Saga share price outperforms despite grim interims

Saga’s (LON:SAGA) share price has climbed higher in today’s session, even as the lifestyle group posted a slump in half-year profits. The company, however, reaffirmed its full-year profit guidance and said that it had made progress against the strategic reset of its business.

As of 09:56 BST, Saga’s share price had added 2.51 percent to 46.56p. The group’s shares have given up more than 60 percent of their value over the past year.

Saga posts interim results

Saga announced in a statement this morning that its profit before tax had tumbled 52.1 percent to £52.6 million in the six months ended July 31. The company further revealed a 72.4-percent slump in available operating cash flow and slashed its payout to shareholders from 3.0p per share to 1.3p per share.

“We have made good progress against our strategic reset.  The sales of our three-year fixed price insurance are encouraging, and a higher proportion of customers are coming to us direct,” Saga’s chief executive Lance Batchelor commented in the statement. The company’s chairman Patrick O’Sullivan noted that it was “early days in our transformation programme and there remains much to do but what we have seen so far gives us confidence that we are pursuing the right strategy”.

Today’s update comes after Saga said in June that political uncertainties were weighing on its tour business. Earlier in the year, the cruises-to-insurance group for the over 50s booked a £310-million charge.

Analysts on lifestyle group

The five analysts offering 12-month targets for the Saga share price for the Financial Times have a median target of 55.00p, with a high estimate of 110.00p and a low estimate of 39.00p. As of September 13, the consensus forecast amongst five polled investment analysts covering the lifestyle group has it that the company will outperform the market.