Saga impresses with maiden results as holiday business revenues rise

LONDON (ShareCast) - Over-50s tour operator and insurance provider Saga (LSE: SAGA.L - news) impressed the market with its maiden annual full-year results, driven by good performances in its motor insurance, travel and financial services. Revenues were down 4.6% to £900.5m during its first year as a listed company following its public offering offering (IPO) last summer.

Despite a 7% increase in gross profits to £375.4m, profits before tax fell 33% to £113.8m due to the acquisition of Destinology and costs during the IPO.

Its home insurance division remained "highly competitive", the group said, with market rates falling by 5.7%.

However, the travel business grew thanks to its tour operating and cruising divisions, with revenues up 15.2% at £381.3m.

The holiday business saw a 11% jump in passengers and 6.7% rise in ship passenger days.

Chief executive Lance Batchelor said: "It has been a significant and successful year for Saga, starting with our IPO and culminating in the growth strategy we outlined in January following a comprehensive strategic review." Numis gave a 'buy' recommendation after the results based on a "strong business model and untapped potential".

The broker added: "These are solid results that include positive signs for future growth that are supportive of our investment thesis." Shares (Berlin: DI6.BE - news) in Saga were up 1.8% to 192p on Thursday at 15:08.