Saga confirms travel restart ‘a priority’

Saga has confirmed plans to restart its travel business from June 27 “as a priority” subject to government restrictions.

The over-50s travel and insurance specialist described cruise load factors as “strong” at 77% for 2021-22 and 48% for the following 12 months.

Tours bookings represent 60% and 27% of the revenue targets for 2021-22 and 2022-23, the group revealed in a trading update.

The group’s cash burn rate for the year to date was described as being at the lower end of the guidance of £7 million-£9 million a month.

Saga’s liquidity position “remains strong,” with total available cash of £78 million at the end of May, in addition to an undrawn £100 million revolving credit facility.

Net debt, excluding Saga’s two cruise ships, was £246 million.

Cruise cashflows are “modestly positive” for the year to date as a result of the collection of final balances on June and July departures.

Saga said in an agm trading update that the resumption of sailing for both ships and restarting tours “remains the priority”.

The company said: “Following the suspension in March 2020, our cruise business will resume on 27 June 2021, initially for UK itineraries, with the inaugural cruise of Spirit of Adventure on 26 July and European sailing planned from mid-August.

“With continued uncertainty surrounding the timing of the full easing of government restrictions and the implications of that for the travel sector, we have put in place contingency plans to manage any potential impacts.

“This includes plans to potentially operate for a short period with fewer guests than typical load factors, if necessary.

“Through the first four months of the year, the focus has been on ensuring the safe restart of the travel business, while keeping costs and subsequent cash burn to a minimum.

“The monthly cash burn for the four months to 31 May 2021 was at the lower end of our previous guidance of £7 million-£9 million per month.

“Customer loyalty and demand throughout the suspension period has been outstanding, with 73% of cancelled cruise bookings retained and sailings through to the end of September seeing exceptionally high demand.

“Bookings beyond the initial UK itineraries remain strong, and as at 5 June, the average load factor is 77% for 2021-22 with per diems ahead of plan, and 48% for 2022-23 with per diems in line with the plan.

“Following reset of the business and ahead of restart, customer retention in tours remains stable at 42%. Bookings are also strong with 60% of the revenue target booked for 2021-22 and 27% for 2022-23, with the latter ahead of pre-pandemic levels.”

Group chief executive Euan Sutherland said: “Saga has made further strong progress, delivering against all the pillars of our turnaround plan.

“In insurance we have continued to support customers and delivered another resilient performance.

“In travel we are clearly focused on the safe return to service and ensuring we can satisfy the significant pent-up demand from customers.

“Our focus on enhancing our financial position, while driving simplicity and efficiency across the business remains and we are well progressed with our plans for a brand relaunch and to transform our data and digital approach.

“Looking ahead, while we are mindful of continued uncertainties around Covid-19 and the outlook for the consumer economy, we are confident we have the right strategy and people in place to return Saga to sustainable growth.”

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