Last checked at 
(Alliance News) - Saga PLC on Tuesday provided a trading update for the period from August 1 to Monday, amid a launch of a media business line.
Kent-based Saga is holding a capital markets event on Tuesday. It provides insurance, cruises and package holidays to people over 50.
The company is on track for underlying pretax profit of GBP20 million to GBP30 million in the financial year ending on January 31, compared to a loss of GBP6.7 million the year before, Saga said. The anticipated profit would still be far below the GBP109.9 million that Saga booked for financial 2020, which ended before Covid restrictions were enacted in many countries.
Saga expects revenue in financial 2023 to be 40% to 50% higher than the GBP377.2 million in financial 2022, as it hailed a recovery in cruise and travel following the easing of Covid restrictions. That would put revenue at GBP528 million to GBP566 million. Revenue of financial year 2022 was less than half of the GBP797.3 million recording for financial 2020.
Saga added that insurance broking outturn is "broadly" in line with guidance, with total policies down 3% annually.
However, it noted that its insurance underwriting arm struggled with high levels of claims inflation. Saga expects to report annual claims inflation of 13% and a combined operating ratio of 125%, up from 96% a year ago and worse than previously forecast.
Saga on Monday had confirmed it is seeking buyers for its insurance underwriting business, called Acromas Insurance Co Ltd. Acromas underwrites 25% to 30% of Saga's overall insurance offering to customers.
Looking ahead, Saga aims for business diversification across its Cruise, Travel, Insurance, Money and Media arms. It launched 'Saga Exceptional' on Tuesday, part of a new business called Saga Media. Saga aims for GBP50 million in new revenue from Saga Media in the five years to 2027-28. It also has a goal of GBP7 million in annual pretax profit from the business by that time, rising to GBP40 million by 2033-34.
"This is a plan that is already well underway and is accelerated today with the launch of Saga Exceptional. Through this exciting new website and the wider media strategy, we will be engaging daily with our customers, providing them with reviews, stories and content which matter and is tailored for them,"said Saga Chief Executive Officer Euan Sutherland.
Back in July, Saga hired Aaron Asadi to be CEO of Saga Media. Asadi was chief content officer at magazine publisher Future PLC.
Saga shares rose 5.9% to 161.44 pence each in London on Tuesday morning.
By Tom Budszus, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
