Saga plc (LON:SAGA), the UK’s specialist in products and services for life after 50, provides the following update on trading covering the period from 1 August 2018 to 15 January 2019.
●The Group has continued to trade in line with our expectations during the period.
●Insurance reflects the ongoing pressure on broking profitability offset by another strong result in underwriting, continuing the trend seen in the first half results.
●Travel performing well with good progress on cruise bookings.
●Possibilities, our fast-growing membership scheme, now has more than one million members.
Insurance
Motor and Home markets continue to be competitive, with falling average premiums and some upward pressure on net rates in Home, impacting broker revenue and profitability. Saga branded Motor and Home policy count is broadly stable year on year, with increased new business volumes.
Results for the Group’s underwriter continue to exceed our expectations, supported by a particularly positive experience for small and large personal injury claims.
Travel
Travel is now fully sold for the 2018/19 year and is 54% sold of our targets for 2019/20.
Tour revenue for 2019/20 departures is approximately flat as the change in mix towards higher margin products, with fewer passengers, continues.
Cruise demand continues to be strong. With the launch of forward sales for Spirit of Adventure during the period, the bookings for both Spirit of Discovery and Spirit of Adventure continue to support the Group’s ambitious plans:
· Spirit of Discovery reaching 69% of our sales target for 2019/20 departures1.
· Spirit of Adventure reaching 34% of our sales target for 2020/21 departures1.
The Saga Pearl II and Saga Sapphire are due to leave service in April 2019 and June 2020, respectively. An assessment of the recoverable amount for both ships has resulted in a non-cash impairment of £6.0m, which will be excluded from Underlying PBT.
Membership and the Saga brand
Possibilities has added a further 250,000 members since September and now has over one million members.
As part of the Group’s strategy to become a member-led organisation and to attract new customers, we have recently launched a new integrated creative advertising campaign across TV, press, digital media and direct marketing spanning our holidays, cruise and travel insurance products.
Lance Batchelor, SAGA Group Chief Executive Officer, said:
“We are making progress with our strategy to invest in attracting new customers across the business. In a challenging insurance market, the increase in new business has kept our policy count broadly stable. Our underwriting business has performed well during the year. Healthy forward sales for our new cruise ships and the growth in membership are encouraging signs for the Group.”
Notice of results
On 4 April 2019, Saga will announce its preliminary results for the year ended 31 January 2019 and an update on strategy.
Note:
1 Spirit of Discovery and Spirit of Adventure are planned to launch in July 2019 and August 2020, respectively. Sales targets cover the period from launch to the end of the financial year (31 January) and are consistent with those previously disclosed.
