In an update issued to investors, Saga noted a backdrop of a challenging external environment in insurance and travel, but painted a bullish picture of its cruise operation.
“In Cruise, we are building on the excellent progress over the first half of the year,” the company said. “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 £20 million for the second half. The build program for the Spirit of Adventure is on track and we remain on time and on budget for delivery in August 2020.”
The company said it remained focused on a new strategy set out last year, focused on returning Saga to its heritage as a company that delivers high quality, differentiated products and services that resonate with its core customers.
“The insurance business is in a much more stable position than a year ago and our cruise business is fully on track,” the company said .”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.”
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.”
“We have forward bookings for 2020/21 (in cruise) of 76% of full year target levels and we remain fully on track with our expectations for £40 million of EBITDA per new ship,” the company said.
“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 £4 million of one-off costs which will be taken below Underlying PBT.”
