Holidays sector growth helps boost profits at Saga
Over 50s travel and insurance group Saga has hailed "strong" results as an impressive performance from its cruise ship and holidays arm helped annual profits surge 55% higher.
The group, which is celebrating its 65th anniversary, said trading profits at its travel business rose more than a quarter - up 26.5% to £17.2 million as its tour operator saw passenger numbers rise 10% to 189,000.
Group-wide pre-tax profits jumped to £176.2 million in the year to January 31 from £113.8 million, although the previous year's results were hit by £50 million in costs from its 2014 stock market flotation and other debt and borrowing costs.
On an underlying basis, group earnings increased 5% to £238.8 million as Saga also grew profits across its Saga Services insurance businesses.
Lance Batchelor, Saga group chief executive, said the company made "significant progress" over the past year.
He added: "I look ahead to the next period for Saga with a great deal of confidence.
"The year ahead will see a renewed focus on our customers and further developing the Saga brand."
Its travel business notched up an 11% rise in revenues to £423.1 million, although its cruise ship load factor - a key measure of how well it fills its ships - edged lower to 84.4% from 84.9% the previous year.
Saga's insurance businesses also fared well, with motor profits up 17.8% to £118.3 million as it benefited from rising premiums, which picked up pace at the end of 2015.
It also grew motor policies by 3.1% to 1.2 million.
Premiums fell in its home insurance business amid a "highly competitive" market, but this was offset by a 2.3% rise in policy numbers, which helped profits rise 3.2% to £64.1 million.
Saga, whose £2.1 billion flotation was one of the biggest stock market listings of 2014, saw full-year cruise sales rise 2.6% to £86.2 million.
But the group warned profits in the travel business will be impacted in the year ahead as it plans to take one of its ships, the Saga Sapphire, out of service for two months to give it an overhaul.
Saga announced in December it would add a new ship to its fleet in 2019 and confirmed it was making "good progress" with the design plans.
The new ship will replace one of the group's existing two ships and Saga has the option to buy a second similar cruise ship for delivery in 2021.
Saga was founded 65 years ago by the late Sidney De Haan, the former owner of the Rhodesia Hotel in Folkestone, when he started offering off-peak holidays to retired people.