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Saga customers carry on travelling despite Brexit

Published 21/09/2016, 10:48
© Reuters.  Saga customers carry on travelling despite Brexit

By Noor Zainab Hussain

(Reuters) - Britain's shock vote to leave the European Union has not dented demand for holidays among Britons over 50 years old, travel and insurance firm Saga said on Wednesday.

Saga, which offers ocean and river cruises, singles holidays and escorted tours, said a poll of its travel customers showed 99 percent of them were not reconsidering their holiday plans because of the June 23 vote to leave the bloc.

Chief Executive Officer Lance Batchelor said Saga's clients, most of whom live off retirement funds, plan well in advance and were not likely to change their behaviour quickly.

"They are a tough bunch. They love to travel. If you talked to Saga customers as they approached retirement and asked them what they plan to spend their time on, the answer will very often be lots of travel," Batchelor said.

"Because they have at least 50 years of life experience, they are less likely to panic when things happen around the world. They want to carry on travelling, they are really brave and intrepid," he said.

Saga, which has already achieved the majority of its holiday sales for the current year, reported an 8.5 percent rise in first-half pretax profit from continuing operations to 109.9 million pounds, beating a consensus forecast supplied by the company of 99 million pounds.

Recent attacks in Tunisia, Egypt and France and Turkey, coupled with a hit to sterling from the Brexit vote, have dampened demand for travel by Britons.

But Saga's customers have only changed course over their preferred travel destinations, the company said.

"Events that have happened over the last 12 months in Turkey, Egypt and in some North African countries have certainly led to a lower level of demand there," Chief Financial Officer Jonathan Hill told Reuters.

"We see certainly good demand for our Asian, Caribbean and South American destinations," he said.

The company, which listed on the London Stock Exchange in May 2014, raised its interim dividend 23 percent to stick to its payout target of 50-70 percent of net earnings.

On the new European capital rules for insurers that came into effect in January, Saga reported a Solvency II ratio of 196 percent, well above minimum capital requirements of 100 percent.

Shares in Saga were up 1.5 percent at 225 pence at 1041 British time.

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