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Saga PLC - Folkestone, Kent-based holiday and insurance provider to over 50s - Says will report a full-year underlying pretax profit, despite Covid-19 challenges. It had reported a GBP109.9 million underlying pretax profit for financial 2020, which ended January 31 last year.
Notes, that while it has "significant liquidity and headroom" to current covenants in short-term bank facilities, given the backdrop of continued disruption to its Travel business, it is taking actions to further enhance financial flexibility. Starts "constructive discussions" with lenders, who were described as "supportive".
Insurance business performance continues to be resilient in highly competitive market, with motor & home policy sales 1% ahead of the year before. Noted reduced claims frequency expected to have positive impact of at least 5 basis points on current year loss ratio. Says Travel business well positioned to resume operations, and will focus on customer retention and controlling costs. Cash burn rate for second half towards lower end of previous guidance of GBP6 million to GBP8 million per month.
Chief Executive Euan Sutherland says: "We have made good progress in delivering our new strategy and have accelerated the pace of change at Saga, against the backdrop of the challenges that the Covid-19 pandemic has brought to our business. Insurance remains resilient, while within Travel we are focusing on ensuring the safest possible environment for our guests when cruise and holidays resume, whilst appropriately controlling costs until that time.
"We are confident in our strategy, the strength of our brand and the loyalty and economic resilience of our customers. We know they are ready to travel in great numbers and live their lives to the full as the vaccine programme is rolled out. We are excited about the opportunities ahead as we focus on delivering more exceptional experiences for our customers," Sutherland adds.
Current stock price: 266.90 pence, down 3.9% Tuesday
Year-to-date change: up 5.5%
By Paul McGowan; paulmcgowan@alliancenews.com
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