TIDMSAGA
RNS Number : 0752B
SAGA PLC
28 January 2020
28 January 2020
Saga plc
("Saga" or "the Group")
Trading update
Saga plc ("Saga" or "the Group"), the UK's specialist in
products and services for life after 50, provides the following
update on trading covering the period from 1 August 2019 to 27
January 2020.
Current year trading
We continue to focus on disciplined execution of the strategy
set out in April, against a backdrop of a challenging external
environment in Insurance and Travel. We expect full year Underlying
Profit Before Tax ("Underlying PBT") to be in line with our
previous guidance.
Insurance
The Insurance Broking business continues to show clear signs of
progress:
-- As of 26 January 2020, we had sold 317k 3-year fixed price
policies, with over 60% of direct new business customers choosing
this product since it was fully launched.
-- Around 57% of new business customers are coming to us on a
direct basis, compared to 50% in the year ended 31 January
2019.
-- Customer retention across home and motor business of 75% is
around two percentage points better than in the prior period,
reflecting a range of initiatives.
For the full year ended 31 January 2020 we expect Saga branded
home and motor policies to be approximately 3% lower than the prior
year, reflecting a highly competitive market and a disciplined
approach to new business. Home and motor margins are expected to be
at the higher end of our GBP71-GBP74 range, reflecting the lower
new business strain.
For the Insurance Underwriting business, reserves in aggregate
are tracking in line with expectations, with continued favourable
experience on large bodily injury claims. In line with other
insurers, we are seeing higher inflation on third party damage and
theft costs, with overall inflation running at around 7% compared
to longer-term expectations of around 5%. This trend is not
expected to have a significant impact on the current year but will
have a modest adverse impact on future year margins if retail
pricing conditions remain competitive.
Travel
In Cruise, we are building on the excellent progress over the
first half of the year:
-- The first six months of operation for the Spirit of Discovery
have been successful. Customer feedback has been very positive and
we expect the new ship to achieve EBITDA of more than GBP20 million
for the second half.
-- The build programme for the Spirit of Adventure is on track
and we remain on time and on budget for delivery in August
2020.
-- We have forward bookings for 2020/21 of 76% of full year
target levels and we remain fully on track with our expectations
for GBP40 million of EBITDA per new ship.
For Tour Operations, revenues are expected to be down around 5%
compared to the prior year, in line with trading at the half year.
We are seeing a much more resilient picture in those parts of the
business where our customer proposition is truly differentiated,
notably in escorted tours. The administration of Thomas Cook in the
second half has resulted in approximately GBP4 million of one-off
costs which will be taken below Underlying PBT.
FCA Market Study
Saga welcomes the work being undertaken by the FCA and believes
that, over the long-term, it will be positive for Saga's customers
and our place in the market. As previously announced, we have been
implementing a proactive strategy to improve renewal pricing for
our long-standing customers and improve pricing practices.
The FCA published its interim report in October 2019 and the
final report is expected to be published in Q1 2020. There is a
wide range of potential outcomes for the industry and the Board
will consider these once the final report has been published.
Strategy
The strategy we set out in April was focused on returning Saga
to its heritage as a company that delivers high quality,
differentiated products and services that resonate with its core
customers. Our experience since April gives us confidence that the
Group is taking the right actions, and we are seeing good progress
and a significant improvement in the quality of execution. The
Insurance business is in a much more stable position than a year
ago and our Cruise business is fully on track. Our customers are
responding well to what we are doing and it is clear that the Saga
brand remains strong with our core target market.
There remains much to do to continue to improve our capabilities
in all areas of the business and to respond to changing customer
behaviours, across both Insurance and Travel.
With the recent appointments of Euan Sutherland as Group CEO,
Cheryl Agius as Insurance CEO and Gilles Normand as Group COO, we
have a strong team in place to improve Saga's operational and
financial performance. The Board and the executive team, with
Euan's leadership, are looking at where performance and cost
efficiency can be improved. The Group is also reviewing all aspects
of its capital allocation priorities and where balance sheet
deleveraging can be accelerated. We will update on our progress
with the announcement of our preliminary full year results.
Euan Sutherland, Group CEO, said
"I'm delighted to have joined Saga and to be working with a
strong executive team. Although Saga continues to face challenging
markets in Insurance and Travel, we have a clear focus on improving
performance and cost efficiencies within the Group, while
strengthening our financial position and reducing debt."
ENDS
For further information please contact:
Saga plc
Mark Watkins, Director of Investor Relations Tel: 07738 777 479
Email: mark.watkins@saga.co.uk
MHP Communications
Tim Rowntree/Simon Hockridge Tel: 020 3128 8789/ 8742
Email: saga@mhpc.com
Notes to editors
About Saga
Saga is a specialist in the provision of products and services
for life after 50. The Saga brand is one of the most recognised and
trusted brands in the UK and is known for its high level of
customer service and its high quality, award winning products and
services including cruises and holidays, insurance, personal
finance and publishing. www.saga.co.uk
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
TSTKKOBKKBKBBDB
(END) Dow Jones Newswires
January 28, 2020 02:00 ET (07:00 GMT)
Saga (LSE:SAGA)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Saga (LSE:SAGA)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
