Saga set to swing to profit as cruise demand recovers

The firm expects an underlying pre-tax profit of £35 million to £50 million for 2022-23, against a £7 million loss the previous year.

Over-50s group Saga has said it is on track to return to annual profit (PA)
Over-50s group Saga has said it is on track to return to annual profit (PA)

Over-50s group Saga has said it is on track to return to annual profit as it cheered a bounce back in demand for cruises and holidays.

The firm said it expects to swing to an underlying pre-tax profit of £35 million to £50 million for 2022-23, having slumped to a £7 million loss the previous year.

It said cruise bookings for this summer have been “exceptionally strong” with the load factor – how well it fills its ships – expected to be 75% for the full year.

Its holidays business is set to report a small loss for the first half and the full year, although it said this was a “much-improved” result against the previous year.

Euan Sutherland, Saga group chief executive, said: “During the first five months of the year, Saga has made good progress in what has been a particularly challenging external environment and we are pleased that we are on-track to return to an underlying profit for the 2022/23 financial year.”

But Saga added a note of caution amid a backdrop of soaring fuel costs, inflation and wider economic uncertainty.

It said: “The group is navigating a period of global turbulence and remains mindful of the current inflationary pressures.

“Notwithstanding this, we remain confident in the strength of the Saga brand and that the growth plan set out as part of the preliminary results will return Saga to sustainable growth.”

Its update showed cruise bookings for next summer are better than expected, with a load factor of 34%.

Saga holidays bookings for 2023/24 are also showing “encouraging signs”, it added.

The firm is embarking on a plan to cut debt and boost growth while positioning itself as the “superbrand for older people”.

It unveiled five new senior hires on Tuesday as part of the strategy overhaul, including ITV chairman Sir Peter Bazalgette as senior independent non-executive director.

As well as two non-executive appointments, it also announced three new executive team members, including Jerry Toher, currently chief customer officer at mutual insurer Royal London as chief executive of Saga Personal Finance, and Aaron Asadi as chief executive of Saga Media.

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