Monarch failure costs Saga £2 million
Monarch’s collapse has cost over-50s travel firm Saga around £2 million, the firm revealed in a trading update released this morning.
It told investors that its underlying group pre-tax profit for the year ending in January 2018 would be only between 1% and 2%.
"This has been impacted by more challenging trading in insurance broking during the period and the Monarch Airlines administration, which has affected our tour operations business," the company said.
"Our travel segment continues to trade well and is expected to be strongly ahead of the prior year.
"However, the tour operations business has been impacted by the collapse of Monarch Airlines with an approximate one-off cost of £2 million."
The group, which also includes publishing and personal finance, is making £10 million in cost savings next year by completing a review of its operating structure at a one-off cost of about £4 million.
"We expect an increase in the profitability of our broking and travel businesses next year, including the approximately £10 million of annualised savings from the actions we have taken in the current year," the group said.
However, it warned that underlying pre-tax profit is expected to be 5% lower than the current year.
CEO Lance Batchelor said: "Against a backdrop of some challenging trading conditions in our final quarter, we continue to develop the business for the long term.
"With greater customer insight and a stronger business platform, now is the right time for Saga to invest in growing the customer base and the business.
"We are confident that the actions taken will ultimately see a better quality of earnings and profit growth across the business, supporting our progressive dividend policy for the benefit of our shareholders."
Preliminary results for the financial year to the end of January will be released on April 12, 2018.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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