Saga share price: 4 things we learnt from its half-year results

The insurance and travel company for over-50s saw its share price rise as much as 17% following a strong set of interim results last week, with it on course to hit its full-year profit target.

Last week, Saga saw its share price climb as much as 17% after publishing a strong set of half-year results, with the business on track to hit its full-year pre-tax profit target of between £105 million and £120 million.

‘I am pleased with the progress that has been achieved this year,’ Saga Chairman Patrick O’Sullivan said. ‘It is early days in our transformation programme and there remains much to do but what we have seen so far gives us confidence that we are pursuing the right strategy.’

In the wake of its latest results, IG looks at the key takeaways from its recent trading update.

Saga turnaround sees early results

Just six months into its turnaround strategy, Saga has made good progress, fundamentally changing the way it does business in an increasingly commoditised travel and insurance market that saw the company record a £135 million loss last year.

This financial year, the group has seen a positive response from consumers to its new product offerings, with over 175,000 3-year fixed price policies being sold since launch.

Saga’s direct-to-consumer insurance strategy is yielding a share of new business of 53%, with over half of those customers opting for the 3-year fixed price product, the company said

‘We have made good progress against our strategic reset,’ Saga Group CEO Lance Batchelor said. ‘The sales of our 3-year fixed price insurance are encouraging, and a higher proportion of customers are coming to us direct.’

Saga share price down 50%

The last six months represent a significant step in the right direction for Saga, but investors will need to see this strong set of results built upon in the second half of the year and beyond if the company’s stock is to rebound.

Since January, the over 50s insurance and travel provider has seen its stock value halve, with the group struggling in an extremely challenging insurance market.

Saga has struggled to retain customers in an insurance market where price transparency and the ease of switching have led to a lack of consumer loyalty.

Practise trading Saga and other insurance stocks with an IG demo account

Cruise revenue targets hit

Saga has already met its cruise revenue targets for the financial year.

Cruise sales have significantly supported the group’s target of £40 million of EBITDA per year from each new ship. Its latest vessel, Spirit of Discovery, is now fully operational and helping fill additional cruise capacity into next year, the company said.

Saga slashes dividend

The group’s performance over the last six months allowed them to issue a 1.3p interim dividend to shareholders, down from 3p a share in the same period last year.

The decision to slash the dividend, although unpopular with shareholders, was necessary. Saga still has a lot of work ahead of it to address declining customer numbers and strengthen its insurance business, which is responsible for the lion share of the group’s profits.

‘It's encouraging to see the group making strides to improve performance, but only time will tell if attempts to revamp its insurance offering are enough to attract premium customers back,’ Hargreaves Lansdown research editor Nadeem Umar said.

‘The company currently trades on a PE ratio of just 5.7 times - investors are clearly not optimistic.’

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.


Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

For more info on how we might use your data, see our privacy notice and access policy and privacy webpage.

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.