Preliminary Results

About this update from Saga Plc

[{"type":"text","content":"\n \n 17 April 2024 \n Saga plc \n P reliminary results for the year ended 31 January 2024 \n Saga delivers underlying profit more than double that of the prior year and significantly reduces debt \n Saga plc ( Saga or the Group ), the UK's specialist in products and services for people over 50, announces its preliminary results for the year ended 31 January 2024. These results are reported under International Reporting Standard ( IFRS ) 17 'Insurance Contracts' and any prior year comparisons have been restated accordingly. \n   \n \n \n \n \n Year ended \n \n \n 31 January 2024 \n \n \n 31 January 2023 (restated 1 ) \n \n \n Change \n \n \n \n \n Underlying Revenue 2 1F \n \n \n £732.7m \n \n \n £648.9m \n \n \n 13% \n \n \n \n \n Revenue \n \n \n £741.1m \n \n \n £663.7m \n \n \n 12% \n \n \n \n \n Trading EBITDA 2 \n \n \n £116.5m \n \n \n £92.5m \n \n \n 26% \n \n \n \n \n Underlying Profit Before Tax 2 \n \n \n £38.2m \n \n \n £15.5m \n \n \n 146% \n \n \n \n \n Underlying Profit Before Tax (Under Previous IFRS) 2 \n \n \n £45.3m \n \n \n £21.5m \n \n \n 111% \n \n \n \n \n Loss before tax \n \n \n (£129.0m) \n \n \n (£272.7m) \n \n \n 53% \n \n \n \n \n Available Operating Cash Flow 2 \n \n \n £143.8m \n \n \n £54.9m \n \n \n 162% \n \n \n \n \n Net Debt 2 \n \n \n £637.2m \n \n \n £711.7m \n \n \n 10% \n \n \n \n \n Leverage ratio \n \n \n 5.4x \n \n \n 7.5x \n \n \n 2.1x \n \n \n \n \n   \n 1 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 2 Refer to the Alternative Performance Measures Glossary for definition and explanation \n Mike Hazell, Saga's Group Chief Executive Officer, said: \n \"Saga has delivered a strong financial performance with underlying revenue growth of 13% and an underlying profit that was more than double that of the prior year. We have also continued to generate significant positive cash flows and reduced our net debt by £74.5m over the past 12 months. Off the back of this strong performance, we are now also taking action to position the business for long-term success. I am excited about the potential that partnerships present for Saga and, as a result, we are accelerating the work we are doing to explore such opportunities across both our Ocean Cruise and Insurance businesses. \n \"Ocean Cruise had an outstanding year and, as a result, we far exceeded our initial earnings targets, while River Cruise and Travel both returned to profit for the first time since the pandemic. Looking ahead, forward bookings are strong, with all three of these businesses significantly ahead of the same point in the prior year. \n \"While our Insurance business continued to be hindered by challenging conditions, with inflationary headwinds impacting policy volumes and margins, particularly for our three-year fixed-price policies, we are taking the necessary actions to reposition the business. We are investing in price to improve our competitive position and stabilise our policy volumes and early signs indicate that this is delivering the expected benefits. \n \"Alongside this, we continue to develop our 9.6m strong customer database and explore ways in which we can deepen our relationship with those customers. Saga Publishing is instrumental in this, broadening our reach through the delivery of purposeful and insightful content in the form of our digital weekly newsletters and our award-winning magazine. Saga Money is now also set up to serve a broader range of customers following the launch of four new products. \n \"I am confident in our strategic direction, which underpinned by the strength of our brand, allows us to continue to serve our unique customer base. Our decision to accelerate our partnership strategy will provide us with a capital-light route to growth, reducing debt and delivering long-term sustainable value for all our stakeholders.\" \n   \n Operational and financial highlights \n ·      Underlying Revenue 3 increased 13%, reflecting growth across Cruise and Travel. This translated to growth in Trading EBITDA 3 of 26%, from £92.5m in the prior year to £116.5m in the current year. \n ·      Underlying Profit Before Tax 3 was more than double that of the prior year: \n o  Under IFRS 17, Underlying Profit Before Tax 3 was £38.2m, compared with £15.5m 4 in the year before. \n o  Underlying Profit Before Tax (Under Previous IFRS) 3 was £45.3m, £23.8m higher than the £21.5m reported for the year ended 31 January 2023. \n ·      The reported loss before tax of £129.0m reflects a £104.9m impairment of Insurance goodwill, restructuring costs of £40.3m and other smaller one-off below-the-line items. \n ·      Net Debt 3 at 31 January 2024 was £637.2m, £74.5m or 10% lower than the £711.7m at 31 January 2023. At the same date, Available Cash 3 was £169.8m and both the £85.0m facility with Roger De Haan and the £50.0m Revolving Credit Facility ( RCF ) remained undrawn. \n 3 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 4 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n   \n Divisional performance \n Ocean Cruise - Exceeded initial targets, supported by strong customer demand \n ·      Ocean Cruise reported an Underlying Profit Before Tax 5 of £35.5m, compared with an Underlying Loss Before Tax 5 of £0.7m in the previous year, a year-on-year improvement of £36.2m. \n ·      Ocean Cruise Underlying Revenue 5 of £215.9m grew 28% when compared with 2022/23, supported by a load factor of 88% and per diem of £331, significantly ahead of the 75% and £318 in the prior year. \n ·      As a result, the business has now exceeded our target of £40.0m Ocean Cruise Trading EBITDA (Excluding Overheads) 5 per ship, achieving £45.0m per ship. \n River Cruise - Return to profit, supported by strong load factor and per diem \n ·      River Cruise reported an Underlying Profit Before Tax 5 of £3.0m, which compares with an Underlying Loss Before Tax 5 of £5.1m in 2022/23, a year-on-year improvement of £8.1m. \n ·      River Cruise revenue of £43.8m was 52% ahead of the year before, supported by a load factor of 85% and per diem of £285. This reflects a 43% increase in passengers to 16.6k. \n Travel - Strong passenger and revenue growth \n ·      Travel returned to profit for the first time since the pandemic, reporting an Underlying Profit Before Tax 5 of £1.5m, an improvement of £5.6m when compared with the £4.1m Underlying Loss Before Tax 5 last year. \n ·      Revenue was 44% ahead of the prior year at £156.3m, supported by a 22% increase in passengers to 57.8k. \n Insurance Broking - Positioning the business for a return to policy growth \n ·      Insurance Broking reported an earned Underlying Profit Before Tax 5 of £39.8m, compared with £71.5m 6 in the previous year, a year-on-year decline of £31.7m driven by the challenging insurance environment and, in particular, the impact of net rate inflation. \n ·      The number of total policies in force at 31 January 2024 was 1.5m, 9% behind the prior year. \n ·      Policy sales across the 12-month period were also 9% behind, reflecting a 9% fall in motor and home policies, alongside 8% and 3% fewer sales of travel and private medical insurance policies respectively. \n ·      In motor and home insurance, inflation impacted margins and customer retention: \n o  While new business sales were broadly flat, customer retention was 81% compared with 84% in the prior year, driven by an increase in the number of customers shopping around. \n o  This impacted the direct share of new business, now 43% compared with 49% in the prior year. \n o  The margin per policy was £55 compared with £69 6 in the prior year, reflecting continued inflationary pressure, particularly within our three-year fixed-price policies. \n ·      The impact of this, alongside the short-term effect of the actions taken that will make the business more competitive, resulted in a further Insurance goodwill impairment of £36.8m, in addition to the £68.1m recognised in the first half. At 31 January 2024, £344.7m of Insurance goodwill remained on the statement of financial position. \n Insurance Underwriting - Price increases start to benefit the combined operating ratio \n ·      Our Insurance Underwriting business reported an Underlying Loss Before Tax 5 of £1.4m, a fall of £12.1m when compared with the Underlying Profit Before Tax 5 of £10.7m 6 in the prior year. \n ·      While still elevated due to the sustained level of claims inflation, the current year net combined operating ratio ( COR ) reduced to 117.1% from 120.5% 6 in the prior year. \n 5 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 6 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n   \n Wider strategic progress \n ·      Saga Money reported an Underlying Profit Before Tax 7 of £1.1m compared with £2.3m in the prior year, reflecting the short-term impact of high interest rates on customer demand for equity release products. Irrespective of this, good progress was made in positioning this revitalised business area for medium-term growth through the launch of a range of new products designed to support people over 50 in managing their finances. \n ·      Our customer database continues to be one of our core assets, containing data on 9.6m, and contact details for over 7.2m people over 50 in the UK. As a result of our global digital consent programme, we have increased the size of our marketable email base by more than 9% in the past 12 months. \n ·      Alongside our progress in data, our Publishing business, with our award-winning magazine and weekly digital  newsletters, continues to be instrumental in deepening the connection we have with our customers. The magazine has more than 120k print subscribers each month and our digital newsletters, when combined, are reaching 1.2m readers weekly. \n ·      As indicated previously, we delivered a series of efficiencies through the move towards a leaner central operating model, reducing our central operating expenses by £12.0m within the 2023/24 year. The full £15.0m annualised benefit of these savings will be reflected in the 2024/25 result. \n 7 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n   \n Financial position \n Reducing our level of debt continues to be a key priority and, following a series of actions taken to increase the Group's financial flexibility, we have sufficient liquidity to meet the £150.0m bond repayment in May 2024 through a combination of Available Cash 8 and utilisation of the £85.0m facility with Roger De Haan. \n To provide additional financial flexibility following repayment of the bond, the Group has agreed a series of measures, including an increase to the leverage covenant attached to the RCF to 6.25x until the facility matures, and a further extension to the £85.0m facility with Roger De Haan from 31 December 2025 to 30 April 2026. \n While repayment of the bond will reduce our cash at hand, we will continue to have sufficient liquidity, together with the currently undrawn £50.0m RCF, to support our business development and plans. \n 8 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n   \n Strategy and outlook \n The strong customer demand we have generated across Cruise and Travel is expected to continue and, with an encouraging pipeline of bookings, these businesses are well set to continue to grow in 2024/25. \n Bookings for Ocean Cruise remain exceptionally strong and we have already secured a load factor for 2024/25 of 78% 9 and a per diem of £367 9 . This is 4ppts and 9% ahead of the already strong 74% 9 and £338 9 at the same time last year. \n River Cruise bookings for 2024/25 are also positive and significantly ahead of the same point last year, with a load factor of 72% 9 and per diem of £339 9 compared with 66% 9 and £299 9 . \n In Travel, building on the significant growth in 2023/24, booked revenue for 2024/25 is £140.7m 9 from 45.3k 9 passengers, 12% and 4% ahead of the prior year respectively. \n In Insurance, conditions continue to be challenging and we are repositioning the business accordingly, with a focus on stabilising and recovering volume. We are taking a series of actions, including investment in price to improve our competitive position and address the recent decline in policy sales, particularly within motor and home insurance. As we make this change, we expect some short-term impact to earnings, arising from this price investment, together with the acquisition costs associated with a higher number of new business policies.   \n As a result, we expect written Underlying Profit Before Tax 10 for Insurance Broking to be materially lower in 2024/25 than in 2023/24. We are already beginning to see signs of stabilisation as a result of our revised approach. \n Having applied significant price increases throughout the past 18 months, the Insurance Underwriting business is now on a much stronger footing. As these price increases continue to flow through, we expect to report an Underlying Profit Before Tax 10 for 2024/25 in the low single digits, with an improving current year COR. \n The maturity profile of Saga Money's new products, and the high interest rate environment anticipated for this year, mean that we expect a similar contribution from this business in 2024/25 to that in 2023/24 before it delivers a more meaningful proportion of Group earnings over time. \n The net result of these is that we expect the Group to generate an Underlying Profit Before Tax 10 that is broadly consistent with that of 2023/24, reflecting growth across Cruise and Travel, offset by a transitional year in Insurance, before a planned return to growth thereafter. \n Our priorities remain unchanged; to reduce leverage and increase our strategic flexibility. Consistent with our move towards a capital-light model, we are accelerating our partnership strategy, exploring opportunities in Ocean Cruise and Insurance that would support our growth ambitions, crystallise value and enhance long-term returns for our shareholders. In Ocean Cruise, with the current business nearing optimum capacity, we are evaluating routes to accelerate growth as customer demand continues to build strongly. In Insurance, we are focused on scaling the business and increasing its efficiency and effectiveness. We believe that such partnerships could deliver growth, increase flexibility and reduce debt. \n The Board remains confident in the strength of the Saga brand, its colleagues and its unique products and services, and will continue to focus on driving long-term sustainable growth for all our stakeholders. \n 9 Current year bookings reflect the position at 14 April 2024, while the prior year refers to the position at 16 April 2023 \n 10 Refer to the Alternative Performance Measures Glossary for definition and explanation \n END \n Management will hold a presentation for analysts and investors at 9.30am today. The webcast can be accessed by registering at www.investis-live.com/saga-group/65f87ab3b095440c00c6695c/fdqaa and a copy of the presentation slides is available at www.corporate.saga.co.uk/investors/results-reports-presentations/ . \n A separate live presentation for retail investors will be held via the Investor Meet Company platform on 18 April 2024 at 9.30am. The presentation is open to all existing and potential investors. Questions can be submitted pre-event via the Investor Meet Company dashboard up until 9.00am on 16 April 2024, or at any time during the live presentation. Investors can sign up to Investor Meet Company for free and follow Saga plc via www.investormeetcompany.com/saga-plc/register-investor . Investors who already follow Saga plc on the Investor Meet Company platform will automatically be invited. \n For further information, please contact: \n   \n \n \n \n \n Saga plc \n \n \n   \n \n \n \n \n Emily Roalfe, Director of Investor Relations and Treasury \n \n \n Tel: 07732 093 007 \n \n \n \n \n   \n \n \n Email: [email protected] \n \n \n \n \n Headland Consultancy \n \n \n   \n \n \n \n \n Susanna Voyle     \n \n \n Tel: 07980 894 557 \n \n \n \n \n Will Smith \n \n \n Tel: 07872 350 428 \n \n \n \n \n \n \n \n Tel: 020 3805 4822 \n   \n \n \n \n \n \n \n \n Email: [email protected] \n   \n \n \n \n \n   \n Notes to editors \n Saga is a specialist in the provision of products and services for people over 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 travel, insurance, personal finance and media. www.saga.co.uk \n   \n Chairman's Statement \n I am pleased to report that for the year ended 31 January 2024 Saga delivered a strong financial result. Cash flows and underlying profit were significantly higher than in the prior year, driven by growth within our Cruise and Travel businesses, alongside actions taken to lower the cost of our central functions. We were also able to reduce our level of debt by £74.5m. \n Our Ocean Cruise business had an outstanding year, with exceptional levels of customer satisfaction and occupancy, allowing us to take more customers on holiday and exceed our financial targets. Bookings for the year ahead are even stronger than at the corresponding point last year. \n Our River Cruise and Travel businesses also performed well and the growth in passenger numbers helped both businesses return to profit for the 2023/24 financial year. \n Our Insurance operations continued to be challenged by inflation, that has impacted both margins, particularly for our older three-year fixed-price policies, and policy volumes. Looking forward, we are repositioning this business by investing in price and implementing efficiencies to improve our competitive position to stabilise our policy volumes and build a platform for growth. \n Our Underwriting business has applied price increases in the last 18 months that have strengthened its position and we are expecting this to lead that business back to profitability. \n We made the decision to reduce our central operating expenses and exit some of our smaller, loss-making activities. We are committed to, and continue to invest in, providing our customers with engaging purpose-led content through the Saga Magazine and our increasingly popular newsletters. In addition, Saga Money, which in the past has reported relatively small returns, is positioned for growth, with the aim of becoming a far more meaningful proportion of the Group's earnings over time. \n Our current Ocean Cruise operations will, in time, become restrained through a lack of capacity. We are exploring options to continue to grow this business with the support of a partner. We are also in the early stages of considering potential partnership opportunities that could support growth in our Insurance operations. \n Throughout the past year, there have been a number of changes to the Board. Euan Sutherland, our former Group Chief Executive Officer ( CEO ), and James Quin, our former Chief Financial Officer ( CFO ), resigned. Eva Eisenschimmel, an independent Non-Executive Director ( NED ) and Chair of the Remuneration Committee, made the decision to step down. I'd like to thank them all for their contribution to Saga during their time here. Julie Hopes, an existing NED and Chair of the Risk Committee now chairs the Remuneration Committee. Mike Hazell, who was appointed as Group CEO, and Mark Watkins, Group CFO, bring a wealth of experience to their new roles and I am very pleased to see the progress they are making in leading Saga through its current phase of development. \n At Saga, we are at our best when we provide exceptional service to our customers, alongside innovative, meaningful and good value products that are tailored to suit their needs. We will continue to leverage our insight and data capabilities, and the considerable collective buying power of the millions we have on our customer database. With the excellent team we have, and our developing strategy, I believe there is an exciting future for Saga as we continue to reduce our debt, explore strategic partnerships, new opportunities and grow our core businesses. \n   \n Sir Roger De Haan \n Non-Executive Chairman \n 16 April 2024 \n   \n Group Chief Executive Officer's Strategic Review \n Significant opportunity \n When I joined Saga back in October 2023, I had clear views about the strength of the business and the brand, based on what was already evident to me. Fast-forward to today, and with the benefit of the visibility I now have, those opinions have only strengthened. It is clear that there is a significant opportunity to drive long-term sustainable growth for all our stakeholders through maximising our core businesses, reducing debt as we move towards capital-light business models, growing the number of customers we serve and deepening the connection we have with them. I believe these objectives can be amplified by the work we are doing to explore partnerships. \n Strong demand in Cruise and Travel but Insurance remains challenging \n During 2023/24, we generated strong customer demand in our Cruise and Travel businesses; however, conditions in Insurance remained challenging. Saga Money launched four new products, allowing us to serve more customers, and we continued to enhance our data and marketing capabilities. Alongside this, we maintained a disciplined approach to our cost base, identifying efficiencies and moving towards a leaner central model. \n Growth in underlying revenue and profit \n I am delighted to report that, for the year ended 31 January 2024, Saga delivered a strong financial result. Underlying Revenue 1 was £732.7m, representing 13% growth when compared with the prior year and, on a statutory basis, revenue was £741.1m, 12% higher. Following the adoption of International Financial Reporting Standard ( IFRS ) 17, we report an Underlying Profit Before Tax 1 of £38.2m, more than double the £15.5m 2 in the prior year. This was also the case for Underlying Profit Before Tax (Under Previous IFRS) 1 , which was £45.3m compared with £21.5m in the prior year. This result reflects a return to profit for Cruise and Travel, but continued challenges in Insurance. \n After reflecting a £104.9m impairment of Insurance goodwill and £40.3m of restructuring costs, alongside other smaller one-off below-the-line items, we report a loss before tax of £129.0m, which compares with a loss of £272.7m 2 in the prior year. \n Debt reduction continues to be a key strategic priority for the Group and we have continued to make progress in this area. Net Debt 1 at 31 January 2024 was £637.2m, £74.5m lower than the £711.7m at the same point last year. The Group also continued to hold sufficient liquidity with Available Cash 1 of £169.8m, alongside the £85.0m loan facility with Roger De Haan and the £50.0m Revolving Credit Facility ( RCF ), both of which remained undrawn at the year end. \n 1 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 2 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n Our strategy \n Our ambition is to become the largest and most-trusted brand for older people in the UK. We will achieve this through the delivery of our growth plan, which has evolved, in line with our ambition, as we continually develop the business to support the changing needs of our customers. This plan is focused on the following three priorities: \n 1. Maximising our core businesses \n 2. Reducing debt through capital-light growth \n 3. Growing our customer base and deepening our customer relationships \n An update on our progress during the past year in each of these areas is set out below. \n 1. Maximising our core businesses \n We plan to drive our core businesses of Cruise, Travel, Insurance and Money, through business-led growth strategies, supported by our extensive data and Publishing marketing platform. \n Cruise \n For the year ended 31 January 2024, our Ocean Cruise business delivered an Underlying Profit Before Tax 3 of £35.5m, a £36.2m improvement when compared with the Underlying Loss Before Tax 3 of £0.7m in the prior year. \n We continued to generate strong customer demand, which supported a load factor (being the proportion of our total capacity that was filled) of 88% and a per diem (being the average price charged per customer per day) of £331. This was 13ppts and 4% higher than the 75% and £318 respectively in the prior year. These factors, when combined, meant that we exceeded our target of £40.0m Ocean Cruise Trading EBITDA (Excluding Overheads) 3 per ship, delivering £45.0m per ship. \n   \n In Ocean Cruise, we work hard to set ourselves apart from others in the market and we are continually exploring new ways to enhance the inclusivity of our offering and increase our differentiation. For departures in 2024/25 and beyond, we made the decision to increase the reach of our VIP chauffeur service, allowing more customers from further afield to experience what we have to offer. \n Bookings for 2024/25 are significantly ahead of the prior year, with a load factor of 78% and per diem of £367 at 14 April 2024. This is 4ppts and 9% ahead of the 74% and £338 at the same point in the prior year, which in itself was a year of significant growth. \n Given this strong momentum in demand for our boutique cruise offering, the business is approaching optimum capacity with our current two ocean cruise ships. We are exploring opportunities to further optimise the business, including potential partnership arrangements that, consistent with our move to a capital-light business model, would support further growth, crystallise value, reduce debt and enhance long-term returns for shareholders. \n In line with previous guidance, our River Cruise business returned to profit, reporting an Underlying Profit Before Tax 3 of £3.0m for the year, an improvement of £8.1m when compared with the Underlying Loss Before Tax 3 of £5.1m in the prior year. We achieved a 43% increase in the number of customers sailing with us and a load factor and per diem of 85% and £285 respectively. \n River Cruise continues to see strong growth and bookings for 2024/25 are ahead of the same point last year. At 14 April 2024, the booked load factor was 72%, with a per diem of £339. This compares with 66% and £299 at the same time in the prior year. \n Unlike our current Ocean Cruise business, we are able to scale River Cruise in a capital-light way, allowing us to offer our luxury cruises to an increasing number of customers. We are, therefore, delighted to have welcomed Spirit of the Douro to our programme in March 2024, with our third purpose-built ship, Spirit of the Moselle, to follow in July 2025. \n The financial performance of the Ocean and River Cruise businesses is driven by our ability to deliver exceptional experiences for our customers every day. Our key metric for monitoring customer satisfaction is transactional net promoter score ( tNPS ), which improved significantly during the year to 74, from 58 in the previous year, reflecting a considerable improvement in the rating for River Cruise following the steps taken to more closely align the customer experience to that of our Ocean Cruise experience. \n Travel \n For 2023/24, Travel generated revenue of £156.3m, 44% higher than the year before, and returned to profit for the first time since the pandemic. The business reported an Underlying Profit Before Tax 3 of £1.5m, an improvement of £5.6m when compared with the Underlying Loss Before Tax 3 of £4.1m in the prior year, reflecting strong passenger growth of 22%, having taken more than 57k customers on holiday. \n Innovation continues to be a key differentiator for Saga and it is the continual development of our offering that has led to industry-wide recognition, most recently through 28 wins at the 2023 British Travel Awards. \n Looking ahead to 2024/25, our pipeline of future bookings continues to grow. At 14 April 2024, booked revenue was £140.7m from 45.3k passengers, representing growth of 12% and 4% respectively when compared with the same point in the prior year. \n Insurance \n Reflecting the continued impact of the market-wide inflationary headwinds and declining policy volumes, Insurance Broking reported Underlying Profit Before Tax 3 of £39.8m on an earned basis, a decline of £31.7m when compared with £71.5m 4 in the prior year. \n The inflationary environment, and the resulting impact on our pricing, led to the number of policies in force at the end of the year, across all products, declining by 9%, when compared with the prior year, to 1.5m. Similarly, total policy sales during the year were also 9% lower. \n Revenue generated from the sale of travel insurance remained broadly flat when compared with the previous year, with increased margins per policy offsetting an 8% fall in the number of policies sold, driven by price increases applied in the second half of the year. \n Private medical insurance revenue, however, increased 5% when compared with the prior year, despite policy sales falling by 3%. This reflects the benefit from a one-off contribution in relation to the new partnership secured with Bupa. Over time, this relationship is expected to open up exciting new opportunities for a digital health and wellbeing proposition that will not only enhance the offering for our existing customers but also be a key point of differentiation when attracting new customers. \n In motor and home, inflation impacted both our volumes and margins. Our pricing approach, addressing increased net rates from our panel of underwriters, resulted in a 9% drop in policies in force and policy sales compared with the prior year, with customer retention of 81%, 3ppts lower. Our margin per policy was £55, compared with £69 4 in the year before, mostly driven by our three-year fixed-price policies that fix the price the customer pays for two further renewals. \n The dynamics within Insurance remain challenging and, as a result, we need to ensure that we balance the business effectively between protecting and, in time, growing the number of policies sold and the delivery of sustainable profitability. We are investing in price to improve our market competitiveness and this will impact profitability in the short term, as will the acquisition costs arising from attracting a higher number of new business policies. While we expect this approach to drive greater long-term profitability, the anticipated impact of these changes, when compared with previous growth projections, has resulted in the goodwill allocated to the Insurance Broking business being impaired by a further £36.8m. This is in addition to the £68.1m impairment in the first half of the year. At 31 January 2024, £344.7m of goodwill remained on the statement of financial position. \n Looking ahead, we are focused on scaling the business and the number of customers we are able to serve, creating the foundation for a sustainable insurance business model. As part of this, and consistent with our move towards capital-light models, we are exploring options for partnerships within our Insurance value chain. While still in the very early stages, we believe that such partnerships could benefit our customers and support us in delivering our Insurance growth ambitions. \n Our Insurance Underwriting business reported an Underlying Loss Before Tax 3 , after expected recoveries from reinsurance arrangements, of £1.4m, a decline of £12.1m when compared with an Underlying Profit Before Tax 3 of £10.7m 4 in the prior year. \n Over the past 18 months, we have applied significant price increases, balancing the need to provide customers with fair-value products with the continued market-wide claims inflation. These are now, however, beginning to flow through to the result, with the current year net combined operating ratio reducing to 117.1% from 120.5% 4 in the prior year. We expect this to mean that the Insurance Underwriting business returns to profit in the coming year. \n Money \n Saga Money reported an Underlying Profit Before Tax 3 of £1.1m, compared with £2.3m in the prior year. This reflects the short-term impact of high interest rates on the market-wide customer demand for equity release products. \n We made good progress during the year in positioning the business for medium-term growth. With support from a number of new partners, we launched: a range of fixed savings accounts; legal services including wills, probate and lasting powers of attorney; investments ISAs; and, more recently, mortgages. Our new range of mortgage products are all designed exclusively for people over 50, offering assistance with first-time purchases, remortgages, buy-to-let and equity release to fund intergenerational support. \n The quality of, and customer satisfaction in relation to, these services is evident in our sector-leading tNPS, which increased to 72 from 64 in the prior year. \n 3 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 4 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 2 . Reducing debt through capital-light growth \n In 2023/24, we continued to make good progress in reducing our debt, with Net Debt 5 at 31 January 2024 being £637.2m, £74.5m lower than the £711.7m at the previous year end. \n To further increase the Group's financial flexibility, we took a series of actions that included the delivery of £12.0m of central cost savings in the second half, following the move towards a leaner operating model, and exiting some of our smaller, loss-making activities, in order to prioritise growth within our core Cruise, Travel, Insurance and Money operations. We are also grateful for the ongoing support from our Chairman, Roger De Haan, with his facility being increased to £85.0m, alongside an extended maturity, now April 2026, to support the Group with its deleveraging plans. In addition, to maximise the Group's liquidity, we concluded discussions with our lending banks to increase the leverage covenant associated with our undrawn £50.0m RCF. \n 5 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n 3. Growing our customer base and deepening our customer relationships \n The third strand of our growth plan is focused on protecting and growing the number of customers we serve and increasing the frequency and quality of our interactions with them through data-driven insight. By doing so, we can develop our business around a better understanding of their unique needs and the trusted relationship we have with them. \n Our customer database continues to be one of our core assets in achieving this goal, holding details of 9.6m people over the age of 50 in the UK. During the past year, we have actively sought to gather consent from more of this group to contact them about our full range of products and services. As a result of this, at 31 January 2024 we had consent to contact 7.2m of these individuals, a significant improvement from the 6.8m at the same time in the prior year. \n We have also developed our website, which attracts more than 15m visitors per year, giving everybody the opportunity to sign up for email updates, providing interesting articles and offers on a range of our products. \n The delivery of insightful and relevant content to our unique customer group is key to our success and we continue to do this through our popular and award-winning Saga Magazine, which reaches more than 120k readers monthly. Our digital newsletters, covering Travel, Money and the Magazine, when combined, are delivered to 1.2m people weekly. \n We continually monitor the strength of the Saga brand and one of the metrics used is tNPS, which was 59 for the year, a two point reduction when compared with the prior year. This reflects increases across Cruise and Money, offset by a lower result in Insurance, due to market-wide increases to pricing, alongside some resultant contact centre pressure from increased call volumes. \n Underpinning all three strands of our growth plan is the ambition to create an exceptional colleague experience. As diversity, equity and inclusion is a key part of this, we launched a colleague survey, beginning with those in senior leadership roles and above, to gather data on diversity representation across the organisation. Building on this, we have set targets to increase female representation in leadership positions from 42% to 50% and, representation on the Board from 22% to 40% by December 2027. \n Positioning Saga for long-term sustainable growth \n Before I conclude, it is important to recognise the contribution of our colleagues, not only for their work over the past year, but also for the way they have welcomed me to the Saga family. In addition, while I have not had a chance to meet you all, I would like to thank our customers, investors and partners for their continued support. \n Overall, we have made good progress over the past 12 months, growing our Cruise and Travel businesses and positioning Money for future growth while continuing to navigate the challenging dynamics in Insurance. \n Saga is a special brand with a unique purpose and I am excited about our future. Maximising our core businesses will mean we build this future on solid foundations. We can complement this objective with strategic partnerships that allow us to focus on our core strengths while leveraging the capabilities of partners to amplify those strengths. In doing so, we can grow our business and continue to reduce our debt, accelerated through capital-light business models where it makes sense. At the heart of this remains our customer. Saga was built on its understanding of the older people it serves, combined with its considerable marketing reach across that customer base. Our long-term sustainable growth will be built around these fundamentals. \n   \n Mike Hazell \n Group Chief Executive Officer \n 16 April 2024 \n   \n Group Chief Financial Officer's Review \n I am delighted to be presenting my first Chief Financial Officer's report after being appointed to the role in November 2023. The Group has now adopted International Financial Reporting Standard ( IFRS ) 17 and reports an Underlying Profit Before Tax 1 of £38.2m, more than double the £15.5m 2 reported in the prior year. This performance is largely in line with expectations and reflects a strong recovery in Cruise and Travel, coupled with a continuation of the challenging conditions within Insurance. Underlying Profit Before Tax (Under Previous IFRS) 1 was £45.3m compared with £21.5m in the year before. \n The positive trading conditions for Ocean Cruise, River Cruise and Travel have continued, being more reflective of a normal environment after residual pandemic disruption in the prior year, with all three businesses returning to profitability. Ocean Cruise reported an Underlying Profit Before Tax 1 of £35.5m (2023: Loss of £0.7m) and River Cruise reported an Underlying Profit Before Tax 1 of £3.0m (2023: Loss of £5.1m), reflective of strong customer demand driving higher load factors and per diems. Travel reported an Underlying Profit Before Tax 1 of £1.5m (2023: Loss of £4.1m), with the recovery driven by a 22% increase in passenger volumes. \n Industry-wide challenges, however, continue to impact the Group's Insurance businesses. Insurance Broking reported an Underlying Profit Before Tax 1 of £39.8m (2023: £71.5m 2 ). This reflected ongoing inflationary headwinds, primarily impacting motor insurance, and the impact on the Group's three-year fixed-price policies, where the increase in the cost of net rates cannot be passed on to customers. As a result, margins for motor and home fell to £55 per policy (2023: £69 2 ) for the year. Against this backdrop, our pricing caused lower new business volumes and lower customer retention, resulting in a 9% decline in policies in force to 1.5m. Our Insurance Underwriting business is, however, starting to see the benefits of the pricing actions taken over the past 12 months, with the current year net combined operating ratio ( COR ) improving to 117.1% (2023: 120.5% 2 ). \n The dynamics seen in the Insurance business during 2023/24 demonstrate that a different approach is needed to balance policy volumes and sustainable profits over the long term. Going forward, the Insurance Broking business is taking pricing action to increase competitiveness, with the aim of stabilising policy volumes. This is expected to have an adverse impact on profitability in the near term. \n The Group reported a loss before tax of £129.0m (2023: loss of £272.7m 2 ), that reflects an impairment of Insurance Broking goodwill of £104.9m and other exceptional items of £62.3m. The impairment of goodwill was driven by a conservative view of cash flows from Insurance compared with our previous growth projections, reflecting the different approach being taken by this business in the future. The exceptional items primarily relate to restructuring costs from the changes made in the second half of 2023/24 to reduce central costs, together with the costs of exiting some of the smaller, early-stage, loss-making activities of Saga Exceptional, Insight and Spaces. \n The Group remains highly cash-generative and, turning to the Group's statement of financial position, Net Debt 1 at 31 January 2024 was £637.2m, £74.5m lower than a year ago. This was driven by a £12.3m increase in Available Cash 1 to £169.8m (31 January 2023: £157.5m) and £62.2m of Cruise ship debt repayments. As a result, the total leverage ratio reduced to 5.4x (31 January 2023: 7.5x). \n Available Operating Cash Flow 1 for 2023/24 increased to £143.8m (2023: £54.9m) driven by the recovery in Ocean Cruise operating cash flow, a one-off benefit from River Cruise and Travel moving to 70% coverage under the Civil Aviation Authority ( CAA ) escrow arrangement and reduced central costs. This was partially offset by a decline in Insurance Broking EBITDA. \n Looking ahead, the strong customer demand in Cruise and Travel is continuing and the steps we are taking to reposition the Insurance business are showing encouraging early signs. While 2024/25 will be a transitional year as we lay the foundations for future growth, we expect Underlying Profit Before Tax 1 to be broadly consistent with that of 2023/24. Meanwhile, we are continuing to reduce our level of debt through organic cash generation, while exploring partnership opportunities in our Ocean Cruise and Insurance businesses as part of the move towards a more capital-light model. \n 1 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 2 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n   \n Operating performance \n Group income statement \n \n \n \n \n   \n   \n £m \n \n \n 12m to \n Jan 2024 \n   \n \n \n                           Change \n \n \n (restated 3 ) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying Revenue 4 \n \n \n 732.7 \n \n \n 12.9% \n \n \n 648.9 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying Profit/(Loss) Before Tax 4 \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Cruise and Travel \n \n \n 40.0 \n \n \n >500.0% \n \n \n (9.9) \n \n \n \n \n Insurance Broking (earned) \n \n \n 39.8 \n \n \n (44.3%) \n \n \n 71.5 \n \n \n \n \n Insurance Underwriting \n \n \n (1.4) \n \n \n (113.1%) \n \n \n 10.7 \n \n \n \n \n Total Insurance \n \n \n 38.4 \n \n \n (53.3%) \n \n \n 82.2 \n \n \n \n \n Other Businesses and Central Costs \n \n \n (17.0) \n \n \n 51.3% \n \n \n (34.9) \n \n \n \n \n Net finance costs 5 \n \n \n (23.2) \n \n \n (5.9%) \n \n \n (21.9) \n \n \n \n \n Underlying Profit Before Tax 4 \n \n \n 38.2 \n \n \n 146.5% \n \n \n 15.5 \n \n \n \n \n Impairment of Insurance goodwill \n \n \n (104.9) \n \n \n   \n \n \n (269.0) \n \n \n \n \n Other exceptional items \n \n \n (62.3) \n \n \n \n \n \n (19.2) \n \n \n \n \n Loss before tax \n \n \n (129.0) \n \n \n 52.7% \n \n \n (272.7) \n \n \n \n \n Tax credit/(expense) \n \n \n 16.0 \n \n \n >500.0% \n \n \n (0.4) \n \n \n \n \n Loss after tax \n \n \n (113.0) \n \n \n 58.6% \n \n \n (273.1) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Basic earnings/(loss) per share \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Underlying Earnings Per Share 4 \n \n \n 30.0p \n \n \n 132.6% \n \n \n 12.9p \n \n \n \n \n Loss per share \n \n \n (80.8p) \n \n \n 58.7% \n \n \n (195.7p) \n \n \n \n \n   \n The Group's business model is based on providing high-quality and differentiated products to its target demographic, predominantly focused on cruise, travel and insurance. The Cruise and Travel businesses comprise Ocean Cruise, River Cruise and Travel. The Insurance business operates mainly as a broker, sourcing underwriting capacity from selected third-party insurance companies, and, for motor and home, also from the Group's in-house underwriter. Other Businesses include Saga Money, Saga Publishing and CustomerKNECT, a mailing and printing business. \n Underlying Revenue 4 \n Underlying Revenue 4 increased by 12.9% to £732.7m (2023: £648.9m 3 ) due to increased trading in the Cruise and Travel businesses as customer confidence returned to pre-pandemic levels. \n Underlying Profit Before Tax 4 \n The Group generated a total Underlying Profit Before Tax 4 of £38.2m in the current year, compared with £15.5m 3 in the prior year. This is primarily due to a £49.9m improvement in Cruise and Travel, moving from a £9.9m Loss to a £40.0m Profit, of which £36.2m relates to the Ocean Cruise business. This was partially offset by a £31.7m reduction in Insurance Broking profitability due to difficult trading conditions within motor and a £12.1m reduction in Insurance Underwriting profitability due to lower positive changes to liabilities for prior year incurred claims. \n Net finance costs 5 in the year were £23.2m (2023: £21.9m), which exclude finance costs that are included within the Cruise and Travel businesses of £18.2m (2023: £19.2m) and Insurance Underwriting business of £2.5m (2023: £1.9m 3 ). \n Loss before tax \n The loss before tax for the year, of £129.0m, includes a £104.9m impairment to Insurance Broking goodwill and other exceptional items of £62.3m, consisting of: \n ·      Restructuring costs of £40.3m, which have materially increased year on year as a result of the cost-reduction programme initiated in the second half, alongside the decisions to exit some of our smaller loss-making activities and rationalise our property portfolio; \n ·      impairments to assets, other than goodwill, of £11.9m (net of amounts recoverable under quota share arrangements); \n ·      onerous contract provisions of £12.1m on three-year fixed-price policies and on insurance contracts under IFRS 17; \n ·      fair value profit on debt securities of £3.5m; \n ·      a £1.0m positive change in discount rate on non-periodical payment order ( PPO ) insurance liabilities; \n ·      discretionary customer ticket refunds, and related costs, within Ocean Cruise of £1.0m; \n ·      costs associated with the unsecured loan facility with Roger De Haan of £0.4m; \n ·      £0.3m costs on the acquisition and disposal of The Big Window Consulting Limited (the Big Window ); \n ·      fair value losses of £1.4m on derivatives; and \n ·      foreign exchange gains on River Cruise ship leases of £0.6m. \n The loss before tax in the prior year, of £272.7m 3 , includes a £269.0m impairment to Insurance goodwill and other exceptional items of £19.2m, including: \n ·      restructuring costs of £3.7m; \n ·      impairments to assets, other than goodwill, of £1.1m (net of amounts recoverable under quota share arrangements); \n ·      an onerous contract provision of £3.8m on insurance contracts under IFRS 17; \n ·      fair value loss on debt securities of £15.0m; \n ·      a £6.3m positive change in discount rate on non-PPO insurance liabilities; \n ·      acquisition costs on the purchase of the Big Window of £0.7m; \n ·      foreign exchange losses on River Cruise ship leases of £2.0m; \n ·      a negative IFRS 16 'Leases' adjustment of £0.6m on River Cruise ships; and \n ·      fair value gain on derivatives in the year of £1.4m. \n Tax \n The Group's tax credit for the year was £16.0m (2023: £0.4m expense), representing a tax effective rate of 66.4% (2023: negative 10.8%), excluding the Insurance goodwill impairment charge. In both the current and prior years, the difference between the Group's tax effective rate and the standard rate of corporation tax was mainly due to the Group's Ocean Cruise business being in the tonnage tax regime. \n There was also an adjustment in the current year for the over-provision of prior year tax of £4.5m credit (2023: £0.8m expense). Excluding the impact of the Ocean Cruise business being in the tonnage tax regime, the Insurance goodwill impairment and adjustments to prior year tax, the tax effective rate for the current year is 19.9% (2023: 11.1%). \n Earnings/(loss) per share \n The Group's Underlying Basic Earnings Per Share 4 was 30.0p (2023: 12.9p). The Group's reported basic loss per share was 80.8p (2023: loss of 195.7p 3 ). \n 3 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 4 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 5 Net finance costs exclude Cruise, Travel and Insurance Underwriting finance costs and net fair value gains/(losses) on derivatives \n Effect of IFRS 17 on Underlying Profit Before Tax 6 and loss before tax \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n \n \n Change \n \n \n 12m to \n Jan 2023 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Underlying Profit Before Tax (Under Previous IFRS) 6 \n \n \n \n \n \n 45.3 \n \n \n 23.8 \n \n \n 21.5 \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n New approach to reserve margin \n \n \n \n \n \n (2.4) \n \n \n (0.1) \n \n \n (2.3) \n \n \n \n \n Change in valuation of PPO reserves (other than due to margin) \n \n \n \n \n \n (3.9) \n \n \n 0.5 \n \n \n (4.4) \n \n \n \n \n Discounting of non-PPO reserves (other than change in discount rate) \n \n \n \n \n \n (2.6) \n \n \n (1.8) \n \n \n (0.8) \n \n \n \n \n Effect of expensing insurance acquisition costs when incurred \n \n \n \n \n \n 0.6 \n \n \n (3.7) \n \n \n 4.3 \n \n \n \n \n Other individually immaterial adjustments \n \n \n \n \n \n 1.2 \n \n \n 4.0 \n \n \n (2.8) \n \n \n \n \n Impact of IFRS 17 on Underlying Profit Before Tax 6 \n \n \n \n \n \n (7.1) \n \n \n (1.1) \n \n \n (6.0) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying Profit Before Tax 6 \n \n \n \n \n \n 38.2 \n \n \n 22.7 \n \n \n 15.5 \n \n \n \n \n   \n For the year ended 31 January 2024, the transition to IFRS 17 resulted in an Underlying Profit Before Tax 6 reduction of £7.1m, compared with a £6.0m reduction in the prior year. The material movements between the IFRS 17 impact on Underlying Profit Before Tax 6 across the two years are detailed below: \n ·      The new approach to reserve margin adjusts for differences in reserving between the previous standard, IFRS 4 'Insurance Contracts', and IFRS 17. Specifically, management margins included within the IFRS 4 results are reversed, while new provisions for events not in data ( ENIDs ) and the risk adjustment are included under IFRS 17. In the current year, the reversal of the change in management margins reduced IFRS 17 profit by £6.2m and this was partially offset by a reduction in ENIDs of £2.1m and a reduction in the risk adjustment of £1.7m, net of reinsurance, totalling £2.4m. \n ·      £1.8m negative impact arising from the discounting of non-PPO reserves that under previous IFRS, were not subject to discounting. The negative impact in the current and prior year largely arises from the increase in recoveries under the quota share reinsurance agreement, with these recoveries discounted over a longer duration than that of the underlying claims. \n ·      The impact of expensing insurance acquisition costs when incurred produced a benefit to Underlying Profit Before Tax 6 in both the current and prior years. This is due to decreasing acquisition costs linked to lower sales of policies underwritten by Acromas Insurance Company Limited ( AICL ). The £3.7m movement, when compared with the prior year, reflects a slowdown of that trend. \n ·      £4.0m positive change in the impact of other individually immaterial adjustments, in part due to remeasurement of the three-year fixed-price obligation. \n   \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n \n \n Change \n \n \n 12m to \n Jan 2023 \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Loss before tax (under previous IFRS) \n \n \n \n \n \n ( 130.7 ) \n \n \n 123.5 \n \n \n (254.2) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n Impact of IFRS 17 on Underlying Profit Before Tax 6 \n \n \n \n \n \n (7.1) \n \n \n (1.1) \n \n \n (6.0) \n \n \n   \n \n \n \n \n Impact of discount rate change on non-PPO reserves \n \n \n \n \n \n 1.0 \n \n \n (5.4) \n \n \n 6.4 \n \n \n   \n \n \n \n \n Fair value gains/(losses) on investments \n \n \n \n \n \n 3.4 \n \n \n 18.5 \n \n \n (15.1) \n \n \n   \n \n \n \n \n Net expense from onerous contracts \n \n \n \n \n \n (9.0) \n \n \n (5.2) \n \n \n (3.8) \n \n \n   \n \n \n \n \n Reversal of deferred acquisition cost impairment under IFRS 4 \n \n \n \n \n \n 13.4 \n \n \n 13.4 \n \n \n - \n \n \n   \n \n \n \n \n Impact of IFRS 17 on loss before tax \n \n \n \n \n \n 1.7 \n \n \n 20.2 \n \n \n (18.5) \n \n \n   \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Loss before tax \n \n \n \n \n \n (129.0) \n \n \n 143.7 \n \n \n (272.7) \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n In the year ended 31 January 2024, the adoption of IFRS 17 decreased the loss before tax by £1.7m (2023: £18.5m increase). The most material movements are as follows: \n ·      £7.1m negative impact arising from the movements in Underlying Profit Before Tax 6 described above. \n ·      £1.0m positive impact from the increase in the period in the discount rate used to value non-PPO claim liabilities, with this discount rate being linked to market interest rates. This positive impact was £5.4m lower than the positive impact in the prior year, when there was a more significant increase in market interest rates. \n ·      £3.4m positive impact from changing the classification of the debt securities that support the Group's insurance liabilities. Under the new classification, fair value gains or losses in each period are presented within profit or loss, whereas, under the previous classification, any such gains or losses were reported outside profit or loss, within other comprehensive income. The significant improvement, when compared with the prior year, arises from a tightening of credit spreads and interest rate movements. \n ·      £9.0m in relation to the provision for onerous contracts. The higher provision is due to a combination of an increase in contracts that are onerous at initial recognition (primarily due to renewals in years two and three of three-year fixed-price policies) and an upwards revaluation of the existing provision due to prolonged claims inflation. \n ·      £13.4m in relation to the reversal of an impairment of deferred acquisition costs under IFRS 4 as these are expensed immediately under IFRS 17. No such impairment existed in the prior year. \n   \n 6 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n Cruise and Travel \n \n \n \n \n   \n \n \n 12m to Jan 2024 \n \n \n   \n \n \n 12m to Jan 2023 \n \n \n \n \n £m \n \n \n Ocean \n Cruise \n \n \n River \n Cruise \n \n \n Travel \n \n \n Total Cruise and Travel \n \n \n Change \n \n \n Ocean Cruise \n \n \n River \n Cruise \n \n \n Travel \n \n \n Total Cruise \n and Travel \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Underlying Revenue 7 \n \n \n 215.9 \n \n \n 43.8 \n \n \n 156.3 \n \n \n 416.0 \n \n \n 36.2% \n \n \n 168.3 \n \n \n 28.8 \n \n \n 108.4 \n \n \n 305.5 \n \n \n \n \n Gross profit \n \n \n 81.1 \n \n \n 11.3 \n \n \n 30.0 \n \n \n 122.4 \n \n \n 95.5% \n \n \n 40.2 \n \n \n 1.5 \n \n \n 20.9 \n \n \n 62.6 \n \n \n \n \n Marketing expenses \n \n \n (12.3) \n \n \n (4.4) \n \n \n (9.6) \n \n \n (26.3) \n \n \n (7.8%) \n \n \n (11.0) \n \n \n (3.2) \n \n \n (10.2) \n \n \n (24.4) \n \n \n \n \n Other operating expenses \n \n \n (15.1) \n \n \n (4.0) \n \n \n (19.6) \n \n \n (38.7) \n \n \n (33.9%) \n \n \n (10.7) \n \n \n (3.4) \n \n \n (14.8) \n \n \n (28.9) \n \n \n \n \n Investment return \n \n \n - \n \n \n 0.1 \n \n \n 0.7 \n \n \n 0.8 \n \n \n 100.0% \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n \n \n Finance costs \n \n \n (18.2) \n \n \n - \n \n \n - \n \n \n (18.2) \n \n \n 5.2% \n \n \n (19.2) \n \n \n - \n \n \n - \n \n \n (19.2) \n \n \n \n \n Underlying Profit/(Loss) \n Before Tax 7 \n \n \n 35.5 \n \n \n 3.0 \n \n \n 1.5 \n \n \n 40.0 \n \n \n 504.0% \n \n \n (0.7) \n \n \n (5.1) \n \n \n (4.1) \n \n \n (9.9) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Average revenue per passenger (£) \n \n \n 4,683 \n \n \n 2,639 \n \n \n 2,704 \n \n \n 3,452 \n \n \n 6.8% \n \n \n 4,714 \n \n \n 2,483 \n \n \n 2,297 \n \n \n 3,233 \n \n \n \n \n Ocean Cruise load factor \n \n \n 88% \n \n \n \n \n \n \n \n \n 88% \n \n \n 13ppts \n \n \n 75% \n \n \n \n \n \n \n \n \n 75% \n \n \n \n \n Ocean Cruise per diem (£) \n \n \n 331 \n \n \n \n \n \n \n \n \n 331 \n \n \n 4.1% \n \n \n 318 \n \n \n \n \n \n \n \n \n 318 \n \n \n \n \n River Cruise load factor \n \n \n \n \n \n 85% \n \n \n \n \n \n 85% \n \n \n n/a \n \n \n \n \n \n n/a \n \n \n \n \n \n n/a \n \n \n \n \n River Cruise per diem (£) \n \n \n \n \n \n 285 \n \n \n \n \n \n 285 \n \n \n n/a \n \n \n \n \n \n n/a \n \n \n \n \n \n n/a \n \n \n \n \n Passengers ('000) \n \n \n 46.1 \n \n \n 16.6 \n \n \n 57.8 \n \n \n 120.5 \n \n \n 27.5% \n \n \n 35.7 \n \n \n 11.6 \n \n \n 47.2 \n \n \n 94.5 \n \n \n \n \n \n Ocean Cruise \n The Ocean Cruise business owns two ocean cruise ships, Spirit of Discovery and Spirit of Adventure. \n In the current year, the business returned to fully operational conditions for the first time since the pandemic and achieved a load factor of 88% (2023: 75%) and a per diem of £331 (2023: £318). These two factors, when combined, equated to Underlying Revenue 7 growth of 28.3% and resulted in a return to profitability from an Underlying Loss Before Tax 7 of £0.7m in the prior year to an Underlying Profit Before Tax 7 of £35.5m in the current year. \n In the prior year, there were some adverse impacts on a small number of cruises due to COVID-19, 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. \n River Cruise \n The River Cruise business has 10-year leases in place for two boutique river cruise ships, Spirit of the Rhine and Spirit of the Danube, alongside other charters that are largely managed on an annual basis . \n In the current year, the business returned to more normal operating conditions. For 2023/24, we aligned management information for River Cruise to the Ocean Cruise business, so load factor and per diems became key performance indicators for River Cruise. The business achieved a load factor of 85% and a per diem of £285 for the year. This resulted in Underlying Revenue 7 growth of 52.1% and a return to profitability from an Underlying Loss Before Tax 7 of £5.1m in the prior year to an Underlying Profit Before Tax 7 of £3.0m in the current year. \n In the prior year, although the business was operating, both the Omicron variant of COVID-19 and the conflict in Ukraine impacted the number of passengers travelling, due to continued customer caution in relation to Central Europe. \n Travel \n The Travel business, which includes both the Saga Holidays and Titan brands, saw increased volumes when compared with the prior year, with passenger numbers increasing from 47.2k to 57.8k. The business also generated higher revenue per passenger in the year, increasing from £2,297 to £2,704. \n This led to Underlying Revenue 7 growth of 44.2% and a return to profitability from an Underlying Loss Before Tax 7 of £4.1m in the prior year to an Underlying Profit Before Tax 7 of £1.5m in the current year. \n In the first half of the prior year, the recovery in volumes was impacted by a level of disruption from a variety of factors, including operational challenges faced by airlines and airports. In the second half of the prior year, we saw customer cancellations returning closer to pre-pandemic levels. \n Forward Cruise and Travel sales \n The Ocean Cruise load factor for 2024/25 is ahead of the same point last year for 2023/24 by 4ppts. This is due to an improved load factor in the first quarter when compared with the prior year. The per diem for 2024/25 is 8.6% higher than the same point last year, reflecting the inflationary impact on operating costs in customer pricing. \n The River Cruise load factor and per diem for 2024/25 are also ahead of the same point last year, by 6ppts and 13.4% respectively. This is due to increased customer demand for 2024/25, following the introduction of our third spirit-class ship, Spirit of the Douro. \n Travel bookings for 2024/25 are ahead of the same point last year by 12.1% and 3.7% for revenue and passengers respectively. The increased revenue is due, in part, to higher passenger numbers, but also higher average selling prices as a result of enhanced revenue management processes. The increase in passenger numbers is due to increased uptake of short-haul travel within our Titan brand and hotel holidays within our Saga brand, as customer confidence returns. \n \n \n \n \n   \n \n \n Current year departures \n \n \n \n \n   \n \n \n 14 April 2024 \n \n \n Change \n \n \n 16 April 2023 \n \n \n \n \n Ocean Cruise revenue (£m) \n \n \n 200.8 \n \n \n 11.6% \n \n \n 179.9 \n \n \n \n \n Ocean Cruise load factor \n \n \n 78% \n \n \n 4ppts \n \n \n 74% \n \n \n \n \n Ocean Cruise per diem (£) \n \n \n 367 \n \n \n 8.6% \n \n \n 338 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n River Cruise revenue (£m) \n \n \n 41.5 \n \n \n 17.2% \n \n \n 35.4 \n \n \n \n \n River Cruise load factor \n \n \n 72% \n \n \n 6ppts \n \n \n 66% \n \n \n \n \n River Cruise per diem (£) \n \n \n 339 \n \n \n 13.4% \n \n \n 299 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Travel revenue (£m) \n \n \n 140.7 \n \n \n 12.1% \n \n \n 125.5 \n \n \n \n \n Travel passengers ('000) \n \n \n 45.3 \n \n \n 3.7% \n \n \n 43.7 \n \n \n \n \n 7 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n Insurance \n Insurance Broking \n The Insurance Broking business provides tailored insurance products and services, principally motor, home, private medical and travel insurance. \n Its role is to price the policies and source the lowest risk price, whether through the panel of motor and home underwriters or through solus arrangements for private medical and travel i nsurance. The Group's in-house insurer, AICL, sits on the motor and home panels and competes for that business with other panel members on equal terms. AICL offers its underwriting capacity on the home panel through a coinsurance deal with a third party, so the Group takes no underwriting risk for that product. Even if underwritten by a third party, the product is presented as a Saga product and the Group manages the customer relationship. \n \n \n \n \n \n \n \n 12m to Jan 2024 \n \n \n   \n \n \n 12m to Jan 2023 (restated 8 ) \n \n \n \n \n \n \n \n Motor \n \n \n Home \n \n \n Other \n \n \n   \n \n \n   \n \n \n Motor \n \n \n Home \n \n \n Other \n \n \n   \n \n \n \n \n £m \n \n \n broking \n \n \n broking \n \n \n broking \n \n \n Total \n \n \n Change \n \n \n broking \n \n \n broking \n \n \n broking \n \n \n Total \n \n \n \n \n Gross Written Premiums 9 ( GWP ) \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Brokered \n \n \n 114.1 \n \n \n 162.4 \n \n \n 131.0 \n \n \n 407.5 \n \n \n 7.5% \n \n \n 105.0 \n \n \n 150.1 \n \n \n 123.9 \n \n \n 379.0 \n \n \n \n \n Underwritten \n \n \n 195.5 \n \n \n - \n \n \n 3.0 \n \n \n 198.5 \n \n \n 7.8% \n \n \n 180.9 \n \n \n - \n \n \n 3.2 \n \n \n 184.1 \n \n \n \n \n GWP \n \n \n 309.6 \n \n \n 162.4 \n \n \n 134.0 \n \n \n 606.0 \n \n \n 7.6% \n \n \n 285.9 \n \n \n 150.1 \n \n \n 127.1 \n \n \n 563.1 \n \n \n \n \n Broker revenue \n \n \n 4.5 \n \n \n 25.4 \n \n \n 45.1 \n \n \n 75.0 \n \n \n (28.1%) \n \n \n 35.7 \n \n \n 26.5 \n \n \n 42.1 \n \n \n 104.3 \n \n \n \n \n Instalment revenue \n \n \n 3.4 \n \n \n 3.3 \n \n \n - \n \n \n 6.7 \n \n \n 9.8% \n \n \n 3.1 \n \n \n 3.0 \n \n \n - \n \n \n 6.1 \n \n \n \n \n Add-on revenue \n \n \n 8.1 \n \n \n 9.5 \n \n \n - \n \n \n 17.6 \n \n \n (10.2%) \n \n \n 9.2 \n \n \n 10.4 \n \n \n - \n \n \n 19.6 \n \n \n \n \n Other revenue \n \n \n 27.1 \n \n \n 17.3 \n \n \n (3.3) \n \n \n 41.1 \n \n \n (10.8%) \n \n \n 25.2 \n \n \n 17.7 \n \n \n 3.2 \n \n \n 46.1 \n \n \n \n \n Written Underlying Revenue 9 \n \n \n 43.1 \n \n \n 55.5 \n \n \n 41.8 \n \n \n 140.4 \n \n \n (20.3%) \n \n \n 73.2 \n \n \n 57.6 \n \n \n 45.3 \n \n \n 176.1 \n \n \n \n \n Written gross profit \n \n \n 35.9 \n \n \n 55.5 \n \n \n 49.7 \n \n \n 141.1 \n \n \n (19.0%) \n \n \n 66.7 \n \n \n 57.6 \n \n \n 49.8 \n \n \n 174.1 \n \n \n \n \n Marketing expenses \n \n \n ( 9.6 ) \n \n \n (6.2) \n \n \n (5.6) \n \n \n ( 21.4 ) \n \n \n 15.1 % \n \n \n ( 13.0 ) \n \n \n (6.7) \n \n \n (5.5) \n \n \n ( 25.2 ) \n \n \n \n \n Written Gross Profit After Marketing Expenses 9 \n \n \n 26.3 \n \n \n 49.3 \n \n \n 44.1 \n \n \n 119.7 \n \n \n (19.6%) \n \n \n 53.7 \n \n \n 50.9 \n \n \n 44.3 \n \n \n 148.9 \n \n \n \n \n Other operating expenses \n \n \n ( 36.6 ) \n \n \n (29.6) \n \n \n (19.1) \n \n \n ( 85.3 ) \n \n \n ( 3.5 %) \n \n \n ( 36.8 ) \n \n \n (28.4) \n \n \n (17.2) \n \n \n ( 82.4 ) \n \n \n \n \n Written Underlying (Loss)/Profit Before Tax 9 \n \n \n (10.3) \n \n \n 19.7 \n \n \n 25.0 \n \n \n 34.4 \n \n \n (48.3%) \n \n \n 16.9 \n \n \n 22.5 \n \n \n 27.1 \n \n \n 66.5 \n \n \n \n \n Written to earned adjustment \n \n \n 5.4 \n \n \n - \n \n \n - \n \n \n 5.4 \n \n \n 8.0% \n \n \n 5.0 \n \n \n - \n \n \n - \n \n \n 5.0 \n \n \n \n \n Earned Underlying (Loss)/Profit Before Tax 9 \n \n \n (4.9) \n \n \n 19.7 \n \n \n 25.0 \n \n \n 39.8 \n \n \n (44.3%) \n \n \n 21.9 \n \n \n 22.5 \n \n \n 27.1 \n \n \n 71.5 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Policies in force \n \n \n 700k \n \n \n 605k \n \n \n 194k \n \n \n 1,499k \n \n \n (9.3%) \n \n \n 800k \n \n \n 645k \n \n \n 207k \n \n \n 1,652k \n \n \n \n \n Policies sold \n \n \n 750k \n \n \n 633k \n \n \n 192k \n \n \n 1,575k \n \n \n (8.7%) \n \n \n 849k \n \n \n 670k \n \n \n 206k \n \n \n 1,725k \n \n \n \n \n Third-party panel share 10 \n \n \n 33.6% \n \n \n \n \n \n \n \n \n \n \n \n 0.9ppts \n \n \n 32.7% \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n Insurance Broking Underlying Profit Before Tax 9 , on a written basis (which excludes the impact of the written to earned adjustment deferring the revenue on policies underwritten over the term of the policy), decreased to £34.4m, from £66.5m 8 . \n A key metric for the Insurance Broking business is Written Gross Profit After Marketing Expenses 9 , but before deducting overheads. This reduced from £148.9m 8 in the prior year to £119.7m in the current year, due mainly to lower renewal volumes and margins on motor business. There were falls in Written Gross Profits After Marketing Expenses 9 in motor of £27.4m, in home of £1.6m and in other broking of £0.2m. \n For motor and home insurance, in terms of the total Written Gross Profit After Marketing Expenses 9 , the new business proportion increased by £3.4m, while there was a £32.4m reduction in the renewal proportion. \n The reduction in profitability of the motor business is attributable to significant inflationary pressures on the net rates charged by panel partners, which have increased at a faster pace than the price that can be charged to consumers in a competitive marketplace. This has been accentuated by the fact that a significant number of motor policies are on three-year fixed-price deals, which fix the customer price for two renewals. Lower new business volumes in the prior year have also led to a 13% reduction in the level of renewal volumes in the current year. \n The three-year fixed-price product remains important, with 582k policies sold in the year, 42% of total motor and home policies, with 28% of direct new business customers taking the product despite cost of living pressures. This product remains highly attractive to our customer base and, while current profitability has been impacted by high industry inflation, this is a short-term challenge, as all policies will have been repriced by the middle of 2025. Inflation for the three-year fixed-price home product is within expectations. \n The challenging motor environment led to the average gross margin per policy for motor and home combined, calculated as Written Gross Profit After Marketing Expenses 9 divided by the number of policies sold, reducing to £54.7 in the current year, compared with £68.9 8 in the prior year. \n In addition, customer retention decreased from 84% to 81%, overall motor and home policies in force decreased 9% when compared with 31 January 2023 and direct new business sales reduced by 6ppts to 43%, as the Group rebalanced volumes towards price-comparison website distribution channels. \n Written profit and gross margin per policy for motor and home are stated after allowing for deferral of part of the revenues from three-year fixed-price policies, which is then recognised in profit or loss when the option to renew those policies at a predetermined fixed price is exercised or lapses, recognising the inflation risk inherent in these products. As at 31 January 2024, £10.6m (2023: £9.7m 8 ) of income had been deferred in relation to three-year fixed-price policies, £8.9m (2023: £7.9m 8 ) of which related to income written in the year to 31 January 2024. \n Motor broking \n Gross Written Premiums 9 increased by 8.3% due to a 22.6% increase in average premiums, partially offset by an 11.7% reduction in core policies sold. Gross Written Premiums 9 , from business underwritten by AICL, increased 8.1% to £195.5m (2023: £180.9m), due to a 43.2% increase in average premiums, offset by a 24.5% decrease in core policies sold. \n Written Gross Profit After Marketing Expenses 9 was £26.3m (2023: £53.7m 8 ), contributing £35.1 per policy (2023: £63.3 8 per policy). The decrease in written gross profits, and margin per policy, is mainly due to the adverse impact of inflation on motor renewal profitability. \n Home broking \n Gross Written Premiums 9 increased by 8.2% due to a 14.6% increase in average premiums, partially offset by a 5.5% reduction in core policies sold. \n Written Gross Profit After Marketing Expenses 9 was £49.3m (2023: £50.9m), equating to £77.9 per policy (2023: £76.0 per policy). The increase in renewal margins and a 10.0% increase in new business policies sold was more than offset by lower new business margins and an 8.1% reduction in renewal policies sold. \n Other broking \n Other broking primarily comprises private medical insurance ( PMI ) and travel insurance. \n Gross Written Premiums 9 increased 5.4% as a result of higher average premiums on both PMI and travel insurance policies, with policy sales broadly stable at 33k (2023: 34k) for PMI and a slight reduction, to 146k (2023: 158k), for travel insurance. \n As a result, Written Gross Profits After Marketing Expenses 9 relating to travel insurance products decreased by £0.6m. \n While sales of PMI were stable, Written Gross Profit After Marketing Expenses 9 was £1.6m higher. This increase is mainly due to a one-off payment from Bupa as part of the agreed terms for migrating the book from AXA. \n 8 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 9 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 10 Third-party underwriter's share of the motor panel for policies \n   \n Insurance Underwriting \n \n \n \n \n   \n \n \n   \n \n \n 12m to Jan 2024 \n \n \n   \n \n \n 12m to Jan 2023 (restated 11 ) \n \n \n \n \n £m \n \n \n   \n \n \n      \n Gross \n \n \n Re- \n insurance \n \n \n   \n Net \n \n \n Gross change \n \n \n   \n Gross \n \n \n Re- \n insurance \n \n \n   \n Net \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Insurance Underlying Revenue 12 \n \n \n A \n \n \n 169.8 \n \n \n (17.0) \n \n \n 152.8 \n \n \n 7.1% \n \n \n 158.5 \n \n \n (14.8) \n \n \n 143.7 \n \n \n \n \n Incurred claims (current year) \n \n \n B \n \n \n (170.9) \n \n \n 22.3 \n \n \n (148.6) \n \n \n 3.0% \n \n \n (176.1) \n \n \n 32.4 \n \n \n (143.7) \n \n \n \n \n Claims handling costs in relation to incurred claims \n \n \n C \n \n \n (15.6) \n \n \n - \n \n \n (15.6) \n \n \n (19.1%) \n \n \n (13.1) \n \n \n - \n \n \n (13.1) \n \n \n \n \n Changes to liabilities for incurred claims (prior year) \n \n \n D \n \n \n (15.3) \n \n \n 33.9 \n \n \n 18.6 \n \n \n (154.3%) \n \n \n 28.2 \n \n \n 6.4 \n \n \n 34.6 \n \n \n \n \n Other incurred insurance service expenses \n \n \n E \n \n \n (14.7) \n \n \n - \n \n \n (14.7) \n \n \n 10.4% \n \n \n (16.4) \n \n \n - \n \n \n (16.4) \n \n \n \n \n Insurance service result \n \n \n   \n \n \n (46.7) \n \n \n 39.2 \n \n \n (7.5) \n \n \n (147.1%) \n \n \n (18.9) \n \n \n 24.0 \n \n \n 5.1 \n \n \n \n \n Net finance (expense)/income from (re)insurance (excludes impact of change in discount rate on non-PPO liabilities) \n \n \n   \n \n \n (5.6) \n \n \n 3.1 \n \n \n (2.5) \n \n \n (100.0%) \n \n \n (2.8) \n \n \n 0.9 \n \n \n (1.9) \n \n \n \n \n Investment return (excludes fair value gains/losses on debt securities) \n \n \n   \n \n \n 8.6 \n \n \n - \n \n \n 8.6 \n \n \n 14.7% \n \n \n 7.5 \n \n \n - \n \n \n 7.5 \n \n \n \n \n Underlying (Loss)/Profit Before Tax 12 \n \n \n   \n \n \n (43.7) \n \n \n 42.3 \n \n \n (1.4) \n \n \n (207.7%) \n \n \n (14.2) \n \n \n 24.9 \n \n \n 10.7 \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Reported loss ratio \n \n \n (B+D)/A \n \n \n 109.7% \n \n \n \n \n \n 85.1% \n \n \n (16.4ppts) \n \n \n 93.3% \n \n \n \n \n \n 75.9% \n \n \n \n \n Expense ratio \n \n \n (C+E)/A \n \n \n 17.8% \n \n \n \n \n \n 19.8% \n \n \n 0.8ppts \n \n \n 18.6% \n \n \n \n \n \n 20.5% \n \n \n \n \n Reported COR \n \n \n (B+C+D+E)/A \n \n \n 127.5% \n \n \n \n \n \n 104.9% \n \n \n (15.6ppts) \n \n \n 111.9% \n \n \n \n \n \n 96.5% \n \n \n \n \n Current year COR \n \n \n (B+C+E)/A \n \n \n 118.5% \n \n \n \n \n \n 117.1% \n \n \n 11.2ppts \n \n \n 129.7% \n \n \n \n \n \n 120.5% \n \n \n \n \n Number of earned policies \n \n \n   \n \n \n 539k \n \n \n \n \n \n \n \n \n (18.6%) \n \n \n 662k \n \n \n \n \n \n \n \n \n \n \n Policies in force - Saga motor \n \n \n   \n \n \n 463k \n \n \n \n \n \n \n \n \n (13.5%) \n \n \n 535k \n \n \n \n \n \n \n \n \n \n \n   \n The Group's in-house underwriter, AICL, underwrites over 65% of the motor business sold by Insurance Broking, alongside a smaller proportion of business on other panels. Alongside this, AICL underwrites a portion of Saga's home panel, although all home underwriting risk is passed to third-party insurance and reinsurance providers. AICL also has excess of loss and funds-withheld quota share reinsurance arrangements in place, relating to its motor underwriting line of business, which transfer a significant proportion of motor insurance risk to third-party reinsurers. \n In line with the wider market, AICL has experienced a prolonged period of elevated claims inflation that in the 12 months to 31 January 2024, was estimated at around 15%. In response to this, material price increases have been applied over the past 12 months; however, these take time to fully flow through to insurance revenue. \n Gross insurance revenue increased 7.1% to £169.8m (2023: £158.5m 11 ), reflecting a 31.6% increase in average earned premiums. This was only partially offset by the 18.6% reduction in the number of earned policies underwritten by AICL, particularly those underwritten for Saga as opposed to other panels. \n While claims trends in the first half of 2022/23 were somewhat adverse to expectations, inflationary pressures really started to accelerate from mid-2022 onwards. Results for the second half of the prior year were heavily impacted by these pressures, as well as from an increased frequency of large losses. These trends continued into the first half of 2023/24, albeit with some moderation in large loss frequency and with pricing actions over the past 12 months starting to benefit revenue. \n The above factors, when combined, result in a reduced current year gross COR of 118.5% (2023: 129.7% 11 ); however, after allowing for reinsurance arrangements, this reduced further to 117.1% (2023: 120.5% 11 ). \n Following the increases applied over the past year, pricing now reflects recent and emerging trends and, as a result, the COR is expected to reduce over time as these higher prices flow through to the result. \n Positive changes to liabilities for incurred claims reduced from £34.6m in the prior year to £18.6m in the current year. This was driven by a deterioration in gross liabilities for claims incurred in prior years in 2023/24, which in turn was driven by further claims inflation and an adverse development on one specific large claim. The net finance expense line includes the unwind of the discount of opening claims liabilities, which materially increased in the prior year due to the increase in the claims discount rate over the past 12 months. This also includes modest adjustments to the valuation of PPO liabilities, which were a net £1.0m positive in the current year, compared with nil in the prior year. \n 11 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 12 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n Other Businesses and Central Costs \n \n \n \n \n   \n \n \n 12m to Jan 2024 \n \n \n   \n \n \n 12m to Jan 2023 (restated 13 ) \n \n \n \n \n £m \n \n \n Other \n Businesses \n \n \n Central Costs \n \n \n Total \n \n \n Change \n \n \n Other \n Businesses \n \n \n Central Costs \n \n \n Total \n \n \n \n \n Underlying Revenue 14 \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Money \n \n \n 6.4 \n \n \n - \n \n \n 6.4 \n \n \n (19.0%) \n \n \n 7.9 \n \n \n - \n \n \n 7.9 \n \n \n \n \n Publishing and CustomerKNECT \n \n \n 12.3 \n \n \n - \n \n \n 12.3 \n \n \n 19.4% \n \n \n 10.3 \n \n \n - \n \n \n 10.3 \n \n \n \n \n Insight \n \n \n - \n \n \n - \n \n \n - \n \n \n (100.0%) \n \n \n 0.6 \n \n \n - \n \n \n 0.6 \n \n \n \n \n Other \n \n \n - \n \n \n - \n \n \n - \n \n \n (100.0%) \n \n \n - \n \n \n 1.0 \n \n \n 1.0 \n \n \n \n \n Total Underlying Revenue 14 \n \n \n 18.7 \n \n \n - \n \n \n 18.7 \n \n \n (5.6%) \n \n \n 18.8 \n \n \n 1.0 \n \n \n 19.8 \n \n \n \n \n Gross profit \n \n \n 7.2 \n \n \n 5.0 \n \n \n 12.2 \n \n \n (8.3%) \n \n \n 8.1 \n \n \n 5.2 \n \n \n 13.3 \n \n \n \n \n Operating expenses \n \n \n (6.3) \n \n \n (28.3) \n \n \n (34.6) \n \n \n 29.7% \n \n \n (8.9) \n \n \n (40.3) \n \n \n (49.2) \n \n \n \n \n Investment income \n \n \n - \n \n \n 5.4 \n \n \n 5.4 \n \n \n 440.0% \n \n \n - \n \n \n 1.0 \n \n \n 1.0 \n \n \n \n \n Net finance costs \n \n \n - \n \n \n (23.2) \n \n \n (23.2) \n \n \n (5.9%) \n \n \n - \n \n \n (21.9) \n \n \n (21.9) \n \n \n \n \n Underlying Profit/(Loss) Before Tax 14 \n \n \n 0.9 \n \n \n (41.1) \n \n \n (40.2) \n \n \n 29.2% \n \n \n (0.8) \n \n \n (56.0) \n \n \n (56.8) \n \n \n \n \n   \n The Group's Other Businesses include Saga Money, Saga Publishing and CustomerKNECT. \n Underlying Profit Before Tax 14 for Other Businesses, when combined, increased by £1.7m, from a £0.8m Underlying Loss Before Tax 14 in the prior year to an Underlying Profit Before Tax 14 of £0.9m in the current year, largely due to the decision to exit some of our smaller, loss-making activities of Saga Exceptional and Saga Insight. Revenue in Saga Money decreased by £1.5m due to market-wide equity release challenges arising from the inflationary environment. \n Central operating expenses decreased to £28.3m (2023: £40.3m 13 ). Gross administration costs, before Group recharges, decreased by £10.5m in the year, as a result of a cost-reduction programme enacted in the second half of the year and lower property costs following closure of the Group's unused offices. Net costs decreased by a further £1.5m due to higher Group recharges to the business units. \n Net finance costs in the year were £23.2m (2023: £21.9m), excluding finance costs included within the Cruise and Travel businesses of £18.2m (2023: £19.2m) and Insurance Underwriting business of £2.5m (2023: £1.9m). \n 13 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 14 Refer to the Alternative Performance Measures Glossary for definition and explanation \n   \n Cash flow and liquidity \n Available Operating Cash Flow 15 \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n   \n \n \n                                     Change \n \n \n 12m to \n Jan 2023 \n (restated 16 ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Insurance Broking Trading EBITDA 15 \n \n \n \n \n \n 47.2 \n \n \n (39.6%) \n \n \n 78.2 \n \n \n \n \n Other Businesses and Central Costs Trading EBITDA 15 \n \n \n \n \n \n (12.2) \n \n \n 58.6% \n \n \n (29.5) \n \n \n \n \n Trading EBITDA 15,17 from unrestricted businesses \n \n \n   \n \n \n 35.0 \n \n \n (28.1%) \n \n \n 48.7 \n \n \n \n \n Dividends paid by Insurance Underwriting business \n \n \n \n \n \n 14.0 \n \n \n (44.0%) \n \n \n 25.0 \n \n \n \n \n Working capital and non-cash items \n \n \n \n \n \n 9.4 \n \n \n 206.8% \n \n \n (8.8) \n \n \n \n \n Capital expenditure funded with Available Cash 15 \n \n \n \n \n \n (21.6) \n \n \n (36.7%) \n \n \n (15.8) \n \n \n \n \n Available Operating Cash Flow 15 before cash repayment from/(injection into) Cruise and Travel operations \n \n \n \n \n \n 36.8 \n \n \n (25.1%) \n \n \n 49.1 \n \n \n \n \n Cash repayment from/(injection into) River Cruise and Travel businesses \n \n \n \n \n \n 14.9 \n \n \n 183.7% \n \n \n (17.8) \n \n \n \n \n Ocean Cruise Available Operating Cash Flow 15 \n \n \n \n \n \n 92.1 \n \n \n 290.3% \n \n \n 23.6 \n \n \n \n \n Available Operating Cash Flow 15 \n \n \n   \n \n \n 143.8 \n \n \n 161.9% \n \n \n 54.9 \n \n \n \n \n Restructuring costs \n \n \n \n \n \n (28.8) \n \n \n (>500.0%) \n \n \n (1.4) \n \n \n \n \n Interest and financing costs \n \n \n \n \n \n (39.3) \n \n \n (3.4%) \n \n \n (38.0) \n \n \n \n \n Business acquisitions \n \n \n \n \n \n - \n \n \n 100.0% \n \n \n (0.9) \n \n \n \n \n Tax receipts \n \n \n \n \n \n 4.6 \n \n \n 91.7% \n \n \n 2.4 \n \n \n \n \n Other (payments)/receipts \n \n \n \n \n \n (5.8) \n \n \n (>500.0%) \n \n \n 0.3 \n \n \n \n \n Change in cash flow from operations \n \n \n \n \n \n 74.5 \n \n \n 330.6% \n \n \n 17.3 \n \n \n \n \n Change in Ocean Cruise ship debt \n \n \n \n \n \n (62.2) \n \n \n (34.1%) \n \n \n (46.4) \n \n \n \n \n Cash at 1 February \n \n \n \n \n \n 157.5 \n \n \n (15.6%) \n \n \n 186.6 \n \n \n \n \n Available Cash 15 at 31 January \n \n \n   \n \n \n 169.8 \n \n \n 7.8% \n \n \n 157.5 \n \n \n \n \n \n \n \n \n \n \n \n \n \n Available Operating Cash Flow 15 is made up of the cash flows from unrestricted businesses and the dividends paid by restricted companies, less any cash injections to those businesses. Unrestricted businesses include Insurance Broking (excluding specific ring-fenced funds to satisfy Financial Conduct Authority ( FCA ) regulatory requirements), Other Businesses and Central Costs, and the Group's Ocean Cruise business. Restricted businesses include AICL, River Cruise and Travel. \n As a result of significantly improved cash generation from the Ocean Cruise business and cash repayments from the River Cruise and Travel businesses, partially offset by a reduction in cash generation from unrestricted businesses, Available Operating Cash Flow 15 increased from an inflow of £54.9m in the prior year to £143.8m in the current year. \n Excluding cash transfers to and from the Cruise and Travel businesses, the Group continued to be cash-generative in the year, with an Available Operating Cash Flow 15 of £36.8m compared with £49.1m in the prior year. Trading EBITDA 15,17 from unrestricted businesses reduced by £13.7m, mainly as a result of reduced motor margins in the Insurance Broking segment, partially offset by significant cost savings enacted in Other Businesses and Central Costs during the second half of the year. Changes in working capital were a £9.4m inflow in the current year, compared with an £8.8m 16 outflow in the prior year, mainly due to an increase in net premiums payable to our panel of underwriters following price increases in the year due to high claims inflation. This was only partially offset by price increases to customers, as a result of the reduction in motor margins and the inability to pass these price rises on to fixed-price product holders. Dividends from AICL reduced by £11.0m, as expected. \n For River Cruise and Travel, the Group was repaid £14.9m in the year. This is an improvement of £32.7m when compared with the £17.8m provided to the businesses to cover trading cash flows in the prior year. The improvement is due to the businesses, in agreement with the CAA, moving from a fully ring-fenced trust arrangement, where the businesses could not access 100% of customer cash until they returned from their river cruise or holiday, to a ring-fenced escrow arrangement where only 70% of customer cash is restricted until they return. At 31 January 2024, the ring-fenced businesses held cash of £49.1m, of which £37.9m was held in escrow. The Group must hold a minimum of £8.1m of cash outside of escrow within the ring-fenced businesses, as agreed with the CAA. \n The Ocean Cruise business reported an Available Operating Cash Flow 15 of £92.1m (2023: £23.6m), with an increase in advance customer receipts of £13.7m (2023: decrease of £4.1m) and net trading income of £82.2m (2023: £31.6m), partially offset by capital expenditure of £3.8m (2023: £3.9m). Net of interest costs of £15.2m (2023: £15.2m) and exceptional costs of £1.0m (2023: nil), the Ocean Cruise business reported a net cash inflow, before capital repayments on the ship debt, of £75.9m for 2023/24 compared with £8.4m in the prior year. \n Other cash flow movements \n Restructuring costs of £28.8m (2023: £1.4m) were significantly higher than in the prior year, largely arising from the cost-reduction programme initiated in the second half of the current year, alongside the decisions to exit some of our smaller, loss-making activities and rationalise our property portfolio. \n Interest and financing costs increased in the current year due to higher floating interest costs on the ship debt deferral loans. \n In the prior year, business acquisitions related to the purchase of the Big Window. \n Tax receipts of £4.6m (2023: £2.4m) include the benefit of repayments in relation to tax overpaid in prior years. \n The Group continued to make the agreed payments to the defined benefit pension fund as part of the deficit recovery plan of £5.8m (2023: £5.8m). These are included within other payments. In the prior year, other receipts also included £5.0m of restricted cash released to Available Cash 15 that the Group had previously agreed with the FCA to hold on a temporary basis and a further £1.1m in respect of the Threshold Condition 2.4 balance that the Insurance Broking business holds as restricted cash. \n In the current year, the Group continued to make capital repayments against its ship debt facilities, with two payments totalling £30.6m (2023: £30.6m) on Spirit of Discovery's debt facility and two payments totalling £31.6m (2023: £15.8m) on Spirit of Adventure's debt facility. \n 15 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 16 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 17 Trading EBITDA includes the line-item impact of IFRS 16 with the corresponding impact to net finance costs included in net cash flows used in financing activities \n   \n Reconciliation between operating and reported metrics \n Available Operating Cash Flow 18 reconciles to net cash flows from operating activities as follows: \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n \n \n   \n Change \n \n \n 12m to \n Jan 2023 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Net cash flows from/(used in) operating activities (reported) \n \n \n \n \n \n 83.7 \n \n \n 702.2% \n \n \n (13.9) \n \n \n \n \n Exclude cash impact of: \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Trading of restricted divisions \n \n \n \n \n \n (13.0) \n \n \n (136.8%) \n \n \n 35.3 \n \n \n \n \n \n \n \n Non-trading costs \n \n \n \n \n \n 34.6 \n \n \n 361.3% \n \n \n 7.5 \n \n \n \n \n \n \n \n Interest paid \n \n \n \n \n \n 38.2 \n \n \n 1.6% \n \n \n 37.6 \n \n \n \n \n \n \n \n Tax (received)/paid \n \n \n \n \n \n (3.2) \n \n \n (455.6%) \n \n \n 0.9 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 56.6 \n \n \n (30.4%) \n \n \n 81.3 \n \n \n \n \n Cash released from restricted divisions \n \n \n \n \n \n 28.9 \n \n \n 301.4% \n \n \n 7.2 \n \n \n \n \n Include capital expenditure funded from Available Cash 18 \n \n \n \n \n \n (21.6) \n \n \n (36.7%) \n \n \n (15.8) \n \n \n \n \n Include Ocean Cruise capital expenditure \n \n \n \n \n \n (3.8) \n \n \n 2.6% \n \n \n (3.9) \n \n \n \n \n Available Operating Cash Flow 18 \n \n \n   \n \n \n 143.8 \n \n \n 161.8% \n \n \n 54.9 \n \n \n \n \n   \n Underlying Revenue 18 reconciles to the statutory measure of revenue as follows: \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n   \n \n \n Change \n   \n \n \n 12m to \n Jan 2023 (restated 19 ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Underlying Revenue 18 \n \n \n \n \n \n 732.7 \n \n \n 12.9% \n \n \n 648.9 \n \n \n \n \n Ceded reinsurance premiums earned on business underwritten by the Group \n \n \n \n \n \n 17.0 \n \n \n 14.9% \n \n \n 14.8 \n \n \n \n \n Onerous contract provision \n \n \n \n \n \n (3.1) \n \n \n (100.0%) \n \n \n - \n \n \n \n \n Ocean Cruise insurance compensation for refunds paid to customers \n \n \n \n \n \n (5.0) \n \n \n (100.0%) \n \n \n \n \n \n \n \n Ocean Cruise discretionary customer ticket refunds \n \n \n \n \n \n (0.9) \n \n \n (100.0%) \n \n \n - \n \n \n \n \n Insurance Underwriting profit commission \n \n \n \n \n \n (0.9) \n \n \n (100.0%) \n \n \n - \n \n \n \n \n Exit from smaller, loss-making activities \n \n \n \n \n \n 1.3 \n \n \n 100.0% \n \n \n - \n \n \n \n \n Revenue \n \n \n \n \n \n 741.1 \n \n \n 11.7% \n \n \n 663.7 \n \n \n \n \n   \n Trading EBITDA 18 reconciles to Underlying Profit Before Tax 18 as follows: \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n   \n \n \n Change \n   \n \n \n 12m to \n Jan 2023 (restated 19 ) \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Insurance Broking Trading EBITDA 18 \n \n \n \n \n \n 47.2 \n \n \n (39.6%) \n \n \n 78.2 \n \n \n \n \n Insurance Underwriting Trading EBITDA 18 \n \n \n \n \n \n 1.2 \n \n \n (90.7%) \n \n \n 12.9 \n \n \n \n \n Ocean Cruise Trading EBITDA 18,20 \n \n \n \n \n \n 74.8 \n \n \n 91.8% \n \n \n 39.0 \n \n \n \n \n River Cruise and Travel Trading EBITDA 18 \n \n \n \n \n \n 5.5 \n \n \n 167.9% \n \n \n (8.1) \n \n \n \n \n Other Businesses and Central Costs Trading EBITDA 18 \n \n \n \n \n \n (12.2) \n \n \n 58.6% \n \n \n (29.5) \n \n \n \n \n Trading EBITDA 18 \n \n \n   \n \n \n 116.5 \n \n \n 25.9% \n \n \n 92.5 \n \n \n \n \n Depreciation and amortisation \n \n \n \n \n \n (34.4) \n \n \n (1.2%) \n \n \n (34.0) \n \n \n \n \n Net finance costs (including Cruise, Travel and Insurance Underwriting) \n \n \n \n \n \n (43.9) \n \n \n (2.1%) \n \n \n (43.0) \n \n \n \n \n Underlying Profit Before Tax 18 \n \n \n   \n \n \n 38.2 \n \n \n 146.5% \n \n \n 15.5 \n \n \n \n \n \nAdjusted Trading EBITDA 18 is used in the Group's leverage calculation for the Revolving Credit Facility ( RCF ) covenant and is calculated as follows: \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n   \n \n \n Change \n   \n \n \n 12m to \n Jan 2023 (restated 19 ) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Trading EBITDA 18 \n \n \n \n \n \n 116.5 \n \n \n 25.9% \n \n \n 92.5 \n \n \n \n \n Impact of accounting standard changes since 31 January 2017 \n \n \n \n \n \n 1.7 \n \n \n (39.3%) \n \n \n 2.8 \n \n \n \n \n Spirit of Discovery and Spirit of Adventure Trading EBITD A 18,20 \n \n \n \n \n \n (74.8) \n \n \n (91.8%) \n \n \n (39.0) \n \n \n \n \n Adjusted Trading EBITDA 18 \n \n \n \n \n \n 43.4 \n \n \n (22.9%) \n \n \n 56.3 \n \n \n \n \n   \n Ocean Cruise Trading EBITDA 18 , 20 reconciles to Ocean Cruise Trading EBITDA (Excluding Overheads) 18 as follows: \n \n \n \n \n £m \n \n \n \n \n \n 12m to \n Jan 2024 \n \n \n Change \n \n \n 12m to \n Jan 2023 \n \n \n \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Ocean Cruise Trading EBITDA 18,20 \n \n \n \n \n \n 74.8 \n \n \n 91.8% \n \n \n 39.0 \n \n \n \n \n Ocean Cruise overheads \n \n \n \n \n \n 15.1 \n \n \n ( 41.1 %) \n \n \n 10.7 \n \n \n \n \n Ocean Cruise Trading EBITDA (Excluding Overheads) 18 \n \n \n   \n \n \n 89.9 \n \n \n 80.9 % \n \n \n 49.7 \n \n \n \n \n   \n 18 Refer to the Alternative Performance Measures Glossary for definition and explanation \n 19 The prior year has been restated to reflect the adoption of IFRS 17 'Insurance Contracts' \n 20 Ocean Cruise Trading EBITDA includes Ocean Cruise overheads \n   \n Statement of financial position \n Goodwill \n During the first half of 2023, high claims cost inflation, particularly in motor, put pressure on the Insurance business. Combined with the impact of Saga's three-year fixed-price products and highly competitive market conditions, this led to lower margins per policy and lower overall Underlying Profit Before Tax 21 for the Insurance Broking business, compared with prior growth assumptions. The Group, therefore, conducted an impairment review of the £449.6m Insurance goodwill asset that was included on the statement of financial position at 31 January 2023. \n The Group's five-year financial forecasts incorporated the impact of the changes in the market environment, including the impact of continued pressure on margins. Further stress tests were considered, including the continuation of high claims cost inflation for an extended period and further downsides compared with revised base case assumptions. This resulted in management taking the decision to impair Insurance goodwill by £68.1m as at 31 July 2023. \n The market challenges in Insurance persisted through the second half of the year and our latest five-year forecasts have, therefore, been focused on effectively balancing the protection and, ultimately, growth of policy sales with the longer-term sustainability of the business. This, however, is expected to result in reduced profitability in the short term, when compared with previous growth projections. Management therefore considered it necessary to perform a further impairment assessment of goodwill as at 31 January 2024. Forecast cash flows, consistent with the latest five-year plan and further stress tests, including the impact of a slower recovery from high claims inflation, have been modelled. As a result, management has taken the decision to impair Insurance goodwill by a further £36.8m, taking the total impairment charge for the year to £104.9m. Consistent with the approach taken in...

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