Saga plc (LSE:SAGA) fell sharply on Tuesday morning after the UK over-50s travel and insurance specialist published a pre-market AGM trading update warning that full-year holidays passenger numbers could slip due to the Middle East conflict. That has disappointed markets that had expected the company’s strong travel momentum to hold across all segments.
Shares reached an intraday low of 537p, more than 10% below Monday’s close of 601p, before partially recovering to trade at around 563p, still down approximately 6% on the session. The stock had reached a 12-month intraday high of 652.92p in April 2026, and Tuesday’s move erases a meaningful portion of those gains.
What the Update Said
The RNS announcement said the group was trading in line with full-year expectations. Ocean Cruise revenues for the first half of the financial year are expected to be ahead of the prior year, driven by 13% growth in booked per diems and a load factor of 93%. River Cruise is also tracking ahead, with per diems 4% higher and a load factor of 93%.
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The market reaction centred on the holidays section: Saga said full-year passenger numbers could come in slightly behind the prior year, with more customers opting for shorter, short-haul trips as a result of the Middle East conflict. On a more constructive note, the Ageas motor and home insurance partnership triggered a £10.5m contingent consideration payment following outperformance of early policy volume targets.
Tuesday’s update follows a year of significant change for the business. In its full-year results published in April, Saga reported underlying profit before tax from continuing operations rising 19% to £44.2m, with travel underlying profit up 37% to £87.2m. The sale of in-house underwriter AICL and the launch of the Ageas partnership removed underwriting risk from the insurance division. Net debt at 31 May 2026 stood at £464.7m, a leverage ratio of 3.2x, down from 3.7x at the January 2026 year end.
Group Chief Executive Mike Hazell said the company had made a “strong start to the year, building on the significant growth we achieved last year,” and reiterated the medium-term targets of at least £100m in underlying profit before tax and a leverage ratio below 2.0x by January 2030. The consensus analyst price target stands at 725p, well above current levels.
Saga will publish interim results for the six months ending 31 July 2026 on 30 September 2026. The pace of Ageas insurance renewals, which are expected to follow later this year, and any further clarity on the holidays passenger trend will be closely watched. With leverage still above 3x and no dividend in the current guidance framework, the recovery thesis depends on Saga continuing to convert its cruise and insurance momentum into sustained profit growth despite the emerging headwind in packaged holidays.