Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
Saga has avoided a cash crunch and delivered underlying pre-tax profit of £48mn for 2024, even as the over-50s travel and insurance specialist cautioned on the current financial year’s outlook.
The London-listed group’s pre-tax profit was up 25 per cent on the previous year, as the company scaled back exposure to its lossmaking insurance business and benefited from a post-pandemic rebound in cruises, it said on Wednesday.
Still, Saga forecast that a “material” increase in financing costs in the current financial year would mean weaker underlying profit “before returning to growth thereafter”.
On a reported basis, pre-tax losses widened to £160mn in 2024, largely due to a writedown in the value of its insurance broking business, which chief executive Mike Hazell said had struggled in a consolidating UK market.
However, Hazell told the Financial Times, “we’ve seen our travel businesses going great guns, and offsetting a lot of that decline”.
In January, Saga announced that it had refinanced its debt with £485mn from private credit provider HPS Investment Partners, replacing debt that had been set to mature in 2026. The new debt funding matures in 2031.
In a restructuring of its insurance business, Saga last year granted royalty-free use of its brand to Belgian insurer Ageas. The 20-year partnership will allow Saga to exit its exposure to underwriting and insurance price risk.
Saga has laboured for years under a highly leveraged balance sheet, with former chief executive Euan Sutherland criticising the group’s private equity owners for leaving Saga “loaded with debt, starved of investment and driven with a very short-term focus”.
The group cut its debt for the year ending in January to £591mn, a reduction of £47mn compared with 2023, ahead of predictions by analysts at Peel Hunt.
Shares were trading down slightly to 123.4p in London on Wednesday morning.
