The over-50s group, Saga, expects annual revenue to rise by up to 50% thanks to a rebound in demand for cruises and leisure travel.
Saga said sales have been boosted by a rebound in holiday demand since pandemic restrictions were lifted, with the group estimating a 40% to 50% increase in sales from last year’s £377.2million.
But the vacation-to-financial services company acknowledged a tougher year for its insurance division after it reported a 3% decline in policy sales and its insurance business was hit by rising claims costs.
The insurance division sees claims inflation around 13% as the entire sector is hit by the higher cost of repair bills, but Saga said its insurance division is implementing double-digit rate increases.
The company warned of profits last autumn due to the problems in its insurance division and cut its full-year profit before tax guidance to £20m-30m, compared with £35m-50m for last year’s guidance.
Saga confirmed Monday it was in talks to sell the underwriting arm of its insurance division, Acromas Insurance Company, to help pay off debt.
The group reportedly intends to raise up to $90m
Saga said its travel business is expected to post a 10-fold increase in revenue year-over-year, but that it will report a “small” underlying pre-tax loss on marketing and administrative expenses, as previously forecast.
Cruise and tour bookings for 2023-24 are strong, he added.
Euan Sutherland, CEO of Saga Group, said: “We have continued to navigate a challenging time for the UK motor insurance market and although our underwriting business has been under pressure, our retail brokerage result will be in line with expectations.
“Overall, we are well positioned to continue our growth as we make progress on our three-pronged plan aimed at maximizing our existing businesses, incrementally improving our scalability while reducing leverage and branding Saga as ‘The Superbrand’ to position for older people in the UK.”
Shares of the group rose 5% in morning trade on Tuesday.