Saga returns to profit and set for further growth as travel business booms

Over-50s travel and insurance group Saga has revealed a returned to profit and forecast a further “step forward” in earnings over the year ahead, as it shrugged off Iran war disruption in the sector.

The group saw shares leap more than 10% higher on Wednesday at one stage after it reported pre-tax profits of £2.1 million for the year to January 31, against losses of £160.2 million the previous year.

On an underlying basis, profits jumped 19% higher and to £44.2 million, helped by a 31% surge in travel earnings to £14 million.

The group said it was seeing limited impact from the Middle East conflict on its travel arm, with no cruise ship itineraries and only limited holidays bookings to Egypt, Cyprus and Turkey.

It said it had cancelled package holiday trips to Jordan, affecting less than 500 customers, but said bookings across its travel business had remained robust since the war started at the end of February.

Chief executive Mike Hazell told the Press Association he was “not concerned about what we’re seeing” in terms of any effect on bookings, adding that the overall impact for the group is “small”.

He said around 75% of its holiday programme for the year is already booked.

“For the small proportion who haven’t booked their current holidays, then there will be some people waiting to see how this settles down, but we have plenty of options for them to travel to regions that aren’t affected,” Mr Hazell said.

The group added it was 100% hedged for its fuel costs for the year to next March and 75% hedged to the end of 2027.

Saga saw passenger numbers rise by 11% in the past financial year as it focused on the needs of its target over-50s market, while it also brought all the travel divisions – ocean cruises, river cruises and package holidays – under one leadership team.

Saga said: “In Travel, we remain confident in driving continued success.

“While mindful of the current uncertainty in the Middle East, we have minimal exposure to the region.”

The group said it remains “confident” in its aims to boost underlying annual profits to at least £100 million by January 2030.

Saga has recently relaunched holidays in the UK for customers, with trips to historical cities such as Canterbury, Chichester and Falmouth.

Chairman Sir Roger De Haan, whose parents Sidney De Haan and Margery Crick founded Saga in 1951, said: “Travel is now the largest generator of profits in the group.

“Implementing a series of operational improvements and changes to our management structure led to increased customer numbers and improved customer satisfaction.”

“It is excellent that, after a number of years, we have started offering holidays in the UK again, the place our journey began 75 years ago,” he added.