UK’s Saga Group, which specializes in insurance products and travel for people aged 50 and over, has warned that it is facing challenging trading conditions in both business segments, although the cruise market is proving more resilient.

Saga said it is in the very early days of its turn-around strategy for its insurance business and that its travel tour business are impacted by competition and the current political uncertainties (Brexit). Booked tour revenues for the year were down 4 percent as of June 15, compared to last year, and margins will be impacted by competitive discounting, according to Saga.

Cruise bookings are more resilient, the company stated, and expects to reach target booking levels for departures this year. Forward bookings for its two new ships are on track, with a significant step up in marketing activities planned for the next three months with the launch of first new ship, the Spirit of Discovery.

Saga said that 2019-2020 departures for the Spirit of Discovery were 85.9 percent booked and that 2020-2021 departures were 31.1. percent booked. For the next new ship, the Spirit of Adventure, which enters service next year, 2020-2021 bookings were 30.6 percent booked.

However, in line with company expectations, it is forecasting a 3 million pound loss for its cruise business for the first half of the year due to the sale of the Saga Pearl II in April, and the consequent short-term reduction in revenues, as well as training, launch and marketing cost related to the Spirit of Discovery. The financial benefits of the new ship are expected to start accruing from the date of its first cruise in July.

Earlier this month, Saga announced that its CEO Lance Batchelor would be leaving the company at the end of the year, as share values have declined.

For its fiscal year ended Jan. 31, 2019, Saga posted revenues of 841.5 million pounds, including 96.6 million pounds from its two cruise ships compared to 88.2 million pounds for 2018. Saga reported a loss of 162 million pounds (after taxes).

For its fiscal year 2019, Saga also reported 26,000 passengers which translates into each passenger spending 3,715 pound for tickets and onboard or approximately 289 pounds per day based on 334,000 sold cruise days.