Saga half-year profits are up but trading is flat
Over 50s products and services specialist Saga has reported a rise in half-year pre-tax profits to £104.5 million.
However, its trading profit remained almost flat at £117.6 million.
The trading performance of Saga’s travel division was ‘robust’, said the group, adding that it had met ‘a substantial majority’ of its 2016/17 sales targets for departures in 2017/18.
Chief executive Lance Batchelor said the group had ‘produced another solid performance’ in the year to the end of July, but City analyst Joshua Raymond at XTB described it as ‘an unspectacular set of results’.
He added: "The anaemic growth trading profit means the firm must keep a tight grip on costs, whilst they remain confident Travel insurance will continue to see demand, despite the drop in value of the pound making holidays abroad for UK consumers more expensive."
In the company’s interim statement, Batchelor said: "I am pleased that the business has made significant progress with our key strategic initiatives whilst delivering another robust financial performance.
"The strength of our core businesses and our operating model has again led to strong cash generation, enabling us to further reduce our debt ratio and giving us the confidence to increase our interim dividend by 23% to 2.7p.
"Saga already has significant brand awareness and customer loyalty but we have been working hard to enhance our understanding of the relationship with our customers. This has produced some fascinating insights and opportunities and we are underway with the work that will enable us to capitalise on our findings.
"We have seen no discernible impact to date from Britain’s decision to leave the European Union; this has been especially notable in our Travel business, where we polled customers recently and 99% said that Brexit would not make them reconsider their future holiday plans.~
"The robust operational performance in the first half means that we are on track to meet our targets for the full year."
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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