Update in relation to travel advice from the Gov't

13 March 2020

This announcement contains inside information

Saga plc

("Saga" or "the Group")

Update in relation to travel advice from the Government

Saga notes the updated travel advice from the Government which advises people aged 70 and over and those with pre-existing health conditions against cruise ship travel at this time.

The health and safety of customers and colleagues is our number one priority.  We have, therefore, made the decision to temporarily suspend operations of our Cruises until 1 May 2020.  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.   

Demand for our Cruises has been very positive, with bookings of around 80% of the full year revenue target. While cancellations had increased in recent weeks, as of 11 March 2020, 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%.

Financial impact

It is estimated that a cessation of Cruise trading for the next 6 weeks will reduce Cruise profit before tax by between £10m and £15m.  Related advance customer receipts for this period are £22m.

While the travel environment remains uncertain, the Group continues to have significant available liquidity, underpinned by a £100m undrawn revolving credit facility, £33m of cash at the end of February and the strong cash generation of the Insurance business. As previously noted, the insurance business is not expected to be significantly impacted by COVID-19 and has had a good start to the current financial year.  The two disposals recently announced are also expected to generate an additional £37m of cash proceeds in the first half.

There are a range of further mitigating actions the Group will take including additional cost efficiencies and reducing discretionary spend. 

ENDS

For further information please contact:

Notes to editors

About Saga

Saga is a specialist in the provision of products and services for life after 50. The Saga brand is one of the most recognised and trusted brands in the UK and is known for its high level of customer service and its high quality, award winning products and services including cruises and holidays, insurance, personal finance and publishing. www.saga.co.uk