30th Sep 2015 07:13
LONDON (Alliance News) - Saga PLC on Wednesday said its pretax profit surged in the first half on lower costs, improved margins and better revenue, driven by strong performances for its motor insurance and travel arms.
The FTSE 250-listed company, which provides products and services for over-50s, said its pretax profit in the first half to the end of July was GBP101.3 million, more than double the GBP42.2 million it made a year earlier.
The profit rise was driven by the group posting higher revenue, better gross margins and lower administrative and financing costs in the half.
Saga said its revenue rose to GBP478.3 million in the half, up from GBP440.1 million, with a particularly strong performance in its financial services unit. Core motor insurance policies for the company increased 9.7% in the half to 1.1 million, while the motor insurance unit's underwriting performance was robust. The group also acquired motorbike insurer Bennetts in the half and remains on track to launch Saga Investment Services by the end of 2015.
The group's travel business also performed well, improving trading profit and benefiting from an increase in the company's cruise capacity.
The company, which floated in May 2014, also said it would pay its maiden interim dividend of 2.2 pence.
"I am pleased to report continued momentum in both our financial performance and in the implementation of the strategic initiatives that we announced earlier this year. In particular, we have successfully launched our motor panel, reached the decision to invest in replacing our shipping capacity and we are on track to launch Saga Investment Services," said Lance Batchelor, Saga's chief executive.
"We are confident of delivering on our targets for the full year and of continuing to build sustainable returns for shareholders through profit growth, cash generation and our progressive dividend policy," he added.
Shares in Saga were up 2.1% to 205.40 pence just after the open on Wednesday.
By Sam Unsted; [email protected]; @SamUAtAlliance
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