Insurance and travel company Saga has seen its share price rise after delivering a better-than-expected set of results this morning.
The over 50s holiday and insurance company had issued a profit warning in December after the collapse of Monarch Airlines which had affected its tour operations business.
In its preliminary results for the year to 31 December, the company announced that profit before tax had fallen 7.6 per cent from £193.3m to £178.7m while earnings per share had fallen from 14.1p to 13p.
Read more: Shares in Saga sink as the collapse of Monarch Airlines hits its profits
Saga’s share price rose by as much as eight per cent on the news.
Brokers Numis said that the results indicate “that the company is becoming more efficient and starting to see the benefits of investment in retail broking and travel”.
It said that this, combined with the arrival of new ships in 2019 and 2020, “gives confidence in returning the business to sustainable profit growth”.
Brokers at Bernstein highlighted the dividend growth of 5.9 per cent which they said “shows continued confidence in cash generation”.
“One of the concerns we have heard from investors since launch was the sustainability of Saga’s progressive dividend. This increase signals management’s continued confidence in the cash generation of its ongoing business,” they said.
Chief executive of Saga Lance Batchelor said: “In a challenging market we have delivered a set of full year results which is in line with the rebased profit expectations set at the end of 2017. We have also continued to develop our strategy for long term growth.”