13th Mar 2020 08:21
(Alliance News) - Saga PLC, which provides products and services for life after 50, said Friday it has temporarily suspended its cruise ship operations until May 1.
The company noted the advice from the UK government, given on Thursday, urging those over the age of 70 with pre-existing conditions not to travel.
"Our customer service teams will be in contact with Cruise customers who were due to travel in the next six weeks to offer them either a full refund or a credit for a future departure," Saga added.
Speaking on Thursday, UK Prime Minister Boris Johnson said coronavirus "is the worst public health crisis for a generation". Johnson said anyone with coronavirus symptoms, however mild, such as a continuous cough or high temperature, must now stay at home for seven days.
He said school trips abroad should be stopped, while people over 70 with serious medical conditions should not go on cruises.
Saga said its decision comes despite "very positive" demand for its cruises, with bookings of around 80% of the full year revenue target.
While cancellations had increased in recent weeks, Saga said the average booked load factor for the remaining five cruise departures in March was 79% and the average booked load factor for five April departures was 85%.
Saga expects its six-week cruise suspension will dent pretax profit by between GBP10 million and GBP15 million. For the financial year ended January 31 2018, Saga posted a GBP134.6 million pretax loss. Pretax profit for the six months to July 31 - the firm's first half - slumped 52% year on year to GBP52.6 million.
"While the travel environment remains uncertain, the group continues to have significant available liquidity, underpinned by a GBP100 million undrawn revolving credit facility, GBP33 million of cash at the end of February and the strong cash generation of the Insurance business," Saga said.
The company said its Insurance unit will not be "significantly" impacted by the coronavirus, and has made a good start to the current financial year.
Saga added: "There are a range of further mitigating actions the group will take including additional cost efficiencies and reducing discretionary spend."
Shares in Saga were down 0.1% early Friday in London, at 14.98 pence, have initially risen 1.3%.
The move by Saga followed a similar decision by much-larger peer Carnival PLC on Thursday. Its Princess Cruises division will voluntarily pause its global operations in response to the "unpredictable circumstances" evolving from the spread of covid-19 virus.
"In proactive response to the unpredictable circumstances evolving from the global spread of covid-19 and in an abundance of caution, Princess Cruises announced that it will voluntarily pause global operations of its 18 cruise ships for two months, impacting voyages departing March 12 to May 10," the travel leisure company said.
Those currently onboard a cruise that will end in the next five days will continue to sail as expected through the end of the itinerary so that onward travel arrangements are not disrupted, Carnival said, adding that current voyages that are underway and extend beyond March 17 will be ended at the most convenient location for guests.
Princess Cruises plans to be back in operation beginning with cruises departing May 11. It plans offer guests either cash refund or the opportunity to transfer 100% of the money paid for their cancelled cruise to a future cruise of their choice.
Carnival was down 10% in early trading at 1,160.50p, after closing down 18% on Thursday.
By Paul McGowan; [email protected]
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