January 28, 2020 / 8:10 AM / 22 days ago

Saga expects profit in line with view despite Thomas Cook collapse hit

(Reuters) - Saga Plc (SAGA.L) said on Tuesday it was on track to meet its annual profit outlook even as it flagged a one-off charge of 4 million pounds ($5.26 million) related to the collapse of Thomas Cook last year.

The over-50s tourism and insurance firm, which earlier this year launched an overhaul of its mainstay insurance unit to battle margin pressures, said the insurance business was in a much more stable position than a year ago.

“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,” newly appointed Chief Executive Officer Euan Sutherland said.

Shares of the company were 5.3% higher at 43.9 pence in early trade.

During its half-year results, Saga said it expects annual underlying pretax profit between 105 million pounds and 120 million pounds.

In the backdrop of growing worries over the spread of the new coronavirus in China, which has raised concerns about travel demand, a Saga spokesperson said on Monday the company did not have any tours to China until later in the year.

The company, which owns Saga Holidays, Saga Cruises, Titan and Destinology, expects annual revenue for Saga’s tour operations to be down 5%, but added that it was seeing a “much more resilient picture” in its escorted tours.

Saga’s branded home and motor policies are expected to be about 3% lower for the year ended Jan. 31, as the insurance market remained competitive, however, customer retention of 75% was better than last year.

Reporting by Yadarisa Shabong in Bengaluru, additional reporting by Noor Zainab Hussain in Bengaluru; Editing by Aditya Soni

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