Saga on track to hit targets ahead of schedule after strong first half

Saga PLC on Wednesday said it was on course to meet mid-term targets ahead of schedule after reporting first half results ahead of expectations.

In response, shares in the Kent, England-based provider of products and services for people over 50 surged 13% to 727.00 pence each in London on Tuesday. It was the best performing stock on the FTSE 250, which is up 0.9%.

Saga said pretax profit ballooned to £28.0 million in the six months to July 31 from £3.7 million the year prior.

Revenue improved 12% to £367.5 million from £328.2 million, which analysts at Berenberg said was 4% ahead of consensus.

Underlying pretax profit soared 98% to £46.6 million from £23.5 million and trading earnings before interest, tax, amortisation and depreciation by 35% to £90.9 million from £67.5 million, both being around 13% better than consensus.

Net debt fell to £429.1 million from £515.1 million a year ago, with a leverage ratio of 2.7 times, down from 4.3x.

Saga said the strong first-half performance has increased profit and cash flow expectations for the full year and reinforced confidence in exceeding medium-term targets earlier than anticipated.

As a result, it now expects full year underlying pretax profit to be materially higher than the prior year's £44.2 million, and in the range of £65 million to £70 million. Saga's financial year runs to the end of January.

In addition, the FTSE 250-listing now expects to reach its targets of £100.0 million underlying pretax profit and a leverage ratio of below 2.0 times, before the original target date of January 2030.

Berenberg said it would be increasing underlying pretax profit estimates by 11% to 13%. It expects Saga to achieve its mid-term targets in FY29, one year ahead of schedule.

Saga Chief Executive Mike Hazell said: "Profitability has increased significantly in the first half of the year and we expect this to drive a strong full year outcome, ahead of our previous guidance. All our core businesses are growing, cash generation has increased and debt continues to fall."

Saga said revenue in its Travel business grew 14% with strong demand for cruises and holidays. Insurance Broking sales increased 12%, with underlying pretax profit up 75%.

The new savings partnership with NatWest Boxed has had an "exceptionally strong" start since launching in December 2025, Saga said. Deposit levels have reached more than £2.1 billion and 51,000 new savings accounts have been opened.

No dividend was declared, unchanged on-year, as the firm continues to prioritise reducing debt.

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