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21 Sep 2016

BY Edward Robertson

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Saga shrugs off Brexit vote with strong financials

Saga has said the Brexit vote has had next to no impact on its travel sales.

Saga Sapphire
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Saga shrugs off Brexit vote with strong financials

In its interim results for the six months ending July 31, 2016, the group recorded a profit before tax of £109.9 million, a year-on-year improvement of 8.5%.

 

Group chief executive Lance Batchelor shrugged off concerns that its business, and travel in particular, would be hit hard by the vote to leave the EU.

 

He said: “Saga already has significant brand awareness and customer loyalty but we have been working hard to enhance our understanding of the relationship with our customers.

 

“This has produced some fascinating insights and opportunities and we are underway with the work that will enable us to capitalise on our findings.

 

“We have seen no discernible impact to date from Britain’s decision to leave the European Union; this has been especially notable in our travel business, where we polled customers recently and 99% said that Brexit would not make them reconsider their future holiday plans.

 

“The robust operational performance in the first half means that we are on track to meet our targets for the full year."

 

Batchelor added during the financial period, its tour operating arm Saga Holidays, which has been working with the trade for nearly two years now, carried 95,000 passengers, a 1% drop on the previous year.

 

Its cruising arm did not fare quite so well with ship passenger days dropping 21.1% to 135,000 during the same period. However, this was attributed to Saga Sapphire undergoing scheduled maintenance, so lowering capacity.

 

The financial figures for both sectors remained strong, with tour operating revenue set to grow by 15% for 2017/18 to £105.4 million while passenger numbers receive a 13% boost to 49,600.

 

Cruise revenue is set to grow by 1% in the same period to £51.6 million with cruise passenger days returning to growth as 210,900 have already been booked.

 

Batchelor said: “We have delivered growth in both revenue and profit within our tour operating business.

 

“We have continued to see a shift in the mix of sales to longer-haul, higher-value products as customers look beyond some of the more traditional holiday destinations. In this area, our customers value the security and the highly differentiated products that we offer.

 

“The shift is testament to our expertise in catering for the specific needs of our customer demographic and the flexibility of our model, which allows us to shift our offer to match changes in demand.

 

“We are continuing to broaden and target our offering based upon customer insight and this has been very well received to date.

 

“Cruising has had a strong first half year with improvements in yields year on year. However, Saga Sapphire underwent scheduled maintenance during the period which had a £4.7 million adverse profit impact.

 

“Our focus in cruising remains the safety of our ships, our passengers and our crew and we continue to invest to ensure we are continuously "raising the bar" within this remit.

 

“Outside of this we continually challenge ourselves to understand and adapt to our customer feedback which is ultimately measured by our exceptionally high guest satisfaction scores.

 

“In both tour operating and cruising, we have already secured the substantial majority of our 2016/2017 sales targets and are ahead of prior year for departures in 2017/2018.”

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