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(Alliance News) - Saga PLC has made "good" strategic progress, it said on Thursday, as it carries out a transformation programme to turn things around.
In May, Saga said it was planning a "fundamental shift in strategy" in order to address long-term challenges facing the business. The company operates cruises for over-50s, and also offers financial services such as insurance.
Pretax profit for the six months to July 31 slumped 52% to GBP52.6 million, with the underlying figure down 51% to GBP52.8 million.
The decline in profit, Saga said, was due to lower reserve releases from the Acromas Insurance unit, lower margins in Retail Broking, and the short-term impact of the retirement of the Saga Pearl II cruise ship.
Saga's revenue declined by 8.3% on the year before to GBP395.9 million.
The company has reduced its dividend to 1.3 pence from 3.0p, in line with a new dividend policy previously set out.
Chair Patrick O'Sullivan commented: "I am pleased with the progress that has been achieved this year. It is early days in our transformation programme and there remains much to do but what we have seen so far gives us confidence that we are pursuing the right strategy."
Saga said performance in Insurance has been solid, while cruise revenue targets for its current year have been achieved, and forward bookings for financial 2021 are over 50% of target.
Looking ahead, the firm reiterated underlying pretax profit guidance for its year ending January of between GBP105 million and GBP120 million. In financial 2019, the figure was GBP180.3 million, so profit could be down as much as 42%.
"The board believes in the opportunity for and ability of the group to return to sustainable growth and restore value for all shareholders and is supporting the executive team as they focus on the profitability of our core Travel and Insurance businesses as well as the capital efficiency of the Group," continued O'Sullivan.
"There is real strength in the Saga brand. In order to maximise its potential and realise the value of our strategy we need to serve our customers well with the right products and great service so that we continue to deserve the trust they place in us."
Saga said the search for a new chief executive is going well. Current CEO Lance Batchelor announced in June he will retire from January next year. A former Domino's Pizza Group PLC boss, Batchelor has led Saga since 2014.
Shares were up 0.9% on Thursday morning in London at 45.84p each, but they have lost more than 60% over the past 12 months.
