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(Alliance News) -Saga PLC, which provides insurance and travel to people over 50, on Monday said the restart of its travel business is a "priority" as it prepares to resume cruises towards the end of this month.
The Kent, England-based company, which holds its annual general meeting on Monday, said its travel business is due to resume from June 27, depending on government restrictions, with cruises to set sail initially for UK itineraries.
"With continued uncertainty surrounding the timing of the full easing of government restrictions and the implications of that for the travel sector, we have put in place contingency plans to manage any potential impacts. This includes plans to potentially operate for a short period with fewer guests than typical load factors, if necessary," said Saga.
Saga's AGM update comes as UK Prime Minister Boris Johnson is poised to sign off plans to delay the lifting of coronavirus lockdown restrictions in England amid growing concerns about the surge in case of the highly transmissible Delta variant.
The prime minister is expected to agree to put the final easing of controls on hold for up to four weeks when he meets senior ministers and officials on his return on Sunday from the G7 summit in Cornwall. It could mean that lockdown lifting – which had been slated for June 21 under the government's road map – will be put back to July 19.
Despite uncertainty, Saga highlighted continued demand for its travel business. The company said it has retained 73% of its cruise customers after cancelled bookings and 42% of tour customers. Cruise load factors remain ahead of expectations at 77% for the current financial year ending January 31, 2022 and 48% for the following year ending in 2023.
Holiday tour bookings have reached 60% of the revenue target for the current financial year and 27% for the following year, it said.
Saga noted that its cash burn for the year-to-date was at the lower end of its expectations of GBP7 million to GBP9 million per month. However, the easing of international restrictions remain crucial for Saga's travel business.
For its insurance business, Saga said motor and home policy sales for the period stretching February 1 to June 13 were 2% behind year-on-year due to a competitive market, though it noted an "improved picture" since the start of May.
Saga has appointed Steve Kingshott as Insurance chief executive, who will be joining the business from Tesco PLC in the autumn.
The firm added that its liquidity position remains "resilient", with available cash balances of GBP78 million at the end of May 31 in addition to an undrawn GBP100 million revolving credit facility. Total debt at the end of May was GBP757 million, largely in line with the end of January.
"Our focus remains on the consistent delivery of our strategy and our Board has been encouraged by the continued progress in the first four months of the year. In Travel, the resumption of sailing for both ships and restarting Tours remains the priority, whilst in Insurance we aim to deliver consistent performance across our balanced scorecard," it said.
Saga shares were 0.5% higher at 412.60 pence in London on Monday.
By Scarlett Butler; scarlettbutler@alliancenews.com
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