Saga revenue almost doubles as turnaround gathers tempo

Saga mentioned first-half revenue almost doubled and raised its steerage, because the over-50s journey and insurance coverage specialist’s turnaround gathered tempo.

The firm’s IPO almost a decade in the past was extremely anticipated, however the group has by no means actually lived as much as expectations, having been ravaged by poor efficiency of its insurance coverage corporate affairs, the pandemic and issues about debt.

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But let’s not take something away from right now’s replace. The firm reported underlying pre-tax revenue of £46.6m for the six months to 31 July, up 98%, on earnings up 14% to £366.3m.

Statutory pre-tax revenue from persevering with operations jumped from £3.7m to £28.0m, helped by decrease distinctive prices. Growth got here throughout all its companies, led by its journey arm, the place cruises and holidays grew strongly.

Crucially for a corporation that has lengthy carried heavy debt, Saga minimize its web debt by greater than £70m since January to £429m, bringing its leverage ratio right down to 2.7 instances from 4.3 instances a yr earlier.

It mentioned it now expects to achieve its medium-term targets, together with £100m of underlying revenue and leverage beneath two instances, forward of the unique January 2030 date.

These targets can be behind right now’s 12% rally.

Saga’s journey corporate affairs grew revenue 45%, with robust demand for its ocean and river cruises, and it relaunched holidays to China. Its insurance coverage arm grew revenue 75% because it moved its motor and residential cowl to a partnership with Ageas, and it’s making ready to launch pet insurance coverage with Allianz. A brand new financial savings partnership with NatWest Boxed has attracted greater than £2bn of deposits since December.

On the again of the robust begin, Saga upgraded its full-year steerage, now anticipating underlying pre-tax revenue of £65m to £70m, materially forward of final yr.