Saga Group today reported a “solid” performance in its travel division for the half year to July 31.
Pre-tax profits for the over-50s company’s travel brands were flat “as expected” at £12 million against £11.9 million in the same period in 2017.
This came as total travel revenue declined marginally to £228.7 million against £230.4 million year-on-year.
Tour operations generated revenues of £181.1 million, down from £185.5 million, while cruises were up at £47.6 million against £44.9 million a year earlier, reflecting a 3,000 increase in passenger days with a rise in capacity.
Saga’s tour operations saw the number of holidaymakers decline by 7.3% to 89,000 while cruise passengers carryings rose by 7.7% to 14,000.
Underlying pre-tax profit for tour operations was in line with the same period last year at £7.2 million.
The cruise business achieved underlying pre-tax profit of £4.8 million against £4.7 million.
Forward bookings for new ship Spirit of Discovery continue to meet an “ambitious plan” with more than 64% of the sales target for the first 19 cruises already achieved at “attractive” rates.
Group CEO Lance Batchelor said: “Travel has delivered a solid performance and we are seeing encouraging demand for our new ship, Spirit of Discovery, in line with our ambitious plan.
“Construction is on track, with keel laying this summer, ahead of her maiden cruise next year.”
He added: “Our travel business continues to perform as it manages a change in mix towards higher margin products, with fewer passengers.
“Underlying profitability is flat despite some headwinds relating to fuel hedges and a £1.5 million investment in marketing.
“The construction of our new cruise ship, Spirit of Discovery, reached another milestone in June with the keel laying in Papenburg.
“The construction continues to be on time and on budget for her maiden cruise in July 2019.
“We have achieved over 64% of our sales target for the first 19 cruises starting June 2019, at per diems that continue to be in line with our expectations. We have now sold over 90% of targeted capacity for her first five cruises.”
Overall Saga Group pre-tax profits rose by 3.2% to £109 million despite revenue falling by 1.7% to £430.6 million.
“The group is benefitting from lower operating expenses across the business, reflecting a more efficient operating structure and investment in our IT systems,” Batchelor said.
More: New Saga ships to go all-inclusive