Saga Shares Rose 9.43% on Its H2 ’24 Trading Update, Later Fell

The Saga PLC (LON: SAGA) share price rose 9.43% after releasing a half-year trading update from 1 August 2023 to 29 January 2024. The Group forecasts a promising financial outlook for 2023/24, expecting to report revenue growth between 10-15% and more than doubling the underlying profit before tax compared to the previous year.

Significant growth is anticipated in the Ocean Cruise segment, with expected year-on-year revenue growth of around 30%. This is supported by an impressive load factor of 87% and a per diem of £331, outperforming last year's 75% load factor and £318 per diem. Consequently, the Group is set to surpass its target of £40.0m Ocean Cruise Trading EBITDA (Excluding Overheads) per ship.

The River Cruise sector is also projected to see a return to underlying profit, bolstered by an 85% load factor and a per diem of £285. This translates to approximately £44m in revenue and 17k passengers, a notable increase from last year's £29m revenue and 12k passengers.

Travel revenue is projected to grow between 40-45%, with passenger numbers reaching 58k, marking a 20% increase from the previous year. This growth aligns with prior guidance, indicating a return to pre-pandemic Underlying Profit Before Tax levels when combined with River Cruise revenue.

In the Insurance segment, market conditions remain stable. Insurance Broking anticipates a 9% decrease in policy sales and policies in force across all products, with specific declines in motor and home policy sales. Customer retention is expected to be 81%, slightly lower than last year's 84%. 

Mike Hazell, Saga Group's Chief Executive Officer, said: “For 2023/24, Saga remains on track to deliver significant growth in revenue, in addition to an underlying profit more than double that of the prior year, exceeding our previous guidance. Our Cruise and Travel businesses have had an outstanding year, having taken around 120k passengers on holiday, with customers continuing to be drawn to the strength of the Saga brand and offer. As a result, these businesses will return to profitability, in line with expectations. In Insurance, the market-wide inflationary environment and declining policy volumes are continuing to impact our performance.”

Saga share price. 

The Saga share price was up 9.43% to trade at 158.45p from Monday’s closing price of 144.80p.