5th Mar 2020 10:41
(Alliance News) - Saga PLC on Thursday said the impact of coronavirus on its operations cannot yet be quantified, though it has already caused cancellations and lower bookings.
Folkestone, Kent-headquartered Saga provides financial services such as insurance to over-50s, though also runs holidays for the same age group.
Saga's Cruise business has forward sales for 80% of targeted revenue for its financial year ending January 2020, the company said, but there has been a higher level of cancellations following the coronavirus outbreak.
The firm's two most recent ship departures had occupation of around 80%. Saga's cruise ships all start and end at UK ports.
In the Tour Operations unit, there has likewise been a rise in cancellations and suppressed demand. Forward passenger bookings for its current financial year are 20% lower than last year.
However, Saga said that, given lower exposure to northern Europe and the Far East, it should be able to react to changes in demand.
The Insurance business has had a "robust" start to its current financial year, Saga said.
"The evolution of COVID-19 and the impact this will have on full year earnings for financial 2021 cannot be predicted with any certainty at the current time. While our Travel business will be impacted, the group expects the performance and cash generation of the Insurance business to be largely unaffected," said Saga.
"There are a range of actions the group can take to mitigate against weaker trading in the Travel business, such as the cost efficiency actions already underway and announced in the recent trading statement."
Saga also announced the sale of its Patricia Whites and Country Cousins businesses to Limerston Capital for an enterprise value of GBP14 million. Both units are introductory care agencies.
This is part of Saga's plan to sell non-core assets to reduce debt. As of January 31, net short-term bank debt was around GBP110 million, down from GBP148 million at July's end.
Saga will report results for this year ended January 31 on April 2. Saga shares were down 7.4% on Thursday morning in London at 22.90 pence each.
By George Collard; [email protected]
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