Euan Sutherland, Saga’s Group CEO, said, ‘I am pleased to announce a 15% increase in revenue for the first half of the year, due to the continued growth of our Cruise and Travel businesses, in addition to further debt reduction.
‘Alongside this, under consistent accounting standards, we report an underlying half year profit that is broadly in line with the prior year.
‘In ocean cruise, bookings are on track to achieve our targets for the full year, reflecting continued strong customer demand, while our River Cruise business has returned to profit with a 34% increase in guest numbers. Travel is also on track to return to profit for the full year.’
Saga Chairman Roger De Haan added, ‘Saga made progress during the first six months of the financial year, particularly within the cruise and travel businesses which reported a significant uplift in revenue. When combined, this was more than 40% higher than in the same six-month period the year before.
‘Our ocean cruise ships are seeing a high level of demand and based on current bookings, are expected to sail with strong load factors for the full year and with a higher revenue per guest per night than before.
We have also been working hard to develop our River Cruise operations to provide the same levels of satisfaction that guests experience on board our ocean cruise ships. The changes we have made to date have been well received.’
Ocean cruise load factor exceeds 80%
In the first half of the year, the ocean cruise segment returned to fully operational conditions for the first time since the pandemic and achieved a load factor of 83% (H1 2022: 66%) and a per diem of £333 (H1 2022: £318). These two factors combined equated to revenue growth of 37.1% and resulted in a return to profitability from an underlying loss before tax of £6.9m to an underlying profit before tax of £12.9m, an improvement of 287.0%.
In the first half of the prior year, there were some adverse impacts on a small number of voyages due to COVID, while the conflict in Ukraine dampened customer demand for departures to the Baltics and Black Sea, resulting in late itinerary changes and some limited cancellations.
Ocean cruise available operating cash flow, after capital repayments and interest on the ship facilities, was £7.8m for the first six months of the year, compared with an outflow of £9.7m for the same period in 2022.
At September 24, the booked load factor for the full year was 86%, a 12ppt increase when compared with the same point last year with the per diem of £332, 4% ahead. Saga expects to report at least £40m ocean cruise trading EBITDA (excluding overheads) per ship.
Looking ahead to 2024/25, the booked load factor, noted on September 24, was 49% and the per diem was £359. This compares with 43% and £326 at the same point last year.
River cruise returns to profit
In the first half of the year, the river cruise business returned to more normal operating conditions. The business achieved a load factor of 83% and a per diem of £296. This resulted in revenue growth of 41.8% and a return to profitability from an underlying loss before tax of £2.1m to an underlying profit before tax of £1.5m.
In the prior period, although the business was operating, both the COVID Omicron variant and the conflict in Ukraine impacted the number of passengers travelling, due to continued customer caution in relation to Central Europe.
Booked revenue at September 24 was £43.3m for the full year, 52% higher than at the same point last year, representing a load factor of 85% and per diem of £285. Bookings reflect a significant increase in the number of first-time buyers following the decision to offer more shorter seven-day cruises.
At the same date, the booked load factor for 2024/25 was 30% with revenue and passengers 40% and 31% higher, when compared to the same time last year.
Higher level of profit forecast for the second half of 2023/24
Saga’s CFO James Quin noted, ‘In terms of overall performance and in line with expectations we set as part of our full year results announcement, the very different market dynamics in our two main businesses are evident in our results.
‘In terms of the positives, cruise and travel continued to recover from the pandemic, and the first half of this year has seen a return to normal trading. Travel and Cruise combined returned to profit, with an £11.6m loss in the first half of 2022/23 reversing to a profit of £11.8m in the first half of 2023/24.
‘Seasonality effects mean that we expect a much higher level of profit in the second half of 2023/24, as roughly 60% of travel revenue is generated in that period, and we expect a H2 ocean cruise load factor of at least 87% compared with 83% in the first half.’
In cruise, Saga expects to achieve at least £40m ocean cruise trading EBITDA (excluding overheads) per ship for the full year, through a load factor of around 86%, with the opportunity to grow this further in 2024/25. River Cruise and Travel, when combined, are anticipated to return to an Underlying Profit Before Tax for the full year, in line with pre-pandemic levels.
At September 24, secured bookings for the year ended January 31, 2025 equated to revenue of £16.7m, 40% ahead of the same time last year, reflecting higher passenger numbers and inflationary increases to pricing. At the same date, the load factor and per diem were 30% and £321 respectively.
Saga noted that river cruise has made significant progress in replicating the same level of satisfaction that passengers experience on board Saga’s ocean cruise ships through actions taken to improve pre-cruise administration and the quality of food on board, alongside the benefit of fewer pandemic-driven itinerary changes.