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(Alliance News) - Saga PLC said on Thursday said financial 2022 will come in at a slight loss, but it expects to return to profit in the following financial year.
Saga provides insurance, cruises and package holidays to people over 50. In a trading update for the period from August 1 to January 26, the Kent-based company said its Insurance business has stayed slightly ahead of the previous year in all key metrics.
It notes that new UK Financial Conduct Authority rules on price changes from January 1 have caused some pricing volatility in its motor and home insurance markets, and the longer-term impact is as yet unknown.
Its Travel business continued to be hit by the pandemic. Earnings before interest, tax, depreciation and amortisation for the Cruise division were positive but will fall to a pretax loss of between GBP45 million and GBP50 million after ship depreciation and financing costs are costs are considered.
Cruises had a load factor of 68% and per diem of GBP299 as of Saturday, which bookings show will increase to 73% and GBP316 respectively for the next financial year as a whole.
With the restrictions on travel and associated disruption in the second half of the recent year, which ended on January 31, the company expects to make a small pretax loss for the full year. The company reported a pretax profit of GBP700,000 in the first half. However, it said it expects to return to profit in the next financial year.
In financial 2021, Saga recorded a pretax loss of GBP61.2 million, narrowed from GBP300.9 million the year before.
Saga's share price was up 5.8% to 297.84 pence each in London on Thursday afternoon.
Chief Executive Officer, Euan Sutherland, commented: "Saga has delivered a successful second half of the financial year with our Insurance business remaining in growth and delivering positive momentum across all key metrics, while our cruise ships resumed their international itineraries. With a stronger Insurance business and progress being made in transforming our Travel business, our turnaround strategy is working well. While Omicron has impacted travel bookings through December and January, our outlook for Cruise in 2022/23 and beyond is positive."
The annual results will be announced on March 23.
By Elizabeth Winter; elizabethwinter@alliancenews.com
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