In a trading update covering the period from August 2023, the over-50s specialist said Saga Group, which includes an insurance business as well as cruise and travel, was on track for “significant” revenue growth in 2023/24.
Mike Hazell, Saga Group chief executive, said: “Our cruise and travel businesses have had an outstanding year, having taken around 120,000 passengers on holiday, with customers continuing to be drawn to the strength of the Saga brand and offer. As a result, these businesses will return to profitability, in line with expectations.”
He added: “Bookings for the new seasons in cruise and travel are robust, showing good overall progress.
It confirmed media speculation that it was seeking a partner for its two ocean ships: “We are exploring opportunities to optimise the business, including potential partnership arrangements which, consistent with our move to a capital-light business model, would support further growth, crystallise value, reduce debt and enhance long-term returns for shareholders.”
The Group is expected to report revenue growth of between 10-15% and an underlying profit before tax more than double that of the £21.5 million last year when it confirms results for the 12 months to 31 January.
Saga said ocean cruise revenue growth is expected to be 30% higher, with a load factor of 87%, compared to the previous 75% and per diem of £331 against £318 in the prior year.
It added: “As a result, and in line with previous guidance, we expect to exceed our target of £40 million ocean cruise trading Ebitda (excluding overheads) per ship.”
Saga added river cruise was expected to return to underlying profit, supported by a load factor of 85% and a per diem of £285. This equates to revenue of around £44 million and 17,000 passengers, compared with £29 million and 12,000 passengers in the prior year.
Other travel revenue growth is expected to be between 40-45%, with 58,000 passengers, an increase of more than 20% compared with the prior year.
Saga said: “In line with previous guidance, travel (when combined with river cruise for consistency with previous reporting) is on track to return to pre-pandemic underlying profit before tax.”
The Group said 2024/25 ocean cruise was “materially ahead of the prior year” at 66% sold, with river cruising 59% booked.
It added travel revenue was 12% ahead of the same point last year, with sales of 35,000, 2% ahead.
Saga said it expected to repay a £150 million bond due in May 2024, which was taken out during the pandemic.
