Saga cruise and tour operations return to annual profit

Saga Group’s ocean, river cruise and tour operations all returned to profit in the past year on the back of “strong customer demand”.

The over-50s company’s overall annual underlying revenue rose by 13% to £732.7 million, reflecting growth in the cruise and travel sectors.

This led to the pre-tax loss being cut by 53% from £272.7 million to £129 million year-on-year.

The travel and insurance specialist reported a £35.5 million pre-tax profit for its two-ship ocean cruise arm for the year to January 31 against a loss of £700,000 in the previous 12 months.

This came as revenue for the division grew by 28% to £215.9 million.

The pre-tax profit for river cruising of £3 million compared to a loss of £5.1 million in 2022-23 as revenue grew by 52% to £43.8 million.

Saga’s tour operating business returned to profit for the first time since the pandemic, reporting an underlying pre-tax profit of £1.5 million, an improvement of £5.6 million over the £4.1 million loss the previous year.

Revenue was 44% ahead at £156.3 million, supported by a 22% increase in passengers to 57,800.

Saga Group said: “The strong customer demand we have generated across cruise and trravel is expected to continue and, with an encouraging pipeline of bookings, these businesses are well set to continue to grow in 2024-25.

“Bookings for Ocean Cruise remain exceptionally strong and we have already secured a load factor for 2024/25 of 78%. 

“River cruise bookings for 2024-25 are also positive and significantly ahead of the same point last year, with a load factor of 72%.

“In travel, building on the significant growth in 2023-24, booked revenue for 2024-25 is £140.7 million from 45,300 passengers, 12% and 4% ahead of the prior year respectively.”

The company added: “Consistent with our move towards a capital-light model, we are accelerating our partnership strategy, exploring opportunities in ocean cruise and insurance that would support our growth ambitions, crystallise value and enhance long-term returns for our shareholders. 

“In ocean cruise, with the current business nearing optimum capacity, we are evaluating routes to accelerate growth as customer demand continues to build strongly.”

Chief executive Mike Hazell said: “Off the back of this strong performance, we are now also taking action to position the business for long-term success.

“I am excited about the potential that partnerships present for Saga and, as a result, we are accelerating the work we are doing to explore such opportunities across both our ocean cruise and insurance businesses.

“Ocean cruise had an outstanding year and, as a result, we far exceeded our initial earnings targets, while river cruise and travel both returned to profit for the first time since the pandemic. 

“Looking ahead, forward bookings are strong, with all three of these businesses significantly ahead of the same point in the prior year.”

Non-executive chairman Sir Roger Die Hahn added: “Our current ocean cruise operations will, in time, become restrained through a lack of capacity.

“We are exploring options to continue to grow this business with the support of a partner.”