(Alliance News) – On Tuesday, Saga PLC provided a business update for the period from August 1 to Monday, as part of the launch of a media business line.
Saga, whose head office is in Kent, is hosting a financial markets event on Tuesday. It offers insurance, cruises and combined trips for people over 50 years of age.
The company is on track to deliver an underlying pre-tax profit of £20-30m in the fiscal year to January 31, compared with a loss of £6.7m a year earlier, Saga said. Expected earnings would still be well below the £109.9m Saga booked for fiscal 2020, which ended before Covid restrictions came into effect in many countries.
Saga expects fiscal 2023 revenue to be 40-50% higher than fiscal 2022’s £377.2m as it welcomed the resumption of cruising and travel following the easing of covid restrictions. This would generate revenue of between £528m and £566m. Revenue for the 2022 financial year is less than half of the £797.3 million recorded for the 2020 financial year.
Saga added that the insurance broker’s results are “largely” in line with forecasts, with total policies up 3% per year.
However, it noted that its insurance underwriting arm has struggled with high levels of claims inflation. Saga expects to report annual claims inflation of 13% and a combined operating ratio of 125%, down from 96% a year ago and worse than previous guidance.
On Monday, Saga had confirmed that it was seeking buyers for its insurance underwriting business, called Acromas Insurance Co Ltd. Acromas purchases 25-30% of all the insurance Saga offers to its clients.
In the future, Saga aims to diversify its business into its cruise, travel, insurance, money and media branches. It launched “Saga Exceptional” on Tuesday, which is part of a new business called Saga Media. Saga aims to get £50m in new revenue from Saga Media over the five years to 2027-28. It also aims to generate an annual pre-tax profit of £7m by then, rising to £40m in 2033-34.
“It’s a plan that’s already in place and accelerating today with the launch of Saga Exceptional. Through this exciting new website and broader media strategy, we’ll be engaging with our customers on a daily basis, providing reviews, stories and content that matter and are relevant to them,” said Euan Sutherland, CEO of Saga.
Last July, Saga hired Aaron Asadi as CEO of Saga Media. Asadi was director of content at the magazine publisher Future PLC.
Saga shares rose 5.9% to 161.44 pence apiece in London on Tuesday morning.
By Tom Budszus, Alliance News reporter
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