Over-50s specialist Saga plc has reported “exceptional growth” in its ocean and river cruise business, along with continued momentum in its travel division, which includes Titan Travel.
The group’s interim results for the six-month period to July 31 show that underlying revenue increased 11% to £393.3 million, driven by “continued strong momentum in our cruise and travel businesses and an improved insurance underwriting performance, but affected by ongoing challenges in insurance broking”.
The company posted earnings before interest and taxes (Ebitda) of £67.4 million, an increase of 27% year on year.
Underlying pre-tax profit was £27.2 million, up from £8 million in the same period last year.
However, the “challenging conditions” in insurance broking resulted in an impairment of the goodwill allocated to that business of £138.3 million.
This, together with other small, one-off exceptional items resulted in the group reporting a loss before tax of £104 million, compared with a loss before tax of £77.8 million in the same period last year.
The group confirmed it is exclusive negotiations with Ageas for a 20-year affinity partnership for its motor and home insurance broking operations and the sale of its insurance underwriting business.
More: Saga delays release of half-year results
Mike Hazell, Saga’s group chief executive, said: “Saga made significant progress in the first half of the financial year, with ocean and river cruise delivering exceptional growth, while we continued to position the group for long-term success through the exploration of potential partnership opportunities.”
The ocean cruise business owns two ocean cruise ships: Spirit of Discovery and Spirit of Adventure.
In the first half of the current year, the business achieved a load factor of 90% (H1 2023: 83%) and revenue growth of 17%. Underlying pre-tax profit soared 117% to £28 million.
The river cruise business has 10-year charters in place for Spirit of the Rhine and Spirit of the Danube, alongside two other shorter-term charters.
It achieved a load factor of 86%, revenue growth of 12.8% and a 93.3% increase in profitability to £2.9 million.
The travel business, which includes the Saga Holidays and Titan brands, generated higher revenue per passenger in the first half of the current year, increasing by 18.7% from £2,712 to £3,220, but passenger numbers decreased year on year from 25,700 to 24,500.
This led to revenue growth of 13.2% and a return to profitability, from an underlying loss before tax of £2.6 million in the first half of 2023, to an underlying pre-tax profit £300,000.
Travel bookings for 2024-25 are ahead of the same point last year by 15.6% and 8.2% for revenue and passengers respectively.
The increased revenue is due, in part, to higher passenger numbers, but also higher average selling prices, as a result of enhanced revenue management processes.
The increase in passenger numbers is largely due to increased uptake of short-haul travel within the Titan brand and the introduction of new products.