Saga plc

Saga reported underlying revenue up 7% year over year and underlying PBT from continuing operations of GBP 23.5 million, with underlying PBT increasing from GBP 27.2 million to GBP 38.7 million. Available operating cash flow was GBP 89.4 million, up 64%, and net debt at 31 July was GBP 515.1 million, down GBP 102.1 million versus 31 July 2024 and GBP 77.7 million versus year-end; leverage was 4.3x versus 4.8x a year ago. Travel businesses generated GBP 41.6 million of underlying PBT, Ocean Cruise posted GBP 34.5 million of underlying PBT on 8% revenue growth, River Cruise delivered GBP 3.9 million, and Holidays delivered GBP 3.2 million. Insurance Broking generated GBP 8.9 million of underlying PBT, while AICL contributed GBP 15.6 million before disposal. Management now expects full-year underlying PBT to be in line with the prior year and net debt leverage to be below the prior year.

Mike Hazell framed the half as evidence that Saga is simplifying the business while improving trading momentum. He emphasized the strategic reset toward a less complex, lower-risk model, including the refinancing, the underwriting sale, the new leadership structure, and progress toward the Ageas and NatWest Boxed partnerships. His tone was confident on the GBP 100 million medium-term profit target and less than 2x leverage by January 2030, saying the first half gave him even greater confidence in those goals.

Mark Watkins highlighted that the first half was driven by travel and insurance broking, with underlying revenue up 7%, underlying PBT from continuing operations at GBP 23.5 million, and operating cash flow of GBP 89.4 million. He noted net debt fell to GBP 515.1 million and leverage improved to 4.3x, while finance costs rose as expected after the refinancing. He also pointed to strong operational metrics in cruise and river, including Ocean Cruise load factor of 94% and per diems of GBP 391, River Cruise load factor of 93% and per diems of GBP 364, and said full-year cruise bookings remain strong even though second-half profitability should seasonally be lower.

Analysts focused on Ocean Cruise pricing and forward bookings, the scale and use of Saga’s customer database, the future contribution of the NatWest money partnership, cruise competitive dynamics, and the readiness of the Ageas insurance launch. Management said Ocean’s load factors are getting into the 90s, so future upside should come more from per diem growth, less discounting, and added value than from occupancy gains. On the database, Hazell said Saga has 9.7 million people on it and can contact 7.7 million, using publishing and AI tagging to learn what content resonates and to target products. He also said the NatWest money business is a medium-term growth opportunity, Ageas is on track for a Q4 2025 go-live, and Saga is not seeing material impact from Middle East disruption to ocean cruise because it can flex itineraries.