Later life specialist Saga has seen profits fall slightly after a troublesome end of last year when the company revealed it was exposed to the collapse of Monarch Airlines.
The insurance and travel product provider for the over 50s reported this morning (12 April) its pre-tax profits fell 7.6 per cent from £193.3m in January 2017 to £178.7m this year.
However, the company attributed this primarily to refinancing, efforts to cut costs and making up for losses on derivatives contracts.
Under its alternative performance measure, which excludes non-cash derivative losses and one-off financial impacts that are not expected to recur, profits were up 1.4 per cent to £190.1m.
Saga saw its share price tumble in December after it revealed growth in its older person-focused insurance and tour operating businesses had been impacted by a "challenging trading environment".
In particular the tour operations business had been impacted by the collapse of Monarch Airlines with an approximate one-off cost of £2m to the group.
Saga also completed a review of its operating structure, which it believed would generate annual savings of about £10m, which came at a one off cost of £5m.
Lance Batchelor, group chief executive officer, said: "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.
“In December we outlined our plans to further invest in growing our customer base and, having seen some initial momentum in new business, the early signs are promising.
“While this investment will contribute to a small decrease in profitability compared to last year, I am confident that we have put in place the right investment to drive the Saga business forward."
Saga also provides personal finance products for the over 50s. It last year launched a range of savings products, including a fixed rate cash Isa, a variable rate cash Isa, and a telephone savings account.
Meanwhile, Saga’s chairman of 14 years, Andrew Goodsell, is stepping down in April to be succeeded by Patrick O'Sullivan, former chairman of Old Mutual.
He said: “After 26 years with Saga, 14 of which as chairman, I will retire from the board on 30 April 2018. I welcome Patrick O'Sullivan as my successor and wish him success as he takes over the stewardship of this great British company."
carmen.reichman@ft.com
