Saga Group trimmed annual losses as it delivered a “resilient” performance in the face of Covid-19 challenges.
The over-50s travel and insurance company reported pre-tax losses of £23.5 million in the 12 months to January 31, reduced from £61.2 million in the same period a year earlier.
But the group’s travel division reported an underlying pre-tax loss of £79.3 million, in line with the previous year, reflecting the ongoing impact of the Covid-19 pandemic.
Saga’s cruise arm lost £47.7 million while its tour operations business started a restructure to lower costs by combining the operations of Saga Holidays and Titan Travel. The management of its river cruise operation has moved across to ocean cruise.
The company revealed plans to launch a new “hotel stays proposition” later this year.
Saga aims to achieve break even in its tour operations after two years of heavy losses, “and clearly our ambition is to achieve a much better performance in the future”.
The company added: “Similarly for cruise, the current year will see some impact from Covid-19 in terms of itinerary disruption, the cost of the measures we are taking to protect customers and the earn through of customer discounts offered in 2020.
“However, cruise demand continues to be strong and price increases should largely offset the impact of inflation on our costs.”
Cruise bookings for 2022-23 are “strong” with a 73% load factor despite a “challenging” external environment.
This follows the company’s ships generating positive earnings [ebitda] in the second half of the financial year with a load factor of 68%, “despite pandemic-related operational challenges”.
Cruises remained suspended until the end of June last year when UK sailings resumed with limited passenger numbers.
Group chief executive Euan Sutherland said: “Once UK restrictions were lifted in the summer and we were able to commence international sailing, we continued to navigate local restrictions at our ports of call, amending itineraries and reducing capacity as necessary.”
Tour operations bookings worth £132 million for 2022-23 had been secured by March 20.
But this is 30% below the same point two years ago, “with customer confidence still impacted by the pandemic but expected to recover over the course of this year”.
Saga began the restructure of its tour operations in the past year “to deliver growth and create a lower-cost, more agile, customer-focused business”.
Sutherland added: “Looking to our tour operations business, our customers have been cautious about returning to this form of travel, with the need to move through airports and mix with a greater range of people.
“As such, we have taken a number of steps to amend our product set and ensure that we are well-positioned to offer customers the holidays they want today.
“We are confident that this will help return the business to growth as customer demand rebuilds.
“These actions place us in a strong position as travel restrictions ease and customer demand rebuilds.”
Reviewing the group’s overall performance, he said: “Over the last year, Saga has delivered a resilient performance, whilst laying the foundations for future growth.
“During 2021/22, we reduced our debt, strengthened our financial position and relaunched the brand.
“The insurance business delivered a robust performance with the second year of policy growth after several years in decline, whilst in travel, we resumed operations, secured positive cruise bookings for 2022-23 and began the restructure of our tour operations business.”
He added: “Looking to the future, I am both confident and excited about the opportunities ahead of us as we emerge stronger from the pandemic than we went in, whilst remaining mindful of the current challenging external environment.
“Against this backdrop, we are now looking to convert the foundations laid over the past two years into sustainable growth and are further evolving our strategic approach.
“Our growth plan will see us focused on maximising our existing businesses, reducing our debt while step-changing our ability to scale the business and positioning Saga as ‘Superbrand’ for older people.
“We already have a strong brand, management team and financial position – all the tools required to return the business to sustainable growth and create long-term value for our stakeholders.”
Overall the company managed to reduce net debt by £31.2 million to £729 million.