Saga share price rallies as group delivers rise in underlying profit

Lifestyle group for the over-50s hikes payout to shareholders

Saga share price rallies as group delivers rise in underlying profit

Shares in Saga (LON:SAGA) have jumped in London this morning after the cruises-to-insurance group for the over-50s revealed a rise in profits for the financial year ended January 31. The results come after the company warned in December last year that it had seen more challenging trading environment, and was impacted by the collapse of Monarch Airlines.

As of 09:26 BST, Saga’s share price had added 6.67 percent to 125.00p, outperforming the FTSE 250 index which currently stands 0.13 percent lower at 19,629.24 points. The group’s shares have lost just under 40 percent of their value over the past year, as compared with about a one-percent rise in the mid-cap index.

Saga posts results

Saga announced in a statement this morning that its underlying profit before tax had inched 1.4 percent higher to £190.1 million. The group’s profit before tax from continuing operations, however, dipped 7.6 percent to £178.7 million. Saga proposed a full-year dividend of 9.0p, marking a 5.9-percent rise on the prior-year period.

“In a challenging market we have delivered a set of full year results which is in line with the rebased profit expectations set at the end of 2017,” Lance Batchelor, Group Chief Executive Officer, commented in the statement.

Going forward, Saga expects overall profitability of its travel business to step forward again year on year, and noted that it had already secured the majority of its FY 2019 sales targets in both its tour operating and cruising businesses.

Analysts on group

The eight analysts offering 12-month price targets for Saga for the Financial Times have a median target of 137.50p on the shares, with a high estimate of 195.00p and a low estimate of 115.00p. As of April 6, the consensus forecast amongst 8 polled investment analysts covering the lifestyle group for the over-50s has it that the company will outperform the market.

As of 10:06 BST, Thursday, 12 April, Saga PLC share price is 124.30p.

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