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(Sharecast News) - Saga reaffirmed its full-year outlook on Tuesday, boosted by buoyant demand for its cruises, despite war in the Middle East hitting its holiday division.
The FTSE 250 firm, which provides holidays and insurance for the over 50s, said overall trading in the travel division had been strong in the first four months of the year, to 26 June.
Interim ocean cruises revenue is expected to be up year-on-year, on the back of 13% growth in booked per diems and a booked load factor of 93%. River cruises revenues were also on course to be ahead year-on-year.
However, away from cruises and geopolitical events weighed on the holidays business. Saga noted that interim passenger numbers and revenues were expected to be ahead of the prior period. But looking to the full year, and it warned that revenues would be only "marginally ahead" with passenger numbers "potentially slightly behind" due to the US-Iran war. The conflict was also pushing holidaymakers away from long-haul and towards short-haul, it noted. Although Washington and Tehran have agreed a ceasefire while a permanent deal is negotiated, tensions remain high.
In insurance broking, Saga said trading was in line with expectations, with its recently-formed partnership with Ageas "progressing well". Saga first agreed to hand over its home and motor insurance to the UK arm of the Belgian insurer in a 20-year deal in 2024, as part of wider plans intended to simplify its structure and boost the share price.
The partnership went live at the end of 2025, with a contingent consideration payment of 10.5m due in the coming days.
Addressing shareholders at the annual general meeting, chief executive Mike Hazell said: "Saga has made a strong start to the year, demonstrating the resilience of our customers and our diverse offering, despite the current geopolitical uncertainty.
"Looking ahead, we are focussed on continuing to grow our travel business and completing the transition to our new insurance model. We remain on track to deliver our full-year guidance and continue to make clear progress towards our medium-term targets of at least 100m underlying pre-tax profits."
However, concerns about the holiday division weighed heavily on the shares and by 0930 BST the stock had shed 8% at 550.28p
Saga is due to publish interim results for the six months to 31 July at the end of September.
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