Saga (SAGA) H2 2025 earnings summary

Executive summary

• Achieved strong financial performance with growth in underlying profit, robust cash flow, and continued net debt reduction, driven by travel business momentum and improved insurance underwriting.

• Completed a strategic review, agreed sale of Insurance Underwriting, and secured a partnership with Ageas, resulting in a lower-risk insurance business and fast-growing travel segment.

• All business units are now profitable, with detailed growth plans and new leadership in place.

• Secured new long-term financing arrangements, providing funding certainty for six years.

• Annual underlying profitability targeted to reach at least £100m within five years, with leverage below 2.0x.

Financial highlights

• Underlying profit before tax from continuing operations rose 8% year-over-year to GBP 37.2 million; total underlying PBT including discontinued operations up 25% to GBP 47.8 million.

• Underlying revenue rose 5% year-over-year to £768.2m; trading EBITDA up 18% to £137.1m.

• Net debt reduced by £46.7m to £590.5m, with leverage ratio improving from 5.4x to 4.7x.

• Available operating cash flow was £109.6m, down 24% year-over-year, mainly due to lower Insurance Broking contribution.

• Ocean Cruise reported a 38% increase in underlying PBT to GBP 48.9 million, with a 91% load factor and 8% higher per diem.

Outlook and guidance

• Medium-term target of at least GBP 100 million underlying PBT and leverage below 2x within five years.

• 2025/2026 expected to be a transitional year with lower underlying PBT due to higher finance costs, but trading EBITDA to remain broadly flat.

• Net debt reduction to continue, but at a slower pace in 2025/26 due to one-off items; deleveraging to accelerate from January 2026.

• Travel businesses expected to maintain momentum with higher load factors and per diems; insurance broking earnings to recover from 2026/2027.

• Ocean and River Cruise, and Holidays expected to continue growth in revenue, EBITDA, and profit in 2025/26.