- Strong first half
- Full year to be ahead of consensus
- Net debt continues to fall
Over 50s products specialist Saga (SAGA) rallied as much as 8% to a new three-year high of 236p after the company reported a strong first half and said full-year profit is now expected to be ahead of consensus expectations.
The shares have more than doubled over the last year reflecting robust trading updates and a reduction of net debt.
CEO Mike Hazel commented: ‘In April, we laid out our plans to deliver underlying profitability of at least £100 million and leverage below two times by January 2030.
‘Our performance in the first half was a significant step forward towards meeting our targets and it has further reinforced my confidence in the future.’
TRAVEL STRENGTH
Strong demand for Ocean and River Cruise holidays and a ‘material’ increase in customer numbers drove a 33% rise in the travel division’s underlying pre-tax profit to £41.6 million.
Group underlying pre-tax profit was ahead of expectations but 5% lower at £23.5 million due to increased financing costs associated with the group’s new corporate debt facility.
Reducing net debt remains a priority for the group, and it fell 17% in the half to £515 million, equating to 4.3 times EBITDA (earnings before interest, tax, depreciation, and amortisation). The full-year leverage ratio is now expected to drop below the prior year.
Looking ahead, the company said the travel vision has strong forward booking for the second half and it anticipates a further improvement in profitability.
Full-year underlying pre-tax is now expected to be in line with the prior year when the company reported £38.2 million.
