SHARE OF THE WEEK: Investors looking for reassurance from Saga
SHARE OF THE WEEK: Investors seeking reassurance from Saga as it looks to dump its weak insurance business
Investors will be looking for reassurance from Saga next week as it releases full-year results and attempts to dump its weak insurance business.
In the over-50s annual results on Tuesday, analysts expect the travel and insurance company to post a £20m profit for 2022, at the lower end of the £20m to £30m forecast.
The company previously had expectations for a profit of £35m to £50m for the year, but lowered these figures due to the rise in insurance claims costs.
In 2021, Saga posted a loss of £61.2 million following a complete shutdown of the travel and tourism industry due to Covid.
The insurance branch is the largest company in the group and has been struggling with sky-high damage claims in recent years.
In February, Saga confirmed it was looking for buyers for its captive insurance business – the sale of which was reported to raise as much as £90m.
This would benefit the company’s operational and strategic position and pay off some of its £721 million mountain of debt.
While exclusive talks with an Australian insurance group fell through earlier last month, analysts expect an update on Tuesday on how Saga’s hunt is progressing.
Andreas Van Embden, analyst at Peel Hunt, said this sale should be a top priority for the company.
Shares of Saga have soared in recent months, rising nearly 60 percent over the past six months, but still down more than 90 percent from 2016 highs.