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Saga share price sinks after AGM statement

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Saga’s share price (LON:SAGA) has taken another heavy beating this morning, as the company pointed to political uncertainties which are weighing on its tour business. The news marks another blow for the cruises-to-insurance group for the over-50s which booked a £310-million charge this year, and trimmed its payout to shareholders.

As of 09:03 BST, Saga’s share price had given up 7.74 percent to 34.69p, weighing on the FTSE 250 which currently stands 0.14 percent in the red at 19,284.29 points. The group’s shares have given up more than 73 percent of their value over the past year, as compared with about a 7.4-percent fall in the mid-cap index.

Saga points to political uncertainties

Saga announced in a statement ahead of its AGM that it was making progress with its strategy, “despite challenging trading conditions in both insurance and travel markets”. The company noted that while trading for the period from February 1 to June 18 had been broadly in line with expectations, the company’s Tour Operations business was “being impacted by current political uncertainties”. The lifestyle group noted that the division’s booked revenues for the full year were down four percent as of June 15, while margins would be impacted by competitive discounting.

“We are resolutely focused on the execution of our new strategy and have a clear set of priorities,” Saga’s outgoing chief executive Lance Batchelor commented in the statement. “Against challenging headwinds in both travel and insurance, we see early signs of progress in stabilising our Retail Broking business and forward bookings for the Cruise business have been resilient.”

Analysts on mid-cap lifestyle group

The three analysts offering 12-month targets for the Saga share price for the Financial Times have a median target of 65.00p, with a high estimate of 110.00p and a low estimate of 60.00p. As of June 14, the consensus forecast amongst five polled investment analysts covering the mid-cap group has it that the company will outperform the market.

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