Saga cruises ahead with new membership programme

Alys Key
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The Spirit of Adventure will be on the open seas by 2020 (Source: Saga)

It's full steam ahead for travel and insurance firm Saga, which set out a raft of new projects in its half-year results this morning, despite a dip in pre-tax profits.

As well as investing in a new ship, the over-50s services provider will target high-spenders with a new membership scheme, promising savvy pensioners deals with the likes of Apple.

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The figures

Pre-tax profit dropped 6.3 per cent to £103m in the six months to 31 July. Excluding derivatives and debt write-offs, underlying profits rose 5.5 per cent to £110.2m.

Revenue fell just 0.4 per cent to £435.4m.

Saga reduced its debt pile by 13.8 per cent in the period to £460.4m.

The group raised its dividend to 3p.

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Why it's interesting

Despite the drop in profits, Saga is pushing on with the delivery of a second cruise ship in 2020. This follows a jump in revenue and gross profit in the group's cruising business, which netted pre-tax profit of £4.5m this year compared to just £500,000 last year.

Saga also noted a one per cent drop in high-spending customers, which prompted its new Saga Possibilities scheme. The membership programme will offer customers deals with Prezzo restaurants and Majestic Wine, among others. It is hoped that this will encourage the trend for the most loyal customers to spend more, which Saga has already seen this year in a four per cent increase in top customers' average spend.

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What Saga said

"Saga is on track to deliver a fourth consecutive year of growth," chief executive Lance Batchelor affirmed.

He added: "I'm delighted to announce the launch of Saga Possibilities, our new membership programme, available to all Saga customers. Saga Possibilities is a critical new offering that will allow us to thank and encourage our customers to enjoy more of what Saga can offer.

"I believe that these results continue to demonstrate that Saga is growing, has good momentum, and is on track to deliver in line with expectations for the full year."

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