Saga it expects profits to be “well ahead” of the previous year, driven by a strong performance from its ocean cruise and travel section – but its insurance arm continues to weigh it down.
The over 50s specialist saw £150m in booked revenue from its travel segment as of this week, 37 per cent ahead of the same point last year and driven by an uplift in demand.
The insurance and travel group also claimed it had seen a record launch for its ocean cruise season, which has already seen a booking load factor of 34 per cent, ahead of last year – as the firm rides the wave of a post-pandemic uptick in holidaying.
It is currently on track to deliver pre-tax earnings of £40m per ship, as it preps for the more profitable late summer period.
Saga’s shares soared 6.66 per cent in early trading on the announcement, but have now gone back down being flat.
Euan Sutherland, Saga’s Chief Executive Officer, said: “We have taken strong bookings for our ocean cruises with a load factor that is ahead of the same point in the prior year, and our River Cruise and Travel businesses are on track to return to profitability in line with previous guidance.”
It comes amid a post-pandemic surge in the broader travel industry, which saw Saga report a 50 per cent revenue boost in its April results.
Despite the boost in Saga’s cruise and travel divisions, the company was weighed down by a challenging year for its insurance segment, specifically motor, as high inflation and the cost-of-living continued to dent performance and prompts a rise in the price of premiums.
“In Insurance, market conditions, particularly in motor, continue to weigh on our Group result,” Sutherland said. Policy sales in car and home insurance were 7 per cent behind last year.
In January, Saga confirmed that it was in talks to sell of the insurance arm of its underwriting business, in an attempt to help pay down debts.