(Alliance News) - Saga PLC, which provides insurance and travel to people over 50, said Wednesday it is seeing pent-up demand for cruises and is ready for its ships to leave dock as soon as governments allow.
Saga shares were up 9.7% at 382.28 pence early Wednesday in London.
Saga reported a GBP61.2 million pretax loss in the financial year that ended January 31, narrowed from a GBP300.9 million loss the year before. However, on an underlying basis, profit fell by 84% to GBP17.1 million from GBP109.9 million, amid Covid-19 restrictions. Revenue fell by 58% to GBP337.6 million from GBP797.3 million.
The company said its statutory pretax loss included a GBP59.8 million impairment of goodwill in its Travel division in the first half of the year, as the virus pandemic halted travel.
Saga said it is ready to resume tour and cruise operations as soon as allowed. "Customer demand remains strong, with evidence of significant pent-up demand from customers ready to travel," it said. Total cruise bookings are GBP154 million for financial 2022 and 2023 combined, up 20% from GBP128 million at the same point last year.
In the company's Insurance division, underwriting generated a profit of GBP58.7 million in the recent year, including GBP37.6 million in reserve releases "primarily due to continued favourable experience on large bodily injury claims relating to prior accident years". Saga recorded a combined operating ratio of 91.4%, meaning its underwriting was profitable.
Saga declared no final dividend, saying its priority is reducing debt and noting that payouts aren't allowed during the holiday it has been granted on ship debt repayment. Saga's last payout was a 1.3 pence interim dividend for financial 2020.
The company reported adjusted net debt, excluding cruise ships, of GBP246.9 million on January 31, down 32% from GBP361.7 million a year before.
"Looking ahead, while we are mindful of economic headwinds and the potential ongoing impacts of Covid-19, it is clear that there is significant pent-up demand among our customer base, the vast majority of whom have now been vaccinated and are ready to enjoy post-lockdown freedom," said Chief Executive Officer Euan Sutherland.
By Tom Waite; thomaslwaite@alliancenews.com
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Saga (SAGA)