Saga sees annual profits leap by a quarter

Saga sees annual profits leap by a quarter

Work is underway to design and build a next generation Saga cruise ship due for delivery in 2019, the company disclosed today alongside a jump in annual profits.

The over-50s specialist reported continued customer and profit growth across its travel businesses in the year to January 31.

The number of people taking trips offered by Saga tour operations rose by 9.9% to 189,000 while ship passenger days rose marginally by 0.9% to 339,000.

Overall trading profit for the travel division was up by 26.5% year-on-year to £17.2 million as revenue rose by 11% to £423.1 million.

“Within our tour operating businesses we have seen a shift in the mix of sales to longer-haul, higher-value products where we can provide our customers with both security and a highly differentiated product,” Saga said.

“The success of this shift is attributable to our ability to know more about our customers' wants and needs than any other provider, and to create affordable packages underpinned by excellent service.”

Saga’s two ships, Saga Sapphire and Saga Pearl II, saw load factors almost static at 84.4%.

“Whilst the announcement of the purchase of the new ship has caused much excitement amongst our customers, our immediate focus is on ensuring the maintenance of the customer experience and the high levels of satisfaction with customers' overall holiday experience which we have seen reach historic highs this year,” the company said.

Saga Sapphire will undergo scheduled maintenance enter in the coming year, taking the ship out of service for two months.

“As with the refit of Saga Pearl II last year, this will enhance our service capability and the proposition to customers on board. It will, however, mean we have one ship out of service for two months during the year, which, whilst budgeted, will hold back the total profit growth in the travel business for the coming year,” Saga admitted.

Saga’s tour operating businesses is around three quarters sold for the period to January 31, 2017, the company disclosed.

“As expected, our cruise revenue is lower than last year's position, given the Sapphire wet dock.  As we are over 90% sold, we have good visibility on the outturn for the year,” the company added.

Saga Group’s overall annual pre-tax profit was up by almost 55% to £176.2 million.

Chief executive Lance Batchelor, said: "The last year saw significant progress in delivering the strategy we set out in early 2015.

“Our core insurance and travel businesses maintained their strong growth trajectory and were enhanced by new and improving products, new routes to market and the ability to target a broader range of customers.

“The year ahead will see a renewed focus on our customers and further developing the Saga brand.

“Whilst the customer has always been at the heart of the Saga proposition, there is more we can do to enhance our approach and build stronger relationships. We will therefore be looking closely at the whole customer journey with a view to putting more of Saga into our customers' lives."

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