurance Broking reported an earned underlying profit before tax of £39.8m, compared with £71.5m in 2023. The year-on-year decline of £31.7m was driven by the “challenging insurance environment and, in particular, the impact of net rate inflation.”
Insurance Underwriting reported an underlying loss before tax of £1.4m, a fall of £12.1m compared to 2023’s levels. Due to a “sustained level of claims inflation,” the firm’s underwriting combined ratio – a measure of underwriting profitability – improved marginally from 117.1 per cent to 120.5 per cent.
On the other hand, Saga’s ocean cruise business roared back to life with underlying profit before tax hitting £35.5m, compared to an underlying loss after tax of £0.7m in the previous year. Revenue at the ocean cruise business rose 28 per cent overall.
Mike Hazell, Saga’s chief executive officer, said: “Ocean Cruise had an outstanding year and, as a result, we far exceeded our initial earnings targets, while River Cruise and Travel both returned to profit for the first time since the pandemic.”
He added: “While our Insurance business continued to be hindered by challenging conditions, with inflationary headwinds…we are investing in price to improve our competitive position and stabilise our policy volumes and early signs indicate that this is delivering the expected benefits.”
“I am confident in our strategic direction, which underpinned by the strength of our brand, allows us to continue to serve our unique customer base. Our decision to accelerate our partnership strategy will provide us with a capital-light route to growth, reducing debt and delivering long-term sustainable value for all our stakeholders,” Hazell summarized.