Saga Group’s tour operations and river cruises are projected to return to the black this year as strong demand was reported for its ocean ships.
The over-50s holidays and insurance company reported a return to underlying profit in the year to January 31 with an outcome of £21.5 million against a loss of £6.7 million the the same period a year earlier.
The reported loss before tax for the year of £254.2 million reflected a £269 million impairment of insurance goodwill as previously reported, according to the group.
Continued recovery of cruise and travel following the pandemic helped boost group revenue by 54% to more than £581 million.
Saga’s travel arm, excluding cruises, saw revenue rise more than 10 times over the previous year to £108.4 million to give an underlying loss of £4.1 million.
Total booked revenue for 2023-24 had reached £136.6 million at March 26, 32% ahead of the same time last year, building on a recovery in touring revenues.
The company said: “Customer feedback received to date in relation to our revamped travel offering has been incredibly positive and is reflected in our forward bookings.”
Saga’s two ocean ships are on target to each achieve targeted earnings [ebitda] of £40 million on the back of strong bookings for the current financial year representing a load factor of 72%.
The ocean cruise business reported an underlying loss of £700,000 for the full year but saw a “considerable improvement” in the second half with an underlying pre-tax profit of £6.2 million as the impact of Covid-19 lessened. This compared with a loss of £47.7 million in the 12 months to January 2022.
Revenue for the division rose by 100% year-on-year to £168.3 million, supported by a load factor of 75% against 68% in the previous 12 months.
The river cruise arm reported a loss of £5.1 million but saw revenues rise to £28.8 million from £1.7 million the year earlier.
River cruise bookings for 2023-24 are 23% ahead of the same point in 2022 with more than 12,500 passengers at a load factor of 63%.
Customer satisfaction levels for both ocean and river cruises was described as “exceptional”.
The group financial officer’s review of the year said: “For cruise and travel, the first half of 2022-23 was far from ‘plain sailing’.
“The cruise business was affected by ongoing impacts from Covid-19, which led to the curtailing of two ocean cruises and higher cancellations on other departures.
“The travel business was impacted by lower demand and also experienced higher-than-normal cancellations, in part due to the operational issues impacting the industry.
“These factors were much less of an issue in the second half, although revenues and profitability have yet to recover to levels anticipated pre-pandemic.”
Looking forward, Saga Group said: “The progress made in 2022-23 places us in good stead as we enter 2023-24.
“We expect to see customer demand continue to build for our ocean cruises and we are aiming to achieve a load factor of at least 80% and our targeted £40 million ebitda per ship, excluding overheads.
“We expect both our river cruise and travel businesses to significantly increase the number of passengers that travel with us and return to profit.
Group chief executive Euan Sutherland said: “Over the past year, through what continued to be a particularly challenging external backdrop, Saga made progress against its strategy while achieving significant revenue growth and returning to underlying profit.
“Our ocean cruise business continued to see strong customer demand and bookings for 2023-24 are on track to meet our targets.
“In travel, bookings are significantly ahead of the same point last year and that business will return to profit this year.”
He added: “Our top priorities for the next 12 months are to strengthen our financial position and continue to build Saga into the largest and fastest-growing business for older people in the UK, delivering long-term, sustainable growth for our stakeholders.”