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(Sharecast News) - Saga has refunded £44m to customers after the Covid-19 outbreak halted its travel business, the over-50s holiday and insurance specialist confirmed on Monday.
The group suspended travel operations in mid-March, scrapping all departures up to and including August. Customers who had holidays cancelled have been either refunded or rebooked on future trips; as at 31 May, £44m of advance receipts had been refunded, Saga said.
It added that it expected "some travel" to resume this year and that retention levels continued to be high, particularly in cruises. However, Saga conceded that its stress tests included one based on travel not fully resuming until 2021.
In its insurance arm, total policies for the period 1 February to 21 June were 5% lower than the same period a year earlier, following a "significant decline" in the number of new travel policies sold from mid-March.
Motor and home policies were 1% higher year-on-year, although margins per policy after marketing costs in the first four months of the year were £68, down £6 on the prior period.
"Market conditions continue to be challenging, in part due to Covid-19, with an easing of competitive conditions in February and March but with signs of a return to more competitive conditions in motor and home in the last month," Saga said.
Regarding liquidity, Saga said its position remained "strong" and benefited from diversified sources of income. As at 31 May, available cash balances, which exclude the Saga Tour CAA ringfenced group, were £30m with access to a further undrawn £50m on the group's revolving credit facility.
Euan Sutherland, chief executive, said: "Saga has made good progress against the priorities set last year, and we have accelerated this change given the backdrop for the Cogid-19 crisis.
"Our insurance business has been resilient and continues to make progress, while within travel, more than 70% of cruise guests have moved their booking to later sailings, showing the continued demand for our specialists boutique offer."
24 Jan 2023 12:28
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