Saga Cruises is sailing back into the black as passenger numbers rise
Saga hailed an ‘excellent’ year for its cruise business, but still suffered a £129m loss as problems at its insurance business took their toll.
The company, which specializes in insurance and holidays for the over-50s, went back into the black with its ocean cruise business, where 2023 profits came in at £36 million, up from a £700,000 loss the year before.
The river cruise business announced an annual profit of £3 million, compared to a loss of £5 million in 2022.
Saga’s travel business, which includes both the Saga Holidays and Titan brands, saw passenger numbers rise from 47,000 in 2022 to 57,800 last year.
“Ocean Cruise had an excellent year and as a result we comfortably exceeded our initial profit targets, while River Cruise and Travel both returned to profit for the first time since the pandemic,” said CEO Mike Hazell, the company’s former chief financial officer. officer who took over from Euan Sutherland in November.
On track: Saga, which specializes in insurance and holidays for the over-50s, saw profits from its ocean cruise business reach £36 million for 2023
He added: ‘Forward bookings are strong, with all three companies significantly ahead at the same point last year.’
In 2023, tours of the fjords and Scandinavia were particularly popular, while cruises to Greenland became increasingly popular.
But despite huge demand for cruises and getaways, Saga still posted losses of £129 million as its insurance arm continues to feel the sting of high inflation, pushing up the price of payouts.
Auto insurers are being significantly affected by rising claims due to higher repair and labor costs and semiconductor shortages, driving up used car prices.
In addition, they are not allowed to engage in ‘price hikes’, where new customers get cheaper premiums while loyal customers have to pay more for renewals.
Saga was reportedly in talks last year to sell its insurance business to Open, an Australian insurer, but was unable to get a deal over the line.
But the company recently said it is ‘exploring opportunities’ as it tries to reduce its debts, which currently stand at £637 million.
Last year it asked chairman Roger De Haan for £35 million, adding to the pile of money it owed him. It said it was looking at a partnership that would see an outside company take control of its cruise operations.
The two flagship ships, Spirit of Adventure and Spirit of Discovery, operate cruises across the British Isles, Mediterranean, Scandinavian countries and Caribbean, with prices ranging from £1,300 to £15,000.
Analysts at Peel Hunt said ‘further strategic action is required’ to put the company on ‘solider financial footing’.